Railway Servants Are Central Government Employees, Cannot Be Denied Service Benefits: Supreme Court

A Division Bench of the Supreme Court holds that separate railway service rules do not strip railway servants of their status as civil servants of the Union, restoring pay weightage to a retired Sub-Engineer.

The Supreme Court has held that a railway servant does not cease to be a member of the civil service of the Union merely because his conditions of service are regulated by rules specific to the Railways. Deciding four appeals filed by Bency John, a retired Sub-Engineer of the Kerala State Electricity Board, a Division Bench of Justice Dipankar Datta and Justice Satish Chandra Sharma set aside two Division Bench orders of the Kerala High Court that had denied him pay weightage for his prior service in the Indian Railways. The Court found that the High Court's reasoning, that the Central Civil Services rules do not apply to railway servants and therefore railway service cannot count as Central Government service was fundamentally misconceived. The judgment, dated 26 May 2026, restores the Single Judge's order and directs the Board to extend all accrued benefits within three months.

How the Dispute Reached the Supreme Court

Bency John joined the Indian Railways as a Junior Draftsman on 9 August 1990. After more than ten years of regular pensionable service with the Central Government, he was relieved on 24 February 2001 to join the Kerala State Electricity Board as a Sub-Engineer on 26 February 2001.

On his joining, the Railways remitted Rs. 2,16,429 towards pro-rata pension liability against a demand of Rs. 1,50,597 made by the Board. This was recorded in his Service Book, acknowledging that his Railways service was liable to be reckoned for pension. The Board's own order, B.O. 2119/96 dated 9 January 1996, had explicitly provided that “regular pensionable Central Government Service followed by Board Service” would be counted for computing qualifying service for weightage. Long Term Settlements between the Board and its employee unions in 2000 and 2007 reiterated the same position.

Relying on these provisions, the appellant's prior Railways service was reckoned and he was granted weightage for pay fixation and other benefits. Then, on 1 December 2012, the Chief Internal Auditor of the Board issued a letter objecting to the pay fixation, cancelling the weightage, and ordering recovery of the alleged excess amount paid. The sole reason cited was that railway service cannot be reckoned as Central Government service for weightage in pay revision.

His representations were rejected. He filed W.P.(C) No. 18225/2013 before the Kerala High Court. A Single Judge, following the precedent set in the case of a similarly situated employee, D. Vishnu Nampoothiri, allowed the writ petition on 21 March 2017, holding that Railways service is required to be reckoned as Central Government service.

The Board challenged both Single Judge judgments in writ appeals. On 19 August 2019, a Division Bench of the High Court allowed both appeals in short orders, holding that railway service cannot be reckoned for weightage because the Central Civil Services (Conduct) Rules, 1964 and the Central Civil Services (Classification, Control and Appeal) Rules, 1965 do not apply to railway servants, who have their own separate rules. The Division Bench dismissed Bency John's review petitions on 6 March 2020. He then approached the Supreme Court with four special leave petitions, out of which these civil appeals arose.

The Two Questions Framed for Decision

The Supreme Court identified two questions for decision. First, whether a railway servant ceases to be a member of the civil service of the Union merely because separate rules govern his service conditions including recruitment, conduct, control, and pension. Second, whether the Board, having accepted the pro-rata pension contribution and having acted upon its own Board Orders and settlements for years, is estopped from unilaterally withdrawing the benefit of weightage from the appellant.

Railway Servants Hold Civil Posts Under the Union

The Court began its analysis by tracing the constitutional and statutory framework governing railway servants. It noted that Article 309 of the Constitution is the source of all relevant rules. The President has made separate rules for railway servants — the Railway Services (Conduct) Rules, 1966, the Railway Services (Discipline and Appeal) Rules, 1968, and the Railway Services (Pension) Rules, 1993 in exercise of the same power under the proviso to Article 309 under which the Central Civil Services rules were made. The Court observed that if railway services were not services in connection with the affairs of the Union, there would have been no occasion for the President to make these rules at all.

The Court examined the Railways Act, 1989. Section 2(20) defines a “government railway” as a railway owned by the Central Government. Section 2(34) defines a “railway servant” as any person employed by the Central Government or by a railway administration in connection with the service of a railway. The Railway Board itself was created under the Indian Railway Board Act, 1905 and constituted by a Resolution of the Government of India. Under Section 2-A of the Railways Act, 1989, the Central Government may invest the Railway Board with all or any of its powers or functions. The Court described the Railway Board as a statutory body exercising governmental powers, its creation being a matter of administrative convenience given the scale of the railway system.

