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Gauhati High Court

Sri Tarun Hazarika vs The State Bank Of India & Ors on 12 March, 2015

Author: Ujjal Bhuyan

Bench: Ujjal Bhuyan

                            W P(C) No.5623/ 2008
                              BEFORE
                THE HON'BLE MR. JUSTICE UJJAL BHUYAN
12.03.2015
        Heard Mr. DP Chaliha, learned Senior Counsel assisted by Mr. UP
Chaliha, learned counsel for the petitioner and Mr. SS Sarma, learned Senior
Counsel assisted by Mr. A Sarma, learned counsel for the respondents.
        By filing this petition under Article 226 of the Constitution of India,
petitioner seeks a direction to the respondents for payment of pension.
        Facts of the case may be briefly narrated.

Petitioner had joined service in the State Bank of India (SBI) as Clerk- cum-Cashier on 21.10.1980. In the course of his service, he was promoted to the rank of Deputy Manager, and at the relevant point of time, he was serving as Deputy Manager in the North Lakhimpur Branch of SBI.

SBI issued a circular on 30.12.2000, deciding to implement a Voluntary Retirement Scheme for the employees called, SBI Voluntary Retirement Scheme (Scheme). All permanent employees of SBI who had put in 15 years of service or had completed 40 years of age as on 31.12.2000 were eligible to avail the Scheme. Intending eligible employees had to apply between 15.01.2001 to 31.01.2001. As per the Scheme, gratuity, provident fund, pension, leave encashment etc., as due, were to be paid to the employees who would be granted voluntary retirement as per the Scheme.

Petitioner applied for voluntary retirement under the Scheme, which was accepted by the SBI and he was informed that his voluntary retirement would come into force w.e.f. 31.03.2001.

Following his voluntary retirement, petitioner received his dues, except pension. He, therefore, represented before the SBI authorities for pension under the SBI Employees' Pension Fund Rules (Pension Rules). Petitioner was, however, informed by SBI authorities on 13.09.2001 that he was not eligible for pension as per the Pension Rules. Petitioner was further informed by another communication dated 15.09.2001 that under the Pension Rules, a person who retires before the age of superannuation is eligible for pension only if he completes 20 years of pensionable service. Since petitioner did not put in the WPC No. 5623/2008 Page 1 of 8 required length of pensionable service as on the date of retirement, he would not be entitled to pension.

This led the petitioner to file WP(C) No. 2980/2002 before this Court. This Court held that petitioner had not completed 20 years of pensionable service and, therefore, he was not entitled to pension under Rule 22(i) of the Pension Rules. But, it was noted that petitioner had made a claim for proportionate pension under Rule 22(ii), under which the Trustees of the Pension Fund had the discretion to grant proportionate pension to a member of the pension fund who has attained the age of 55 years or who has suffered permanent incapacity to the satisfaction of the authority. This Court, therefore disposed of the writ petition vide order dated 20.07.2007 with the direction that Trustees of the Pension Fund should consider the representation filed by the petitioner in terms of Rule 22 (ii) of the Pension Rules and thereafter to pass necessary order.

Following the order of this Court, petitioner was informed by the Zonal Office of the SBI, Jorhat vide letter dated 28.12.2007 that the Trustees of SBI Pension Fund in the meeting held on 29.11.2007 had considered the representation of the petitioner, but declined to accept the prayer of the petitioner for proportionate pension.

Thereafter the present writ petition has been filed.

Petitioner has contended that the Trustees did not consider the claim of the petitioner in the correct perspective and the discretion vested on them was exercised in a mechanical manner without reference to the object behind Rule 22(ii) of the Pension Rules. Petitioner has contended that he has fallen short of only 20 days of the pensionable service of 20 years and the authority ought to have shown the magnanimity in condoning the shortfall considering the eligibility of the petitioner and his long service to the Bank. Further contending that impugned order is illegal and arbitrary, interference of the Court has been sought for.

Respondents have filed affidavit opposing the prayer made by the petitioner. It is stated that on the date of his retirement, petitioner had not completed 20 years of pensionable service and, therefore, he was not eligible to receive pension under the Pension Rules. It is stated that all the other entitlements of the petitioner were paid following his voluntary retirement. Since WPC No. 5623/2008 Page 2 of 8 the petitioner is legally not entitled to pension, his claim for pension was rightly turned down. Earlier direction of this Court was complied with by duly considering the case of the petitioner. No wrong has been committed by the Trustees in declining to accept the prayer of the petitioner for pro-rata pension. Neither any constitutional nor any legal right of the petitioner has been violated; therefore, the writ petition should be dismissed.

