Govind Swaroop Chaturvedi vs Cm-Md. Punjab And Sind Bank And ...
2006 Latest Caselaw 646 Del

JUDGMENT

S. Ravindra Bhat, J.

Page 1603

1. The Petitioner in these writ proceedings claims directions for release of pension as well as certain amounts due to him on account of Leave Fare Concession (LFC).

2. The Petitioner joined the services of the Respondent (hereafter called as `the Bank'). The bank as well as other nationalised banks introduced a pension scheme embodied, in Pension Regulations, under the Banking Companies (Acquisition & transfer of Undertakings) Act, 1980 in the year 1995. The Pension Regulations (hereafter referred to as `the Regulations') entitled, inter alia by Rule 3(ii)(a) and (b) all employees and officials working in the bank and those who had retired on or after 1.11.1993 to pension subject to certain conditions. Regulation 3(ii) provided that such of the employees working in the organisation who exercised an option within 120 days from the notified date to become members of the fund and refund (within 60 days of the expiry of the said period of 120 days) the entire contribution to the provident fund, interest accrued with it, together with a further simple interest at the rate of 6% per annum from the date of settlement of the provident fund account till the date of refund were entitled to pension. The Petitioner admittedly did not opt for pension under the regulations; hePage 1604 continued to be a CPF (Contributory Provident Fund) optee. The bank as well as several other public sector banks introduced a special voluntary retirement scheme in the year 2000 (hereafter ). As per this scheme, the bank offered several benefits. In the case of the Respondent Bank the benefits were outlined in Clause 7 of the VRS. Clause 10 spelt out the general conditions for the release of VRS and Clause 7 (ii) stated that pension including commuted value of pension as per the pension regulations applicable to the bank were admissible.

3. The Petitioner had opted for the VRS. Before acceptance of his application the bank had issued a circular on 23.12.2000 intimating that as per the VRS an eligible employee, opting for voluntary retirement would also be entitled to the benefits of CPF, pension, gratuity and encashment of accumulated privilege leave, as per rules. The said circular, inter alia, read as follows:

As per the scheme, an employee who is eligible and applies for voluntary retirement is entitled for the benefit of CPF, pension, Gratuity and encashment of accumulated privilege leave, as per rules.

Bank (Employees') Pension Regulations, 1995 do not have provisions enabling payment of pension to an employee who retires before attaining the age of superannuation except under circumstances as in Regulations 29, 30, 32 and 33. We had, therefore, taken up with the Government the need to incorporate necessary provisions in the Pensions in the Pension Regulations by way of amendments to Regulation 28 so that employees who retire as above under special/adhoc schemes formulated by the banks, after serving for a prescribed minimum period would be eligible for pro-rata pension.

4. At this stage it would be relevant to notice Regulations 28 and 29 of the Pension Regulations which deal with pension. Regulation 28 prescribes and provides for superannuation pension to employees retiring on the attainment of age of superannuation; pension on voluntary retirement is provided for under Regulation 29. The eligibility of employees to the benefit of voluntary retirement is 20 years qualifying service. The said two regulations read as follows :

28. Superannuation Pension:

Superannuation Pension shall be granted to an employee who has retired on his attaining the age of superannuation specified in the Service Regulation or Settlements.

29. Pension on Voluntary Retirement :

(1) On or after the 1st day of November, 1993, at any time after an employee has completed twenty years of qualifying service he may, by giving notice of not less than three months in writing to the appointing authority retire from service;

Provided that this sub-regulation shall not apply to an employee who is on deputation or on study leave abroad unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year;

Provided further that this sub-regulation shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking or company or Page 1605 institution or body, whether incorporated or not to which he is on deputation at the time of seeking voluntary retirement;

Provided that this sub-regulation shall not apply to an employee who is deemed to have retired in accordance with Clause (1) of Regulation 2,

(2) The notice of voluntary retirement given under Sub-regulation (1) shall require acceptance by the appointing authority:

Provided that whether the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.

(3)(a) An employee referred to in Sub-regulation (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than three months giving reasons therefor;

(b) On receipt of a request under Clause (a), the appointing authority may subject to the provisions of Sub-regulation (2), consider such request for the curtailment of the period of notice of three months on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of three months on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of three months.

4) An employee, who has elected to retire under this regulation and has given necessary notice to that effect to the appointing authority, shall be precluded from withdrawing his notice, except with the specific approval of such authority:

Provided that the request for such withdrawal shall be made before the intended date of his retirement.

