Standard Chartered Bank & Ors. vs Gopinath Mehra & Anr.
2018 Latest Caselaw 7211 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         RFA No. 42/2012

%                                                  6th December, 2018

STANDARD CHARTERED BANK & ORS.                          ..... Appellants

                          Through:       Mr. Ajay Monga with Mr.
                                         Sanjay Gupta, Mr. Ateev
                                         Mathur, Ms. Jagriti Ahuja,
                                         Advs.(Mobile No.9213743613).

                          versus

GOPINATH MEHRA & ANR.                                 ..... Respondents

                          Through:       Mr. Aseem Mehrotra, Adv.
                                         Mobile No. 9811062351).

CORAM:
HON'BLE MR. JUSTICE VALMIKI J. MEHTA

To be referred to the Reporter or not?


VALMIKI J. MEHTA, J (ORAL)

1. This Regular First Appeal under Section 96 of the Code of Civil

Procedure, 1908 (CPC) is filed by the defendants in the suit

impugning the Judgment of the trial court dated 03.12.2011 by which

the trial court has decreed the suit filed by respondents/plaintiffs and

has ordered the appellants/defendants to pay the complete monthly

pension amount to the respondents/plaintiffs. By the impugned

judgment, a declaration has been granted in favour of the

respondents/plaintiffs that on completion of a particular number of

years during which the difference between the actual pension and the

commuted pension is received, resulting in the realization of the

lumpsum payment received by the respondents/plaintiffs at the time of

the retirement, the original pension amount is to be restored. Money

decrees were also passed in favour of the respondents/plaintiffs along

with interest at 11% per annum as to the amounts in the hands of the

appellants/defendants existing after the number of years during which

the commuted amount of pension would stand adjusted. An

Injunction was also passed against the appellants/defendants

restraining them from recovering any amount from the pension of the

respondents/plaintiffs holding that the entire commuted amount

already stands recovered.

2. The three appellants in the appeal are three defendants in the

suit. Actually, in my opinion, the appellants no. 1 and 3/defendant

nos. 1 and 3 were actually neither necessary parties to the suit nor in

the appeal inasmuch as the pension fund being the appellant

no.2/defendant no.2 is a legal entity and it is this pension fund which

is making payment of the pension to the respondents/plaintiffs. In

fact, pension is being paid by the appellant no.2/defendant no. 2/Trust

Fund to the respondents/plaintiffs on receipt of amounts from Life

Insurance Corporation (hereinafter 'LIC') inasmuch as the funds of the

appellant no.2/defendant no. 2/Trust Fund are invested in different

policies and annuities of LIC for payments of pension and commuted

amount of pension to the members of the appellant no.2/defendant no.

2/Trust Fund.

3. The admitted facts are that respondents/plaintiffs retired from

the services of the appellant no.1/defendant no. 1 on 30.11.1988 and

31.01.1991. The respondents/plaintiffs were members of the appellant

no.2/defendant no. 2/Trust Fund and at the time of their retirement

they received as a lumpsum amount being the commuted amount of

pension, and the respondents/plaintiffs thereafter received a lesser

monthly pension payment on account of having received a commuted

lumpsum amount of pension at the time of their retirement. The

respondents/plaintiffs claim that though the rules of appellant

no.2/defendant no. 2/Trust Fund, and of which they were members

and accordingly governed by the rules of the Trust, do not provide for

restoration of the full amount of pension, since however there was no

prohibition for restoration of the full amount of pension, therefore,

once on lesser amount of monthly pension is received over the number

of years, hence the lumpsum amount received by the

respondents/plaintiffs at the time of the retirement is recovered by

adding the total monthly deductions. Hence the original pension

amount of the respondents/plaintiffs should be restored.

Appellants/Defendants challenged and disputed the claim of the

respondents/plaintiffs on the ground that in the scheme of which the

respondents/plaintiffs were members and the relevant rules of the

appellant no.2/defendant no. 2/Trust Fund qua the

respondents/plaintiffs, there was no provision for restoration of the

pension to the entire amount, although after a particular number of

years recovery from the monthly pension amount the recovery is

complete of the lumpsum pension amount.

4. There are two main issues which have been urged on behalf of

the parties before this court. Firstly, the issue which is urged is that

even if the relevant Pension Trust Rules of the appellant

no.2/defendant no. 2/Trust Fund do not provide for restoration of the

complete monthly pension amount, in view of the fact that there is no

prohibition to restore the complete monthly pension amount then

whether the respondents/plaintiffs are therefore entitled to restoration

of the complete monthly pension amount on account of lack of a

prohibition entitled rule. The second aspect which is argued is that the

respondents/plaintiffs claim parity with the employees of the

Grindlays Bank and this Grindlays Bank was merged with the

appellant no.1/defendant no. 1/bank, and employees of the Grindlays

Bank, as per the relevant pension rules and Pension Trust Fund to

which they were members, contained an appropriate rule providing for

restoration of complete amount of pension on account of monthly

recoveries made from the monthly pension payment which would at a

particular point of time result in recovery by the Pension Trust Fund of

the lumpsum payment made as commuted pension to the employees

on the dates of their retirement.

5. On the first aspect, in my opinion, the trial court has completely

erred in holding that since there is no prohibition of restoration of the

complete pension, and even if the rules of the appellant no.2/defendant

no. 2/Trust Fund, do not provide for restoration of the complete

monthly pension amount, only because there is no prohibition in the

rules for restoration of the entire monthly pension amount, therefore,

the monthly pension amount has to be restored to its complete amount

once recoveries are made every month totaling to the lumpsum

commuted pension amount which is received by the employees.