The Court then turned to Article 311 of the Constitution, which protects members of the civil service of the Union and holders of civil posts under the Union from dismissal or removal by an authority subordinate to the appointing authority. It is not disputed that railway servants are entitled to the procedural safeguards Article 311 contemplates. The Court cited the seven-Judge Bench decision in Moti Ram Deka v. North East Frontier Railway, AIR 1964 SC 600, where provisions of the Indian Railway Establishment Code permitting termination of permanent railway employees by notice without inquiry were struck down as unconstitutional. Once the Court in that case held that Article 311 was available to railway servants, it necessarily followed that railway employees were holders of civil posts under the Union, since Article 311 applies only to members of the civil services or persons holding civil posts under the Union or a State.

The Court also referred to State of Assam v. Kanak Chandra Dutta, AIR 1967 SC 884, which explained that a civil post is a post on the civil as distinguished from the defence side of the administration, an employment in a civil capacity under the Union or a State, and that the relationship of master and servant between the State and the holder of the post is indicated by the State's right to select and appoint, to suspend and dismiss, to control the manner of work, and to pay remuneration.

The Court then addressed the CCS (Conduct) Rules directly. Rule 1(3) of those rules states that they apply to every person appointed to a civil service or post in connection with the affairs of the Union, but the proviso carves out railway servants from their application. The Court read this proviso as confirmation, not exclusion: by the very terms of the proviso, a railway servant is also a Government servant, it is simply that the CCS (Conduct) Rules, rather than the Railway Services (Conduct) Rules, do not apply to him.

The Court also noted that the jurisdiction of the Central Administrative Tribunal under Section 14 of the Administrative Tribunals Act, 1985 is not barred in respect of a railway servant. A railway servant has the same locus standi to move the Tribunal as a Government servant defined under the CCS Rules. The AT Act excludes members of the armed forces, officers of the Supreme Court and High Courts, and secretarial staff of Parliament and State Legislatures but not railway servants.

On the first question, the Court concluded: the delegation of powers to the Railway Board does not make a railway servant an employee of the Railway Board as distinct from the Central Government, nor does it alter his status as a member of the civil service of the Union. A railway servant, though appointed under rules made exclusively for the Railways in exercise of powers under the proviso to Article 309, remains a person holding a civil post in connection with the affairs of the Union under the administrative control of the Central Government. The Railway Board functions as the Government of India itself for railway administration; service under the Railway Board is service under the Central Government. The first question was answered in the negative.

Board Estopped From Withdrawing Benefits It Had Already Extended

On the second question, the Court expressed surprise that benefits extended to the appellant under the Board's own orders were sought to be withdrawn on the basis of a note of the Chief Internal Auditor dated 1 December 2012 and a purported order of the Chairman of the Board dated 3 June 2013.

The Board had accepted the pro-rata pension contribution remitted by the Railways. Its own B.O. 2119/96 dated 9 January 1996 unambiguously allowed counting of regular pensionable Central Government service for weightage. The Long Term Settlements of 2000 and 2007, binding under the Industrial Disputes Act, 1947, reiterated that former Government service followed by Board service without break would be counted for computing qualifying service for weightage. The Board had acted on these provisions for years before reversing course.

The Division Bench of the High Court had upheld the withdrawal based on the misconception that since the CCS rules do not apply to railway servants, the service put in by the appellant cannot be reckoned for weightage. The Supreme Court held that this was an error. The second question was answered in the affirmative.

Order

The Supreme Court set aside the Division Bench orders dated 19 August 2019 allowing W.A. No. 1155 of 2017 and W.A. No. 1895 of 2017. The appeals against the orders dated 1 December 2012 and 3 June 2013 were not entertained. The judgment and order of the Single Judge dated 21 March 2017 in W.P.(C) No. 18225/2013 was restored. The Board was directed not to withdraw any benefit accrued in the appellant's favour.

The Court directed that the appellant shall be entitled to all benefits flowing from the Single Judge's judgment within three months from the date of production of an authenticated copy of the judgment.

The Court also noted that if D. Vishnu Nampoothiri has not preferred any appeal against the High Court order dismissing his writ petition, he may approach the Board for grant of similar relief based on the Single Judge's order on his writ petition. The Court expressed the hope and trust that the Board will not subject D. Vishnu Nampoothiri to any discrimination in such event.

The appeals were allowed with no order as to costs.