K. L. Bhasin vs Punjab National Bank And Ors.
2019 Latest Caselaw 3751 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                 Date of decision: 13.08.2019
+      W.P.(C) 7518/2018
       K. L. BHASIN                                       ..... Petitioner
                          Through       Mr. Ashok Bhalla, Adv.

                          versus

       PUNJAB NATIONAL BANK AND ORS.         ..... Respondents
                    Through Mr. Rajesh Kumar with Ms. Sakshi
                            Gaur, Advs.

       CORAM:
       HON'BLE MR. JUSTICE SURESH KUMAR KAIT

                          J U D G M E N T (ORAL)

1. Vide the present petition, the petitioner seeks directions thereby to set

aside the Board of Directors Resolution dated 12.08.2006 of respondent no.l

with regard to appropriation of Bank Contribution of PF of the petitioner

amounting to ₹76,020/- towards alleged losses, as intimated to the petitioner

by the respondent no.2 vide letter dated 23.01.2018, with all consequential

and attendant benefits.

2. Further seeks directions thereby to direct the respondents to release

the Pensionary Benefits to the petitioner in terms of Regulation 33 of

P.N.B.(Employees') Pension Regulations 1995 after completing the requisite

formalities.

3. Also seeks direction to the respondents, to treat the Bank Contribution

of PF of the petitioner, as his contribution towards Pension Fund and if any

further amount is liable to be contributed by the petitioner towards Pension

Fund, the same may kindly be deducted/set off, out of dues/arrears of

Pension payable to the petitioner and the balance amount be released to the

petitioner, along with interest.

4. Brief facts of the case are that the petitioner had joined Erstwhile New

Bank of India on 01.11.1969 and was working as Manager (MMG/S-II),

Branch Officer, Defence Colony, New Delhi.

5. On 17.07.1990, THE petitioner was placed under suspension Order

and thereafter he was served with THE Charge Sheet dated 18.12.1990.

6. New Bank of India was amalgamated with Punjab National Bank vide

Government of India Notification dated 04.09.1993, where after the

petitioner became Officer Employee of Punjab National Bank.

7. After conducting the departmental enquiry in the charge-sheet dated

18.12.1990, the Disciplinary Authority inflicted major punishment of

dismissal upon petitioner vide order dated 15.01.1994, the operative part of

which reads as under:

"Keeping in view of the seriousness of the proven charges, I decide to impose upon Shri Bhasin Major

penalty of "Dismissal from Service which shall be a disqualification for future employment". Further, Shri Bhasin will not be entitled to any wages for the period of suspension excepting the subsistence allowance paid/payable."

8. On 29.09.1995 Punjab National Bank introduced "P.N.B.(Employees')

Pension Regulations 1995".

9. On 07.12.2000, the petitioner filed Civil Writ Petition bearing

W.P.(C) No. 7487/2000 challenging the punishment of dismissal, inflicted

upon him by Punjab National Bank.

10. This Court while disposing of the Writ Petition to the limited extent,

by converting the punishment of dismissal to the punishment of compulsory

retirement, passed order which is as under:

"9. In view of the aforesaid discussion, this writ petition is allowed to the limited extent that the punishment imposed upon the petitioner from dismissal from services is converted to the punishment of compulsory retirement and which shall be also a disqualification for future employment with the respondent no.l/employer."

11. Being aggrieved, the respondent Punjab National Bank filed LPA No.

338/2017 against the aforesaid order & judgement dated 23.03.2017 which

was disposed of by the Division Bench of this Court vide order dated

25.10.2017, which reads as under:

"Learned counsel appearing on behalf of the appellant

states that the latter would be satisfied if the appeal is disposed of with a clarification that the sole respondent would be entitled to terminal benefits strictly in accordance with the rules.

Learned counsel appearing on behalf of the respondent does not oppose this prayer made on behalf of the appellant.

In view of the foregoing, the appeal is disposed of with a clarification that the respondent shall be entitled to all terminal benefits only in accordance with the rules."

12. Consequently, the petitioner submitted representation dated

10.11.2017 followed by representations dated 02.01.2018 and 08.01.2018

for release of his pension in view of Regulation 33 of "PNB (Employees')

Pension Regulations, 1995" and other terminal benefits as admissible to

him in view of his punishment being converted from dismissal to

compulsory retirement.

