Gujarat High Court
Punjab National Bank vs Jayendra N. Shah on 22 April, 2024
Author: Biren Vaishnav
Bench: Biren Vaishnav
NEUTRAL CITATION
C/LPA/523/2018 JUDGMENT DATED: 22/04/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/LETTERS PATENT APPEAL NO. 523 of 2018
In
R/SPECIAL CIVIL APPLICATION NO. 18630 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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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 or any order
made thereunder ?
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PUNJAB NATIONAL BANK & ORS.
Versus
JAYENDRA N. SHAH
==================================================
Appearance:
MANAN K PANERI(7959) for the Appellant(s) No. 1,2,3
KRISHNAN M GHAVARIYA(8133) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BIREN VAISHNAV
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 22/04/2024
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV)
1. This appeal under clause 15 of the Letters Patent arises out of a judgment and order passed by the learned Single Judge dated Page 1 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined 01.02.2018. The respondent was the original petitioner before the learned Single Judge. He shall hereinafter be referred to as the petitioner. The appellants shall hereinafter be referred to as the respondent. The petitioner approached this Court by filing Special Civil Application No.18630 of 2011, inter alia praying for quashing of the communications dated 12.01.2011 and 08.10.2011. By the aforesaid communications, on a request for pension made by the petitioner, the respondent - Bank informed the petitioner that he was not entitled to an option vide Pension Circular dated 27.04.2010 as he did not fall within the categories meant for the purposes of that Circular. He was treated to ineligible for another pension option.
2. Before the learned Single Judge it was the case of the petitioner that he was working as a clerk-cum-cashier in the Bank.
Pursuant to a show cause notice by an order dated 30.11.1998, the petitioner by virtue of sympathetic considerations of the Bank rather than being dismissed from service, was imposed a punishment of "discharge from service" with superannuation benefits in terms of Clause 19.6 (b) of the Bipartite Settlement. It was the case of the petitioner before the learned Single Judge that having been imposed a penalty of discharge with superannuation Page 2 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined benefits on his refunding the provident fund contribution, he was entitled to avail the benefit of option for pension in light of the Circular of the Bank dated 20.09.2010.
3. Relying on the decision of the Hon'ble Apex Court in the case of Bank of Baroda v. S.K. Kool (D) Through L.Rs. & Anr., reported in AIR 2014 SC 915, the learned Single Judge held thus :-
10. This Court has considered the submissions of both the sides. It could be seen that initially the petitioner was imposed the punishment of dismissal from service, however, in pursuance to his representation, the final order came to be passed on 30.11.1998, according to which, the punishment has been replaced by 'discharged from service' with superannuation benefits as would be due otherwise without disqualification from future employment in terms of clause 19.6(b) of the Bi-partite settlement.
11. It could be seen that petitioner has been discharged from service under Clause 19.6(b) of Bipartite Settlement. Clause 19.6 was available only in First Bipartite Settlement and is not there either in Sixth or seventh Bipartite Settlement. Clause 19.6 of First Bipartite Settlement is reproduced as under:
19.6 An employee found guilty of gross misconduct may:
(a) Be dismissed without notice; OR
(b) Be warned or censured, or have an adverse remark entered against him; OR
(c) Be fined; OR
(d) Have his increment stopped; OR
(e) Have his misconduct condoned and be merely discharged.
12. From the order dated 30.11.1998, it is apparent that the petitioner has been imposed punishment of dismissal which has been replaced with discharged from service with superannuation Page 3 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined benefits as would be due otherwise, without disqualification from future employment in terms of clause 19.6(b) of the Bipartite Settlement. Meaning thereby, the petitioner can be warned or censured or at the most an adverse remarks could have been entered in his service record. This Court is of the considered opinion that once the order of dismissal has been replaced with the order of discharged from service with superannuation benefits, the petitioner cannot be denied with the subsequent benefits of grant of pension which are available to the similarly situated other employees.
4. In the opinion of the learned Single Judge, in light of the decision of the Hon'ble Apex Court in the case of S.K. Kool (supra) since the penalty involved did also consider extending the benefits of superannuation, in light of the decision in the case of S.K. Kool (supra), pension option was open to be exercised by the petitioner.
The learned Single Judge accordingly directed the Bank to pay superannuation benefits as per the scheme vide Circular dated 20.09.2010. The respondent - Bank is in appeal before us.
5. Mr. Manan K. Paneri, learned counsel appearing for the respondent - Bank would submit that as was set out in the communications impugned in the petition, the original petitioner would not fall in the category of retired employees as per the Regulations. In support of his submission, he would rely on the Pension Regulations of the Bank, which define the term 'retired' and 'retirement' in Clauses-2 (x) and (y) to the Pension Page 4 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined Regulations. He would, therefore submit that the learned Single Judge committed an error in directing the Bank to pay pensionary benefits.
