Case BriefsSupreme Court

Supreme Court: In a case where the 3-judge bench of Arun Mishra, BR Gavai and MR Shah, JJ was hearing a reference in a plea of SBI employees seeking pension on completion of 15 years of service as per the State Bank of India Voluntary Retirement Scheme, it was held that the employees who completed 15 years of service or more as on cut­off date are entitled to proportionate pension under SBI VRS to be computed as per SBI Pension Fund Rules.

Refraining from burdening the bank with interest, the bench directed,

“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.”

Factual Background

  • After obtaining approval of the Government of India, the Indian Bank Association (IBA) evolved a Voluntary Retirement Scheme. The Central Board of Directors of SBI adopted and approved the scheme in its meeting held on 27.12.2000 for implementing the VRS for the employees of the bank by retiring them on completion of 15 years of service with the benefit provided in the scheme. The heart and soul of the scheme were that benefits to be given on completion of 15 years of service. The eligibility for benefits was provided to those who had completed 15 years of service as on 31.12.2000.
  • The SBI submitted that it reserved a right under the scheme to modify, amend or cancel it or any of the clauses and to give effect to it from any date deemed fit. The Deputy Managing Director­cum­CDO was the competent authority for the purpose.
  • As specific queries were raised, a clarification was issued by the Deputy Managing Director on 15.1.2001, stating that as per the existing rules, employees who had not completed 20 years of pensionable service, were not eligible for pension.
  • The respondent before the Supreme Court questioned the refusal of the bank to pay pension. He retired on 31.3.2001 under the SBI VRS. On 18.3.2001, the bank accepted the offer of the employee to retire him voluntarily. He was aged 59 years three months and had nine months service still to go before attaining the age of superannuation. On 31.3.2001, when the VRS became effective, he had put in 19 years, nine months, and 18 days of pensionable service. He had to retire on completion of 60 years and would have put in a little more than 20 years of pensionable service.

Taking note of the facts, the Court noticed that once the Central Board of Directors accepted the memorandum for making payment of pension, in case it was not accepting the proposal in the memorandum, it ought to have said clearly that it was not ready to accept the proposals of the Government and the IBA and rejects the same. Once it approved the proposals referred to in the memorandum, which were on the basis of IBA’s letter and Government of India’s decision it was bound to implement it in true letter and spirit cannot invalidate its own decision by relying on fact it failed to amend the rule, whereas other Banks did it later on with retrospective effect.

“They cannot invalidate otherwise valid decision by virtue of exclusive superior power to amend or not to amend the rule and act unfairly and make the entire contract unreasonable based on misrepresentation.”

It further said that while construing a contract, the language and surrounding circumstances of the overall scheme, memorandum and letters are to be read conjointly to find out whether any departure made by the Board of Directors in its Resolution dated 27.12.2000 is of pivotal significance. In this case, the decision was taken by it of approval of the IBA scheme as proposed. Its binding effect cannot be changed on the basis what parties choose to say afterward, nor they can   be permitted to wriggle out. The contract is required to be read as a whole. It is apparent on a bare reading that optees will be eligible for proportionate pension under the Pension Regulations of the bank and therefore, the bank bears the risk of lack of clarity, if any.

 “It was not the provision in the VRS scheme that incumbents having completed 20 years of service would be entitled for pensionary benefits. The scheme was carved out specially for attracting the employees by providing pension and other benefits to eligible persons like ex gratia, gratuity, pension and leave encashment. Deprivation of pension would make them ineligible for the benefits and would run repugnant to the eligibility clause.”

The Court concluded by saying that 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.

[Assistant General Manager, State Bank of India v. Radhey Shyam Pandey, 2020 SCC OnLine SC 253, decided on 02.03.2020]

Case BriefsHigh Courts

Patna High Court: Ashutosh Kumar, J., directed the petitioner to file a fresh representation before the Principal Secretary, Department of Health, Government of Bihar, Patna.

The petitioner has filed this petition against an order issued by the Health Department. The petitioner asked for his voluntary retirement which was acceded to but allowed with a condition that he would be disqualified from being considered for any engagement on a contract or for any other responsibility.

The petitioner stated that the facts have been incorrectly stated in the order as he was not serving as an Associate Professor in the Department of Surgery but was an Associate Professor in Laparoscopic Surgery Department, PMCH.  He had also requested for retiring voluntarily from 31-07-2019 but without any reason, the Health Department sanctioned his voluntary retirement from 31st of May, 2019.

The Court was of the view that the impugned order must read that the petitioner has voluntarily retired from the post of Associate Professor, Laparoscopic Surgery Department, which is a separate department in PMCH. Further, the prohibition on the petitioner for being appointed on contractual terms in future is also without justification and the Health Department does not have any authority to put such prohibition upon the petitioner. In cases of voluntary retirement, without there being any charge against the employee, the Bihar Service Code provides that such request could be unilaterally withdrawn before the same is accepted. Therefore the petitioner is not disqualified and must be allowed to retire voluntarily.

