Gujarat High Court
Associate Banks Retired Officers ... vs State Bank Of India on 25 April, 2025
Author: A.S. Supehia
Bench: A.S. Supehia
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/MISC. CIVIL APPLICATION (FOR REVIEW) NO. 662 of 2025
In R/LETTERS PATENT APPEAL NO. 1029 of 2014
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ASSOCIATE BANKS RETIRED OFFICERS ASSOCIATION UNIT S.B.S
Versus
STATE BANK OF INDIA & ANR.
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Appearance:
MR DEEPAK N KHANCHANDANI(7781) for the Applicant(s) No. 1
MR KAMAL TRIVEDI, ADVOCATE GENERAL & SENIOR ADVOCATE with
MS DHARMISHTA RAVAL(707) for the Opponent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MRS. JUSTICE MAUNA M. BHATT
Date : 25/04/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. The present review application is filed under Section 114
of the Code of Civil Procedure, 1908, (the CPC) seeking review
of the CAV judgment and order dated 02.07.2024 passed by
this Court in the captioned Letters Patent Appeal, wherein and
whereby this Court had rejected the same, confirming the
judgment and order dated 18.07.2014 passed by the learned
Single Judge in Special Civil Application No.5750 of 2010.
2. Learned advocate Mr.Deepak Khanchandani, appearing
for the applicant-Association, at the outset, has submitted that
though the judgment of the Karnataka High Court dated
23.03.2011, rendered in the case of Jatheendranath and other
Vs. State of Mysore passed in W.P. Nos.34619 of 2003 and
allied matters, was relied upon, the same has not been dealt
with, while passing the CAV judgment and order. It is
submitted that before the Karnataka High Court, a similar issue
was raised regarding Voluntary Retirement Scheme (for short,
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"VRS"), which was introduced by the State Bank of Mysore, on
27.01.2001, and wherein the employees, who were denied the
pension in view of the Regulation 29(5) of the Employees'
Pension Regulations, 1995, (for short, "the Regulations, 1995)
after opting for VRS, filed the writ petitions assailing such
action. It is submitted that the Karnataka High Court had
allowed the writ petition directing the Bank to pay pension to
such employees. It is submitted that the same was challenged
before the Division Bench of the Karnataka High Court and the
Division Bench ultimately dismissed the appeal filed by the
Bank, which was further challenged before the Supreme Court.
3. Learned advocate Mr.Khanchandani, has referred to the
order dated 13.02.2018 passed by the Supreme Court in Civil
Appeal No.5525 of 2012 in the case of Bank of Baroda and
another Vs. G. Palani and others, and has submitted that in
paragraph Nos.17 and 34, the Supreme Court has confirmed
the view taken by the Karnataka High Court. Thus, it is
submitted that in an identical and analogous Regulations
relating to pension, the employees of the Bank have been
conferred the benefits of additional 5 years, hence the
members of the present applicant-Association cannot be
denied such benefits. It is urged that in the judgment, of which
review is sought, since the aforesaid judgment is not
considered, the present application may be allowed.
4. Learned advocate Mr.Khanchandani, has further
submitted that while considering the rival submissions, this
Court has misconstrued the number of years of service put in
by the original appellant, while passing the said CAV judgment
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and order. He has submitted that in paragraph No.24 of the
CAV judgment, the Court has recorded that the appellants
have not completed 20 years of service, however the applicant
has in fact, made a categorical statement in the writ petition
that the members of the applicant-Association have completed
20 years of service and hence, they would be entitled to the
pension.
5. Learned advocate Mr.Khanchandni has also submitted
that the judgment and order passed by the learned Single
Judge of this Court dated 01.05.2009 in Special Civil
Application No.7443 of 2002 and allied writ petitions, rendered
on a similar issue, which was also produced on record of the
writ petition, however,it is also not considered and hence, this
Court may allow the review application. No further submissions
are made.
