A Bench of the Supreme Court comprising Justices Prashant Kumar Mishra and Shree Chandrashekhar has held, in Punjab School Education Board and Another v. Satnam Singh and Others, that service rendered by an employee on a contract, ad hoc, daily-wage or work-charged basis before their formal regularisation must be computed as qualifying service for retiral and pension benefits.
The appeal arose from a ruling of the Punjab and Haryana High Court in favour of employees of the Punjab School Education Board who had rendered several years of pre-regularisation service before being formally regularised, and who sought to have that earlier period counted toward their qualifying service for pension purposes. The Board resisted the claim, arguing that qualifying service should run only from the date of formal regularisation, not from the date the employee actually began working in a contractual or ad hoc capacity.
The Supreme Court dismissed the Board's appeal and upheld the High Court's view, holding that an employee's actual, continuous engagement in service — even where that engagement began on a contract, ad hoc, daily-wage or work-charged basis — cannot be disregarded when computing qualifying service for pensionary purposes once the employee is subsequently regularised. The Court's ruling also extended to employees regularised after 2004, holding that they remain entitled to exercise a choice regarding coverage under the earlier, defined-benefit pension scheme rather than being automatically confined to the later contributory scheme, subject to the applicable service rules.