Andhra HC (Pre-Telangana)
K. Chalapati Rao And Anr. vs State Bank Of India, Bombay And Ors. on 16 March, 1995
Equivalent citations: 1995(2)ALT367
ORDER B. Subhashan Reddy, J.
1. The cause projected in these two writ petitions is similar. The point for consideration is whether the pension is a fundamental right traceable to Articles 16 and 21 of the Constitution of India or is a necessary corollary attached to the service. The petitioner in W.P. NO. 15806 of 1991 was a practising advocate and joined the service of State Bank of India - the respondent therein on 1-6-1974 at its local Head Officer at Hyderabad. He retired on 31-5-1991 after rendering 17 years of service and on attaining the age of superannuation. Though he was paid provident fund and gratuity as retiral benefits, he was to paid pension and that is the grievance in this writ petition. On 2-8-1991, he claimed pension which was declined by the respondent on 27-8-1991 by intimation. The declining of the request of the petitioner to grant pension was on the basis that the petitioner did not render a minimum of 20 years of service which is a condition precedent for the grant of pension.
2. The petitioner in the other case was appointed as a probationary office in the State Bank of India - the respondent herein - on 18-9-1968 and worked in various capacities as an officer till 20-12-1986 and left the services of the respondent on the said date by resigning the post. As on the date of his resignation, he had put in service of 18 years 3 months. Though he was paid gratuity and provident fund, he too was not paid pension and he sough for the same but was not granted for the same ground of not completing the service of 20 years.
3. Mr. P. Balakrishna Murthy appeared for the petitioner in W.P. No. 15806 of 91 while Mr. Y. Suryanarayana appeared for the petitioner in W.P. No. 1762 of 89. Mr. K. Srinivasa Murthy defended the respondents in both the matters.
4. The contention, of the learned counsel for the petitioner is that pension is no-way concerned with provident fund and gratuity and pension is recognised as a third retiral benefit and that the same is paid for past service rendered and that it has to be construed as a retirement pay akin to that of earned income and that pension is neither a bounty nor a matter of grace and that it is a property right under the Constitution and that after retirement of longstanding service to the employer spending all his energies both, physical and mental, the employee when retires will neither be suitable nor competent healthwise to render services and to lead a dignified life, he pension has got to be paid as a matter of course and that the same is a fundamental right traceable to Article 21 of the Indian Constitution apart from the same being a necessary service condition implied under Article 16 of the Constitution. Alternatively, the learned counsel for the petitioners also contend that even if the pension cannot be claimed as of right, the pension scheme evolved in this case is discriminatory and is violative of equality clause as 20 years period prescribed as a qualifying service is irrational and it could have been 10 years for entitlement of pension.
5. The learned counsel for the respondent, on the other hand, contends that pension is not a fundamental right traceable to Constitution and that it cannot be claimed as a right and that it is a scheme and unless a person falls under the scheme, it cannot be claimed as of right and that the petitioners being fully aware of the rules and with their eyes wide open had joined the service and that they have received the gratuity and the provident fund and that they are not entitled for claiming pension as they did not complete the qualifying service of 20 years for entitlement of pension. He submits that such of the employees who a re entitled for the pension after putting in qualifying service are not entitled for matching contribution to the provident fund account and for the reason that the petitioners and the like who are disentitle to claim pension, they have been benefited by the bank making a matching contribution to their provident fund accounts. This fact is not disputed. The petitioner in W.P. No. 15806 of 91 had received Rs. 88,500/- towards gratuity and Rs. 3,39,223/- towards provident fund. The petitioner in W.P. No. 17672 of 1989 was also offered the amounts of gratuity and provident fund due to him, but it is stated that he had collected only a part of the amount while the balance is still lying to his credit for his withdrawal. Mr. K. Srinivasa Murthy, further submits that fixation of qualifying service of 20 years for entitlement to claim pension is rational and not discriminatory and that the petitioners cannot claim that it should be 5 years, 10 years or 15 years and the scheme evolved in the instant case is perfectly valid and tenable.
