Rajasthan High Court - Jodhpur
All India Retired Bank Emplo.Asso vs Sbbj And Ors on 11 September, 2019
Author: S. Ravindra Bhat
Bench: S. Ravindra Bhat
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HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 2337/2003
All India Retired Bank Employees Association through its
President, Legal Committee C.L.Chamaria aged 71 years s/o late Shri Laxmi Narain Ji Chamaria, resident of 57-A, Gandhi Nagar, Sri Ganganagar.
----Petitioner Versus
1. State Bank of Bikaner & Jaipur, Head Office Tilak Marg, Jaipur through the Managing Director.
2. Indian Banks Association, Stadium House, 6 th Floor Veer Nariman Road, Mumbai, through its Secretary.
3. The Union of India, through Secretary, Ministry of Finance, Banking Division, Government of India, New Delhi.
----Respondents
For Petitioner(s) : None
For Respondent(s) : Mr.V.K.Thakur on behalf of
Mr.A.K.Rajvanshy.
HON'BLE THE CHIEF JUSTICE S. RAVINDRA BHAT Judgment 11/09/2019
1. The petitioner-Association seeks directions to grant pension commutation to erstwhile employees of the State Bank of Bikaner & Jaipur (hereafter "the bank"), pursuant to the adoption of pension regulations, by the latter (i.e. the bank) in 1996.
2. The petitioner allege that the Pension Regulations were adopted with many reservations on the part of the union representatives. The Indian Bank Association, (IBA) in consultation and approval by the Government of India directed all the banks to adopt the final Pension Regulations. The pension regulations of all banks were, therefore, identically worded with (Downloaded on 11/09/2019 at 08:54:49 PM) (2 of 15) [CW-2337/2003] the only exception that the name of each bank was different. In exercise of the powers by Section 63 (1) and (2) (o) of the State Bank of India Subsidiary Banks Act 1959 ("the Act of 1959"), the bank (with the approval of RBI) framed the State Bank of Bikaner & Jaipur (Employees) Pension Regulations 1995 ("BEPR-95"
hereafter) providing for the establishment of and maintenance of pension fund and grant of pension for the benefits of employees of the bank. Regulation 3 (i)(a) provided that the regulations were to apply to employees who were in the service of the bank on or after the 1st day of January 1986 but had retired before the 1 st day of Nov.1993 and thereafter. By Regulation 3(1)(b) and (c), retirees were required to exercise the option in writing within one hundred twenty days from the notified date to become member of the pension fund and those so opting had to refund, within sixty days after the expiry of the said period of 120 days specified in Regulation 3 (1) (b) the entire amount of Bank's contribution to the provident fund including interest on it together with a further simple interest at the rate of 6% per annum from the date of settlement of the provident fund account till the date of refund of the aforesaid amount to the bank.
3. In terms of Regulation 3(9) notwithstanding anything contained in sub-regulation 3(1)(2)(3)(5) and (8) an option exercised before the notified date by an employee or the family of the deceased employee in pursuance of the settlement was to be deemed to be an option for the purpose of the chapter (in which the regulation was located). It is stated that before the regulations were made and made effective, options from retirees were taken in anticipation. However, those options cannot but be deemed to have been given as per the requirement of regulation 3(1)(2)(3) (Downloaded on 11/09/2019 at 08:54:49 PM) (3 of 15) [CW-2337/2003] (5) and (8) of Regulations, it was not as if the retirees did not want to exercise the options as stipulated by Regulation 3. The petitioner states that the bank treated the option given prior to making of the regulations as the once given in terms of Regulation 3(1)(2)(3)(5) and (8).
4. It is submitted that all the retirees who retired on or after 01.01.1986 but before 01.11.1993 and opted for pensions within 120 days did so, when called upon by the respondent bank. In these circumstances, it is alleged that the bank and IBA in terms of approval by third respondent decided to deduct the amount of Bank's contribution to P.F. including interest accrued thereon together with further simple interest at the rate of 6% per annum on the said amount from the date of settlement the PF account till 01.04.1995 from the arrears of pension payable to retirees. The instructions of IBA for charging interest up to 01.04.1995 were also sent to all banks later on proposing amendment to pension regulation 3 of BEPR 95 by its circular letter NO.PD/CIR/76/62/1317 dated 23.01.2002.
