C/SCA/3065/2011 CAV JUDGEMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 3065 of 2011
SPECIAL CIVIL APPLICATION NO. 14293 of 2011
SPECIAL CIVIL APPLICATION NO. 4652 of 2011
SPECIAL CIVIL APPLICATION NO. 4653 of 2011
SPECIAL CIVIL APPLICATION NO. 4654 of 2011
SPECIAL CIVIL APPLICATION NO. 4655 of 2011
SPECIAL CIVIL APPLICATION NO. 4656 of 2011
SPECIAL CIVIL APPLICATION NO. 4657 of 2011
SPECIAL CIVIL APPLICATION NO. 5056 of 2011
SPECIAL CIVIL APPLICATION NO. 5717 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS JUSTICE SONIA GOKANI
Whether Reporters of Local Papers may be allowed to see the judgment ?
To be referred to the Reporter or not ?
Whether their Lordships wish to see the fair copy of the judgment ?
Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ?
Whether it is to be circulated to the civil judge ?
BANK OF BARODA RETIRED OFFICERS ASSOCIATION & 3....Petitioner(s)
BANK OF BARODA & 2....Respondent(s)
MR HRIDAY BUCH, ADVOCATE with MR NAVALDAN R LANGA for the Petitioner(s) No. 1 - 4
MR DARSHAN M PARIKH, ADVOCATE for the Respondent(s) No. 1 , 3
NOTICE SERVED BY DS for the Respondent(s) No. 2
HONOURABLE MS JUSTICE SONIA GOKANI
Date : 14/08/2012
1. In this group of petitions, identical question of law is involved and therefore, they are being decided by a common judgment, however, for appreciating the rival claims of the parties, facts emerging from Special Civil Application No.3065 of 2011 shall be taken into account treating the same as a lead matter.
2. Petitioner No.1 Bank of Baroda Retired Officers Association is registered under the provisions of Trade Union Act, 1986 bearing Registration No. G/4766/1990. Respondent No.1 is the Banking Company and respondent No.2 is the officer of the respondent No.1. Respondent No.3 is an Association of three national Banks. The petitioners No.2,3 and 4 retired from service of respondent No.1 with effect from 24.1.2007, 30.7.2007 and 9.9.2010 respectively, under the scheme of voluntary retirement contemplated under the service regulations of respondent No.1 banking company.
3. By way of this petition, these petitioners challenge the legality, validity and propriety of the actions of respondents in denying pensionary benefits to the officers/employees, who have retired under Bank of Baroda (Officers) Service Regulations, 1979 ('BOBOSR' for short) read with clause (f) of the Circular of respondents No.1 dated 9.9.2010 and also clause (13) of the instructions issued by respondent No.3, whereby the officers, who have voluntarily retired under the BOBOSR are excluded from exercising their option to receive pensionary benefits from various pension schemes.
4. It is averred that the in service conditions are covered by statutory regulations framed by the Board of Directors of the Bank in consultation with Reserve Bank of India and after obtaining previous sanction of Central Government, under Sections 12 and 19 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970, services regulations as well as pension regulations have come into force on 1.7.1979 and 29.9.1995 respectively. These regulations are framed after much deliberations between the trade union, officers and the management of various Banks. It is the say of the petitioner that retired employees are paid pension, who opted for pension regulation scheme of 1995. This has been recently modified and liberalized making it more inclusive to provide umbrella of pension to more employees. First time, the pension was given under a joint scheme in the year 1995, which was opposed by some of the employees and hence, there were two classes of employees, one which opted for pension and another which did not.
5. Services of these two classes of employees were covered by two different sets of rules, namely, Bank of Baroda Employees (Pension) Regulations, 1995 for one class of employees, which opted for pension and (2) Bank of Baroda (Officers) Service Regulations, 1979 (BOBOSR) for those officers who form another class, who did not opt for pension.
It also appears from pleadings that the Indian Bank Association signed a new and liberalized agreement ( a joint note ) on 27.4.2010 ( hereinafter referred to as 'IBA', a representative body of management of Banks operating in India including the respondent bank). This has been jointly singed by Indian Bank Association and the representatives of the employees. It permitted an option to those employees, who did not join the pension scheme by incorporating clause (3) in the agreement. Respondent Bank upon instructions from IBA to give effect to the above referred agreement issued circular dated 9.9.2010. This circular contains provision giving option to all the employees, who could not opt for pension on earlier occasion.
