Period Spent On Furlough Not Counted As 'Eligible Service' For Claiming Retiral Benefits Under State's 2006 Scheme: MP High Court

The Madhya Pradesh High Court on Monday (July 14) dismissed an appeal by a former Revenue Inspector, challenging a single judge's order which had rejected the inspector's claim for retirement benefits sought under the State Government's Furlough Scheme, 2006.

In doing so the court while upholding the single judge's order said that 2006 scheme stipulates that the period spent on Furlough (leave) shall not be counted towards eligible service for computation of pension. 

The inspector was appointed as a revenue inspector from September 1990 to 2011. The State Government in 2006 introduced a Furlough scheme for its employees, permitting them to take a leave of absence for up to five years, wherein they were entitled to 50% of their salary and could engage in other employment or business.

The inspector had opted for this scheme and went on leave of absence from October 1, 2006. On June 25, 2011, before the expiry of his five-year leave period, he formally communicated his decision to voluntarily retire, effectively ending his service on July 1, 2011. 

The appellant, however, claimed the retiral dues based on the continuous length of service including nearly 5 years spent on Furlough.

However, a division bench of Acting Chief Justice Sanjeev Sachdeva and Justice Pavan Kumar Dwivedi in its order noted that neither the Civil Service Pension Rules of 1976, nor the Civil Service Leave Rules of 1977, provided for a similar Furlough scheme. Thus, the division bench held that the Furlough Scheme must be interpreted as an independent policy.  It said:

 "The Furlough scheme itself stipulates that the period spent on Furlough shall not be counted towards eligible service for computation of pension. Furlough has to be considered as a whole. The government servant who has proceeded on leave for a period of 5 years under the Furlough scheme is entitled for 50% of pay and also entitled to take alternative employment during the said period. The Furlough scheme specifically stipulates that the period spent on Furlough shall not be counted towards computation of pension and consequently, learned Single Judge has held that in terms of Clause 2.13 of Furlough scheme the period spent by the appellant on Furlough shall not be taken into account for computing his retiral dues. We find no infirmity in the view taken by the learned Single Judge particularly, in view of explicit clause of Furlough".

Emphasizing that the scheme has to be read as a whole the bench said that an employee cannot contend that the "beneficial part of the scheme is admissible" and the part which provides that Furlough period must not be counted towards retiral dues separately, is not sustainable for being contrary to the rules. 

Representing the inspector, Advocate Archana Kher argued that since his Foulough duration was less than the five-year maximum allowed under the Civil Service Leave Rules, 1977, it ought to be counted as part of his continuous government service. It was also submitted that under Rule 21 of the Civil Services Pension Rules, 1976 and the applicable leave rules, such a leave period did not serve the continuity of service. 

The inspector claimed that with 16 years of active duty and nearly 5 years of Furlough, his total service exceeded 20 years, making him eligible for retirement benefits. 

Opposing the appeal, Additional Advocate General Anand Soni for the State argued that the Scheme was a standalone policy, separated from the Pension and Leave Rules, and needed to be interpreted in its entirety. 

The division bench concurred with the reasoning of the Single Judge the bench dismissed the appeal.

For Appeal: Advocate Archana Kher

For Respondents: Additional Advocate General Anand Soni

Case Title: Dhawal v State of Madhya Pradesh (WA-1272-2025)

Click here to read the Order