5. It is argued that Regulation 28 provides for superannuation pension to an employee who retires on attaining the age of superannuation specified in the service regulations or settlement. Regulation 29 provide pensionary benefits on voluntary retirements. In terms of Regulation 29 (1), employees who sought voluntary retirement on or after 1st day of Nov.1993 at any time after the employee completed 20 years of qualifying service could seek voluntary retirement from the service after giving notice of not less than three months in writing to the competent authority. Regulation 29 (2) provides that the notice of voluntary retirement shall require acceptance by the competent authority. (Downloaded on 11/09/2019 at 08:54:49 PM)
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6. The petitioners urge that similar provisions contained in pension regulations applicable to the employees of the Bank of India and other banks as well. In the case of Bank of India, the issue of making eligible such voluntary retirees for pensionary benefits retired from 01.01.1986 to 31.10.1993 was taken up and finally the Supreme Court in Civil Appeal No.6959/97 (Bank of India V/s Indu Rajgopal & others with other similar appeals) decided on 05.04.2000. It was held that the retirees w.e.f. 01.01.1986 who sought voluntary retirements are also eligible for pensionary benefits w.e.f. 01.11.1993 on the basis of discrimination. In compliance the respondent bank also released pensionary benefits to all retirees who sought voluntary retirement with qualifying service of 20 years or more on and after 01.01.1986.
7. It is urged on behalf of the petitioners that Regulation 41 relates to commutation. Regulation 41(1) provides that a retiree shall be entitled to commute for a lump sum payment a fraction not exceeding one third of his basic pension. Regulation 41(2) provides that a retiree should indicate the fraction of pension, which he desires to commute and which cannot be more than one third of the basic pension. Under Regulation 41(4), it is only after the retiree indicating that he desires to commute for a lump sum payment as per regulation 41(1) and 41(2) that the occasion arises to calculate lump sum amount payable to a retiree in terms of a table specified in Regulation 41(4). Regulation 41(5)(1) to
(g) provides the method of arriving at the date on which the commutation of a retiree will become absolute for the purpose of calculation of commuted value to be payable to a retiree as age to next birthday as per table specified in regulation 41(4). Regulation (Downloaded on 11/09/2019 at 08:54:49 PM) (5 of 15) [CW-2337/2003] 51(1) too is referred to; it provides for nomination by the employee conferring of one or more persons to right to receive the amount of pensionary benefits under the Pension Regulations in the event of the death before the amount becomes payable or having become payable, but has not been paid.
8. It is submitted that in these circumstances, when the three retirees' and their dependents (after their death) sought for the benefit of commutation of pension, the bank took the position that such benefit was unavailable, because the employees had not opted for the benefit within the time prescribed; moreover the benefit of commutation could be availed of after the bank's medical practitioner had advised and provided for a medical certificate about the good health of the retiree. In this case, two retirees had died and the third had suffered from a major ailment and could not be issued a medical certificate. Thus, the petitioners could not claim commutation.
9. The petitioner argues that the reason for denial of commutation benefit is arbitrary because the regulations cannot be interpreted in such a manner as to defeat their very objectives. It is submitted that once the regulations have clearly provided for pre-1995 retirees, the denial on the ground that they or some of them were not alive as on the date of coming into force of the regulations, or that options were not provided for in time, are not valid.
10. The respondent bank, in its counter affidavit, states that a writ petition filed by an association is not of a general nature but filed on behalf of legal representatives of two retired deceased employees viz. (1) Shri Sagan Lal Juneja (2) Shri V.D.Kirori and one retired employee Shri R.C.Bhandari. All the three employees (Downloaded on 11/09/2019 at 08:54:49 PM) (6 of 15) [CW-2337/2003] have distinct causes as their date of retirement and nature and reason of retirement is different; likewise, the date of death of two retired employees is different and their claim is also different and cause of action is also different. Therefore, the bank states that the writ petition amounts to a joint writ petition, not maintainable. The aggrieved parties cannot file a joint writ petition in this case.
11. It is submitted that the facts regarding three employees are as under:-
Sr. Name of Employee Date of Retirement Date of Date of filing No. death application for pension and commutation of pension 1 Shri Sagan Lal 29.04.92 Voluntary 20.06.95 03.01.95 Juneja retirement on medical grounds 2 Shri V.D.Kirori 28.02.89 14.06.95 10.12.94 Superannuation 3 Shri R.C.Bhandari 30.06.86 Voluntary - 24.11.2000 retirement
12. The bank relies on Regulation 41 of the State Bank of Bikaner & Jaipur (Employees) Pension Regulations, 1995 which is related to commutation and states that the pension option for retirees between 01.01.1986 to 31.10.1993 was open upto 30.09.1994 in terms of the draft regulations sent by IBA on 17.03.1994. The date on which the Pension Regulations were notified is 23.03.1996. The bank argues that pension was allowed to those employees who retired on or after 01.01.1986 but had retired before 01.11.1993 and such retired employees had to opt for pension within 120 days from the notified date. Further, in case if the application for commutation was made after one year of retirement the commutation of pension upto the maximum limit of one third is allowed only from the date when the Bank's Authorized Doctor/Chief Medical & Health Officer of the concerned (Downloaded on 11/09/2019 at 08:54:49 PM) (7 of 15) [CW-2337/2003] district certifies the employee's good health. However, if the employee did not possess good health, he/she was not entitled to commutation of pension.