Therefore, the Court directed the petitioner to make a fresh representation before the Principal Secretary and can have the facts verified and must issue a clarificatory order to clarify the last post held by the petitioner. The future disqualification attached must be revisited and if it is beyond the competence of the authority, the same must be deleted.[Vishnu Kant Pandey, v. State of Bihar, 2019 SCC OnLine Pat 1273, decided on 01-08-2019]

Case BriefsHigh Courts

Patna High Court: A Division Bench of Amreshwar Pratap Sahi and Anjana Mishra, JJ. dismissed an appeal for voluntary retirement filed against the respondent as the inquiry was started almost after 2 years of giving notice.

Respondent herein had tendered an application for voluntary retirement entitling her to be treated as a retired government servant She was proceeded against in departmental proceedings for her unauthorized absence. The point for consideration was whether the respondent could have proceeded for voluntary retirement from service in the disciplinary proceedings. Learned Single Judge held that since respondent’s voluntary retirement application was accepted in law, therefore the action taken by appellants was not in conformity with the rules. Aggrieved thereby, the present appeal was filed.

Counsels for the appellant, Binita Singh and Apurv Harsh, contended that as per Rule 74 (b)(i) of Bihar Service Code, 1952 a government servant may, after giving at least 3 months previous notice, in writing, to the appointing authority concerned retire from service on the date on which such a government servant completes 30 years of qualifying service or attains 50 years of age. Thus, a government servant could get retired only if he gave atleast 3 months prior notice to the concerned authority. 

Learned counsels for the respondent P.K. Shahi and Sanjeev Kumar Mishra contended that in view of the law laid down in Dinesh Chandra Sangma v. State of Assam, (1977) 4 SCC 441 the application moved for voluntary retirement was in order and the same had rightly been treated to be a valid application by the learned Single Judge. Thus, the entire disciplinary proceedings were invalid and consequently quashing of the punishment order was justified.

The Court noted that the application for voluntary retirement had been filed by the respondent before the concerned authority, but no orders were passed thereon. Once the application for voluntary retirement had been moved, then merely because the period of three months had not been mentioned in the said application, the same would not render it invalid ipso facto and it would mature after the expiry of three months. Inquiry against the respondent was commenced almost after two years after the maturity of her application, but no explanation was provided for the said delay.

Reliance was placed on the case of Dinesh Chandra Sangma v. State of Assam, (1977) 4 SCC 441 where it was held that consent of government is not necessary to give legal effect to voluntary retirement. In view thereof, the appeal was dismissed. [State of Bihar v. Swarn Lata Sinha, 2019 SCC OnLine Pat 852, decided on 07-05-2019]

Case BriefsHigh Courts

Rajasthan High Court: Ashok Kumar Gaur, J. allowed the writ petition for the benefit of the Non-Practicing Allowance (NPA) as no reference was made of such circular to show that the person can be deprived of such benefits.

A petition was made by the petitioner praying for the grant of Non-Practicing Allowances (NPA) and also challenged the order by which the earlier order of granting NPA was withdrawn.

The facts of the case were that petitioner was sent on deputation as Deputy Director (AIDS) in Rajasthan State AIDS Control Society. The petitioner pleaded that he must be granted NPA and thus requested the authorities and submitted a representation to the Project Director to grant him NPA. The petitioner further submitted that the Society held its meeting in which a conscious decision was taken to grant NPA to those working in other National programmes but the same was not paid to him. Thus, this application.

 Abhay Bhandari, Senior Counsel for the petitioner submitted that he had to seek voluntary retirement which was accepted. It was further submitted that instead of granting him the actual benefit on the promoted post, the respondents had denied the actual benefit of the promotion to the petitioner only on account of the fact that the petitioner was promoted after he had sought voluntary retirement. The petitioner was also entitled to his fixation in the pay scale of Rs 10000-325-15200 on his promotion and only because the petitioner had sought voluntary retirement, the actual benefit could not have been denied to him.

Prakhar Gupta, Counsel for the respondent submits that the petitioner was not entitled to grant of NPA. It was submitted that since the petitioner was not getting any NPA prior to his posting in the Rajasthan State AIDS Control Society and as such he could not be given such benefit. Counsel further submitted that the NPA could only be given to the persons who were entitled as per the order issued by the Finance Department from time to time. Counsel submitted that the claim of the petitioner for grant of pay scale of Rs 10000-325-15200 on the promoted post was also not justified as the petitioner had sought voluntary retirement and while considering his case for promotion, he was not working and as such notional benefit is only to be given to the petitioner.

