Delhi High Court
United Bank Of India vs Kamlesh Pratap Singh on 6 December, 2016
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ LETTERS PATENT APPEAL No. 403/2015
Reserved on : 27th September, 2016
% Pronounced on : 6th December, 2016
UNITED BANK OF INDIA ...Appellant
Through : Mr. Rajesh Kumar & Mr. Gaurav
Kumar Singh, Advocates
Versus
KAMLESH PRATAP SINGH ...Respondent
Through : Mr. Harish Sharma & Mr. Bharat
Bhushan, Advocates
WRIT PETITION (CIVIL) No. 3817/2016
DEEPAK SAPRA ...Petitioner
Through : Mr. K.G. Mishra & Mr. A.V.
Malhotra, Advocates
Versus
PUNJAB NATIONAL BANK ...Respondent
Through: Mr. Rajesh Kumar & Mr. Gaurav
Kumar Singh, Advocates
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
HON'BLE MS. JUSTICE SUNITA GUPTA
SANJIV KHANNA, J.
The afore-stated Letters Patent Appeal and writ petition raise similar
issues and are, therefore, being disposed of by this common judgment for
clarity and convenience. At the same time, as facts in each case are
required to be noticed and there are dissimilarities, we have preferred to
separately deal with each case.
LPA No. 403/2015
2. LPA No. 403/2015 impugns the order and judgment of the learned
Single Judge dated 5th May, 2016 passed in W.P.(C) No. 3521/2014 titled
Kamlesh Pratap Singh vs. United Bank of India.
2.1 Pursuant to bipartite settlement dated 29.10.1993 signed between
Indian Banks' Association and the Workmen Union, the United Bank of
India (Employees') Pension Regulations, 1995, (Regulations for short)
were framed by the appellant/United Bank of India under Section 19 of the
Banking Companies (Acquisition and Transfer of Undertaking) Act, 1990.
2.2 The employees of the appellant Bank who were already covered
under the Contributory Provident Fund were required to exercise the
option to be governed by the pension Regulations within a period of 120
days from the date of notification. The Bank‟s contribution to the
Contributory Provident Fund, in the case of said employees, was required
to be refunded.
2.3 The respondent-Kamlesh Pratap Singh, was an employee of the
appellant- United Bank of India, who did not opt for the pension under the
Regulations and remained covered by the Contributory Provident Fund
scheme.
2.4 In 2009, departmental proceedings were initiated against Kamlesh
Pratap Singh vide charge sheet dated 21.3.2009 and the Disciplinary
Authority imposed punishment of compulsory retirement with
superannuation benefit. The operative portion of the punishment order
dated 23.12.2009 reads as under:
" In view of the facts and circumstances of the case and the gravity
of the proved misconduct, I find that the proposed punishment has
been just and proper.
Therefore, I impose on you the following punishment under
Clause 61 of the Memorandum of settlement dated 10.0.2002
with immediate effect:
"Compulsory Retirement" with superannuation benefits i.e.,
Pension and/or Provident Fund and Gratuity as would be due
otherwise under the Rules prevailing in the Bank without
disqualification from future employment.""
2.5 Kamlesh Pratap Singh not being a pension optee was paid
terminal/superannuation benefit, i.e. his own as well as bank‟s contribution
to the provident fund and gratuity. There is no dispute or lis about this
payment.
3. The United Bank of India by notification/circular dated 16th August,
2010 and in terms thereof had invited fresh options from the serving and
retired employees to join the pension scheme. The short question is
whether the respondent was eligible and qualified to exercise option and
join the pension scheme as per notification/circular dated 16th August,
2010.
4. We would begin with referring to the relevant portion of the said
circular/notification dated 16th August, 2010, which reads as under:-
" Indian Banks' Association has signed a settlement with the
Workmen Unions and a Joint Note with Officers' Organization on
27.04.2010 in respect of extending another option for pension to the
non optees who were in the service of the Bank prior to 29 th
September, 1995 and confirmed to be in service on or after the said
date.
Existing Pension Scheme for which another option is being extended
now is not applicable for those who joined the Bank on or after 01 st
April, 2010.
Salient features of the aforesaid settlement leading to extension of
opportunity for another option for pension are as follows:
1. SERVING EMPLOYEES means those who were in service of the
Bank as on 27th April, 2010 and joined the Bank prior to 1st April,
2010.
2. RETIRED EMPLOYEES means those who were in service of the
Bank on or after 29th September, 1995 and ceased to be in service of
the Bank on account of retirement on Superannuation, Voluntary
retirement, death or on account of VRS under special scheme prior
to 27th April, 2010.
3. Eligibility and terms and conditions:
A) This "another option for pension" will be available to those
hitherto non optee retired employees.
i) Retired from the Bank's service on superannuation or on
Voluntary retirement on or after 29th September, 1995.
ii) Retired from the Bank's service on account of VRS under special
scheme on or after 29th September, 1995 after rendering a minimum
of 15 years service.
iii) Died while in service of the Bank on or after 29 th September,
1995 (families of the deceased employees may opt for getting family
pension ).
All of the above retired employees/families of the deceased
employees who want to opt for pension now will have to pay 156%
of what they received on retirement/death on account of the Bank's
contribution to SPF and interest accrued thereon being his/her share
of 30% initial funding gap."
5. The Circular/notification records that a fresh option was being
granted pursuant to the settlement dated 27th April, 2010 between the
Indian Bank's Association and Workmen Unions and the joint note with the
Officers Organization. The option was available and confined to "retired
employees" who as per the eligibility clause were; (i) employees who were
in service of the Bank on or after 29th September, 1995; and (ii) had
ceased to be in service of the Bank on account of retirement on
superannuation, voluntary retirement, death, or on account of the Voluntary
Retirement Scheme (VRS) on or after 29th September, 1995 after
rendering a minimum of 15 years service. The term "retired employees"
was, therefore, given a precise and definite meaning and conspicuously and
consciously excluded employees awarded punishment of "compulsory
retirement". The option being available only to the retired employees of the
type specified, all employees who could have earlier opted for pension
when the Regulation was first introduced in 1995, were not eligible to
exercise the second option.
5.1 The retired employees or their families who desired to opt for
pension were required to pay 156% of what they had received on
retirement/death as the Bank's contribution towards 30% of the initial
funding gap.
6. By another circular/notification dated 20th August, 2010, paragraph 2
of the circular/notification dated 16th August, 2010 was partly modified in
the following manner:-
"In that Circular inter-alia it has been mentioned under para-2 that
"RETIRED EMPLOYEES" means those who were in service of the
Bank on or after 29th September, 1995 and ceased to be in service of
the Bank on account of retirement on Superannuation, voluntary
retirement, Death, or on account of VRS under Special Scheme prior
to 27th April, 2010"
Now, instead of the above, para-2 should be read as "RETIRED
EMPLOYEES" means those who were in service of the Bank on or
after 29th September, 1995 and ceased to be in service of the Bank
on account of retirement on Superannuation, Death or on account of
VRS under Special Scheme prior to 27th April, 2010.
Again in that Circular, it has been mentioned under para 3 (A) (i)
that "Retired from Bank's service on superannuation or on Voluntary
Retirement on or after 29th September, 1995.
