Holding

Reinstatement creates continuity of service, entitling the employee to pensionary benefits for the entire period, while back wages for the intervening employment are not payable.

Summary

Dr. D.K. Jain (Respondent No.1) was appointed as a Statistical Officer on 14 May 1971 and his services were terminated on 10 April 1974. He challenged the termination and, during the pendency of the writ petition, joined another organization on 25 January 1975. The ICMR (appellant) later offered him reinstatement with his original seniority but without back wages for the period he worked elsewhere; he accepted the offer and was reinstated. The High Court held that he should be deemed to have been in continuous service for the purpose of computing pensionary and other retiral benefits, excluding only the claim for back wages. On appeal, the Supreme Court affirmed that reinstatement amounts to continuity of service, granting him pension benefits for the entire period, and dismissed the appeal.

Issues considered

Whether the period during which the employee worked in another organization should be counted as continuous service for pensionary and retiral benefits.
Whether the employee is entitled to back wages for the period he was not in the appellant's employment.
Effect of reinstatement on the continuity of service under service law.

Subjects

service continuitypension computationreinstatementback wagesservice lawretirement benefits

Judgment

THE DIRECTOR GENERAL, I.C.M.R. A
v.
DR. D.K. JAIN AND ANR.

MARCH 9, 2007

[S.B. SINHA AND MARKANDEY KATJU, JJ.] B

Service Law:

Pensionary and retiral benefits-Computation of period of service-
Period during which employee remained in employment of another C
organization-Employee's services terminated-While reinstating the
employee he was given his original seniority from his initial appointment,
but was refused back wages for the period he worked in another
organizatiorr-Entitlement to computation of the said period for purposes of
pensionary and other retiral benefits-Held, on facts, having regard to conduct D
-y of parties, what was denied to employee was only back wages for the period
he was in service of some. other organization, which cannot be construed to
mean that the employee although being validly appointed and continued in
service would be deprived of the pensionary benefits during the period in
question.
E
Respondent no. I joined the services of the appellant on 14.5.1971. His
services were terminated on 10.4.1974. This was challenged by him in a writ
petition before the High Court. Meanwhile he joined another organization
on 25.1.1975. Before the High Court the appellant offered a regular post to
respondent no .. 1 maintaining the seniority originally assigned to him, but F
without back wages. Respondent no. I accepted the offer. The High Court
aceordingly disposed of the writ petition. However, the period during ,which
respondent no. I remained in employment of the other organization was kept
out of consideration for purpose of computing pensionary and other retiral
benefits. The writ petition of respondent no. I having been allowed by the
High Court holding that during the period in question he would be deemed to G
be in service, the employer filed the appeal.

Dismissing the appeal, the Court

HELD: Having regard to the conduct of the parties which is significant H
893
894 SUPREME COURT REPORTS [2007] 3 S. C.R.

.A for the purpose of determining the issue involved, for all intent and purport,
respondent no. I has to be treated to be continuing in service despite small
disruption. The very fact that the offer made in favour of the respondent by
the appellant was for reinstatement in service; it is beyond any cavil of doubt,
the same would amount to continuity of his service. Moreover, the respondent
B has·been given his due seniority from the date of his initial appointment. What
was denied to him was only the back wages for the period he was in service in
some other organization, which cannot be construed to mean that the employee
although being validly appointed and continued in service shall be deprived of
the pensionary benefits during the period in question. +
[Paras 13-1411898-8, C, El
c
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1377 of2007.
From the Order dated 26.4.2006 of the High Court of Delhi at New Delhi
inC.W.P. No. 701812001
D Raju Ramachandran, Y.K. Rao, Madhu Sikri, and Saket Sikri for the
Appellant.
Dr. M.P. Raju, Ashwani Bhardwaj, Dr. D.K. Jain for the Respondents. "f""

