Harish Chandra Dhupar vs Union Of India & Others
2008 Latest Caselaw 980 Del

W.P. (C) No. 2263/2001             Page 1


                                                       REPORTABLE

*           IN THE HIGH COURT OF DELHI AT NEW DELHI

+            WRIT PETITION (C) NO. 2263 OF 2001



%                          Date of Decision :   9th July, 2008.


HARISH CHANDRA DHUPAR                       ..... Petitioner
                Through Mr. Bharat Bhushan, Mr. Harish
                Sharma & Mr. B.K. Saini, Advocates.

                  Versus


UOI & ORS.                                      ..... Respondents

Through Mr. R.S. Mathur, Advocate.

CORAM:

HON'BLE MR. JUSTICE SANJIV KHANNA

1. Whether Reporters of local papers may be

allowed to see the judgment?

2. To be referred to the Reporter or not ?      YES

3. Whether the judgment should be reported

in the Digest ?                                 YES

SANJIV KHANNA, J:

1. The petitioner, Mr. Harish Chandra Dhupar was an employee

of Punjab National Bank. The respondent-Bank had introduced PNB

Employees' Voluntary Retirement Scheme, 2000, which was a non

statutory scheme. Under Clause 6 of the said Scheme, an employee

seeking voluntary retirement was entitled to ex gratia amount W.P. (C) No. 2263/2001 Page 2

specified therein. Under Clause 7, an employee seeking voluntary

retirement was also eligible for benefits specified therein, in addition

to the ex gratia payment. Clause 7(2) provided as under:-

"ii) a) Pension (including commuted value of pension) as per PNB (Employees') Pension Regulations 1995.

OR

b)Bank's contribution towards PF as per existing rules. "

2. It is admitted case of the parties that the petitioner was a

pension optee and was covered by PNB (Employees') Pension

Regulations- 1995. The relevant portion of the Pension Regulations

has been filed by the petitioner. Regulation 28 of the Pension

Regulations deals with superannuation pension and Clause 29 deals

with pension on voluntary retirement. Regulation 28 of the Pension

Regulations relating to superannuation will obviously not apply to the

petitioner as he had not retired on attaining age of superannuation.

Clause 29, which deals with pension on voluntary retirement, states

that the said provision will apply to an employee, who on or after 1 st

day of November, 1993 has completed 20 years of qualifying service

and gives notice of not less than three months in writing to the

appointing authority to voluntarily retire from service. Sub-Clause 5

of Clause 29 stipulates that an employee retiring voluntarily under this

Regulation shall be entitled to an addition of a period not exceeding

five years to the qualifying service subject to the condition that the W.P. (C) No. 2263/2001 Page 3

service rendered by such employee shall not exceed 33 years.

Regulation 28 and relevant portion of Regulation 29 read as under:-

"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.

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;

              xx x x xx
              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."

3. The question which arises for consideration is whether

Regulation 28 or 29 will apply to the case of the petitioner in terms of

Clause 7 of the PNB Employees' Voluntary Retirement Scheme,

2000. It is the case of the respondent-Bank that Regulation 28 will

apply, whereas the case of the petitioner is that Regulation 29 is

applicable.

4. It may be relevant to state that the parties should have been ad

idem on the date when the agreement to voluntarily retire was W.P. (C) No. 2263/2001 Page 4

entered into, to have a legally enforceable contract under the

Contract Act, 1872.

5. Regulation 28 deals with superannuation pension, which is

granted to an employee when he retires on attaining age of

superannuation as specified in service regulations. The said

Regulation is not applicable to the petitioner. Regulation 29 deals

with pension on voluntary retirement. There is merit in the

contention of the petitioner that under Clause 7(2) of PNB

Employees' Retirement Scheme, 2000 when reference was made to

Pension Regulations and entitlement of the petitioner to get pension,

reference was made to Regulation 29 and not to Regulation 28. The

effect thereof was that the petitioner will be entitled to pension under

the Pension Regulations as payable in case of voluntary retirement

i.e. Regulation 29. Accordingly, the petitioner will be entitled to

benefit of addition of five years to his qualifying service for the

purpose of calculation of pension payable to him.

6. The respondent-Bank was the author of the contractual scheme

called, Voluntary Retirement Scheme, 2000. The respondent-bank if

it wanted should have clarified in Clause 7 that pension which would

be payable would be in terms of Regulation 28 and on satisfaction of

the conditions specified therein and not in terms of Regulation 29. In

case there is any doubt or ambiguity, the question should be decided

in favour of the petitioner, the employee. Rule of Contra Preferentum W.P. (C) No. 2263/2001 Page 5

states that in law every man's grant shall be taken by construction of

flaw most forcibly against him. (See, Chitty on Contracts, page 620

(12-081), Vol. 1, 28th Edn.)

