[Cites 12, Cited by 0]
Punjab-Haryana High Court
Ujagar Singh vs State Bank Of Patiala on 9 January, 2026
Author: Sandeep Moudgil
Bench: Sandeep Moudgil
HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
****
CWP-16738-1999 (O&M)
****
Ujagar Singh Saini (through LRs) ... Petitioner
VS.
State Bank of Patiala & Ors. ... Respondents
****
1. Judgment reserved on 28.10.2025
2. Judgment pronounced on 09.01.2026
3. Judgment uploaded on 12.01.2026
4. Whether operative or full judgment Full
5. Delay in pronouncement of full judgment and reasons, if any NA
****
CORAM: HON'BLE MR.JUSTICE SANDEEP MOUDGIL
****
Present: Mr. Inderjit Singh, Advocate for the petitioner
Mr. Anil K Ahuja, Advocate for the respondents
****
Sandeep Moudgil, J.
Prayer
(1). The jurisdiction of this Court has been invoked under Article 226
of the Constitution of India, inter alia, for issuing a writ of certiorari for
quashing the orders dated 04.10.1996 and 11.06.1997 (Annexures P10 & P11)
vide which the pension and retiral benefits have been denied to the petitioner. A
further prayer has been made for directing the respondents to release an amount
of Rs.2,37,540/- deducted from the provident fund dues payable to the
petitioner as mentioned in the letter dated 26.10.1998 (Annexure P6), besides
other pensioner dues along with interest @ 18% p.a.
Contentions
On behalf of the petitioner
(2). Learned counsel for the petitioner contends that the deceased,
namely, Ujagar Singh had unfortunately passed away during the pendency of
1 of 14
CWP-16738-1999 -2-
the present petition on 14.03.2017, leaving behind his wife, Smt.Amar Kaur
and two sons, namely, Sushil Kumar and Ashwani Kumar as the legal heirs and
thereafter, even one of his LRs, namely, Ashwani Kumar died on 24.12.2018
and now the matter is being pursued by the wife of Ashwani Kumar, namely,
Mrs. Beenu who is daughter-in-law of the original petitioner, Ujagar Singh
Saini as is evident from CM-6750-CWP-2019.
(3). It is submitted that petitioner, Ujagar Singh Saini (since deceased)
after nearly twenty two years of service with the respondent Bank as Junior
Management Officer Grade Scale-I, was removed from service vide order dated
15.07.1994 (Annexure P1) passed by the Chief General Manager on the ground
of allegation of embezzlement and tampering with the Bank's record. It is
further submitted that the disciplinary proceedings culminated in the penalty of
"removal from service" under Regulation 67(g) of the State Bank of Patiala
(Officers') Service Regulations, 1979 (in short, the 1979 Regulations), which is
statutorily distinct from "dismissal", yet the Bank has, for pensionary purposes,
unlawfully treated the petitioner as if he were a dismissed officer and invoked a
rule that "no superannuation pension is admissible to dismissed officers", even
though no penalty of dismissal was imposed on the petitioner.
(4). Learned counsel urged that the petitioner was informed that only
about Rs.18,893/- of provident fund was payable, while a substantial sum of
Rs.2,56,433/- stood in a sundry deposit account, the break-up of which
included amounts deposited towards vehicle loan, house building loan, sums
received from another branch, and old dues, was disclosed only after persistent
demand and even then without a fair and timely settlement of his PF, gratuity
and leave encashment.
2 of 14
CWP-16738-1999 -3-
(5). He then averred that the State Bank of Patiala (Employees')
Pension Regulations, 1995 (in short, the 1995 Regulations) were notified for
employees who were in service on or after 01.01.1986 and had retired on or
after 01.11.1993 but before the notified date, subject to exercising an option.
Initially, by letter dated 22.09.1994, the petitioner was informed he was not
eligible to opt for pension, but subsequently, in view of a circular, his option
was entertained and was advised to complete formalities vide letter dated
26.03.1995 (Annexure P-8); he submitted the required information by letter
dated 06.05.1996 (Annexure P-9) and repeatedly requested release of pension.