6. It is the say of the petitioners that the said agreement created two sets of employees, namely,(i) the serving employees who were in service on the date of signing of the agreement on 27.4.2010 and (ii) Those employees, who were in service of the Bank prior to 29.9.1995 and retired prior to the date of a joint note i.e. 27.4.2010.
It is further the say of the petitioners that they belong to the second set of employees, who were in service prior to 29.9.1995 and retired prior to the date of this joint note. It is insisted that there is no other class of employees other than these two clearly defined classes and the said agreement (Joint note) did not contemplate creating any class within these classes.
It is further urged that the petitioners had applied for voluntary retirement prior to such agreement was signed and as no option was available on that date, the petitioners were unable to submit the form on the date of retirement. It is the case of the petitioners that voluntary retirement, as prayed for by the petitioners, was duly sanctioned and as per the normal rules prevalent on the date of retirement, they duly retired from service. After the agreement dated 27.4.2010, the circular has been issued on 9.9.2010 and when it came to the notice of the applicant that such a joint agreement has been arrived at, they made an attempt to apply under the same. Respondents however denied the petitioners to offer the right to exercise the second option in the liberalized pension scheme. It is averred that it is legitimate right of the petitioners to opt for the joint pension scheme, such denial is being challenged on the ground of the same being unjust, unreasonable and discriminatory act on the part of the respondent employer.
Reliefs sought for by the petitioners are as follows:-
(A) Your Lordships be pleased to admit and allow this petition;
(B) Your Lordships be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction by quashing impugned clause(f) of Circular dated 9.9.2010 as well as clause 13 of the instructions issued by respondent No.3 dated 10.8.2010 by holding the same as illegal, arbitrary and violative of Art.14 of the Constitution of India and also contrary to the settlement and joint note dated 27.4.2010 and also further be pleased to direct the respondents to permit petitioner No.2 and other similarly situated employees/officers and members of the petitioner No.1 association to exercise their option for existing pension scheme and also be pleased to direct the respondents to pay pensionary benefits and all other consequential benefits together with appropriate rate of interest.
Pending, admission, hearing and final hearing disposal of this petition. Your Lordships be pleased to direct the respondents to accept options to join existing pension scheme subject to out come of the writ petition.
7. Learned Advocate Mr. Hriday Buch appearing with learned advocate Mr. Navaldan R. Langa for the employees and the Association have emphasized that this benefit is contemplated for the purpose of all the employees and there is no specific exclusion made. He further urged that this is an attempt to create class within the class and very less number of employees, are excluded thereby. This was a second opportunity for all those who retired earlier and who could not opt for the pension for various reasons. Those who have taken voluntary retirement have been specifically excluded and those who were in service of the Bank prior to 29.9.1995( in case of Nationalized Bank) and 26.3.1996 (in case of associate banks of State Bank of India) and retired after that date and prior to the date of joint note i.e. on 27.4.2010, needed to exercise the option in writing within 60 days from the date of offer to become the member of pension fund and within 30 days, they needed to refund the entire amount of Bank's contribution rendered towards the provident fund and interest accrued thereon, received by the officer on retirement together with his share in contribution towards meeting 30% of the fund of Rs.3115 crores, being the estimated fund for those officers, who were found eligible under the joint note. He further urged that voluntary retirement is on completing 55 years of age or on completing 30 years of service under BOBOSR and yet for a strange reason, they have held not to have been entitled to the pension. This is not an intelligent classification nor sub-serving the object. This indeed is a artificial class created which is violative of fundamental rights of the applicants. Accordingly, he urged the Court to issue a writ in the nature of mandamus or any appropriate writ or direction to grant the petitioner to exercise the second option for joining the pension scheme.
What is thus sought to be created by issuance of Circular dated 9.9.2010, urged by learned advocates is that while seeking prior approval of the Board of Directors, artificial classification is created and thereby on such discriminatory practice, genuine officers are estopped from enjoying fruits of such the bipartite settlement.
