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CASE NO.: Appeal (civil)  5503 of 2003

PETITIONER: Union Bank of India

RESPONDENT: Venkatesh Gopal Mahishi & Anr

DATE OF JUDGMENT: 12/01/2007

BENCH: G. P. Mathur & Lokeshwar Singh Panta

JUDGMENT: J U D G M E N T

Lokeshwar Singh Panta, J.  

       This appeal is directed against the judgment and order  dated 02.04.2002 passed by the High Court of Judicature at  Bombay in Writ Petition No.567 of 2002 whereby and  whereunder Venkatesh Gopal Mahishi has been held entitled  for pension under the Union Bank of India (Employees’)  Pension Regulations, 1995.         The facts, in brief, are that Venkatesh Gopal Mahishi,  respondent No.1 herein, joined the services of the Union Bank  of India (hereinafter referred to as ‘the appellant-bank’) as a  Peon on 02.05.1960.  On 19.02.1991, the respondent No.1  had submitted an application to the authority seeking  retirement on medical grounds with further request to give  employment to his dependent son on compassionate ground.   The request of the respondent No.1 was accepted by the  appellant-bank and he was retired as Daftary from the service  w.e.f. 01.11.1993 and later on his son has been given  employment.           The appellant-bank, in exercise of the powers conferred  by clause (f) of sub-section (2) of Section 19 of the Banking  Companies (Acquisition and Transfer of Undertakings) Act,  1970 (5 of 1970), after consultation with the Reserve Bank of  India and with the previous sanction of the Central  Government, framed regulations called Union Bank of India  (Employees’) Pension Regulations, 1995 (for short "Pension  Regulations"), whereunder pension option was made available  to the employees of the appellant-bank in lieu of the  employer’s contribution in the Provident Fund on the  employees surrendering the same to the bank.  The appellant- bank called for option to be exercised by the employees who  had retired from service between 01.01.1986 and 31.10.1993.  The respondent No.1 accordingly submitted an application on  28.06.1994 for pension under the Pension Regulations, but  his claim was rejected by the competent authority on  12.11.1994 inter alia on the ground that the respondent No.1  was not eligible to the pension scheme as he was retired under  different scheme prior to the date of enforcement of the  Pension Regulations.         The respondent No.1, after about seven years from the  date of the rejection of his claim for the grant of the benefits of  the pension scheme to him, filed Civil Writ Petition No.567 of  2002 before the High Court of Judicature at Bombay seeking  grant of pension.  A Division Bench of the High Court allowed  the writ petition primarily relying on an earlier decision of

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learned Single Judge in the case of Madhav K. Kirtikar v. Bank  of India [1997 (2) Bom. C. R. 524].  Now, the appellant-bank is  before us in this appeal.         We have heard the learned counsel for the parties at  length and have gone through the judgment of the Division  Bench of the High Court and other material on record.         Mr. Raju Ramachandran, learned senior Advocate  appearing on behalf of the appellant-bank, has broadly made  threefold submissions: (i) that Pension Regulations do not  apply to the respondent No.1 as he is an award staff; (ii) that  the respondent No.1 has sought retirement on medical  grounds covered by the non-statutory scheme, which is  different scheme and on his request his son was appointed on  compassionate grounds, thus, the respondent No.1 is not  entitled to take two benefits under different schemes; and (3)  that even if the respondent No.1 is held eligible for pension,  the Pension Regulations will not be applicable to him as the  respondent No.1 was retired on 01.11.1993 and the Pension  Regulations are made applicable to those employees only who  have voluntarily retired w.e.f. 01.01.1986 to 31.10.1993 under  the statutory scheme/rules of retirement.         Per contra, Mr. Nitin S. Tambwekar, learned counsel  appearing on behalf of respondent No.1, contended that the  claim of the respondent No.1 for the grant of pension is fully  covered by the Pension Regulations and the stand of the  appellant-bank that the Pension Regulations are not  applicable to the respondent No.1 as he had sought voluntary  retirement on medical grounds, is not tenable and justified.    According to the learned counsel, the appellant-bank cannot  classify its employees into separate and different categories  who have retired on medical grounds or sought voluntary  retirement on any other ground as per the scheme/rules.  The  learned counsel also submitted that the claim of the  respondent No.1 is covered by Regulation 29 of the Pension  Regulations and the Chief Manager of the appellant-bank vide  communication dated 20.09.1993, addressed to the  respondent No.1, has categorically admitted that the  respondent No.1 has been treated as voluntarily retiree from  the services of the Bank w.e.f. 01.10.1993.  The learned  counsel lastly contended that this Court, in exercise of the  jurisdiction under Article 136 of the Constitution of India,  should not lightly interfere with the well-reasoned judgment  and order of the Division Bench granting beneficial reliefs to  the respondent No.1 - retiree of the appellant-bank.         We have duly considered the respective contentions of  the learned counsel for the parties.  It is not in dispute that  the appellant-bank framed the above-said Pension Regulations  for the grant of pension to its employees.  Under Chapter III of  the Pension Regulations, Bank shall constitute a Fund to be  called the Union Bank of India (Employees’) Pension Fund.   The Provident Fund Trust shall, immediately after the  constitution of the Fund, transfer to the Union Bank of India  (Employees’) Pension Fund the accumulated balance of the  contribution of the Bank to the Provident Fund and interest  accrued thereon upto the date of such transfer in respect of  every employee.         Regulation 2 (k) defines ’date of retirement’ to mean the  last date of the month in which an employee attains the age of  superannuation or the date on which he is retired by the Bank  or the date on which the employee voluntarily retires; or the  date on which the officer is deemed to have retired.           Under Clause (n) ’Employee’ means any person employed  in the service of the bank on full time work on permanent  basis or on part-time work on permanent basis on scale wages  and who opts and is governed by these regulations, but does