5) The qualifying service of an employee retiring voluntarily under this regulation shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty-three years and it does not take him beyond the date of superannuation.

6) The pension of an employee retiring under this regulation shall be based on the average emoluments as defined under Clause (d) of Regulation 2 of these regulations and the increase, not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating his pension.

5. It is a matter of record that Regulation 28 was subsequently amended, on 8.6.2000. The amended Regulation reads as follows :

28. Superannuation Pension

Superannuation Pension shall be granted to an employee who has retired on his attaining the age of superannuation specified in the Service Regulations or Settlements.

Provided that, with effect from 1st day of September, 2000 pension shall also be granted to an employee who opts to retire before attaining the age of superannuation, but after rendering service for a minimum period of 15 years in terms of any Scheme that may be framed for such purpose by the Board with the approval of the Government.

Page 1606

6. The Petitioner had put in about 17 years of service and therefore was eligible in terms of VRS which required an employee opting for VRS having completed 15 years of service. The bank accepted his request and relieved him from the service with effect from 28.2.2001.

7. The Petitioner alleges that the denial of pension is arbitrary and contrary to the terms of the VRS as well as Notification dated 23.12.2000. He submitted that both in terms of Clause 7 of the VRS as well as the express terms of the Notification which clarified the VRS before its closure, all employees were entitled to pension.

8. It was urged by the Petitioner that the VRS was a departure from the normal rule of voluntary retirement embodied in Regulation 29 and that as a consequence upon its introduction, every employee had a right to opt for pension. In his case the Petitioner opted for pension on 9.2.2001. It was therefore submitted that the bank was bound to honour the request and disburse the amounts payable as per the Regulations, towards pension since there was a complete change from the circumstances which existed at the time of formation of the pension regulations.

9. The Petitioner further urged that VRS was a special scheme and having opted for the benefits under the VRS which also included pension, there was no question of either having been disentitled or disqualified for pension in terms of Regulation 29 of the Punjab & Sind Bank (Pension) Regulations, 1995.

10. The Petitioner further urged that during the course of his employment before he opted for VRS in December 2000 he had been granted the facility of LFC and even an amount of Rs. 80,000/- had been sanctioned. He had booked tickets and spent an amount of Rs. 25,000/-. However, the benefit was suspended. This happened by virtue of Notification/circular issued in November, 2000. The bank suspended the benefit of LFC which impelled him to cancel the bookings and incur an expenditure of Rs. 6200/-. The bank reimbursed an amount of Rs. 5225/- which was accepted by him without prejudice to his rights. He submits that this facility, regardless of whether he opted for VRS, had to be given and the bank's action in not disbursing the amounts and not permitting him to undertake the journey is arbitrary.

11. Mr. Rajat Arora, appearing on behalf of the Petitioner, submitted that the VRS entitled employees opting under the scheme to special and independent benefits, and that it provided the benefit of pension subject to pension regulations. The Regulations were a complete a statutory code binding both the employees as well as the bank. In terms of the pension regulations only those who had opted for pension and complied with the terms, refunding amounts within the statutorily prescribed period were entitled to pension. This was known to all employees including the Petitioner who accepted the decision willingly and voluntarily and sought for release from service in terms of the VRS. At that time, he was conscious that under the Pension Regulations, the benefit of pension could not be availed by him, since he had not refunded the provident fund contribution with interest, as stipulated by the Regulations.

12. Learned counsel also submitted that the Petitioner had received substantial sums of money in terms of the VRS, exceeding Rs. 10 lakhs and, having enjoyed the benefits, he could not turn around and claim to be aggrieved by Page 1607 non-payment of pension to which he was ineligible in the first instance. It was also submitted that the change in the regulations by amendment of Regulation 29 enured only in the case of employees who had opted for pension, in the year 1995 when the regulations were brought into force.

13. Counsel also submitted that as far as the grievance with regard to the LFC was concerned, the bank had issued regulations similar to the one in question dated 28.11.2000 even earlier in the years 1991 and 1993. Those circulars were independent of VRS or pension and were meant as cost cutting exercises applicable to all. He also relied on the terms of the circular that the LFC benefit as well as other expenditure were sought to be brought under control and such benefits were to be given only to employees who continued in the organisation in order to help them perform better and as incentives for work for rather than for those who wanted to leave the Bank's services.