Mr. Chaliha, learned Senior Counsel submits that petitioner fulfilled both the conditions of eligibility for voluntary retirement under the Scheme. At the time of acceptance of the Scheme, it was not made clear to the petitioner that he would still be required to comply with the provisions of the Pension Rules to be eligible for pension. In any case, petitioner has fallen short of 20 days of pensionable service of 20 years. Petitioner had represented before the authority claiming pro-rata pension under the discretionary power of Rule 22(ii). In the earlier round of litigation, this Court had directed the SBI authorities to consider the said prayer of the petitioner. The Trustees of the Pension Fund did not properly appreciate the objective behind Rule 22(ii) and mechanically rejected the claim of the petitioner. He further submits that pension is not a bounty; it is a right which accrues to an employee by dint of long years of service rendered to the employer. Therefore, to deny him pension on technical grounds at the end of his service career would neither be fair nor just. He, therefore, seeks interference by this Court so that pension is paid to the petitioner.

Per contra, Mr. Sarma, learned Senior Counsel for the respondents submits that since petitioner is not entitled to pension under the Pension Rules, authorities cannot be compelled to pay pension to the petitioner. Whatever dues to which the petitioner was legally entitled, have already been released to the petitioner. In so far pro-rata pension is concerned, the Trustees of the Pension Fund had examined the matter and exercised their discretion by declining to accept the prayer of the petitioner. No fault can be found with the said decision of the Trustees. He submits that acceptance of the Scheme by the petitioner was a voluntary act and by doing so he had entered into a contract with the SBI authority. When the petitioner had entered into a contract, he is bound by the terms of the contract and the Court cannot rewrite the terms of the contract to confer benefit on the petitioner to which he is not entitled under the contract. In WPC No. 5623/2008 Page 3 of 8 support of his submissions, Mr. Sarma has placed reliance on the decision of the Apex Court in the case of BANK OF BARODA & ORS. VS. GANPAT SINGH DEORA, reported in (2009) 3 SCC 217 as well as a recent decision of the Apex Court dated 18.10.2013, passed in CIVIL APPEAL NO. 9172/2013 (PUNJAB NATIONAL BANK & ORS. VS. RAM KISHAN).

Submissions made have been considered.

Facts are not in dispute. It is not disputed that petitioner fulfilled both the conditions of eligibility for availing the Scheme, but at the same time, he had not completed 20 years of qualifying service for pension under the Pension Rules to receive pension; he had fallen short by 20 days.

Question for consideration is whether petitioner is entitled to pro-rata pension in terms of the Pension Rules.

To appreciate the above aspect, a brief reference to the Scheme is called for. As already noticed, all permanent employees of SBI who had either put in 15 years of service or had completed 40 years of age as on 31.12.2000 were eligible to apply for voluntary retirement under the Scheme. Petitioner fulfilled both the conditions of 15 years of service and 40 years of age as on 31.12.2000. Therefore, his application for voluntary retirement was accepted. Among the benefits under the Scheme, it was stated that pension in terms of Pension Rules, including commuted value of pension would be available to the beneficiaries. Therefore, petitioner's claim to pension would have to be judged in terms of the Pension Rules.

Rule 22(i) of the Pension Rules lays down the eligibility criteria for receiving pension. Clause (i) of Rule 22 provides as under: -

A member shall be entitled to pension 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 his request in writing;
WPC No. 5623/2008 Page 4 of 8
(d) After twenty five years' pensionable service.

However, Clause (ii) of Rule 22 deals with proportionate pension and reads as under: -

" (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."

This Court in the earlier round of litigation held that since petitioner had not completed 20 years of pensionable service, he was not entitled to pension under Clause (i) of Rule 22, but since petitioner had made a claim for pro-rata pension under Clause (ii), the authority was directed to consider the said claim of the petitioner.

From a perusal of Clause (ii) of Rule 22, it is seen that a discretion is vested on the Trustees of Pension Fund to grant proportionate pension to a member of the Pension Fund who has either attained the age of 55 years or who has suffered permanent incapacity to the satisfaction of the authority. Thus, Clause (ii) is an exception to the general principles laid down in Clause (i). Noticing this aspect of the matter, this Court had therefore, directed the Trustees of the Pension Fund to consider the claim of the petitioner for pro-rata pension. As already stated above, claim of the petitioner was examined by the Trustees and by the decision dated 29.11.2007, which was communicated to the petitioner vide letter dated 28.12.2007, the claim was rejected. The decision of the Trustees reads as under: -

"(i) Considered the representation of Shri Tarun Hazarika.

VRS optees were eligible for pension only if they had put in 20 years of pensionable service as on 31st March, 2001. Sanction of pension to Shri Hazarika alone by relaxing the minimum pensionable service will not be equitable to other similarly placed VRS optees who had not put in the required pensionable service. The trustees, therefore, are not favour of acceding to the request. The request of Shri Tarun Hazarika for pension under rule 22 (ii) is, therefore, declined."

