NATIONAL INSURANCE COMPANY LIMITED vs AHMED ALI BHAMBHRO and others
This matter concerns a service dispute regarding the entitlement of an employee to pensionary benefits for service rendered in a previous organization following his transfer to the National Insurance Corporation Limited. The respondent was transferred from the Pakistan National Produce Company Limited (PNPCL) to the petitioner corporation due to the winding up of his former employer. Upon retirement, the petitioner refused to count the respondent's prior service towards his pension, citing Regulation 6(3) of the National Insurance Corporation Employees' Pension Funds Regulation, 1986, which conditions the acceptance of pensionary liability on the existence of a pension scheme in the former organization and the payment of proportionate liability. The core legal question was whether the respondent was entitled to pensionary benefits for his prior service despite the petitioner's reliance on the restrictive regulation. The Supreme Court dismissed the appeal, holding that the regulation was inapplicable because the respondent was transferred under compelling circumstances rather than on deputation, and there was no evidence that his prior service lacked a pension scheme. The court affirmed the respondent's right to pensionary benefits for the entire period of service.
- Does Regulation 6(3) of the National Insurance Corporation Employees' Pension Funds Regulation 1986 preclude pensionary benefits for an employee transferred due to the winding up of their former company?
- Is an employee transferred under compelling circumstances entitled to pensionary benefits for their prior service if the employer fails to prove the absence of a pension scheme in the former organization?
- Regulation 6(3), National Insurance Corporation Employees' Pension Funds Regulation 1986
ORDER
MIAN SAQIB NISAR, C.J.---The respondent was transferred from Pakistan National Produce Company Limited to the National Insurance Corporation Limited under an administrative order of the competent authority on the basis of Function Test as the Company where he was earlier serving had been wound up. At the time of his retirement, the question arose about the pensionary benefits for the period he spent in his erstwhile Company. On the refusal of his pensionary benefits, the respondent approached the High Court and the learned High Court through the impugned order had granted him the pensionary benefits for the period to which he had been serving in Pakistan National Produce Company Limited (PNPCL).
2. Mr. Zahid Ibrahim learned counsel for the petitioner has drawn our attention to Regulation No, 6(3) of National Insurance Corporation Employees' Pension Funds Regulation, 1986 to argue that as the pensionary benefits were not available under the rules of the Company where he had been earlier working and beside, this rule by itself prohibits the pensionary benefits until and unless expressly and unequivocally granted to the respondent/employee. The said Regulation reads as under:- "6(3). In case an employee of any other organization is permanently absorbed in the service of the Corporation, the Corporation may accept the pensionary liability in respect of such an employee subject to the condition that pension scheme exist in the former organization from where the employee has been transferred and that organization pays the proportionate liability for the period the employee remained in their service. Such pension contribution will be recovered from the concerned organization at the rate approved by the Corporation."
3. We find that in the facts and circumstances where the respondent has not been worked on deputation rather in the compelling circumstances had been transferred and it is not on record as to whether his earlier service in PNPCL did not carry pension scheme, therefore, his pensionary benefits for the period he had served in the earlier company can not be denied. In such situation, the provisions of Regulation 6(3) reproduced above, have no relevance. Therefore, there is no merit in this appeal which is accordingly dismissed leaving the parties to bear their own costs.