6. Opposing the present application, learned senior
advocate Mr.Kamal Trivedi, appearing with learned advocate
Ms.Dharmishta Raval, for the respondent - Bank has submitted
that the judgment of the Karnataka High Court will not apply to
the facts of the present case and also to the Scheme of
Voluntary Retirement introduced by the respondent-Bank. He
has submitted that there is vital difference on the facts in the
present case and the case before the Karnataka High Court. It
is submitted that in the present case, the Voluntary Retirement
Scheme was introduced by the respondent-Bank making it
effective from 19.02.2001 and prior to the commencement of
the aforesaid VRS, the respondent - Bank specifically clarified
by issuing a Circular dated 15.02.2001 declaring inter alia that
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the employees, who are desiring to avail the benefits of VRS,
will not get the additional benefits of 5 years of notional
service included in their length of service, as provided in
Regulation 29(5) of the Regulations, 1995. It is submitted that
this Circular was never challenged by the original appellants
before any forum. It is submitted by learned senior advocate
Mr.Trivedi that in the case before the Karnataka High Court,
after the VRS was made effective from 27.01.2001 and was
implemented, the State Bank of Mysore introduced the Circular
dated 30.01.2001 modifying the above referred VRS
Regulations, which directly affected the interest of employees
and in wake of such facts, the Karnataka High Court declared
the action of the State of Mysore as illegal. Thus, it is
submitted that the judgment of the Karnataka High Court will
not apply in the facts of the present case.
7. Learned senior advocate Mr.Kamal Trivedi, while referring
to the order of the Supreme Court dated 13.02.2018 rendered
in the case of G. Palani (supra) confirming the Karnataka
High Court Judgment has submitted that the issue before the
Supreme Court was only concerned with the calculation of
pension on the basis of average emoluments and the issue
raised by the present applicant in the writ petition and the
Letters Patent Appeal, is different. Thus, it is urged that the
aforesaid judgment, on which reliance is placed, will not apply
to the case of the present applicant - Association.
8. Learned senior advocate Mr.Kamal Trivedi, has also
referred to the judgment of the Supreme Court in the case of
Bank of India and Anr. Vs. K. Mohandas and Ors., (2009) 5
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S.C.C. 313, and has submitted that in paragraph Nos.33 and
34, the Supreme Court has recorded the distinguishing factor,
which comes to the rescue of the respondent - Bank. It is
submitted that in the said case also, at the fag end of VRS, the
Bank has proposed amendment in the pension regulations and
the Supreme Court has deprecated the same, whereas in the
present case, there is no amendment in the pension
regulations by issuing any Circular and it is only clarified that
the employees will not be entitled to the benefit of additional 5
years of service and such circular has not been challenged by
the applicant before any forum.
9. We have heard the learned advocates appearing for the
parties at length.
10. We may clarify at this stage, that the applicant-original
appellant had referred to various judgments of the High Court
and the Supreme Court, including the judgment of Karnataka
High Court, on which the present review is premised, and the
citations were recorded in paragraph No.13 of the order dated
13.02.2018. However, the issue in all the judgments, including
the judgment of the Karnataka High Court, on which reliance is
placed, emanate from the jugement of the Supreme Court
rendered in the case of Bank of India (supra). Hence, the
issue, which was raised in the writ petition and the captioned
appeal, was decided by placing reliance on the said judgment.
11. We may, at the outset, deal with the judgment passed by
the Karnataka High Court, on which the reliance is placed,
seeking review of the CAV Judgment dated 02.07.2024.
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12. The facts, as recorded by the Karnataka High Court in the
judgment rendered in the case of Jatheendranath (supra)
will clarify that the State Bank of Mysore introduced the
Voluntary Retirement Scheme and notified on 27.01.2021 and
after the promulgation of the Scheme, the Bank had issued a
Circular dated 30.01.2001 clarifying that the benefit of
increased number of years will not be applicable to those
employees, who seek VRS. We may at this stage mention that
the Regulation 29 of the State Bank of Mysore Pension
Regulation, 1995, is pari materia to the Regulation 29(5) of the
present respondent - Bank, and the Circular issued by the
State Bank of Mysore is almost similarly worded. This Circular
was challenged by the employees before the Karnataka High
Court.
