When Pension Rules Are Capable of More Than One Interpretation, Courts Must Lean in Favour of the Employee: MP High Court

The Madhya Pradesh High Court at Gwalior has directed that service rendered by a police officer with the erstwhile Madhya Pradesh Electricity Board prior to joining the Police Department be counted towards his qualifying service for pension, holding that the service conditions of MPEB employees were determined by the State Government by virtue of the Board being constituted and its members appointed by the State under the Electricity (Supply) Act, 1948.

Justice Ashish Shroti, deciding the petition on March 20, 2026, overruled the objection raised by the District Pension Officer and directed processing of the petitioner's claim for counting his service from June 21, 1981 to January 15, 1988.

Munesh Kumar Gautam was initially appointed as Assistant Grade III with the Madhya Pradesh Electricity Board on June 21, 1981. When the Police Department issued an advertisement for the post of Sub-Inspector in May 1987, he applied, obtained a No Objection Certificate from MPEB on November 13, 1987, and was selected. He proceeded on pre-appointment training in January 1988, submitted his resignation from MPEB which was accepted with effect from January 19, 1988, and was formally appointed Sub-Inspector on December 9, 1988. He was eventually promoted to Inspector and retired on April 30, 2017 — having served approximately 30 years in the Police Department.

After retirement, he applied for counting his MPEB service towards pensionable service. The Assistant Inspector General of Police and the Superintendent of Police, Shivpuri accepted the claim and passed an order on May 15, 2018 directing the counting of service for the relevant period. However, the District Pension Officer, Shivpuri raised an objection that Rule 26 of the M.P. Civil Services (Pension) Rules, 1976 did not cover service rendered with MPEB as it was not State Government service. The Police Headquarters directed the Superintendent of Police to act as per the District Pension Officer's objection — prompting the present writ petition.

The court examined whether service rendered with MPEB qualified as "qualifying service" under Rule 3(p) and Rule 13 of the M.P. Civil Services (Pension) Rules, 1976; whether the service conditions of MPEB employees were "determined by the Government" within the meaning of Rule 13(1); and whether the objection of absence of prior permission from the earlier employer could be sustained at this stage.

Rule 3(p) Extends Beyond Pure State Government Service

The court examined Rule 3(p) which defines "qualifying service" as the period between joining pensionable service under the State Government and retirement, including "the period which qualifies under any other order or rule for the time being in force." The court held that while the first part of the definition restricts qualifying service to service under the State Government, the latter part expressly extends it to service qualifying under any other order or rule. "A cumulative reading of this rule makes it clear that the service rendered by an incumbent under any rule other than Pension Rules of 1976 would also qualify for pension. The mandate is that such service should be a pensionable service."

MPEB Service Conditions Determined by State Government — Rule 13 Satisfied

The pivotal question was whether the service conditions of MPEB employees were "determined by the Government" within the meaning of Rule 13(1) of the Pension Rules, which requires that an employee's duties and pay be regulated by the Government or under conditions determined by the Government. The District Pension Officer had contended that MPEB service was simply not State Government service.

The court rejected this by examining the Electricity (Supply) Act, 1948. Section 5(1) provided that the Board was constituted by the State Government by notification. Section 5(2) provided that all members of the Board were appointed by the State Government. Section 79(c) empowered the Board to make regulations governing duties of officers and employees and their salaries and conditions of service. The court held: "Since the Board was constituted by and its members were appointed by State Government, it can safely be concluded that the service conditions of employees of MPEB were determined by State Government. Thus, the conditions laid down under Rule 13(1) of Pension Rules are also satisfied."

The court further invoked the principle of beneficial interpretation set down by the Supreme Court in State of Rajasthan v. O.P. Gupta, (2022) 18 SCC 382, which held that "when financial rules framed by the Government such as Pension Rules are capable of more interpretations than one, the courts should lean towards that interpretation which goes in favour of the employee."

Prior Permission Objection Rejected — NOC Was Sufficient, Prior Permission to Be Presumed

The State raised a secondary objection that the petitioner had not obtained prior permission from his earlier employer before taking up the subsequent appointment — only a No Objection Certificate for participating in the selection process. The court rejected this emphatically on the facts. The NOC dated November 13, 1987 specifically stated that the Board had no objection to the petitioner's selection as Sub-Inspector. The petitioner's application had also been forwarded through the Board's own authority. Moreover, the petitioner had completed approximately 30 years of service in the Police Department and had already retired. "Raising the issue that there was no prior permission, at this stage, is not permissible."

Drawing on O.P. Gupta, where the Supreme Court had held in a materially similar situation that "it is to be presumed that prior permission had been taken unless the contrary could be established by the State," the court held the same principle applicable here. The State had produced nothing to rebut this presumption. The court also noted the Supreme Court's observation in that case that denial of pension is a continuing wrong and courts cannot be oblivious to the difficulties of a retired employee approaching the court.

The Madhya Pradesh High Court allowed the writ petition, overruled the objection of the District Pension Officer, and directed the respondents including the District Pension Officer, Shivpuri, to process the petitioner's claim for counting his service from June 21, 1981 to January 15, 1988 pursuant to the order of May 15, 2018.

Date of Decision: March 20, 2026