ING Vysya Bank Limited vs N.V. Rangareddy

B.S. Patil, J.—This appeal is filed challenging the judgment and decree dated 7th November, 2007 passed by the City Civil Judge, Bangalore City, decreeing the suit O.S. No. 7105 of 2003 filed by the respondent herein. For the sake of convenience parties are referred to by their rank in the Trial Court.

Respondent-plaintiff filed the suit seeking relief of declaration to declare that he was entitled for pension under the Vysya Bank Limited (Employees) Pension Regulations, 1995 with effect from 7-8-1989, the date on which he was compulsorily retired from his service under the defendant-Bank. It was the case of the plaintiff that he joined the service of the Bank during the year 1964 as a Clerk and was promoted to higher posts periodically. When he was working as Scale-I Officer an enquiry was held against him with regard to charges of irregularities in the matter of sanction of loan. The charges were held proved. He was dismissed from service on 2-8-1999.

An appeal was preferred against the order of the Disciplinary Authority. The said appeal was partly allowed and penalty of dismissal from service imposed was modified by substituting it with a penalty of compulsory retirement from the service of the Bank. This order by the Appellate Authority was passed on 29-1-1990. The said order has attained finality.

Thereafter, defendant-Bank paid only the benefit of Provident Fund with accrued interest and gratuity. According to the plaintiff, his service conditions are governed by the Vysya Bank Limited (Employees) Pension Regulations, 1995 and as per the said Regulations he was entitled for payment of pension. Though plaintiff made a claim in this regard it was rejected on the ground that as the plaintiff had been compulsorily retired from service from the Bank before the cut-off date fixed in the Pension Regulations he was not entitled for pension. Thereafter, plaintiff filed a writ petition in W.P. No. 27332 of 2008 challenging the cut-off date fixed in the Regulations and seeking a direction for payment of pension. The said writ petition was withdrawn with liberty to approach appropriate forum. Thereafter, the present suit was filed by the plaintiff.

Defendant contested the claim made by plaintiff contending inter alia that the suit had been filed after a lapse of nine years after the Pension Regulations were introduced and therefore, it was not maintainable in law. It was further contended that punishment of dismissal from service imposed on the plaintiff was substituted in appeal by a penalty of compulsory retirement from service with effect from 7-8-1989 and Pension Regulations of the defendant-Bank came into effect from 29-9-1995 making them applicable only to those employees who were in service of the Bank on or after 1-1-1986 but before 1st day of November, 1993. The defendant-Bank specifically contended that as per Regulation 3.1 plaintiff was not entitled for payment of pension because he had been compulsorily retired from service by way of penalty on 7-8-1989 during the period from 1-1-1986 to 1-11-1993.

Based on pleadings, the Trial Court framed the following issues:

"1. Does the plaintiff prove that he is entitled for pension from the defendant-Bank under Vysya Bank Limited (Employees) Pension Regulations, 1995 from 7-8-1989?

What decree or order?"

Plaintiff examined himself as P.W. 1 and got marked six documents. defendant-Bank on their part examined one witness by name Pothanna Setty, Vice-President, Industrial Relations and Welfare of the Bank, Exs. D. 1 to D. 10 were produced and marked.

On appreciation of evidence on record both oral and documentary, the Trial Court has recorded a finding that plaintiff was able to prove that he was entitled for pension from the Bank in terms of the Employees'' Pension Regulations with effect from 1-11-1993. Accordingly, a direction has been issued to the Bank to settle the pension.

Plaintiff produced before the Trial Court the Regulations regulating payment of Pension to the Employees of Vysya Bank as Ex. P. 1. The Trial Court, based on the pleadings and evidence has recorded a finding in paragraph 9 of the judgment that plaintiff retired from service of the Bank with effect from 7-8-1989 and hence as per Regulation 34 contained in Chapter V, payment of Pension or Family Pension in respect of employees who retired or died between 1-1-1986 to 31-10-1993 has been provided for and as per the said Regulations the employees falling between the aforementioned cut-off dates shall be eligible for pension with effect from 1st November, 1993.

It is further found by the Trial Court that defendant having admitted the fact that plaintiff was compulsorily retired from service with effect from 7-8-1989, in the absence of any direction by the Appellate Authority ordering for withholding the pension payable to the plaintiff, he was entitled for pension as per the Pension Regulations. The Trial Court has also found that the pension regulations adopted by the defendant-Bank do not contain any provision to deny pension to the persons who were compulsorily retired from service by the Bank. Accordingly, the claim of the plaintiff has been accepted and the suit has been decreed.

Learned Counsel appearing for the appellant contends that Regulation 33 of the Pension Regulations has no application to the respondent because he has been compulsorily retired from service with effect from 7-8-1989 by way of penalty. It is his contention that the cut-off date fixed by the Regulations not being under challenge and the writ petition filed making a grievance against the cut-off date in W.P. No. 27332 of 2008 having been withdrawn by the plaintiff, the Trial Court committed gross error in holding that plaintiff was entitled for grant of pension. He urges that the Trial Court has proceeded by merely referring to Rule 4(1) of the Regulations without taking note of Regulation 33. It is also his further submission that there was no need for the Appellate Authority to specifically deny the retiral benefit while passing the order of compulsorily retirement in the place of the order of penalty of dismissal imposed by the Disciplinary Authority.

