Absorbed Cooperative Employees Entitled To Pension From Date Of Absorption; Prior Society Service Is Not Counted

A bench of Justices Vikram Nath and Prasanna B. Varale heard appeals arising from a cluster of Special Leave Petitions challenging the Madhya Pradesh High Court Full Bench judgment on pension entitlements of employees of cooperative electricity societies absorbed into the Madhya Pradesh State Electricity Board (MPSEB). The central issue related to whether absorbed employees were entitled to pension and, if so, whether the period of service rendered in the societies prior to absorption would count as qualifying service.

The Supreme Court allowed the appeals in part and directed that absorbed employees were entitled to pension payable by MPSEB with effect from their respective dates of absorption, but held that the service rendered in the cooperative societies prior to absorption could not be counted for qualifying service. The Court recognised that earlier decisions had required functional integration on absorption and that uniformity was necessary to avoid discrimination. The Court, in its reasoning, observed: “In view of the above, while the appellants are held entitled to pension from the MPSEB, the period of service rendered in the Society prior to absorption cannot be counted. This is for the reason that such service was not under the State Government, and was not governed by its rules. The appellants would thus be eligible for pension from the date of their absorption into MPSEB, from which point they became employees governed by State rules.” The Court further noted that “it would be wholly unjust to deny pension benefits to the absorbed employees when they are performing the same duties and discharging the same responsibilities as other MPSEB employees,” and relied on the principle that “once a service is merged with another service, the merged service gets its birth in the integrated service and loses its original identity.”

Background The dispute arose after a policy decision to merge numerous cooperative electricity societies with MPSEB; the merger took effect on March 15, 2002, and MPSEB issued terms of absorption in June 2004 providing, among other things, that “Pension/gratuity will be payable to the employees absorbed in the Board as per the rules/regulations of the concerned society.” Employees and unions, including Bijli Karamchari Sangh (BKS), challenged aspects of the merger and claimed parity of pensionary and other fringe benefits with regular MPSEB employees.

A Single Judge of the Madhya Pradesh High Court directed extension of pensionary benefits to absorbed employees in 2015. A Division Bench upheld that direction in 2016, and this Court declined special leave in 2018. Separately, a Full Bench of the High Court in August 2019 answered reference questions against pension claims, holding that absorbed society employees would be governed by society rules and not by MPSEB pension rules. The present appeals assailed that Full Bench judgment and certain contempt proceedings.

This Court reviewed earlier precedents including Panchraj Tiwari v. MPSEB, and subsequent decisions (Uma Shankar Dwivedi and Brajendra Singh Kushwah) which emphasised full functional integration on absorption. The Supreme Court concluded that, given the litigation history and the relief already granted to members of BKS, it would be unfair to deny pension to absorbed employees; accordingly, it held that all absorbed employees would be entitled to pension in the particular facts. However, applying the Madhya Pradesh Civil Services (Pension) Rules, the Court held that qualifying service began only from the date the employee assumed charge under the State and therefore pre-absorption society service did not qualify. The Court directed implementation within four months and payment of arrears in the same period. Pending applications were disposed of.

Case Details: Case No.: 2025 INSC 670 Case Title: Vijay Kumar Joshi v. Akash Tripathi & Ors. Appearances: For the Petitioner(s): [Advocates not indicated in the reported judgment] For the Respondent(s): [Advocates not indicated in the reported judgment]