6. Mr. Krishnan Ghavariya, learned counsel appearing for the respondent - original petitioner would support the order of the learned Single Judge and submit that once the penalty of discharge from service with superannuation benefits were extended to the petitioner, the benefits of the scheme in accordance with the Circular dated 20.09.2010 was clearly applicable and the learned Single Judge can therefore not be faulted for the directions that were given by the judgment under challenge. He would submit that even in the case of S.K. Kool (supra) the concerned employee was not being paid any pension and interpreting the terms of the Bipartite Settlement, namely Article 22, the Hon'ble Apex Court had categorically held that denial of pensionary benefits was bad.
7. Learned advocate Mr. Paneri, would support his submissions by relying on the decision of the Division Bench of the Delhi High Court in the case of United Bank of India v. Kamlesh Pratap Singh rendered in Letters Patent Appeal No. 403 of 2015 which Page 5 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined has considered the decision of the Hon'ble Apex Court in the case of S.K. Kool (supra).
8. Considering the submissions made by the respective learned counsels, we cannot lose sight of the fact that the original petitioner was charge-sheeted and the proposed punishment that was sought to be invoked was dismissal from service. On a representation being made by the original petitioner, on sympathetic considerations, the respondent - Bank decided to impose a punishment of discharge from service in terms of clause 19.6 (b) of the Bipartite Settlement. The Bipartite Settlement which set out disciplinary action and procedure thereof, indicates the penalties that can be imposed. The question before us is whether merely because the penalty was of discharge from service, qualifying with the words "superannuation benefits"
would it entitle the original petitioner the benefit of the Circular, 10 years hence issued by the Bank on 20.09.2010. The Circular of
20.09.2010 provides for extension of provident fund and pension fund to retired employees of the Bank. The term 'retired' and 'retirement' as defined in the Punjab National Bank (Employees') Pension Regulations 1995 reads as under :-
""(x) "retired" includes deemed to have retired under clause (1);Page 6 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024
NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined (y) "retirement" means cessation from Bnak's service,-
(a) or attaining the age of superannuation specified in Service Regulations, or Settlements;
(b) on voluntary retirement in accordance with provisions contained in regulations 29 of these regulations;
(c) on premature retirement by the Bank before attaining the age of superannuation specified in Service Regulations or Settlement;"
9. 'Retirement' as defined herein-above indicates retirement on attaining the age of superannuation on voluntary retirement or premature retirement before attaining the age of superannuation.
10. It is in light of these Regulations and the Circular that the Delhi High Court considered the case of S.K. Kool (supra) in the case relied upon by learned advocate Mr. Paneri. Before the Delhi High Court too, the concerned employee was visited with punishment of compulsory retirement from service with superannuation benefits. The Division Bench discussed and distinguished the judgment in the case of S.K. Kool (supra) by setting out the terms of Regulations defining 'retirement'. It would be in the benefit of this judgment to reproduce paragraphs 8 to 16 of the judgment of the Division Bench.
"8 In spite of the aforesaid discussion, we would examine the Page 7 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined contention of the respondent-Kamlesh Pratap Singh that the word "retired" in the circular/notification dated 16th August, 2010 as modified by the circular/notification dated 20th August, 2010 should be interpreted as per clause 2(y) of the Pension Regulations read with the settlement agreement dated 27th April, 2010, in light of the decision of the Supreme Court in Bank of Baroda Vs. S.K. Kool, (2014) 2 SCC 715.
9. The submission of the petitioner is to the following effect. Clause 2(y) of the Pension Regulations defines "retirement" as under:-
"y. "retirement" means cessation from Bank's service-
a. on attaining the age of superannuation specified in Service Regulations or Settlements;
b. on voluntary retirement in accordance with the provisions contained in Regulation 29 of these Regulations;
c. on premature retirement by the Bank before attaining the age of superannuation specified in Service Regulations or Settlement;"
Paragraph 2(II)(a) of the settlement agreement dated 27th April, 2010 under "Terms of Settlement" stipulates as under:-
"(2) Another option for joining the existing Pension Scheme shall be extended to those employees who:-
(i)(a) xxxxx
(b) xxxxx
(c) xxxxx (II)(a) were in service of the bank prior to 29 th September 1995 in case of Nationalised Banks/ 26th March 1996 in case of Associate Banks of State Bank Of India and retired after that date and prior to the date of this Settlement;"
Harmoniously construing Clause 2(y) of the pension Regulations and paragraph 2(II)(a) of the settlement agreement, the term "retired" would also cover an employee who was compulsorily retired with superannuation benefits and would thus, be eligible to exercise option to join the pension scheme.
