B.Veeriah (deceased) & Ors. v. Union of India & Ors.

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 02.2.2009C O R A M :THE HONOURABLE MR. JUSTICE K. CHANDRUW.P.No.8320 of 19991. B.Veeriah (deceased)2. Gnanasundari .. Petitioners(Petitioner No.2 substituted in the placeof the deceased sole petitioner as per court order dated 18.7.2007 in WPMP.No.1378 of 2007)-vs-1.Union of India, rep.by itsSecretary, Department of BankingAffairs, New Delhi.2.The Chairman and Managing Director,Indian Bank, 31, Rajaji Salai,Post Box No.1384, Chennai-1.3.The Chief Manager,C/o.Personnel Department,Indian Bank, 31, Rajaji Salai,Chennai-600 001.4.Indian Banks Association, rep.by itsSecretary, Stadium House,Veer Nariman Road, Mumbai-400 020. .. RespondentsPRAYER : Petition filed under Article 226 of the Constitution ofIndia praying for the issuance of a writ of certiorarified mandamuscalling for the records connected with the order of the thirdrespondent made in Reference INVPEN/98, dated June 30, 1998 and quashthe same and direct the second respondent to disburse the petitionerthe invalid pension he is entitled to as per Indian Bank (Employees')Pension Regulations, 1995 and award costs.For petitioners: Mr.M.Muthupandian for Mr.R.RengaramanujamFor respondents: Mr.T.S.Sivagnanam, ACGSCfor R1 https://hcservices.ecourts.gov.in/hcservices/ Mr.G.Venkatraman for M/s.Aiyar & Dolia (R2)*****O R D E R The writ petition challenges the order of the third respondentdated 30.6.1998 rejecting the request for an invalid pension claimedby the first petitioner. The reasons found in the impugned order areas follows:-a)The resigned employee had not sought retirement onmedical grounds with the benefit of invalid pension.b)The resigned employee did not satisfy the eligibilityconditions for invalid pension as stipulated underRegulation 30 of Indian Bank (Employees') PensionRegulations, 1995."2. In the writ petition, notice of motion was ordered on07.6.1999 and subsequently it was admitted on 21.1.2004. On behalf ofthe second and third respondents, a detailed counter affidavit dated17.8.2008 has been filed. In the meanwhile, since the original writpetitioner had passed away on 06.7.2006, his legal representativeshave come on record.3. The original petitioner who was an employee of the thirdrespondent bank submitted his resignation on 30.7.1993 and he alsorequested that his son may be given an employment on the basis of thenon-statutory scheme available in the bank. On 17.9.1993, the medicalboard certified that he was completely and permanently incapacitatedfrom doing any work. The petitioner submitted an application forcompassionate appointment for his son. He also submitted hisresignation letter on 17.1.1994. The third respondent bank acceptedhis resignation letter on 15.2.1994. The petitioner's son Manoharanwas called for an interview and was given an appointment oncompassionate ground on 28.3.1994. 4. On 16.6.1994, a pension scheme was introduced and by aCircular No.47 (94-95), the employees who retired from 01.1.1986 to31.10.1993 were asked to exercise an option to come under the pensionscheme. The petitioner on 29.6.1994 sent a letter opting for thepension scheme even though he had resigned from his post on 17.1.1994and left the service on 15.2.1994. The statutory pension scheme cameinto force in the bank with effect from 29.5.1995. 5. The petitioner once again sent another letter seeking forpension and followed it by a legal notice. It was in response to thesame, the impugned order came to be passed as noted already. https://hcservices.ecourts.gov.in/hcservices/

6. Mr.Muthupandian, learned counsel appearing for the petitionersubmitted that the bank did not give individual notice about thepension scheme. Since the petitioner had been certified by themedical board as incapacitated to do any work he ought to have beentreated as eligible for an Invalid Pension as contemplated underRegulation 30 of the Indian Bank (Employees) Pension Regulations1995. The said regulation clearly states that an employee withminimum 10 years of service and who retires on or after 1.11.1993 onaccount of permanent incapacitation due to bodily or mentalinfirmity, is entitled for such pension. 7. Per contra, Mr.G.Venkataraman, learned counsel appearing forthe second and third respondent bank drew the attention of this Courtto Regulation 22 and submitted that resignation by an employee ofthe bank shall entail forfeiture of his entire past service andconsequently he shall not be qualified for any pensionary benefits.In the present case, the original petitioner in order to avail thenon-statutory compassionate scheme and for getting an appointmentfor his son resigned from the service and therefore he cannot nowturn back and claim Invalid Pension on grounds of physicalincapacity. It was also stated that the anvil of the pension schemewas widely published in leading newspapers in July and November 1994and therefore the petitioner cannot feign ignorance about theintroduction of the new scheme. The bank had fulfilled its obligationof providing an employment to his son and it is not reasonable toclaim an invalid pension to which he is not entitled to. It was alsosubmitted that an eligibility for pension arises out of a statutoryscheme and therefore the petitioner's claim cannot be granted de horsthe scheme.8. Though Mr.M.Muthupandian, learned counsel for the petitionerplaced reliance upon the judgment of this Court in W.A.No.1076 of2006 dated 31.8.2006 (The Management of Indian Overseas Bank rep.byits Chairman and Managing Director -vs- P.N.Balasubramaniam), thesaid case has no relevance as it is not a case of resignation. TheDivision Bench dealt with the case of a 'retirement' and a 'voluntaryretirement'. 