Casual Labourers With Temporary Status Entitled to Pension Even Without Formal Regularisation, Supreme Court Rules

A Division Bench of Justices Sanjay Karol and Augustine George Masih holds that decades of continuous service cannot be negated by administrative inaction on regularisation.

The Supreme Court on 1 June 2026 held that a temporary status casual labourer in the Department of Posts is entitled to pensionary benefits on superannuation even in the absence of a formal order of regularisation. The Court set aside judgments of the Patna High Court that had denied pension to three Night Guards — or their legal representatives — who had rendered continuous service spanning several decades. The judgment, authored by Justice Augustine George Masih on behalf of the bench also comprising Justice Sanjay Karol, turns on the interpretation of the Casual Labourers (Grant of Temporary Status and Regularisation) Scheme, 1991 and a departmental circular dated 30 November 1992. The Court found that the High Court had read those instruments in a manner that defeated their beneficial purpose, and that the State cannot extract permanent-natured service while withholding corresponding social security.

How the Dispute Reached the Supreme Court

The three employees at the centre of the case — Late Suraj Sah, Bahuru Sahu, and Pitamber Jha — were appointed as paid casual labourers (Night Guards) in the Department of Posts in Bihar in the early 1970s and 1980s. Suraj Sah joined on 12 February 1972, Bahuru Sahu on 10 October 1971, and Pitamber Jha on 20 June 1981. All three rendered long, continuous, and uninterrupted service until superannuation.

Following directions of the Supreme Court in Jagrit Mazdoor Union (Regd.) and Others v. Mahanagar Telephone Nigam Ltd. and Another (1990 Supp SCC 113), the Department of Posts formulated the 1991 Scheme. Pursuant to it, all three employees were conferred “temporary status” with effect from 29 November 1989 by a departmental memo dated 20 November 1992. A further circular dated 30 November 1992 directed that casual labourers who had completed three years of continuous service under temporary status would be treated at par with temporary Group ‘D’ employees, with entitlement to a range of service benefits. A subsequent memo dated 3 May 2000 directed that Suraj Sah and Bahuru Sahu be treated at par with temporary Group ‘D’ employees.

Despite these steps, none of the three was ever formally regularised as a Group ‘D’ employee. Suraj Sah retired on 31 December 2008 and passed away on 10 April 2015, leaving behind his widow Bhikhani Devi and minor children. Bahuru Sahu retired on 30 April 2008 and Pitamber Jha on 31 October 2015.

When the employees or their representatives sought pensionary benefits, the Department rejected the claims on the ground that formal regularisation was a mandatory prerequisite. Bhikhani Devi filed O.A. No. 050/00372 of 2017 before the Central Administrative Tribunal, Patna, seeking family pension under the Central Civil Services (Pension) Rules, 1972. The other two appellants filed separate Original Applications. The Tribunal allowed all three applications in 2018, directing the Department to consider the claims. The Union of India challenged those orders before the Patna High Court, which allowed the writ petitions on 14 October 2019, holding that the claims were barred by delay and laches and that, absent formal regularisation, no pensionary entitlement arose. The High Court also held that the Tribunal's earlier decisions relied upon did not constitute binding precedent. The appellants then approached the Supreme Court by way of Special Leave Petitions.

The Core Question

The Court framed the issue precisely: whether a temporary status casual labourer, in the absence of a formal order of regularisation, would be entitled to pensionary benefits on superannuation.

The appellants argued that pension constitutes a continuing cause of action and cannot be defeated by delay, relying on M.L. Patil (Dead) through LRs v. State of Goa and Another (2023) 1 SCC 660. On merits, they contended that the Central Civil Services (Temporary Service) Rules, 1965 govern temporary government servants who retire on superannuation after rendering not less than ten years of service, entitling them to superannuation pension, gratuity, and family pension. They also relied on an Office Memorandum dated 14 April 1987 under the CCS (Pension) Rules, 1972, which they said dispensed with the requirement of holding a substantive pensionable post for temporary servants who had rendered the requisite service. They further argued that the circular dated 30 November 1992 used the phrase “such as” when listing benefits, indicating the list was illustrative and not exhaustive.

The Union of India countered that the 1991 Scheme exclusively governed the appellants' service conditions, that Clause 6 of the Scheme made counting of temporary status service towards retirement benefits conditional on formal regularisation, and that Clause 8 extended parity with temporary Group ‘D’ employees only for limited purposes such as GPF contributions and certain advances — not for pension. The Additional Solicitor General also argued that the CCS (Temporary Service) Rules, 1965 did not apply to persons employed in extra-temporary establishments or paid out of contingencies, and that extending pension without regularisation would have significant financial implications.

Reading the 1991 Scheme and the 1992 Circular

The Court undertook a clause-by-clause analysis of the 1991 Scheme. It found that Clause 2, which directed payment at the minimum of the pay scale applicable to regular Group ‘D’ employees along with Dearness Allowance, House Rent Allowance, and City Compensatory Allowance, signalled a deliberate move away from a purely casual or daily-rated framework. Clause 4 conferred leave entitlement, indicating that temporary status employees were no longer to be treated as mere day-to-day workers.