High Court opined the petitioner has been promoted as Senior Medical Officer and a particular pay scale was required to be given to the person who was promoted on the regular basis, the same cannot be denied to him only on account of the fact that he had sought voluntary retirement. The court further held that as there was no clause which prescribed that a person who has been promoted on regular line of promotions, can be deprived from the pay scale of the higher post. Thus, the order was made to the respondent to pay the NPA along with the actual benefit of pay revision of promotion within five weeks.[Avdhesh Gupta v. State of Rajasthan, 2019 SCC OnLine Raj 686, decided on 20-05-2019]

Case BriefsHigh Courts

Allahabad High Court: In a recent judgment passed by the Division Bench comprising of Dr. Devendra Kumar Arora and Rajnish Kumar JJ., in regard of the orders given by the State Government with respect to applications of voluntary retirement were disposed of.

The aggrieved petitioners were members of the Provincial Medical Services (PMS), and had applied for voluntary retirement, but their petitions were rejected on the basis of scarcity of doctors in the State. As per the criteria enumerated under Fundamental Rules 56(c) of the Financial Handbook, voluntary retirement can be stopped only if the  individual concerned is at a premature age, or is subject to some disciplinary proceeding. In the accumulated writ petitions of this case, all the conditions were fulfilled, and all the four petitioners were rejected on the grounds of poor medical conditions in the State.

Reliance was placed on the landmark judgments in Dinesh Chandra Sangma v. State of Assam, (1977) 4 SCC 441, Union of India v. Sayed Muzaffer Mir, 1995 Supp (1) SCC 76 : AIR 1995 SC 176 and Dr Anil Dewan v. State of Punjab, CWP No.9455 of 2008, which unanimously concluded that the State could not interpret the rule on its own convenience and that voluntary retirement was a right which could not be infringed. Hence, the previous order was quashed and retirement was granted to the petitioners. [Dr. Achal Singh v. State of U.P., Service Bench No. 14939 of 2017, decided on 29-11-2017)

Case BriefsHigh Courts

Bombay High Court:  A writ petition by former employees of the respondent bank who asserted that differentiating between ‘resignation’ and ‘voluntary retirement’ was bad in law and unjustified, was dismissed by a Division Bench comprising of M.S. Karnik and A.A. Sayed, JJ. The petitioners’ contention was that since they had been employees of the bank for more than 20 years and had resigned because they had no provision pertaining to voluntary retirement upon completion of 20 years of service, they were entitled to be covered under the Bank of India (Employees) Pension Regulations, 1995.

The Regulations of 1995 provided for entitlement to avail pension after 20 years of service on grounds of voluntary retirement for persons retiring between 1986 and 1993. The petitioners resigned between the aforementioned period and sought that the court declare ‘retirement’ to include ‘resignation’.

The Court rejected their contentions, accepted the cases put forward by the respondent, relied on the definition of ‘retirement’ under the Regulations and held that under service jurisprudence, the concept of resignation is not covered under retirement. Since the petitioners’ employment terms were governed by the Officers Service Regulation, 1979, the Court came to the conclusion that they were not entitled to receive pension under the new scheme. Therefore, the petitioners had voluntarily relinquished their services. [Hutoxi Noshir Shroff v. Bank of India,  2017 SCC OnLine Bom 6600, decided on 21.07.2017]

Case BriefsSupreme Court

Supreme Court: Interpreting the provisions of Sections 33C(2) of the Industrial Disputes Act, 1947 vis-à-vis a Voluntary Retirement Scheme framed by the State of Andhra Pradesh, the Court said that though there is cessation of relationship between the employee and the employer in VRS but if it does not cover the past dues like lay-off compensation, subsistence allowance, etc., the workman would be entitled to approach the Labour Court under Section 33C(2) of the Act.

Explaining the position of law, the Court said that if the VRS had mentioned about the lay-off compensation, needless to say, the claim would have been covered and the amount received by the workmen would have been deemed to have been covered the quantum of lay-off compensation. If it is specifically covered, or the language of VRS would show that it covers the claim under the scheme, no forum will have any jurisdiction. However, on a perusal of the VRS framed by the State of Andhra Pradesh, the Court noticed that it did not deal with the lay-off compensation and hence, said that the workmen is entitled to approach the Labour Court.

The 3-Judge Bench of Dipak Misra, V. Gopala Gowda and Kurian Joseph, JJ was deciding the reference made by the 2-Judge Bench in an appeal from the decision of the Andhra Pradesh High Court where it was held that once the workmen had availed the Voluntary Retirement Scheme and received the special compensation package, they could not have put forth a claim for lay-off compensation under Section 33C(2) of the Act. [A. Satyanarayana Reddy v. Presiding Officer, Labour Court, 2016 SCC OnLine SC 1059, decided on 30.09.2016]