13. Vide order dated 23.01.2018, the respondent-bank apprised the status

of terminal benefits of the petitioner, stating, inter-alia, that the Bank

Contribution of Provident Fund was appropriated towards loss whereas the

petitioner is not eligible for pension under the extant provisions.

14. Learned counsel appearing on behalf of the petitioner submits that

Punjab National Bank is a member of Indian Bank Association, which has

issued Circular No. HR & IR/CIR/G2/BRK/4684 dated 16.03.2018, para 9

of which reads as under :

"8. To work out the methodology in this regard, a meeting of the GMs(HR) was convened on 28.02.2018 at IBA. After detailed discussions, a consensus has been arrived at to extend the option of pension to compulsorily retired employees/officers on same terms and conditions as mentioned in Bipartite Settlement/Joint Note dated 27.4.2010. As per the agreed terms and conditions of said Bipartite Settlement/Joint Note, Pension/Family Pension shall be payable with effect from 27th November, 2009, provided that employees/officers who are compulsorily retired after that date shall get pension from the respective dates of such retirement. Court cases, if any, in the matter may be withdrawn forthwith."

15. In terms of Final Order & Judgement dated 23.03.2017 in CWP No.

7487/2000 r/w Order dated 25.10.2017 in LPA No. 338/2017, the petitioner

was deemed to be compulsory retired w.e.f. 15.01.1994 after completing

more than 22 years of service and was entitled to Pension in terms of

Regulation 33 of Pension Regulations which was applicable w.e.f.

01.11.1993.

16. Learned counsel for the petitioner has relied upon the case of United

Bank of India vs Prasanta Kumar Roy and Others and Punjab National

Bank vs C.P.Krishnaswamy & Ors.: (2012) 12 SCC 519, whereby held that

the employees who were compulsorily retired even before 01.11.1993 were

allowed Pension in terms of Pension Regulations.

17. In the case of Ghanshyambhai Muljibhai Patel vs Bank of India:

2013 IC 1941(Gujarat High Court), the High Court had allowed the petition

for payment of pension to an employee who had compulsorily retired even

before 01.11.1993.

18. Learned counsel further submits that the case of the petitioner is on

better footing and entitles him pension in terms of Extant Regulation 33 of

Pension Regulations. However, the Disciplinary Authority had neither

passed any Order for recovery of any alleged loss from the petitioner in

terms of Regulation 4(d) of D&A Regulations nor the Bank's Contribution

to PF of petitioner could be appropriated by the Bank without any Notice to

the petitioner. Even otherwise, once the Respondent Bank has released the

Gratuity to the petitioner under Payment of Gratuity Act, 1972, the plea of

alleged loss is not sustainable.

19. On the other hand, learned counsel appearing for the respondents

submits that the petitioner was dismissed from the Service vide order dated

15.01.1994 and appeal of the petitioner was also rejected by the Appellate

Authority on 07.12.1994.

20. On 29.09.1995, Punjab National Bank introduced PNB (Employees')

Pension Regulations 1995 with retrospective effect with different dates in

respect of different categories.

21. Learned counsel for the respondents further submits that petitioner

had filed a W.P.(C) No.7487/2000 challenging the punishment inflicted

upon him, which was allowed by this Court to the limited extent, by

converting the punishment of dismissal to the punishment of compulsory

retirement, vide judgment dated 23.03.2017, the operative part of which

reads as under:

"10. The writ petition is allowed to the limited extent as stated above, leaving the parties to bear their own costs. Let the terminal benefits, whichever are payable to the petitioner in view of the passing of the present judgment, be released to the petitioner within a period of two months from today. Obviously, what would be the entitlement of the petitioner, taking the petitioner only as having compulsorily retired, will be the entitlement in accordance with the applicable rules of the respondent no.l/Punjab National Bank/ employer."

22. Being aggrieved, respondent bank had challenged the order and

judgment dated 23.03.2017, vide LPA No. 338/2017 which was disposed of

vide Order dated 25.10.2017 which reads as under:

"Learned counsel appearing on behalf of the appellant states that the latter would be satisfied if the appeal is disposed of with a clarification that the sole respondent would be entitled to terminal benefits strictly in accordance with the rules.