Page 8 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined
10. In the impugned order and judgment dated 5 th May, 2016 the Single Judge has accepted the aforesaid contention of the respondent and held that the decision in S.K. Kool (supra) would squarely apply, for in the said case, the respondent therein had suffered an identical penalty of removal with pensionary benefits and it was held that the said employee would be entitled to opt for pension under the identical Regulations as adopted by the Bank of Baroda.
11. On a plain and literal reading of the definition of the term "retired" in clause 2(y) of the Pension Regulations, it is apparent that retired employees would not include those employees who, like the respondent, have suffered the punishment of compulsory retirement with superannuation benefits. With regard to paragraph 2(II)(a) of the settlement agreement dated 27th April, 2010, it will be wrong and fallacious to assume that the word "retired" used therein was not in the context of or in reference to the word's natural contours, but was reflective of a stretched and hyperbolic meaning so as to include officers who were compulsorily retired as a punishment, with superannuation benefits and have received payments of the contributory provident fund. In S. K. Kool (supra), the aforesaid plain and literal interpretation of the word "retirement" was not applied to an employee who was removed with entitlement to superannuation benefits. This was a case of an employee who was entitled to pension, having opted for the same, and not contributory provident fund as superannuation benefit and, therefore, to deny pension would have negated the ameliorative nature of the punishment order. He would have neither got pension, nor payment from the contributory provident fund.
12. In the case of S.K. Kool (supra), the employee had suffered penalty of removal from service with superannuation benefits as would be due otherwise and without disqualification from future employment. The Bank, however, in view of the said punishment had refused to grant leave encashment and pensionary benefits relying upon Regulation 22 of the Pension Regulations, which reads as under:-
"22. Forfeiture of service: (1) Resignation or dismissal or removal or termination of an employee from the service of the Bank shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits."
The Bank's stance was that in terms of the Regulation 22, the order of removal had the effect of forfeiture of past service and consequently, the employee did not qualify for pensionary benefits. The contention of the bank was firmly and decisively Page 9 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined rejected by making reference to the order of punishment, for the employee was entitled to superannuation benefits as would be due otherwise. Importantly, the employee was a pension optee and was, therefore, entitled to pension in terms of the Regulation. Pension was payable albeit was being denied on account of the punishment of removal and Regulation 22. The question whether pension option could be exercised was not the issue. Pension on retirement was payable. This was not a case where the employee had applied for option under the settlement agreement dated 27th April, 2010 or the circular/notification issued by the Bank giving an option to the retired employees which did not include employees who had suffered punishment of compulsory retirement. The question and issue decided was different, and the observations and ratio too was in a different context.
13. In the case of S.K. Kool (supra), the Supreme Court referred to the bipartite settlement signed by the Indian Banks' Association and the Banks' Workmen's Union with regard to disciplinary action procedure. In terms of the said settlement, clause 6(b) was inserted as one of the punishments which could be inflicted on an employee found guilty of gross misconduct. The said clause was as under:-
"6. An employee found guilty of gross misconduct may;
(a)............
(b) be removed from service with superannuation benefits i.e. Pension and/or Provident Fund and Gratuity as would be due otherwise under the Rules or Regulations prevailing at the relevant time and without disqualification from future employment, or.."
The Supreme Court observed that the punishment with which the employee, i.e. S.K. Kool, was visited was punishment of removal from service with superannuation benefits. In this context, it was held that Regulation 22 would not disentitle the employee to pensionary benefits, for it would amount to fraud on the bipartite agreement. The punishment imposed and Regulation 22 had to be harmonized so as to give effect to the punishment imposed in terms of clause 6(b). Accordingly, the punishment of removal with retirement benefits, would not disentitle the employee from payment of retirement benefits which he was otherwise entitled to. In the said case, as the employee, i.e. S.K. Kool, was entitled to pension, which was directed to be paid to him. Not granting the superannuation benefits i.e the pension to S.K. Kool would have been contrary to the punishment imposed.
Page 10 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined
14. We would like to reproduce paragraphs 14 and 15 in S. K. Kool (supra), which read as under:-
"14. The Regulations do not entitle every employee to pensionary benefits. Its application and eligibility is provided under Chapter II of the Regulations whereas Chapter IV deals with qualifying service. An employee who has rendered a minimum of ten years of service and fulfills other conditions only can qualify for pension in terms of Regulation 14 of the Regulations. Therefore, the expression "as would be due otherwise"
would mean only such employees who are eligible and have put in minimum number of years of service to qualify for pension. However, such of the employees who are not eligible and have not put in required number of years of qualifying service shall not be entitled to the superannuation benefits though removed from service in terms of Clause 6(b) of the Bipartite Settlement. Clause 6(b) came to be inserted as one of the punishments on account of the Bipartite Settlement. It provides for payment of superannuation benefits as would be due otherwise.
