Calcutta High Court (Appellete Side)
State Bank Of India And Ors vs Golam Jilani And Anr on 18 February, 2019
Author: Bibek Chaudhuri
Bench: Dipankar Datta, Bibek Chaudhuri
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
The Hon'ble JUSTICE DIPANKAR DATTA
And
The Hon'ble JUSTICE BIBEK CHAUDHURI
M.A.T. 1053 of 2018
State Bank of India and Ors.
-Versus-
Golam Jilani and Anr.
For the Appellant: Mr. Subrata Kumar Sinha, Adv.
For the Respondent: Mr. Mrinmay Bhattacharya, Adv.
Heard on: January 29, 2019.
Judgment on: February 18, 2019.
BIBEK CHAUDHURI, J. : -
1. State Bank of India through its officers have challenged the
judgment and order dated 10th August, 2018 passed in W.P No.34722(W)
of 2013 by a learned Single Judge of this Court directing the appellants to
take steps for releasing the pensionary benefit in favour of the respondent
No.1 within a period of three months from the date of receipt of copy of
such judgment.
2. The respondent No.1 as writ petitioner filed W.P No.34722(W) of
2013 stating, inter alia, that he joined service in the State Bank of India,
Calcutta Main Branch in the subordinate cadre on 6th August, 1979.
Subsequently, he was promoted to the post of Assistant (Accounts) in the
State Bank. In course of his service, he was posted in different branches
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of the bank and while he was working at Fort William Branch, Calcutta,
he received a letter to show cause, vide letter baring No.Br.17-111 dated
22nd January, 2002 why disciplinary action would not be taken against
him for certain irregularities, and/or forgery allegedly committed by him
in course of his official duties. The respondent no.1 denied all the
allegations levelled against him in writing on 23rd March, 2002. However,
on 27th September 2002, the controlling authority of the respondent No.1,
viz, appellant No.3 herein, initiated disciplinary action against the
respondent No.1 by issuing a charge-sheet on different counts. The
disciplinary authority suspended him from service with effect from 23rd
May, 2002 pending disciplinary proceeding. On culmination of
disciplinary proceeding, the respondent No.1 was proposed to be
punished with removal from service together with superannuation
benefits, i.e, pension, provident fund and/or gratuity as would be due
otherwise under the rules and regulations, prevailing at the relevant time
and without disqualification from future employment. Against the said
order, he preferred a departmental appeal which, however, yielded no
result.
3. Challenging the order of punishment, the respondent No.1 filed W.P
No.4389(W) of 2005 which was dismissed by a learned Single Judge of
this Court by a judgment and order dated 29th July, 2009. The said order
was also unsuccessfully challenged by the respondent No.1 in F.M.A
No.680 of 2010.
4. In the second round of litigation, the respondent No.1 by filing W.P
34722(W) of 2013 has alleged that though he was removed from service by
the disciplinary authority with superannuation benefits, viz, pension
and/or provident fund and gratuity as would be due otherwise under the
rules and regulations prevailing at the relevant time and without
disqualification from future employment, the Assistant General Manager
(HR), State Bank of India by a letter dated 22nd March, 2012 rejected his
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prayer for grant of pension on the ground that he did not fulfil the criteria
as mentioned in Rule 22(I)(a) and 22(I)(d) of the SBI Pension Fund Rules.
The said communication was impugned in the above numbered writ
petition.
5. The learned Single Judge, placing reliance on the decision of the
Hon'ble Supreme Court in Bank of Baroda vs. S.K. Kool (1) through
Legal Representative and Another reported in (2014) 3 WBLR (SC) 444
was pleased to allow the writ petition and directed the bank to release
pensionary benefits in favour of the respondent No.1 within a period of
three months.
6. In the case of S.K.Kool (Supra), the employee of the appellant-Bank
had suffered the penalty of removal from service with superannuation
benefits as would be due otherwise and without disqualification from
future employment. The bank, however, had refused to grant leave
encashment and pensionary benefits relying upon regulation 22 of the
Pension Regulations, which reads as follows:-
"22. Forfeiture of Service.- (1)Resignation or dismissal or
removal or termination of an employee from the service of the
bank shall entail for forfeiture of his entire past service and
consequently shall not qualify for pensionary benefits."
The appellant bank urged before the Supreme Court that in view of the
provision of forfeiture contained in Rule 22, an employee being removed
from service forfeits his past service and consequently, the employee did
not qualify for pensionary benefits.