Learned counsel appearing on behalf of the respondent does not oppose this prayer made on behalf of the appellant.

In view of the foregoing, the appeal is disposed of with a clarification that the respondent shall be entitled to all

terminal benefits only in accordance with the rules.

23. Thereafter, petitioner made representations requesting for release of

his terminal dues including pensionary benefits.

24. The respondent vide letter dated 23.01.2018, while sanctioning Leave

Encashment and Gratuity, apprised the petitioner that the bank Contribution

of Provident Fund was appropriated by the Bank towards loss (by the Board

in its Meeting held on 12.08.2006) therefore, the petitioner is not eligible for

pension under the extant provisions, which has given rise to present Writ

Petition.

25. Whereas, learned counsel for the petitioner submits that once the

respondent bank has released the Gratuity to the petitioner under Payment of

Gratuity Act, 1972, the plea of alleged loss is not sustainable. More so, there

is a categorical observation in Order & Judgment dated 23.03.2017,

"however, the admitted position even as per the order dated 20.02.2017 is

that there is no monetary loss which is caused to the respondent no.l/

employer."

26. It is further submitted that before forfeiting and appropriating the

Banks Contribution to PF of the petitioner and appropriating towards alleged

loss to respondent Bank, neither any notice was given to the petitioner nor

the securities taken in account of the borrowers were handed over to the

petitioner so as to enable him to recover the amount forfeited by the Bank

after disposing/realizing of the securities mortgaged/available in the

borrowers accounts.

27. Further submitted that there was no Pension Scheme earlier in the

bank and the petitioner, like other Employees/Officers, was entitled to

Bank's Contribution to PF in terms of Punjab National Bank Employees

Provident Fund Trust Rules. It is not in dispute that the petitioner had

completed service of more than 22 years on 15.01.1994 and was entitled to

the Pension in terms of Regulations 33 of Pension Regulations which are

applicable w.e.f 01.11.1993, as such, the Regulation 33 of Pension

Regulation was deemed to be existing on 15.01.1994. On 29.09.1995 the

Bank's Contribution to PF of the petitioner was lying with the respondents

and not withdrawn by the petitioner.

28. Counsel for the petitioner submits that as per the Bipartite Settlement

dated 29.10.1993 relates to Workmen Employees and is not applicable in the

case of petitioner, as he was an Officer and had been working as Manager in

MMG/S-II. As per PNB Employees Pension Regulations 1995 which were

notified on 29.09.1995, on which date the petitioner was not in the service of

the Bank.

29. Counsel for the petitioner submits that on 29.09.1995, the bank

contribution to PF was available with the respondents, which was illegally

appropriated by the Board in its meeting held on 12.08.2006. In the

intervening period, the respondent bank neither sought option of the

petitioner nor refunded the bank's Contribution to PF to the petitioner. Thus,

the respondents cannot take advantage of their own wrong. Even otherwise,

the petitioner has exercised option for pension vide letter dated 10.11.2017,

after dismissal of LPA No. 338/2017 vide Order dated 25.10.2017

30. To strengthen his arguments, learned counsel for the petitioner has

relied upon the cases of United Bank of India vs. Prasanta Kumar Roy and

Others And Punjab National Bank vs. C.P. Krishnaswamy &. Ors.:

(2012) 12 SCC 519, whereby held that the employees who were

compulsorily retired even before 01.11.1993 were allowed pension in terms

of Pension Regulations.

31. In the case of Ghanshyambhai Muljibhai Patel (Supra), the Gujarat

High Court had allowed the petition for payment of pension to an employee

who had compulsorily retired even before 01.11.1993. Against the said

Judgment, the Bank of India had filed LPA No.446/2013, which was

dismissed by the Hon'ble Division Bench of Gujarat High Court vide Final

Order & Judgment dated 28.08.2013.

32. Being aggrieved, the respondent bank filed SLP (C) No.37207/2013

(Now CA No. 14666/2015) wherein, the Hon'ble Supreme Court of India

had granted Leave vide Order dated 15.12.2015, but no interim/relief was

granted therein. In fact, the Hon'ble Supreme Court of India vide Order

dated 29.01.2019 specifically directed to pay pensionary benefits to the

respondent in C.A. No. 14666/2015 arising out of SLP (C) No. 37207 of

2013 within a period of four weeks from the said date.

