Delhi High Court
All India Punjab And Sind Bank Retired ... vs The Union Of India (Uoi) And Anr. on 13 March, 2006
Author: S. Ravindra Bhat
Bench: S. Ravindra Bhat
JUDGMENT S. Ravindra Bhat, J.
Page 1089
1. These writ proceedings raise common questions for determination. Hence, they are dealt with by this common judgment.
2. The writ petitioners in these proceedings, were employed by various public sector banks. The writ petitioners in WP 426/2002, 826/2002; 13305-08/2003 & 24154-24521/05 were employees of the Punjab and Sind Bank. The petitioners in WP 5398-5407/2004 were employees and officials who had worked with the Syndicate Bank. All the petitioners are seeking identical reliefs, of direction for addition of five years qualifying service to the number of years of service put in by them, in their respective banks, for the purposes of calculation of pension. Although in some of the petitions, claims were made to quash a notification which introduced amendment to regulations in 2002, those were not pressed during the course of hearing.
3. It is an undisputed fact that the respondent banks, in tune with the policies uniformly evolved and enforced in all the public sector banks in the country, formulated the 'Special Voluntary Retirement Scheme' in 2000 (hereafter 'the scheme'). The objects of the scheme, identical in nature, even to the extent Page 1090 that the material provisions were in pari materia, were to have a balanced age profile providing for mobility, training, development of skills and succession plans for higher level positions; to provide an exit for employees who have an honest feeling that they should now retire and take rest or that there are better opportunities elsewhere and to have over all reduction in the existing strength of the employees and to increase productivity and profitability.
4. The scheme was open to all permanent employees of the Banks, except those specifically mentioned as 'ineligible', who had put in 15 years of service or had completed 40 years of age as on 31st December, 2000. Age was to be reckoned on the basis of the date of birth as entered in service record.
5. Material parts of the scheme, relevant for the purpose of deciding the present case, are extracted below (the terms, stipulation, even the sequence and numbering of the provisions are identical in nature; hence for the sake of convenience, the scheme applicable to Punjab and Sind Bank is reproduced in these proceedings):
5. ELIGIBILITY 5.1 All permanent full time employees of the bank will be eligible to seek voluntary retirement under the scheme provided they meet the following eligibility criteria on the date of application :-
a) they have completed 15 years of service or
b) 40 years of age.
xxx xxx xxx xxx xxx xxx 6. AMOUNT OF EX-GRATIA
An employee seeking voluntary retirement under the scheme will be entitled to the ex-gratia amount mentioned below in para (a) or (b), whichever is less :-
a) 60 days salary (pay plus stagnation increments plus special pay plus dearness relief) for each completed year of service;
or
b) salary for the number of years service left.
7. OTHER BENEFITS An employee seeking voluntary retirement under the scheme will be eligible for the following benefits in addition to the ex-gratia amount mentioned in para 6 above of this scheme.
i) Gratuity as per Payment of Gratuity Act, 1972 or Gratuity payable under the Service Rules as the case may be, as per existing rules;
ii) a) Pension (including commuted value of pension) as per PSB (Employees) Pension Regulations 1995 or
b) Bank's contribution toward PF as per existing rules.
iii) Leave encashment as per existing rules.
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iv) Any other retirement benefit under the existing rules.
8. MODE OF PAYMENT The 50 per cent of the amount of ex-gratia shall be paid instant in cash.
And The remaining 50 per cent of the amount of ex-gratia will be paid in the form of Bond issued by the Bank for a period of 5 years. The said bonds shall bear 10 per cent interest per annum to be paid to an employee on half yearly basis subject to deduction of tax at source in terms of Income Tax Rules.
xxx xxx xxx 10. GENERAL CONDTIONS :
10.1 Only completed years of service will be reckoned for arriving at the minimum eligible service.
10.2 Fraction of service of 6 months and above will be reckoned as one year for the purpose of calculating ex-gratia. Fraction of service less than 6 months will be ignored for the purpose of calculating ex-gratia.