Admittedly, the contracts of the respondents/plaintiffs either with their

employer being the appellant no.1/defendant no. 1 or with the

appellant no.2/defendant no. 2/Trust Fund which is an independent

entity, are private contracts. Private contracts are governed by their

private contractual terms and conditions. The rules of the appellant

no.2/defendant no. 2/Trust Fund are in the nature of contractual terms

between its members and the appellant no.2/defendant no. 2/Trust

Fund, with the respondents/plaintiffs being the members of appellant

no.2/defendant no. 2/Trust Fund and thus being contractually bound as

per the Pension Trust Fund Rules of the appellant no.2/defendant no.

2/Trust Fund. An entitlement as per a contract, has to be a categorical

entitlement and it is not an acceptable answer that since the rules do

not prohibit restoration of the original amount of monthly pension, a

rule to restore pension amount to the original amount must be deemed

to be included in the relevant Pension Trust Fund Rules of the

appellant no.2/defendant no. 2/Trust Fund. After all, we are

concerned with imposition of a financial liability, and this is all the

more so because Ld. Counsel for the appellants/defendants rightly

argues that the financial instruments which are purchased by the

appellant no.2/defendant no. 2/Trust Fund for its members from the

LIC are only because of and as per the rules of the appellant

no.2/defendant no. 2/Trust Fund, and these contractual rules are

framed as per the financial requirements in terms of the agreements

among the employees of the appellant no. 1/defendant no.1. Putting it

in other words, it is rightly argued by the appellant no.2/defendant no.

2/Trust Fund that once the respondents/plaintiffs have such contractual

rights and obligations which are provided in the contract, being the

Pension Trust Fund Rules of the appellant no.2/defendant no. 2/Trust

Fund, then such contractual rules will prevail, and that once these

contractual Pension Trust Fund Rules do not provide for restoration of

the original amount of monthly pension, if financial liability is created

upon the appellant no.2/defendant no. 2/Trust Fund beyond that

envisaged in the rules, then the entire financial mechanics and the

funds available to the appellant no.2/defendant no. 2/Trust Fund

would get jeopardized, and this jeopardy will result in financial losses

to the appellant no.2/defendant no. 2/Trust Fund, with the

consequential chain reaction to the other members of the Pension

Trust who may not get their requisite amounts of pension or annuities

as the appellant no.2/defendant no. 2/Trust Fund would have reduced

funds available with it on account of paying moneys to persons such

as the respondents/plaintiffs who have not subscribed to a scheme in

which they are restored the original monthly amount of pension. I

also agree with the arguments urged on behalf of the

appellants/defendants that once to no other similarly situated person to

the respondents/plaintiffs the original monthly pension amount has

been restored, the respondents/plaintiffs cannot get original monthly

pension amount because this will result in respondents/plaintiffs being

discriminated favourably as against those other persons who did not

and do not get the complete pension amount even after the lumpsum

commuted pension amount is recovered from the monthly pension

payments of employees over a particular number of years. I, therefore,

hold that the trial court has erred in holding that merely because the

Pension Trust Funds Rules are silent, the respondents/plaintiffs would

be entitled to restoration of the original monthly pension.

6. Even the second argument urged as regards the parity claimed

by the respondents/plaintiffs with the employees of Grindlays Bank,

and this entity/bank merged with the appellant no. 1/defendant no. 1,

this argument is a completely misconceived argument because

admittedly the employees of the Grindlays Bank are governed by a

separate Pension Trust Fund with its separate rules, and these rules do

provide for restoration of the original monthly pension amount after

recovery of the commuted lumpsum payment from the monthly

pension payments which are made to the restored employees.

Obviously such scheme which exists for Grindlays Bank employees

would have resulted in such financial instruments being purchased by

the Pension Trust Fund of the Grindlays Bank employees which would

take care of the requisite financial liability of such Pension Trust Fund

of Grindlays Bank, whereas in the present case, the Pension Trust

Fund of the employees of appellant no.1/defendant no.1/bank with the

appellant no.2/defendant no. 2/Trust Fund, and of which the

respondents/plaintiffs are members, do not have any rule of restoration

of the total monthly pension amount after a particular number of years

of making payment of reduced monthly pension amount on account of

lumpsum commuted pension amount being paid to the retired

employees and financial instruments accordingly only would have

been purchased by appellant no.2/defendant no. 2/Trust Fund to take

care of the expected and agreed financial requirements.

7. Ld. counsel for the respondents/plaintiffs sought to place

reliance upon two judgments of the Hon'ble Supreme Court in support

of the aforesaid two contentions being Common Cause & Ors. v.

Union of India, (1987) 1 SCC 142 and Welfare Association of

Absorbed Central Government Employees in Public Enterprises &

Ors. v. Union of India & Anr., (1996) 2 SCC 187. However, neither

of the judgments will apply because these judgments deal with the

relevant provisions of law and rules pertaining to Central Government

employees or employees of the Public Sector Undertakings, and the

relevant rules of the Pension Trust Funds of the Public Sector

Companies, but the same parity cannot be granted to the present

situation as the same is qua the employees of the private Pension Trust

Funds herein being the retired employees of the appellant no.

1/defendant no. 1/bank.

8. In view of the aforesaid discussion, this appeal is allowed.

Impugned judgment and decree of the trial court dated 03.12.2011 is

set aside. Suit of the respondents/plaintiffs will stand dismissed.

Parties are left to bear their own costs. Amount deposited by the

appellant no. 1/defendant no. 1 in this Court, along with accrued

interest, be released back to the appellant no. 1/defendant no.1.

DECEMBER 06, 2018                            VALMIKI J. MEHTA, J
aruna