Railway staff are Central government employees: Supreme Court restores benefits to KSEB employee

The Supreme Court recently held that service rendered in the Indian Railways qualifies as Central Government service and cannot be disregarded for granting weightage in pay fixation..The Court set aside the 2019 Kerala High Court Division Bench judgment that had denied such benefits to a Kerala State Electricity Board (KSEB) employee.A Bench comprising of Justice Dipankar Datta and Justice Satish Chandra Sharma restored the earlier 2017 Single Judge ruling in favour of the employee, Bency John, who had joined KSEB after over a decade of service in the Railways. The Court held that once such service had been recognised and benefits granted, they could not later be withdrawn on a reinterpretation of rules.On the issue of whether railway employees are Central Government servants, the Court noted the constitutional and administrative position of the Railways within the Union government. "The Railway Board functions as the Government of India itself for railway administration; consequently, service under the Railway Board in the broader sense is service under the Central Government, and a railway servant does not cease to be a member of the civil service of the Central Government merely because his conditions of service are regulated by rules specific to the Railways," the Bench observed..The dispute arose after KSEB initially counted the John's prior railway service for granting weightage whereby his prior railway service was counted to grant a higher starting salary and associated service benefits. The KSEB even recorded the same in his service book and accepted pension contributions from the Railways. However, the KSEB later reversed this position, citing that railway service could not be treated as Central Government service for such purposes, and ordered recovery of alleged excess payments..The Supreme Court, in its May 26 judgement, expressed strong disapproval of this reversal. It noted that the withdrawal of benefits was based on internal communications rather than a consistent application of established policy. The Court highlighted this inconsistency, remarking,"We are surprised that after the appellant was extended benefits in terms of the “Board Orders”, the same was sought to be withdrawn on the basis of a purported order of the Chairman of the Board.".The Court also rejected the reasoning adopted by the High Court’s Division Bench which had relied on the inapplicability of Central Civil Services (CCS) Rules to railway employees to deny the benefit of weightage."The Division Bench committed an error in upholding such order(s) based on a misconception that since the CCS (Classification, Control & Appeal) Rules, 1965 and the CCS (Conduct) Rules, 1964 do not apply to a railway servant, the service put in by the appellant cannot be reckoned for weightage in the fixation of pay and allowances," held the Court..On the broader legal position, the Court emphasised that the existence of separate service rules for railway employees does not alter their fundamental status as Union civil servants."The delegation of powers to the Railway Board does not have the effect of making 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," said the Court..Hence, it allowed the appeals, restored the single-judge’s decision and directed that all benefits earlier granted to John be continued, with no recovery permitted. It also directed that consequential benefits be released within three months..Advocates Renjith B Marar, Lakhmi N Kaimal, Arun Poomulli, Harsh Vardhan Shyam and Jeby Mather represented Bency John (petitioner).Advocates Subhash Chandran, Anirudh KP and Bineesh K appeared for the respondents..[Read Judgement]