Fresh re-employment terms excluding past service prevent aggregation for continuous-service retirement medical benefits.

The Appellant joined Indian Oil Corporation Limited (“IOC”) as a Pharmacist Compounder-cum-Dresser on 9 April 1980. Following an incident at IOC’s Mathura Refinery on 23 October 1989, he was dismissed from service on 27 October 1989. His criminal conviction arising from the incident was subsequently set aside, and the dismissal order was quashed by the High Court for want of jurisdiction; he was reinstated on 10 October 2002.

IOC thereafter initiated departmental proceedings, culminating in a second dismissal order dated 31 July 2008. The Appellant tendered an unconditional apology and sought re-entry into service. IOC offered him re-employment on conditions including waiver of wages and benefits for the intervening period and non-assertion of monetary claims. The subsequent offer dated 31 August 2009 expressly treated the arrangement as fresh employment and excluded counting of past service. The Appellant accepted the terms, joined at Vadodara on 2 September 2009, and served until retirement on 30 June 2016.

After retirement, the Appellant sought Post-Retirement Medical Scheme (“PRMS”) benefits. IOC rejected the request on the ground that he had not completed fifteen years of continuous service. His writ petition was dismissed by the learned Single Judge on 20 March 2026, leading to the present intra-court appeal.

Whether the Appellant’s service before his re-employment on 2 September 2009 could be aggregated with his subsequent service for satisfying the PRMS requirement of fifteen years of continuous service

Whether the conditions of re-employment, including waiver of monetary claims and exclusion of past service, were void as an impermissible restraint on legal proceedings under Section 28 of the Indian Contract Act, 1872

Whether denial of PRMS benefits to the Appellant, despite the alleged grant of such benefits to a co-accused employee, violated Article 14 of the Constitution

Whether the earlier acquittal, quashing of the first dismissal, alleged defects in the departmental enquiry, or the interlocutory direction to take a compassionate view justified grant of PRMS benefits

The Court applied the eligibility condition under the PRMS scheme requiring fifteen years of continuous service.

Section 28 of the Indian Contract Act, 1872, concerning agreements in restraint of legal proceedings, did not invalidate the conditions because they formed part of a mutually accepted arrangement for re-entry into service rather than an independently imposed restraint.

The Court further applied the principle that criminal acquittal does not automatically invalidate departmental proceedings, as criminal and disciplinary proceedings operate in distinct fields and are governed by different standards of proof.

It also held that an interlocutory direction for reconsideration does not finally determine substantive entitlement.

The Court found that the Appellant did not resume his earlier service pursuant to the order quashing the first dismissal; rather, after the second dismissal, he sought mercy, tendered an apology, and accepted fresh employment on specific terms.

The re-employment offer expressly provided that his past service would not count for any purpose, and he continued in service for nearly seven years without challenging that condition. Consequently, only the period from 2 September 2009 to 30 June 2016 could be treated as continuous service, which was substantially less than the fifteen-year PRMS requirement.

The Section 28 challenge failed because the Appellant voluntarily accepted and benefited from the arrangement.

The alleged preferential treatment of another employee could not create entitlement contrary to the Appellant’s own contractual terms and the PRMS eligibility criteria.

The Court also held that the acquittal did not nullify the departmental action, the unchallenged second dismissal could not be indirectly attacked after acceptance of re-employment, and the interlocutory order required only reconsideration, which IOC had undertaken.

Advanced age and medical hardship could not override the express fifteen-year continuous-service requirement.

He therefore failed to satisfy the PRMS requirement of fifteen years of continuous service. The challenges under Section 28 of the Contract Act and Article 14 of the Constitution were rejected, and the acquittal, quashing order, departmental proceedings, and interlocutory direction did not alter the result.

The appeal was dismissed, the judgment dated 20 March 2026 was upheld, and there was no order as to costs.