10.3 The 60 days salary would be treated as equivalent to 2 month's salary and the compensation would be calculated on the basis of last salary drawn by employee/officer.
10.4 It will not be open for an employee to withdraw the request made for voluntary retirement under the scheme after having exercised such option.
10.5 A mere request of an employee seeking voluntary retirement under the Scheme will not take effect until and unless it is accepted in writing by the competent authority and communicated to respective employee/officer.
Xxx xxx xxx 10.13 The benefits payable under this scheme shall be in full and final settlement of all claims of whatsoever nature, whether arising under the scheme or otherwise to employee (or to his nominee in case of death). An employee who voluntarily retired under this scheme will not have any claim against the bank of whatsoever nature and no demand or dispute or difference will be raised by him or on his behalf, whether for re-employment of any of his relative on compassionate grounds in the service of the bank or for nay other benefit whatsoever.
6. It is also the common case of parties that pension schemes were introduced in nationalized Banks, including the two Banks in these proceedings, sometime in 1995. The petitioners are pension optees in terms of the pension schemes, which were contained in statutory regulations. The regulations bespeak pension of for seven categories, viz. (i) Superannuation Pension, (ii) Pension on voluntary retirement, (iii) Invalid Pension, (iv) Compassionate Allowance, (v) Premature Retirement Pension, (vi) Compulsory Retirement Page 1092 Pension and (vii) Family Pension. The pension regulations, like the VRS is couched in identical terms. The material regulations, viz Regulations 28 and 29, read as follows:
28. SUPERANNUATION PENSION Superannuation pension shall be granted to an employee who has retired on his attaining the age of superannuation specified in the service Regulation or Settlements.
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 an 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 by 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 given reasons therefor;
(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 wit the specific approval of such authority.
Page 1093 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 voluntary 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.
(6) The pension of an employee retiring under this regulation shall be based on the average emoluments as defined under clause (d) of regulation 2 of these regulations and the increase, not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating his pension.
7. Apparently circulars were issued, before the last date fixed for acceptance of the VRS by the banks, that instructions had been sought from the Government as to the eligibility criterion for grant of pension under the VRS, since the pension regulations entitled employees to pension only in certain contingencies. It was notified, in December, 2000, that the Central Government had required amendments to be carried out to the pension regulations in a suitable manner. As a result of the circulars, and in terms of the pension regulations, it is alleged that the petitioners opted for the VRS. Later, after they were relieved, the pension regulations were amended on 8-6-2002. The material portion of the amendment, which was to Regulation 28, reads as follows:
Provided that, with effect from 1st Day of September, 2000, pension shall be also granted to an employee who opts to retire before attaining the age of superannuation, but after rendering service for a minimum period of 15 years in terms of any Scheme that may be framed for such purpose by the Board with the approval of the Government.
8. The petitioners in all these proceedings claim that they had put in more than 20 years service with their employer banks, and are entitled to the benefit of addition of 5 more years of qualifying service while reckoning pension. For this purpose, they strongly rely on Clause 7 (ii) (a) of the VRS which states that pension as per the pension regulations would be granted, in addition to gratuity, and ex-gratia amounts.
9. Learned counsel appearing on behalf of the petitioners contended that the reference to pension under clause 7 of the VRS was clearly to Regulation 29 of the regulations, which was the only provision for grant of pension to those who retired before superannuation. It was submitted that the construction placed by the bank that the petitioners and others fell in a special category, of VRS optees who retired by virtue of a contractual arrangement, and were not covered by Regulation 29, is contrary to the plain intendment of the regulations. The petitioners had put in more than 20 years service, and were entitled to pension as per Regulation 29, which also meant that the benefit of addition to qualifying service for calculating pension inhered in them.
