Canara Bank vs Gulzari Lal Kwatra
2016 Latest Caselaw 7267 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+              LETERS PATENT APPEAL No. 1041/2011
                                    Reserved on:      26th October, 2016
                                  Date of decision: 6th December, 2016

       CANARA BANK                                        ..... Petitioner
                         Through:    Mr. Naveen R. Nath, Advocate.

                         Versus

       GULZARI LAL KWATRA                          .... Respondent
                    Through: Mr. Mukul Gupta, Sr. Advocate with
                    Mr. Rajat Katyal and Mr. Sumit Kumar Mishra,
                    Advocates.

       CORAM:
       HON'BLE MR. JUSTICE SANJIV KHANNA
       HON'BLE MS. JUSTICE SUNITA GUPTA

SANJIV KHANNA, J.

The present intra-Court appeal impugns the order dated 1st

September, 2011 passed in W.P. (C) No.2438/1996, Gulzari Lal Kwatra

Vs. Union of India & Anr. The aforesaid writ petition filed by Gulzari Lal

Kwatra, the respondent herein, stands allowed with the direction that the

respondent, who had suffered punishment of compulsory retirement, would

be entitled to pension under the Canara Bank (Employees) Pension

Regulations, 1995, (Pension Regulations, for short). The order and

judgment of the Single Judge follows the decision dated 30th May 1997, of

the Karnataka High Court in Writ Appeal No. 8897 of 1996 titled Canara

Bank Vs. B.M. Ramachandra. It has been observed that the said decision

was affirmed by the Supreme Court in Bank of India Vs. Indu

Rajagopalan, (2001) 9 SCC 318.

2. We would briefly refer to the facts relevant to the present appeal. The

respondent was an employee of Laxmi Commercial Bank, and consequent

to the amalgamation of the said bank with Canara Bank, was inducted into

the service of the latter Bank as an accountant with effect from 24th August,

1985. The appellant-Canara Bank initiated disciplinary action against the

respondent on account of unauthorised absence from service and a charge-

sheet was issued under the Canara Bank Officer Employees' (Discipline

and Appeal) Regulations, 1976, (1976 Regulations, for short). By order

dated 26th August, 1991, the respondent was compulsorily retired from

service under Regulation 4(h) of the 1976 Regulations. The appeal and

revision filed by the respondent against the order of compulsory retirement

were dismissed by the appellate and reviewing authority on 16th June, 1993

and 5th September, 1995, respectively.

3. The Pension Regulations were enacted and had come into effect from

29th September, 1995. Clause 33 of the said Regulations pertains to

Compulsory Retirement Pension and reads as under:-

"33. Compulsory Retirement Pension:

[1] An employee compulsory retired from services as a penalty on or after 1st day of November 1993 in terms of Discipline and Appeal Regulations or settlement by the authority higher than the authority

competent to impose such penalty may be granted 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;"

A reading of the aforesaid clause would show that only those

employees who had suffered the penalty of compulsory retirement on or

after 1st November, 1993 could opt for pension under the Pension

Regulations. As is evident from the facts stated above, the respondent had

suffered penalty of compulsory retirement on 26th August, 1991, nearly

four years prior to the enactment of the Pension Regulations and, therefore,

could not have opted for pension in terms of Clause 33 quoted above.

4. The respondent had made a representation to the appellant-Bank

praying that he should be covered under the Pension Regulations and

accordingly be granted pensionary benefits accruing to him. The said

application of the respondent was rejected by the appellant-Bank vide letter

dated 13th December, 1995.

5. The respondent then filed W.P.(C) No. 2438/1996 challenging the

aforesaid orders. The primary challenge in the writ petition was to the

order of compulsory retirement dated 26th August, 1991. The prayer made

in the writ petition was that the order of compulsory retirement be set aside

and the respondent should be reinstated with continuity of service and

consequential benefits including payment of back wages and emoluments.

The respondent had also prayed for release of benefit of pension accruing

to him during the pendency of the writ petition. The prayer and grounds for

setting aside the punishment of compulsory retirement were not pressed

before the Single Judge. Even before us counsel for the respondent has not

pressed the aforesaid reliefs or argued that the matter should be remanded

to the Single Judge. The constitutional validity of the Clause 33 Pension

Regulations was not made the subject-matter of challenge in W.P. (C)

No.2438/1996.

