Delhi High Court
Mange Ram And Ors. vs National And Grindlays Bank Ltd. on 4 August, 1986
Equivalent citations: 1987(12)DRJ52, 1987LABLC1560
JUDGMENT D.K. Kapur, C.J.
(1) The appellant had instituted a Suit for the recovery of Rs. 1,27,372.50 and a declaration that he was entitled to a monthly pension ofRs. 812.50 as against Rs. 400.00 granted to him by the respondent Bank. He also claimed a further declaration that he was entitled to an allowance ofRs. 150.00 per month. The Suit was based on the claim that he had no age of retirement and having joined the service of the respondent Bank in the year 1924, he could not be compulsorily retired against his wishes with effect from 1/1/1966, when he was 61 years of age and had put in 41" years of service.
(2) The case in the plaint was that the plaintiff had to serve in the Bank till he attained the age of 65 years and thus he claimed a sum of Rs. 1,25,685.00, the calculation of which is set out in paragraph No. 15 of the plaint. The claim is made out-Salary at the rate of Rs. 1,625.00 per month, D.A. at the rate of Rs. 438.75 per month, Additional D.A.,attherateof Rs. 50 per month, and there are further amounts claimed for annual medical allowance and bonus at the rate of 20 per cent-of the annual basic salary, and there is some further amount claimed as gratuity.
(3) In the written statement, it was claimed that the plaintiff was governed by the Pension and Gratuity Rules which came in force on 31/12/1957, and not by the Pension Rules called the Staff Clerical Rules in force earlier which are contained in a memorandum dated 14th February, 1949. There are some other pleadings which are not very relevant. The Court framed the following issues :-
"1.Is the plaint bad for mis-joinder of causes of action ?
2.Is the plaintiff's claim for salary till he attains the age of 65 years inconsistent with his claim for a pension and allowance until the age of 65 years and also with his claim that he is entitled to serve the bank indefinitely. If so, is the plaintiff not bound to make an election regarding relief he claims ?
3.What were the rules relating to pension and gratuity applicable to the plaintiff?
4.Was the plaintiff's retirement illegal ?
5.Were the defendants entitled to withdraw the additional allowance of Rs. 150.00 permonth?
6.Is the plaintiff entitled to compensation ?
7.What is the amount of pension to which the plaintiff is entitled ?
8.Relief."
The Suit was tried on the Original side of this Court. The first two issues were decided against the defendant. On the third issue it was held that the plaintiff's conditions of pension were as modified in 1957 and he was governed by the Retirement Benefit Option contained in Exhibit P-5. On the 4th issue, which was concerned with the retirement of the plaintiff, it was held that the retirement was valid. On the 5th issue, it was held that the appellant could not claim the amount of extra allowance as a matter of right, but it could be paid to him as a matter of grace. The plaintiff' was held to be entitled to a pension of Rs. 400.00 per month. In view of this conclusion, the plaintiff's suit was dismissed.
(4) The learned counsel for the appellant (who has since died and is now represented through Legal representatives submits that the appellant was wrongly retired and he was entitled to serve till the age of 65 at least. In this connection, it may be said that many officials of the Bank had served to various ages, some even up to 70 years according to the plaintiff. Admittedly, some had served beyond the age of 65. Learned counsel for the appellant contends that there is no age of retirement and the appellant was entitled to continue indefinitely at his own sweet will. We have carefully examined this submission. We find that no terms of service have been proved in this case. It appears that persons employed by the Bank retired at various ages. This makes us believe that the Bank was retiring its officers at varying ages, and there was no fixed age of retirement. We cannot accept the contention that the appellant was entitled to serve the Bank at his own sweet will till whatever age he liked.
