Employee can’t suffer for employer’s lapse, says HC; grants GPF benefits to PEOSU engineer
Justice Harpreet Singh Brar quashes corporation’s rejection, rules ad-hoc appointee became automatic member of superior pension scheme upon regularisation.
The continued CPF deductions were termed an “administrative lapse” by the Corporation, for which the employee could not be penalised. (Image generated using Google Gemini) In a significant ruling clarifying pension rights for employees regularised soon after the introduction of new retirement schemes, the Punjab and Haryana High Court has directed the PEPSU Road Transport Corporation (PRTC) to treat a long-serving Junior Engineer as a member of the more beneficial General Provident Fund (GPF) scheme under the 1992 Regulations.
Justice Harpreet Singh Brar allowed the writ petition filed by Jatinder Pal Singh Grewal, quashing the Corporation’s 2021 rejection of his claim and ordering full GPF benefits with retrospective effect.
The case
Grewal was first engaged as Junior Engineer (Civil) on an ad-hoc basis on January 16, 1992, with successive 89-day extensions. While he was still serving in that capacity, the PEPSU Road Transport Corporation Employees Pension/Gratuity and General Provident Fund Regulations, 1992, came into force on June 15, 1992.
On December 28, 1992, he received a fresh regular appointment order with six months’ probation, and his services were formally regularised with effect from June 28, 1993. Despite this, the Corporation continued deducting contributions under the older Contributory Provident Fund (CPF) scheme for nearly three decades.
In 2019, Grewal began making representations. A committee was formed, but on June 22, 2021, it recommended against shifting him to GPF, citing continuous CPF deductions since 1992. The Corporation issued the impugned rejection letter on October 19, 2021. Grewal then moved the High Court seeking to quash the letter and committee report, along with a direction to treat him as a GPF member “for all intents and purposes”.
Arguments
Senior Advocate Sumeet Mahajan argued that Grewal’s regular appointment came after the 1992 Regulations had taken effect. He therefore fell under Clause 3(1)(i), which applies automatically to employees “appointed on or after the date of issue of Regulations on whole-time and regular basis”.
As Grewal was not a regular employee on June 15, 1992, there was “no requirement or occasion” for him to exercise an option under Clause 3(1)(ii) or Clause 4, which apply only to those already working on a regular basis before the cut-off date.
The continued CPF deductions were termed an “administrative lapse” by the Corporation, for which the employee could not be penalised. RTI replies and a comparative chart showed that other employees regularised after June 15, 1992, were granted GPF benefits. Even some pre-1992 regular employees who never opted were extended the scheme.
Court’s reasoning
Justice Brar held that the Regulations must be “harmoniously construed”. Clause 3(2) excludes work-charged, contractual and non-regular employees. Thus, “working immediately before the date of issue of Regulations” in Clause 3(1)(ii) refers to those working on a whole-time and regular basis before that date.
On June 15, 1992, Grewal was still an ad-hoc employee and therefore outside the scheme. His status changed only with the fresh regular appointment on December 28, 1992, which described him as “a new entrant in the service of the PRTC for all intents and purposes”.
The court ruled that since his regularisation occurred after the Regulations were in force, he was automatically covered under Clause 3(1)(i), and no option was required.
Relying on the Supreme Court’s 2023 judgment in Calcutta State Transport Corporation v. Ashit Chakraborty, the court observed that employees cannot be made to suffer for the employer’s fault. The plea of discrimination was upheld, as similarly placed employees had been granted GPF benefits.
The verdict
The court quashed the October 19, 2021, rejection letter and the June 22, 2021, committee report. The Corporation must now treat Grewal as a GPF member under the 1992 Regulations for all purposes.
He has been directed to refund the employer’s CPF contribution within three months of receiving the certified copy of the order, without any interest liability.
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