13. The Circular issued by the State Bank of Mysore further
clarifies that the employees, who apply for Voluntary
Retirement, under the Voluntary Retirement Scheme, would
simultaneously submit their applications for pension in the
terms of pension regulations. This is the distinguishing feature
in the case of the respondent-Bank. In the instant case, the
respondent-Bank introduced Voluntary Retirement Scheme on
06.02.2001 and the same was open and made effective from
19.02.2001. Before the effective date from 19.02.2001, the
respondent-Bank issued a clarificatory Circular dated
15.02.2001 declaring that the employees, who are desiring to
avail benefit of the VRS, would not be getting benefit of
additional five years of notional service in calculating their
length of service, as provided under Section 29(5) of the
Regulations, 1995. Thus, the circular was issued before the
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scheme was made effective from 19.02.2001. It is not the case
of the members of the applicant-Association that they were
not aware about the Circular. None of them had challenged the
Circular dated 15.02.2001 before any forum. In the writ
petition also, there is no prayer clause challenging the Circular
dated 15.02.2001, whereas before the Karnataka High Court,
such circular was challenged and Clause-4 of the Circular
dated 30.10.2001, which restricted the benefit of additional 5
years under pension Regulation 29(5) was quashed and set
aside. The applicant-original writ petitioner filed the writ
petitions in the year 2010 claiming benefit of additional five
years, without challenging the Circular dated 15.02.2001.
14. It is interesting to note that the applicant - original
petitioner had completed 20 years of service and were even
otherwise eligible for voluntary retirement under the provisions
of Regulation 29 (5) of the Regulations, 1995, which entitles
them the benefit of additional five years. However, instead
they chose to go for the Voluntary Retirement Scheme, which
was more financially attractive. They filed the writ petition
after the judgment of the Supreme Court in the case of K.
Mohandas (supra) claiming the benefit of additional 5 years
of service under the Regulation 29(5) of the Regulations, 1995.
The employees of different Banks at the relevant time,
immediately approached the respective High Courts
challenging the action of the Banks to alter the Pension
Regulations at the fag end of the VRS, after they had opted for
the same however, the applicant-original writ petitioner filed
the captioned writ petitions after the decision of the Supreme
Court, that too without challenging the Circular dated
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15.02.2001. They embraced the Voluntary Retirement Scheme
with open arms fully knowing the provisions of Circular dated
15.02.2001. Thus, in absence of any challenge to the Circular
dated 15.02.2001, the applicant cannot claim the benefits of
additional 5 years of service under Regulation 29(5) of the
Regulations, 1995.
15. In the case of K. Mohandas (supra), the Supreme Court
has examined the action of various banks in amending and
introducing the proposed amendment in the pension
regulations, which are statutory in nature and the Circulars
were issued after Voluntary Retirement Scheme was
introduced. The Supreme Court in paragraph Nos.33 and 34 in
the case of K. Mohandas (supra) has categorically recorded
as under : -
"33. What was, in respect of pension, the intention of the banks at the time
of bringing out VRS 2000? Was it not made expressly clear therein that the
employees seeking voluntary retirement will be eligible for pension as per
Pension Regulations? If the intention was not to give pension as
provided in Regulation 29 and particularly sub- regulation (5)
thereof, they could have said so in the scheme itself. After all much
thought had gone into the formulation of the VRS 2000 and it came
to be framed after great deliberations. The only provision that could
have been in mind while providing for pension as per Pension
Regulations was Regulation 29. Obviously, the employees, too, had
benefit of Regulation 29(5) in mind when they offered for voluntary
retirement as admittedly Regulation 28 as was existing at that time
was not applicable at all. None of the regulations 30 to 34 was
attracted. It appears that VRS 2000 evoked huge response, much
more than expected and then began the second thought. At the fag
end of operation of VRS 2000, at the instance of NBA, the banks
proposed amendment in the Pension Regulations and a circular
came to be issued. But, by that time, ball had gone out of the hands
of the employees; they had already made their offers which were
irrevocable; it was not open to them to withdraw the offers as per
specific condition incorporated in the scheme (albeit this court in O.P.
