In a recent ruling, the Supreme Court of India has clarified that a state government employee serving on deputation in a central government department is not entitled to a pension under the Central Civil Services (Pension) Rules, 1972 (“CCS Pension Rules”). The judgment came as the Court overturned the decision of the Calcutta High Court, which had earlier upheld the Central Administrative Tribunal's (CAT) order directing that the pension of a former state government employee be fixed according to the central pay scale.
The dispute centers on Phani Bhusan Kundu, a former employee of the West Bengal Government who served on deputation as Animal Husbandry Commissioner in the Government of India from 1991. Kundu had retired in 1992 from his post in the state government, but due to an administrative oversight, he was not repatriated to his parent department. His pension was processed by the state government under the West Bengal Services (Death-cum-Retirement Benefit) Rules, 1971 (“WB Pension Rules”).
In 2014, Kundu approached the CAT seeking to have his pension calculated under the CCS Pension Rules, arguing that his service on deputation had effectively made him a permanent employee of the central government. However, the CAT and subsequently the Calcutta High Court ruled in his favor, stating that deputation had created an “indefeasible right” to be absorbed into the central government service.
The Supreme Court, however, disagreed with this interpretation. The Bench, comprising Chief Justice Sanjiv Khanna and Justice Sanjay Kumar, observed that the CAT's ruling was "contrary to the law and unsustainable." Citing the 1997 judgment in State of Punjab v. Inder Singh, the Court explained that deputation refers to "service outside the cadre or outside the parent department, that is, in another department on a temporary basis." It further clarified that, “The deputee does not become a regular employee in the borrowed service/department. The deputees lien on the post in the parent department continues. Deputation does not result in absorption in the borrowed department/service.”
The Court emphasized that since Kundu’s appointment as Animal Husbandry Commissioner was made on a deputation basis and the relevant recruitment rules did not provide for permanent absorption into the central government, his claim to pension under the CCS Pension Rules was invalid. It further stated, “The post of Animal Husbandry Commissioner, as per the recruitment rules, was to be filled by transfer on deputation basis. The rules do not visualize any absorption in the said post. It is, therefore, not possible to hold that respondent No. 1, Phani Bhusan Kundu, was a permanent employee and has qualifying service, to be eligible to get pension under the CCS Pension Rules.”
The Court also referred to the WB Pension Rules, noting that the service must be permanent or quasi-permanent to qualify for a pension under those provisions. Since Kundu had not been absorbed into the central government service, his pension remained governed by the state’s rules.
As a result, the Supreme Court allowed the Union of India's appeal and dismissed Kundu's petition, although he will continue to receive his pension under the WB Pension Rules.
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