Prem Singh v. The State of Uttar Pradesh & Ors.
Background
Prem Singh was appointed as a Welder in 1965 in a "work-charged" establishment (a category of government employment distinct from regular service), was later regularized in 2002, and superannuated in 2007. He sought to have his pre-regularization work-charged years counted towards pension-qualifying service under Uttar Pradesh's retirement rules, but the State rejected this and his writ petition and appeal were dismissed by the High Court. This case was the lead matter in a large batch of similarly-placed appeals (filed by both employees and the State) that a Division Bench had referred to a larger three-judge bench because of doubts about the validity of Rule 3(8) of the U.P. Retirement Benefit Rules, 1961 and Regulation 370 of the Civil Services Regulations.
Decision Breakdown
The Supreme Court held that excluding work-charged service from pension-qualifying service, merely because it wasn't preceded by temporary or regular appointment, was an arbitrary and discriminatory classification. Relying on its own precedent (Habib Khan v. State of Uttarakhand) involving a pari materia Punjab rule that had already been struck down, the Court "read down" Rule 3(8) and struck down Regulation 370 and the related Financial Handbook instruction, holding that work-charged service must be counted towards pension-qualifying service even without prior temporary/regular appointment. It also directed that long-serving work-charged employees (10+ years) be treated as regularized for pension purposes, with arrears of pension capped at three years before the order and payable within three months. As a result, all the employees' appeals (including Prem Singh's) were allowed, and the State's appeals were dismissed.
Lesson Learnt
Government employees who spent years in "work-charged" or similarly informal employment categories before formal regularization cannot be denied pension credit for that period on arbitrary rule-based distinctions: courts will strike down pension rules that discriminate between materially similar categories of long service.