Supreme Court Clarifies Railway Staff Are Central Government Employees for Service Disputes

The Supreme Court has held that railway employees are as much entitled as other Central government servants to approach the Central Administrative Tribunal (CAT) in service-related disputes, clarifying that railway servants continue to hold civil posts under the Union despite being governed by separate service rules.

A Bench of Justices Dipankar Datta and Satish Chandra Sharma said the tribunal's jurisdiction is not barred in respect of railway servants and that "service matters" concerning them include all matters relating to their conditions of service in connection with the affairs of the Union or under the control of the Government of India.

"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 Bench said.

Court further noted that the Railway Board functions as the Government of India itself for railway administration. Therefore, service under the Railways is service under the Central Government, and a railway employee does not cease to be a member of the Central civil service merely because his service conditions are governed by Railway-specific rules.

Can Railway service be treated differently from Central Government service?

Answering the question in the negative, Court said the fact that railway employees are governed by separate service rules does not alter their status as Central government employees holding civil posts under the Union.

Referring to Articles 309 and 311 of the Constitution, the Bench explained that a civil post is a post on the civil, as distinguished from the defence, side of the administration. Such a post involves a master-servant relationship where the State has the power to appoint, suspend, dismiss, control the manner of work and pay remuneration.

"There must be a relationship of master and servant indicated by the State's right to select, appoint, suspend, dismiss, control the manner of work, and pay remuneration; a post is an office to which duties in connection with the affairs of the State are attached and may exist apart from the holder; a post under the State means a post under its administrative control," the Bench said.

Court was hearing an appeal filed by Bency John against multiple orders of the Kerala High Court.

John had joined the Indian Railways as a Junior Draftsman on August 9, 1990. After completing more than 10 years of regular pensionable service, he was relieved in February 2001 to join the Kerala State Electricity Board Ltd as a Sub-Engineer.

His Railway service was initially counted for pay fixation and other benefits. However, in December 2012, the Chief Internal Auditor of the Board objected to the pay fixation, cancelled the weightage granted and ordered recovery of the alleged excess payment on the ground that Railway service could not be treated as Central Government service for granting such benefits.

After his representation was rejected, John approached the Kerala High Court. While a single judge ruled in his favour, holding that Railway service must be treated as Central Government service, a division Bench reversed the decision. It held that since railway employees are governed by separate Railway rules and not the Central Civil Services (Conduct) Rules, 1964 and Central Civil Services (Classification, Control and Appeal) Rules, 1965, their service could not be counted for weightage.

Why did the Supreme Court reject the high court's view?

The Supreme Court said the high court division bench had proceeded on a misconception that non-applicability of the CCS Rules to railway servants changed their status as Central government employees.

Highlighting the scale and significance of the Railways, the Bench observed that it is the country's largest civilian employer and plays a critical strategic role by transporting passengers, troops, foodgrains, coal, petroleum and other essential commodities, besides acting as a lifeline during disasters.

Court also noted that the Railway Board is a specialised statutory body comprising domain experts in areas such as traffic, engineering, finance, mechanical, electrical and staff administration. The powers exercised by the Railway Board under the Railways Act are delegated by the Central Government purely for administrative convenience and efficiency.

"The conferment and exercise of powers and functions of the Central Government by the Railway Board under the Railways Act, 1989 and the rules framed thereunder, is a continuation of the arrangement for administrative convenience and efficiency in the working of the vast railway system in the country... The Railway Board is, thus, a statutory body exercising governmental powers because the alternative would be unworkable," the Bench said.

After examining the statutory framework, Court concluded that delegation of powers to the Railway Board does not make railway employees employees of the Railway Board distinct from the Central Government, nor does it alter their status as members of the Union's civil service.

The Bench also expressed surprise that the benefits already extended to the appellant under the Board's own orders were later withdrawn on the basis of an internal audit note and a subsequent order of the Railway Board Chairman.

"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," Court observed.

Holding that the Kerala High Court division bench had erred in law, the Supreme Court set aside its judgment, restored the single judge's decision and directed that the appellant be granted all consequential benefits within three months.

Case Title: Bency John Vs Kerala State Electricity Board Ltd & Ors

Bench: Justices Dipankar Datta and Satish Chandra Sharma 

Date of Judgment: May 26, 2026