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Mr. Ashwani Kumar Sharma Vs. Oriental Bank of Commerce - Court Judgment

LegalCrystal Citation
SubjectService
CourtDelhi High Court
Decided On
Case NumberCWP 7016/2001 and LPA 449/1998
Judge
Reported in(2003)IILLJ575Del; 2003(3)SLJ405(Delhi)
ActsBanking Companies (Acquisition and Transfer of Undertakings) Act, 1990 - Sections 19; Oriental Bank of Commerce (Employees') Pension Regulations, 1995 - Regulations 2, 3, 3(1), 3(2), 6, 16, 22 and 28; Constitution of India - Articles 12 and 14; Pension Rules - Rules 1, 6, 11(2), 48 and 48A(4); Central Civil Services (Pension) Rules - Rule 26; Bank of India (Employees') Pension Regulations, 1997; Army Rule - Rules 2 and 13(3); State Bank of Travancore (Officers') Service Regulations, 1979 - Regulation 20(2); Fundamental Rules - Rule 56
AppellantMr. Ashwani Kumar Sharma;mr. Narendra Kantilal Dave
RespondentOriental Bank of Commerce;union of India (Uoi) and ors.
Appellant Advocate Arun Mohan, Sr. Adv.,; Abhinav Vashisth and; Vinay Sabharwa
Respondent Advocate Jagat Arora, ; Rajat Arora and ; R. Singh, Advs.
Cases ReferredA.K. Srivastava v. Union of India and Ors.
Excerpt:
service - retirement benefit - section 19 of banking companies (acquisition and transfer of undertaking) act, 1990 and regulations 2, 3, 6, 16, 22 and 28 of oriental bank of commerce (employees) pension regulations, 1995 - whether petitioner entitled to pensionary benefits - pension not bounty but statutory right - pension is deferred salary - paid when person completes qualifying service without blemish - relationship of employer and employee immaterial for purposes of pensionary benefits - held, petitioner entitled to benefit of pension scheme. - - i now request your good self to reconsider my case on sympathetic grounds as i at the time of tendering my resignation was passing through a difficult period and trauma and was not in a position to think or act correctly. (b) on receipt.....s.b. sinha, c.j.1. the question involving in these matters being identical, they were taken up for hearing together and are being disposed of by this common judgment.(facts of cw 7016/2001)2. on september 27, 1973 the petitioner was appointed with respondent bank on a permanent basis. the petitioner was promoted from time to time and in the year 1996 he was holding the post of the deputy chief manager in the general administration department of the respondent.3. in the year 1993, the oriental bank of commerce employees pension scheme, 1993 (hereinafter called 'the scheme') came into being. in 1995, the respondents, in exercise of their power under section 19 of the banking companies (acquisition and transfer of undertakings) act, 1990 made regulations known as the oriental bank of.....
Judgment:

S.B. Sinha, C.J.

1. The question involving in these matters being identical, they were taken up for hearing together and are being disposed of by this common judgment.

(FACTS OF CW 7016/2001)

2. On September 27, 1973 the petitioner was appointed with respondent Bank on a permanent basis. The petitioner was promoted from time to time and in the year 1996 he was holding the post of the Deputy Chief Manager in the General Administration Department of the respondent.

3. In the year 1993, the Oriental Bank of Commerce Employees Pension Scheme, 1993 (hereinafter called 'the scheme') came into being. In 1995, the respondents, in exercise of their power under Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1990 made regulations known as the Oriental Bank of Commerce (Employees') Pension Regulations, 1995 (hereinafter called and referred to as 'the Regulations' for short). The petitioner who was in the service of the Bank at that time exercised his option to become a member of the Bank's Pension Scheme. As per the provisions of the scheme, the petitioner authorized the Bank/Trustee of the Contributory Provident Fund to transfer the entire Bank's share of the contribution to the Provident Fund along with entire interest accrued thereon to the credit of the pension fund. This was done subsequently under this scheme and the petitioner was required to contribute to the Provident Fund Account at the rate determined by the Bank from time to time. In terms of the Scheme, however, the Bank was not to make any contribution to the petitioner's Provident Fund account from 1st November, 1993. On November 7, 1996, the petitioner applied to the respondent No. 1 Bank for long leave as he had to take his wife to New Zealand for special medical treatment. On November 14, 1996, respondent No. 1 permitted the petitioner to avail 112 days privilege leave, followed by 253 days extra ordinary leave, on loss of pay and allowances for a total period of one year, for going to New Zealand with effect from 15.1.1997. It was stated in the letter sanctioned leave that the petitioner could not be entitled to the facility of residence, facility of telephone at residence, reimbursement of entertainment expenses and other benefits attached to the post for the period of loss of pay, with effect from 7.5.1997. On December 15, 1997, the petitioner sought extension of leave informing the respondent that he was not in a position to resume his duties, as his wife was under medical treatment and there was no one else to look after her. As her treatment was allegedly prolonging, the petitioner requested the Bank to extend his lease for a further period of one year. The petitioner along with the said letter enclosed the medical certificate from the doctor attending his wife. On February 17, 1998, respondent informed the petitioner that the request for extension of leave for a further period of one year had not been acceded to and he was advised to resume his duties latest by 1.3.1998 failing which the matter would be referred to the disciplinary authorities for taking suitable action. On April 1, 1998, the petitioner again requested the respondent bank to extend his leave for another year beginning from January 15, 1998 and prayed that his case may be considered sympathetically on humanitarian ground as he had to look after this wife who was undergoing medical treatment in New Zealand. But the respondent bank stated by its letter dated 1st May 1998 conveyed that they had not received any reply to their letter dated 17th February 1998 and advised the petitioner to resume duties immediately failing which disciplinary action shall be initiated. On 18th May 1998, the petitioner informed respondent No. 1 that a letter dated 1st April 1998 had been sent in response to their letter dated 17th February 1998. The petitioner enclosed a copy of the said letter dated 1st April 1998 along with the post office receipt. The petitioner further requested the said respondent to consider his application for extension of leave, on humanitarian grounds, as it was necessary to look after his wife in New Zealand. On 24th July 1998, respondent bank informed the petitioner that it had been decided to initiate an inquiry under Regulation 6 of the Regulations to enquire into charge leveled against him by a memorandum dated 8th June 1998 which was allegedly not received by the petitioner. The said letter further stated that he would be informed about the date, time and venue of the inquiry by the inquiring authority.

