Gujarat High Court
Bank Of India & vs Bank Of India Retired ... on 1 April, 2014
Author: Ks Jhaveri
Bench: Ks Jhaveri, A.G.Uraizee
C/LPA/732/2000 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
LETTERS PATENT APPEAL NO. 732 of 2000
In SPECIAL CIVIL APPLICATION NO. 10532 of 1996
With
LETTERS PATENT APPEAL NO. 743 of 2000
In
SPECIAL CIVIL APPLICATION NO. 7011 of 1997
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE KS JHAVERI
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
================================================================
1 Whether Reporters of Local Papers may be allowed to see
the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as
to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?
5 Whether it is to be circulated to the civil judge ?
================================================================
BANK OF INDIA & 1....Appellant(s)
Versus
BANK OF INDIA RETIRED OFFICERSASSOCIATION & 2....Respondent(s)
================================================================
Appearance:
Page 1 of 7
C/LPA/732/2000 JUDGMENT
NANAVATI ASSOCIATES, ADVOCATE for the Appellant(s) No. 1 - 2
MR GT PARIKH, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 2 - 3
================================================================
CORAM: HONOURABLE MR.JUSTICE KS JHAVERI
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
Date : 01/04/2014
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE KS JHAVERI)
1. We have heard Mr. Chudgar, learned advocate appearing for Nanavati Associates for the appellants and Mr. G.T. Parikh, learned Counsel appearing for respondent no. 1.
2. This intra-court Letters Patent Appeal has been filed challenging the common judgement and order dated 16.09.1999 passed by the learned Single Judge in Special Civil Applications No. 10532 of 1996 & 7011 of 1997 in so far as the learned Single Judge has directed the appellant Bank to pay the retiring officers interest @ 6% per annum on the commuted value of pension for the period between 01.11.1993 till 31.03.1995.
3. The original petitioners - present respondent no. 1 by way of the writ petitions had challenged the fixation of the cut off date for fixing the date of commutation as 01.11.1993 and had further prayed for direction directing the bank to refund the interest which was paid by the employees on the Provident Fund amount which was required to be refunded to the appellant bank. The original petitioners also sought for Page 2 of 7 C/LPA/732/2000 JUDGMENT directions to make payment to the retired officers, the interest on the commuted value of pension from 01.11.1993 to 31.03.1995.
4. Mr. Chudgar, learned advocate appearing for the appellants submitted that the learned Single Judge erred in not appreciating that the option for opting to the pension scheme was a package deal in lieu of contributory provident fund evolved between the bamk and the employees as well as the Officers Association at all India level. He submitted that as a part of the package deal, the ex-employees/officers of the bank are getting more and more benefits while foregoing some benefits. He submitted that taking an over all view of the pension scheme as provided under the said Pension Regulation, the pensioners have more to gain and therefore the said direction by the learned Single Judge directing the bank to make payment of interest on the commuted value of pension ought not to have been made as this amounts to giving even more benefits to a section of retired employees who have already benefited immensely from a very liberal pension scheme.
4.1 Mr. Chudgar further submitted that in fact the vires of the scheme was already challenged but the same was declined and was held intravires. He submitted that the Pension Scheme cannot be given effect retrospectively as doing so will only increase the financial burden of the bank. He therefore submitted that keeping in mind the financial burden, the employer has to decide upon the applicability of the Scheme.
4.2 Mr. Chudgar contended that under the Scheme the Page 3 of 7 C/LPA/732/2000 JUDGMENT retired officers of the appellant Bank are given an opportunity to opt for the Scheme and by choosing to opt for the same, the officers and the appellant bank enter an Agreement which contains a condition of extending benefit of the Pension Scheme only if the retired officers refund the employer's contribution to the Provident Fund with simple interest @ 6%.
4.3 Mr. Chudgar submitted that there is no provision under the said statutory scheme to pay interest on commuted value ad therefore the direction to pay the aforesaid could not have been given by the learned Single Judge. In support of his submissions, Mr. Chudgar has relied upon a decision of the Apex Court in the case of Union of India vs. E. Merck (India) reported in 1998(97) E.L.T. 218 (S.C.), wherein the Apex Court has observed as under :
"3. Admittedly, there is no statutory basis for the claim of interest made by the respondent in its writ petition inasmuch as there is no provision in the statute imposing an obligation on the Revenue to pay interest on the amount refunded. The respondent's claim for interest was also not based on any other statutory provision.
4. In short, there is no statutory or legal basis for making the claim of interest indicated in the writ petition to furnish a ground for issuance of a writ of mandamus. We may also add that the Tribunal's order did not by itself indicate the precise liability of the Revenue to refund any specific amount to the respondent so as to give rise thereby to a liability to refund any specified amount on the date of the Tribunal's order.
