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                                        Now SC Imposes Cost of Rs 50,000 and 6% Interest for Denial of Pension to CRS Optee :  Biggest Ever Slap on Face of Bank Management and IBA




Rajesh Goyal  & RK Pathak


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When this morning I opened my email, I was pleasantly surprised to see the email of Mr R K Pathak, giving the details of the Supreme Court judgment granting pensionary benefits to one of the bankers.  The mail gave immense pleasure, not because I was going to get any benefit out of this judgement, but because the judgment was in line with what AllBankingSolutions and many many other senior colleagues have been fighting for years together, Mr Pathak being among one of them.   At ABS, we have time and again brought to light various judgments to our readers so that an awareness is created and message passes to others who have been unjustifiedly denied the pensions.  IBA and bank management have been fighting court cases with public money and ensuring that senior retired bankers go to their graves at the earliest by draining their meagre savings and ensuring that their health deteriorates by frequent visits to High Courts and Supreme Courts. 


I am not sure, how many of our colleagues will benefit from this judgment as the same is loaded with few complex interpretations.   However, it is tribute to our senior bank colleagues and their families that they have been fighting tooth and nail.  Once again this case belongs to a widow of a banker, who decided to not leave the Bank of Baroda Management and fought upto Supreme Court.   I am not going into the details of the Court case, as the same are produced from email of Mr R K Pathak, who now appears to have become champion to the cause of such bankers.   This case is important as it exposes BoB's negative attitude and their case dismissed earlier by not only Tribunal but also High Court, and they still preferred to drag this poor senior citizen, a woman, to Supreme Court.   It is only in rare cases that Supreme Court puts the costs to the Bank and asks to pay the pension alongwith 6% interest.   It shows the disguest the Supreme Court judges must have felt from the negative and harassing attitude of BoB management.   All bankers need to condemn such attitude.


I am also giving a link to the complete copy of the judgment of Supreme Court so that others can read or discuss with their colleagues well versed in law for their future course of action, but before that I would like to share my two basic thoughts with our readers and bank colleagues :-


(a) Are the Law Officers posted in banks and HR personnels are so ill trained that they do not have the basic understanding of their subjects ?  Luckily, I have completed my LL.B from Delhi University in late 1970s and my Diploma in Personnel Management and Industrial Relations from a reputed institute around that time only.   The basic premises of law is that it is meant to protect poor, minorities, downtrodden i.e. people who can be suppressed by the muscle power and money power.  Our Law Officers in banking industry give wrong feedback to bank management and encourage them to contest the case at lower courts, high courts and then supreme court even if they know that it is wrong and immoral to do so.     Similarly, the basic premises while we teach Human Relations Management, the trainees are told that you have to be first human and then an employer.   If we do not take care of our HR resources, we can never progress in the long run.  However, our HR personnel always try to deny the rightful dues of their banker colleagues.   This is pathetic.  


When I see the attitude of Law Officers and HR personnel in banks, I used to and still feel that either I have not understood Law and Personnel Management in right prospective  during my education or  our colleagues in these departments have gone down so much in the greed of promotions and good postings that they prefer to tow the line of management.


(b) Secondly, the copy of the Supreme Court we are uploading on this website today itself.   I have been confirmed by R K Pathak that it has been sent to  Mr Unnikrishnan  Dy Chief Executive Officer of IBA on his email for immediately placing the same before IBA Chairman (Mr Kamat) and Chief Executive Officer (Mr Tanksale) for their consideration.   I am sure that all union leaders also must have received the same from different sources.   If anybody has not received, the same it can be downloaded right from this website.    UFBU has a meeting with IBA tomorrow (i.e. 14/12/2013).   There is a strong need that UFBU should confront IBA people with judgment and show them the mirror as to how the stand of IBA and Bank Managements have been negative as far bank employees are concerned.   It will be a big shame on the part of IBA and UFBU if they fail to take up this issue in tomorrow's meeting (i.e. 14/12/2013)



Click Here to Download Full Text of Supreme Court Judgment in Bank of Baroda vs SK Kool



 We give below the text of email of RK Pathank explaining the implications of the above judgment  :





S.K. Kool, Respondent No. 1 herein (since deceased), was working as a clerk with the Petitioner, Bank of Baroda and while working as such after a departmental inquiry, as a measure of punishment, visited with the penalty of 'removal from service with superannuation benefits as would be due otherwise and without disqualification from future employment'.

S.K. Kool, hereinafter referred to as 'the employee', made a request for leave encashment, which was declined by the Petitioner Bank of Baroda, hereinafter referred to as 'the employer', on the ground that 'where cessation of service takes place on account of employee's resignation or his dismissal/termination/compulsory retirement from the Bank's service, all leaves to his credit lapse.'


The employee laid claim for pensionary benefits but the same was also declined. However, the employer advised the employee to ask for sanction of compassionate allowance not exceeding two-thirds of the pension which would have been admissible to him otherwise. A dispute was raised and the competent Government referred the dispute for adjudication by the Industrial Tribunal. The dispute referred to the Industrial Tribunal, hereinafter referred to as 'the Tribunal', reads as follows:


“Whether the action of the management of Bank of Baroda in denying pension and encashment of leave to Shri S.K. Kool is legal and justified? If not, what relief the concerned workman is entitled to?”