Now, instead of the above, para 3 (A) (i) should be read as "Retired
from Bank's service on or after 29th September, 1995."
By the aforesaid modification the term "voluntary retirement" in paragraph
2 of the notification/circular dated 16th August,2010 was deleted.
However, employees who had taken voluntary retirement under a special
scheme prior to 27th April, 2010 were eligible. Paragraph 3 (A) (i) was also
amended to delete the words "on superannuation or on voluntary retirement
on or after 29th September, 1995". This deletion was inconsequential as
the expression "retired employees", was expressly defined in paragraph 2.
Noticeably, no amendment was made to incorporate or include those
employees who had suffered punishment of compulsory retirement.
6.1 Thus, the circular/notification dated 16th August,2010 read with the
amendment dated 20th August, 2010, did not postulate and cover the
employees who were indicted in the disciplinary proceedings and awarded
punishment of compulsory retirement with superannuation benefit. They
may have been paid contributory provident fund and gratuity, but were not
eligible nor conferred any right to opt for pension.
7. Whatever may have been the terms of the settlement agreement
between the Indian Banks' Association and Workmen Unions, and the Joint
Note with the Officers Organisation, the explicit legal position that
emerges from the above mentioned circular/notification and the
modification, is that the option for pension was limited and confined to the
retired employees as mentioned in the said circular/notification dated 16 th
August, 2010 as modified by the circular/notification dated 20 th August,
2010. The settlement agreement dated 27th April, 2010 on which the
respondent relies, was not incorporated in the said circulars/notification.
Violation of the settlement agreement would be a different matter, but as
far as the exercise of option under the circular/notification was concerned,
it was strictly limited to the retired employees as defined in paragraph 2
which precisely defined the term "retired employee", who were eligible to
opt. In case, there was any conflict between the settlement agreement and
the two circulars/notifications, the latter would prevail and would be
binding, unless the circulars/notifications are challenged and the challenge
is upheld.
8 In spite of the aforesaid discussion, we would examine the
contention of the respondent-Kamlesh Pratap Singh that the word "retired"
in the circular/notification dated 16th August, 2010 as modified by the
circular/notification dated 20th August, 2010 should be interpreted as per
clause 2(y) of the Pension Regulations read with the settlement agreement
dated 27th April, 2010, in light of the decision of the Supreme Court in
Bank of Baroda Vs. S.K. Kool, (2014) 2 SCC 715.
9. The submission of the petitioner is to the following effect. Clause
2(y) of the Pension Regulations defines "retirement" as under:-
"y. "retirement" means cessation from Bank's service-
a. on attaining the age of superannuation specified in Service
Regulations or Settlements;
b. on voluntary retirement in accordance with the provisions
contained in Regulation 29 of these Regulations;
c. on premature retirement by the Bank before attaining the age of
superannuation specified in Service Regulations or Settlement;"
Paragraph 2(II)(a) of the settlement agreement dated 27th April, 2010 under
"Terms of Settlement" stipulates as under:-
"(2) Another option for joining the existing Pension Scheme shall be
extended to those employees who:-
(i)(a) xxxxx
(b) xxxxx
(c) xxxxx
(II)(a) were in service of the bank prior to 29 th September 1995 in
case of Nationalised Banks/ 26th March 1996 in case of Associate
Banks of State Bank Of India and retired after that date and prior to
the date of this Settlement;"
Harmoniously construing Clause 2(y) of the pension Regulations and
paragraph 2(II)(a) of the settlement agreement, the term "retired" would
also cover an employee who was compulsorily retired with superannuation
benefits and would thus, be eligible to exercise option to join the pension
scheme.
10. In the impugned order and judgment dated 5 th May, 2016 the Single
Judge has accepted the aforesaid contention of the respondent and held that
the decision in S.K. Kool (supra) would squarely apply, for in the said
case, the respondent therein had suffered an identical penalty of removal
with pensionary benefits and it was held that the said employee would be
entitled to opt for pension under the identical Regulations as adopted by the
Bank of Baroda.
11. On a plain and literal reading of the definition of the term "retired"
in clause 2(y) of the Pension Regulations, it is apparent that retired
employees would not include those employees who, like the respondent,
have suffered the punishment of compulsory retirement with
superannuation benefits. With regard to paragraph 2(II)(a) of the settlement
agreement dated 27th April, 2010, it will be wrong and fallacious to assume
that the word "retired" used therein was not in the context of or in
reference to the word's natural contours, but was reflective of a stretched
and hyperbolic meaning so as to include officers who were compulsorily
retired as a punishment, with superannuation benefits and have received
payments of the contributory provident fund. In S. K. Kool (supra), the
aforesaid plain and literal interpretation of the word "retirement" was not
applied to an employee who was removed with entitlement to
superannuation benefits. This was a case of an employee who was entitled
to pension, having opted for the same, and not contributory provident fund
as superannuation benefit and, therefore, to deny pension would have
negated the ameliorative nature of the punishment order. He would have
neither got pension, nor payment from the contributory provident fund.
12. In the case of S.K. Kool (supra), the employee had suffered penalty
of removal from service with superannuation benefits as would be due
otherwise and without disqualification from future employment. The Bank,
however, in view of the said punishment had refused to grant leave
encashment and pensionary benefits relying upon Regulation 22 of the
Pension Regulations, which reads as under:-
"22. Forfeiture of service: (1) Resignation or dismissal or removal
or termination of an employee from the service of the Bank shall
entail forfeiture of his entire past service and consequently shall not
qualify for pensionary benefits."
The Bank's stance was that in terms of the Regulation 22, the order of
removal had the effect of forfeiture of past service and consequently, the
employee did not qualify for pensionary benefits. The contention of the
bank was firmly and decisively rejected by making reference to the order
of punishment, for the employee was entitled to superannuation benefits as
would be due otherwise. Importantly, the employee was a pension optee
and was, therefore, entitled to pension in terms of the Regulation. Pension
was payable albeit was being denied on account of the punishment of
removal and Regulation 22. The question whether pension option could be
exercised was not the issue. Pension on retirement was payable. This was
not a case where the employee had applied for option under the settlement
agreement dated 27th April, 2010 or the circular/notification issued by the
Bank giving an option to the retired employees which did not include
employees who had suffered punishment of compulsory retirement. The
question and issue decided was different, and the observations and ratio too
was in a different context.
13. In the case of S.K. Kool (supra), the Supreme Court referred to the
bipartite settlement signed by the Indian Banks' Association and the Banks'
Workmen's Union with regard to disciplinary action procedure. In terms of
the said settlement, clause 6(b) was inserted as one of the punishments
which could be inflicted on an employee found guilty of gross misconduct.
The said clause was as under:-
"6. An employee found guilty of gross misconduct may;
(a)............
(b) be removed from service with superannuation benefits i.e.
Pension and/or Provident Fund and Gratuity as would be due
otherwise under the Rules or Regulations prevailing at the relevant
time and without disqualification from future employment, or.."