4. The petitioner, by a letter dated 1st August 1998 submitted his resignation which is as under:

'Dear Sir,

I wish to submit that on 14/01/1997, I had proceed on 112 days Privilege leave to be followed by 253 days Extra-Ordinary leave.

Vide my letter of 15/12/1997, I requested to extend my leave for one more year but the same was declined vide your letter dated 17/02/1998. My subsequent requests for the same were also declined overlooking my circumstances.

As I am required to be physically present here in Auckland, enabling my wife to continue to receive prolonged specialist treatment; thereforee, I am unable to resume my duties in near future. Hence, under these circumstances, I am left with no option but to resign.

I hereby submit my resignation with a request to kindly waive off the required notice period and may be relieved forthwith.'

5. The said resignation of the petitioner was accepted by the respondent bank in terms of its letter dated 24th September 1998 which reads as under:

'This has reference to your letter dated 1st August 1998 whereby you have tendered your resignation from the services of the Bank and have requested to waive the requirement of notice period of three months. We have to inform that your request has been acceded to and you stand relieved from the service of the Bank with immediate effect. However, please note that the acceptance of your resignation and your relieving is subject to the condition that any amount due from you to the Bank shall be adjusted from your retiral dues.'

6. The petitioner by his letter dated 5th October 1998 while thanking the respondent bank for accepting his resignation, requested it to settle the retirement benefits and to initiate the pension process as he had opted thereforee and was eligible. By letter dated 14th October 1998, the petitioner reiterated his stand. The petitioner was asked by the respondent bank to complete the formalities as regards payment of pension stating:

'As per our record we have received the pension option form of the captioned object. As per H.O. letter No: x dated: x the subject will stand retired from the Bank's service at the close of business hours as on x. We are enclosing Form No. 1 (to be completed by the retiree) and calculation sheet (to be completed by yourself.) These may be returned to us as quickly as possible after completion in all respects. Both Form 1 and the calculation sheet should be verified and duly attested by the each incumbent to enable us to calculate the amount of pension and commutation payable to the retiree.'

7. The petitioner, however, states that as the pension papers had not been processed and he had been asked to concert his resignation to a voluntary retirement, but despite the same, by letter dated 1st August 1998 the said request was not acceded to by the respondent bank in terms of letter dated 26th November 1998. The petitioner demanded his pensionary benefits in terms of his letter dated 18th June 2001.

8. The petitioner in the said letter, inter alia, contended:

'I visited India in the month of February, 1999 and visited Pension Department, Establishment Department and Personal Department to complete the formalities. I was then told that I cannot get my pension because I wrote the word resign instead of voluntary retirement. I showed them pension department's letter also, but nobody listened or paid attention to it. Even my request letter to the Chairman and Managing Director of the Bank and which was forwarded to Deputy General Manager, (Personnel) was not responded. After staying for two months in India and getting nowhere I returned back to New Zealand.

I now request your good self to reconsider my case on sympathetic grounds as I at the time of tendering my resignation was passing through a difficult period and trauma and was not in a position to think or act correctly. Moreover the pension was just introduced in our Bank at that time and nobody was familiar with its rules and regulations. Perhaps I was the first person at that time to opt for the premature retirement.

In the light of above facts I once again request you to intervene in the matter and help me in getting my pension.'

FACTS OF LPA 449/1998

9. The writ petitioner/appellant joined the bank on 12th February 1966. He served the respondent bank for a period of 26 years and five months. He had an unblemished record throughout his service career. In fact, the bank appreciated his services in terms of letter dated 5th September 1991. The pension scheme was introduced by the respondent bank with retrospective effect from 1st January 1986 on or about 29th September 1995. However, as in terms of the said scheme, the petitioner submitted his resignation on 5th August 1992. As by reason afore-mentioned scheme, a cut-off date of 1993 was fixed, the petitioner filed a writ petition before this court which was marked as CW 3209/1996. The said petition has been dismissed inter alias on the ground that the petitioner having resigned and not voluntary retired, he was not entitled thereto in terms of the said scheme.

RELEVANT STATUTE:

10. The respondent bank made regulations which are statutory in nature known as Oriental Bank of Commerce (Employees') Pension Regulations, 1995.

11. Regulation 2(w) defines qualifying service to mean:

'qualifying service' means the service rendered while on duty or otherwise which shall be taken into account for the purpose of pension under these regulations.'

12. The said regulations applied to employees who were in service of the bank on or after 1st day January 1986 but had retired before the 1st day of November 1993. The qualifying service which is required for getting the benefit of the said pension scheme, is in the following terms:

'14. Qualifying Service.-

Subject to the other conditions contained in these regulations, an employee who has rendered a minimum of ten years of service in the Bank on the date of his retirement or the date on which he is deemed to have retired shall qualify for pension.'