The Supreme Court was pleased to observe that the punishment that the
employee, i.e., S.K. Kool, was visited with a punishment of removal from
service with superannuation benefits. It was held in the aforesaid report
that the punishment imposed and regulation 22 had to be harmonised so
as to give effect to the punishment imposed in terms of Clause 6(b) of the
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Memorandum of Settlement dated 10th April, 2002/27th May, 2002 on
Disciplinary Action and Procedure. The said Memorandum of Settlement
was arrived at by and between the Indian Banks' Association and their
workmen representated by the All India Bank Employees' Association,
National Confederation of Bank Employees, Indian National Bank
Employees' Federation and is commonly called as Bipartite Settlement.
Paragraphs 14 and 15 of the judgment of S.K Kool (supra) are relevant
and reproduced below:-
"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 fulfils other conditions
only can qualify for pension in terms of Regulation 14 of the
Regulations. Therefore, the expressions "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 upon
Bipartite Settlement? Obviously it would be. From the
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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 not be
entitled to that."
7. Mr. Subrata Kumar Sinha, learned Advocate for the appellants
placed before us a copy of the Bipartite Settlement dated 10th April,
2002/27th May, 2002, which was arrived at in terms of the provisions of
Section 18(1) of the Industrial Disputes Act, 1947 read with Rule 58 of the
Industrial Disputes (Central) Rules, 1957. Clause 6 of the settlement
refers to various kinds of punishment that may be imposed on an
employee found guilty of gross misconduct. In the instant case,
admittedly the respondent No.1 had been visited with the punishment
referred to in Clause 6(b) of the said settlement the terms of which have
already been stated above.
8. It is urged by Mr. Sinha that an employee who was removed from
service with superannuation benefits under Clause 6(b) of the settlement
may be entitled to pension and provident fund and gratuity or only
pension or only provident fund and gratuity as would be due otherwise
6
under the rules and regulations of the Bank. The phrase "and/or" denotes
that a removed employee with superannuation benefits may either be
entitled to superannuation benefits including pension or any of the
superannuation benefits as would be due otherwise under the rules and
regulations prevailing at the relevant time.
9. Mr. Sinha next draws our attention to the State Bank of India
Employees' Pension Fund Rules, 1955 (hereafter the said rules). Rule 22
of the said rules provides as follows:-
"22. (1) 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 or if he
is in the service of the Bank on or after 1.11.93, after
having completed ten years pensionable service provided
that he has attained the age of fifty eight years or if he is
in the service of the Bank on or after 22.05.1998. After
having completed ten years pensionable service provided
that he has attained the age of sixty 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.
(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
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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 Clauses 1(c)
above shall be entitled to proportionate pension."
10. According to Mr. Sinha Clause 6(b) of the Bipartite Settlement
speaks about the punishment of removal from service with
superannuation benefits as would be otherwise due as a penalty for
gross misconduct committed by an employee of the bank. Rule 22 of the
SBI Employees' Pension Fund Rules delineates situations when an
employee of the State Bank of India shall be entitled to a pension.
According to him, the respondent No.1 did not fulfil either of four clauses
[(a) to (d)]. He could have been entitled to pension on fulfilment of either of
the said four clauses but not otherwise. The respondent No.1 did not
complete 25 years' of service; hence, he was not entitled to pension in
spite of he having completed more than 22 years of service.
11. It is also urged by Mr. Sinha that the ratio of the judgment of the
Supreme Court in S.K. Kool (Supra) is distinguishable having regard to
the facts and circumstances of the present case in as much as the said
reported judgment deals with a question as to whether a removed
employee of Bank of Baroda would be entitled to pension are not. In the
instant case, the learned Single Judge failed to consider that the State
Bank of India Employees' Pension Fund Rules was framed by the Central
Board of the State Bank of India in exercise of the powers conferred by
Section 50 of the State Bank of India Act, after consultation with the
Reserve Bank of India and the with the previous sanction of the Central
Government. Such Rules do not postulate grant of pension to an
employee of the State Bank of India on completion of ten years' qualifying
service, which is applicable to the employees of Bank of Baroda.
8
Therefore, the principle laid down in S.K. Kool (Supra) is not applicable in
the instant case.
12. Mr. Mrinmoy Bhattachariya, learned Advocate for the respondent
No.1, on the other hand, supports the impugned judgment and order
passed in W.P No.34722(W) of 2013. According to him, the Bipartite
Settlement on disciplinary action and more particularly Clause 6(b) of the
said settlement would be redundant if a harmonious construction be not
made with the Rules. The respondent No.1 served the Bank for more than
22 years. According to Rule 22(1)(c) of the State Bank of India Employees'
Pension Fund Rules, an employee is entitled to a pension after having
completed 20 years pensionable service, irrespective of the age he shall
have attained. The learned counsel for the respondent No.1 has
repeatedly urged us to consider Clause 6(b) of the Bipartite Settlement
along with Rule 22(1)(c) of the Pension Fund Rules for giving harmonious
construction in the matter of granting pension to respondent No.1 relying
on the principle laid down in S.K. Kool.