9. Mr.G.Venkataraman, learned counsel for the respondent Bankplaced reliance upon the judgment of the Supreme Court in UCO Bank v.Sanwar Mal, reported in (2004) 4 SCC 412, for the purpose ofcontending that the Supreme Court had upheld the validity offorfeiture of gratuity in respect of resignation of an employeerelating to a very same scheme. He placed reliance upon the passagesfound in paragraphs 8 and 9 of the said judgment, which may beusefully extracted below:- https://hcservices.ecourts.gov.in/hcservices/ Para 8. Shri R.P. Bhatt, learned Senior Counsel appearing onbehalf of the respondent in Civil Appeal No. 1506 of 2003inter alia urged that Regulation 22 to the extent itprovides for forfeiture of service and disqualifying thosewho have resigned for pensionary benefits is an arbitraryand unreasonable classification and repugnant to Article 14of the Constitution, that Regulation 22 was contrary tothe objects of the Pension Scheme embodied in theRegulations, that employees who have resigned aftercompleting qualifying service contemplated by Regulation 14were entitled to opt for pension as they were in a positionto bring in their contribution of retiral benefits to theircredit for having worked for a minimum service of 10 yearsin the Bank and that the respondent had worked for more than10 years after which he resigned and, therefore, hefulfilled the qualifying service contemplated by Regulation14 and consequently, he was entitled to the benefit of thePension Scheme.Para 9. We find merit in these appeals. The words“resignation” and “retirement” carry different meanings incommon parlance. An employee can resign at any point oftime, even on the second day of his appointment but in thecase of retirement he retires only after attaining the ageof superannuation or in the case of voluntary retirement oncompletion of qualifying service. The effect of resignationand retirement to the extent that there is severance ofemployment (sic is the same) but in service jurisprudenceboth the expressions are understood differently. Under theRegulations, the expressions “resignation” and “retirement”have been employed for different purpose and carry differentmeanings. The Pension Scheme herein is based on actuarialcalculation; it is a self-financing scheme, which does notdepend upon budgetary support and consequently itconstitutes a complete code by itself. The Schemeessentially covers retirees as the credit balance to theirprovident fund account is larger as compared to employeeswho resigned from service. Moreover, resignation bringsabout complete cessation of master-and-servant relationshipwhereas voluntary retirement maintains the relationship forthe purposes of grant of retiral benefits, in view of thepast service. Similarly, acceptance of resignation isdependent upon discretion of the employer whereas retirementis completion of service in terms of regulations/rulesframed by the Bank. Resignation can be tendered irrespectiveof the length of service whereas in the case of voluntaryretirement, the employee has to complete qualifying servicefor retiral benefits. Further, there are differentyardsticks and criteria for submitting resignation vis-à-visvoluntary retirement and acceptance thereof. Since the https://hcservices.ecourts.gov.in/hcservices/ Pension Regulations disqualify an employee, who hasresigned, from claiming pension, the respondent cannot claimmembership of the fund. In our view, Regulation 22 providesfor disqualification of employees who have resigned fromservice and for those who have been dismissed or removedfrom service. Hence, we do not find any merit in thearguments advanced on behalf of the respondent thatRegulation 22 makes an arbitrary and unreasonableclassification repugnant to Article 14 of the Constitutionby keeping out such class of employees. The view we havetaken is supported by the judgment of this Court in the caseof Reserve Bank of India v. Cecil Dennis Solomon1. Beforeconcluding we may state that Regulation 22 is not in thenature of penalty as alleged. It only disentitles anemployee who has resigned from service from becoming amember of the fund. Such employees have received theirretiral benefits earlier. The Pension Scheme, as statedabove, only provides for a second retiral benefit. Hencethere is no question of penalty being imposed on suchemployees as alleged. The Pension Scheme only provides foran avenue for investment to retirees. They are providedavenue to put in their savings and as a term or conditionwhich is more in the nature of an eligibility criterion, theScheme disentitles such category of employees as are out ofit." 10. The learned counsel also brought to the notice of this Courtanother judgment of the Supreme Court in Union Bank of India -vs-Venkatesh Gopal Mahishi and another reported in (2006) 12 SCC 20. Inthat case, the Supreme Court dealt with the case of a voluntaryretirement submitted by an employee on medical grounds and also therequest for an appointment of the employee's son on compassionategrounds. The bank dealt with the case on the basis of non-statutoryscheme providing for compassionate appointment on grounds ofvoluntary retirement on medical grounds. It was thereafter theemployee moved the High Court of Bombay seeking for pension under thePension Regulations, 1995. The employee's case was allowed byplacing reliance upon an earlier judgment of the Bombay High Court inMadhav K. Kirtikar -vs- Bank of India reported in (1997) 2 Bom CR524. It must be noted that the same judgment was relied upon by theDivision Bench of this Court in the IOB's case (cited supra), for thepurpose of granting pension to an employee who voluntarily retiredbefore 01.11.1993. 