33. Counsel for the petitioner further submits that the case of petitioner is

on better footing and entities him pension in terms of Extant Regulation 33

of Pension Regulations, which was deemed to be existing on 15.01.1994.

34. Learned counsel further submits that the Circular dated 16.03.2018

issued by IBA cannot supersedes the PNB Employees Pension Regulations

1995 and no distinction can be drawn between employees Compulsorily

Retired before or after 29.09.1995.

35. Further the case of the petitioner is that Forfeiture of bank's

Contribution to Provident Fund of the petitioner came to his knowledge vide

letter dated 23.01.2018 as such, there is no delay in filing the writ petition.

36. Regulation 33 inter-alia provides that an employee compulsorily

retired from service 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. The petitioner

neither exercised the option for pension in terms of Settlement dated

29.10.1993 or the Pension Regulations, 1995 nor refunded the banks

Contribution to Provident Fund or authorized the Pension Fund Trust to

transfer his banks Contribution to Provident Fund to the Pension Fund.

37. The petitioner filed W.P.(C) No. 7487 of 2000, inter alia, challenging

the order dated 15.01.1994 passed by the Disciplinary Authority imposing

punishment of dismissal from service which is to be disqualification for

future employment upon the petitioner.

38. The Board of Directors of the respondent bank decided to appropriate

₹76,020.40 of the Banks Contribution of the Petitioner in view of the loss of

₹90.35 lacs caused to the Bank by the Petitioner in two accounts i.e. M/s

Super Plastics and M/s Aakriti Steels (P) Ltd., which was in addition to three

more accounts involving ₹104.78 lacs in the Charge Sheet which was kept in

abeyance in view of the punishment of dismissal imposed upon the

Petitioner.

39. It is pertinent to mention here that vide order dated vide order dated

23.03.2017, this Court allowed W.P.(C) No.7487 of 2000 of the Petitioner

limited to the extent of converting punishment of dismissal to that of

compulsory retirement.

40. Vide order dated 25.10.2017 passed in LPA No. 338 of 2017, the

Division Bench of this Court while recording the submission of the

respondent bank, the appeal may be disposed of with a clarification that the

petitioner would be entitled to terminal benefits strictly in accordance with

rules and laws.

41. The respondent bank in reply to the letter dated 08.01.2018 of the

petitioner, inter alia, informed (a) Own Contribution of PF already stands

paid but Banks Contribution of PF has been appropriated towards loss

caused to the Bank in the account of M/s Super Plastics and M/s Aakriti

Steels (P) Ltd.; (b) Gratuity of ₹1 lac under the P.G. Act, 1972 is being

released; (c) In view of unavailability of your leave record the maximum

amount of Leave Encashment (240 days) with interest of ₹3,05,508.59 is

being paid; (d) Petitioner is not eligible for pension. An amount of

₹4,05,508.59 was credited in the account of the Petitioner on 23.01.2018.

42. Regarding the issue raised by the petitioner that petitioner is entitled

to terminal benefits in accordance with rules; that Disciplinary Authority

has not passed any order for recovery of any alleged loss; the banks

Contribution to P.F. cannot be forfeited without notice to the petitioner.

43. Further case of the petitioner is that the Gratuity having been paid, the

plea of alleged loss is not sustainable; as he has been informed about

appropriation of ₹76,020/- of the bank Contribution in the Board Meeting

held on 12.08.2006 by letter dated 23.01.2018 etc.

44. It is not in dispute that the Disciplinary Authority in the order dated

15.01.1994 has concurred with the finding of the Enquiry Officer, inter alia,

that the Bank has been defrauded to the extent of ₹21.11 lacs in C.C.

Account and ₹14.13 lacs in Term Loan Account as on 28.03.1990 in case of

M/s Super Plastics and to the extent of ₹16.38 lacs in cash credit and ₹14.46

lacs in Term Loan Account of M/s Aakriti Steels Pvt. Ltd. The Disciplinary

Authority has also noticed that Bank's huge fund of more than ₹1 crore has

been put to jeopardy.