The petitioners and other similarly situated officers, who have retired under statutory scheme framed by the Bank, cannot be denied option for pension when the scheme is benevolent and the object is to benefit one and all.
The association, by this petition, has sought writ of mandamus or any other appropriate writ for quashing the impugned Clause(f) of circular dated 9.9.2010 as well as clause-13 of instructions issued by respondent No.3 dated 10.8.2010 by holding that the same as arbitrary and violative of Article 14 of the Constitution of India.
8. Learned advocate Mr. Darshan Parikh appearing for the respondents contended that respondents' in their affidavit-in-reply have not disputed the fact that such a joint note has been signed to extend liberally benefit of pension to the retired employees, who had earlier not opted for retirement. However, claim of the petitioners is being challenged on the ground that those persons, who voluntarily retired under Clause 19 of BOBOSR would not come within the purview of the definition of 'retirement' as the pension regulations define this term 'retirement' as those employees who retired on attaining the age of superannuation specified in service regulations or on voluntary retirement in accordance with the provisions contained in regulation 29 or on prematured retirement by the Bank before attaining the age of superannuation specified in service regulations. It is, therefore, emphasized that while considering the scope of settlement, it was a clear intention of the parties to the settlement to keep those who voluntarily retired under Clause 19 out of the settlement and no relief can be granted to the petitioners or other similarly placed persons.
9. It is urged that several round of dialogues took place between the representatives and officers of All India Banks Officers Association, All Indian Banks Officers' Federation and Indian Banks Associate representatives of officers and other banks. After several rounds of discussions, joint agreement of 27.4.2010 got culminated, which has been accepted by both the sides. Benefit under the settlement had been given by the Banks which have to bear different impacts of financial burden for the past by way of arrears as well as in the future. It is submitted that as per the law laid down by the Supreme Court and the agreement having been accepted in full without any objection, subsequent challenge of the same is not tenable at law and the same should be rejected in limine.
10. Learned advocate Mr. Parikh based on these details and ration submitted that employees, once having accepted the part of the agreement, are estopped from contending that other part of the agreement is not acceptable. He further urged that if the cut off date is fixed, the the same cannot be said to be arbitrary. Relevant factors are to be taken into account when there is no scheme, which would necessarily please everyone but that would not make the settlement or the scheme violative of Article 14 of the Constitution of India. It is further urged that in the year 2001 Bank introduced the scheme for voluntary retirement from 15.1.2001 and various employees opted for voluntary retirement under the said scheme. However, the petitioners and other similarly placed persons, did not opt for voluntary retirement of the year 2001 and, therefore, they are not governed by the scheme.
He urged that those employees who did not opt for option of pension cannot be governed by pension regulations of the year 1995 and they also could not have applied for voluntary retirement, as per Regulation 29 of the Pension Regulations. Therefore, his submissions were that services of all the officers, employees of Bank are governed by BOBOSR and regulation 19 provided for voluntary retirement in terms of the said regulations. All those employees who did not opt for pension on the ground that it was onerous scheme and instead applied for voluntary retirement under BOBOSR and such request was accepted by the Bank, these employees stood voluntarily retired as per the said provisions and all the benefits available, under regulation 19 were made available to them.
12. It is emphasized that pension regulations 1995 have been determined to be applied only to those employees who had opted for pension and were in service as on 27.4.2010 and those who joined services between 29.9.1995 and 21.3.2010. It would not be applicable to persons who joined the employment of the Bank after 1.4.2010.
13. It is emphatically argued that the petitioners who are now claiming the option for pension are not entitled and their request is rightly rejected as there was no intention of the parties while entering into settlement dated 27.4.2010 to include this group of persons. This was an unacceptable package and if certain benefits are given to certain classes of persons from the specified dates and if this formula was worked out on the basis of economic factor like capacity to pay and financial position of the Banking Industry as a whole, so also regarding the past and future burden to be borne by the bank, the same cannot be said to be cumbersome.
