Tripura High Court | Contractual Service Cannot Confer Regular Employee Status for Post-Retiral Benefits | Arrears of Salary Directed, Erroneous Pension and Gratuity to Be Refunded
Sanchayita Lahkar
The High Court of Tripura Division Bench of Chief Justice M.S. Ramachandra Rao and Justice S. Datta Purkayastha held that a contractual appointee cannot claim retiral benefits such as gratuity, pension, or leave encashment in the absence of regularization of service. The Court, however, directed payment of salary arrears, including revisions, to the appellant for the period he actually served. The Bench further ordered refund of retiral benefits already received, if any, with interest, and set aside the Single Judge’s directive for an enquiry.
The appellant, an ex-serviceman, was appointed as an Accounts Officer in the District Rural Development Agency (DRDA), Tripura, on 10 September 2001, on a contractual basis following an interview. His remuneration was initially fixed and subsequently revised on different occasions through departmental memoranda. On 1 October 2011, he was granted the benefit of ACP-I on completion of 10 years of service, and later MACP-II on 12 September 2019 after 17 years of service. His contractual tenure continued until 31 December 2021, when his services were discontinued.
Following discontinuance, the appellant submitted a representation on 15 January 2022 seeking release of retiral benefits. When these were not granted, he approached the Court in WP(C) No.197 of 2022. The petition was disposed of on 16 May 2023 with a direction to the authorities to consider his claim. Pursuant thereto, on 27 July 2023, the Secretary, Rural Development Department, rejected his claim.
The appellant then filed WP(C) No.607 of 2023. In that writ petition, he challenged the order dated 27 July 2023 and sought multiple reliefs, namely:
- payment of gratuity amounting to ₹10,00,000 with interest;
- leave encashment of ₹9,47,600 with interest;
- payment of arrears of pay for October 2018 to May 2020 as per the Tripura State Civil Services (1st Amendment) Rules, 2018;
- release of outstanding salary for July 2021 to December 2021 along with an increment due on 1 July 2021;
- recording his retirement date as 31 December 2021 in the Employees’ Provident Fund (EPF) portal to enable receipt of EPF and pension.
Before the Single Judge, the appellant contended that he should be treated as a regular appointee notwithstanding his initial contractual appointment. He relied upon a 2002 memorandum sanctioning him a regular pay scale, subsequent departmental communications wherein his post was reflected as permanent, as well as the sanction of ACP and MACP benefits. He further referred to a communication dated 20 March 2021 indicating that retiral benefits of ₹19,47,600 were to be released to him.
The State, however, opposed his claim. It contended that the appellant had manipulated records during his service tenure, and that his contractual engagement was wrongly shown as regular employment without authorization from competent authorities. Reference was made to a communication dated 17 March 2022 wherein an enquiry was directed into the irregularities of extending pay scales and benefits to him despite his contractual status. The State also asserted that the appellant retired on 5 December 2019 as per his contractual terms.
The learned Single Judge set aside the order dated 27 July 2023, remitted the matter back to the authorities, and directed an enquiry to determine whether the appellant was a regular employee and thereby entitled to retiral benefits.
Aggrieved, the appellant preferred Writ Appeal No.47 of 2024 before the Division Bench. The appellant’s counsel reiterated submissions made earlier and argued that no enquiry was necessary. The State maintained that there was no regular appointment order and that the appellant remained a contractual employee throughout. Reliance was placed on the DRDA Employees Death-cum-Retirement Gratuity and Leave Encashment Regulations, 2014, which exclude contractual employees from their ambit.
The Division Bench considered the submissions and examined the records.
The Court recorded: “Counsel for the appellant did not deny that the appellant's initial appointment was only on contract basis for one year on purely temporary basis, which was being extended from time to time, as can be seen from the memo dt. 18.06.2002 and memo dt. 22.09.2004 whereby the appellant was allowed to continue in service up to the age of attaining 58 years.”
