Railway Service Counts for Pension Weightage

The Supreme Court has held that service rendered in the Railways is to be treated as Central Government service for the purpose of pensionary benefits and pay fixation, where the governing Board Orders and settlement terms so provide.

The appellant had joined the Indian Railways in 1990 and later moved to the Kerala State Electricity Board Limited in 2001 after more than 10 years of regular pensionable service under the Central Government. On joining the Board, the Railways remitted pro-rata pension liability, and the appellant’s service book recorded that his railway service was liable to be reckoned for pension. The Board’s own order dated 9 January 1996, as well as long term settlements of 2000 and 2007, provided that former Government service followed by Board service without break would count for qualifying service for weightage.

The dispute arose when the Chief Internal Auditor of the Board objected to the pay fixation in 2012, cancelled the weightage earlier granted, and ordered recovery on the ground that railway service could not be reckoned as Central Government service for pay revision. The appellant’s challenge succeeded before the Single Judge, who followed an earlier decision in a similar matter.

The Division Bench reversed that view, reasoning that railway servants are governed by separate conduct and disciplinary rules and therefore their service could not be counted for weightage. The Supreme Court found that approach erroneous. It held that the fact that railway servants are governed by separate service rules does not alter the constitutional and statutory position that the Railways is an integral department of the Central Government and that railway employees are Central Government servants for the relevant purpose.

The Court set aside the Division Bench orders dated 19 August 2019, restored the Single Judge’s judgment dated 21 March 2017, and held that the appellant is entitled to the benefits extended under the Board Orders. It also directed that no benefit already accrued in the appellant’s favour shall be withdrawn.

The Court further directed that the appellant receive all benefits flowing from the restored judgment within three months of production of an authenticated copy of the judgment. It also observed that if the similarly placed employee, D. Vishnu Nampoothiri, has not appealed, he may seek similar relief from the Board, and the Board should not discriminate against him.

Practical takeaway: where Board rules and settlements recognize former Central Government service, railway service cannot be excluded merely because separate conduct or disciplinary rules apply.