Karnataka HC Denies Old Pension To Contract Engineers Made Permanent In 2007, While Limiting Gangmen Eligibility To Those Absorbed As Junior Linemen Before April 2006

In W.A. Nos. 1240 and 1252 of 2023, Assistant Engineers and Junior Engineers had been appointed on contract in 2003 on consolidated remuneration.

A Board resolution in March 2007 made their appointments permanent prospectively, and their appointment orders stated that contract service would not count for pension and that they would be covered by the contributory pension scheme.

KPTCL adopted the New Defined Contributory Pension Scheme (NPS) for new recruits joining on or after 1 April 2006; the employees challenged its application and sought coverage under the old pension scheme.

W.A. No. 1254 of 2023 concerned Gangmen converted to Probationary Mazdoors and subsequently absorbed as Junior Linemen.

The Single Judge allowed the petitions and directed application of the old scheme, leading to the Corporation’s appeals.

The Corporation’s 5 July 2007 decision made the NPS applicable to new recruits joining KPTCL/ESCOM service on or after 1 April 2006, with equal employee and employer contributions.

The Court treated permanent appointment to a cadre post, rather than prior contractual engagement, as the relevant entry into service for choosing the pension scheme; regularisation does not ordinarily relate back to the date of contractual or casual engagement.

It also applied the principle that a belated service claim may be rejected for delay and laches, and that a later representation or rejection does not, by itself, revive a stale claim.

The Court distinguished Union of India v. Tarsem Singh on continuing wrongs and relied on the rule that delay may defeat claims affecting settled rights, while recurring monetary claims may be treated differently.

Regulations 181 and 181(A) were held inapplicable to the Engineers’ contract appointments, which were on consolidated remuneration rather than as temporary or permanent employees.

For Gangmen, the governing settlement and approval required conversion and subsequent absorption as Junior Linemen; conversion to Probationary Mazdoor status alone did not amount to absorption into that cadre.

The Court held that the Engineers’ 2003 engagements were contractual and carried no permanency or cadre pay scale; their permanent status began only with the 30 April 2007 appointment orders.

Those orders expressly excluded contract service from pension calculation and specified contributory pension coverage, which the employees accepted and acted upon while NPS deductions were made for years.

Their challenge, brought after substantial delay and without challenging the appointment conditions or the NPS decision when made, could not be founded on a later representation or a decision of the Madras High Court; the cut-off date itself was neither arbitrary nor unlawful.

For Gangmen, the Court examined the Government approval, settlement and implementation orders and concluded that only absorption as Junior Linemen with the prescribed pay scale constituted the relevant permanent entry.

Accordingly, employees absorbed before 1 April 2006 were eligible for consideration under the old scheme, while those absorbed on or after that date fell under NPS.

W.A. No. 1254 of 2023 was disposed of by modifying the Single Judge’s order: only Gangmen converted and absorbed as Junior Linemen with the prescribed pay scale before 1 April 2006 were entitled to be considered under the old pension scheme; those absorbed on or after that date were subject to NPS.

KPTCL was directed to identify the employees covered by each scheme and provide the consequential benefits to those eligible under the old scheme within three months of receiving the certified judgment; the directions also applied to employees who had retired or died.