ASHOK KUMAR DABAS (DEAD THROUGH LEGAL HEIRS) v. DELHI TRANSPORT CORPORATION
Resignation vs. Retirement: Supreme Court Clarifies Pension Forfeiture under CCS Rules but Upholds Gratuity Rights under Payment of Gratuity Act.
Court: Supreme Court of India
Citation: 2025 INSC 1404
Decision Date: 09-12-2025
List of Laws
Central Civil Services (Pension) Rules, 1972; Payment of Gratuity Act, 1972; Rule 26 of the Central Civil Services (Pension) Rules, 1972; Section 4 of the Payment of Gratuity Act, 1972
- Facts: Ashok Kumar Dabas, an employee of Delhi Transport Corporation (DTC), resigned in 2014 after serving since 1985. His resignation was accepted. He later requested withdrawal of his resignation, which was denied. He then sought retiral benefits (pension, gratuity, leave encashment), but the DTC only offered provident fund, citing his resignation.
- Procedural Posture: Dabas's legal heirs appealed to the Supreme Court after the High Court upheld the Tribunal's decision, which had declined the claim for pensionary benefits. The Tribunal had dismissed the original application and a subsequent review application filed by the deceased employee.
- Issue: Are the legal heirs of the deceased employee entitled to pension, gratuity, and leave encashment, considering the employee resigned from service, and what is the effect of Rule 26 of the Central Civil Services (Pension) Rules, 1972 regarding forfeiture of service upon resignation? Further, is the employee entitled to gratuity under the Payment of Gratuity Act, 1972, despite the resignation?
- Holding: The Supreme Court partly allowed the appeal, holding that the legal heirs are not entitled to pension due to the forfeiture of past service upon resignation as per Rule 26 of the 1972 Rules. However, they are entitled to gratuity under the Payment of Gratuity Act, 1972, and leave encashment.
- Reasoning: The Court reasoned that Rule 26 of the 1972 Rules explicitly states that resignation entails forfeiture of past service, thus negating any claim for pension. The Court distinguished resignation from voluntary retirement, emphasizing that the employee's decision was a resignation, not a request for voluntary retirement. Citing BSES Yamuna Power Limited v. Ghanshyam Chand Sharma and another, the Court reiterated that resignation leads to forfeiture of past service. However, regarding gratuity, the Court noted that Section 4 of the Payment of Gratuity Act, 1972, mandates gratuity payment for employees with at least five years of service, regardless of resignation, unless the employer is specifically exempted, which DTC was not. The respondent's counsel conceded to the payment of leave encashment.
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