Clause 6 — which provides that 50% of service rendered under temporary status would be counted for retirement benefits after regularisation as a regular Group ‘D’ official — was the central battleground. The Court held that this clause does not create the pensionary entitlement itself. Rather, it confers an additional benefit: where formal regularisation does occur, half the temporary status service is also counted. The pensionary entitlement of temporary status employees who have completed the prescribed period of service flows independently from the Scheme and the 1992 circular. The expression “after regularisation” in Clause 6 cannot be read so narrowly as to extinguish the underlying entitlement where regularisation never happened due to administrative inaction.

Clauses 12, 13, and 17 reinforced this reading. Clause 12 permitted regularisation in units other than recruiting units, enlarging avenues for absorption. Clause 13 granted age relaxation equivalent to casual service for purposes of regular appointment. Clause 17 prohibited open-market recruitment for Group ‘D’ posts so long as eligible casual labourers were available. The Court found that these provisions collectively demonstrated that the Scheme was conceived as a pathway towards regularisation, not as a mechanism for perpetual retention in temporary status.

On the 1992 circular, the Court focused on the phrase “benefits admissible to temporary Group ‘D’ employees such as” followed by a list that included counting of service for pension and terminal benefits. The Court held that the words “such as” rendered the list illustrative and not exhaustive. The circular, being a beneficial instrument, had to be read in the letter and spirit of its administrative intent: to extend all benefits available to temporary Group ‘D’ employees to temporary status casual labourers, including pensionary benefits.

Constitutional and Precedential Foundations

The Court situated its reasoning within a broader constitutional framework. It held that any classification resulting in denial of benefits to employees who are similarly situated in terms of duties and responsibilities would fall foul of Article 14. Articles 38, 39, and 43 of the Constitution cast a positive obligation on the State to ensure social and economic justice and fair conditions of work. Pension, the Court said, is not a gratuitous benefit but a facet of social welfare and economic justice.

The Court also relied on State of Jharkhand and Others v. Jitendra Kumar Srivastava and Another (2013) 12 SCC 210, which held that pension is a hard-earned benefit in the nature of “property” within the meaning of Article 300A of the Constitution. Once pension is recognised as a constitutional right in the nature of property, it cannot be taken away except by authority of law, and administrative inaction cannot defeat or deny it.

The Court drew on a consistent line of precedent. In Jagrit Mazdoor Union, the Court had directed that upon completion of three years of continuous service under temporary status, casual labourers are to be treated at par with Group ‘D’ employees and entitled to all admissible benefits. In Vinod Kumar and Others v. Union of India and Others (2024) 9 SCC 327, the Court recognised that where employees perform duties indistinguishable from those of regular employees over long periods, the distinction between temporary and permanent employment becomes substantively illusory. In Jaggo v. Union of India and Others (2024 SCC OnLine SC 3826), the Court reiterated that employees who have rendered continuous and essential service cannot be denied regular benefits merely on account of nomenclature. In Yashwant Hari Katakkar v. Union of India and Others (1996) 7 SCC 113, the Court held that where an employee has rendered long years of service and there is no justifiable reason for not conferring permanent status, denying pension merely for want of formal regularisation would be a travesty of justice.

Applying the Framework to the Three Appellants

The Court mapped the service trajectory of Late Suraj Sah across three phases: casual labourer from 1972 to 29 November 1989; temporary status casual labourer from 29 November 1989 to 30 November 1992; and temporary status casual labourer entitled to benefits admissible to temporary Group ‘D’ employees from 30 November 1992 until superannuation on 31 December 2008. The period from 30 November 1992 to 31 December 2008 exceeded the minimum qualifying service of ten years under Rule 10(1-B) of the CCS (Temporary Service) Rules, 1965 read with the CCS (Pension) Rules, 1972. The Court held that Suraj Sah was therefore entitled to superannuation pension and other retirement benefits.

The same analysis applied to Bahuru Sahu, who superannuated on 30 April 2008, and Pitamber Jha, who superannuated on 31 October 2015. Both had completed more than the minimum qualifying period of ten years after acquiring entitlement to temporary Group ‘D’ benefits.

On delay and laches, the Court held that pensionary benefits constitute a continuing cause of action and cannot be defeated solely on the ground of delay. However, it balanced this against settled principles on limitation: arrears, wherever applicable, would be confined to the period of three years and two months preceding the date of filing of the respective Original Applications before the Tribunal.

Order

The Court answered the framed question in the following terms: a temporary status casual labourer would be entitled to pensionary benefits on superannuation even in the absence of regularisation.

The impugned judgments of the Patna High Court were set aside as proceeding on an erroneous interpretation of the Scheme and the circular dated 30 November 1992.

Bhikhani Devi, as widow and legal representative of Late Suraj Sah, is entitled to pensionary benefits accrued to him together with admissible family pension, with arrears confined to three years and two months before the filing of her Original Application. Bahuru Sahu is entitled to pensionary and consequential retiral benefits, subject to the same arrears limitation. Pitamber Jha is entitled to pensionary and consequential retiral benefits from the date of his retirement on 31 October 2015.

The Respondents were directed to compute and release all payable benefits within three months from the date of the judgment. In case of default, interest at 6% per annum from the date of accrual until disbursement shall be payable. There was no order as to costs.