15. The Bipartite Settlement tends to provide a punishment which gives superannuation benefits otherwise due. The construction canvassed by the employer shall give nothing to the employees in any event. Will it not be a fraud Bipartite Settlement? Obviously it would be. From the conspectus of what we have observed we have no doubt that such of the employees who are otherwise eligible for superannuation benefit are removed from service in terms of Clause 6(b) of the Bipartite Settlement shall be entitled to superannuation benefits. This is the only construction which would harmonise the two provisions. It is well-settled rule of construction that in case of apparent conflict between the two provisions, they should be so interpreted that the effect is given to both. Hence, we are of the opinion that such of the employees who are otherwise entitled to superannuation benefits under the Regulations if visited with the penalty of removal from service with superannuation benefits shall be entitled for those benefits and such of the employees though visited with the same penalty but are not eligible for superannuation benefits under the Regulations shall Page 11 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined not be entitled to that."
The aforesaid decision, therefore, dealt with an entirely different factual matrix and the legal issue and question involved is clearly distinguishable. The question and interpretation involved in the present case are different. The issue in S.K. Kool (supra) related to the impact and effect of Regulation 22, which postulates forfeiture of past service on punishment of removal, dismissal, resignation and termination, and when the punishment order directs payment of superannuation benefits. This decision does not deal with the question whether or not an employee who had suffered punishment of compulsory retirement with superannuation benefits was entitled to exercise option in terms of the circulars/notifications dated 16th August, 2010 and 20th August, 2010. The decision also does not deal with the question or issue what is meant by the term "retired", for in the said case, the punishment imposed was one of removal from service and not compulsory retirement.
15. The appellant-United Bank Of India had interpreted the term "retired" by giving it a specific meaning in their circulars and notifications dated 16th August, 2010 and 20th August, 2010, to mean retired on superannuation or voluntary retirement under the special schemes prior to 27th April, 2010. Employees who had suffered the punishment of compulsory retirement with superannuation benefits were excluded and ineligible. There was no objection or protest from the Workers Union or Officers Association questioning the definition and meaning of the term "retired" as used in the aforesaid circulars. The appellant bank was not questioned for giving the term "retired" a narrow meaning in contrast with and contrary to the settlement agreement dated 27th April, 2010.
16. The circulars/notifications dated 16th August, 2010 and 20th August, 2010 had the effect of giving a non-optee in service, or a "retired" officer, another chance to opt for the Pension Scheme. In the case of a retired employee, the option was restricted to the categories specified and not to cases wherein the employee had suffered the punishment of compulsory retirement with benefits as due. To sum up, the effect of the aforesaid reasoning would be that employees who had suffered the punishment of compulsory retirement with superannuation benefits without opting for pension, Page 12 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined would be entitled to such benefits as were paid or were payable to them under the relevant Contributory Provident Fund Scheme. They would not be covered by the circulars/notifications dated 16th August, 2010 and 20th August, 2010."
11. Reading the aforesaid paragraph would indicate that the Division Bench on the plain and literal reading of the definition of the term 'retired' and 'retirement' found that it would not include employees who are compulsorily retired with superannuation benefits. The question whether pension option could be exercised was not an issue and the question was whether pension would be payable on retirement. Considering the decisions of the Apex Court where penalties of compulsory retirement were imposed and also on the question of a cut-off date for the purposes of pension, the Division Bench of the Delhi High Court found that the Circular in question which, is identically worded to the Circular in the facts of our case, opined that on the interpretation of the Bipartite Settlement, the penalty order of compulsory retirement could not make the employee eligible for pension.
12. Therefore, in our opinion, solely relying on the decision in the case of S.K. Kool (supra) in isolation of reading the definitions of the term 'retired' and 'retirement' as set out in the Pension Regulations which the Division Bench of the Delhi High Court in Page 13 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024 NEUTRAL CITATION C/LPA/523/2018 JUDGMENT DATED: 22/04/2024 undefined the case of Kamlesh Pratap Singh (supra) has interpreted, specifically referring to the decision of the Apex Court in the case of S.K. Kool (supra), we find that the learned Single Judge clearly fell in error in extending the benefits of pension to the respondent original petitioner.
13. With the aforesaid reasons, therefore, the Letters Patent Appeal No. 523 of 2018 is allowed. The order dated 01.02.2018 passed by the learned Single Judge is quashed and set aside.
(BIREN VAISHNAV, J) (PRANAV TRIVEDI,J) phalguni Page 14 of 14 Downloaded on : Fri Apr 26 21:18:55 IST 2024