(5) Learned counsel for the appellant contends that the age of retirement can be made out from the terms of the memorandum dated 14/2/1949, Exhibit P-1. That memorandum reads as follows :-- "GRINDLAYS Bank Limited New Delhi, 14/2/1949, STAFF-Clerical Pensions. The following is issued in accordance with a memorandum from Head Office in India dated the 2/12/1947, which advised the Board had amended Rules governing the issue of pensions to the Clerical Staff as under :- (a) Pensions for ordinary clerks to remain unaltered, that is to say, for those clerks retiring at age 55 or later with not less than 30 years. service. (1) For those with 30 years ) 50% of basic salary at the time service or more. ) of retirement with a maximum ) of Rs. 100.00 p.m. (2) For those with 35 ) 50% of basic salary at the time years service or more. ) of retirement with a maximum ) of Rs. 125.00 p.m. (b) Maximum pension for ) Superintendents at Rs. 135.00 ) p.m. ) (c) Maximum pension for Sub- ) On the same percentage. Accountants at Rs. 200.00 ) p.m. ) (d) Maximum pension for ) Assistants at Rs. 400.00 p.m. ) (e) In the case of Sub-Accountants and Assistants, who have served 40 years and attained the age of 65 years 50% of their basic salary at the time of retirement, without a maximum. Any individual's questions regarding pensions will be answered but it must be emphasised that the pensions are payable only when specially sanctioned by the Board of Directors. It is especially to be made clear that the fact that the rules refer to clerks retiring at the age of 55 and in certain circumstances Sub-Accountants and Assistants retiring at the age of 65, does not mean that there is any right or entitlement to a pension at these ages, provided the requisite years of service have been completed, but that the Board will only consider granting such pensions when they have agreed to the retirement of any individual member of the Clerical Staff. sd/- S.G; Read MANAGER" It will be seen on an examination of the contents of this memorandum that various rates of pension are given to persons who retire at the age of 55 or earlier and that pension depends on the years of service put in. The pension for persons who serve for 30 years and for those who serve for 35 years or for those who serve beyond the age of 65, are separately given. In fact, there is a variable chart regarding pension, dependent on the years of service and the age of retirement. It appears that the plaintiff was an Assistant at the time of his retirement. Under this memorandum, the maximum pension for Assistant is fixed at Rs. 400.00 per month, but in Sub-clause (e), it is stated as follows:- "IN the case of Sub-Accountants and Assistants, who have served 40 years and attained the age of 65 years 50% of their basic salary at the time of retirement, without a maximum."
Thus, if a Sub-Accountant or an Assistant served the Bank for 40 years and also attained the age of 65, then 50% of the basic salary would be the pension. The very fact that there are variable rules, shows that persons could be retired between 55 and even after 65. It means that there must be an inherent method by which these persons could be retired. If there was a fixed age of retirement, then there would be no question of any Assistant getting a pension of Rs. 400.00 p.m. under Sub-clause (d) because he would always get a pension under Sub-clause (e).
(6) In the end of 1957, or thereabout, the Grindlays Bank Ltd., was amalgamated with the National Bank of India, and this led to the issue of a new Pension Scheme which is Exhibit P-5. Under this Scheme, a convenanted Assistant is to get Rs. 400.00 per month as pension. So, it does not make any difference in the case of the appellant whether he is covered by the 1949 Scheme or the 1957 Scheme. :
(7) The main claim in the Suit is for salary between the actual age of retirement and the age of 65. In our view, there is no proof at all that there is a retirement age fixed under the terms of appointment or by any service rules. So, the plaintiff has failed to establish that he is entitled to the sum claimed as salary between the age of 61 and the age of 65. 'Learned counsel for the appellant contended that a person could not be retired if there was no term for retiring him. We cannot accept the proposition that a person who is employed must be allowed to serve till the end of his life, unless there is a specific term to that effect. The very fact that this is a contract of employment means that this can be terminated unless there is some contract to the contrary. There may be a case in which a person is employed 'for his life'. Or, there may be a case in which a person is employed till a specific age of retirement, say, 60, or there may be a case where a person may be employed for a given number of years, say, 30. Or, there may be a fixed age of retirement. Normally, if there is no term fixing the age of retirement or fixing the term of service, it would follow from the nature of the contract that it can be terminated at any time. It can either be terminated by dismissal or retirement, or by mere termination of the contract of service. There is no statute which affects the terms of service under the contract of employment, which governs the plaintiff. His services could, therefore, be ended by his retirement. We have not been pointed out any other contract or any other term or service by which the plaintiff could claim that he is entitled to continue in service till the age of 65. Reliance for this purpose is solely placed on the Pension Rules which themselves show that there are various ages of retirement for which various pensions are payable. In any event, the plaintiff has to fail on the main claim.