11. However, the Supreme Court in the Union Bank of India's case(cited supra) distinguished the said judgment of the Bombay HighCourt on the ground that the case did not relate to an Award staffbut related to an officer. In this context, it is relevant to referto the following passages found in paragraphs 22 and 28 of the said https://hcservices.ecourts.gov.in/hcservices/ judgment:-''Para 22. High Court has allowed the writ petition ofRespondent 1 simply relying upon the decision of the learnedSingle Judge in Madav Kirtikar1 in which the learned SingleJudge found the officers of the bank who had voluntarilyretired between 1-1-1986 and 31-10-1993 eligible forpension, irrespective of their retirement on attaining theage of superannuation or under the scheme of voluntaryretirement. The High Court has not given any finding on thefundamental issue whether the claim of Respondent 1 who,admittedly, was an award staff at the time of retirement onmedical grounds in the year 1993, is covered under thePension Regulations, 1995 or not. In our view, the decisionof the learned Single Judge in Madav Kirtikar1 as reliedupon by the Division Bench in its impugned order, is not ofany help or assistance either on facts or on law to the caseof Respondent 1. In that case, the employee of the bank wasan officer who sought voluntary retirement under theprovisions of the Officers’ Service Regulations governingthe terms and conditions of voluntary retirement under thescheme in the normal circumstances and not on medicalgrounds. Secondly, in that case there was no question ofappointment of dependant of the retiree on compassionategrounds.Para 28. As we have held that Respondent 1, having retiredas award staff, is not entitled to the grant of pensionunder the Pension Regulations, 1995, we do not consider itnecessary and expedient to go into the other abovementionedpoints raised by the learned counsel for the parties." 12. But the Supreme Court had made a factual mistake of holdingthat the Pension Regulations will not apply to Award staff of thebank. But when this was brought to the notice of the Supreme Court byway of an interim application, the Supreme Court made a correction inits earlier judgment vide an order dated 08.1.2008, which has sincebeen reported in (2008) 2 SCC 102 (Union Bank of India -vs- VenkateshGopal Mahishi and another). The relevant passages found in the saidorder may be extracted below:-''Para 3. In the judgment dated 12-1-200711, this Courtrecorded three submissions made by Shri Raju Ramachandran,Senior Advocate appearing on behalf of applicant Bank. Thefirst submission as recorded in the judgment was, “PensionRegulations do not apply to Respondent 1 as he is an awardstaff”. This submission appears to have been mistakenlymentioned in the judgment dated 12-1-20071 and it needs tobe suitably corrected to the extent that “there was noscheme/provision of voluntary retirement in the terms andconditions of service applicable to the award staff towhich Respondent 1 belonged. https://hcservices.ecourts.gov.in/hcservices/ Para 4. The rectification of the abovesaid submission isessential because this factual mistake has been recordedin the judgment as a submission of the learned SeniorCounsel appearing on behalf of the appellant Bank due tooversight. The applicant Bank in this application hascategorically submitted that the Pension Regulations areapplicable to all employees of the Bank irrespective ofwhether they are officers or award staff.Para 5. Thus, in the factual situation as noticed above,the first submission recorded in the judgment dated 12-1-20071 shall stand rectified and corrected to the aboveextent which shall form part of the main judgment. We maymake it clear that this order of change/rectification ofthe factual mistake of first submission noticed in thejudgment will have no bearing or effect on the finalresult of the appeal which was decided on other issues andcontentions on merits.(Emphasis Added) 13. Therefore, the attempt of the petitioner to draw sustenancefrom the decision of the IOB's case (cited supra) has no bearing tothe present case since the Supreme Court has already upheld theforfeiture clause. Hence, there is no case made out for thepetitioner to demand Invalid Pension on the basis of the PensionRegulations applicable to the second respondent bank. The writpetition will stand dismissed. However, there will be no order as tocosts.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarjsTo1.The Secretary to Government of India, Department of Banking Affairs,New Delhi.2.The Chairman and Managing Director,Indian Bank, 31, Rajaji Salai,Post Box No.1384, Chennai-1. https://hcservices.ecourts.gov.in/hcservices/

3.The Chief Manager,C/o.Personnel Department,Indian Bank, 31, Rajaji Salai,Chennai-600 001.4.The Secretary, Indian Banks Association, Stadium House, Veer Nariman Road, Mumbai-400 020. W.P.No. 8320 of 1999BS(CO)SRA(09/02/2009)