1. Court’s decision
The Delhi High Court (Division Bench) upheld the core finding that employees who took special voluntary retirement under a 2003 scheme after completing more than 10 years (but less than 20 years) of service were entitled to pension. It rejected the discom’s argument that pension required 20 years’ service and that “membership of the pension trust” was being wrongly equated with “entitlement to pension.” However, the Court modified the Single Judge’s directions on who pays and interest: it reassigned liability for pension up to each employee’s age of 60 years to a special purpose vehicle (created for the voluntary retirement arrangement) with reimbursement by the pension trust, and removed the 12% interest direction. It also enhanced costs to ₹50,000 per employee to compensate for the loss of interest.
2. Facts
The dispute arose from a Special Voluntary Retirement Scheme, 2003, introduced for regular employees who had completed 10 years of service from the date of joining the erstwhile Delhi Vidyut Board or had attained 40 years of age as on 18 December 2003. The scheme listed “other benefits on voluntary retirement,” including gratuity and “pension as per rules payable by DVB Pension Trust.” The employees opted for voluntary retirement under this scheme and their applications were accepted. The record also reflected that pension was paid for about six months and then stopped, prompting litigation. A Single Judge allowed the employees’ writ petition and directed pension from the date of voluntary retirement with arrears and 12% interest. The discom appealed.
3. Issues
The Division Bench framed the central controversy as whether merely opting under the special voluntary retirement scheme made an employee entitled to pension, or whether pension depended on completing qualifying service under the scheme read with the Central Civil Services (Pension) Rules, 1972. The discom argued that 20 years’ service was necessary (drawing from voluntary retirement provisions), and that 10 years only enabled “membership” of the pension trust, not pension eligibility. The employees’ side pressed that the scheme promised pension and that the pension rules’ qualifying service standard supported pension entitlement on completion of 10 years. A further issue concerned allocation of pension liability among the discom, the pension trust, and the special purpose vehicle, and whether interest could be imposed.
4. Petitioner’s arguments (appellant’s case)
The discom contended the Single Judge had directed pension without properly adjudicating eligibility under the Pension Rules, 1972. It argued that clause 4.1.5 of the retirement scheme linked pension to “applicable provisions” and that, read with the trust deed/terminal benefit rules and pension rules, employees needed 20 years’ service for pension. According to the discom, the writ petitioners admittedly had more than 10 but less than 20 years, and thus could at most be members of the fund but not pensioners. It relied on a prior Delhi High Court Division Bench judgment dealing with similar restructuring-era pension questions and argued that the Single Judge wrongly relied on a Supreme Court ruling about a different pension scheme with different “qualifying service” language. The discom also argued that the pension trust (not the discom) should bear pension liability.
5. Respondent’s arguments
The employees argued that once the discom accepted their voluntary retirement under the scheme—which explicitly listed pension as a benefit—it could not deny pension later, especially after paying pension for about six months and then abruptly stopping. They emphasized the scheme’s promise and the expectation created by it, and contended that no fraud or misrepresentation was attributed to them to justify withdrawal. They supported reliance on the Supreme Court’s approach in analogous voluntary retirement pension disputes and cited another Supreme Court decision on voluntary retirement and pension entitlements. They also urged that if the Court was inclined to accept the discom’s 20-year argument, it should at least grant proportionate pension rather than deny pension altogether.
6. Analysis of the law
The judgment turns on reading the Special Voluntary Retirement Scheme alongside the Pension Rules, 1972, especially the concept of “qualifying service.” The Court noted that while the scheme may appear to suggest that anyone eligible to opt for voluntary retirement is entitled to all clause 4 benefits, gratuity and pension were stated to be “as per rules” and payable by the pension trust—meaning the pension rules still govern eligibility and computation. The Court then examined Rule 49(2) (pension on retirement after completing not less than ten years of qualifying service) and Rule 3(q) (definition of qualifying service) to conclude that qualifying service means service rendered while on duty that counts for pension, not some separate post-membership period in a trust. The Court also treated the retirement scheme as a special arrangement that operates as an exception to the general voluntary retirement framework requiring longer service.
7. Precedent analysis
The discom attempted to distinguish the Supreme Court’s ruling in National Insurance Co. Ltd. v. Kirpal Singh on the ground that the “qualifying service” clause in the insurance pension scheme was materially different. The Court, however, endorsed the Single Judge’s broader reliance on analogous voluntary retirement jurisprudence, noting that the Single Judge had examined Supreme Court authorities and Delhi High Court precedents in detail. The Division Bench also referenced earlier Delhi High Court litigation involving the electricity distribution restructuring context to highlight the dispute’s recurring nature, but ultimately decided the present case by construing the SVRS 2003 and the Pension Rules, 1972 together.
