Railway Servants Are Members Of Civil Service Of Central Government: Supreme Court
The Bench noted that KSEB could not withdraw a benefit after accepting the appellant’s prior service and acting upon its own Board Orders and settlements.
Justice Dipankar Datta, Justice Satish Chandra Sharma, Supreme Court
The Supreme Court has held that employees of the Indian Railways continue to hold civil posts under the Union and remain Central Government servants, notwithstanding the existence of a separate service framework governing railway administration. Setting aside orders of the Kerala High Court, the Court restored the relief granted to a former railway employee who was denied weightage in pay fixation after joining the Kerala State Electricity Board Ltd. (“KSEB”).
On the second issue, the Court held that KSEB could not withdraw a benefit after accepting the appellant’s prior service and acting upon its own Board Orders and settlements. The Bench expressed surprise that benefits already extended to the employee were later sought to be withdrawn through internal audit objections and administrative directions.
A Bench of Justice Dipankar Datta and Justice Satish Chandra Sharma observed, “…A railway servant though appointed in a Government Railway under rules made exclusively for the Railways in exercise of powers under the proviso to Article 309 of the Constitution 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; 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”, it further observed.
Advocate Renjith B. Marar appeared for the appellant and Subhash Chandran K.R, AOR appeared for the respondent.
The appellant had joined the Indian Railways as a Junior Draftsman in 1990 and, after completing more than ten years of regular pensionable service, was relieved in 2001 to join KSEB as a Sub-Engineer. Upon his joining the Board, the Railways remitted the pro-rata pension contribution demanded by KSEB, and his prior railway service was duly recorded in his service book.
Further, KSEB’s own Board Order dated January 09, 1996 also expressly provided that regular pensionable Central Government Service followed by Board Service would be counted for computing qualifying service for weightage. Similar recognition was reflected in long-term settlements entered into with employee unions in 2000 and 2007.
The dispute arose in 2012 when KSEB’s Chief Internal Auditor objected to the appellant’s pay fixation, cancelled the benefit of weightage earlier granted to him, and ordered recovery of the alleged excess payment. The Board took the position that railway service could not be treated as Central Government service for weightage because railway employees were governed by separate service rules and were outside the ambit of the Central Civil Services framework.
A Single Judge of the Kerala High Court ruled in the employee’s favour and held that railway service had to be reckoned as Central Government service.
However, a Division Bench reversed that finding, holding that railway employees were governed by distinct rules and therefore could not claim weightage under KSEB’s scheme. Review petitions were also dismissed, prompting the employee to approach the Supreme Court.
Before the Court, the appellant argued that the Railways functions directly under the Ministry of Railways, Government of India, and that railway employees are holders of civil posts under the Union. It was further contended that KSEB, having accepted the pension contribution and extended benefits under its own Board Orders for years, could not later resile from that position and withdraw accrued service benefits.
Accepting those submissions, the Supreme Court undertook an extensive examination of the constitutional scheme under Articles 309 and 311, the Railways Act, 1989, the Administrative Tribunals Act, 1985, and earlier precedents concerning the status of railway servants.
The Bench observed that the Railway Board was constituted as a specialised statutory body to exercise the powers and functions of the Central Government in relation to railway administration, and that the existence of separate rules governing railway employees did not alter their constitutional status. The Court noted that the Central Civil Services Rules themselves expressly exclude railway servants, while simultaneously recognising them as Government servants governed by a separate regulatory framework.
“On a conspectus of all these provisions of the Constitution, the AT Act and subordinate legislation made under Article 309, as well as the precedents obtaining in the field, our inevitable conclusion is that 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…”, it thus observed.
The Court further clarified that delegation of powers to the Railway Board for administrative convenience could not transform railway servants into employees of a body distinct from the Union Government.
“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 dated 3rd June, 2013, preceded by a note of the Chief Internal Auditor of the Board dated 1st December, 2012. 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”, the Bench further observed.
Allowing the appeals, the Court set aside the Kerala High Court Division Bench judgments dated August 19, 2019, restored the Single Judge’s order dated March 21, 2017, and directed that the appellant be granted all consequential benefits within three months. The Court further observed that if another similarly situated employee, D. Vishnu Nampoothiri, approached the Board seeking identical relief, KSEB ought not subject him to discriminatory treatment.
Cause Title: Bency v. John Kerala State Electricity Board Ltd & Ors. (Neutral Citation: 2026 INSC 562)
Appearances:
Appellant: Renjith B. Marar, Lakshmi N. Kaimal, AOR, Arun Poomulli, Harsh Vardhan Shyam, Jeby Mather, Advocates.
Respondents: Subhash Chandran K.R, AOR, Anirudh K P, Bineesh K, M/s Krs Associates, Advocates.