Municipal Council Cannot Deny Pension to Absorbed Employee After Accepting Service for 18 Years; Punjab & Haryana High Court Sets Aside Contradictory Orders

Case Name: Kamaljeet Singh v. State of Punjab and Others

Date of Judgment: 19 May 2026

Citation: CWP-7703-2022

Bench: Justice Harpreet Singh Brar

Held: The Punjab and Haryana High Court held that an employee absorbed by a Municipal Council after the Punjab Municipal Employees Pension and General Provident Fund Rules, 1994 came into force would automatically be governed by the pension rules and was not required to exercise any separate option for pension. The Court further held that the Municipal Council could not deny pension after treating the petitioner as its employee for nearly 18 years and criticised the Executive Officer for passing contradictory speaking orders reflecting non-application of mind.

Summary: The petitioner was initially appointed as a Rigman with the Punjab Water Supply and Sewerage Board in 1980 and his services were regularised in 1991. Subsequently, the maintenance work undertaken by the Board was transferred to the Municipal Council, Kharar, and the petitioner along with other permanent employees was absorbed by the Council in 1998 after approval from the Directorate of Local Government, Punjab.

The petitioner retired on 30.06.2016 after rendering more than 34 years of service but was denied pension and pensionary benefits. His representations and legal notice failed to yield any result, compelling him to approach the High Court. The Municipal Council rejected his claim through speaking orders dated 27.10.2021 and 02.12.2021 on differing grounds. Initially, the claim was rejected for failure to exercise option under the Punjab Municipal Employees Pension and General Provident Fund Rules, 1994. Later, the stand was changed by asserting that the petitioner was not an employee of the Municipal Council at all.

The petitioner argued that since he joined the Municipal Council in 1998, long after the 1994 Rules had come into force, the Rules applied automatically to him by virtue of Rule 1(3)(i). It was further contended that the Municipal Council itself had accepted transfer of CPF contributions from the Board and had continuously treated him as its employee. The petitioner also expressed readiness to refund the employer’s contribution towards CPF for grant of pensionary benefits.

The Municipal Council opposed the petition on the ground of delay and contended that the petitioner had failed to exercise option under the 1994 Rules. It was also argued that acceptance of CPF benefits amounted to waiver of pensionary claims.

After analysing the Punjab Municipal Employees Pension and General Provident Fund Rules, 1994, the Court held that only those employees who were already working with Municipal Committees prior to 01.04.1990 were required to exercise an option for pension. Since the petitioner was absorbed by the Municipal Council in 1998, the pension rules applied to him automatically and no separate option was required.

The Court also relied upon its earlier judgment in Jatinder Pal Singh Grewal v. PEPSU Road Transport Corporation and reiterated that employees regularised or absorbed after pension rules come into force are to be treated as fresh entrants automatically covered under the pension scheme.

Significantly, the Court criticised the conduct of the Executive Officer in issuing two contradictory speaking orders within a short span. The Court observed that such conduct reflected clear non-application of mind and lack of understanding regarding functioning of a State instrumentality. It further held that administrative authorities cannot modify orders arbitrarily when serious civil consequences are involved.

Decision: The High Court allowed the writ petition and quashed the impugned orders dated 27.10.2021 and 02.12.2021. The Municipal Council was directed to count the petitioner’s entire service as qualifying service for pension and intimate the amount required to be refunded towards CPF contribution. Upon deposit of such amount by the petitioner, the Council was directed to release pension and arrears, though without interest.