The Judgment of the Court was delivered by
E S.B. SINHA, J. 1. Learned counsel for both the parties acept that the
Union of India is not a necessary party in this case. It is hence directed to
be expunged accordingly.
2. Leave granted.
F 3. Respondent No. 1 herein joined the services of the appellant as a
Statistical Officer on 14.5.1971. He completed his period of probation. However, --1
on or about 10.4.1974 his services were terminated. He questioned the order
of his tennination by filing a writ petition before the High Court of Delhi which
was marked as CWP No. 545/1974. Indisputably he joined Bombay Cancer
Registry on or about 25.1.1975.
G
4. The writ petition filed by the respondent herein came up for
consideration before the High Court some time in 1983. During pendency of
the said writ petition. The appellant herein placed before the said Court an
offer so that respondent No. 1 may be reinstated in service on the following
terms:
H
THE DIRECTOR GENERAL, l.C.M.R. v. DR. D.K. JAIN [S.B. SINHA, J.] 895

"Having regard to the facts summed up in para I avobe and the A
issues discussed in para 2. Director General of ICMR is of the
considered view that Shri Jain can at best be offered a regular post
of Sr. Research Officer, which he had been holding before his service
were tenninated. He may be given his seniority in the grade of Senior
Research Officer, as had been originally assigned to him, and his pay B
may be fixed as per rules. He cannot be given any back-wages for the
reasons that he had not worked in the post since April, 1974, that his
services were terminated in terms of the conditions specifically included
. _.
in the offer of appointment issued to him and that. for some time he
was actually employed (no employee can draw pay from two sources).
As already explained, there is no question of offering him any C
appointment for the post higher than Sr. Research Officer because
such an appointment can be made only by direct recruitment through
open advertisement as per the procedure of the Council. Shri Jain is,
however, free to take his chance along with other candidates for the
post of Asstt. Director under the Council. as and when such a post D
is created and advertised."

5. The said offer of the appellant having been accepted by respondent
No. I the High Court disposed of the writ petition directing:

"The respondent Council has addressed a letter to this Court E
dated 22.4.1983. Let this letter be placed on record.

The petitioner has been offered a post on the terms and conditions
given in the aforesaid letter the petitioner has conveyed his acceptance
to the Council of the offer made to him. The disposes of the writ
petition. F
Mr. Gupta on behalf of petitioner further submits the following
two points:
I. That the petitioner should be considered for appointment to the
post of Assistent Director. I have no doubt that if the post is
available the petitioner will be considered for the same and if G
found eligible, he will be given llis due promotion.
2. The petitioner has bee.n appointed against a regular post. He
should be considered for confirmation. This request also seems
to me to be reasonable since the petitioner has been reinstated in
service. H
896 SUPREME COURT REPORTS [2007) 3 S.C.R.

A The petition is disposed of in terms of the above order. No costs."

6. Pursuant to and in furtherance of the said order passed by the High
Court. Respondent No. I was reinstated in service on the following terms:

"1. The pay of Sh. Jain will be fixed as admissible under the ICMR
B Rules.

2. He will be given seniority in the grade of Senior Research officer
(Rs. 1100-50-1600) as was originally assigned to him.
i.
3. He will not be given any back-wages.

C 4. Notwithstanding his seniority in the grade of SRO he will not have
any claim for automatic promotion to the post of Assistant Director.
He can, however, take his chance along with other candidates for the
post of Assistant Director as and when such a post is created and
advertised. As regards his posting. I am to State that with his
D experience in work at the Bombay Cancer Registry. Sh. Jain is
considered suited to work as Senior Research Officer at the technical
unit of the National Cancer Registry Project under Dr. L.D. Sanghvi
at the Tata Memorial Research Centre. Bombay. He is, therefore,
..
required to report to Dr. Sanghvi as early as possible.

E I am to add that only after Shri Jain has joined the post of S~nior
Research Officer (Rs. 1100-50-1600) on the above terms and conditions
and without any further pre-conditions on his part, if he makes any
specific request for giving him back-wages, the matter may be
considered in due course on merits by the Competent authority,
However, the Council cannot make any commitment in this regard at
F this stage."