10. It was averred, and contended on behalf of the petitioners that the amendment of Regulation 28 by addition of the proviso, in 2002, did not alter Page 1094 their entitlement petitioners to be treated as voluntary retirement optees, and their vested right to claim pension in terms of Regulation 29. Any other interpretation would lead to arbitrariness, and unfairness, because the petitioners opted for voluntary retirement as per VRS policies, in terms of the express agreement, and understanding that pension was payable as per Regulation 29. The Petitioners relied upon the judgments of the Supreme Court in Pawan Alloys and Castings v. UP State Electricity Board ; Surya Narayan Yadav v. Bihar State Electricity Board Delhi Cloth and General Mills and Ors. v. Union of India to say that the respondent banks are estopped from denying their entitlement to addition of 5 years service. It was also contended that upon the acceptance of their offers, the rule in question became regulation 29, and a subsequent change in pension conditions could not operate to their detriment. Reliance was placed upon Chairman Railway Board v. C.R.Rangadhamaiah .
11. It was averred and contended on behalf of the petitioners that Regulation 28 deals only with superannuation pension; admittedly the petitioners did not retire on attaining the age of superannuation. Hence the stand of the respondent that the petitioners could get pension only by virtue of proviso to Regulation 28 is erroneous.
12. The respondent banks submitted that the petitioners have no legal right to maintain the present petition, as their rights have not been violated. The petitioners, after having availed benefits under voluntary retirement scheme 2000 introduced by the banks, cannot maintain the present petition. The benefits under the VRS 2000 of the Respondent Bank were as a package, which was accepted and acted upon by the petitioners here and hence there is no grievance left. Prior to the issuance of Circulars impugned in this petition and amendment of Regulation 28 of Pension Regulations, 1995, the employees availing benefits under VRS 2000 had no right to pension. In order to give the benefits of pension to the optees or VRS 2000, necessary steps were taken by the Respondent Bank as per guidelines of IBA and with the approval of the Govt. of India. The impugned circulars were issued and necessary amendments were effected in Regulation 28 of the Pension Regulation, but for which the petitioners would not have be entitled to any pension at all.
13. It is claimed, and contended by the respondents that there was a specific Regulation 29,disentitling the petitioners for pension if they avail the benefit under VRS 2000. Therefore, the petitioners can have no grievance rather they have benefited by the impugned circulars and amendments made in Regulation 28 of pension Regulation, 1995.
Page 1095
14. After having availed benefits by virtue of the impugned circulars dated 23.12.2000 and circular dated 08.06.2002, which effected the amendments it is not open to the petitioners to challenge the same circulars. On the one hand the petitioners have availed benefits under these circulars and on the other hand they are challenging the same circular, which is not permissible in law. The petitioners cannot be allowed to approbate and reprobate. Hence the petition is liable to be dismissed. The respondents, have, inter alia, claimed that the petitions are belated; the pension was filed in 2002, and in many instances the petitioners have approached the court in 2003-2004.
15. In the judgment of the Supreme Court reported as Bank of India v. O.P. Swarnakar , it was held that VRS formulated by the banks were contractual in nature, and consequently, the official could withdraw from it. It was also held that the employee cannot approbate and reprobate; after accepting the amounts, and appropriating them, he could not maintain writ proceedings, questioning the rejection of his withdrawal of retirement option.
16. As noticed earlier, the pension regulations were formulated in 1995. In its terms the petitioners are pension optees. Prior to its introduction, there were no provisions entitling employees to pension. The question is whether the retirement under SVRS is a retirement entitling 'superannuation pension' as per regulation 28, or is it 'voluntary retirement' as per Regulation 29, entitling the employee to pension, as per calculation in the regulations, and also enabling addition of 5 years qualifying service.
17. At the first blush, the arguments of the petitioners appear to have some force. After all, mere semantics cannot take away the element of volition, which is the pre-requisite for pension in the case of voluntary retirement. Whether statutory or non statutory, the management banks have to accept the offer of voluntary retirement. The SVRS had disentitled the employee to withdraw from the offer; that condition was held to be unenforceable in Swarnakar's case. Therefore, the difference, between the two classes of voluntary retirement, appear to be negligible.