Swarnakar held that offer could be withdrawn before acceptance) and their
offers were accepted and they were relieved. We are afraid, it would be
unreasonable if amended Regulation 28 is made applicable, which had not
seen the light of the day and which was not the intention of the bank when
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scheme was framed. The banks in the present batch of appeals are public
sector banks and are `State' within the meaning of Article 12 of the
Constitution and their action even in contractual matters has to be
reasonable, lest, as observed in O.P. Swarnakar, it must attract the wrath
of Article 14 of the Constitution.
34. Any interpretation of the terms of VRS 2000, although contractual in
nature, must meet the test of fairness. It has to be construed in a manner
that avoids arbitrariness and unreasonableness on the part of the public
sector banks who brought out VRS 2000 with an objective of rightsizing its
manpower. The banks decided to shed surplus manpower. By formulation of
the Special Scheme (VRS 2000), the banks intended to achieve its objective
of rationalizing its force as they were overstaffed. The Special Scheme was,
thus, oriented to lure the employees to go in for voluntary retirement. In
this background, the consideration that was to pass between the parties
assumes significance and a harmonious construction to the Scheme and
Pension Regulations, therefore, has to be given."
16. The foregoing highlighted observations made by the
Supreme Court distinguish the case of the applicant-appellant.
The Supreme Court has noticed that in case the Banks
intended not to give pension, as provided in the Regulation
29(5), the Banks could have said in the scheme itself. In the
present case, the respondent-Bank, before the VRS was made
effective, had clarified their intention of refusing to extend the
benefit of five years. The glaring feature, which is missing in
the present case, is that the Banks, which were before the
Supreme Court at the fag end of the operation of VRS,
proposed amendment in the 'Pension Regulations'. Hence, it
was held by the Supreme Court that by that time, the ball had
gone out of the hands of the employees, they had already
made their offers which were irrevocable, and it was not open
for them to withdraw the offers. Such is not the case of the
applicant. In their case, there was no question of withdrawing
the offer, but the question was of applying for the Voluntary
retirement despite having the knowledge of the Circular dated
15.02.2001. The respondent-Bank has neither attempted to
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amend the pension Regulations nor the Circular dated
15.02.2001 has been issued at the fag end of VRS, but it was
prior to the effective date of VRS, I.e. on 27.01.2001.
17. Unquestionably, in the case of Bank of Mysore, the VRS
was introduced on 27.01.2001 and was altered by subsequent
Circular dated 30.01.2001 and in that case, the original
petitioners before the Karnataka High Court had also
challenged illegality and validity of the subsequent circular
dated 30.01.2001, which was consequentially quashed. The
applicant has not remained vigilant, and did not question the
action of the Bank. Hence, the judgment of Karnataka High
Court on which, the learned advocate Mr.Khanchandani has
placed reliance will not come to the rescue of the present
applicant. The order of the learned Single Judge of this Court
dated 01.05.2005 rendered in Special Civil Application No.7443
of 2002, will also not apply in case of the appellant, since the
parties therein i.e the employees and the Union Bank of India,
with consensus had invited the order in line with the judgment
of the Supreme Court rendered in the case of K.Mohandas
(supra).
18. Another ground of completion of 20 years of service,
which has been raised in the review application, is also
answered accordingly. The applicant with the open eyes, has
accepted the benefits of VRS in wake of the Circular dated
15.02.2001 and hence, in absence of any challenge to the
Circular dated 15.02.2001, the members of the applicant -
Association cannot now claim the benefits of additional 5 years
under Regulation 29(5) of the Regulations, 1995.
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19. Accordingly, the present application fails. The same is
rejected.
Sd/-
(A. S. SUPEHIA, J)
Sd/-
(MAUNA M. BHATT,J)
MAHESH/48
