Drawing a firm line between pensionable and non-pensionable government service, the Punjab and Haryana High Court has ruled that employees absorbed into government departments after serving in excluded establishments cannot seek the benefit of the Old Pension Scheme (OPS) or count their earlier service towards pension in the absence of a specific statutory provision.The ruling assumes significance amid a growing wave of litigation by employees attempting to secure OPS coverage after restructuring, absorption, merger or liquidation of public sector undertakings following the introduction of the New Pension Scheme (NPS) in 2004.Dismissing a petition filed by a former SPINFED employee absorbed in the Punjab State Electricity Board (PSEB), Justice Harpreet Singh Brar held that service rendered in a non-pensionable establishment “cannot be treated as qualifying service” merely because the employee was later absorbed into a pensionable organisation.“The service rendered in an excluded or non-pensionable establishment cannot be treated as qualifying service in the absence of any specific statutory provision or scheme conferring such benefit,” Justice Brar ruled.The Bench added: “There is no provision, which permits the clubbing of service in a non-pensionable establishment with that in a pensionable establishment for the purpose of grant of pensionary benefits.”The matter was placed before Justice Brar’s Bench after the retired employee sought quashing of an order rejecting his claim for counting past service rendered in the Punjab Cooperative Cotton Marketing and Spinning Mills Federation Limited (SPINFED) towards pensionary benefits. He had also sought inclusion under the OPS in terms of the Punjab Civil Services (Amendment) Rules, 2025.The petitioner contended that he was initially appointed as Junior Engineer (Electrical) in SPINFED on April 19, 1991. Following the State government’s decision to liquidate SPINFED in 2003, employees were offered voluntary retirement under the VRS-2002 scheme. The petitioner was subsequently absorbed as Junior Engineer in the Punjab State Electricity Board through an appointment letter issued on November 17, 2004. He later retired as Assistant Engineer on July 31, 2025.Appearing before the court, the petitioner argued that his earlier SPINFED service ought to be counted for pension and he should be shifted from NPS to OPS under the 2025 amended rules. Rejecting the plea, Justice Brar asserted the issue already stood settled by the Supreme Court, where it was categorically held that service rendered on a non-pensionable post cannot be counted for pensionary benefits.Referring extensively to the Punjab Civil Services Rules, Volume II, Justice Brar observed that the rules themselves drew a “clear distinction” between pensionable and non-pensionable establishments. “As observed above, Rule 3.17 expressly excludes ‘periods of temporary or officiating service in a non-pensionable establishment’ from being reckoned as qualifying service,” the Bench noted.The court further held that Rule 5.3 also reinforced the distinction by recognising only the “qualifying portion” of service, meaning service rendered in a pensionable establishment. “Thus, a harmonious construction of the aforesaid provisions leads this Court to the inescapable conclusion that the petitioner’s past service in SPINFED, being a non-pensionable establishment, cannot be counted for the purposes of pensionary benefits,” Justice Brar ruled.On the claim for OPS coverage, the High Court held that the petitioner did not fall within the categories protected under the Punjab Civil Services (Amendment) Rules, 2025. Justice Brar observed the benefit under the amended rules was confined to employees appointed against vacancies advertised before January 1, 2004, or compassionate appointees whose requests were received before that date.“The petitioner’s appointment was result of ‘absorption’ as a surplus employee following the liquidation of SPINFED and was treated as fresh appointment for all intents and purposes,” the Bench observed.The court also noted that the process for the petitioner’s appointment in PSEB began only after January 1, 2004, and his appointment letter expressly stipulated that his service would be governed by the NPS — a condition accepted by him at the time of joining.“Crucially, the petitioner’s appointment letter dated 17.11.2004 clearly stipulates that his services would be governed by the NPS; a condition, which he accepted unconditionally at the time of joining,” Justice Brar held. Finding no merit in the plea, the High Court dismissed the petition in its entirety.