18. There are however, two vital things to be borne in mind while examining the issue. One is that Regulation 29 of the Pension Regulations entitles every employee to opt out of service, by voluntarily retiring from the banks service, to pension, and addition of qualifying service to an extent of 5 years, in the following terms:
The qualifying service of an employee retiring voluntary under this regulation shall be increased by a period not exceeding five years.
The second, and to my mind, very significant, consideration is that the employee is entitled to substantial ex-gratia amount, which is calculated on the basis of the balance length of service, or 60 days salary for each year of service, whichever is the lower amount.
Page 1096
19. This question had arisen for consideration in several High Courts. In writ proceedings before the Madras and Calcutta High Courts, the learned single judges upheld employees contentions that they were entitled to increase of 5 years while calculating qualifying service. The Division Bench of the Calcutta High Court reversed the single judge's opinion. In Kerala High Court, on the other hand, the single judge had declined relief, but the Division Bench granted it. The learned single judge of the Madras High Court, in K. Radhakrishnan v. Indian Bank 2004 (1) LLJ 1144 (Madras) held as follows:
11. Under the Pension Regulations, in chapter 5, there are certain kinds of pensions, namely, (i) Superannuation Pension, (ii) Pension on Voluntary Retirement, (iii) Invalid Pension, (iv) Compassionate Allowance, (v) Premature Retirement Pension, (vi) Compulsory Retirement Pension and (vii) Family Pension.
12. From this, it is seen that voluntary retirement is provided for under regulation 29. The argument of the learned counsel for the respondents that regulation 29 is applicable only to voluntary retirement under normal circumstances and not to the Special Scheme of VRS is not acceptable. A reading of regulation 29 does not allow such an interpretation. Therefore, regulation 29 is applicable to all the persons, including the petitioner, and such of those who opted for the said package, offered under Special Voluntary Retirement Scheme, 2000.
13. It cannot be lost sight of that it was an incentive given to those employees of the Indian Bank, in order to reduce the total strength of the staff. Therefore, concessions were given and compensation was also bestowed. Hence, this is a scheme, by which a person, who is not ordinarily eligible for the benefits, was given more benefits. Because of the incentive, many employees opted to go on VRS and hence, that scheme or package cannot be altered unilaterally. The condition that is found in the letter dated 30.12.2000, by which the petitioner was relieved to the effect that pension would be regulated by the proposed amendment, has no application, in so far as the petitioner and similarly placed persons are concerned. The offer was only to accept as per the terms given under the Indian Bank Employees' Voluntary Retirement Scheme, 2000 and the same cannot be altered unilaterally.
14. Further, the present amendment has been made to regulation 28, which refers to superannuation pension. To that regulation, a proviso has been added. The proviso is an exception or a qualification, which restricts or modifies the application of the main provision. Therefore, the proviso cannot control the main section and it cannot go beyond the main section. The proviso to regulation 28 can, at the most, be said to be applicable to persons, who are superannuated. Admittedly, the petitioner is not superannuated and he went on Voluntary Retirement Scheme. Therefore, regulation 28, as amended, has no application to those who retired voluntarily, such as the petitioner. Hence, the contention of the respondents that regulation 28, as amended, is applicable to the petitioner is not acceptable and the same is rejected.
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15. Under the circumstances, only regulation 29 governs the payment of pension to those persons, who went on voluntary retirement. Under clause 5 of regulation 29, qualifying service of an employee, who retires voluntarily, shall be increased, not exceeding 5 years, subject to the condition that the total qualifying service rendered by such an employee shall not, in any case, exceed thirty-three years. That means, by addition of 5 years, the total number of service shall not exceed 33 years. Therefore, only up to 33 years, it can be increased. In the instant case, the petitioner has completed 29 years of service and hence, he is entitled for the addition of 5 years; but, by adding the 5 years, it shall not exceed 33 years.