6. In John Lee & Son (Grantham) Ltd versus Railway

Executive reported in (1949) 2 All ER 581, it was observed as

under :-

"We are presented with two alternative readings of this document and the reading which one should adopt is to be determined, among other things, by a consideration of the fact that the defendants put forward the document. They have put forward a clause which is by no means free from obscurity and have contended.... That it has a remarkably, if not an extravagantly, wide scope, and I think that the rule contra preferentem should be applied."

7. The justification for the said rule is that " a person who puts

forward the wording of a proposed agreement may be assumed to

have looked after his own interests so that if the words leave room for

doubt about whether he is intended to have a particular benefit there

is reason to suppose that he is not." (See, Tam Wing Chuen versus

Bank of Credit Commerce Hong Kong Ltd. Reported in (1996) 2

BCLC 69).

8. The Supreme Court has also applied the said doctrine in the

case of United India Insurance Co. Ltd versus Pushpalaya

Printers reported in (2004) 3 SCC 694.

W.P. (C) No. 2263/2001 Page 6

9. It may be relevant to state here that the petitioner had

submitted the application dated 31st October, 2000 for voluntary

retirement on 2nd November, 2000. The application was processed

and was accepted on 16th December, 2000, unconditionally and

irrevocably. The petitioner was also discharged/retired from service

on the same date. A concluded and a binding contract came into

existence on the said date. The stand taken by the respondent bank

is that after 16th December, 2000, Pension-Regulation 28 was

amended and proviso to Regulation 28 was introduced under which

pension was payable on pro rata basis. In other words, employees

who adopted for voluntary retirement, were not entitled to benefit of

Regulation 29 but would be entitled to pension in terms of Regulation

28 and that too on pro rata basis. This amendment was with

retrospective effect from 1st September, 2000.

10. Rules and Regulations normally have prospective effect. Rules

and Regulations cannot be amended with retrospective effect unless

power to the same effect is conferred by express words or by

necessary implication by an enactment. In absence, a subordinate

legislation or a mere administrative instruction cannot have

retrospective effect to take away or defeat a vested right and modify

a concluded contract. The concluded contract dated 16th December,

2000 by which the petitioner and the respondent-Bank had ended the

employer and employee relationship, cannot be altered and modified W.P. (C) No. 2263/2001 Page 7

unless there is clear statutory mandate under which such right and

power is conferred. The respondent-Bank has failed to show any

such power to retrospectively amend the Pension Regulations. (Refer

Bejgam Veeranna Venkata Narsimloo vs. State of Andhra

Pradesh reported in AIR 1998 SC 542).

11. Almost a similar controversy had come up for consideration

before the Supreme Court in the case of Bank of India and Others

versus O.P. Swarankar and Others, reported in JT 2002 (10) SC

436 , wherein in paragraph 68 of the judgment it was held as under:-

"67. Furthermore, a large number of employees have withdrawn their offer only when a proviso is sought to be added to regulation 28 aforementioned. In terms of the scheme the employees, who expected to get benefits of clause 4 of regulation 29 would be deprived therefrom. It is not in this dispute that the qualifying period for pension qualifying for receiving pension was 20 years. Only upon completion of 20 years, in terms of the statutory regulation contained in regulation 29, an employee could opt for voluntary retirement and in terms thereof, he would be entitled to the benefits specified therein. The said regulations had specifically been mentioned for the purpose of computation which would include invocation of sub- regulation 4 of regulation 29 providing for relaxation of 5 years towards the qualifying period. The employees must have proceeded on the basis that despite the fact they have merely rendered 15 years of service which was not a qualifying service under the regulations, they would be entitled to the pensionary benefits in terms of the scheme.

By introducing the provisio to regulation 28, W.P. (C) No. 2263/2001 Page 8

pension was sought to be made pro rata in place of full pension.

68. The basic concept of the scheme, therefore, underwent a change which also goes to show that the banks had sought to invoke its power of amending the scheme.

Once the scheme is amended and/or an apprehension is created in the mind of the employees that they would not even receive the entire benefits as envisaged under the scheme, they were entitled to revoke their offers. Their action in our considered opinion is reasonable. It may be that some of the employees only opted for the provident fund benefit which did not undergo any amendment but the same would not change the attitude on the part of the banks.