5. In other words, in the facts and circumstances of this case, there is no basis on which a legal obligation of the Revenue to refund a specific sum of money on a particular date is shown to have arisen to provide foundation necessary for issuance Page 4 of 7 C/LPA/732/2000 JUDGMENT of a writ of mandamus. It is, therefore, unnecessary to examine in the present case the larger question urged on behalf of the respondent that the liability of payment of interest on the amount of excess duty refunded may, in a given case, give rise to a legal obligation providing foundation for issuance of a writ of mandamus to direct payment of interest also on the amount refunded."
5. Mr. Parikh, learned advocate appearing for the respondent employees supported the impugned order and submitted that the learned Single Judge has gone through the evidence in detail and has rightly come to the conclusion that the respondents are entitled to interest on the commuted value and therefore this Court may not interfere in the impugned judgment and order.
6. The learned Single Judge by way of the impugned judgement and order dated 16.09.1999 in Special Civil Applications No. 10532 of 1996 & 7011 of 1997 has observed as under:
"9. The only question which now remains to be considered is whether the respondent-bank acted arbitrarily in not paying the officers any interest on the commuted value of the pension between 1.11.1993 and 31.1.1996. There is no dispute about the fact that the amount of CPF contribution made by the bank earlier at the time of the petitioner's retirement was required to be refunded by the retired officers to the bank and has accordingly been refunded with 6% interest. The interest has been charged for the period from the date of settlement of Provident Fund account till 31.3.1995. If that be so, there is no reason why retired officers should suffer loss of interest on the commuted value of pension between 1.11.1993 and 31.3.1995. The learned counsel for the petitioner Page 5 of 7 C/LPA/732/2000 JUDGMENT has of course submitted that the interest is required to be given for the entire period from 1.11.1993 till 31.1.1996 when the amount was actually credited to the amount of the retired officers. However, since the bank has not charged any interest on the CPF refund amount after 1.4.1995, it would be inequitable to require the bank to pay interest to the petitioners on the amount of commuted pension after 31.3.1995. Hence, the Bank is required to be directed to pay the retiring officers interest on the commuted value of pension from 1.11.1993 till 31.3.1995.
10.The next question is what rate of interest should be awarded. The learned counsel for the petitioner would urge that interest should be awarded at the rate of 18% and that in any case it ought to be awarded at 12% which is the rate of interest being awarded by the Courts where there has been delay in payment of pension or commuted pension.
Ordinarily, it is so. But, here, in this case there is some justification in the argument advanced by the learned counsel for the respondent-bank that the officers who retired between 1.11.1986 and 31.10.1993 have been required to refund the amount of CPF with interest only at the rate of 6% per annum though the respondent-bank could have demanded such refund with interest at the rate of 12% per annum.
Apart from that, considering the fact that a large number of officers had retired in June 1986- 87, if the petitioners' insistence on the award of 12% interest on the commuted value of pension is to be granted, then the bank may as well be justified in contending that in such an eventuality the bank may be permitted to reopen the entire scheme. That would mean opening pandora's box and would be contrary to the interests of the retired officers themselves. In the facts and circumstances of the case and taking an overall view of the matter, it appears to the Court that it would be just and proper to direct the respondent- bank to pay its officers covered by the Scheme interest on the value of commuted pension for the period from 1.11.1993 till 31.3.1995 at the rate of 6% per annum."Page 6 of 7
C/LPA/732/2000 JUDGMENT
7. Going by the records of the case and having heard the learned advocates for the parties, we are in complete agreement with the reasonings adopted and findings arrived at by the learned Single Judge. When on one hand the bank charged interest upto 31.03.1995 on Contributory Provident Fund for all employees at the rate of 6%, at the time of giving pension on commutation the refusal on the part of the bank in paying 6% simple interest for the period from 01.11.1993 (date on which the same was due) to 31.03.1995 (date upto which interest is charged on CPF) is not justified. The bank being an ideal employer ought not to have refrained from refunding the said amount of interest. It is at this stage that the court is required to strike a balance. It is a settled position of law that the Courts should not enforce and shall, when called upon to do so, strike down an unfair and unreasonable clause in a contract, entered into between the parties who are not equal in bargaining power. Therefore, as the respondents - employees have paid the amount of interest on Provident Fund, it is expected that the decision of the learned Single Judge shall be accepted and adhered to by the Bank. The appeals are devoid of any merits and are dismissed accordingly. No costs.
(K.S.JHAVERI, J.) (A.G.URAIZEE,J.) divya Page 7 of 7