Permanent severance to join non-pensionable service constitutes voluntary retirement, preserving pension entitlement under the 1981 Rules.

The Petitioner joined as a Lecturer in English at Cuttack College, a fully aided institution, on 23 July 1985, and his appointment was approved with effect from 1 June 1989. He subsequently served as Lecturer/Reader in various non-Government aided colleges governed by the Odisha Aided Educational Institutions’ Employees Retirement Benefit Rules, 1981 (“1981 Rules”).

On 30 June 2014, while serving as Reader in English at Kujang College, he was permanently relieved with the permission of the competent authorities to join as Professor/Associate Professor at Rajiv Gandhi University, Arunachal Pradesh. He retired from the University on superannuation on 29 February 2024, where no pensionary scheme was available.

The Petitioner claimed pension under the 1981 Rules for his service in Odisha. Although the State initially directed processing of his pension claim, the Controller of Accounts sanctioned only pro-rata pension and admissible DCRG amounting to ₹18,31,606 under the Odisha Civil Services (Pension) Rules, 1992 (“OCS Pension Rules”).

The Petitioner declined the lump-sum pro-rata payment and sought regular pension under the 1981 Rules.

The State defended the decision on the ground that, having retired from Rajiv Gandhi University, the Petitioner was not eligible for pension under the 1981 Rules and could receive only pro-rata pension under Rule 44 of the OCS Pension Rules.

Rule 3 of the 1981 Rules applies to the teaching and non-teaching staff of recognised non-Government educational institutions under the direct payment system.

Rule 4 confers eligibility for pension or gratuity upon retirement by superannuation, voluntary retirement or retirement after completion of thirty years’ qualifying service or attainment of fifty years, medical incapacity, abolition of post, or closure of the institution.

Rule 6 governs the calculation of qualifying service for pensionary benefits.

The OCS Pension Rules apply to Government servants appointed to posts borne on a pensionable establishment and do not ordinarily govern employees of non-Government aided institutions.

In Adikanda Jena v. State of Orissa, 1990 (I) OLR 234, the Court held that employees of aided educational institutions are not ipso facto Government servants and that service conditions applicable to Government servants do not automatically apply to them.

The Court also relied on P. Bandopadhya v. Union of India, (2019) 13 SCC 42, concerning the pensionary consequences of severance of Government service upon absorption in another establishment.

The Court found that the Petitioner’s service from 23 July 1985 to 30 June 2014 in recognised non-Government aided colleges was admitted and was governed by the 1981 Rules.

Since the Petitioner was not a Government servant in that service, the OCS Pension Rules could not be invoked merely because he later joined and retired from Rajiv Gandhi University.

The orders permitting him to leave Kujang College expressly treated his departure as permanent relieving, and the Government had itself directed the authorities in 2016 to release his pension and other pensionary benefits.

The Court held that permanent severance with the permission of the competent authority, undertaken when the Petitioner was above fifty years of age, could be interpreted as voluntary retirement under Rule 4(2) of the 1981 Rules.

Consequently, denying all benefits under the 1981 Rules and substituting pro-rata pension under the OCS Pension Rules was held to be unjustified, illegal and arbitrary.

The order dated 29 December 2025 and the pro-rata pension order dated 18 May 2026 were quashed.

The State authorities were directed to grant the pension and pensionary benefits admissible under the 1981 Rules within four months from receipt of the certified copy of the judgment.