The Bank then stated that no superannuation pension is admissible to
"dismissed officers"; the petitioner immediately replied on 25.10.1996
(Annexure P-11) that he was not "dismissed" but "removed" under Regulation
67(g) of the 1979 Regulations and, therefore, entitled to superannuation
benefits and against such an action, the petitioner got served a legal notice
dated 02.11.1996 but without any response.
(6). Mr. Inderjit Singh, Advocate for the petitioner vehemently
contended that "removal from service" under Regulation 67(g) of the 1979
Regulations cannot be treated as synonymous with "dismissal" for denying
pension in view of the fact that the petitioner had completed qualifying service
and was allowed to opt under the 1993 Regulations and therefore, he is entitled
to superannuatory benefits notwithstanding the penalty of removal. He submits
that no amount towards gratuity has been paid whereas Regulation 49 of the
1979 Regulations makes an eligible officer entitled to gratuity while Regulation
12(2) of the State Bank of Patiala (Payment of Gratuity to Employees)
Regulations, 1970 permits forfeiture only to the extent of financial loss where
3 of 14
CWP-16738-1999 -4-
termination by dismissal for misconduct after 01.01.1966 involves such loss.
Contrarily, he submits that there is no specific finding of financial loss, no
quantified assessment and no order directing forfeiture from gratuity, and none
of the conditions in the Gratuity Regulations or in the Bank's own circular
(Annexure P-2) on withholding/forfeiture of gratuity is satisfied.
On behalf of respondents
(7). On the other hand, written statement dated 15.01.2001 has been
filed by Chief Manager, wherein it has been averred that a regular enquiry was
held under the provisions of 1979 Regulations and as per the enquiry report, the
charges of embezzlement to the tune of Rs.2,37,540/- and putting the bank's
interest to jeopardy were duly proved and consequently, vide order dated
15.07.1994, the petitioner was ordered to be removed w.e.f. 20.07.1994 from
service and the said order has since attained finality.
(8). It is maintained that the petitioner committed
frauds/embezzlement of the sum of Rs.2,37,540/-and the said amount was to be
recovered from him and after appropriating the aforesaid amount Rs.1,15,642/-
deposited by the petitioner and of Rs.1,40,791/- being Provident Fund of the
petitioner, an amount of Rs.18,893/- was paid to him on 12.05.1998. However
on reconsideration, it has been the decided to refund the amount of petitioner's
contribution alongwith interest after adjusting/deducting the amount of
Rs.18,893/- already paid to him.
(9). Mr. Anil K Ahuja, Advocate for the respondents vehemently
contended that the entire controversy has to be examined only through the lens
of the State Bank of Patiala (Employees') Pension Regulations, 1995 (in short
as 1995 Reg.) which forms the only set of pension regulations validly framed
4 of 14
CWP-16738-1999 -5-
under Section 63 of the SBI (Subsidiary Banks) Act, 1959 (in short as 1959
Act) and duly notified in the Official Gazette. He submits that 1995
Regulations were consciously given retrospective coverage for employees who
were in service on or after 01.01.1986 and retired before 01.11.1993, and also
for those who retired between 01.11.1993 and the date of notification, thereby
occupying the entire field of pension entitlement for this period, leaving no
room for any parallel or competing "regime" to operate.
(10). He further averred that the so‑called 1993 Pension Regulations, as
explained in the affidavit dated 29.09.2016 filed by the General Manager of the
respondent-Banks coupled with the covering letter placed on record, were at all
times a 'draft pension scheme' received from IBA, expressly circulated
"subject to completion of certain formalities including approval of the Board of
Directors and amendment of the Service Regulations" and were never approved
or framed as Regulations under Section 63 of the 1959 Act or notified in the
Official Gazette, and hence could not, in law, confer any statutory or vested
right to pension in favour of any employee, including the petitioner.