14. The judgment in Bank of India and Ors. v. O.P. Swaranakar etc. AIR 2003 858 undoubtedly declared that the terms of VRS are non-statutory and contractual. The terms of the VRS, constituted an invitation/offer requiring acceptance. Therefore an employee like the Petitioner who opted or expressed willingness did so in relation to clear terms. The question which arises therefore is whether the bank is under a duty to pay pension.

15. The circular dated 23.12.2000 relied upon Clause 7 of the VRS provide a key to the understanding of this issue. The circular states that the benefit of CPF, pension, gratuity and other benefits as per Rules would be disbursed to the optees. Likewise, Clause 7 of the VRS in question in these proceedings spells out the entitlement of the optee as follows:-

(ii) a) Pension (including commuted value of pension) as per PSB (Employees) Pension Regulation 1995.

OR

(b) Bank's contribution toward PF as per existing Rules.

(iii) Leave encashment as per existing rules.

16. It is therefore be clear that both the notifications as well as VRS expressly made the regulations and rules of the Bank applicable in that regard. The parties do not dispute that no pension was payable before framing of the Regulations. All existing employees and those who retire with effect from 1.11.1993 were given option to join the pension scheme. The two conditions or ingredients applicable in that regard were (i) exercising of option was 120 days from the notified date and (ii) refund of accumulated contributions to the provident fund account along with interest and a further interest at 6 % per annum. The employees who did not exercise that option continued with the existing pensionary benefit under the CPF scheme; the Petitioner was such an employee. Therefore, even if the VRS was not introduced, admittedly he would have been ineligible for pension either under Regulation 28 or 29.

17. The only species of voluntary retirement in the bank was one spelt out in Regulation 29; it was a statutory one and entitled only who those qualifying service, to opt for voluntary retirement. Such employees were not entitled ex gratia, under VRS. The introduction of the VRS was a part of the larger measure by the Government to rationalise the manpower in the public sector banks. It provided an opportunity to the banks as well as employees who had Page 1608 put in reasonable amount of service, to opt out for service and join other organisations or pursue alternative carriers. The eligibility for VRS was 15 years qualifying service. The Petitioner on his being optee deemed it appropriate to exercise that option and secure all the benefits including the ex gratia and other amounts applicable.

18. The contention that the VRS constituted a special extra-statutory or contractual retirement and therefore did away with the requirement of having to opt, cannot be in my mind countenanced. The pension scheme put in place by the bank invisioned creation of a fund within a time-frame for purposes of managing the corpus, out of which payment was to be disbursed to beneficiaries. In the absence of such a structure the scheme would have unmanageable. Therefore, the whole concept or idea acrue to the employees who had opted for CPF. Those who opted out of the pension scheme could not claim that benefit. The objective of VRS was rationalisation of the work force; it did not independently provide for pension as is sought to be contended. Therefore, the question of the Petitioner or any other VRS optee and who had not opted for pension in the first instance of 1995, claiming that benefit, in my opinion cannot arise. This is fortified by the reference to the pension regulations as well as Clause 7 of the VRS as well as the notification itself. Therefore, I am of the opinion that the Petitioner's claim that he is entitled to the benefit of pension without having opted for it in the first instance and having continued as a CPF beneficiary, cannot be accepted.

19. As far as the second issue with regard to LFC is concerned the facts show that the Petitioner had sought for the benefit that he was in service. At that stage the bank had not notified the VRS. Nevertheless, the bank as a uniform measure to cut down costs, notified that all expenditure in that regard was to be kept in abeyance and no LFC would be sanctioned up to 30.6.2001; a period which was extended up to 30.9.2001. The fact remains that the Petitioner had retired from the service in terms of the VRS; in February, 2001. The benefits under the VRS admittedly included payment of leave encashment. There is no dispute that the ex gratia included the leave encashment benefit payable to the Petitioner on account of leave credited to this account. These amounts were paid to him. Having regard to the fact that the suspension of the benefit was a part of the larger economy measure applicable to all employees, and not only to those who had applied for VRS, I am of the opinion that the Respondents did not act arbitrarily in withholding the benefit of the Petitioner subsequently, after he was relieved from its services. The Petitioner had also claimed for refund of Rs. 8200/-, which he states, was wrongfully withheld on account of certain dues. He contended that his dues were repaid in 1987 itself having regard to the nature of these proceedings it is not possible to adjudicate on the correctness or otherwise of such contentions. It is open to the Petitioner to initiate these proceedings in that regard, if so advised.

19. For the foregoing reasons the reliefs claimed cannot be granted and the writ petition is dismissed, subject to the above observations.