6. Judicial precedents have been cited in support of the contentions raised on either side. I shall now first deal with the decisions cited on behalf of the petitioners. In General Manager S.Rly v. Rangachari , the question for consideration was as to whether Article 16 covers only initial appointment and not any further, in the matter of services. It was held that the said Article covers not only the initial appointment, but also all stages including that of retirement. From this, M/s. P. Balakrishna Murthy and Y. Suryanarayana, the learned counsel for the petitioners submit that the said Supreme Court judgments laid down a proposition that pension is also a fundamental right guaranteed in the said article. I apprehend, I cannot accede to this contention. The purport of the above decision cannot be construed as one laying down that the pension is a fundamental right guaranteed under Article 16 of the Constitution. In Randhir Singh v. Union of India , the question for consideration was equal pay for equal work on the touchstone of Articles 14 and 16 and also the guidelines under the Directive Principles under Article 39(d) of the Constitution. This does not help the petitioners in any manner. In D. S. Nakara v. Union of India AIR 1983 SC 1390 the Supreme Court dealt with a question of classification in Revised Pension Formula between the pensioners on the basis of retirement specified in memoranda. But, in that case, the question of consideration for granting pension for non-pensioners did not arise for consideration. There was a pension scheme under which the petitioners in that case were being paid pension, but after the hike in pension because of the liberalised pension scheme, they were deprived of the same on the ground that before the cut off date of the effective date of the said liberalised pension scheme, they retired and as such, they were not eligible while their counter-parts who retired later to the cut off date were entitled for more pension. This classification was held to be irrational and was struck down conferring benefit to even the pensioners who retired before the liberalised pension scheme. The premise was that the pensioners, as a whole, is a homogeneous class and there could not be further division in the said class on the touch-stone of Article 14 of the Indian Constitution. This has got no relevance to the instant case. In Olga Tellies v. Bombay Municipal Corporation. , the question for consideration was the validity of the removal of encroachments from pavements of public streets on the touch-stone of fundamental rights under Articles 14, 21 and Directive Principles under Article 39(a) and 41 and the principle laid down therein would in no manner strengthen the argument of the petitioners. In a comprehensive judgment, the Supreme Court held that no person can be deprived of his life or liberty without procedure established by law and discussed in detail the reasonableness of such a procedure and held that even a trespasser is entitled for a notice before taking any action for eviction and further held that no person has got a right to encroach on a public street or park and that if any encroacher had been there, longstanding encroachment can be removed and suggested alternative rehabilitation elsewhere. It is not understandable as to how this proposition an lend any support to the case of the petitioners. In Bharat Petroleum M.S.P. v. Bharat Petroleum Corporation Ltd. 1988 II CLR 163 a pension scheme was already there and the question for consideration was the escalation of pension. The same has got no relevance to this case. In Vikram Deo Singh Tomar v. State of Bihar , the question was with regard to the minimum amenities provided to the inmates of Care Homes maintained by the State and it was held by the Supreme Court that the State must provide atleast the minimum conditions ensuring the human dignity of inmates and directions in that regard were issued and they were on the touch-stone of the fundamental right under Article 21 and the Directive Principles under Article 39 of the Indian Constitution. This cannot be pressed into service to support the contention of the petitioners. In Chhetriya Pardushan Mukti Sangharsh Samiti v. State of U.P. the Supreme Court was dealing with the environmental pollution because of working of mills and plants in residential localities. Mr. P. Balakrishna Murthy lays emphasis on what is stated by the Supreme Court in paragraph 8 of the said judgment. The said judgment highlighted as to what is the quality of life and living as contemplated by Article 21 of the Constitution and what is the remedial action if qualify of life and living is endangered. The Supreme Court held that one can have recourse to Article 32 of the Constitution invoking its jurisdiction whenever a citizen is robbed of his enjoyment of qualify of life and living by anything which endangers or impairs by conduct of anybody either in violation or derogation of laws. But, this has to be understood only in the context of the facts arising in that case and not as laying down a proposition that pension should be necessarily paid so as to maintain the quality of life. In fact, in that case, the Supreme Court snubbed the petitioner-society styling itself as environmental protection society stating that it is an abuse of the process of the Supreme Court as the owners of the mills and plants were found to be complying with the statutory provisions. As such this case has got absolutely no relevance to the facts on hand. In D. K. Yadav v. J.M.A. Industries Ltd. 1993 I CLR 116 it has head that principles of natural justice are implicit under Article 14 of the Indian Constitution and any action, decision even administrative in nature, which involves civil consequences must be fair, reasonable, non-arbitrary and in consonance with principles of natural justice. It was held that Articles 21 and 14 include right to means of livelihood and rules of procedure for deprivation of right must be just, fair and reasonable. The purport of the above judgment is of no help to the petitioners as it deals with the observance of principles of natural justice and affording fair opportunity of being heard before terminating the service of an employee.
7. Mr. K. Srinivasa Murthy, draws support from two decisions rendered by the Supreme Court. In Union of India v. Deoki Nandan Aggarwal, 1991 II CLR 611 the question for consideration was only regarding discrimination between Judges completing 7 years of service and others who did not complete the said term for the purpose of fixation of pension. It was held that such a distinction was valid. The Supreme Court further held "it is a well known practice in pensionary schemes to fix a minimum period of such pension will depend on the particular service, the age at which a person could enter into such service, the normal period which he is expected to serve before his retirement on superannuation, and various other factors. "The Supreme Court also noted that fact that under the Government of India Act, 1935, there was no pension provided for the Judges who had not completed 7 years of service. The Supreme Court further held "prescribing a minimum period of service before retirement on superannuation, for pension is the very scheme itself and not a classification. It is to say a qualification for eligibility. It is different from computation of pension. All those who satisfy that condition are eligible to get pension. "In Action Committee, South Eastern Railway Pensioners v. Union of India 1991 Supp. (2) SCC 544, it was held that classification according to retirement date for calculation of pension and gratuity is proper as there is a valid distinction.
