Employees engaged on work-charged basis before 2004 entitled to Old Pension Scheme despite regularization after New Pension Scheme commencement, rules Division Bench citing Supreme Court precedents.
In a significant judgment delivered on 25th September 2026, the Division Bench of the Punjab and Haryana High Court has dismissed the petition filed by the Post Graduate Institute of Medical Education and Research (PGIMER), Chandigarh, thereby upholding the grant of Old Pension Scheme (OPS) benefits to employees initially appointed on temporary or work-charged basis before January 1, 2004, whose services were regularized after the implementation of the New Pension Scheme (NPS).
The case arose when several employees, appointed as Mortar Mates in 1994 on temporary work-charged terms but in regular pay-scales with annual increments, sought pension benefits under the OPS following their regularization in 2016. PGIMER contested this claim on grounds that these employees were paid from the contingency fund prior to regularization and that no sanctioned posts existed at the time of regularization, thus disqualifying them from OPS benefits.
The Tribunal had earlier ruled in favor of the employees, relying heavily on the Division Bench judgment in Harbans Lal v. State of Punjab (2010), upheld by the Supreme Court, which clarified that employees appointed before 1.1.2004 are entitled to OPS benefits even if regularization occurred after the NPS commencement. This principle was further reiterated by the Supreme Court in Punjab School Education Board v. Satnam Singh (2026 INSC 965), emphasizing that contract, ad hoc, or daily wage service prior to regularization must be counted as qualifying service for pension, ignoring artificial breaks.
Addressing PGIMER's arguments, the High Court observed that continuous service in regular pay scales with increments for over three decades cannot be negated merely because payment was made from contingency funds or due to the absence of a sanctioned post at the time of regularization. The Court held that once regularization is granted against vacant posts, those posts must be treated as the original posts for pensionary purposes.
The Court thus affirmed the Tribunal's order granting OPS benefits to the employees, dismissing PGIMER's petition. Two of the respondents have already retired, and the decision ensures their pension benefits are computed considering their entire qualifying service including the pre-regularization period.
This judgment reinforces the legal position that long-serving employees engaged on temporary or work-charged basis before 2004 are protected under the Old Pension Scheme, safeguarding their retirement benefits against technicalities arising from regularization delays.
Bottom Line:
Pension - Employees initially appointed prior to 01.01.2004 on work-charged/temporary basis in regular pay-scale with annual increments and continued in service till regularization after 01.01.2004 - Entitled to benefit of Old Pension Scheme - Payment from contingency fund or absence of sanctioned post at time of regularization does not defeat such claim once service was continuous and regularization was granted.
Statutory provision(s): Relevant legal principles relate to Old Pension Scheme (pre-2004) and New Pension Scheme (post-2004) implementation guidelines, Punjab Civil Services Rules amendments.