(11). Learned counsel further asserted that the options called for or
exercised under the 1993 draft scheme were inherently provisional, conditional
and inchoate, being clearly subject to the final statutory framework that would
ultimately be notified and once the 1995 Regulations came into force on
29.09.1995, with retrospective operation from 01.01.1986, they subsumed and
governed all pension entitlements for the relevant period. He then submits that
at best, the 1993 draft Scheme created an expectation, but the same was purely
"subject to approval", and therefore, any expectation had to yield to, and be
measured strictly in the terms of the notified Regulations of 1995.
5 of 14
CWP-16738-1999 -6-
Issues for Determination
(12). Having heard learned counsel for the parties, the following issues
arise for determination by this Court:-
(i) Whether the respondent Bank can deny the petitioner
pension and other retiral benefits on the ground that he was
'removed' from service under Regulation 67(g), despite his
having completed qualifying service and exercised his
option under the 1993 Regulations, particularly when the
1993 Regulations does not explicitly specify 'removal' as
one of the contingencies for denial of such benefits?
(ii) Whether the respondent-Bank's action of forfeiting the
petitioner's leave encashment is legally justified in absence
of a specific enabling provision in Regulation 38 of the
1979 Service Regulations that permits such forfeiture in
cases of 'removal'?
Issue No. 1:
(13). In view of the consistent stand taken by the respondents in their
written statement as well as by its learned counsel, that the State Bank of
Patiala Employees' (Pension) Regulations, 1993, as relied upon by the
petitioner, were never notified in the Official Gazette and that only the 1995
Regulations framed under Section 63(2) of the SBI (Subsidiary Banks) Act,
1959 were enforceable, this Court vide order dated 16.09.2016 directed the
respondents file an affidavit showing that the Regulations of 1993 were only a
draft pension scheme and the same were never statutorily approved and
enforced and that only Regulations of 1995 were legally framed and enforced.
(14). The respondents filed additional affidavit (in CM-12962-CWP-
2016) dated 29.09.2016 of Shyam Kishore Agrawal, General Manager
(Treasury) & Chief Financial Officer, State Bank of Patiala deposing that the
6 of 14
CWP-16738-1999 -7-
Regulations of 1993 were just a draft Pension Scheme/Regulations and its
adoption by the Bank was only subject to completion of certain formalities and
approval of Board of Directors and amendment to State Bank of Patiala
Officer's Service Regulations-1979. The relevant averments made in the said
affidavit read as under:-
"4. That State Bank of Patiala Employees (Pension) Regulations
1993 (in short Regulations of 1993) were only draft Regulations as
received from the Indian Banks Association in pursuance to
settlement to introduce pension as retiral benefit between the
Indian Banks Association and the representatives of Award Staff
and officers of Banks. Keeping in view the time limit within which
the options were to be exercised by the serving /retired employees,
these Regulations were circulated by the State Bank of Patiala
subject to completion of the procedure mentioned above, for the
information to all concerned. Thus it is submitted that the draft
Regulations 1993 were not framed in exercise of powers conferred
by sub section (1) and clause (O) of sub section (2) of section 63 of
the State Bank of India (Subsidiary Banks) Act, 1959 in
consultation with the Board of Directors of the State Bank of
Patiala and with the approval of the Reserve Bank of India
notified in the Official Gazette as required.
5. That Regulations of 1993 were just draft Pension
Scheme/Regulations. The said fact is evident from the contents of
the covering letter dated 24.05.1994 whereby the draft
Scheme/Regulations of 1993 was circulated. A copy whereof is
attached herewith as Annexure RR-1.
6. That in Para No.8 of covering letter of 1993 Pension
Scheme/Draft Regulations reads as under:-
"The adoption of the above scheme by the Bank is subject to
completion of certain formalities including of the approval
Board of Directors and amendment to State Bank of Patiala
7 of 14
CWP-16738-1999 -8-
Officer's Service Regulations-1979. However, keeping in
view the time limit within which the options are to be
exercised by the serving/retired employees, we are
circulating the scheme for the information of all
concerned."
