A decade spent in the Indian Railways cannot be wiped away when an employee moves to another public-sector service. In a significant ruling, the Supreme Court has held that railway employees are Central Government servants and are entitled to have their previous railway service taken into account for pay fixation and related benefits when they join a new qualifying service.
The judgment came from a Bench of Justices Dipankar Datta and Satish Chandra Sharma, which overturned a Kerala High Court decision that had denied such recognition to railway service.
At the heart of the dispute was an employee who joined the Indian Railways in 1990 and later moved to the Kerala State Electricity Board (KSEB) as a Sub-Engineer in 2001 after serving the Railways for more than ten years. When he joined KSEB, the Railways transferred over ₹2.16 lakh towards his pro-rata pension contribution, and his earlier service was initially considered for granting weightage in pay fixation.
That benefit, however, was withdrawn in 2012. KSEB’s Chief Internal Auditor ordered cancellation of the weightage and directed recovery of the benefits already granted, taking the view that railway service could not be treated as Central Government service. Although a Single Judge of the High Court sided with the employee, a Division Bench later reversed that decision, prompting an appeal before the Supreme Court.
The Supreme Court found the reasoning adopted by the Division Bench unsustainable.
The Court emphasized that railway employees remain government servants even though they are governed by the Railway Services (Conduct) Rules rather than the Central Civil Services (Conduct) Rules. According to the Bench, a separate regulatory framework does not alter the fundamental character of railway employment as service under the Union Government.
Rejecting the distinction drawn by the High Court, the Court observed that several branches of government administration operate under specialised service rules for practical and administrative reasons. Such arrangements, it said, do not create a separate class of employees outside the fold of Central Government service.
The Bench noted that both the Railway Services Rules and the Central Civil Services Rules derive their authority from Article 309 of the Constitution and are framed in relation to the affairs of the Union. Treating railway employees differently solely because they are governed by a distinct set of rules would therefore be arbitrary.
The judgment further clarified that the powers exercised by the Railway Board do not transform railway personnel into employees of the Board as a separate entity. They continue to hold civil posts connected with the affairs of the Union and retain their status as members of the civil service under the Central Government.
With these findings, the Supreme Court restored the employee’s entitlement to service weightage and reaffirmed that time spent in the Railways must be recognised when determining pay and related benefits in a subsequent qualifying public-sector appointment.