13. It is submitted that Regulation (5)(c) below Table to Regulation 41 is relevant. The bank states that Shri Sagan Lal Juneja took voluntary retirement on medical grounds as he was suffering from brain tumor and Paralysis. He was not of good bodily health. This fact is evident from the application dated 03.01.1995 filed by Sagan Lal Juneja. Since he was not of good bodily health and he died on 20.6.1995 prior to notified date (23.03.1996), his widow is not entitled to commutation of pension.
14. It is submitted that Shri V.D.Kirori retired prior to 01.11.1993, the date from which the pension scheme was made applicable. He retired on attaining the age of superannuation on 28.02.1989 and he died on 14.06.1995 prior to the notified date (23.03.1996) and in such a case there was no provision for payment of commuted value of pension. Shri R.C.Bhandari retired on 30.06.1986 and he applied for commutation of pension on or about 24.11.2000. He submitted a medical certificate dated 24.11.2000. In terms of the Pension Regulations commutation is subject to medical examination of the retiree. The commutation becomes absolute from the date on which medical certificate is issued declaring the retiree as a fit person for commutation by the Bank's approved Doctor under Regulation 41(5)(c) and therefore the contention on behalf of Shri Bhandari that the absolute date of commutation should be taken as 01.11.1993 in his case is not correct and the absolute date of commutation cannot be taken as 01.11.1993.
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15. The bank submits that on a plain reading and interpretation of the Pension Regulations, the petitioner-Association cannot claim any directions that commutation benefits should be given to the three employees' or their representatives.
16. The relevant provisions contained in the Regulations are extracted below:
"2. Definitions:
In these regulations, unless the context otherwise requires:-
*************** ***********
(k) "Date of retirement" means the last date of the
month in which an employee attains the age of superannuation or the date on which he is retired by the Bank or the date on which the employee voluntarily retires; or the date on which the officer is deemed to have retired;
(l) "Deemed to have retired" means cessation from service of the Bank on appointment otherwise on deputation by Central Govt. as a whole time Director or Managing Director or Chairman in any Bank, specified in Column 2 of the FIRST SCHEDULE of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) / Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980) or in any public financial institution or State Bank of India established under State Bank of India, Act, 1955 (23 of 1955) or in Subsidiary Banks as defined in State Bank of India (Subsidiary Banks) Act, 1959;
*************** ************
(r) "Notified date" means the date on which these regulations are published in the official gazette; *************** ************ (u) "pensioner" means an employee eligible for pension under these regulations;
3. Application- These regulations shall apply to employees who-
( 1) (a) were in the service of the Bank on or after the 1st day of January, 1986 but had retired before the 1st day of November, 1993; and
(b) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and (Downloaded on 11/09/2019 at 08:54:49 PM) (9 of 15) [CW-2337/2003]
(c) refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause
(b) the entire amount of Bank's contribution to the Provident Fund including interest accrued thereon together with a further simple interest at the rate of six percent per annum on the said amount from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Bank or (2) (a) have retired on or after the 1st day of November, 1993 but before the notified date; and
(b) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and
(c) refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause
(b) the entire amount of the Bank's contribution to the Provident Fund and interest accrued thereon together with a further simple interest at the rate of six percent per annum on the said amount from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Bank; or (3)(a) are in the service of the Bank before the notified date and continue to be in the service of the Bank on or after the notified date; and
(b) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and
(c) authorise the trust of the Provident Fund of the Bank to transfer the entire contribution of the Bank alongwith the interest accrued thereon to the credit of the Fund constituted for the purpose under regulation 5; or (4) join the service of the Bank on or after the notified date, or (5) were in the service of the Bank during any time on or after the 1st day of November, 1993 and had died after retirement but before the notified date, their family shall be entitled for the amount of pension payable to them from the date on which they would have been entitled to pension under these regulations had they been alive till the date on which they died, if the family of the deceased -
(a) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and
(b) refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause
(a) above the entire amount of the Bank's contribution to the Provident Fund and interest accrued thereon together with a further simple interest at the rate of six percent per annum from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Bank; or (6) joined the service of the Bank on or after the 1st day of November, 1993 but who have died while in the service of the Bank before the notified date, their family (Downloaded on 11/09/2019 at 08:54:49 PM) (10 of 15) [CW-2337/2003] shall be entitled to the family pension under these regulations;