8. State Bank of India was constituted under the State Bank of India Act, 1955, a Central enactment. Under Section 43 of the said Act, the respondent-State Bank of India is entitled to appoint its officers. Advisors and employees as it considers necessary and desirable for the efficient performance of those functions and determine the terms and conditions of their appointment and service. Section 50 of the above Act, empowers the Central Board, after consultation with the Reserve Bank and with the previous sanction of the Central Government to make regulations not inconsistent with the said Act and the Rules and thereunder, to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of the above Act. Apart from the general power under Section 50(1) of the Act, sub-section (2) of Section 50 enumerates the said powers and under sub-clause (o) the rule relating to superannuation scheme is contemplated. Pursuant to the rule, pension scheme was formulated in which the qualifying service to get the pension is 20 years. The said Rule 22 is extracted below :
"22(i) A member shall be entitled to a pension under these rules on retiring from the Bank's service -
(a) After having completed twenty years' pensionable service provided that he has attained the age of fifty years;
(b) after having completed twenty years' pensionable service, irrespective of the age, he shall have attained, if he shall satisfy the authority competent to sanction his retirement by approved medical certificate or otherwise that he is incapacitated for further active service;
(c) After having completed twenty years pensionable service, irrespective of the age he shall have attained at this request in writing;
(d) After twenty five years pensionable service.
(ii) A member who has attained the age of fifty-five years or who shall be proved to the satisfaction of the authority empowered to sanction his retirement to be permanently incapacitated by bodily or mental infirmity from further active service (such infirmity not being the result of irregular or intemperate habits) may, at the discretion of the trustees, be granted a proportionate pension.
(iii) A member who has been permitted to retire under clause 1 (c) above shall be entitled to proportionate pension.
The petitioners, admittedly, do not fit in the said condition. No employee is entitled to pension as of right, and it is not a necessary condition or inevitable corollary attached to any service unless a provision is made therefor. In the instant case, there is power to make such a provision and the provision as mentioned above has been made. While making such a provision, conditions can be prescribed and the prescription of qualifying service for entitlement of pension can be one of the essential conditions. The only thin to be seen is whether the prescription of qualifying service as 20 years which the petitioners did not possess is unreasonable or arbitrary and as to whether there is intelligible differential for such prescription. In so far as the employees of the State Bank of India are concerned, there is no discrimination adopted. It is a uniform rule in the service of State Bank of India that minimum qualifying service for entitlement of pension is 20 years. But, the petitioners' contention is that it should have been 10 years. But the analogy of other services cannot be taken. Mr. Balakrishana Murthy cited Rules, 36 and 45 of A. P. Revised Pension Rules, 1980 but they cannot be pressed into service in support of his contention. Article 41 of the Constitution projected by him also cannot help him. The Pension Scheme is a policy and the said scheme cannot be declared bad unless it is arbitrary and unreasonable. A particular service may attract pension or not and merely because pension is not provided, it cannot be said that the said policy is wrong and that per force a policy should be evolved to grant pension. There cannot be any such imposition on any employer, but when employer fixed the qualifying service enabling the employee to draw the pension, the courts can only see whether it is rational or not. Prescription of 20 years of qualifying service cannot be said to be irrational for the reason that there is intelligible differential. In some service, there is no pension scheme at all. In some of the services including that of Governmental pension has been provided and qualifying period for claiming pension varies from service to service basing upon different circumstances and considerations. There cannot be uniform qualifying service period for claiming pension in all services. State Government service is different from Central Government and there is further difference in the service of the Governmental Corporations. Situation is altogether different in banking service. Considerations akin to Governmental service do not prevail in banking service. Courts are not here to prescribe a particular period, say, 10 years instead of 20 years. Courts have to only see as to whether the said fixation is arbitrary. I do not see any arbitrariness in the said prescription of 20 years as a qualifying service for entitlement to pension."
9. In view of what is stated supra, I hold that pension is not a fundamental right either traceable to Article 16 or 21 of Indian Constitution. The pension is a scheme and not a right and unless the employee falls within the ambit of the scheme, it cannot be claimed as of a right. As the petitioners are not covered by the pension scheme, they cannot claim as of right and as such, they are not entitled for the same. If the petitioner in W.P.No. 17672 of 89 so chooses to receive the remaining amount of gratuity and provident fund which he did not receive even though the respondent was ready to pay, he shall be at liberty to withdraw the same.
10. These two writ petitions are, thus, dismissed, but without any order as to costs.