Parmeshwar Nanda Etc. v. The State of Jharkhand Through Chief Secretary & Ors. Etc.
Background
The appellants had been employed between 1978 and 1990 under a Central Government-sponsored Adult Education/Non-Formal Education Project in undivided Bihar. When the Project was shut down in 2001 after the state bifurcation that created Jharkhand, they were declared "surplus" employees and only absorbed into regular government posts via a 2007 notification, which explicitly stated their absorption would be treated as a fresh appointment that would not count their prior Project service for seniority or pay protection. They sought pension benefits by counting their years of service under the Project.
Decision Breakdown
The Supreme Court held that the appellants' Project-era service could not be counted towards pension because it failed two of the three mandatory conditions under the Jharkhand/Bihar Pension Rules: the service was not "under the Government" (the Project was a centrally-funded scheme, not part of the State's regular cadre) and was not "substantive and permanent." The Court rejected reliance on a 1969 Circular about temporary government servants, holding it did not apply to Project employees who were never government servants at all, and distinguished the facts from a Bihar case (Baliram Singh) where the State had specifically agreed to count such past service. The appeals relating to Jharkhand employees were dismissed, while one connected appeal concerning Bihar (where past service had been expressly made pensionable) was disposed of in line with the Baliram Singh precedent.
Lesson Learnt
Employees absorbed from a government-funded "project" or scheme into regular service are not automatically entitled to have their prior project years counted for pension: that depends entirely on the specific terms of the absorption policy and applicable pension rules, so it is important to check what the absorption order actually says about past service.