The Supreme Court observed that the punishment with which the
employee, i.e. S.K. Kool, was visited was punishment of removal from
service with superannuation benefits. In this context, it was held that
Regulation 22 would not disentitle the employee to pensionary benefits, for
it would amount to fraud on the bipartite agreement. The punishment
imposed and Regulation 22 had to be harmonized so as to give effect to the
punishment imposed in terms of clause 6(b). Accordingly, the punishment
of removal with retirement benefits, would not disentitle the employee
from payment of retirement benefits which he was otherwise entitled to. In
the said case, as the employee, i.e. S.K. Kool, was entitled to pension,
which was directed to be paid to him. Not granting the superannuation
benefits i.e the pension to S.K. Kool would have been contrary to the
punishment imposed.
14. We would like to reproduce paragraphs 14 and 15 in S. K. Kool
(supra), which read as under:-
"14. The Regulations do not entitle every employee to pensionary
benefits. Its application and eligibility is provided under Chapter II
of the Regulations whereas Chapter IV deals with qualifying service.
An employee who has rendered a minimum of ten years of service
and fulfils other conditions only can qualify for pension in terms of
Regulation 14 of the Regulations. Therefore, the expression "as
would be due otherwise" would mean only such employees who are
eligible and have put in minimum number of years of service to
qualify for pension. However, such of the employees who are not
eligible and have not put in required number of years of qualifying
service shall not be entitled to the superannuation benefits though
removed from service in terms of Clause 6(b) of the Bipartite
Settlement. Clause 6(b) came to be inserted as one of the
punishments on account of the Bipartite Settlement. It provides for
payment of superannuation benefits as would be due otherwise.
15. The Bipartite Settlement tends to provide a punishment which
gives superannuation benefits otherwise due. The construction
canvassed by the employer shall give nothing to the employees in
any event. Will it not be a fraud Bipartite Settlement? Obviously it
would be. From the conspectus of what we have observed we have
no doubt that such of the employees who are otherwise eligible for
superannuation benefit are removed from service in terms of Clause
6(b) of the Bipartite Settlement shall be entitled to superannuation
benefits. This is the only construction which would harmonise the
two provisions. It is well-settled rule of construction that in case of
apparent conflict between the two provisions, they should be so
interpreted that the effect is given to both. Hence, we are of the
opinion that such of the employees who are otherwise entitled to
superannuation benefits under the Regulations if visited with the
penalty of removal from service with superannuation benefits shall
be entitled for those benefits and such of the employees though
visited with the same penalty but are not eligible for superannuation
benefits under the Regulations shall not be entitled to that."
The aforesaid decision, therefore, dealt with an entirely different
factual matrix and the legal issue and question involved is clearly
distinguishable. The question and interpretation involved in the present
case are different. The issue in S.K. Kool (supra) related to the impact and
effect of Regulation 22, which postulates forfeiture of past service on
punishment of removal, dismissal, resignation and termination, and when
the punishment order directs payment of superannuation benefits. This
decision does not deal with the question whether or not an employee who
had suffered punishment of compulsory retirement with superannuation
benefits was entitled to exercise option in terms of the
circulars/notifications dated 16th August, 2010 and 20th August, 2010. The
decision also does not deal with the question or issue what is meant by the
term "retired", for in the said case, the punishment imposed was one of
removal from service and not compulsory retirement.
15. The appellant-United Bank Of India had interpreted the term
"retired" by giving it a specific meaning in their circulars and notifications
dated 16th August, 2010 and 20th August, 2010, to mean retired on
superannuation or voluntary retirement under the special schemes prior to
27th April, 2010. Employees who had suffered the punishment of
compulsory retirement with superannuation benefits were excluded and
ineligible. There was no objection or protest from the Workers Union or
Officers Association questioning the definition and meaning of the term
"retired" as used in the aforesaid circulars. The appellant bank was not
questioned for giving the term "retired" a narrow meaning in contrast with
and contrary to the settlement agreement dated 27th April, 2010.
16. The circulars/notifications dated 16th August, 2010 and 20th August,
2010 had the effect of giving a non-optee in service, or a "retired" officer,
another chance to opt for the Pension Scheme. In the case of a retired
employee, the option was restricted to the categories specified and not to
cases wherein the employee had suffered the punishment of compulsory
retirement with benefits as due. To sum up, the effect of the aforesaid
reasoning would be that employees who had suffered the punishment of
compulsory retirement with superannuation benefits without opting for
pension, would be entitled to such benefits as were paid or were payable to
them under the relevant Contributory Provident Fund Scheme. They would
not be covered by the circulars/notifications dated 16th August, 2010 and
20th August, 2010.
17. Reference is made to circular No.HR & IR/CIR/ 2015-16/MI/ 1852
dated 23rd December, 2015, which reads as under:
"Chief Executives of Member banks which are parties to
Bipartite Settlement dated 10.04.2002.
Dear Sir,
Special Leave Petition NO.17054/2009 before the Hon'ble
Supreme Court - Bank of Baroda Vs. S.K. Kool -
Supreme Court decision dated 11.12.13 against the Bank -
Review Petition (C)No.2344/2014 & (2) SLP
No.11443/2014 Bank of Baroda Vs. G. Sukla before the
Supreme Court.
We refer to our Circular No.CIR/HR&IR/KU/MI/1004 dated
30.06.2015 regarding treatment of cases in which an employee
who is imposed with punishment of "removed with
superannuation benefits" under Clause 6(b) of the Bipartite
Settlement dated 10.04.2002/27.5.2002 on "Disciplinary
Action & Procedure therefor for Workmen" in view of the
above captioned Hon‟ble Supreme Court Judgment. Member
banks were advised to consider implementation of the said
judgment in such cases.
We have been receiving queries from member banks seeking
clarifications as to whether the award staff employees who are
imposed with punishment of "compulsory retired" (6c) and
"discharged from service" (6d) are also covered under the
above judgment.
We have examined the matter and are of the view that
employees imposed with punishment of "removal",
"compulsory retirement" and "Discharge" as per Clause 6 (b),
(c) and (d) of Settlement dated 10.4.2002 are to be considered
with superannuation benefits, i.e. Pension and / or PF and
Gratuity as would be due otherwise under the Rules or
Regulations.
Yours faithfully,
Sd/-
K. Unnikrishnan
Deputy Chief Executive"
The said circular refers to the decision in S.K. Kool (Supra) and
states that employee who has been imposed punishment of removal with
superannuation benefits, as per the bi-partite settlement would be entitled
to pensionary benefits. Queries had been received from the member banks
seeking clarification as to whether staff employees, upon whom
compulsory retirement has been imposed, were covered by the said
judgment. The matter was examined and it was clarified that employees
who had suffered punishment of removal / compulsory retirement with
discharge, as per Clause 6(b), (c) and (d) of the Settlement dated 10 th April,
2002, are to be considered for superannuation benefits, be it pension and/
or provident fund and gratuity, as would be due under the Rules and
Regulations. The aforesaid circular does not in fact state or hold that the
officer, who has suffered punishment of compulsory retirement would be
entitled to opt for pension under the two 2010 Circulars. This circular only
clarifies that an officer who has suffered punishment of removal,
compulsory retirement, discharge is entitled to superannuation benefits as
due, and the same should be paid.