Sri Subramanyam, learned Counsel appearing for petitioner has placed reliance on the judgment of the Delhi High Court in the case of Kailash Nath Singhal Vs. Union of India, to contend that in similar circumstances where a claim was made by an employee who was compulsorily retired from the services of Punjab National Bank on February 21, 1991 by way of punishment for misconduct, it has been held that the Pension Regulations were framed to keep out such of the employees who were compulsorily retired from service by way of punishment prior to 1st November, 1993 from the scope of Regulations with a deliberate intent.

Learned Senior Counsel Sri Subba Rao appearing for the plaintiff-respondent contends that as per Clause 33 of the Regulations even an employee compulsorily retired is entitled for pension. He points out that Regulation 34 regulates payment of pension to employees who retired from service between 1-1-1986 to 31-10-1993. As per this Regulation Sri Subba Rao urges, petitioner is eligible for pension with effect from 1st November, 1993 as he has retired from service after January 1986 but before 31st October, 1993. He has strenuously contended that the word ''retirement'' used in Regulation 34 has to be broadly understood to include compulsory retirement, particularly, because in the absence of specific exclusion of the category of employees who were compulsorily retired from the purview of the benefit conferred under Regulation 34, the Regulation has to be interpreted so as to include in its scope and reach the employees who have been retired from service both on attaining the age of superannuation and also on account of penalty imposed by way of compulsory retirement.

It is his submission that Regulation 33 has no application to the case of the plaintiff. In support of his contention that the word ''retirement'' has to be broadly understood he has placed reliance on the judgment of the Apex Court in the case of State of Punjab Vs. Labour Court Jullunder and Others, . Reliance is also placed on the judgment of the Apex Court in the case of D.S. Nakara and Others Vs. Union of India (UOI), and Workmen of Messrs Binny Ltd. Vs. Management of Binny Ltd. and Another, , A.P. Srivastava (Dead by Lrs.) Vs. Union of India (UOI) and Others, and also State of Jharkhand and Others Vs. Jitendra Kumar Srivastava and Another, . He has also placed reliance on the judgment of the Apex Court in the case of National Insurance Co. Ltd. and Another Vs. Kirpal Singh, to contend that expression ''retirement'' used in the General Insurance Employees'' Special Voluntary Retirement Scheme, 2004 has been interpreted to include voluntary retirement from service for the purpose of entitlement to pension.

In the light of the respective contentions of the learned Counsel for both parties the points that arise for consideration in this appeal are:

"1. Whether the plaintiff-respondent herein is entitled for payment of pension as per the Vysya Bank Limited (Employees) Pension Regulations, 1995?

Whether the judgment and decree passed by the Court below suffer from any illegality or perversity warranting interference in exercise of the appellate jurisdiction?

What decree or order?"

Points 1 and 2. -Employees Pension Regulation known as Vysya Bank Limited (Employees) Pension Regulations, 1995 are the result of an agreement reached between the workmen and employees of various banks and the Indian Banks'' Association. During the negotiation, parties agreed that the Banks shall introduce a pension scheme in lieu of the employers contribution to the provident fund. A settlement was entered into between the parties and that is how the pension regulations were framed and published and were made applicable to their employees by the different Nationalised Banks. Vysya Bank Limited is one such bank which has framed these regulations.

Chapter II of the Regulations in Regulation 4(1) provides for application of the regulations to the category of employees by providing a cut-off date. It states among other things that the Regulations shall apply to the employees who were in the service of the Bank on or after 1st day of January, 1986 and who had retired before 1st day of November, 1993. Other requirements are also mentioned in the provision of which we are not concerned.

Regulation 33 covers the cases of employees compulsory retired and their entitlement for pension. It reads as under:

"33. Compulsory Retirement Pension.--(1) An employee compulsorily retired from service as a penalty on or after 1st day of November, 1993 in terms of Discipline and Appeal Regulations or settlement by the authority higher than the authority competent to impose such penalty may be granted pension at a rate not less than two thirds and not more than full pension admissible to him on the date of his compulsory retirement, if otherwise he was entitled to such pension on superannuation on that date".

Regulation 34 deals with payment of pension or family pension for employees who retired or died between 1-1-1986 to 31-10-1993. It provides as under:

"(1) Employees who have retired from service of the Bank between the 1st day of January, 1986 and the 31st day of October, 1993 shall be eligible for pension with effect from the 1st day of November, 1993.

(2)................".