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not include a person employed either on contract basis or  daily-wage basis or on consolidated wages.           Clause (x) deals with the definition of ’retired’ to include  ’deemed to have retired’ under Clause (1), whereas under  Clause (l) ‘deemed to have retired’ means cessation from  service of the Bank on appointment by Central Government as  a whole-time Director or Managing Director or Chairman in  the Bank or in any other Bank specified in column 2 of the  First Schedule of the Act or Banking Companies (Acquisition  and Transfer of Undertakings) Act, 1970 (5 of 1970).         ’Retirement’ is defined in Clause (y), which reads as  under:- "(a) on attaining the age of superannuation  specified in Service Regulations or Settlements;

(b) on voluntary retirement in accordance with  provisions contained in Regulation 29 of these  regulations; and

(c) on premature retirement by the Bank before  attaining the age of superannuation specified  in Service Regulations or Settlements."                   Chapter II of the Pension Regulations deals with  ’Application and Eligibility’.   Regulation 3(1)(a) envisages that  the Pension Regulations shall apply to employees who were in  the service of the Bank on or after the 1st day of January, 1986  but had retired before the 1st day of November, 1993; (b)  exercise an option in writing within one hundred and twenty  days from the notified date to become member of the Fund;  and (c) refund within sixty days after the expiry of the said  period of one hundred and twenty days specified in clause (b)  the entire amount of the Bank’s contribution to the Provident  Fund including interest accrued thereon together with a  further simple interest at the rate of six per cent per annum  on the said amount from the date of settlement of the  Provident Fund account till the date of refund of the aforesaid  amount to the Bank.         Chapter V deals with ’Classes of Pension’.  Under Clause  28, an employee who has retired on his attaining the age of  superannuation specified in the Service Regulations or  Settlements, is entitled to the superannuation pension.           Clause 29 to the extent it is relevant and relied upon by  the respondent No.1 reads as under:- "Pension on Voluntary Retirement:- (1)  On or after the 1st day of November, 1993,  at any time after an employee has  completed twenty years of qualifying  service he may, by giving notice of not less  than three months in writing to the  appointing authority retire from service;  

Provided ....................................................

Provided further.........................................

Provided that this sub-regulation shall not  apply to an employee who is deemed to  have retired in accordance with clause (1)  of regulation 2."

       An employee is entitled to Invalid Pension under  Regulation 30, Premature Retirement Pension under  Regulation 32 and Compulsory Retirement Pension under  Regulation 33 of the Pension Regulations.