18. We would refer to the case law relied upon by the parties when we
decide Writ Petition (C) No. 3817/2016, Deepak Sapra versus Punjab
National Bank. However, at this stage, we would only notice and record
that a Division Bench of this Court in Kailash Nath Singhal versus Union
of India and Others, 97 (2002) DLT 602 (DB) holds and directs that
employees, who have suffered punishment of compulsory retirement as a
punishment for misconduct would constitute a separate class. Kailash Nath
Singhal, who was compulsorily retired by way of punishment on 21 st
February, 1991 was denied the initial option to opt for pension under the
Punjab National Bank (Employees) Pension Regulations, 1995 as the said
punishment was imposed prior to 1st November, 1993. We shall refer to
the reason for fixing of the cut off date subsequently, but at this stage
would refer to paragraphs 8 and 10 of the judgment in All-India Reserve
Bank Retired Officers Association versus Union of India, (1992) Supp.
(1) SCC 664, which were quoted in Kailash Nath Singhal (supra).
Paragraphs 8 and 10 of All-India Reserve Bank Retired Officers
Association (supra) read as under:-
"8. From what we have stated above it becomes clear that the
demand of Bank employees for introduction of a pension scheme
as a third retiral benefit as recommended by the Study Group in its
report submitted in 1981 was rejected by the Central Government
sometime in 1982. Thereafter a fresh demand was made for the
introduction of a pension scheme in substitution of the CPF scheme
on the pattern of the pension scheme admissible to Central
Government employees. This proposal met with the approval of the
Central Government and accordingly the Bank introduced the
Regulations incorporating the same. Under the Regulations new
entrants joining on and after November 1, 1990 automatically
become governed by the pension scheme; for them the CPF
scheme has no existence. Those employees who were in the
employment of the Bank prior to November 1, 1990 were given an
option to switch over to the pension scheme subject to the
conditions stated earlier. An option was also given to those
employees who had retired between January 1, 1986 and coming
into force of the Regulations to come over to the pension scheme,
provided they were willing to refund the employer's contribution
under their CPF scheme with interest thereon and with further
interest at 6 per cent per annum from the date of receipt of the
provident fund amount till the date of repayment. It will thus be
seen that the pension scheme introduced under the Regulations is
patterned on the pension scheme governing the Central
Government employees which was brought into effect from
January 1, 1986 on the recommendations of the Fourth Central Pay
Commission found in Chapter X of the report, vide paragraph
10.19 of that chapter. There is, however, no doubt that by fixing
the cut-off date Bank employees who superannuated on or before
December 31, 1985 are denied the benefit of the pension scheme.
The contention of the petitioners is that both the groups, namely,
those who retired on or before December 31, 1985 and those who
retired between January 1, 1986 and October 31, 1990 belong to
the same group of CPF retirees and yet the Regulations seek to
divide them by placing an artificial cut-off date under Regulations
3(3) and 31 of the Regulations. It is, therefore, contended that this
artificial division of a homogeneous group not based on any logic
or rationale and having no nexus to the object to be achieved
clearly offends the equality clause contained in Article 14. There is
no doubt that whenever any rule or regulation having statutory
flavour is made by an authority which is a State within the meaning
of Article 12 of the Constitution, the choice of the cut-off date
which has necessarily to be introduced to effectuate such benefits
is open to scrutiny by the Court and must be supported on the
touchstone of Article 14. If the choice of the date results in
classification or division of members of a homogeneous group it
would be open to the Court to insist that it be shown that the
classification is based on an intelligible differentia and on rational
consideration which bears a nexus to the purpose and object
thereof. The differential treatment accorded to those who retired
prior to the specified date and those who retired subsequent thereto
must be justified on the touchstone of Article 14, for otherwise it
would be offensive to the philosophy of equality enshrined in the
Constitution. This is quite clear from the ratio of Nakara
case [(1983) 1 SCC 305 : 1983 SCC (L&S) 145 : (1983) 2 SCR
165] as well as the decision of this Court in B. Prabhakar
Rao v. State of A.P. [1985 Supp SCC 432 : 1986 SCC (L&S) 49 :
1985 Supp 2 SCR 573] We have, therefore, to consider the limited
question whether the classification introduced by clauses 3(3) and
31 of the Regulations is inconsistent with Article 14 of the
Constitution as alleged by the petitioners.
XXXX
10. Nakara [(1983) 1 SCC 305 : 1983 SCC (L&S) 145 : (1983) 2
SCR 165] judgment has itself drawn a distinction between an
existing scheme and a new scheme. Where an existing scheme is
revised or liberalised all those who are governed by the said
scheme must ordinarily receive the benefit of such revision or
liberalisation and if the State desires to deny it to a group thereof, it
must justify its action on the touchstone of Article 14 and must
show that a certain group is denied the benefit of
revision/liberalisation on sound reason and not entirely on the
whim and caprice of the State. The underlying principle is that
when the State decides to revise and liberalise an existing pension
scheme with a view to augmenting the social security cover
granted to pensioners, it cannot ordinarily grant the benefit to a
section of the pensioners and deny the same to others by drawing
an artificial cut-off line which cannot be justified on rational
grounds and is wholly unconnected with the object intended to be
achieved. But when an employer introduces an entirely new
scheme which has no connection with the existing scheme,
different considerations enter the decision making process. One
such consideration may be the financial implications of the scheme
and the extent of capacity of the employer to bear the burden.
Keeping in view its capacity to absorb the financial burden that the
scheme would throw, the employer would have to decide upon the
extent of applicability of the scheme. That is why in Nakara
case [(1983) 1 SCC 305 : 1983 SCC (L&S) 145 : (1983) 2 SCR
165] this Court drew a distinction between continuance of an
existing scheme in its liberalised form and introduction of a wholly
new scheme; in the case of the former all the pensioners had a right
to pension on uniform basis and any division which classified them
into two groups by introducing a cut-off date would ordinarily
violate the principle of equality in treatment unless there is a strong
rationale discernible for so doing and the same can be supported on
the ground that it will subserve the object sought to be achieved.
But in the case of a new scheme, in respect whereof the retired
employees have no vested right, the employer can restrict the same
to certain class of retirees, having regard to the fact-situation in
which it came to be introduced, the extent of additional financial
burden that it will throw, the capacity of the employer to bear the
same, the feasibility of extending the scheme to all retirees
regardless of the dates of their retirement, the availability of
records of every retiree, etc. It must be realised that in the case of
an employee governed by the CPF scheme his relations with the
employer come to an end on his retirement and receipt of the CPF
amount but in the case of an employee governed under the pension
scheme his relations with the employer merely undergo a change
but do not snap altogether. That is the reason why this Court
in Nakara case [(1983) 1 SCC 305 : 1983 SCC (L&S) 145 : (1983)
2 SCR 165] drew a distinction between liberalisation of an existing
benefit and introduction of a totally new scheme. In the case of
pensioners it is necessary to revise the pension periodically as the
continuous fall in the rupee value and the rise in prices of essential
commodities necessitates an adjustment of the pension amount but
that is not the case of employees governed under the CPF scheme,
since they had received the lump sum payment which they were at
liberty to invest in a manner that would yield optimum return
which would take care of the inflationary trends. This distinction
between those belonging to the pension scheme and those
belonging to the CPF scheme has been rightly emphasised by this
Court in Krishena case [(1990) 4 SCC 207 : 1991 SCC (L&S) 112
: (1990) 14 ATC 846]."