7. That the 1993 Pensions Scheme/Regulations were never
approved under the State Bank of India (Subsidiary Banks) Act,
1959 and were never enforced and made applicable and only the
Regulations of 1995 were legally framed, enforced, notified and
made applicable as mentioned in the Bank's circular instructions
circulated vide Circular dated 13.05.1996...."
(15). This issue has to be tested against the statutory framework and
binding precedent. Concededly, the respondent-Bank introduced and acted
upon the 1993 pension scheme by inviting options from the eligible employees
including the petitioner as is clear from the letter dated 26.03.1996 (Annexure
P8) and its reply dated 06.05.1996 requiring the petitioner to complete
formalities under the then existant 1993 Regulations. The 1993 scheme may
not have been formally notified as "Regulations", but the respondent's own
conduct treated it as an operative pension option. Circulars were issued, options
were invited, and the petitioner responded and altered his position accordingly.
(16). The 1995 Regulations, when later notified with retrospective
coverage from 01.01.1986, did not ignore this history and instead, Forms A, C
and D under the 1995 Regulations expressly referred to employees "who
had/had not opted under the 1993 scheme earlier" which shows that the options
earlier invited under the 1993 scheme were acknowledged under the new
Regulations.
8 of 14
CWP-16738-1999 -9-
(17). Guidance may be drawn from "Bank of Baroda v. S.K. Kool
(Dead) through LRs, 2014 ALL SCR 785", wherein the Supreme Court faced a
similar issue between a pension Regulation 22, providing that removal leads to
forfeiture of past service vis-à-vis Bipartite Settlement Clause 6(b) which
allowed "removal 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. The Supreme Court rejected the
respondent's contention that Regulation 22 wiped out pension despite removal
with superannuation benefits holding that in case of apparent conflict between
the two provisions, they should be harmoniously interpreted so as to give effect
to both. It also held that such of the employees who are otherwise entitled to
superannuation benefits under the Pension 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 Regulation
shall not be entitled to that. The relevant extracts of the judgment read as
under:-
"14. The Regulation does not entitle every employee to pensionary
benefits. Its application and eligibility is provided under Chapter
II of the Regulation 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 Article 14 of the Regulation. 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
9 of 14
CWP-16738-1999 - 10 -
qualifying service shall not be entitled to the superannuation
benefit 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.
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 on 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
Regulation 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 Regulation shall
not be entitled to that."
(18). This reasoning has been reaffirmed and applied by the Supreme
Court in "UCO Bank & Anr. v. Vijay Kumar Handa, 2025 INSC 442", where
an employee's punishment was modified from dismissal to removal with
terminal/superannuation benefits. In that case, the bank denied pension by
invoking a regulation barring pension to those "dismissed or removed". The
Supreme Court again harmonised the pension regulations with the settlement
and removal order, holding that an order of removal which specifically confers
10 of 14
CWP-16738-1999 - 11 -
superannuation benefits must be interpreted to include pension, unless
expressly excluded.
(19). The 1995 Regulations, with retrospective coverage and embedded
references to 1993 options, are the statutory analogue of the "rules/regulations
prevailing at the relevant time" through which superannuation benefits "as
would be due otherwise" must be worked out. On this structure, it becomes
untenable for the Bank to say, on the one hand, that 1993 had no legal efficacy,
while on the other hand using the forms appended with the 1995 Regulation to
sort employees by whether they had "opted under the 1993 scheme earlier".
(20). The 1993 scheme and options are the functional equivalent of the
Bipartite settlement/Clause 6(b) context discussed by the Supreme Court in
S.K. Kool (supra) and Handa (supra) the Bank represented that pension would
be available to those in service on or after 1.1.1986 who opted, and invited the
petitioner to do so. Thus, it can be borne out that employee who completed
qualifying service, and exercised option under the operative scheme, falls
within the class of employees for whom the combination of the 1993 scheme
and the 1995 Regulations "provides for superannuation benefits as would be
due otherwise" and as such, denying him pension and other retiral benefits
altogether would render the scheme "a fraud" on its own terms.