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       The respondent No.1, admittedly, gave his option for the  benefits of the Union Bank of India Employees’ Pension  Scheme 1993 on 28.05.1994.  He undertook to refund the  bank’s contribution to the provident fund, amounting to  Rs.46,464.33, including interest accrued thereon together with  further simple interest at the rate of 6% p.a., paid to the  respondent No.1 on his retirement. The request of the  respondent No.1 was rejected by the competent authority of  the appellant-bank on the ground that the respondent No.1  had sought voluntary retirement from the services of the  appellant-bank as Daftary w.e.f. 01.11.1993 vide his  application dated 19.02.1991 on medical grounds under a  non-statutory scheme and with further request to give  appointment to his son on compassionate grounds.  The  appellant-bank accepted the request of the respondent No.1  and he was paid all his legal dues including provident fund  and gratuity, etc. on his retirement and his son was also taken  into services of the bank as Clerk/Typist.  The appellant-bank,  in its counter affidavit filed in the High Court in opposition to  the writ petition of the respondent No.1, has categorically  stated that the claim of the respondent No.1 for the grant of  pension under the Pension Regulations is not covered by the  Pension Regulations as Pension Regulations came into force  from the date of its publication in the Official Gazette, i.e.  29.09.1995, and were made applicable to the employees, who  were in the service of the bank on or after the 1st day of  January 1986, but had retired before 1st day of November,  1993 as per terms of Regulation 3(1).  It has also been stated  that one category of employees, who sought voluntary  retirement from the services of the bank in terms of a scheme  formulated by the bank under the provisions of Regulation  19(1) of the Union Bank of India Officers’ Service Regulations,  1979  (hereinafter referred to as ’the Service Regulations’)  made a demand to consider the claims of those employees,  who had retired under this scheme between the period  01.01.1986 and 01.11.1993 to be treated as pension optees as  was done in the case of those who had retired on  superannuation, voluntary retirement or premature  retirement.         We find from the reading of the counter affidavit of the  appellant-bank that several writ petitions were filed before the  Karnataka High Court and Bombay High Court in regard to  the benefits of the Pension Regulations. The matters were later  on carried to this Court by the Indian Banks’ Association and  the concerned Banks in Special Leave Petitions.  The Special  Leave Petitions were finally decided by this Court by an order  dated 05.04.2000 in favour of the voluntarily retired officers of  the concerned Banks.  The benefits of pension were granted to  those officers of the Bank who had voluntarily retired between  01.01.1986 and 01.11.1993 as per the judgment of this Court.   It appears that the appellant-bank thereafter received a  number of representations from its employees, both officers as  well as the award staff including the respondent No.1,  claiming to be treated as pension optees and be given the  benefits of pension having voluntarily retired between  01.01.1986 and 01.11.1993 under the non-statutory scheme.           The appellant-bank wrote a letter dated 09.11.2000 to  the Under Secretary, Government of India, Ministry of  Finance, Banking Division, seeking clarification of the claims  of those officers who had voluntarily retired during the period  between 01.01.1986 and 31.10.1993 on medical grounds and  sought appointment of dependents on compassionate grounds  as well, as per the Bank’s own scheme.  In response to the  said communication, the Director (IR), Government of India,  Ministry of Finance, Department of Economic Affairs, Banking

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Division, IR Section, vide letter dated 17.05.2001 informed the  appellant-bank that the officers, who had retired with  simultaneous appointment of the dependents on  compassionate grounds, will constitute a separate class and  hence cannot be extended the benefit of exercising option for  pension as has been granted to the incumbents who had  voluntarily retired under the scheme formulated by the Bank  under Regulation 19(1) of the Officers’ Service Regulations.         The appellant-bank again sought clarification from the  Indian Banks’ Association on the subject in issue.   The Indian  Banks’ Association vide its letter No.   PD/GSN/UNION/G2/814 dated 01.10.2001 advised the  appellant-bank as under:- "1. Voluntary retirement as a concept and  as a form of retirement was not available to  award staff under the Bipartite Settlement  prior to the introduction of the Pension  Scheme.  Even after introduction of the  Pension Scheme, it is only those who have  opted for pension who can retire  voluntarily, under Regulation 29 of Bank  Employees’ Pension Regulations, 1995.

2. The decision of the Government of India,  as conveyed to the Bank in case of officer,  will equally hold good in the case of  workmen also."