19. The decision in Kailash Nath Singhal (supra) also refers to decision
of State of West Bengal and Others versus Ratan Behari Dey and Others,
(1993) 4 SCC 62 wherein it has been held as under:-
"Now it is open to the State or Corporation, as the case may be, to
change the conditions of service unilaterally. Terminal benefits as well
as pensionary benefits constitute conditions of service. The employer
has the undoubted power to revise the salaries and/or the pay scales as
also terminal benefits/pensionary benefits. The power to specify a date
from which the revision of pay scales or terminal benefits/pensionary
benefits, as the case may be, shall take effect is a concomitant of the
said power. So long as such date is specified in a reasonable manner,
i.e. without bringing about a discrimination between similarly situated
persons, no interference is called for by the Court in that behalf.
(as quoted in paragraph 18 of Kailash Nath Singhal (supra))
20. The Supreme Court in Bishwanath Prasad Singh vs. State of Bihar
& Ors. (2001) 2 SCC 305, observed that compulsory retirement in service
law jurisprudence has two different connotations. Compulsory retirement
may be imposed as a penalty on a delinquent employee found guilty of
misconduct, in which case it is a penal and stigmatic order and has
consequences. A government servant may also be retired on his attaining a
particular age or completing a certain number of years in service. Such
premature retirements are in public interest and do not cast any stigma. In
the latter case, the government servant is entitled to pension actually earned
and other retirement benefits. For the sake of clarity, we would like to
quote the relevant portion of the aforesaid decision:-
"12. Compulsory retirement in service jurisprudence has two
meanings. Under the various disciplinary rules, compulsory
retirement is one of the penalties inflicted on a delinquent
government servant consequent upon a finding of guilt being
recorded in disciplinary proceedings. Such penalty involves stigma
and cannot be inflicted except by following procedure prescribed by
the relevant rules or consistently with the principles of natural justice
if the field for inflicting such penalty be not occupied by any rules.
Such compulsory retirement in the case of a government servant
must also withstand the scrutiny of Article 311 of the Constitution.
Then there are service rules, such as Rule 56(j) of the Fundamental
Rules, which confer on the Government or the appropriate authority,
an absolute (but not arbitrary) right to retire a government servant on
his attaining a particular age or on his having completed a certain
number of years of service on formation of an opinion that in public
interest it is necessary to compulsorily retire a government servant.
In that case, it is neither a punishment nor a penalty with loss of
retiral benefits. (See Shyamlal v. State of U.P.[AIR 1954 SC 369 :
(1955) 1 SCR 26] , Brij Mohan Singh Chopra v. State of
Punjab [(1987) 2 SCC 188 : (1987) 3 ATC 496] , S. Ramachandra
Raju v. State of Orissa [1994 Supp (3) SCC 424 : 1995 SCC (L&S)
74 : (1994) 28 ATC 443] , Baikuntha Nath Das v. Chief District
Medical Officer, Baripada [(1992) 2 SCC 299 : 1993 SCC (L&S)
521 : (1992) 21 ATC 649] .) More appropriately, it is like premature
retirement. It does not cast any stigma. The government servant shall
be entitled to the pension actually earned and other retiral benefits.
So long as the opinion forming basis of the order for compulsory
retirement in public interest is formed bona fide, the opinion cannot
be ordinarily interfered with by a judicial forum. Such an order may
be subjected to judicial review on very limited grounds such as the
order being mala fide, based on no material or on collateral grounds
or having been passed by an authority not competent to do so. The
object of such compulsory retirement is not to punish or penalise the
government servant but to weed out the worthless who have lost
their utility for the administration by their insensitive, unintelligent
or dubious conduct impeding the flow of administration or
promoting stagnation. The country needs speed, sensitivity, probity,
non-irritative public relation and enthusiastic creativity which can be
achieved by eliminating the dead wood, the paperlogged and callous
(see S. Ramachandra Raju v. State of Orissa [1994 Supp (3) SCC
424 : 1995 SCC (L&S) 74 : (1994) 28 ATC 443] . We may with
advantage quote the following passage from this decision: (SCC p.
430, para 9)
"Though the order of compulsory retirement is not a punishment and
the government servant on being compulsorily retired is entitled to
draw all retiral benefits, including pension, the Government must
exercise its power in the public interest to effectuate the efficiency of
service. The dead wood needs to be removed to augment efficiency.
Integrity of public service needs to be maintained. The exercise of
power of compulsory retirement must not be a haunt on public
servant but act as a check and reasonable measure to ensure
efficiency in service, and free from corruption and incompetence.
The officer would go by reputation built around him. In appropriate
case, there may not be sufficient evidence to take punitive act of
removal from service. But his conduct and reputation in such that his
continuance in service would be a menace in public service and
injurious to public interest.""
W.P.(C) 3817/2016
21. Deepak Sapra, the petitioner in WP(C) No.3817/2016, is an ex-
employee of the Punjab National Bank, the respondent therein.
Departmental proceedings were initiated against the petitioner vide charge-
sheet dated 12th January, 2004. By the order dated 20th December, 2004
the penalty of compulsory retirement was imposed. The penalty order has
attained finality.
22. The respondent-Punjab National Bank („PNB‟ for short) had
introduced Punjab National Bank (Employees) Pension Regulations, 1995
(1995 Regulations, for short) on 29th September, 1995. The petitioner, who
was then a serving employee, did not opt for pension under the 1995
Regulations. Accordingly, the petitioner was governed and consequent to
the penalty of compulsory retirement, was paid the contributory provident
fund inclusive of the bank‟s share and interest accrued thereon and the
gratuity.
23. About six years thereafter, the Indian Banks‟ Association on behalf
of management of banks entered into a Settlement dated 27th April, 2010
with workmen employees and a joint note dated 27th April, 2010 with the
officers employees. Thereafter the Indian Banks Association had issued
the circular dated 10th August, 2010, the relevant portion of which reads as
under:
"(i) To facilitate early implementation, Government has
consented IBA advising all Banks that they may undertake
the exercise of seeking the option from the employees both
serving and retirees who did not opt for pension earlier,
explaining the terms and conditions for such option.
(ii) Sanction of the Government is also accorded to implement
the terms of Settlement/Joint Note dated 27th April 2010
between IBA and Unions/Associations for the grant of option
to retirees and payment of pension to such retirees w.e.f. 27 th
November, 2009, who opt for pension and comply with the
terms and conditions set out in the Settlement/Joint Note for
the grant of pension, pending necessary amendments in the
Bank (Employees) Pension Regulations, 1995
(iii) The existing pension scheme will not be applicable to
those, who join the services of the banks on or after 1 st
April 2010. Officers/Workmen employees joining services of
banks on or after 1st April 2010 shall be eligible for Defined
Contributory Pension Scheme on the lines of New Pension
Scheme introduced for employees of Central Government. The
Officer/Workmen employees joining service on or after 1 st
April 2010shall contribute 10% of Pay and DA towards the
Defined Contributory Pension Scheme.
(iv) Officer / Workmen employees, who opted for Voluntary
Retirement under special Voluntary Scheme after rendering a
minimum of 15 years service, shall be eligible to exercise
option to join the Pension Scheme subject to terms and
conditions applicable to retirees.