69. We, therefore, do not find any error in the judgment of the High Court on this score."

12. The Supreme Court in the aforesaid case also dealt with the

question of estoppel. The said question had arisen in the context that

the optees had withdrawn their applications but had accepted

payment of ex gratia benefits. It was held that the employees, who

have accepted ex gratia payment or any other benefit under the

Scheme, cannot resile therefrom and claim that they had withdrawn

their applications seeking voluntary retirement.

13. Doctrine of Estoppel is based on equity. In such cases, the

Court is required to ascertain whether in particular circumstances, it

would be unconscionable for a party to deny that which, knowingly or

unknowingly, he had allowed or encouraged a third party to assume

to his detriment. (Ref. Jai Narain Parasrampuria versus Pushpa

Devi Saraf reported in (2006) 7 SCC 756). In O.P. Swarankar W.P. (C) No. 2263/2001 Page 9

(supra), the Supreme Court referred to the right of waiver and a

party's right to waive advantage of law or rules for the benefit and

protection of the individual in his private capacity. The Supreme Court

referred to the principle of approbate and reprobate and estoppel by

acceptance of benefits whereunder a person who has accepted

benefits is not permitted to assume inconsistent positions. In the said

case, as stated above, the optees had withdrawn their applications

for voluntary retirement and claimed that they were still in service but

had accepted ex gratia payments or other benefits under the scheme.

They had therefore taken up inconsistent and contradictory pleas.

Principle of Estoppel by accepting benefits under the contract was

therefore applied and it was held that such applicants were barred

from raising the plea that no concluded contract had come into

existence as they had accepted benefits under the said contract itself.

14. I have quoted paragraph 67 of the Judgment in the case of O P

Swarankar (supra) above. The said paragraph indicates that

Regulation 28 was amended after 16th December, 2000 and effect

thereof was that all applicants were fully aware and conscious of the

fact that they will be governed by Regulation 28 and they would not

be entitled to benefit of 5 years relaxation towards qualifying service

as provided in Regulation 29. There was no dispute and parties in the

case of O P Swarankar (supra) were ad idem in their understanding

that under the voluntary retirement scheme the optees would be W.P. (C) No. 2263/2001 Page 10

entitled to benefit under Regulation 28 on fulfilling the conditions

mentioned therein and not under Regulation 29. Thus Doctrine of

Estoppel by acceptance of benefits was applied as the optees had

accepted benefit fully conscious of the fact that Regulation 28

applied, yet the optees accepted benefits. The factual position in the

present case is different. The petitioner herein never withdrew his

request or offer for voluntary retirement. The same was accepted on

16th December, 2000 when a binding contract came into existence.

As on that date, i.e. 16th December, 2000 the petitioner had no

grievance. The claim of the petitioner rightly is that a concluded

contract came into existence on the said date and he is entitled to

payment as per the terms of the said concluded contract. Any

subsequent amendments made in the Pension Regulations after 16th

December, 2000 are not relevant in this case as these have been

made after the concluded contract had come into existence. It is well

settled that a concluded contract cannot be modified and amended

unilaterally by a party and requires mutual consent of both the

parties. The Supreme Court in the case of DDA versus Joint Action

Committee Allottees of SFS Flats reported in (2008)2 SCC 672,

has held that a concluded contract cannot be novated unilaterally and

any change to a concluded contract has to be brought to the

knowledge of the other party and his acceptance to the same has to

be taken. In the absence of the same, any new condition would not W.P. (C) No. 2263/2001 Page 11

be demed to be part of the contract and the other party cannot be

forced to be bound by contractual obligations that he had not agreed

to.

15. I may also note here that in O.P. Swarankar (supra) the

Supreme Court had also observed that the pension

scheme/regulations were non-statutory in nature. The case made out

by the respondent-Bank herein is that on 19th December, 2000 a

fresh circular was issued to all the officers informing the employees

that there was some doubt with regard to the eligibility of pension

under the pension regulations for optees under the Voluntary

Retirement Scheme, 2000. It was stated that clarification had been

received from Government of India and accordingly in such cases

only pro rata pension shall be payable and the Bank was advised to

make amendment to Regulation 28. It is further stated that steps for

amendment to Regulation 28 were being taken. Paragraph 5 of the

said letter indicates that the officer in charge of the individual

branches was to ensure that the retirement benefits were disbursed

in accordance with the amended Regulation 28. It was also

stated in the letter that pending the amendment to the Regulation 28

the retirement benefits could be granted on the basis of Punjab

National Bank Employees Voluntary Retirement Scheme 2000

(PNBEVRS 2000). It is accordingly stated in the letter that all

employees seeking voluntary retirement should be informed that they W.P. (C) No. 2263/2001 Page 12

were eligible for pension as per Regulation 28 and accordingly their

case would be processed under the said Regulation. The said

Circular dated 19th December 2000, could not have affected

Voluntary Retirement request that had been accepted prior to the

issue of the abovementioned letter as a concluded contract between

the Bank and the petitioner seeking voluntary retirement under the

un-amended Regulations had already come into existence by that

time. Principle of "Estoppel" and "waiver" as propounded by the

respondent-Bank will not apply to the facts of the present case.

