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T. Narasiah Vs. State Bank of India and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Judge
Reported in(1978)IILLJ173AP
AppellantT. Narasiah
RespondentState Bank of India and ors.
Excerpt:
.....58 years of age, while the second proviso entitles the employee to retire voluntarily from the bank's service on completion of 25 years' pensionable service. a memo of charges was served upon him on 3-5-1972. after completion of the preliminary enquiry, an enquiry officer was appointed on 9-54973, who was replaced by another enquiry officer on 2-4-1974. the enquiry proceeded to some extent ;but, before it could be completed, the petitioner was informed by the bank through its letter dated 5-5-1976 that 'it has become impossible for the bank to complete the enquiry well in time before you (petitioner) complete 60 years of age. now it may happen that the irregularities or misfeasance of an employee could not be detected well before his retirement, so as to initiate and complete a..........before you (petitioner) complete 60 years of age. accordingly, you will not cease to be in the bank service on the date of superannuation and you will not be paid any subsistence allowance with effect from 10-5-1976'. the petitioner's service under the bank was, accordingly, treated as having ceased with effect from 10-5-1976. thereafter, the petitioner claimed the provident fund and pension payable to him ; but on the bank refusing to pay the same, he has filed the present writ petition.3. in so far as the provident fund is concerned, it is sated by mr. k. srinivasamurthy, the learned counsel appearing for the bank, that the bank has since decided to pay the provident fund in full to the petitioner and that, he can drew it at any time. even with respect to pension, the learned.....
Judgment:

Jeevan Reddy, J.

1. The Imperial Bank of India constituted under the Imperial Bank of India Act, 1920, was taken over and succeeded by the State Bank of India, established under the State Bank of India Act, 1955. The conditions of service under the Bank are governed by the various rules and regulations made both prior to 1955 and continued thereafter, as well as those made after 1955. According to Rule 20 of the State Bank of India (Supervising Staff) Service Rules, ' an employee shall retire from the service of the Bank on attaining the age of 58 years or upon the completion of thirty years' pensionable service, whichever occurs first'. The first proviso to the said Rule reserves a power in the Bank to extend the period of service of an employee beyond 58 years of age, while the second proviso entitles the employee to retire voluntarily from the Bank's service on completion of 25 years' pensionable service. So far as pension is concerned, it is governed by the Imperial Bank of India Employees' Pension and Guarantee Fund Rules and Regulations. According to these Rules, the pension has to be contributed both by the employee and by the Bank, and it is payable to an employee completing the pensionable service.

2. The petitioner was appointed in the Imperial Bank of India on 29-1-1940 and continued under the service of the State Bank of India after the coming into existence of the latter. In 1957 he was promoted as an Agent. In August, 1970 he was working at the Bapatla Branch. By an order dated 12-8-1970 the petitioner was suspended pending enquiry into certain charges against him. A memo of charges was served upon him on 3-5-1972. After completion of the preliminary enquiry, an enquiry officer was appointed on 9-54973, who was replaced by another enquiry officer on 2-4-1974. The enquiry proceeded to some extent ; but, before it could be completed, the petitioner was informed by the Bank through its letter dated 5-5-1976 that ' it has become impossible for the Bank to complete the enquiry well in time before you (petitioner) complete 60 years of age. Accordingly, you will not cease to be in the Bank service on the date of superannuation and you will not be paid any subsistence allowance with effect from 10-5-1976'. The petitioner's service under the Bank was, accordingly, treated as having ceased with effect from 10-5-1976. Thereafter, the petitioner claimed the provident fund and pension payable to him ; but on the Bank refusing to pay the same, he has filed the present writ petition.

3. In so far as the Provident Fund is concerned, it is sated by Mr. K. Srinivasamurthy, the learned Counsel appearing for the Bank, that the Bank has since decided to pay the Provident Fund in full to the petitioner and that, he can drew it at any time. Even with respect to pension, the learned Counsel submitted that so far as the objection to pay the same to the petitioner but that, in so far as the payment of Bank's share in the pension fund is concerned, the petitioner is not entitled thereto unless and until the Bank grants the same in accordance with the aforementioned Pension Rules.