(v) Pension/Family Pension will be payable to those, who opt
to join pension scheme and comply with terms and conditions
set out in the Settlement/Joint Note dated 27.04.2010."
(underlining as per original circular)
As per clause (i) of the Circular, serving employees and retired
employees, who had earlier not opted for pension under the 1995
Regulations could now opt for pension. Clause (iv) stipulated that
officers/workmen employees, who had taken voluntary retirement under
the Special Voluntary Scheme, after having rendered minimum 15 years of
service, were eligible to exercise the option to join the Pension Scheme
under the 1995 Regulations, subject to the satisfaction of the other terms
and conditions by the retiree.
24. By a circular No.8/10 of the respondent-PNB dated 16th August,
2010, it was clarified that the option to join the Pension Regulation had
been extended to:
(A) Employees / officers, who were in service of the bank prior to 29th
September, 1995 and had continued to be in service of the bank on 27 th
April, 2010 and had retired thereafter.
(B) Employees / officers, who were in service prior to 29th September,
1995 and had retired after that date but prior to the settlement / joint note
dated 27th April, 2010 provided they exercise the option in writing within
60 days to become a member of the Pension Fund and would refund the
entire amount of banks contribution to the provident fund and interest
accrued thereon received at the time of retirement with his share in
contribution towards meeting 30% of the funding gap, within 30 days after
expiry of the said period of 60 days. The employees‟ share, it was stated,
had been worked out / computed at 56% of the said amount of banks
contribution to the provident fund and interest thereon.
25. Two years after the said circulars, the petitioner filed
WP(C)No.4031/2012 in the Delhi High Court, asserting that he was
wrongly denied leave encashment on the ground that he had suffered
penalty of compulsory retirement. The writ petition was dismissed by the
Single Judge vide decision dated 18th July, 2013. However, the petitioner
succeeded in LPA No.693/2013 vide decision dated 18th September, 2013,
holding that though the petitioner had suffered punishment of compulsory
retirement, he cannot be denied leave encashment as this would be
contradictory to the plain intent of Regulation 38 of the PNB Officers
Service Regulation 1979. Regulation 38 of the 1979 Regulations as per the
first proviso, it was interpreted, would be applicable to all retirees, whether
they retire on account of superannuation, voluntarily, in public interest on
attaining a certain age or having served for a certain number of years, and
even "retirement" upon imposition of penalty of compulsory retirement. It
was also observed that in cases where penalty of compulsory retirement
was imposed, there was no dispute that pension as applicable and other
terminal benefits were given. Consequently, to single out and deny benefit
of leave encashment to one class of retirees, i.e. those imposed with
compulsory retirement, was arbitrary and without any rationale.
26. Armed with the aforesaid decision, the petitioner wrote several
letters, the last one being the representation dated 18th July, 2015, pressing
that he should be admitted to pension. The petitioner asserted that he had
submitted his e-generated option for pension on 15th September, 2010, after
the respondent bank had issued circular dated 16th August, 2010, giving
another option/chance to the working and retired employees to opt for
pension. On 13th October, 2010, the petitioner had submitted his consent
form, medical form and had deposited Rs.7,55,898.68/-, equivalent to
156% of his contribution along with interest accrued towards pension
option in terms of the circular dated 16th August, 2010. The respondent
bank, however, had refunded the said amount on 17th January, 2011,
informing that the petitioner having suffered the penalty of compulsory
retirement was not eligible for pension option.
27. The petitioner as noted above had not raised this plea or prayer
relating to exercise of option for pension in W.P. (C) No. 4031/2012. On
not receiving any response, the petitioner had filed W.P. (C)
No.8018/2016, challenging the rejection communication dated 17th
January, 2011. This writ petition was disposed of by the single Judge on
15th February, 2016 with the direction that the representation dated 18 th
July, 2015 should be decided by a speaking order.
28. The representation of the petitioner was rejected by a detailed
speaking order dated 11th April, 2016. This order records that the
petitioner was charge-sheeted for serious lapses and irregularities with
respect to sanction of various credit facilities during his tenure in branch
office of Hari Nagar, branch office at N.46, Connaught Circus and branch
office at Delhi Cantt., on the following articles of charge:
"Article I - BO : -46, Con. Circus, New Delhi
He abused his official position and sanctioned credit facilities
to various borrowers without verifying their antecedents and
ensuring proper pre-sanction appraisal and failed to exercise post-
sanction controls thereby jeopardized the interest of the Bank.
Article II - BO : Hari Nagar, New Delhi
He made reckless lending and sanctioned Housing Loan to
various borrowers through middlemen without ascertaining
authenticity of income proof, accepted fake housing plans,
obtained cross guarantees and accepted unrealistic estimates and
failed to verify proper end use of funds, in a view to make
pecuniary gains, thereby jeopardized the interest of the Bank.
Article III - BO : Delhi Cantt.
He unauthorized accommodated various borrowers and
sanctioned credit facilities without proper pre-sanction appraisal
and failed to exercise post-sanction controls thereby jeopardized
the interest of the Bank."
The respondent bank, as a result, had an outstanding amount of more
than Rs.3.0 crores, which it was finding difficult to recover. It was
apprehended that the bank had suffered a loss of more than Rs.1.0 crores.
On the question of pension option, it was elucidated that the petitioner
would not be covered for he was not an employee, who had retired on
attaining the age of superannuation or who had opted for voluntary
retirement. He was also not a pre-maturely retired employee. In the given
circumstances, the petitioner could not be treated at par and equated with
the employees, who had retired. The decisions relied upon were
distinguished, for the petitioner had suffered the penalty of compulsory
retirement, whereas in other cases the order of punishment of compulsory
retirement postulated pensionary benefits. Further in terms of the joint
note / settlement dated 27th April, 2010, an ex-employee was entitled to opt
for pension, provided he satisfied the eligibility criteria. The employees,
who had suffered punishment of compulsory retirement were not to be
compared or treated at par with those, who had retired on superannuation
or had sought voluntary retirement.
28. The petitioner has filed the present writ petition for quashing of
Regulation 2(y) and 29 of the 1995 Regulations to the extent that they deny
pension to compulsory retired officers; and to quash orders dated 11th
April, 2016 and 17th January, 2011, whereby the petitioner‟s entitlement to
exercise option for pension under Circular 8/10 dated 16th August, 2010
has been declined and rejected. The petitioner prays that he should be paid
pension with interest @ 18% for the delay in payment.
29. As the petitioner has challenged the regulation 2(y) and 29 of the
1995 Regulations applicable to Punjab National Bank Employees, we
would like to reproduce the same:
"Regulation 2(y) "retirement" means cessation from
Bank's service,-
a) on attaining the age of superannuation specified in
Service Regulations or Settlements;
b) on voluntary retirement in accordance with provisions
contained in regulations 29 of these regulations;
c) on premature retirement by the Bank before attaining
the age of superannuation specified in Service Regulations or
Settlement;
XXXX
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 note 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 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 where 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 there for;
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
communication 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."