7. It is not in dispute that even a no objection certificate was issued
on his application for acquiring an Indian passport wherein reswpondent No.
I was described as a permanent employee of the appellant organisation with
effect from 23.1.1978. The period from 10.4.1974 to 11.5.1983. However, was
G
kept out consideration for the purpose of computing pensionary and retiral
benefits of Respondent No. I inter alia on the premise that he had not been
in service of the appellant during the said period.

8. The High Court by reason of the impugned judgment has allowed the
G writ petition filed by Respondent No. I herein opining that he would be
THE DIRECTOR GENERAL, l.C.M.R. v. DR. D.K. JAIN [S.B. SINHA, J.] 897

deemed to be in the service of the appellant even during the aforesaid period A
i.e. I0.4.1974to 11.5.1983.

9. Mr. Raju Ramachandran, learned senior counsel appearing on behalf
of the appellant, in support of the appeal, would submit that despite the
settled legal position that 'pension' is not a bounty but the same must be
earned wherefor the employee must remain in the employment of his employer B
during the entire period. In view of the fact that respondent No. I did not earn
any wages during the period in question, the same cannot be considered for
the purpose of computing pensionary and retiral benefits.

10. In a case of this nature, in our opinion, the question as to whether
respondent No. I continued to be in service despite temporary break during C
the said period, will have to be determined having regard to the fact situation
involved herein. The services of Respondent No. I althoughh were terminated
on 10/4/1974, he immediately questioned the legality and validity thereof by
filing a writ petition. The Director of the appellant organisation himself made
an offer that respondent No. I would be reinstated in service subject to the D
terms and conditions mentioned in his letter dated 29.4.1983, as noticed
hereinbefore. It was that offer of the appellant which was unconditionally
accepted by the respondent. Not only this, certain other observations had
also been made by the High Court while passing the order dated 27.4.1983.
The High Court directed that he be reinstated in service.
E
11. The expression 'reinstatement' has been defined in 'Advanced Law
Lexicon' by P. Ramanatha Aiyar, (at page 4030) to mean:

"Reinstatment means that a man is put back in his job. Reinstatement
can only arise if a man is dismissed or removed from service or if
+- otherwise his service has been terminated and he is brought back to F
service. Hemanta Kumar Bhattacherjee v. Union ofIndia, AIR (1958)
Cal. 239, 241 [Constitution oflndia, Art. 311].

Therein it is further stated:

"The word 'reinstatement' in the context of Rule 16.5 of the Punjab G
Police Rules can refere only to the resumption of service for the
purpose of grant of increments. The said rule has no bearing on
qualifying service for compulsory premature retirement. Chamba Singh
v. State of Punjab, AIR (1997) SC 2455, Service Laws."

H
898 SUPREME COURT REPORTS [2007] 3 S.C.R.

A 12. It is also significant to note significant to note that the appellant in
terms of its letter dated 21.4.1983, also assured Respondent No. I to consider
his request, if any, for payment of back-wages. As indicated hereinbefore,
even he had been considered to be a permanent employee of the appellant
with effect from 21.3.1978.

B 13. Having regard to the conduct of the parties which, in our opinion,
is significant, for the purpose of determining the issue involved, we have no
doubt in our mind that for all intent and purport. Respondent No. I has to be
treated to be continuing in service despite small disruption during the
aforementioned period. The very fact that the offer made in favour of the
C respondent by the appellant was for reinstatement in service, it is beyond any
civil of doubt the same would amount to continuity of his service. Moreover,
the respondent has been given his due seniority from the date of his initial
appointment. Had it been a case of fresh appointment, as sought to be argued
by Mr. Raju Ramachandran learned senior counsel appearing on behalf of the
appellant, the question of respondent No. l's getting his seniority from the
D date of his original appointment would not have arisen.

14. What was, therefore, denied to him was only the back-wages for the
period he was in service in some other organisation, which in our opinion
cannot be construed to mean that an employee although being validly
E appointed and continued in service shall be deprived of the pensionary
benefits during the period in question thereby.

15. For the reasons aforementioned, there is no merit in this appeal
which is dismissed. Counsel's fee is assessed at Rs. 5,000/-.

R.P. Appeal dismissed.