This case concerned a person selected and appointed as a conductor with the respondent Corporation. The deceased employee had opted for a new pension scheme introduced in the Corporation. He resigned from the job after about 29 years citing family circumstances. His resignation was accepted by the competent authority of the Corporation. Later on, a request was made for withdrawal of the resignation which was declined by the competent authority. Thereafter, the deceased employee requested the respondent for release of his retiral benefits i.e. gratuity, provident fund, leave encashment and pension. The Corporation informed him that since he had resigned from service, he was found entitled to only provident fund and no other benefit. Aggrieved against the order of the Corporation, an application was filed by the deceased employee before the Tribunal. The same was dismissed by the Tribunal. A review application was filed which was also dismissed by the Tribunal. The deceased employee then approached the High Court by filing a writ petition which was also dismissed. Aggrieved by the High Court, the appellant approached the Supreme Court.

A 2-Judges Bench of the Supreme Court considered Central Civil Services (Pension) Rules, 1972 and held –

“9.1 A perusal of Rule 26 of the 1972 Rules clearly shows resignation from service entails forfeiture of past service…

9.2 Rule 36 of the 1972 Rules provides that the government servant who retired or compulsorily retired shall be granted retiring pension in accordance with Rules 48 and 48-A of the 1972 Rules.

9.3 Rule 48 of the 1972 Rules talks about eligibility or grant of pension on completion of 30 years of qualifying service. Whereas Rule 48-A thereof provides for such entitlement on completion of 20 years or more of qualifying service. In the case in hand, the deceased employee had not completed 30 years of service but certainly had more than 20 years service to his credit.”.

The Bench referred to earlier judgments of the Supreme Court where it was opined that on resignation, past service of an employee stands forfeited and where the distinction between resignation and voluntary retirement was considered. The Bench held that upon resignation by an employee, his past service stood forfeited and hence, the deceased employee was not entitled to any pension. For payment of gratuity, the Bench considered Section 4 of the Payment of Gratuity Act, 1972 and held – “that an employee who had rendered not less than five years of service will be entitled to payment of gratuity, regardless of the fact that he had retired or resigned from service”. For leave encashment, the respondent had fairly submitted that amount due to the deceased employee shall be paid to his family members.

The appeal was partly allowed.