13. In the case of C. Jakob vs. Director of Geology and Mining
reported in (2008) 10 SCC 115, the Supreme Court had the occasion to
examine the Tamilnadu Pension Rules, 1978 and corresponding
provisions of the Central Civil Services (Pension) Rules, 1972 and was
pleased to hold that if a Government servant is not otherwise entitled to
pension, he cannot obviously be granted pension on termination of his
service. The learned Single Judge while disposing of the writ petition was
of the view that a harmonious construction should be made between the
nature of punishment and the right of an employee who has been visited
with a punishment of removal with superannuation benefits with that of
Rule 22(I)(c) of the Pension Rules. The Supreme Court in the case of UCO
Bank and others vs. Sanwar Mal reported in (2004) 4 SCC 412
examined the UCO Bank (Employees') Pension Regulations, 1995, which
was arrived at on the basis of a settlement between the Bank Authority
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and its employees and described the nature of pension scheme of the
Bank as hereunder:-
"Suffice it to state that the entire Regulation 3 refers to
retirees only and not to those who have resigned or been
dismissed/removed from the Bank. Regulation 5 deals with
the constitution of a pension fund. It states that the Bank
shall constitute a fund under an irrevocable trust within the
specified period to provide for payment of pension/family
pension in accordance with the Regulations. It further
provides that the Bank shall be a contributor to the said fund
to ensure that the trustees make due payments to the
beneficiaries under these regulations. A bare reading of
Regulation 5 indicates that the fund will be managed by the
trustees and the beneficiaries are the employees covered by
the Regulations. Regulation 6 inter alia states that on
constitution of the said fund, the Provident Fund Trust shall
transfer to the pension fund the accumulated balance of the
contribution of the Bank to the provident fund along with the
interest accrued thereon up to the date of transfer. Regulation
7 deals with composition of the pension fund. It states that
pension shall consist of the contribution by the Bank at the
rate of 10% per month of the pay of the employee; the
accumulated contributions of the Bank to the provident fund
along with interest accrued up to the date of transfer; the
amount consisting of contributions of the Bank along with
interest refunded by the employees who retired before the
notified date but who opted for pension in accordance with
the Regulations; the investment in annuities/securities
purchased out of the moneys of the fund; annual contribution
by the Bank and income from investments. Regulation 7,
therefore, indicates that the Scheme is a self-financing
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scheme to be run on the basis of contributions from the
employees and the Bank. It further shows that it is a funded
scheme, which is not dependent upon budgetary support.
Regulation 14 inter alia states that an employee who has
rendered a minimum of 10 years of service in the Bank on the
date of his retirement shall qualify for pension."
14. It was further held by the Supreme Court in Sanwar Mal (supra)
that in a self financing scheme, a separate fund is earmarked as the
scheme is not passed on budgetary support. It is essentially based on
adequate contributions from the members of the fund. The scheme
essentially covers only retirees as the credit balance to their provident
fund account is larger as compared to employees who resigned from
service.
15. Under Rule 22 of the State Bank of India Employees' Pension Fund
Rules, employees' entitlement to pension accrues on retirement from the
Bank Service if any one of the following conditions is present:-
(a) In terms of Rule 22(1)(a), if he has completed 20 years
pensionable service provided that he has attained the age
of 50 years, or,
(b) he was in service on or after 01.11.1993, then after having
completed ten years of service provided that he has
attained the age of 58 years, or,
(c) he was in service on or after 22.05.1998, then after having
completed ten years pensionable service, provided, that he
has attained the age of 60 years.
In terms of Rule 22(1)(b), if he has completed 20 year's
pensionable service, irrespective of the age he shall have
attained, upon satisfying the authority competent to
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sanction his retirement by approved medical certificate or
otherwise, i.e, he is incapacitated for further active service.
In terms of rule 22(1)(c), if he has completed 20 years
pensionable service, irrespective of the age he shall have
attained, at his request in writing.
In terms of Rule 22(1)(d), after 25 years pensionable service.
16. In the case of Arikaravula Sanyasi Raju vs. Branch Manager
State Bank of India reported in (1997) 1 SCC 256, the appellant, an
employee of State Bank of India, was removed from service on the finding
of misconduct recorded by order dated 25.05.1990. He filed a writ petition
claiming payment of provident fund and pension. The High Court
dismissed the writ petition which was affirmed by the Division Bench. The
appellant preferred an appeal by special leave before the Supreme Court.