Industrial Tribunal ORDERS as  :- In view of the facts and circumstances and settled legal position, the tribunal feels no hesitation in holding that the action of the opposite party bank in denying superannuation benefits to the workman is neither legal nor justified. Accordingly it is held that the workman is entitled for his superannuation benefits under the final orders of the disciplinary authority passed on 19.09.03 and any other order passed by some other officer denying superannuation benefits stands set aside. Accordingly the workman is held entitled for all termination benefits like pension, leave encashment, gratuity and commutation of pension subject to adjustment of any amount paid under these heads to the workman.


Against the order of Tribunal, Bank files appeal in High Court , which is dismissed with following observation :-   “It is true that both the provisions have to be harmonized. What logically follows from bare reading of the aforesaid provisions is that the disciplinary authority has the competence to inflict punishment of removal from service with a condition that such removal from service shall not in any way result in forfeiture of pensionary benefits to which the workman concerned is otherwise eligible. Only simple reading of the words "AS WOULD BE DUE OTHERWISE" would mean that irrespective of the order of punishment of removal from service, workman would be entitled to superannuation benefits, if it is found due otherwise i.e. if the workman concerned satisfies the other requirement of superannuation benefits under Regulations, 1995, namely, he has completed requisite number of years of working etc.”


Against dismissal order of High Court Bank moves to Supreme Court concludes as under:-


Having considered the rival submissions we do not have the slightest hesitation in accepting the broad submission of Mr. Gupta that the Regulation in question is statutory in nature and the court should accept an interpretation which would not make any other provision redundant. Bearing in mind the aforesaid principle, we proceed to consider the rival contentions. The terms and conditions of service of the employees are governed and modified by the Bipartite Settlement. Various punishments have been provided under the Bipartite Settlement which can be inflicted on the employee found guilty of gross misconduct. In 2002, a Bipartite Settlement was signed by the Indian Banks' Association and the Banks' workmen's Union with regard to disciplinary action procedure. It is common ground that in the light of the said Bipartite Settlement, Clause 6(b) was inserted as one of the punishments which can be inflicted on an employee found guilty of gross misconduct and the same reads as follows:

6. An employee found guilty of gross misconduct may;


(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


11. The employee undisputedly has been visited with the aforesaid penalty in terms of the Bipartite Settlement.

12. Article 22 of the Regulation, which is relied on to deny the claim of the employee 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 forfeiture of his entire past service and consequently shall not qualify for pensionary benefits.


From a plain reading of the aforesaid Regulation, it is evident that removal of an employee shall entail forfeiture of his entire past service and consequently such an employee shall not qualify for pensionary benefits. If we accept this submission, no employee removed from service in any event would be entitled for pensionary benefits. But the fact of the matter is that the Bipartite Settlement provides for removal from service with pensionary benefits "as would be due otherwise under the Rules or Regulations prevailing at the relevant time". The consequence of this construction would be that the words quoted above shall become a dead letter. Such a construction has to be avoided.


The Regulation does not entitle every employee to pensionary benefits. Its application and eligibility is provided under Chapter II of the Regulation 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 forpension in terms of Article 14 of the Regulation. 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 benefit 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. 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 Regulation 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 Regulation shall not be entitled to that.


Accordingly, we hold that the employee's heirs are entitled to superannuation benefits. The entire amount that the Respondent is found entitled to along with interest at the rate of 6% per annum should be disbursed within 6 weeks from the date of receipt/communication of this Order.


In the result, we do not find any merit in this appeal and it is dismissed accordingly with costs of Rs. 50,000/- (rupees fifty thousand) to be paid by the Appellant to the Respondent No. 1 along with other dues and within the time stipulated above.



In view of the above judgment it can be safely concluded that:-


1)           The Act of Resignation is NOT considered as an offence / misconduct NEITHER in bipartite settlement NOR in officer’s service rules to attract the punishment of forfeiture of past service for pensionary benefits.

2)           Relieving letters of the Bank given to Resigned Employees Nowhere states that you are not eligible for superannuation benefits. i.e. Gratuity, Encashment of Leave, Provident Fund & Pension.

3)           None of legislation In India OR in the world inflicts PUNISHMENT for the act which is not defined as an OFFENCE.




Finally the “question of law” which was kept open by the Judiciary in the matter of VIJAYA BANK on 06/12/2013 has been decided in this case on 11/12/2013,as under:-


“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 except where the Service Regulations/Service Rules/Settlements do not disentitle such employee from receiving superannuation benefits “.


This is exactly same clause which IBA & Unions agreed in the settlement of 1993 at Regulation 10 in Pension Regulation circulated by the IBA on 17/03/1994.


In brief, any employee [on resignation, dismissal, compulsory retired] on cessation of his prior to completion of qualifying service as laid down in Regulation 14 of Bank Employees Pension Regulation 1995 shall not be eligible for Pensionary Benefits.





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