       As noticed earlier, the respondent No.1 submitted an  application dated 19.02.1991 to the Chief Manager of the  appellant-bank making request for voluntary retirement on  medical grounds and appointment of his son on  compassionate grounds.  His application was dealt with and  considered under non-statutory scheme, known as Scheme for  ’Appointment of Dependents of Employees Retiring Voluntarily  on Medical Grounds’.          Having gone through the judgment of the High Court  impugned in this appeal, we find that the High Court has  allowed the writ petition of the respondent No.1 simply relying  upon the decision of the learned Single Judge in Madav  Kirtikar (supra) in which the learned Single Judge found the  officers of the bank who had voluntarily retired between  01.01.1986 and 31.10.1993 eligible for pension, irrespective of  their retirement on attaining the age of superannuation or  under the scheme of voluntary retirement.   The High Court  has not given any finding on the fundamental issue whether  the claim of the respondent No.1 who, admittedly, was an  award staff at the time of retirement on medical grounds in the  year 1993, is covered under the Pension Regulations 1995 or  not.  In our view, the decision of the learned Single Judge in  Madav Kirtikar (supra), as relied upon by the Division Bench  in its impugned order, is not of any help or assistance either  on facts or on law to the case of the respondent No.1.  In that  case, the employee of the bank was an officer who sought  voluntary retirement under the provisions of the Officers’  Service Regulation governing the terms and conditions of  voluntary retirement under the scheme in the normal  circumstances and not on medical ground.  Secondly, in that  case there was no question of appointment of dependent of the  retiree on compassionate ground.             In the normal course, we could have remitted the case  back to the High Court for recording decision on the  fundamental issue raised by the appellant-bank in relation to  the entitlement of pension to the respondent No.1, who had  retired as an award staff, but looking to the time-gap between

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the date of retirement of respondent No.1 w.e.f. 01.11.1993  and pendency of the writ petition in the High Court and Civil  Appeal in this Court and with the consent of the learned  counsel for the parties, we propose to deal with and decide  this fundamental issue in this appeal.         The appellant-bank in its affidavit filed before the High  Court has categorically stated and pleaded that as per the  advise of the Director (IR), Government of India, Ministry of  Finance, Department of Economic Affairs, Banking Division,  IR Section, the benefit of exercising option for pension cannot  be extended to the employees who had retired on medical  grounds with simultaneous appointment of the dependents on  compassionate grounds.  The Indian Banks’ Association also  advised the appellant-bank that the concept of voluntary  retirement for the purpose of receiving pension on voluntary  retirement under Regulation 29 is not available to the award  staff.  The respondent No.1 has not denied his status as an  award staff when he sought retirement on medical grounds.   Thus, the respondent No.1 cannot take the benefit of the letter  dated 20.09.1993 received by him from the Chief Manager of  the appellant-bank, treating him as voluntarily retiree from  the service of the bank w.e.f. 01.11.1993 under the Pension  Regulations as nomenclature of the words ’voluntarily retired’  used in the said letter will not change the status of the  respondent No.1 from award staff to any other category of the  employee of the appellant-bank.  Thus, Regulation 29, upon  which reliance is placed by the respondent No.1, is not  attracted in his case and his claim for pension is not covered  thereunder.         This Court in its order dated 03.12.2001 titled as Union  of India v. B. M. Ramachandra Rao & Ors., observed as under:- "Leaving the question of law open,  inasmuch as connected appeals (C. A.  Nos.6959 of 1997 and batch) have been  dismissed, we see no reason to interfere.

The appeals are dismissed.  No costs."         It becomes clear from the reading of the above extracted  order that the question of law, i.e. imposition of the cut-off  date for the grant of benefits of pension to the employees of the  banks who have voluntarily retired between 01.01.1986 and  31.10.1993, was left open.         This Court in Bank of India v. Indu Rajagopalan & Ors.  [(2001) 9 SCC 318] in Civil Appeal No. 6959 of 1997 and  batch, which were the subject matter in Civil Appeal  Nos.1177-1411 of 2000 before this Court in Union of India v.  B.M. Ramachandra Rao & Ors., did not consider it necessary  to go into the arbitrariness, validity or illegality of fixation of  the cut-off date for the grant of pension to those employees  who had retired between 01.01.1986 and 31.10.1993.  In this  case, this Court simply observed "the number of employees  who have retired in this manner and financial implications  being small, no interference was called for in the teeth of the  Bank (Employees’) Pension Regulations, 1995, Regulations  2(y), 29, 2(t), 2(u), 3 and 5."         As we have held that the respondent No.1, having retired  as award staff, is not entitled to the grant of pension under the  Pension Regulations 1995, we do not consider it necessary  and expedient to go into the other above-mentioned points  raised by the learned counsel for the parties.         In the result, for the afore-said reasons, the appeal is  allowed to the extent indicated above.  The impugned  judgment dated 02.04.2002 of the Division Bench of the High  Court of Judicature at Bombay allowing the Writ Petition  No.567 of 2002 filed by the respondent No.1 cannot be

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sustained and it is accordingly set aside and the Writ Petition  shall stand dismissed.           The parties are left to bear their own costs.