20. The opposite viewpoint was accepted by the Calcutta High Court, which held as follows in United Bank of India v. Subhas Chandra De [decided on 13.07.2005 in GA No.593/05 APOT No.643/04 WP No.377/2002]:
In our opinion, the writ petitioners took voluntary retirement under a specific scheme being the Voluntary Retirement Scheme, 2000 and though in regard to settlement of pension, the Regulation off 1995 was referred to in the sale scheme, the benefit of Regulation 29 (5) could not be extended to them and the materials on record clearly indicate that they constitute a distinct and separate class by themselves and are required to be regulated according to the spirit of the Scheme of 2000.
21. The Division Bench of the Kerala High Court, on the other hand, held in Kerala High Court in K. K Mohandas v. Bank of India [decided on 21.06.2005 in WA 1640/2002] as follows:
But when Ext. P3 refers to the pension Regulations 1995 for the purpose of computation of pension to those who opted for voluntarily retirement under Ext.P3 without any conditions as to the applicability or restriction in application of pension scheme, necessarily whatever available under the pension Regulations to the voluntary retired person shall have to be made available to those who retired in terms of Ext. P3 also. In other words Ext. P5 cannot in any way reduce the benefits of those who had opted for voluntary retirement under Ext. P3 before the issuance of Ext. P5. Viewed in that angle necessarily Ext. P5 cannot visit the petitioners adversely to reduce the pension benefits. It will be applicable only to those who have sought for voluntary retirement subsequent to the date of Ext. P5.
6. In so far as writ Petitioners/appellants are concerned, they have applied for voluntary retirement which could not have been withdrawn or revoked based on Ext. P3 itself and with the expectation and the real representation made to them that the Pension Regulations, 1995 will apply to them. Any modification thereto after submission of the application which cannot be revoked shall not adversely affect them. Naturally we are of the view that the pension payable to the writ petitioners/appellants shall be worked applying sub clause 5 of clause 29 of the Pension Regulations, 1995 with its restrictions as contained therein to the to the effect that the total service cannot exceed any service beyond the period of superannuation or in excess of 33 years.
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22. I am inclined to accept the view taken by Division bench of the Calcutta High Court, which appears to be the correct one, and in accord with the object of the VRS itself. The petitioners opted for VRS under Scheme of 2000 of the Respondent Banks. They availed the benefits under VRS; it was a whole package. One component of the package was pension. However, the banks view was that there was a bar under Regulation 29 of Pension Regulations 1995 rendering the employees ineligible for pension if they opted for retirement under VRS 2000. The Regulations as existing in 2000 enabled employees opting for voluntary retirement, to seek it. However, upon acceptance, they were not entitled to benefit of substantial sums of money as ex-gratia, which could be the salary for balance period of service left. These benefits could not be given in the normal course, to some one opting for voluntary retirement.
23. If the logic in Swarnakar's case were to be extended, the position is that both the parties knew the terms of contract, and took a conscious decision to sever the ties of employer-employee in terms of the VRS, which admittedly did not entitle all to pension. Two conditions, to my mind militate against the view canvassed by the petitioners. One, all opting for VRS were not necessarily entitled to pension. For instance, those with less than 20 years were disentitled, though they were eligible to opt for the SVRS. Two, Regulation 29(5) which admittedly confers the benefit of addition of five years service, enacts a condition precedent, i.e that those opting 'under the regulation' were entitled to such addition of service. I am also not persuaded to accept the submission of the petitioners that the principle of promissory estoppel is applicable, in any manner. The interpretation of the respondents is one of the plausible interpretations. Moreover, the petitioners were put on notice, about the change in the regulations before they were relieved from the services. They were beneficiaries of substantial amounts of money. They have also not been able to establish that the change in regulation 28 operates to such a detriment, as to fundamentally alter the basis of their acceptance of the SVRS.
