The Supreme Court has reaffirmed a key rule for government service: resigning and retiring are not the same, and the difference can have serious financial consequences.
In a recent case involving a former Delhi Transport Corporation (DTC) employee, the court upheld the government’s decision to deny pension benefits after the employee voluntarily resigned.
Why Pension Was Denied
The ruling is based on the Central Civil Services (Pension) Rules, 1972, which clearly state:
Resignation from service leads to forfeiture of past service.
Pension entitlement is lost unless resignation is formally withdrawn in the public interest.
Since the DTC employee did not have a withdrawal approved, the court found no legal basis to grant pension to the employee or their legal heirs.
What Benefits Remain After Resignation
The Supreme Court clarified that resignation does not erase all benefits:
Gratuity: Paid under the Payment of Gratuity Act, 1972, to employees with at least five years of service.
The deceased employee’s family was entitled to this.
Leave encashment: Legal heirs are entitled to payment for accumulated leave.
These benefits are statutory and survive even when pension rights are lost.
Key Takeaways for Government Employees
Long service alone does not guarantee pension.
Pension is granted only through superannuation or voluntary retirement according to the rules.
A voluntary resignation is considered a complete severance of service for pension purposes.
Gratuity and leave encashment remain payable even if pension is not.
In public service, how you exit the job matters as much as how long you serve.