45. The subsequent order dated 20.02.2017, which was passed by the

Disciplinary Authority in compliance of the direction dated 24.11.2016

passed in W.P. (C) No. 7487 of 2000, clearly records as under:-

" The record reveals that the loan was sanctioned with various stipulations which were to be compiled with, before disbursement of loan, Shri Bahasin did not comply with these stipulations and disbursed the loan without obtaining margin money from these companies. Further, the loss of ₹ 15 lacs to ₹ 20 lacs occurred approx. 26 years ago which was not a small amount at that time. As a prudent banker, it was his primary duty to safeguard the Bank's interest by following all the guidelines and procedure before recommending the loans. As incharge of the branch and responsible officer of the Bank, it was his duty to cross check/verify all the documents, financial data and genuineness of the promoters. Further, the penalty imposed upon Shri Bhasin was on the basis of lapses committed by him at the time of recommending the proposal and not merely due to his association with a chartered accountant who got business for the Bank. All these facts lead to conclusion that there was a malafide intention on his part and he connived with the party to cause huge loss to the Bank. ...."

46. Thus, this Court while modifying the punishment of dismissal to the

Compulsory Retirement by order dated 23.03.2017 has not interfered with

the finding of loss recorded by the Disciplinary Authority in the earlier order

dated 15.01.1994 or in the order dated 20.02.2017 .

47. The Rule 13 and Rule 14 of the PNB Employees Fund Trust inter-alia

provides that the Bank shall have first lien of the contribution made by it to

the individual account of any member together with interest thereon and

accretion thereto, to recover any loss, damages and liabilities which the

Bank may at any time sustain or incur by reason of any dishonest act, deed

or omission or gross misconduct of or by such member. Rule 14 further

provides that where the Bank shall have a first lien, as provided in Rule 13,

the Trustees shall on receipt of resolution passed by the Board of Directors

of the bank shall pay to the bank the Banks Contribution to the Members

Fund, to the extent such decision is taken by the Board and the payment so

made shall be complete discharge of trustees and further the recovery of

such loss by bank shall be limited to the extent of such financial loss only.

48. It is not in dispute that they have not challenged the above mentioned

rules of the PNB Employees Fund Trust.

49. The loss caused to the bank by the petitioner has been specifically

recorded in the order dated 15.01.1994 passed by the Disciplinary Authority

based on the findings recorded by the Enquiry Officer in the Departmental

Enquiry held against the Petitioner. Therefore, the submissions of the

petitioner that he has not been given any opportunity before ascertaining the

loss, is without any merit and substance.

50. The decision of the Board of Director to appropriate Banks

Contribution to Provident Fund in terms of Rule 13 and 14 is a consequential

order based on the finding of the loss already recorded in the Departmental

Enquiry. Therefore, neither further opportunity of hearing by the Board of

Directors before appropriation was required nor any such opportunity has

been provided or envisaged in Rule 13 & 14 of the Provident Fund Trust

Rules. Further, as mentioned above, there is no challenge neither to the said

Rules nor the procedure to be followed under the said Rules for

appropriation of Banks Contribution to P.F.

51. The issue raised in the present petition is no longer res integra. The

Full Bench of the Supreme Court has decided in the case of Senior

Divisional Manager Life Insurance Corporation of India And Ors vs.

Shree Lal Meena: (2019) 4 SCC 479.

" 26. There are some observations on the principles of public sectors being model employers and provisions of pension being beneficial legislations. We may, however, note that as per what we have opined aforesaid, the issue cannot be dealt with on a charity principle. When the legislature, in its wisdom, brings forth certain beneficial provisions in the form of Pension Regulations from a particular date and on particular terms and conditions, aspects which are excluded cannot be included in it by implication. The provisions will have to be read as they read unless there is some confusion or they are capable of another interpretation. We may also note that while framing such schemes, there is an important aspect of them being of a contributory nature and their financial implications. Such financial implications are both, for the contributors and for the state. Thus, it would be

inadvisable to expand such beneficial schemes beyond their contours to extend them to employees for whom they were not meant for by the legislature."

52. Thus the arguments advanced by learned counsel for the petitioner

and the judgment relied upon. is of no help to the petitioner in the present

case.

53. In view of the above discussion and settled proposition of law, I find

no merit in the present petition and the same is accordingly dismissed.

54. Pending application, if any, stands disposed of.

(SURESH KUMAR KAIT) JUDGE AUGUST 13, 2019 ms