The Bench noted: “At no point of time were petitioner’s services regularized. There is no proceeding issued by the respondents making him a regular employee though in a list dt. 20.08.2013 it appears that the appellant was mentioned as having been regularly appointed, which is factually incorrect.”
It further stated: “Consequently, as per the 2014 Regulations since the appellant continued working on contract basis only, he cannot claim encashment of leave or death-cum-retirement gratuity or even pension which is admissible only to regular employees taking advantage of the mistake committed by the respondents in showing him incorrectly as a regular appointee in certain proceedings.”
Rejecting the appellant’s contention of arbitrariness, the Court observed: “The appellant, while in service, has never approached this Court challenging the said action of the respondents. Now after his services were not extended after 31.12.2021, he cannot at this belated stage seek such a relief.”
On the issue of retirement date, the Court clarified: “The stand of the respondents in the proceeding dt.27.7.2023 that appellant’s service ended on 05.12.2019 because the contract was valid only up to that period, cannot be correct because there is no dispute that he was made to continue to work till 31.12.2021.”
Accordingly, the Court held: “Having extracted work from him up to that date, the respondents cannot deny him salary for the period from 5.12.2019 to 31.12.2021.”
The Bench noted further: “According to the appellant, no salary was paid for the period July, 2021 to December, 2021 and this is not denied.”
On arrears of pay revisions, it observed: “That apart, according to the appellant, there was a Revision of Pay and he is entitled to revised pay for the period October, 2018 to May, 2020 and also arrears of revised pay from 01.07.2021. To this limited extent, the respondents are not correct in denying the same till 31.12.2021.”
Regarding retiral benefits already disbursed, the Court recorded: “If he has received any amounts as pension pursuant to the Pension Payment Order issued to him, he is bound to refund the same along with gratuity and capitalized value of pension.”
On the issue of EPF, the Court stated: “We also do not agree with appellant’s contention that respondents ought to be directed to upload/record the date of retirement/release of the appellant from District Rural Development Agency… in the Employees' Provident Fund portal. No material is placed before us to show his enrolment in the EPF. Also the competent authority under the Employees Provident Fund and Miscellaneous Provisions Act,1952 has not been arrayed as a party… and so no such relief can be granted.”
The Division Bench modified the Single Judge’s order and issued the following binding directions.
The Court directed that the appellant shall submit within four weeks a calculation of arrears of salary, including revisions of October 2018 and 1 July 2021. The respondents are to furnish within four weeks a calculation of pension, gratuity, and capitalized value of pension already received by the appellant. The Bench mandated that the respondents shall pay the appellant arrears of salary from October 2018 until 31 December 2021, after revising his pay for that period in line with pay revisions, after deducting salary already disbursed, and with 7% annual interest until payment.
It further directed that the appellant shall refund to the respondents any retiral benefits such as pension, gratuity, and capitalized pension value already received pursuant to the Single Judge’s judgment, within eight weeks, also with 7% annual interest from the date of receipt until refund.
The Court clarified that mutual adjustment or set-off could be effected between the amounts payable by each side, and the party found liable to pay the balance shall do so. Importantly, the enquiry ordered by the Single Judge pursuant to the letter dated 17 March 2022 was set aside.
The writ appeal was thus partly allowed to the extent indicated, and all pending applications were disposed of.
Advocates Representing the Parties
For the Petitioners: Mr. Purusuttam Roy Barman, Senior Advocate; Mr. Samarjit Bhattacharjee, Advocate; Mr. Koomar Chakraborty, Advocate; Mr. Dipjyoti Paul, Advocate.
For the Respondents: Mr. Mangal Debbarma, Additional Government Advocate.
Case Title: Dibyendu Chakraborty v. State of Tripura & Ors.
Case Number: W.A. No.47 of 2024
Bench: Chief Justice M.S. Ramachandra Rao, Justice S. Datta Purkayastha