In the present case, the undisputed facts would reveal that the plaintiff-respondent entered service in the year 1964 and was compulsorily retired by way of penalty on 7-8-1989. It is because of this reason the Trial Court has found that the plaintiff fell within the cut-off dates i.e., 1-1-1986 and 1-11-1993. It has further proceeded to hold that compulsory retirement also falls within the ambit of the term "retirement" entitling an employee for pension in the absence of the order of penalty specifically excluding the entitlement for payment of pension. It has to be seen that the Regulations have made it clear in Regulation 33 that employees who were compulsorily retired from service by way of penalty on or after the First day of November, 1993, may be granted pension. The regulations do not provide for grant of pension to such of the employees who have been compulsorily retired by way of penalty during the cut-off dates i.e., 1-1-1986 and 1-11-1993. If the intention was to provide the benefit of pension even to such class of employees, there was no necessity to limit the benefit to such of the employees who were compulsorily retired only on or after 1st November, 1993 as per Regulation 33. Similarly, Regulation 34 cannot be interpreted to hold that it provides for pension in respect of employees who were compulsorily retired by way of penalty between 1-1-1986 and 1-11-1993. This clause pertains to payment of pension or family pension in respect of employees who retire or die between the cut-off dates i.e., 1-1-1986 and 1-11-1993. The expression specifically used in this regulation is ''employees who retire''. If this expression is interpreted to include within its scope those employees who were compulsorily retired, then it will tantamount to not interpreting the regulation but enacting a new regulation in its place, particularly because various contingencies provided in the regulations by way of Regulations 33, 34 and Regulation 4(1) make it very clear that benefit of pension in respect of employees compulsorily retired from service has been limited to only such employees who have been retired compulsorily by way of penalty after First day of November, 1993.

In fact, in a similar circumstance, the High Court of Delhi in the case of Kailash Nath Singhal has repelled a similar contention urged by an employee. The Delhi High Court after referring to the Apex Court judgment in D.S. Nakara''s case and subsequent judgments in Krishena Kumar and Others Vs. Union of India and others, ; All India Reserve Bank Retired Officers Association and others Vs. Union of India and others, ; Union of India Vs. P.N. Menon and others, and other judgments, has held that employees who were compulsorily retired by way of punishment formed a homogenous group and dividing the said group of employees into two categories i.e., those who compulsorily retire before November 1993 and those who compulsorily retire after November 1993, could not be termed as one that created arbitrary and violatory classification. It has been further held that the settlement between the managements of 58 banks represented by the All India Banks Association provided for the cut-off date as 1st November, 1993 and both parties had in terms of the settlement consciously and deliberately chose November 1993 as cut-off date for determining their dates and liabilities. In paragraph 29, the Division Bench of Delhi High Court has observed that employees compulsorily retired by way of punishment prior to November 1993 formed a different category and keeping them out of the pensionary benefit extended as per the Pension Regulations appeared to have been deliberate and was not an error or omission because Clause 8 of the settlement specifically mentioned that conditions could be formulated to withhold or withdraw pension in respect of some of the employees. It has been, therefore, stated in the said judgment that the settlement postulated that some categories of employees would be left out of the pensionary benefits or that pensionary benefits would not, automatically be granted to all employees who were in employment with the bank as on 1st January, 1986. In pursuance of Clause 8 of the settlement, employees who were compulsorily retired prior to 1st November, 1993 were left out of the ambit of pension regulations. It is held by the Delhi High Court that Regulation 33 of Pension Regulations had effective roots in Clause 8 of the settlement and to that extent it could not be held that it was beyond the scope of the settlement much less arbitrary or violatory of Article 14 of the Constitution of India. This reasoning and the conclusion arrived at by the Division Bench of the Delhi High Court applies to the facts of the present case, as the grievance made by the plaintiff-employee is similar and the contention urged, are also similar.

Indeed in this case there is no challenge to the cut-off date, whereas in the case before the Delhi High Court challenge was laid to the cut-off date prescribed and the High Court of Delhi has repelled the said contention as well. Therefore, there is no justification for the contentions urged by the Counsel for the appellant. The judgments relied by the respondent have no application to the case on hand. Indeed, most of these judgments have been considered by the Division Bench of the Delhi High Court. Reliance placed by the learned Counsel for the respondent on the judgment in the case of Kirpal Singh, wherein for the purpose of the General Insurance Employees'' Special Voluntary Retirement Scheme, 2004 and for understanding the effect of Pension Scheme, 2004, the Apex Court has held that the term ''retirement'' would include voluntary retirement, has no application to the facts of the present case. The background of the dispute and the historical background in framing the regulations in question in the present case are quite different. In addition, in the instant case we are concerned with compulsory retirement of an employee by way of penalty and not voluntary retirement from the service. The Trial Court has seriously erred in not construing the provisions of the pension regulations properly. The findings recorded by it are perverse and are opposed to the tenor and purport of the regulations particularly Regulations 33 and 34. Hence, this appeal succeeds. The impugned judgment and decree are set aside. The suit is dismissed. In the facts and circumstances of the case, parties are directed to bear their respective costs.