13. However, a distinction is sought to be made between resignation and voluntary retirement. Whereas in case of voluntary retirement, the past service is not forfeited, the same is consequence of resignation in terms of Regulation 22 which is as under:

'22. Forfeiture of service.-

(1) Resignation or dismissal or removal or termination of an employee from the service of the Bank shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits;

(2) An interruption in the service of a Bank employee entails forfeiture of his past service, except in the following cases, namely:-

(a) authorized leave of absence;

(b) suspension, where it is immediately followed by reinstatement, whether in the same or a different post, or where the bank employee dies or is permitted to retire or is retired on attaining the age of compulsory retirement while under suspension;

(c) transfer to non-qualifying service in an establishment under the control of the Government or Bank if such transfer has been ordered by a competent authority in the public interest;

(d) joining time while on transfer from one post to another.

(3) Notwithstanding anything contained in sub-regulation (2), the appointing authority may, by order, commute retrospectively the periods of absence without leave as extraordinarily leave.

(4)(a) In the absence of a specific indication to the contrary in the service record, an interruption between two spells of service rendered by a bank employee shall be treated as automatically condoned and the pre-interruption service treated as qualifying service.

(b) Nothing in Clause (a) shall apply to interruption caused by resignation, dismissal or removal from service or for participation in a strike:

Provided that before making an entry in the service record of the Bank employee regarding forfeiture of past service because of his participation in strike, an opportunity of representation may be given to such bank employees.'

14. Regulation 29, however, provides for pension on voluntary retirement.

'29. 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 that this sub-regulation shall not apply to an employee who is on deputation or on study leave abroad unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year:

Provided further that this sub-regulation shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking or company or institution or body, whether incorporated or not to which he is on deputation at the time of seeking voluntary retirement:

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.

(2) The notice of voluntary retirement given under Sub-regulation (1) shall require acceptance of the appointing authority:

Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.

(3)(a) An employee referred to in sub-regulation (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than three months giving reasons therefore:

(b) On receipt of a request under Clause (a), the appointing authority may, subject to the provisions of sub-regulation (2), consider such request for the curtailment of the period of notice of three months on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of three months on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of three months.(4) An employee, who has elected to retire under this regulation and has given necessary notice to that effect to the appointing authority, shall be precluded from withdrawing his notice except with the specific approval of such authority:

Provided that the request for such withdrawal shall be made before the intended date of his retirement.

(5) The qualifying service of an employee retiring voluntarily under this regulation shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty-three years and it does not take him beyond the date of superannuation.'

15. It is not necessary to note the regulations framed by the Central Bank of India inasmuch as the said regulations are almost identical in nature.

SUBMISSIONS:

16. Learned counsel for the writ petitioners, inter alias would submit that Regulation 22 afore-mentioned is ultra virus the Constitution of India as the same is discriminatory in nature. The learned counsel would contend that having regard to the settled position in law that resignation and voluntary retirement carry the same meaning, no discrimination could have been made as regards payment of pension by taking recourse to Regulation 28 afore-mentioned.

17. Reliance in this connection has been placed on Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd. and Ors., 1984 SCC (L&S;) 540, J & K Cotton Spg. & Wvg. Mills Ltd. v. State of UP, 1990 SCC (L&S;) 570, Balram Gupta v. Union of India, 1988 SCC (L&S;) 126, Union of India and Ors. v. Lt. Col. P.S. Bhargava, : [1997]1SCR130 , Amita Singh v. Air India and Anr., : 2000VIIAD(Delhi)16 , Sudarshan Kumar v. Delhi Transport Corporation and Anr., : 56(1994)DLT538 , Bank of India v. Indu Rajagopalan and Ors., : (2000)ILLJ1617SC and Sansar Chand Atri v. State of Punjab and Anr., 2002(3) Scale 257.

18. The learned counsel appearing on behalf of the respondents, on the other hand, would contend that the distinction between a resignation and voluntary retirement is well-known in service jurisprudence. Voluntary retirement, having regard to the scheme of the pension regulations, may be accepted or may not be accepted as it is subject to express approval of the employer whereas a resignation becomes effective upon expiry of the stipulated period upon service of notice.

19. It was urged that similar provisions have been upheld by different High Courts. Reliance in this connection has been placed on Durga Prasad Mishra v. UCO Bank and Ors., 1998(80) FLR 911, B. Shesha Yadava v. The Oriental Insurance Co. Ltd. and Ors., : 1998(6)KarLJ146 and Mani v. State of Bank of Travancore, : (2000)ILLJ720Ker .

20. The learned counsel would contend that when a new benefit is conferred upon an employee, no right can be claimed there under unless all the pre-conditions thereforee are fulfillled. According to the learned counsel, it is permissible for the rule making authority to fix a cut-off date in relation to a new scheme. Reliance in this connection has been placed on All India Reserve Bank Retired Officers Association and Ors. and Ors. v. Union of India and Ors., : AIR1992SC767 and State of W.B. v. Monotosh Roy and Anr. : (1999)2SCC71 .

21. In State of W.B. Monotosh Roy and Anr. (supra), it was held:-

'13. In All India Reserve Bank Retired Officers Association and Ors. v. Union of India and Ors., : AIR1992SC767 a Bench of this Court distinguished the judgment in D.S. Nakara v. Union of India, : (1983)ILLJ104SC and pointed out that it is for the Government to fix a cut-off date in the case of introducing a new pension scheme. The Court negative the claim of the persons who had retired prior to the cut-off date and had collected their retiral benefits from the employer. A similar view was taken in Union of India v. P.N. Menon, : (1995)IILLJ307SC . In State of Rajasthan v. Amrit Lal Gandhi : [1997]1SCR121 the ruling in P.N. Menon case (supra) was followed and it was reiterated that in matters of revising the pensionary benefits and even in respect of revision of scales of pay, a cut-off date on some rational or reasonable basis has to be fixed for extending the benefits.

