Employees of converted municipalities are entitled to pensionary benefits if recruited before conversion and covered under GPF.

The petitioners were originally laborers in the Una Gram Panchayat, which was converted into the Una Nagarpalika (Municipality) in 1986

Following an Industrial Tribunal award dated 20-02-1997, the petitioners were granted permanent status effective from 01-01-1989

Throughout their service, the Municipality deducted General Provident Fund (GPF) contributions from their salaries

Upon retirement after approximately 39 years of service, the petitioners were denied pensionary benefits. The State and Municipality contended that because the petitioners were regularized after the conversion of the Panchayat into a Municipality, they were governed by the Contributory Pension Scheme (CPF) and Clause 16 of the Government Resolution dated 28-11-1994, which purportedly excludes post-conversion recruits from pension benefits

1. Whether employees of a converted Municipality, who were originally engaged by the Panchayat and later regularized via a judicial award, are entitled to pensionary benefits under the State’s pension scheme

2. Whether the deduction of GPF contributions and long-term service treatment as pensionable employees estops the authorities from denying pension benefits upon retirement

3. Whether the specific nomenclature of the PF account (Head 8336-00-800-04) disentitles the employees from being classified under the GPF/Pension scheme

The Court primarily applied the Government Resolution dated 28-11-1994 by the Urban Development and Urban Housing Department, which accepted liability for pensions for Panchayat employees recruited before conversion

It relied on the precedent in Una Nagar Palika v. Kaliben Balubhai Makwana (2019) 12 SCC 340, which established that similarly situated employees are entitled to pension

furthermore, it applied the principle from Chorwad Gram Panchayat v. Ramniklal Dharshi Shah (2010) 1 GCD 675 and Arjanbhai Panchabhai Bambhania v. Una Nagar Palika regarding the finality of Industrial Tribunal awards and the binding nature of GPF treatment

The Court reasoned that the petitioners were not "recruited" by the Municipality after conversion but were existing workers whose status was regularized by an Industrial Tribunal award

This award carries legal finality that cannot be overridden by administrative resolutions

The Court noted a consistent pattern where the respondents treated the petitioners as pensionable by deducting GPF rather than CPF contributions for decades

It rejected the respondents' technical argument regarding account nomenclature (Head 8336), noting that the Division Bench in The Chief Officer v. State of Gujarat (LPA 1102/2021) had already dismissed such distinctions as "consequential"

The Court held that denying pension after 39 years of service, when the conduct of the authorities suggested a pensionable status, would be "atrocious" and a violation of Article 14 of the Constitution

The Court directed the respondents to work out service details and prepare pension papers based on the last pay drawn. Directions were issued to release the pension by 31-08-2026, failing which a 6% interest rate would apply from 01-09-2026 until realization. Any employer-side CPF contributions already received by the petitioners are to be adjusted against the pension arrears