8. Court’s reasoning
The Court held that the discom’s position—10 years makes one a trust member but pension requires 20 years—did not find support in the Pension Rules, 1972 or the trust documentation as examined. It reasoned that Rule 3(q) defines qualifying service as service rendered while on duty, and Rule 49(2) ties pension to completion of at least ten years’ qualifying service. Because the employees had completed more than ten years of service, the Court saw “no reason” why that service should not be treated as qualifying service. It also held that the general requirement of 20 years for voluntary retirement under the pension rules could not block pension in this special scheme context, because the SVRS was a special voluntary retirement scheme introduced to reduce workforce burden and would prevail over the general rule for those covered by it. The Court accepted that pension, in such cases, would be proportionate under Rule 49’s computation framework, and criticized the notion that the employer could “take a somersault” after inducing retirement under a promised package.
9. Conclusion
The Division Bench largely affirmed the employees’ entitlement: those who opted under SVRS 2003 after completing between 10 and 20 years’ service were entitled to proportionate pension, and the discom’s 20-year eligibility objection was rejected. However, the Court corrected the remedial directions to reflect the agreed payment architecture among institutions: it modified the Single Judge’s order so that pension liability up to age 60 would lie on a special purpose vehicle created for the SVRS arrangement, reimbursed by the pension trust, with the remaining pension thereafter to be paid by the appropriate authority under the pension rules or applicable law. It also set aside the 12% interest direction but enhanced costs to ₹50,000 per employee.
10. Implications
This decision strengthens “special voluntary retirement pension” claims by clarifying that in such schemes, once employees satisfy the scheme’s threshold and the pension rules’ minimum qualifying service, pension cannot be denied by importing general voluntary retirement service-length requirements. It also signals that courts will scrutinize employer attempts to retract promised retirement benefits after inducing employees to exit, particularly where pension was initially paid and then stopped. At an administrative level, the judgment is equally important for delineating institutional liability: distribution companies, special purpose vehicles, and pension trusts must align disbursement responsibility to the restructuring-era understanding, and courts may modify relief to match that architecture. Finally, by replacing interest with enhanced costs, the decision shows an appellate method of balancing employee compensation with practical enforceability where multiple entities share payment responsibility.
Case law references
1) Supreme Court: National Insurance Co. Ltd. v. Kirpal Singh (2014) 5 SCC 189
- What it held (as discussed): The Supreme Court upheld pension entitlement under a voluntary retirement scheme read with a pension scheme that treated ten years of service as qualifying service for pension.
- How applied/distinguished: The discom argued the qualifying service clause there was different; the Court nevertheless treated the reasoning as supportive of the broader principle that where the applicable pension framework recognizes a ten-year threshold and the scheme promises pension, pension cannot be denied on a higher service-length assumption.
2) Supreme Court: C. Jacob v. Director of Geology & Mining (2008) 10 SCC 115
- What it held (as invoked): Cited by the discom to argue against fastening liability and to raise delay/claim-handling principles.
- How treated: The employees argued it was not a pension case; the Court noted the Single Judge had distinguished it in the writ decision and did not accept it as defeating pension entitlement under SVRS.
3) Supreme Court: Assistant General Manager v. Radheyshyam Pandey (2020) 6 SCC 438
- What it held (as cited): Relied upon by employees for the proposition that voluntary retirement schemes and pension promises must be honored within their governing framework.
- How treated: The discom argued it turned on peculiar directions reducing qualifying service in that context; the Court did not treat it as undermining the employees’ entitlement under SVRS 2003 read with Pension Rules, 1972.
4) Supreme Court: Bank of India v. O.P. Swarnakar (2003) 2 SCC 721; HEC Voluntary Retired Employees Welfare Society v. HEC (2006) 3 SCC 708
- What they held (as noted): Authorities on the legal nature of voluntary retirement schemes, employee options, and enforceability of scheme terms.
- How used: The Court noted the Single Judge had drawn guidance from these decisions while holding that once retirement under the scheme is accepted with promised benefits, the employer cannot later deny such benefits by changing its stance.
5) Delhi High Court: prior Division Bench decision involving distribution companies (2015 SCC OnLine Del 11559)
- What it held (as invoked): Relied upon by the discom to argue against pension entitlement in the restructuring context.
- How treated: The employees argued it was distinguishable; the Court resolved entitlement primarily by the SVRS 2003 text and Pension Rules, 1972, and did not accept the discom’s reading to deny pension outright.
FAQs
1) Is 10 years of service enough for pension under a special voluntary retirement scheme in Delhi electricity distribution companies?
In this judgment, the Delhi High Court held that employees who retired under the 2003 special voluntary retirement scheme after completing more than 10 years’ service were entitled to proportionate pension, because Rule 49 of the Pension Rules, 1972 links pension to at least 10 years’ qualifying service and qualifying service means service rendered while on duty.
2) Can an employer stop pension after initially paying it under a voluntary retirement scheme?
The Court criticised the employer’s attempt to deny pension after inducing retirement through scheme benefits and after paying pension for about six months, holding that the employer cannot “take a somersault” and leave retirees without the promised pension benefits under the applicable rules.
3) Who pays pension under the 2003 special voluntary retirement arrangement—discom, pension trust, or another body?
The Court modified the Single Judge’s order to align with the institutional arrangement: pension up to the employee attaining 60 years is payable by the special purpose vehicle created for the scheme (to be reimbursed by the pension trust), and thereafter pension is payable by the appropriate authority under the pension rules or applicable law.