Firstly, the petitioner never withdrew his application for voluntary

retirement and secondly, the petitioner claims payment of his dues

under the Scheme itself before its amendment by letter/Circular dated

19th December, 2000. It is the claim of the petitioner that he is entitled

to substantially higher amount than what has been already paid to

him. The payment received by him is admittedly due to him. Thirdly,

the petitioner had no occasion to accept or reject payment made by

the respondent-Bank on basis of the amended terms mentioned in

the letter/Circular dated 19th December, 2000, as a concluded

contract had come into existence on 16th December, 2000.

16. It has been submitted by the petitioner herein that the

application for voluntary retirement was sent by him keeping mind the

pensionary benefits that would have accrued to him prior to the

amendments in Regulations governing pensionary benefits vide W.P. (C) No. 2263/2001 Page 13

letter/Circular dated 19th December, 2000. The application for

voluntary retirement of the petitioner was accepted on 16th December

2000, thus, at that point of time a concluded binding contract had

come into being between the respondent-Bank and the petitioner,

ending the employer and employee relationship. Any change in

pensionary benefits to the detriment of the petitioner unilaterally

would be contrary to law and equity. Reference in this regard can be

made to the decision of the Supreme Court in the case of Chairman

Railway Board versus C.R Rangadhamaiah reported in (1997) 6

SCC 623. In the said case the retrospective changes in the

pensionary benefits of railway staff was challenged. The Supreme

Court held that the pension admissible to the employees would be

one that was allowed at the time of retirement. In the instant case it

would be the time, when the application of voluntary retirement was

made (or at least the date of acceptance). Amendments made after

acceptance cannot be forced upon the petitioner.

17. It is pertinent to quote here paragraph 4 of the letter dated 16th

December 2000 by which the petitioner was informed that his request

for voluntary retirement was accepted and he was relieved from being

an employee of the Bank from the afternoon of the said date. The

said paragraph reads as under:

"4. As provided in para 10.15 of the Scheme titled as PNBEVRS- 2000, the exgratia payable to you in form of cash as well as in the W.P. (C) No. 2263/2001 Page 14

form of bond, will be paid within 45 days from today. Further, the bonds which would be issued towards 50% of ex-gratia in cash, will bear stipulated interest from today. Your other terminal dues will also be settled in terms of the existing rules of the bank"

18. A plain reading of the above portion of the letter issued by the

bank dated 16th December, 2000 makes it amply clear that the

retirement benefits that were to accrue to the petitioner were in

accordance with rules existing at that point in time on 16th December,

2000. The language is beyond any ambiguity and after having issued

the said letter, the respondent-Bank cannot be permitted to change

the conditions of the contract unilaterally, behind the back of the and

to the detriment of the petitioner. The petitioner would be governed by

the terms of the letter dated 16th December, 2000 and the latter

circular dated 19th December, 2000 shall not be applicable on the

petitioner and hence, the pension shall be payable to him in

accordance with Regulation 29 dealing with Voluntary Retirement

cases.

19. The petition has been decided on the basis of contentions

raised and argued before me. Pleading in the Petition was for a

somewhat different relief but prerogative writs can be issued in an

appropriate manner without fetters of procedural technicalities. It is

for a writ court to issue any appropriate writ to an aggrieved

party, and a writ petition should not fail because the W.P. (C) No. 2263/2001 Page 15

petitioner had applied for a wrong kind of writ. (T.C. Basappa versus

T. Nagappa reported in (1955) 1 SCR 250).

20. In view of the findings given above and the legal propositions

discussed herein, the present Writ is partly allowed. It is held that

Regulation 29 will apply. Arrears shall be paid to the petitioner by the

respondent-Bank within two months with interest @ 8% p.a. from the

date due till payment. In case payment is not made within two

months, the respondent-Bank will be liable to pay interest @ 10%

p.a. after two months. However, in the facts and circumstances of the

case, there will be no order as to costs.

                                                   (SANJIV KHANNA)
                                                        JUDGE

JULY      09, 2008
VKR/P