Provided that the family of such a deceased employee refunds within one hundred and eighty days from the notified date the entire amount of the Bank's contribution to the Provident Fund, if any, and interest accrued there-on together with further simple interest at the rate of six percent per annum from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Bank;
Provided further that the family of such a deceased employee shall apply in writing for grant of family pension; or (7) were in the service of the Bank during any time on or after the 1st day of January, 1986 and had died while in service on or before the 31st day of October, 1993 or had retired on or before the 31st day of October, 1993 but died before the notified date in which case their family shall be entitled to the pension or the family pension as the case may be under these regulations, if the family of the deceased -
(a) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and
(b) refund within sixty days of the expiry of the said period of one hundred and twenty days specified in clause
(a) above the entire amount of the Bank's contribution to the Provident Fund and interest accrued thereon together with a further simple interest at the rate of six percent per annum from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Bank or (8) joined the service of the Bank on or before the 31st day of October, 1993 and who died while in service on or after the 1st day of November, 1993, but before the notified date in which case their families shall be entitled to family pension under these regulation if the family of the deceased employee -
(a) exercise the option in writing within one hundred and twenty days from the notified date to become a member of the Fund ; and
(b) refund within sixty days of the expiry of the said period of one hundred and twenty days specified in clause(a) above the entire amount of the Bank's contribution to the Provident Fund including interest accrued thereon together with a further simple interest at the rate of six percent per annum from the date of settlement of the Provident Fund account of the employee till the date of refund of the aforesaid amount to the Bank.
*************** ************
41. Commutation.-
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******* *********
Notes.-
(4) In the case of a pensioner eligible for
superannuation pension or pension on voluntary retirement or premature retirement pension, no medical examination shall be necessary, if the application for commutation is made within one year from the date of retirement. However, if such a pensioner applies for commutation of pension after one year from the date of his retirement, the same will be permitted subject to medical examination.
Explanation - An applicant who -
(i) retires on invalid pension under regulation 30 of these regulations; or
(ii) is in receipt of compassionate allowance under regulation 31of these regulations; or
(iii) is compulsory retired by the Bank and is eligible for compulsory retirement pension under regulation 33 shall be eligible to commute a fraction of his pension subject to the limit specified in sub-regulation (1) after he has been declared fit by a medical officer approved by the Bank.
(5) The commutation of pension shall become absolute in the case of an employee -
(a) retiring on superannuation or voluntary retirement who submits an application for commutation of pension before the date of retirement, on the date following the date of retirement:
Provided that the employee governed by sub-regulation (3) of regulation 29 shall not apply for commutation of a part of his pension before the expiry of the notice of three months and the commutation of pension shall become absolute only on the expiry of the period of notice referred to in sub-regulation (1) of regulation 29;
(b) retiring on superannuation or on voluntary retirement or on premature retirement, if he applies for commutation of pension after the date of retirement but before the completion of one year from the date of retirement on the date, application for commutation is received by the Competent Authority;
(c) retiring on superannuation or on voluntary retirement or on premature retirement, if he applies for commutation of pension after one year from the date of retirement on the date of the medical certificate given by a medical officer approved by the Bank;
(d) who has retired prior to the 1st day of November, 1993 and who opts to be governed by these regulations, on the 1st day of November, 1993, where the application for commutation is made within the period specified by clause (b) of the sub regulation (1) of regulation 3;
(e) who was in the service of the Bank on or after the 1st day of November 1993 but who retired prior to the publication of these regulations on the day immediately following the date of his retirement, where the application (Downloaded on 11/09/2019 at 08:54:49 PM) (12 of 15) [CW-2337/2003] is made within the period specified by clause (b) of sub- regulation (2) of regulation 3;
(f) who retired on or after the 1st day of November, 1993, but died prior to the notified date, on the day immediately following the date of his retirement, where the application for commutation is made by the family of the deceased within the period specified by clause (a) of sub-regulation (5) of regulation 3;
(g) in respect of whom invalid pension under regulation 30 or compassionate allowance under regulation 31 of compulsory retirement under regulation 33 is admissible, commutation shall become absolute on the date of the medical certificate given by a medical officer approved by the Bank."