30. As per regulation 2(y) the term "retirement" means cessation from
bank's service on (i) attaining the age of superannuation, as specified in
service regulations (ii) voluntary retirement in accordance with regulation
29 and (iii) pre-mature retirement before attaining the age of
superannuation. The term "retirement" as defined excludes employees
who have suffered punishment of compulsory retirement. It includes
employees who are prematurely retired before attaining the age of
superannuation. Regulation 29 deals with pension on voluntary retirement.
31. It is not the case of the petitioner that he is a retired employee within
the meaning of Regulation 2(y). The petitioner also accepts that he is not
entitled to pension under Regulation 29 which is payable to an employee,
who seeks voluntary retirement. This is the precise reasons why petitioner
is challenging the two regulations. The submission of the petitioner is that
the employee, who has suffered compulsory retirement, should be included
in the definition of retirement, and regulation 29 which relates to pension
on voluntary retirement, should include employees, who have suffered
penalty of compulsory retirement. The arguments are very feeble and
weak. The words "compulsory" and "voluntary" have a different
connotation and meaning. Pertinently, Regulation 33 of the 1995
Regulations deals with compulsory retirement pension. The same reads as
under:
"33. Compulsory Retirement Pension:
(1) An employee compulsorily retired from service as a
penalty on or after 1st day of November, 1993 in terms of
Punjab National Bank Officer Employees‟ (Discipline and
Appeal) Regulations, 1979 or awards / settlements may be
granted by the authority higher than the authority
competent to impose such penalty, pension at a rate not
less than two-thirds and not more than full pension
admissible to him on the date of his compulsory
retirement if otherwise he was entitled to such pension
on superannuation on that date.
(2) Whenever in the case of a bank employee the Competent
Authority passes an order (whether original, appellate or in
exercise of power of review) awarding a pension less than
the full compensation pension admissible under these
regulations, the Board of Directors shall be consulted
before such order is passed.
(3) A pension granted or awarded under sub-regulation (1) or
as the case may be, under sub-regulation (2) shall not be
less than the amount of rupee three hundred and seventy
five per mensem."
(emphasis supplied)
When there is a specific provision relating to pension in cases where
penalty of compulsory retirement has been imposed, we do not see any
reason and/ or ground to strike down Regulation 2(y), which defines
retirement and Regulation 29 which relates to payment of pension on
voluntary retirement. Employees awarded punishment of compulsory
retirement are paid pension in accordance with Regulation 33 of the 1995
Regulations.
32. For the reasons elucidated above and while deciding appeal in the
case of Kamlesh Pratap Singh, we will have to reject the contention that an
officer, who has suffered penalty of compulsory retirement is a treated
retired employee under Regulation 2(y). The definition of the retired
employee in Regulation 2(y) is clear and specific and does not include
officers, who had suffered penalty of compulsory retirement.
33. The petitioner has not claimed and does not seek pension under
Regulation 33, which relates to compulsory retirement pension. He is not
covered under Regulation 33. We have reproduced Regulation 33 above
and would note that while imposing penalty of compulsory retirement to an
employee who is entitled to pension, the disciplinary authority is required
to examine the question of quantum of pension payable. The Disciplinary
Authority is empowered and competent to impose such penalty reducing
the rate of pension not less than 2/3rd. Full pension, depending on facts,
need not be paid. It could be urged that the disciplinary authority, when it
imposed punishment of compulsory retirement without further stipulation,
had impliedly granted full pension. The contra view, which we believe has
merit, would be that this aspect was not required to be decided for the
petitioner was not a pension optee and there was no need for the
Disciplinary Authority to pass an order in terms of Regulation 33 of the
Pension Regulation. To draw an assumption as suggested by the petitioner
would be to base once decision on conjecture and surmises. There is
considerable merit in the contention of the respondent-Bank. If the prayer
of the petitioner is to be accepted, it would result in overriding and
negating the effect of Regulation 33 of the Pension Regulation. In case the
petitioner was a pension optee, the Disciplinary Authority at the time of
imposing penalty would have appropriately examined the issued whether
full or reduced pension should be paid. The Disciplinary Authority was
competent to reduce the pension payable after following the procedure as
prescribed in Clause 2 of Regulation 33. Thus, in case the plea and
contention of the petitioner is to be accepted, then the penalty order dated
20th December, 2004 would have to be modified and re-written. This was
certainly not postulated by the two circulars.
34. In the present case as noted above, the petitioner had not opted for
the period covered by the 1995 Regulations. On 20th December, 2004,
when the penalty of compulsory retirement was imposed on the petitioner,
he was not a pension optee. He was paid terminal benefits as applicable,
i.e. the contributory provident fund and gratuity.
35. The petitioner‟s case is entirely predicated and based upon the
circular No.8/10 dated 16th October, 2010, read with the earlier circular
dated 10th August, 2010 issued by the Indian Bankers‟ Association. He
submits that as per the circular dated 16th October, 2010 existing or serving
employees or those, who had retired and not opted for pension could opt
for the same. The pension scheme was not applicable to those, who had
joined services on or after 1st April, 2010. Further, the circulars drew a
distinction between retired employees and officers / workmen, who had
adopted for voluntary retirement under the Special Voluntary Retirement
Scheme. Such employees, who had opted for voluntary retirement under
the Special Voluntary Retirement Scheme were also eligible to exercise
option and join the pension scheme.
36. In Kailash Nath Singhal (supra), the petitioner had challenged
constitutional validity of Regulation 33. The contention was that the said
Regulation unfairly and arbitrarily fixes the cut off date of 1st November,
1993, thereby unnaturally dividing the same class of compulsory retired
employees, who were entitled or not entitled to opt for pension. The
employees who were compulsorily retired prior to 1 st November, 1993
were denied right to opt for pension, whereas those who had retired after 1 st
November, 1993 were entitled to pension. The challenge to the said date
was rejected for several reasons. After quoting from the judgment of the
Supreme Court in V. Kasturi versus Managing Director State Bank of
India, Bombay & Anr,. (1998) 8 SCC 30 it was held that there was no
pension scheme prior to 1st November, 1993. Ergo, the pension scheme
was introduced for employees compulsorily retired only through the 1995
Regulations. In such circumstances, employees, who had retired prior to
1st November, 1993 could be left out as they fall in category II as identified
in V. Kasturi (supra) for no right of a non-pensioner was withdrawn or
taken away. Category-II in V. Kasturi's case (supra) was of those retirees,
who were not covered by any pension scheme. The petitioner‟s case would
be comparable with category-II employees for he was not the pension
optee and not covered under the pension scheme. The petitioner‟s claim is
in fact that he should be allowed to opt for the pension scheme and not that
he is a pension optee and is being discriminated.
37. The Division Bench referred to the judgment in Canara Bank
versus B.M. Ramachandra and Others, (1999) 4 Ker.L.J. 628 (DB), but
the same was distinguished for the following reasons:-
"33. In Ramachandra, some employees had taken voluntary
retirement from Canara Bank between the two dates
abovementioned. Pursuant to the Settlement (which is the same as in
the present case), a pension scheme was formulated by Canara Bank.