6. Thus, the cut-off date of 1st November, 1993 has not been questioned

as being violative of Article 14 of the Constitution. We have to interpret

Regulation 33 as it exists.

7. The counsel for the respondent, however, has relied upon an earlier

order dated 11th December, 2007 passed in the W.P. (C) No.2438/1996.

The said order reads as under:-

"Counsel for the respondent has obtained instructions from his client and submits that the respondent bank has not extended the benefit of the judgment, rendered by the Supreme Court reported as JT 2000 (10) SC 334 entitled Bank of India v. Indu Rajagopalan and Ors. to the employees who were compulsorily retired by way of penalty and hence no such benefits on the ground of parity can be claimed by the petitioner.

Counsel for the petitioner states that in view of the long passage of time, he seeks to confine the relief in the present writ petition to release the benefits of pension payable to the petitioner.

List this matter in the category of „regular matters‟ in the week commencing from 25th February, 2008.

C.M. 4296/1996

Counsel for the petitioner states that at this stage, he does not wish to press this application. The same is, therefore, dismissed as withdrawn."

The order dated 11th December, 2007 would reveal that the appellant

bank had taken the stand that the respondent cannot be granted benefit of

the decision in the case of Indu Rajagopalan (supra). Counsel for the

respondent at that time had stated that he would restrict the relief to the

pensionary benefits only. This possibly is the reason why the respondent

had not pressed his challenge to the punishment order before the Single

Judge and before us as well. The order of compulsory retirement has

attained finality.

8. The counsel for the respondent argues that the order dated 1 st

September, 2011 was a consent order and, therefore the relief claimed for

cannot be withheld by the appellants. The order dated 11th December, 2007

does not reveal or indicate that the impugned order passed by the Single

Judge dated 1st September, 2011 was a consent order. The order does not

record such consent. Therefore, the contention of the respondent to the

said effect must fail and has to be rejected.

9. The constitutional validity of Clause 33 of the Punjab National Bank

(Employees) Pension Regulations, 1995, which is identical and pari

materia to Clause/Regulation 33 of the appellant-Bank, was considered by

a Division Bench of this Court in Kailash Nath Singhal Vs. Union of

India & Ors. 97 (2002) DLT 602 (DB), and the said Regulation/Clause

was upheld. This decision also refers to and distinguishes the judgment in

the case of B.M. Ramachandra & Ors.(supra) passed by the Karnataka

High Court and the decision of the Supreme Court in the case of Indu

Rajagopalan (supra).

10. In the case of B.M. Ramachandra & Ors. (supra), the employees

had taken voluntary retirement between 1st January, 1986 and 1st

November, 1993. The pension scheme had not been made applicable to

those employees, who had retired voluntarily on or after 1 st November,

1993 and this cut-off date was challenged in the writ petition filed in the

Karnataka High Court, for on this ground the pensionary benefits had been

denied to them. The Single Judge held that the cut-off date of 1st

November, 1993 fixed for the employees who had taken voluntary

retirement was irrational. In Kailash Nath Singhal (supra) elucidating

upon the judgment in the case of B.M. Ramachandra & Ors. (supra), it

was held as under:-

"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."

11. Thus, the Division Bench in Kailash Nath Singhal (supra) had

affirmatively distinguished B.M. Ramachandra & Ors. (supra) and held

that the said decision cannot be treated as laying down the ratio as

propounded by the respondent. This is not a case of voluntary retirement,

albeit the respondent has been indicted and has suffered the penalty of

compulsory retirement.

12. The Division Bench in Kailash Nath Singhal (supra) had referred to

the decision of the Supreme Court in Indu Rajagopalan and Ors. (supra)

and observed as under:

"38. We may mention that in 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."

We respectfully agree with the findings recorded by the Division

Bench in Kailash Nath Singhal (supra).

13. In these circumstances, we are unable to accept the contention of the

counsel for the respondent that the respondent would be entitled to pension

under the pension regulations. The appellant should succeed in this appeal.

14. Accordingly, the impugned order and judgment dated 1 st September,

2011 passed in W.P.(C) 2438/1996 is set aside. The writ petition will be

treated as dismissed. In the facts of the present case, there will be no order

as to costs.

(SANJIV KHANNA) JUDGE

(SUNITA GUPTA) JUDGE DECEMBER, 6th 2016 NA