14. In State of U.P. v. Jogendra Singh : (1998)1SCC449 a Division Bench of this Court held that liberalized provisions introduced after an employee's retirement with regard to retiral benefits cannot be availed of by such an employee. In that case the employee retired voluntarily on 12-4-1976. Later on, the statutory rules were amended by Notification dated 18-11-1976 granting benefit of additional qualifying service in case of voluntary retirement. The Court held that the employee was not entitled to get the benefit of the liberalized provision which came into existence after his retirement. A similar ruling was rendered in V. Kasturi v. Managing Director, State Bank of India : (1999)ILLJ238SC .

15. The present case will be governed squarely by the last two rulings referred to above. We have no doubt whatever that the first respondent is not entitled to the relief prayed for by him in the writ petition.....'

22. The learned counsel would contend that from a perusal of Chapter 2 of the Regulations it would appear that the same apply to the employees who were in service of the bank on or after 1st January 1986 but before 1st November 1993. As the respondent in the LPA submitted his resignation on 6th July 1992 which was accepted by the respondent bank on 4th August 1992, the said regulations have no application whatsoever in the instant case.

QUESTIONS:

23. The questions which arise for consideration in the writ petition are:

(i) Whether the terms 'resignation' and 'voluntary retirement' are synonymous?

(ii) Whether Regulation 22 is ultra virus the Constitution?

(iii) Whether the regulations which came into force having been given a retrospective effect on and from 1st January 1986, the cut-off date specified therein would be ultra virus Article 14 of the Constitution of India?

FINDINGS:

24. All the questions being inter-related, are being taken up for consideration together.

25. Pension, as is well known, is not a bounty (See Chairman, Railway Board and Ors. v. C.R. Rangadhamiah and Ors., : AIR1997SC3828 . It is statutory right. The pension, for all intent and purport, is a deferred salary. It is paid when a person completes the qualifying service without any blemish in his career.

26. It may be true that in an undertaking, the provision for payment of pension may not exist. But it is equally true that when such a scheme is framed, no artificial embargo can be created by picking up a date out of hat. It is one thing to say that the authorities have a right to specify a cut-off date for certain purposes but such a principle would not apply unless the benefit which is created for the concerned employees is a new one. It is accepted that the scheme in question was gazetted on 29th September 1995. Prior thereto, merely a circular letter had been issued. The scheme although came into force w.e.f. 29th September 1995 but the same had been given a retrospective effect and retroactive operation w.e.f. 1st January 1986. Those who had retired immediately after 1st January 1993 but before coming into force of the scheme, had been admittedly given the benefit of the said scheme.

27. We may notice that provisions have been made for grant of pension to those who have compulsorily retired in public interest or had taken premature retirement.

28. Retirement has been defined in Regulation 2(y) to mean:

'(y) Retirement' means cessation from Bank's service,

(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;

(c) on premature retirement by the Bank before attaining the of superannuation specified in Service Regulations or Settlement;'

29. It is true that the resignation does not come within the purview thereof but it will bear repetition to state that although compulsorily retirement does not come within the purview of the said definition, provision has been made for payment of pension as specified therein.

30. Payment of pension depends upon completion of qualifying service. A person who completes the qualifying service is entitled to pension. Whether the relationship of employer and employee comes to an end by way of resignation or voluntary retirement in a given situation may not matter so as to enable the employer to deprive the employee from the benefit of a beneficient scheme. It may be one thing to say that a scheme for payment of pension having been introduced at a stage when the concerned employee has retired, would not be entitled to the benefit thereof but it is another thing to say that although he, at all relevant times, was in service, he would be deprived there from only because he has either resigned or retired voluntarily. Resignation and voluntary retirement stand on slightly different footing but the effect and substance thereof is not of much significance. It may be true that an offer of voluntary retirement may be accepted or may not be accepted but such is a case of resignation also particularly when the concerned employee is faced with departmental proceedings. The employer, having accepted the resignation, even upon waiver of the notice period, cannot be permitted to turn round and contend that he was not entitled to the pensionary benefits. The respondents, as noticed from the factual backdrop of the case, themselves processed the matter for grant of pension. The petitioner was asked to make an amendment to his application for resignation to one for voluntary retirement.

31. Both resignation and voluntary retirement can be withdrawn before the same take effect (see Balram Gupta v. Union of India and Anr., : (1987)IILLJ541SC .

32. Retirement or resignation has also been held to be almost synonymous. In Garment Cleaning Works v. Workmen, : (1961)ILLJ513SC and Remington Rand of India Ltd. v. Workmen, : [1970]2SCR935 , it has been held that qualifying period for gratuity should be different in case of retirement or resignation and in case of dismissal for misconduct. In that case also, thus, retirement or resignation has been held to be at par for the purpose of grant of retiral benefits. In the matter of gratuity, why a long minimum period for earning the same in the case of voluntary retirement or resignation has been provided, the Apex Court has answered in British Paints (India) Ltd. v. Workmen, : (1966)ILLJ407SC as thereby the workmen may leave one concern for another after putting in the minimum service qualifying for gratuity. There again, the voluntary retirement or resignation had been held to be pat par.

33. A beneficial scheme like payment of pension to a person whose services come to an end by agreement of the parties, stand completely on a different footing than cessation of such employment on the ground of misconduct or otherwise. Such cessation may not come into effect, as noticed hereinbefore, inter alia:

a) In case of resignation;

(b) Voluntary retirement; and

c) Compulsory retirement by way of punishment.

34. It will be preposterous to suggest that although in case of resignation, having regard to the fact that a person has had an unblemished record of service, would be deprived from pension. At least a part of the pension will be paid to an employee who had been found guilty of misconduct and had been imposed with a punishment of compulsory retirement.