4. While according to the learned Counsel for the petitioner, Sri V. Jagannadha Rao, the petitioner is entitled to the full pension according to the said Pension Rules, it is contended by Mr. K. Srinivasamurthy that the petitioner does not have an automatic right to get full pension on retirement from the Bank service and that, unless and until the Bank sanctions the same, he is not entitled to the pension benefit as a matter of right. It is necessary to examine the relevant Pension Rules for resolving the said question.

5. The Imperial Bank of India Employees' Pension and Guarantee Fund Rules & Regulations, have been framed with the object of providing pension to the Bank employees and security to the Bank against losses arising from dishonesty on the part of the employees. It is not necessary to notice the Rules relating to Guarantee Section of the Fund. It would suffice for our purposes to notice the Rules relating to the Pension Section of the Fund. According to Rule 5A, every employee shall as from the date of his admission to the fund, contributed monthly 5% of his substantive salary.

6. Under Rule 6, the Bank will also subscribe every month to the pension section an amount equal to 5% of the substantive salary of all the employee-members of the said fund. Rule 7 then provides : ' no employee shall have any right of property in the fund beyond the amount of his contributions to the pension section of the fund with interest accrued thereon, nor shall he have any voice in its management unless qualified as a trustee to the fund, as hereinbefore provided'. Rule 10 provides : ' an employee dismissed from the Bank's service for wilful neglect or fraud shall forfeit all claims upon the fund for pension ' Rule 11, with which we are mainly concerned in this writ petition, reads as follows :

11. the retirement of all officers of the Bank shall be subject to the sanction of the Executive Committee of the Central Board. The retirement of all other Executive Committee or the Local Board concerned with their employment. Any officer or other employee who shall leave the service sanction as required by this rule shall forfeit all claims upon the fund for pension.

7. Rule 15 provides that no employee on the staff in India shall be entitled to pension until he shall have completed twenty-five years' service in India. Sub-rule (i) of Rule 19, however, says that an employee retiring from the Bank's service after having completed 20 years, shall be entitled to pension, provided he attains the age of 50 years while serving in India. Sub-Rule (ii) of Rule 19, similarly says that an employee retiring from the Bank service after completion of 20 years of service shall be entitled to pension, irrespective of his age on that date, provided he satisfies the competent authority of the Bank that his retirement is necessary in view of the condition of his health, or that he is otherwise incapacitated from rendering further active service. Sub-Rule (iii) provides that an employee who has attained the age of 55, or whose retirement is sanctioned on the ground of health or other incapacity referred to in Sub-rule (ii), may be granted a proportionate pension at the discretion of the trustees. It is not necessary for our purpose to notice other Rules.

8. In as much as Rule 7 declares that the right of an employee to the extent of his contributions to the pension-section is in the nature of a right to property, he cannot be deprived of the same, except in accordance with law. It is probably for this reason that Mr. K. Srinivasamurthy has now expressed the Bank's willingness to pay the said share of pension fund to the petitioner. To the same effect is the judgment of a learned single Judge of the Bombay High Court in Miscellaneuous Petition No. 964 of 1977, dated November 29, 1977 a copy of which judgment if placed before me by Mr. Srinivasamurthy. So far as the payment of the other half, viz., the Bank's contribution to the pension fund, is concerned, Mr. Srinivasamurthy bases his case on Rule 11, which has been extracted by me herein before, Mr. V. Jagannadha Rao, however, contends that the said rule has no application to the petitioner, inasmuch as he has not retired in terms of Rule 19, in which case alone, according to the learned Counsel, the sanction of the appropriate authority of the Bank is necessary. In cases of normal retirement on attaining the age of supperannuation, it is contended, there is no question of obtaining the leave of the Bank for retirement, nor can there be any question of the Bank sanctioning the retirement. On attaining the age of superannuation, it is argued, an employee automatically goes out of service and to such a case Rule 11 cannot be applied.

