The Supreme Court has dismissed an appeal filed by the Punjab School Education Board (PSEB) and upheld the pensionary benefits granted to employees who had initially worked on a contractual, ad hoc, daily-wage or work-charge basis before being regularized.
A Bench comprising Justice Prashant Kumar Mishra and Justice Shree Chandrashekhar held that the employees’ pre-regularization service must be counted as qualifying service for retiral and pension benefits.
The judgment was delivered on September 8, 2026, in Punjab School Education Board & Anr. v. Satnam Singh & Ors., Civil Appeal No. 6865 of 2022. The appeal challenged the Punjab and Haryana High Court's judgment which had granted the employees pensionary benefits by treating their earlier service as part of their qualifying service.
The respondents had initially been engaged by PSEB as Clerks and Peons between 1993 and 1996 on contractual, ad hoc, daily-wage and work-charge basis, initially for periods of 89 days. Their contractual engagements continued from time to time due to administrative and operational exigencies.
In 2004, following the Board's decision to adopt the Punjab Government's regularization policy on a mutatis mutandis basis, the employees were appointed on a regular basis against permanent vacant posts. Their appointment letters were issued from August 2004.
The employees subsequently claimed that their long period of service prior to regularization should count for pension and that they should be covered by the old pension regime, since their service had effectively commenced before January 1, 2004.
The Supreme Court agreed with the High Court that the substance of the employees' engagement, rather than the nomenclature used in their appointment letters, had to be considered.
The Court noted that the Government policy, the Board's deliberations and its subsequent public notice demonstrated that the employees had, in substance, been regularized rather than freshly appointed in 2004.
The Court also relied upon the Board's own 2011 communication to the Punjab Government, in which the Board had stated that the employees had been working since before January 1, 2004 and sought approval for extending the old pension policy to them.
Referring to the applicable Punjab School Education Board Pension Regulations, the Court noted that qualifying service generally includes periods spent on duty without interruption and that pensionary benefits are to be determined with reference to qualifying service rendered by the employee.
The Bench relied upon the Constitution Bench judgment in D.S. Nakara v. Union of India, observing that pension is not a bounty or an ex-gratia payment but is a payment for past service and constitutes a social welfare measure.
The Court held that where employees had rendered long and continuous service and were ultimately regularized, denial of pensionary benefits on the basis of technicalities or artificial distinctions would generally be unjustified.
The Supreme Court further held that the contractual, ad hoc and daily-wage service rendered before regularization had to be computed as qualifying service.
It specifically observed that the breaks in service in the present case were either notional, artificial/administrative, or caused by court orders, and therefore had to be ignored. The service was to be treated as continuous for pension purposes.
The Court also rejected the argument that PSEB's status as an autonomous body could defeat the employees' claim, noting that the Board had itself subsequently adopted the Government's regularization policy.
On a cumulative assessment, the Supreme Court found the decisions of the Single Judge and Division Bench of the High Court to be legally sound and declined to interfere.
The Court held that the respondent-employees were indeed regularized and were entitled to be treated as having entered Government service prior to January 1, 2004. The judgment records that they have the discretion to choose either the old GPF pension scheme or the new scheme, if they opt for it.
The appeal filed by the Punjab School Education Board was accordingly dismissed, with no order as to costs.
Representation:-
For Appellant(s) : Mr. Rohit Sharma, Adv. Mr. Jatin Lalwani, Adv. Mr. Nikhil Purohit, Adv. Mr. Jay Rawat, Adv. Mr. Kumar Dushyant Singh, AOR
For Respondent(s) : Mr. P S. Patwalia, Sr. Adv. Ms. Natasha Dalmia, AOR Ms. Anisha Jain, Adv. Ms. Shambhavi Singh, Adv. Ms. Prerna Cheema, Adv. Mr. Shadan Farasat, Aag, Sr. Adv. Mr. Karan Sharma, AOR Mr. Arkaprava Das, Adv. Mr. Chetan Manchanda, Adv.
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