35. The matter may be considered from another angle. Upon resignation, the entire service period is lost. Such a concept that a person gets the benefit of the entire service period for all intent and purport, would be unconstitutional. If in case of a contributory provident fund scheme, he would have been entitled to the benefit of the contribution made by the employer, we do not find any reason as to why in a case where the pension scheme is in force, he would be deprived there from. A statute, and in particular, subordinate legislation must be read reasonably.

36. For the purpose of interpretation of a beneficient statute, if the courts take recourse to the literal interpretation, the scheme may result in absurdity or manifest injustice. What is necessary in a situation of this nature would be to apply the rules of purposive construction.

37. In Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd. and Ors., : (1984)IILLJ223SC , the history of pension as a social security measure was taken into consideration. Before the Apex Court, the said contention was answered in the following terms:

'7. The contention of the respondent is that the plaintiff did not retire from service but he left the service of the Company by resigning his post. This aspect of some extent agitated the mind of the High Court. It may be dealt with first. It is not only not in dispute, but is in fact conceded that the plaintiff did render continuous service from December 31, 1929 till August 31, 1959. On exact computation, the plaintiff rendered service for 29 years and 8 months. Rule 6(a) which prescribed the eligibility criterion for payment of gratuity provides that every permanent uncovenanted employee of the Company whether paid on monthly, weekly or daily basis will be eligible for retiring gratuity which shall be equal to half a month's salary or wages for every completed year of continuous service subject to a maximum of 20 years' salary or wages in all provided that when an employee dies, retires or is discharged under Rule 11(2)(ii) and (iii) before he has served the Company for a continuous period of 15 years he shall be paid a gratuity at the rate therein mentioned. The expression 'retirement' has been defined in Rule 1(g) to mean 'the termination of service by reason of any cause other than removal by discharge due to misconduct'. It is admitted that the plaintiff was a permanent uncovenanted employee of the Company paid on monthly basis and he rendered service for over 29 years and his service came to an end by reason of his tendering resignation which was unconditionally accepted. It is not suggested that he was removed by discharge due to misconduct. Unquestionably, thereforee, the plaintiff retired from service because by the letter Annexure 'B' dated August 26, 1959, the resignation tendered by the plaintiff as per his letter dated July 27, 1959 was accepted and he was released from his service with effect from September 1, 1959. The termination of service was thus on account of resignation of the plaintiff being accepted by the respondent. The plaintiff has, within the meaning of the expression, thus retired fro service of the respondent and he is qualified for payment of gratuity in terms of Rule 6.'

38. The Apex Court held that when a statute confers absolute discretion on the employer to pay or not to pay gratuity even if it is earned, is unfair, unreasonable and arbitrary. Absolute discretion, not judicially reviewable, the Apex Court held, inheres the pernicious tendency to be arbitrary and is, thereforee, vocative of Article 14.

39. In Balram Gupta v. Union of India and Anr. (supra), Sabyasachi Mukerjee, J., as his Lordship then was, observed:

'9....There is no unilateral termination of the same prior thereto. He is at liberty, and entitled independently without Sub-rule (4) of Rule 48-A of the Pension Rules, as a government servant, to withdraw his notice of voluntary retirement. In this respect it stands at par with letter of resignation.'

40. In J.K. Cotton Spinning and Weaving Mills Company Ltd. v. State of UP and Ors., 1990 SCC (L&S;) 570, it was held

'The meaning of term 'resign' as found in the Shorter Oxford Dictionary includes 'retirement'. thereforee, when an employed voluntarily tenders his resignation it is an act by which he voluntarily gives up his job. We are, thereforee, of the opinion that such a situation would be covered by the expression 'voluntary retirement' within the meaning of Clause (i) of Section 2(s) of the State Act. In Santosh Gupta case : (1980)IILLJ72SC Chinnappa Reddy, J. observed as under: (SCC p. 342, para 5)

'Voluntary retrenchment of a workman or the retrenchment of the workman or reaching the age of superannuation can hardly be described as termination, by the employer, of the service of a workman.'(Here the word 'retrenchment' has reference to 'retirement'.)

The above observation clearly supports the view which commends itself to us.'

41. In Union of India and Ors. v. Lt. Col. P.S. Bhargava, : [1997]1SCR130 , Kirpal, J., as the learned Chief Justice then was, observed:

'19. ...Once an officer has to his credit the minimum period of qualifying service, he earns a right to get pension and as the Regulations stand, that right can be taken away only if an order is passed under Regulation 3 or 16. The cases of voluntary resignations of officers, who have to their credit the minimum period of qualifying service are not covered by these two Regulations and, thereforee, such officers, who voluntarily resign, cannot be automatically deprived of the terminal benefits.'

42. In Sudarshan Kumar v. Delhi Transport Corporation, : 56(1994)DLT538 , it was held that an employee cannot be deprived of his qualifying service for earning pension only because he resigns. Relying, inter alia, on the decision of the Apex Court in D.S. Nakara and Ors. v. Union of India, : (1983)ILLJ104SC , it was held:

