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The employees who completed 15 years of service or more as on cut­off date were entitled to proporti

Assistant General Manager, State Bank of India & Others Versus Radhey Shyam Pandey,CIVIL APPEAL NO.2463 OF 2015 Arising out of S.L.P. (Civil) No. 3686 OF 2007

Bench: Dipak Misra, V. Gopala Gowda

This Court observed that the principal aim of the socialist State as envisaged in the Preamble is to eliminate inequality. The basic framework of socialism is to provide security in the fall of life to the working people and especially provides security from the cradle to the grave when employees have rendered service in heydays of life, they cannot be destituted in old age, by taking action in an arbitrary manner and for omission to complete obligation assured one. Though there cannot be estoppel against the law but when a bank had the power to amend it, it cannot take shelter of its own inaction and SBI ought to have followed the pursuit of other banks and was required to act in a similar fair manner having accepted the scheme.

On December 27, 2000, the Central Board of State Bank of India approved the VRS scheme proposed by the Indian Banks Association, as per which any employee with 15 years of service was eligible. It is relevant to note that as per SBI Pension Fund Rules, an employee was eligible for pension only on completion of 20 years of service.

In this backdrop, Deputy Managing Director ­cum ­CDO of SBI issued a clarification on January 15, 2001 that as per the existing rules, employees who had not completed 20 years of pensionable service were not eligible for pension.

One Radhey Shyam Pandey, who opted for VRS after 19 years, nine months, and 18 days of pensionable service, was denied pension as per Rules on the ground that he had not completed 20 years of service. There were several other employees who were in the same situation as Radhey Shyam Pandey. They approached the High Courts, which ruled in their favour. Challenging the HC verdicts, the SBI came in appeal. Several civil appeal petitions were clubbed for the respective hearing.

The learned advocate has submitted his offer for voluntary retirement in terms of the Pension Rules existing in the month of January, 2001. On the said date, a member of the Pension Funds was entitled to pension on completion of 20 years of pensionable service provided he has attained the age of 50 years. Alternatively, if a member is in service of the Bank on or after 01.11.1993 and has completed 10 years of pensionable service and has attained the age of 58 years, he shall be entitled to the pension. The petitioner fulfills the second part of Clause (a) of Rule 22 which was in existence on the day when the petitioner submitted his request for voluntary retirement. Even after the amendment on 09.03.2001, another clause has been added i.e. 3rd part of Clause (a) as mentioned above, which does not affect the claim of the petitioner for pension as he is entitled to pension in the second part of Rule 22(1)(a).”

Mr. Rohtagi, learned Attorney General, has submitted that on 30.1.2001, the SBI Employees Pension Fund Rules was amended by the Central Board of SBI. The SBI VRS was in operation from 15.1.2001 to 31.1.2001. The employees were at liberty, as has been stated earlier, to withdraw by 15.2.2001. Admittedly, the Rule was in force on 30.1.2001. The employees were very well aware about the amended Rule. There can be no scintilla of doubt that the Rule existed as on 31.1.2001. If an employee wanted to withdraw, he could have withdrawn prior to 15.2.2001 but as is the admitted position, none of the employees withdrew. There is no cavil over the fact that the employees had accepted all the benefits of the VRS. The crux of the matter is whether the respondents can get the benefit, despite the amendment brought to the Rules.

The Court allowed the appeal preferred by the Bank:

In Bank of India and Another V. K. Mohandas and Others(2009) 5 SCC 313, the Court referred to Regulation 28 of the Employees’ Pension Regulations 1995, which had provided superannuation pension and Regulation 29 provided pension on voluntary retirement. After referring to series of decisions, the Court held thus:

It is also a well-recognised principle of construction of a contract that it must be read as a whole in order to ascertain the true meaning of its several clauses and the words of each clause should be interpreted so as to bring them into harmony with the other provisions if that interpretation does no violence to the meaning of which they are naturally susceptible. (North Eastern Railway Co. v. Lord Hastings (1900) AC 260)

The Court further opined thus:

The facts of the present case, however, do not attract the provisions of Regulation 29 since the respondent accepted the offer of voluntary retirement under the Scheme framed by the Bank and not on his own volition dehors any scheme of voluntary retirement. In such a case, Regulation 14 read with Regulation 32 providing for premature retirement would not also apply to the case of the respondent. While Regulation 2 of the BOBEVRS, 2001 speaks of eligibility for applying under the Scheme, Regulation 14 of the Pension Regulations, 1995, contemplates a situation where under an employee would be eligible for premature pension. The two provisions are for two different purposes and for two different situations. However, Regulation 28 of the Pension Regulations, 1995, after amendment made provision for situations similar to the one in the instant case.

It is essential to advert to the issue whether the employee would be entitled to pension under the four corners of the Rules. Rule 22 which squarely falls for consideration is as follows:-

“22. (i) A member shall be entitled to a pension under these rules on retiring from the Bank’s service –

After having completed twenty years’ pensionable service provided that he has attained the age of fifty years or if he is in the service of the Bank on or after 1.11.93, after having completed ten years pensionable service provided that he has attained the age of fifty eight years or if he is in the service of the Bank on or after 22.5.1998, after having completed ten years pensionable service provided that he has attained the age of sixty years;

After having completed twenty years’ pensionable service, irrespective of the age he shall have attained, if he shall satisfy the authority competent to sanction his retirement by approved medical certificate or otherwise that he is incapacitated for further active service;

After having completed twenty years pensionable service, irrespective of the age he shall have attained at his request in writing.

After twenty five years’ pensionable service.

A member who has attained the age of fifty-five years or who shall be proved to the satisfaction of the authority empowered to sanction his retirement to be permanently incapacitated by bodily or mental infirmity from further active service (such infirmity not being the result of irregular or intemperate habits) may, at the discretion of the trustees, be granted a proportionate pension.

A member who has been permitted to retire under Clause 1(c) above shall be entitled to proportionate pension.”

The court rules in favour of the respondents and direct the appellant Bank to grant pension to the employees seeking voluntary retirement under the SBI-VRS after completing 15 years of pensionable service. Therefore, the respondent Radhey Shyam Pandey, having completed 19 years 8 months and 18 days of service, respondent M.P. Hallan, having completed 19 years and 4 months of service and the respondent R.P. Nigam, having completed 16 years and 6 months of service, become eligible for pension as per the amended Regulation 28 of Employees Pension Rules, 1995. By virtue of power vested in this Court under Article 142 Constitution of India, the pension relief is also extended to all the other employees who have availed SBI-VRS 2000 after having completed 15 years of pensionable service. Thus, C.A. No.@ SLP (C) No.3686 of 2007, C.A. Nos.2287- 2288 of 2010 and C.A. No. 10813 of 2013 are dismissed.

“Resultantly, we are of the opinion that the employees who completed 15 years of service or more as on cut­off date were entitled to proportionate pension under SBI VRS to be computed as per SBI Pension Fund Rules. Let the benefits be extended to all such similar employees retired under VRS on completion of 15 years of service without requiring them to rush to the court. Let order be complied with and arrears be paidwithin three months, failing which amount to carry interest at the rateof 6 per cent per annum from the date of this order. The appeals area accordingly disposed of. No costs.”

– Karthik K.P