Employees under Rural Road Scheme Entitled to Pension; Arrears Limited to Three Years, Supreme Court Holds

A bench of Justices Abhay S. Oka and Augustine George Masih heard the appeal by the State of Uttar Pradesh challenging an Allahabad High Court order that held employees appointed under the Antar Gramin Sadak Nirman Yojana (the Scheme) entitled to pensionary benefits on par with equivalent Cane Development Department posts. The principal issue concerned whether temporary Scheme appointees were covered by service rules and entitled to pension, and whether delay, estoppel or prior withdrawal of Contributory Provident Fund (CPF) dues barred their claims.

The Court dismissed the appeal and upheld the High Court’s grant of post-retiral benefits, subject to limiting arrears. It held that the State’s prior communications and the Cane Commissioner’s orders had brought Scheme employees under the service rules applicable to equivalent government posts and that the ratio of this Court’s earlier decision in Vinod Kumar Goel applied. The Court directed that arrears of pension be restricted to three years prior to the filing of the writ petition (or the date of attaining age 60 years, whichever was earlier), permitted the State to deduct amounts already paid under CPF from the arrears, and laid down timetables for accounting and payment. The Court noted that “pension is not a charity, or a bounty, and an employee is entitled to receive his pension.” The Court, in its reasoning, observed: “This Court vide its earlier judgment in the case of Vinod Kumar Goel (supra) has dealt with this aspect and has categorically held that the employees appointed under the scheme would be governed by the Rules as applicable to the government employees as per the conscious decision of the government. The employees were also entitled to continue till 60 years of age, further entitling them to consequential benefits, which is apparent from the subsequent order dated 10.07.2014 passed by this Court in the second round when Vinod Kumar Goel was not granted the benefit of pension by the Government.”

Background

The respondents were appointed under the Antar Gramin Sadak Nirman Yojana between 1969 and 1982 and had been governed in practice by the Uttar Pradesh Cane (Gazetted) Service Rules, 1979. In 1997 the State recorded that Scheme employees would be extended benefits “as per the rules” provided the Scheme bore the financial burden; a further communication of 12.11.1997 stated that such employees would be covered by applicable service rules, government orders, regulations and bye‑laws. Some employees were allowed to continue in service till age 60 pursuant to interim orders and a later amendment to the Fundamental Rules by notification dated 28.11.2001 raised superannuation from 58 to 60.

Claims for gratuity and pension were initially resisted; in a related line of litigation this Court, in Vinod Kumar Goel, had ultimately held entitlement to pension and consequential benefits. Following that precedent, several respondents sought relief in the Allahabad High Court, which by order dated 18.05.2016 held them entitled to pensionary benefits from the date of retirement, treating service as extended to age 60. The State challenged that decision before this Court, arguing delay, estoppel and that temporary appointees could not claim parity with regular employees; it relied on earlier authorities concerning option and estoppel in pension/CPF contexts.

The Supreme Court examined documentary records, the State’s 1997 communications, the antecedent Vinod Kumar Goel decision, and the conduct of the parties. It rejected the State’s estoppel and waiver plea, observing that respondents had pressed claims before retirement or at relevant times and had been constrained to withdraw CPF amounts. The Court distinguished precedent relied upon by the State (where a contractual option to switch schemes had been available but unexercised) and concluded that the Scheme employees were brought within the applicable service rules by the State’s conscious decision. While recognising that belated service claims might be barred by laches, the Court treated the present claims as relating to a continuing wrong and balanced equities by restricting arrears to three years preceding the High Court petition. The Court directed the State to deduct CPF amounts already disbursed from the arrears, to complete accounting within one month, and to enable any shortfall to be deposited by the respondents within specified timelines; it dismissed the appeal otherwise and made no order as to costs.

Case Details: Case No.: 2025 INSC 370; Civil Appeal No. 1080 of 2017 Case Title: State of Uttar Pradesh & Anr. v. Dinesh Kumar Sharma & Ors. Appearances: For the Petitioner(s): Learned Senior Counsel for the State (names not specified in judgment) For the Respondent(s): Learned Senior Counsel for the respondents (names not specified in judgment)