'10. If a person is entitled to pension on retirement after completing qualifying service, it follows that, the said benefit is a benefit earned by the employee because of the service rendered by him. Can it be said that the benefit so earned ceases to be a benefit only because, at the end of the qualifying service, the employee resigns? If that is to be the law, will it not be penalizing such a person for resigning from service, resulting in the forfeiture of the benefit earned. The letter dated 2.9.1993 (Annexure 2) written to the petitioner proceeds on the assumption that benefit of past service will be lost on resignation as per Rule 26. But it fails to consider the implications of Rule 48 and the need to treat all employees who rendered qualifying years of service on equal footing. It should be noted that the petitioner had no occasion to persuade the first respondent-Corporation to retire him by applying a Rule similar to Rule 48 of the Rules. Question of exercising option did not arise in the year 1986 by which time the petitioner had resigned from service, however, the result of the resignation was in no way different from the normal retirement. In both the cases the employee concerned will be going out of the actual service after rendering a requisite number of qualifying service. In the circumstances, I am of the view that the term 'retired w.e.f. 3rd August, 1981' found in Clause 3 of the Officer Order No. 16 should include a person who resigned also w.e.f. 3rd August, 1981 after rendering qualifying years of service of 30 years as stated in Rule 48 of the Rules. I ma of the view that the phraseology used in Clause 3 of the Scheme should be understood in a liberal sense so as to extend the benefit to all those who rendered the qualifying service and there cannot be any artificial distinction between a person who retired and a person who resigned.'

43. In Jagpal Singh v. Delhi Transport Corporation, : 70(1997)DLT435 , a learned Judge of this court relied upon Sudarshan Kumar v. DTC and Ors., 1994 (7) SLR 163 for negativing a defense that for the purpose of earning pension, an employee must complete 30 years of qualifying service.

44. In Delhi Transport Corporation v. Shri Baijnath Bhargava and Ors., LPA 33/98, one of the questions which were raised before the Division Bench was:

'6. Whether an employee who had resigned from service would be entitled to pension because of Rule 26 of the CCS (Pension) Rules?'

45. Upon consideration of the prevailing rules and upon surveying the case laws on the subject, it was observed:

'This leaves us with the last question namely an employee having resigned from service whether he is entitled to pension?

Learned Single Judge placed reliance upn the decision in Sudarshan Kumar v. Delhi Transport Corporation and Anr. 1994 (7) SLR 163 wherein it was held that benefit of the Pension Scheme extends to all those who renders qualifying service. It was held that there cannot be any distinction between a person who retires and a person who resigned. In both cases the employee goes out of service after rendering requisite qualifying service. Learned Single Judge observed that para 3 of the Scheme should be understood in a liberal sense so as to extend benefit of the Pension Scheme to all those who rendered the qualifying service and there cannot be any artificial distinction between a person who retires and a person who resign.

We are in full agreement with the view taken by learned Single Judge in Sudarshan Kumar's case (supra) Learned Single Judge held that employee who was in service on 27.11.1992 and had thereafter resigned from service, in case had rendered requisite qualifying service and exercised option within the prescribed period or extended period, will also be entitled to pension on fulfillment of the other conditions.'

46. In a case before one of us (Sikri, J.), entitled Amita Singh v. Air India and Anr., : 2000VIIAD(Delhi)16 , a question arose as to whether when an employee for personal reasons prays for voluntary retirement, can the same had been taken to be a resignation so as to deprive her from the grant of pensionary benefits, it was held:

'9. In view of the aforesaid position in law, it does not lie in the mouth of respondent to argue that since the petitioner did not submit request for voluntary retirement, and what the petitioner submitted was only a letter of resignation, her request of voluntary retirement could not be acceded to. This is not all the reason disclosed in letter dated 10.9.1997. On the contrary, as observed earlier, this letter proceeds on the basis that petitioner made request for voluntary retirement but the same could not be acceded to only on the ground that there was no provision for the same in respect of workmen category to which the petitioner belonged. Thus respondents having themselves proceeded on the basis tat there was a request for voluntary retirement made by the petitioner are precluded from contending that petitioner submitted letter of resignation only and not the request for voluntary retirement.'

47. In the instant case also, it appears that the respondents themselves had proceeded on the basis that it was a case of voluntary retirement.

48. In DTC Retired Employees' Association and Ors. v. Delhi Transport Corporation and Ors., : (2001)IILLJ258SC , as regards the deemed option for pension scheme by employees who had not exercised any option within the prescribed time-limit, it was held that the scheme was applicable only to the employees who were in service on the cut off date.

49. In B.M. Ramachandra v. Canara Bank and Ors., Writ Petitions Nos. 3919 to 3994 of 1996 decided on 20th September 1996, Bakthavatsalam, J. of the Karnataka High Court emphasized the reason for difference in qualifying period for pension and gratuity stating:-

'9. I do not see any distinction amongst the retired employees. If a proper construction are given to the Regulations cited supra, in my view the Bank cannot make a distinction among the employees who retired under the scheme of voluntary retirement scheme and employees who retired otherwise because the term 'retirement' which occurs in the Regulations includes voluntary retirement. I do not see any reason to confine voluntary retirement only under Regulation - 29 of the Regulations. If such a construction is given to Regulation 29 of the Regulations, it offends Article 14 of the Constitution of India, as argued by the learned Counsel for the Petitioners. It is always open to this Court to give a construction of the Regulations to achieve the objects. As such in my view, the voluntary retirement which is found in the regulations has to be taken as it applies to all the employees who have opted under the voluntary retirement scheme, as found in Regulation 3(1) of the Regulations. In my view a combined reading of Regulation - 3 read with Regulation 34 clearly shows that the petitioners are also entitled to get the pensionary benefits which are extended by the Bank, even though it is for the first time. What the bank wants is a distinction between the employees who are retired and the employees who sought voluntary retirement and retired. This distinction surely in my view is vocative of Article 14 of the Constitution of India. The Supreme Court in ALL INDIA RESERVE BANK RETIRED OFFICERS ASSOCIATION and Ors. v. UNION OF INDIA and Ors. : AIR1992SC767 has held as follows:

'5. The concept of pension is now well known and has been clarified by this Court time and again. It is not a charity or bounty nor is it gratuitous payment solely depends on the whim or sweet will of the employer. It is earned for rendering long service and is often described as deferred portion of compensation for past service. It is in fact in the nature of a social security plan to provide for the December of life of a superannuated employee. Such social security plans are consistent with the socio-economic requirements of the constitution when the employer is a State within the meaning of Article 12 of the Constitution.'