WPC No. 5623/2008 Page 5 of 8

From a careful reading of the decision of the Trustees of Pension Fund, it is seen that the Trustees had relied upon Clause (i) of Rule 22 to reiterate the general principle that pension would be eligible to the VRS optees if they had put in 20 years of pensionable service as on 31.03.2001. It was observed that sanction of pension to the petitioner alone by relaxing the minimum pensionable service would not be equitable to other similarly placed VRS optees who had not put in the required pensionable service. Therefore, the Trustees opined that they were not in favour of acceding to the request of the petitioner under Rule 22 of the Pension Rules.

I am afraid the Trustees had misread and misconstrued the intent and purport of Clause (ii) of Rule 22. They had mixed up the two provisions, namely, Clause (i) and Clause(ii). As stated above, Clause (ii) is an exception to the general principles laid down in Clause (i). As already discussed above, it is an admitted position that petitioner had not completed 20 years of pensionable service on the date of his retirement i.e. on 31.03.2001 and, therefore, under Clause (i), he was not entitled to pension. Question before the Trustees as per the direction of this Court was whether petitioner was entitled or could be given proportionate pension by exercising the discretion vested on them under Clause

(ii). It was not a case of relaxing the required pensionable service of 20 years. Clause (ii) of Rule 22 specifically mentions that a member of the Pension Fund who has attained the age of 55 years or who has suffered permanent incapacity may be granted proportionate pension at the discretion of the Trustees. Therefore, to be eligible for such a discretionary benefit, a member of the Pension Fund has to fulfill either of the two conditions, namely, he must have completed 55 years of age or he must have suffered permanent incapacity to the satisfaction of the Trustees. Admittedly, petitioner had completed 55 years of age on the date of his voluntary retirement i.e., on 31.03.2001. Therefore, question of relaxing the minimum pensionable service of the petitioner to avail the benefit of Rule 22(ii) does not arise. The reason given for not acceding to the request of the petitioner was that it would not be equitable to other similarly placed VRS optees who had not put in the required pensionable service. This explanation is only a self-serving explanation, besides being vague and presumptive. When the petitioner had put forward a claim for pro-rata pension under Rule 22(ii), his WPC No. 5623/2008 Page 6 of 8 prayer was required to be considered on its own merit. The decision does not disclose or rather nothing is discernible whether any other VRS optees, similarly placed like the petitioner, had made similar claim. Mere saying that grant of such pension would be inequitable would not be sufficient.

It is a settled proposition of law that when an authority is vested with a discretion to exercise a power, such discretion has to be exercised in a fair and judicious manner keeping in mind the basic objective behind such a provision. The discretion is required to be exercised in a reasonable and rational manner. If the provision is a beneficial one, the discretion should ordinarily lean in favour of the beneficiary.

Coming to the first decision cited by Mr. Sarma, learned Senior Counsel for the respondents, it is seen that in the case of GANPAT SINGH DEORA (Supra), the concerned employee had completed only 13 years of service in the Bank and as per Regulation 28 of the Pension Regulations of Bank of Baroda, superannuation pension is granted to an employee who retires on his attaining the age of superannuation as specified in the service Regulations or as per settlement. As per the proviso, pension may also be 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. Admittedly, in that case, the employee had completed only 13 years of service and, therefore, he was not entitled to pension. Therefore, the Apex Court held that the employee having not completed the required length of qualifying service as provided under Regulation 28, he was not eligible for pension under the Pension Regulations.

Similar is the position in the case of RAM KISHAN (Supra), where also the employee did not complete 15 years of service. Relying on GANPAT SINGH DEORA (Supra), the Apex Court held that under the Pension Regulations, unless 15 years of service is rendered by an employee, he would not be eligible for pensionary benefits.

Thus, the two decisions relied upon by learned Senior Counsel for the respondents are clearly distinguishable from the facts of the present case. Here is a case where a specific provision is there whereby the Trustees of Pension Fund are vested with a discretionary power to grant pro-rata pension to an employee of the SBI who had attained 55 years of age as in the present case. In WPC No. 5623/2008 Page 7 of 8 the considered opinion of this Court, the Trustees failed to exercise the power vested on them by Rule 22(ii) in a fair, reasonable and judicious manner. On wholly untenable grounds, the claim of the petitioner has been rejected.

In view of the discussions made above, impugned decision dated 29.11.2007 of the Trustees of SBI Pension Fund, as communicated to the petitioner vide letter dated 28.12.2007 is set aside and quashed. Petitioner shall be paid pro-rata pension under Rule 22(ii) of the SBI Pension Rules. The same shall be done within a period of four (4) months from the date of receipt of a certified copy of this order.

Writ petition is allowed. No costs.

Judge BIPLAB WPC No. 5623/2008 Page 8 of 8