This pension scheme was made applicable to only those employees
who had voluntarily retired on or after 1st November, 1993. This
cut-off date was challenged by the respondents, as in the present
case. A learned Single Judge
34. A careful reading of Ramachandra shows that there are several
differences between that case and the present case.
a) The Respondents in Ramachandra had taken voluntary
retirement under the existing Canara Bank (Officers) Service
Regulations, 1979 which permitted an employee to take voluntary
retirement, though without pension (pages 632 and 638 of the
Report).
b) Pursuant to the Settlement dated 29th October, 1993 the Board
of Directors of Canara Bank adopted draft pension regulations
provided by the Indian Banks Association. Persons who had
taken voluntary retirement between 1st January, 1986 and 1st
November, 1993 were treated as eligible for pension under the
draft regulations. Not only this, both the employees and Canara
Bank had acted on these draft regulations on the basis that they
were applicable to employees who had taken voluntary retirement
between 1st January, 1986 and 1st November, 1993 (page 633 of
the Report). It was only after the draft regulations were formally
adopted by Canara Bank in 1995 that the employees were told
that they were not entitled to any pension.
c) Although Canara Bank did say that the draft Regulations
underwent some modifications before its final formulation, the
Karnataka High Court found that "There is nothing on the record
to show that the draft Regulations which held the retirees like the
writ petitioners entitled to the grant of pension were changed or
modified either by the Central Government or by the Reserve
Bank of India." (Page 644 of the Report).
d) The Karnataka High Court also noticed that the financial
liability on Canara Bank was not so huge, which if accepted
would frustrate the pension scheme (page 643 of the Report).
35. Taking all these factors into consideration, it was held on page
646 of the Report:
"The appellants have not referred to the existence of any
circumstances or conditions which can be considered to be a
ground for the change of the conditions of the statutory
settlement arrived at between the parties. The draft Regulations,
as earlier noted, were rightly understood by the parties concerned
to confer the benefit of the Pension Scheme to the retirees of the
banks prior to 1-1-1993 as well. Any other and contrary
interpretation of the Pension Regulations would amount to
frustrate the statutory settlement arrived at on 29-10-1993..."
Thereafter, it was held:
"The distinction sought to be drawn by the appellants with
respect to the retirees before 1-11-1993 and retirees thereafter
appears only to be imaginary and not real. The draft Pension
Regulations were held applicable to the persons like the writ
petitioners and the same were enforced obviously without any
amendment or alteration, w.e.f. 29-9-1995. The learned Single
Judge was therefore right in holding that the Regulations were
applicable to all the employees who had opted for voluntary
retirement notwithstanding the cut-off date of 1-11-1993"
36. The Karnataka High Court also noted that pensionary benefits
were granted in similar circumstances to employees of the Reserve
Bank of India and the Life Insurance Corporation of India. On these
bases, the Respondents in Ramachandra were held entitled to
pensionary benefits."
38. Reference was also made to Bank of India and Others versus Indu
Rajagopalan and Others, JT 2000(10) SC 334 and the Division Bench
elucidated and explained the position in Kalilash Nath Singhal (supra) in
the following words:-
"38. We may mention that in Ors., Bank of India and Ors.
v. Indu Rajagopalan and Ors.
VIII(2001)SLT95=JT2000(10)SC334, The Supreme Court
declined to interfere with the directions given in
Ramachandra. Apart from other things, what appears to
have weighed with the Supreme Court in Indu Rajagopalan
is that there was no significant financial or other burden on
the appellant Banks.
39. Taking cue from what was said by the Supreme Court
in Indu Rajagopalan, we did inquire from the learned
Counsel for the parties about the financial impact that a
decision in favour of the appellant would have. Neither
Counsel was in a position to enlighten us on this, except to
say that hardly 3 or 4 similar cases were pending in this
Court. We, therefore, take it that the financial burden on
the Bank is not considerable. Even then, we do not find it
possible to decide in favour of the appellant and others like
him. For one, we are of the view that the law is not in
favour of the appellant. We cannot brush aside the legal
position only because there is little or no financial burden
on the Bank. We do not have such a power. Nor can we be
asked to compassionate view of the matter, as submitted
by the learned Counsel for the appellant, because it is
entirely within the domain of the Bank whether or not to
view the case of the appellant and others like him with
compassion."
The Division Bench, therefore, in categorical and affirmative terms
has upheld the constitutional validity of Regulation 33 dealing with
payment of compulsory retirement pension. Deepak Sapra in his writ
petition has deliberately not challenged Regulation 33 and has challenged
Regulations 2(y) and 29 as he was aware and conscious that constitutional
validity of Regulation 33 has been upheld. Challenge to Regulations 2(y)
and 29 is predicated on the same very argument and contentions and should
be rejected.
39. The Division Bench decision in Kailash Nath Singhal (supra) has
been followed in the following cases:-
(i) The decision of the Punjab & Haryana High Court in S.L.
Loona (deceased) through LRs. versus The Punjab National
Bank (CWP No. 6298/1999 decided on 27th March, 2009).
(ii) The decision of the Guwahati High Court in Upendra Nath
Sarna versus Punjab National Bank (W.P. (C) No.
1424/1999 decided on 8th September, 2006)
(iii) The decision of the Rjasthan High Court in T.M. Harsora
versus Punjab National Bank (Civil Writ Petition No.
6597/1997 decided on 25th November, 2008)
40. However, we also have decisions in which contra view has been
taken holding that order of compulsory retirement by way of punishment
would be "retirement" and there is no distinction between an employee,
who has suffered punishment of compulsory retirement and an employee,
who has retired on superannuation, voluntarily or was prematurely retired.
This view has been held by:
(i) The Madras High Court in Writ Petition No. 15766/2013, D.
Kalaichelvan versus Union of India and Another, decided on 1st April,
2015. It is stated that this judgment has been upheld in appeal;
(ii) The Gujarat High Court upholding the judgment of the single Judge in
Bank of India versus S. Ghanshyambhai Muljibhai Patel, LPA No.
446/2013 decided on 22nd August, 2013;
(iii) The Andhra Pradesh High Court in Sreeram Ramamurthy versus
Andhra Bank, W.P. No. 9069/2011 decided on 22nd March, 2012 and
(iv) The Madhya Pradesh High Court in Ashwin Kumar Sharma versus
Punjab National Bank, Writ Appeal No. 905/2012 decided on 8 th August,
2013 upholding the judgment of the single Judge.
41. We would accept that there is variation in the two sets of judgments,
but we are bound by the decision in the case of Kailash Nath Singhal
(supra) and for the reasons stated above, we respectfully agree.
FINAL ORDERS
LPA NO. 403/2015
42. Accordingly, the present Letters Patent Appeal is allowed and the
impugned order dated 5th May, 2015 is set aside. W.P. (C) No3521/2014
filed by Kamlesh Pratap Singh would be treated as dismissed. In the facts
of the case there would be no order as to costs.
W.P.(C) NO. 3817/2016
43. In view of the aforesaid discussion, we do not find any merit in the
present writ petition challenging the vires of Regulation 2(y) and
Regulation 29 of the Punjab National Bank (Employees) Pension
Regulations, 1995. We also reject the submission that the petitioner was
entitled to pension under Regulation 33 of the aforesaid Regulations
consequent to the circular dated 16th August, 2010. The writ petition is
dismissed. In the facts of the present case, there would be no order as to
costs.
SANJIV KHANNA, J.
SUNITA GUPTA, J.
DECEMB ER 6th, 2016
ssn
