Absorbed employees from Public Sector Undertakings are entitled to Old Pension Scheme by counting past service.

The petitioner originally served in the Bihar State Fisheries Development Corporation Limited.

On 27.03.2018, via Office Order No. 473, he was absorbed into the Animal and Fisheries Resources Department, Government of Bihar.

Clause 5 of the said order imposed the New Pension Scheme (NPS) upon the petitioner.

The petitioner challenged this clause, seeking the benefit of the Old Pension Scheme (OPS) by counting his service from his initial joining in the Corporation until his superannuation, placing reliance on a Division Bench judgment in L.P.A. No. 716 of 2017.

1. Whether the petitioner is entitled to the benefit of the Old Pension Scheme by counting his past service in a State Corporation prior to his absorption into a government department.

2. Whether the state can impose the New Pension Scheme on employees absorbed from Public Sector Undertakings/Corporations whose initial service predates the introduction of the new scheme.

The Court relied on the principle established by the Hon’ble Supreme Court in State of Jharkhand vs. Bir Kuar Paswan Ors. (Civil Appeal No. 13372 of 2015), which held that employees sent on deputation from Public Sector Undertakings to State departments and subsequently absorbed are entitled to have their past service counted for pensionary benefits.

This was further reinforced by the Patna High Court Division Bench in L.P.A. No. 716 of 2017, which mandated that such benefits be extended to all identically situated employees in the State of Bihar, regardless of whether they were original litigants, as per the State's Litigation Policy.

The Court observed that the petitioner was a deputationist from a Corporation who was eventually absorbed into a sanctioned government post.

The State’s contention that the precedent in L.P.A. No. 716 of 2017 only applied to the Directorate of Provident Fund or Treasury Office was rejected.

The Court reasoned that the petitioner is "identically situated" to the appellants in the cited L.P.A. and C.W.J.C. No. 20436 of 2021.

Since the Supreme Court and the Division Bench have clearly held that past service in Corporations must be counted for pension purposes upon absorption, the imposition of the New Pension Scheme via Clause 5 of the 2018 order was inconsistent with established legal principles and the State’s own litigation policy.

It directed Respondent No. 4 (Director, Directorate of Fisheries) to extend all pensionary benefits to the petitioner in light of the principles enunciated in L.P.A. No. 716 of 2017. The transition and calculation of benefits must be completed within three months from the date of receipt of the order.