Resignations via proper channel for inter-CPSE movement constitute technical formalities preserving leave and pensionary benefits.

The Petitioners, long-serving executives at BHEL, applied for positions in other Government of India undertakings (REC and NHDC) through the "proper channel."

Following their selection, they resigned from BHEL to join the new organizations.

BHEL accepted the resignations but subsequently refused to transfer or monetize their Half Pay Leave (HPL) balance and declined to transfer their pension corpus to the National Pension System (NPS).

BHEL contended that resignation constituted a severance of service and that company rules lacked provisions for such transfers.

The Petitioners previously approached the High Court, which directed BHEL to pass speaking orders.

BHEL issued orders on July 2, 2018, maintaining its refusal.

Whether the guidelines issued by the DPE regarding carry forward of leave and superannuation benefits apply to BHEL.

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

Whether a resignation for moving to another CPSE via the proper channel constitutes a "technical formality" that preserves pension and leave benefits.

Whether the January 1, 2017, cut-off date in BHEL’s amended pension rules can be used to deny claims for separations occurring in 2015.

The court applied the BPE Office Memorandum dated January 25, 1988, which allows for the carry forward of leave between public enterprises with mutual consent.

It relied on Clause 8.2 of the BHEL Personnel Manual (Vol. II), which incorporates DPE guidelines for leave transfer.

The court further applied the DPE OMs dated May 21, 2014, and February 1, 2017, which define "technical formality" resignation as a resignation submitted by an employee moving to another CPSE through the proper channel, thereby preserving superannuation benefits.

In terms of pension, the court interpreted the BHEL Employees’ Pension Scheme (2016) and its 2021 amendment in harmony with DPE’s mobility framework.

The Court reasoned that BHEL, having adopted DPE guidelines as the basis for its pension scheme and Personnel Manual, cannot arbitrarily ignore the accompanying interpretive framework regarding employee mobility.

The Court found that "proper channel" forwarding of an application constitutes institutional "consent" for transfer, satisfying the requirements of the 1988 BPE OM.

Regarding the HPL, the Court held that BHEL’s internal Manual (Clause 8.2) is itself an "enabling provision" and BHEL cannot claim a lack of rules to avoid discharging leave liability.

Regarding pension, the Court determined that the February 1, 2017, DPE OM clarifying "technical formality" was retroactive in nature as it merely explained an existing category used in the 2014 guidelines.

Therefore, a resignation for moving within the public sector is not a "disqualifying severance" under Clause 4.8 of the Pension Scheme.

Finally, the Court held that a "group corpus" structure does not preclude computation of an individual's share for transfer to NPS, as evidenced by BHEL’s own later policy amendments.

It held that the Petitioners' exits were "technical formalities" and they were entitled to the transfer of benefits.

For Naveen Kumar Gupta, BHEL must transfer HPL liability to NHDC or pay the equivalent lump sum if transfer is impracticable.

For both Petitioners, BHEL must compute the notional individual pension corpus and transfer it to their NPS accounts (PRAN) or successor CPSE schemes within six weeks.

Failure to comply within timelines will attract 6% interest per annum on the payable amounts.