Issue No.2
(21). On the question of "removal" under Regulation 67(g) of the 1979
Regulation, the key point is that forfeiture provisions are to be construed
strictly. In service jurisprudence, "removal" and "dismissal" are distinct
penalties, and where the relevant Regulations confines forfeiture of pension to
11 of 14
CWP-16738-1999 - 12 -
"dismissal", no administrative gloss can extend that disability to cases of
"removal" without an express provision to that effect.
(22). In the 1993 scheme, as pleaded, only "resignation, dismissal or
termination" are stated to entail forfeiture of entire past service for pension and
"removal" is not mentioned. Where the rule‑making authority itself has
deliberately specified certain contingencies, it would be not in the fitness of
things for this Court to permit the respondents to add a new category by self-
interpretation to impose a disqualification that the prevailing Regulation does
not contain and allow the term "removal" to be used as a blunt instrument to
defeat superannuatory dues promised under Clause 6(b) for otherwise eligible
employees.
(23). The forfeiture of Gratuity even under Section 4(6) of the Payment
of Gratuity Act, 1972, is subject to strict conditions, requiring specific grounds
like riotous conduct, moral turpitude, or proved financial loss. Similarly, if a
pension regulation/scheme prevalent at the relevant time, does not list
"removal" as a disqualifying event, this Court cannot expand the scope to deny
benefits, especially when the Bank's own schemes and regulations suggest
otherwise, and the employee has accrued rights under the Regulation.
(24). Even assuming misconduct, Regulation 12(2) of the 1970
Regulations permits forfeiture only to the extent of financial loss and that too
only in cases where the delinquent had been 'dismissed' form service.
Apparently, the stand of the respondent is that the embezzlement of a
quantified amount was proved and that recovery was effected by appropriating
sums including the petitioner's provident fund and deposits, resulting in
12 of 14
CWP-16738-1999 - 13 -
payment of only a small balance, thereby demonstrating that the alleged
financial loss stands substantially adjusted.
(25). The Madhya Pradesh High Court in Madanlal Gupta versus
Madhyanchal Gramin Bank (W.P. No. 9930/2017, decided 17.11.2022) dealt
with the case, where the petitioner was removed from a bank's service and the
employer withheld his earned leave encashment, relying on a regulation dealing
with dismissal/removal. The High Court examined the relevant Regulation 67
and found that there was "absolutely no provision" in the Regulations under
which the claim for leave encashment could be withheld on the ground that the
employee had been penalised or removed. It held that in the absence of a
specific enabling provision, leave encashment cannot be denied merely because
of punishment and that such an interpretation by the employer, reading a
forfeiture of leave encashment into a regulation that did not provide for it, was
impermissible.
(26). Regulation 38 of the 1979 Service Regulations causes lapse of
leave only on "resignation, retirement, death, discharge, dismissal or
termination", and does not mention "removal" at all. There is thus no statutory
provision authorising the Bank to treat removal as a ground for lapse of leave
or forfeiture of leave encashment, for, the retiral dues like the leave encashment
including pension and gratuity are "property" under Article 300A of the
Constitution, and cannot be withheld on the strength of a mere
circular/regulation when there is no statutory rule authorising such withholding.
Conclusion
(27). Accordingly, the writ petition is allowed and the orders dated
04.10.1996 and 11.06.1997 (Annexures P10 & P11) vide which the pension
13 of 14
CWP-16738-1999 - 14 -
and retiral benefits have been denied to the petitioner, stand quashed. The
respondents are directed to quantify the proved loss, if any, by the petitioner,
adjust the same and thereafter, release all the service/pensionary dues including
pension and its arrears including as mentioned in the letter dated 26.10.1998
(Annexure P6), along with interest @ 9% p.a. to the legal heirs of the petitioner
(since deceased), from the date it became due till its actual realization.
(28). The needful shall be done as early as possible but not later than 2
months from the date of receipt of certified copy of this order.
09.01.2026 (Sandeep Moudgil)
V.Vishal
Judge
1. Whether speaking/reasoned? : Yes/No
2. Whether reportable? : Yes/No
14 of 14
