Resignation via proper channel selection between CPSEs constitutes a "technical formality," preserving HPL transfer and pension continuity rights.

The Petitioners, long-serving executives at Bharat Heavy Electricals Ltd. (BHEL), applied for posts in other Government of India undertakings through the "proper channel".

Upon selection, they resigned and were relieved in 2015.

BHEL subsequently refused to transfer or monetize their Half Pay Leave (HPL) and declined to transfer their pension corpus to the National Pension System (NPS), contending that resignation constitutes a severance of service that forfeits such benefits under BHEL's internal rules.

The Petitioners challenged the speaking orders dated July 2, 2018, which rejected their claims.

While Petitioner Agarwal's leave was eventually transferred, Petitioner Gupta's was not.

1. Whether the DPE guidelines on carry forward of leave and superannuation benefits apply to BHEL and to what extent.

2. Whether BHEL lawfully refused to transfer HPL balance in light of the BPE OM dated January 25, 1988, and BHEL’s Personnel Manual.

3. Whether BHEL can deny transfer of pension corpus by treating a "proper channel" selection to another CPSE/Government undertaking as a disqualifying resignation rather than a "technical formality".

4. Whether the January 1, 2017, cut-off date in BHEL’s amended pension policy can be used to resist claims arising from 2015 separations.

The court relied on Bureau of Public Enterprises (BPE) OM dated January 25, 1988, regarding the carry-forward of leave between public enterprises.

It applied Clause 8.2 of the BHEL Personnel Manual, Volume II, which incorporates DPE guidelines for leave transfer.

Regarding pension, the court interpreted Department of Public Enterprises (DPE) OMs dated May 21, 2014, and February 1, 2017, the latter of which defines "technical formality" as a resignation submitted by an employee moving to another CPSE via the proper channel.

The court also applied the doctrine of "incorporation by reference," stating that once an internal manual adopts government guidelines, those guidelines become normative for the organization.

The court reasoned that proper-channel forwarding constitutes "institutional permission" and "consent," distinguishing it from a voluntary resignation that terminates all ties.

Under Clause 8.2 of BHEL’s Manual, outward transfer of leave is permissible despite BHEL's claim of "no enabling provision," as the Manual itself is the provision.

Regarding pension, the court held the February 1, 2017, DPE OM to be "clarificatory" rather than "amendatory," meaning the "technical formality" exception existed in the 2014 framework and applied to the Petitioners’ 2015 exits.

The court rejected BHEL's "group corpus" argument, noting that while the scheme's structure might complicate computation, it does not justify a total denial of earned benefits, a fact proven feasible by BHEL’s own later policy amendments.

Finally, the January 1, 2017, cut-off was deemed irrelevant to a dispute involving the correct interpretation of the pre-existing "technical formality" category in an ongoing litigation.

It held that resignations for moves through the proper channel are "technical formalities" preserving service-linked benefits.

For Naveen Kumar Gupta, BHEL must either transfer HPL to NHDC or pay the equivalent leave salary directly to him.

For both Petitioners, BHEL must compute the notional individual pension corpus as of the date of resignation and transfer it to their NPS accounts or successor CPSE schemes.

Failure to comply within specified timelines (8 weeks for leave, 6 weeks for pension) will attract 6% simple interest per annum.