In my view it is not a new retirement benefit. The regulations framed by the Bank is for giving the pensionary benefits to all the employees of the Bank either retired on attaining the age of superannuation or retired under the scheme of voluntary retirement scheme. thereforee, I do not think it is correct on the part of the Bank to fix the cut off date as 1.1.93 to give the benefit of the Pension scheme. In my view the cut off date fixed for entitlement of pension to the employees who retired voluntary is arbitrary when the Bank decides to extend the benefit of Pension to its employees, I do not think it can make any distinction between the employees who are retired and employees who sought voluntary retirement and retired. A I have already stated, even the regulations framed in 1995 do not contemplated such a situation.,'

50. Yet again, a Division Bench of Karnataka High Court, speaking through R.P. Sethi, Chief Justice, as the learned Judge then was, in Writ Appeals Nos. 8897 to 8972 of 1996 and connected cases decided on 30th May 1997, wherein the question of cut off date provided for in the regulation of the Canara Bank came up for consideration, held:

'12. The distinction sought to be drawn by the appellants wit respect to the retirees before 1.11.93 and retirees there-after appears only to be imaginary and not real. The draft pension Regulations were held applicable to the persons like the writ petitioners and the same were enforced obviously without any amendment or alteration, w.e.f. 29.9.95. The learned Single Judge was thereforee right in holding tat the Regulation were applicable to all the employees who had opted for voluntary retirement notwithstanding the cutoff date of 1.11.1993.

13. It is acknowledged principle of the interpretation and the Rule of construction that if any impugned action is reasonably capable of construction which does not involve the infringement of any fundamental rights, that construction must be preferred though the same may reasonably be possible to adopt in an another manner which may lead to the infringement of fundament rights. Applying such a test in the present case it would be seen that if the interpretation sought to be put by the appellants is accepted, the same would amount in violation of fundamental rights of equality as enshrined in Articles 14 & 16 but if the construction is assumed in favor of the employees, the same would not result in the violation of any right much less a fundamental right. In interpreting a provision the Courts are required to keep in mind the facts and circumstances under which the provision is enacted or made, its purpose and object and the ultimate result sought to be achieved. Having regard to the facts and circumstances of the case and the position of law as noted herein above it can safely be held that the Regulations were intended to be made applicable to all the voluntarily retired employees notwithstanding the cut off date.'

51. The learned judge observed

'A perusal of the record and upon consideration of circumstances it is held that the person like the writ petitioners were held entitled to the pensionary benefits on account of the services rendered by them upon satisfaction of the conditions specified in the Regulations and that grant such pension was neither a concession nor a charity or a bounty...'

52. Negativing the plea that existence of relationship of employer and employee is required for grant of pensionary benefits, it was held:

'If the plea is accepted, then the distinction sought to be made between the retirees of the bank between the dates 1.11.93 to 29.9.95 and between 1.1.96 to 31.10.93 cannot be justified and has to be held to be not only contradictory but artificial and imaginary. If the employees retiring before the commencement of the Regulations but after 1.12.93 can be held to be employees of the bank for the purposes of grant of pension, there is no justification for holding the retirees from 1.1.86 to 31.10.93 being - not entitled to grant of pension on the ground of non-existence of relationship of employer and employee.'

53. Yet again, in Bank of India v. Indu Rajagopalan and Ors., the Apex Court, in CWP 6959/1997 decided on 5th April 2000, p. 147, observed:

'All that has happened is in such of the banks where a Scheme for voluntary retirement was available, certain employees retired under that Scheme. Now a comprehensive Pension Scheme has been framed which came into force w.e.f. 1.11.93 and applicable uniformly to all Bank employees which provides for voluntary retirement as well. The applicability of these Rules to those employees who have voluntarily retired w.e.f. 1.1.88 to 31.10.93 is raised in these matters. It is not possible for Shri V.R. Reddy, learned senior counsel who appears for the appellants to point out that there is any significant financial or other burden or difference so far as those who had voluntarily retired and those who had ordinarily retired. In that event where there is no distinction, the authorities having sought to made a distinction and not applied the regulations framed subsequent to their retirement, the High Court has given appropriate directions.'

54. In Bank of India (Employees') Pension Regulations, 1997 (2) M LJ 559, a learned Single Judge of the Bombay High Court observed:

'15. ...It is thereforee not permissible for the Bank to fix artificially a further cut-off date as 1st November, 1993 to give benefit of the pension scheme to the employees who have retired voluntarily only after 1st November, 1993. When the bank decides to extend the benefit of pension to its employees it cannot make any distinction between the employees who have retired and employees who sought voluntary retirement and retired.'

55. Yet again in Sansar Chand Atri v. State of Punjab and Anr., : [2002]2SCR881 , the fact of the matter as noticed therein is as follows:

'The appellant joined the Indian Army on 8.10.1972 while he was holding the post of Hawaldar. He was discharged from the Army on 1.11.1990 after rendering 18 years and 24 days' of total service. The 'cause of discharge' described in the discharge certificate was 'under Army Rule 13(3) II (iv) at his own request'. He is drawing pension as an ex-serviceman.'