(8) The next question is what is the plaintiff's pension ? As can be seen from the terms of the memorandum of 1949 and the Rules of 1957, the pension in case is Rs. 400.00 per month which has been granted to the plaintiff. Therefore, on these two questions the plaintiff's appeal must fail.
(9) The next question is whether an additional allowance of Rs. 150.00 is payable to the plaintiff. In this connection, it is necessary to refer to the correspondence. In this connection. Exhibit P-7 is a letter addressed by the Manager to the plaintiff staling that instructions had been issued by the Head Office to strictly enforce the age of 58 as the retirement age, so the plaintiff was asked to retire with effect from 1/7/1965. The plaintiff replied by a letter dated 29/3/1965, pointing out that he was still strong, vigorous in health, could work hard and he had a large family, etc., which entitled him to a sympathetic consideration to defer his retirement. Further letter addressed in this behalf to the plaintiff is Exhibit P-9, dated 2/6/1965, wherein it was stated that the plaintiff should proceed on leave prior to retirement (90 days) plus 90 privilege leave due from 1/7/1965. The effective retirement date would be 1/1/1966. The retirement benefits which were sanctioned by the Head Office were a pension of Rs. 400.00 per month plus an additional allowance of Rs.150.00 making a total ofRs.550.00per month, in appreciation of loyal service for the Bank for over 40 years. The further benefits were gratuity for 15 months based on 75% of the present basic salary and the Provident Fund. The plaintiff then wrote protesting that he was being retired at too early an age and he should be allowed to continue in service till the age of 65. This was not accepted by the Bank. There were then legal notices exchanged and finally the plaintiff was retired. Before this. the plaintiff had written on 26/6/1965, that he would not retire on 30/6/1965, but he would continue to attend the office even after that date. It appears that on 1/7/1965, when the plaintiff went to the Bank, he was not allowed to continue to serve. There was a legal notice on 21/7/1966, addressed by the counsel of the appellant to the Bank staling he would resort to Court. There was a reply dated 12/2/1966, in which the Manager of the Bank wrote that in view of the fact that the offer had not been accepted, therefore, the appellant was only paid a sum of Rs. 400.00 as pension. In other words, the allowance of Rs. 150.00was withdrawn.
(10) An examination of the contents of Exhibit P-9 dated 2nd June 1965, shows that the Head Office had sanctioned a retiring benefit to the plaintiff-appellant amounting to Rs. 400.00 per month and Rs. 150.00 per month as additional allowance on account of over 40 years' service. There was nothing in this letter to suggest that this allowance could be withdrawn at a later date or would be withdrawn. We are, therefore, of the view that as far as the claim for Rs. 150.00 as allowance is concerned, the appellant is entitled to get the same. The learned Single Judge was of the view that this officer of Rs. 150.00per month had been withdrawn by letter dated 12th February, 1966, Exhibit P-18, but we are of the view that the offer cannot be withdrawn having been granted to the appellant by the Head Office of the Bank. The learned Single Judge relied on the judgment of the Lahore High Court in Amir Singh and Another v. National Bank of India, A.I.R. 1941 Lahore 87, to hold that a pension granted as a matter of grace could not be enforced by a Suit. But that judgment is distinguishable. In that case the plaintiff was granted a pension at the rate of Rs. 217.00 per month, but later the Bank suffered a loss of Rs. 77,500.00 as a result of some action taken by the plaintiff. So, the pension was stopped. It was held that a Suit for pension does not lie. We do not think that this is correct law. Once the pension has been granted, there is no reason why the same should be withdrawn or the Courts should not enforce the grant of pension.
(11) When a person holds a pensionable post, it is for the employer to grant pension at the time of retirement. In this case the pension was fixed at the rate of Rs. 400.00 per month with a special allowance of Rs. 150.00 per month. There was nothing in the correspondence to indicate that any part of this allowance can be withdrawn and would be withdrawn. We are, therefore, of the view that the appellant was entitled to get the special allowance in addition to his pension from the date of his retirement, which was 1/1/1966, till 3/5/1978, when he died. This period is 149 months and five days. The plaintiff is entitled to this allowance for 149 months. The Suit is, therefore, decreed for a sum of Rs. 22,350.00. The appeal succeeds to this extent. The appellant will get proportionate costs.