24. SVRS was conceived primarily in public interest, viz to rationalize manpower in the banks, which formulated it. Therefore, the banks insisted upon clear acceptance, and prescribed conditions. This measure was conceived as a beneficial move to both parties, viz the bank and the employee, who could get a reasonable, and even comfortable amount of financial security, even while opting for a mid-course change of career. In the case of voluntary retirement under the Regulations, on the other hand, the initiative is entirely that of the employee, and the rationale for severance of the relationship is usually subjective to the employee or officer.
25. The petitioners submission that their right to secure pension under Regulation 29 cannot be curtailed or impaired in any manner, due to amendment of Regulation 28, by addition of the proviso, again seems convincing, at the first blush. Yet, a deeper analysis would show that it is again based on the premise that they were facially entitled to pension under Page 1099 Regulation 29; which is not the case. The regulation clearly entitles all those who put in 20 years service and opt 'under this regulation' for voluntary retirement. Admittedly, the petitioners did not opt under the regulation. They opted under a non-statutory contractual arrangement. In such an event, unless the parties were ad-idem on the terms, there cannot be a presumption that the understanding of one party alone would prevail. For the same reason, the rule that pension regulations ought to receive a liberal construction, cannot apply. The corollary to this discussion is that the banks had intimated that amendments to regulations (to expand entitlement so as to enable all those eligible under the SVRS to pension) were in the anvil. This intimation was in December, 2000 itself. The amendment made to Regulation 28 was in June, 2002. The amendment operated so as to cover SVRS. Therefore, it cannot be ignored; indeed it is the basis for extension of benefit of pension to the petitioners.
26. The court could have intervened if the materials on record had justified a finding that the position of the banks in treating the petitioners to pension under Regulation 28 instead of Regulation 29 had lead to arbitrary or unreasonable results. No such effect was shown; the grievance is that 5 years additional service could not be included. That circumstance itself does not justify a conclusion of illegality, or arbitrariness. The petitioners are beneficiaries to salary for future periods even without working. Even if some disadvantage by way of lower amount of pension were established, by reason of exclusion of 5 years' service the amount offset by the benefit gathered by them due to receipt of such ex-gratia amounts would neutralize the disadvantage, by no small measure. The argument of the petitioners that the amendment of 2002 cannot take away or impair vested right to pension as per existing pension rules, when they retired, is, in my opinion, inapt. The petitioners rights and those opting for SVRS, regardless of the number of years of service put in by them, crystallized only in 2002; they had been notified of the impending change in the regulations, at the time of their being relieved from service pursuant to acceptance of their offer of SVRS.
27. The petitioners had relied upon the proposition that no distinction can be made between employees seeking voluntary retirement on the basis of a scheme, on the one hand, and those seeking it under the pension regulations, for grant of benefits under the regulations, if the conditions under the regulations are fulfillled, by relying on the decisions in Canara Bank v. B.M. Ramachandra and Ors. 1999 (4) Kar LJ 628 affirmed in Bank of India v. Indu Rajagopalan . Those two judgments, to my mind, are of no assistance. The Court there was concerned with the issue as to entitlement of pension to those who retired between 1986 and 1995; the contention of the respondent bank that retirement pension was not admissible to those retiring voluntarily during that period was repelled. The distinction between those cases and the cases in these proceedings is the in present cases, the petitioners have not been held disentitled to pension; their claim for inclusion of extra five years service (for which they have admittedly not worked) has Page 1100 been denied. The SVRS here is a contractual one, introduced during the existence of pension regulations. In the two cases cited, the employees had retired voluntarily under schemes which were formulated before the pension regulations. Having regard to the intention to grant pension to those retiring during the concerned period, the court adopted a beneficial construction and declared such persons to be entitled to pension, because the regulations made no distinction as far as they were concerned, regarding the manner of retirement. In this case, however, the terms of SVRS are different, Regulation 28 has been amended to grant pension to SVRS optees, and, what is more, SVRS optees are entitled to pension even if they put in 15 or more years qualifying service.
28. For the above reasons, these petitions have to fail. They are accordingly dismissed, with no order as to costs.