56. It was held:

'11. The High Court, in our view, is not justified in placing reliance on Sub-clause (iv) of the definition clause and excluding the writ petitioners from the eligible category on that basis. Sub-clause (iv) has no application in the instant case for the reason that it applies to such of those persons who are relieved from service after specific period of engagement and become entitled to get gratuity. If a person, who served in the armed forces, is released after being granted the benefit of pension, the case is taken out of purview of Sub-clause (iv). The exclusionary words 'otherwise that at his own request' occurring in Sub-clause (iv) cannot thereforee, be relied upon to deny the benefit of the appellants. Then the question arises whether such person would fall under Sub-clause (i)? True, according to the terminology used in the Service Rules governing the armed forces there is a distinction between retirement and release/discharge, as pointed out by the High Court. But, in the context of definition of ex-servicemen in Rule 2(c)(ii), broader meaning has to be given to the word 'retired' occurring in Sub-clause (i). In principle and in the light of the considerations set out above, there is no rational basis for excluding those discharged or released from service after earning pension. It is only after considerable period of satisfactory service a member of armed forces becomes entitled to pension. The mere fact that after such long period of service he voluntarily quit the service with the consent of the employer should not place him in a dis-advantageous position for claiming the benefit of reservation for ex-serviceman. thereforee, the expression 'retirement' should be given wider meaning in order to effectuate the objective behind the Rule.'

57. Furthermore, in Narendra Kantilala Dave's case, as has been seen that he had completed more than 36 years of unblemished service. Only because he had resigned after the cut off date, can he be deprived of his pensionary benefits? The cut off date has been picked out of hat. No reason has been assigned as to why such cut-off date has been fixed. Why a person after cut-off date would not be entitled to pension despite his brilliant service record, has not been explained. Can his position be worse than that who had compulsorily retired by way of punishment? If that be so, the provisions for earning pension, upon completion of the period of qualifying service would be mockery. Each case has to be considered on its own facts.

58. Having held so, we may notice a few decisions relied upon by the learned counsel for the parties.

59. In B. Shesha Yadava v. Oriental Insurance Co. Ltd. and Ors., : 1998(6)KarLJ146 , a learned Judge of the Karnataka High Court without considering the rival contentions merely noticed the provisions of paras (30), (31) and (32) of the Scheme which provides for Pension on voluntary retirement, Invalid Pension and Compassionate Allowance under Chapter V and held:

'7. Bare reading of the aforesaid paragraphs, it is crystal clear that none of the paragraphs is applicable to the case of the petitioner inasmuch as the petitioner neither has taken voluntary retirement as per paragraph (30) nor retired from service on account of any bodily or mental infirmity nor he has been dismissed or removed or compulsorily retired or terminated from service to take the benefits of the scheme.'

60. In Durga Prasad Mishra v. UCO Bank and Ors., 1998 (80) FLR 911, a single Judge of the Calcutta High Court again did not consider the matter in great details but merely referred to the Statutory regulation to hold:

10. '...In view of the Regulation 3 of the Pension Regulations and in view of the discussions made hereinabove I am of the view that the Pension Regulations have no manner of application so far the petitioner is concerned. I am of the view that providing Option Forms for the purpose of opting pension under the Pension Regulations and all other communications communicating the petitioner that he is eligible or entitled to get pension under the Pension Regulations were not in accordance with the provisions contained in the Pension Regulations and did not create any right in favor of the petitioner.'

61. The argument was advanced only on the ground that such retiral benefits were payable in terms of doctrine of promissory estoppel and legitimate expectation.

62. In Mani v. State Bank of Travancore, : (2000)ILLJ720Ker a Division Bench of Kerala High Court did not go into the merit of the matter and held that on the face of Regulation 20(2) of the State Bank of Travancore (Officers') Service Regulations, 1979, the appellant therein was not entitled to pension.

63. We may notice that in A.K. Srivastava v. Union of India and Ors., : (1996)ILLJ241SC , it was held that even a temporary Government servant would be entitled to pension after he has completed more than 26 years of service. It was held:

'5. In view of the rival submissions at the bar, the question for consideration is whether there is any rationale behind the rule disentitling pension to a government servant when an order of compulsory retirement is passed in exercise of power under Rule 56(j) of the Fundamental Rules? As has been noticed earlier after completion of a particular period of service the employer has a right to compulsorily retire the employee has a right to voluntarily retire on giving three months' notice. It has been held by this Court time and again that the pension is not a charity or bounty nor is it a conditional payment solely dependent on the sweet will of the employer. It is earned for rendering a long service and is often described a long service and is often described as deferred portion of payment for past services. It is in fact in the nature of social security plan provided for a superannuated government servant. If a temporary government servant who has rendered 20 years of service, is entitled to pension, if he voluntarily retires, there is no justification for denying the right to him when he is required to retire by the employer in the public interest. In other words, the condition precedent for being entitled to pension in case of a temporary government servant is rendering of 20 years of service.

6. In view of the legal position that an order of compulsory retirement is not a punishment and pension is a right of the employee for services rendered, we see no justification for denying such right to a temporary government servant merely on the ground that he was required to retire by the employer in exercise of power under Rule 5(j) of the Fundamental Rules. In our considered opinion a temporary government servant would be entitled to pension after he has completed more than 20 years of service even if he is required to retire by the employer in exercise of power under Rule 56(j) of the Fundamental Rules.'

64. The said decisions, having regard to the large number of decisions as noticed hereinbefore, cannot be said to have laid down a good law particularly when the judgment of the karnataka High Court is against the decisions of the said court. Furthermore, we are bound by the Division Bench decision of this court as also the Supreme Court of India.

65. For the reasons afore-mentioned, we are of the opinion that the writ petition and the Letter Patents Appeal should be allowed and it must be held that the petitioners and the appellant are entitled to the benefit of the pension scheme. The retiral benefits payable to the petitioners are directed to be processed and the payment may be made at an early date and preferably within a period of three months from today.

66. No order as to costs.


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