The Supreme Court after detailed discussion of various provisions
contained in Rule 22 of the Pension Rules held:-
"We cannot accept the said contention as correct. Clauses
22(i)(c) envisages only that after completing 20 years of
pensionable service, if an incumbent retired at his request in
writing and was permitted to retire, he would be entitled to
pension. In other words, for voluntary retirement, on
completion of 20 years of pensionable service, clause (c) of
Rule 22(1) gets attracted. It does not apply to an officer who
was removed from service for misconduct. Under these
circumstances, the High Court has not committed any error
of law warranting interference. Merely because, on a wrong
advice, another employee was given pension after removal
from service, the same cannot be made a ground under
Article 14 to perpetuate the same mistake. So, Article 14 does
not apply and no discrimination arises."
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17. The above decision in Arikaravula Sanyasi Raju (supra) was not
placed for consideration before the Supreme Court in the subsequent
decision of S.K. Kool (supra).
18. A question may crop up as to whether harmonious construction of
Clause 6(b) of the Bipartite Settlement prescribing removal of an employee
for gross misconduct with superannuation benefit and State Bank of
India Employees' Pension Fund Rules is at all possible or not.
19. Rule 14 of the State Bank of India Employees' Pension Fund Rules
states:-
"14. A employee dismissed from bank's service for wilful
neglect or fraud shall forfeit all claims upon the fund for
pension."
20. By way of harmonious construction, this forfeiture clause is waived
in case of an employee who is removed from service on gross misconduct
of wilful neglect or fraud with superannuation benefit. But in order to get
such superannuation benefit in the form of pension, he must fulfil the
criteria prescribed in Rule 22.
21. In the instant case, though the respondent No.1 completed 20 years
pensionable service, at the relevant point of time, he did not attain the age
of 50 years. He had also not completed 25 years of pensionable service.
Therefore, the appellant No.3 rightly rejected his prayer for grant of
pensionary relief vide letter dated 20th March, 2012.
22. It is needless to say that the employees of the State Bank of India
get pension from the accrued interest of a corpus known as the "State
Bank of India Employees' Pension Fund". The said fund is managed by
the board of trustees. It was created by accumulation of provident fund
contribution of the employees of the Bank and employer's contribution.
13
The pension's scheme contained in the State Bank of India Employees'
Pension Fund Rules is a complete Code by itself. There cannot be any
departure from the conditions enumerated in Rule 22 of the Pension Fund
Rules in order to get pension by a removed employee, which is due
otherwise.
23. The learned Single Judge refused to place reliance upon the ratio
decided in Arikaravula Sanyasi Raju (Supra) on the ground that the
judgment in S.K. Kool (Supra) is a subsequent decision, but Arikaravula
Sanyasi Raju (Supra) was followed by the Supreme Court in a
subsequent decision in State Bank of India vs. Radhe Shyam Pandey
reported in (2015) 12 SCC 451 where it has been held:-
"In Arikaravula Sanyasi Raju, (1997) 1 SCC 256 it has been
clearly held, for voluntary retirement on completion of 20
years of pensionable service, Clause (c) of Rule 22(1) gets
attracted. Another aspect need to be noted. State Bank of
India Employees' Pension Fund Rules has been framed under
Section 50 of the State Bank of India Act 1955. The rule has
statutory force. The concept of any kind of promissory
estoppel, if any could not be applicable to promote or condone
the breach of law.
24. In State of Himachal Pradesh and others vs. Rajesh Chander
Sood and others reported in (2016) 10 SCC 77, the Supreme Court
held:-
"71. We are also of the view that there is merit in the
contention advanced on behalf of the respondent employees,
inasmuch as, the seeds of the right to receive pension, emerge
from the very day an employee enters a pensionable service.
From that very date the employee commences to accumulate
qualifying service. His claim for pension would obviously
crystallise, when he acquires the minimum prescribed
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qualifying service, and also, does not suffer a disqualification,
disentitling him to a claim for pension." (emphasis supplied)
25. In view of the above discussion we are of the considered opinion
that as respondent No.1 did not fulfil any of the condition mentioned in
Rule 22(1) of the Pension Fund Rules, he is not entitled to get any pension
on the ground that pensionary relief was not due otherwise to....
thereunder.
26. For the reasons recorded the above, judgment and order passed in
W.P No.34722(W) of 2013 cannot be sustained and is set aside. The
instant appeal is allowed on contest, however, without costs.
Urgent certified website copies of this judgment, if applied for, be
supplied to the parties subject to compliance with all requisite formalities.
(Bibek Chaudhuri, J.)
Dipankar Datta, J. :
I agree (Dipankar Datta, J.)