9. Prima facie, the contention of Sri V. Jagannadha Rao looks attractive, more particularly in the light of the last sentence in Rule 11, which says that an officer or employee leaving the service without sanction as remained by the said rule shall forfeit all claims upon the fund for pension. Obviously, there can be question of obtaining the age of superannuation. But, in my opinion, the said Rules has to be read in its context, and consistent with the object behind the said Rules. The retirement of an employee, and the age of superannuation is provided by a different set of Rules, viz., ' State Bank of India (Supervising Staff) Service Rules'. The retirement, therefore, is not brought about by the pension rules. Pension Rules exclusively deal with the creation of pension fund, its management and its payment to the employees. In that connection, Rule 10 says that an employee who has been dismissed from the Bank service for wilful neglect or fraud, shall forfeit all claims upon the pension fund. Similarly, Rule 15 says that unless an employee put in 25 years of service, he shall not be entitled to pension ; but, the said rule is qualified by Rule 19 which permits the employees to retire with pensionary benefits under certain specified situations, even before completing 25 years' service, Now, Rule 11, which also must be read in the said context, provides that the retirement of all officers of the Bank shall be subject to the sanction of the Executive Committee of the Central Board. The said Rule cannot mean that such a sanction is required for retirement as such because, as I have stated above, the retirement from service is governed by a different set of Rules. Therefore, when Rule 11 says that the retirement is subject to the sanction of the Executive Committee of the Central Board, it means that the pensionary benefits accruing on retirement are subject to such sanction. Similarly, the last sentence in Rule 11, which says that an officer leaving the service without sanction, forfeits all claims to the pension fund, must also be understood as saying that unless sanctioned, no employee can claim the pension fund as a matter of right. If so understood, Rule 11 applies not only in the case of retirement contemplated by Rule 19, but also to cases of retirement of employees on attaining the age of superannuation. The question then arises what is the content and scope of sanction contemplated by Rule 11, and in what circumstances can the Bank deprive an employee of his pensionary rights and to what extent In my opinion, the said power of the Bank is not arbitrary or unguided. The Rules themselves provide sufficient guidance in the matter. Now it may happen that the irregularities or misfeasance of an employee could not be detected well before his retirement, so as to initiate and complete a disciplinary enquiry into the said matter. Again, there my be a case where a disciplinary enquiry is initiated, but could not be completed before the delinquent officer attained the Bank service to enable the authorities to complete the disciplinary enquiry against him which power is available under the Government Service Rules. Even if an enquiry is pending against an employee, he will retire and there is nothing to stop him from retiring on attaining the age of superannuation. Again, the enquiry cannot be continued after the retirement. (It appears that the said Rules have since been amended, but so far as the petitioner herein is concerned, he is governed by the unamended Rules). It is for the said reason that the Bank has reserved to itself the power to sanction the pensionary benefits under Rule 11. If there is nothing wrong with the service of an employee throughout, the Bank will naturally sanction the pension ; but, if there is sufficient material naturally sanction the pension ; but, if there is sufficient material disclosing grave irregularities on the part of the employee, the Bank may well be within its power in refusing to sanction the pensionary benefits, or in sanctioning them only partly. Of course, such a decision has to be arrived at fairly, which necessarily means after holding an enquiry, giving a fair opportunity to the concerned officer to defend himself against the accusation. Such an enquiry would not be a ' disciplinary enquiry ' within the ordinary meaning of the term, but an enquiry confined to the purposes of the Rule, viz., whether the employee should be granted any pensionary benefits ; and if so, to what extent Such an enquiry can also be made after the retirement on attaining the age of superannuation, probably, such enquiries will have to be conducted only after retirement.

10. Now coming to the facts of the present case, it is clear that certain grave charges, were levelled against the petitioner for which he was suspended pending enquiry, and in respect of which an enquiry was also in progress, But, before the enquiry could be completed, the petitioner retired on attaining the age of superannuation. No sanction has been accorded for his retirement under Rule 11 of the Pension Rules. Hence, he cannot claim a vested or enforceable right to get pension. Granting of sanction is within the discretion and judgment of the Bank, as mentioned in the preceding paragraph. The disciplinary enquiry which was pending against the petitioner has, no doubt, come to an end ; but, it is now open to the Bank to conduct an enquiry for the purposes of Rule 11. The Bank shall, therefore, determine the petitioner's right to pensionary benefits in accordance with the said Rule 11. If the petitioner agrees, the enquiry which was pending against him on the date of retirement can be continued ; or a fresh enquiry can be ordered for the purpose of Rule 11. The sanction to be accorded will depend upon the result of such enquiry. Mr. K. Srinivasamurthy has assured that depending upon the result of such enquiry, the Bank will take a fair and just decision with respect to the petitioner's pensionary benefits.

11. The writ petition is, accordingly, disposed of with the above directions but, in the circumstances, without costs.


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