Findings and conclusion
17. It can be seen from the facts that all those employees on behalf of whom the present writ petition has been filed, fulfilled the description under Regulation 3 (1) (a) i.e. who were in the service of the Bank on or after 1 st January, 1986 but had retired on or before 31st October, 1993 and under Regulation 3(8) i.e. those who had joined the service on or before 31.10.1993 and died on or after 1.11.1993 but before the notified date. In both the categories i.e. those who were in service on or after 1.1.1986 but retired before 31.10.1993 and those who were in service after 31.10.1993 but had retired before the notified date, it was essential for the concerned person i.e the individual himself/herself or family members of the deceased to exercise an option in writing within 120 days from the notified date to become a member of the fund and also refund within 60 days of the expiry of the said period of 120 days (i.e. six months from the notified date) the entire amount of bank's contribution to the provident fund and interest accrued thereon with further simple interest of 6% p.a. from the date of the settlement of the (Downloaded on 11/09/2019 at 08:54:49 PM) (13 of 15) [CW-2337/2003] provident fund account till date of refund. In this case, therefore, options were available to each of the three individuals or family members of the deceased, to apply for the fund and the benefits inclusive of commutation, according to the conditions stipulated. This meant that options had to be exercised within 120 days of the notified date (23.3.1996). Therefore, options were to be exercised in all these cases before 23.7.1996 and the refund of entire provident fund contribution of the Bank with interest and further interest of 6% p.a. had to be made on or before 23.9.1996. This condition was not complied with.
18. As far as the benefit of commutation was concerned, mere exercise of opinion did not per se entitle an automatic commutation of pension for lump sum payment upto one third of the total amount of pension. Firstly, commutation is payable with the condition that the concerned employee had to indicate the fraction of pension which he/she desires to commute in terms of Regulation 41 (1)(2)(3) and (4). In the present case, the conditions stipulated in Regulation 41 apply, which was that if the pensioner was not in employment he had to seek commutation within one year of retirement. Shri S.L.Juneja had been granted voluntary retirement on medical ground; he applied for commutation on 3.1.1995; he subsequently died on 20.6.1995. Shri V.D.Kirori died on 14.6.1995; he had retired on 28.2.1989. In case of third employee Shri R.C.Bhndari retirement took place on 30.6.1986; he applied for commutation well after the period stipulated i.e. on 24.11.2000. In his case the materials produced before the Court show that the Bank treated the date of commutation as having become absolute on 24.11.2000 and (Downloaded on 11/09/2019 at 08:54:49 PM) (14 of 15) [CW-2337/2003] calculated the same with factor of 5.72 at the age of 74. This letter was written on 28.8.2001; there is no other material on record to show that he was medically examined to claim commutation benefits in terms of the Regulations, more particularly the table appended to Regulation 41 (4).
19. In employment parlance, commutation of pension is not an inherent right but one conferred by the Rules. Ordinarily, it is a benefit that can be availed by an employee upon his/her retirement either on superannuation or upon voluntary retirement, as the case may be, depending on the Rules and Regulations governing the public employment. The commutation of pension entails the calculation of the life expectancy of the individual concerned having regard to the medical conditions and also the monthly pension drawn by him/her. The lump sum payment of a fraction of a portion of the pension of his/her annualized pension multiplied by the relevant factor in terms of the Rules is made.
20. In the present case, two employees had died even before the notified date. Nevertheless, the Regulations permitted grant of commutation to their next of kin/dependents provided they fulfilled the criteria i.e. opting for commutation within the time frame and refunding the Bank's contribution within the stipulated time. The pension application form by Shri S.L.Juneja, who retired on 29.4.1992, was submitted before the notified date and he sought commutation of one third part of his pension. In case of Shri V.D.Kirori too the commutation form appears to have been filled and given before his death. Shri Kirori's wife applied for commutation on 15.6.1997; the demand for commutation appears to have been made much later to a legal notice. (Downloaded on 11/09/2019 at 08:54:49 PM)
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21. Having regard to the above analysis it is evident that the commutation benefit in the case of Shri R.C.Bhandari was given according to option exercised by him under Regulation 41 (5)(c). In the case of other two employees, conditions stipulated in the Regulations were not fulfilled; the Bank naturally declined the relief. However, it appears that the widows/dependents of the deceased employees were granted family pension under the Regulations.
22. In view of the above discussion, it is held that the directions sought for by the petitioner-Association cannot be granted; the writ petition has to fail. It is accordingly dismissed. All pending applications too are disposed of.
(S. RAVINDRA BHAT),CJ Parmar/-
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