14. Learned advocate for the respondents relied on the following judgments:-
1. AIR 1997 SC 782, State of Rajasthan and another etc. vs. Amrit Lal Gandhi and others etc.
2. AIR 1976 SC 1207, Addl. Distt. Magistrate, Jabalpur vs. Shivakant Shukla.
3. AIR 2006 SC 171, State of Punjab and others v. Amar Nath Goyal and others.
4. AIR 2005 SC 2429, Hari Chand and others vs. Faridabad Complex Administration and others.
5. 2011 (8)SCALE 96, Sheelkumar Jain vs. The New India Assurance Col. Ltd.and Ors.
6. AIR 1982 SC 917, V. T. Khanzode and others vs. Reserve Bank of India and another.
7. AIR 1992 SC 570, Union of India and others vs. Tejram Parashramji Bombhate and others.
8. 2000(1) GLH 199, Premji Khanji Masani vs. Regional Manager
9. 2004(4) SCC 412, O.N.G.C. Ltd. vs. G.S.Chugani and another
10. 1999(1) SC 194, UCO Bank and others vs. Sanwar Mal
11. AIR 1983 SC 130:1983 (1) SCC 305, D. S. Nakara and others vs. Union of India.
12. 2008(1) SC 586, Union of India vs. Dineshan K.K.
15. The Apex Court in the case of V.T. Khanzode and others vs. Reserve Bank of India and another reported in AIR 1982 SC 917 has held that number of schemes governing service matters may not be full-proof and some or the other section of employees are bound to feel aggrieved on the score of its expectations being falsified or remaining to be unfulfilled.
16. In the case of State of Rajasthan vs. Amritlal Gandhi and Ors reported in 1997(2) SCC 342, Supreme Court held says that introducing pension scheme envisages financial implications and approval of the Government was necessary and the Government in its evidence before the High Court justified cut off date on the ground of the same being wholly economic. The Supreme Court held that paying capacity is a relevant and valid consideration while fixing the cut off date. Accordingly, the pension regulations, which were made applicable prospectively giving limited retrospectivity to the same were fully approved.
17. Judgment of the Apex Court rendered in the case of State Government Pensioners' Association and others vs. State of A.P. reported in AIR 1986 SC 1907 holds that where the payment of joint amount of gratuity was with prospective effect from the specified date and the question was whether that offended Article 14 of the Constitution of India and the Division Bench of the High Court when answered in negation, the Supreme Court stamped the same in affirmation by holding that there is no illegality or unconstitutionality involved in providing for prospective operation from the specified date. It said that the Court does not need to rewrite the notification and introduce a provision which did not exist.
18. Affidavit-in-rejoinder also has been filed by other petitioners who have have refuted all contentions on the line of the present petitioner.
19 From the submissions of both the sides as also from the decisions produced in support of their respective submissions, the question that would arise for the determination of this Court is as to whether the circular issued by the present respondent Bank of Baroda pursuant to the joint note dated 27.4.2010 is contrary to the spirit of joint note and whether the same would permit pension to those employees who have taken voluntary retirement under BOBOSR and whether such denial would amount to is violation of Article 14 of the Constitution?
19A. Pension regulations are available for employees of all classes whereas BOBOSR operate for the purpose of officers only.
19B. Pension regulations of the respondent Bank defines 'Retirement' under Regulation (2)(y) 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 provision 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 Settlements;
Three kinds of retirement are being recognized by the pension regulations and the persons ceases from bank service. Under these regulations Under these regulations, retiring employee is the one who retires on attaining the age of superannuation specified in service regulations or (ii) under Regulation 29 on voluntarily retiring, or (iii) on prematured retirement by the Bank before attaining the age of superannuation.
19C. It would be appropriate to refer to Regulation 29 of the said pension regulations, at this stage, which permits voluntary retirement to the employees:-
29. Pension on Voluntary Retirement.
(1) On or after the 1st day of November, 1993, at any time after an employee has completed twenty years of qualifying service he may, by giving notice of not less than three months in writing to the appointing authority retire from service; Provided that this sub-regulation shall not apply to an employee who is on deputation or on study leave abroad unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year;
Provided further that this sub-regulation shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking or company or institution or body, whether incorporated or not to which he is on deputation at the time of seeking voluntary retirement:
Provided that this sub-regulation shall not apply to an employee who is deemed to have retired in accordance with clause (1) of Regulation
(2) The notice of voluntary retirement given under sub-regulation(1) shall require acceptance by the appointing authority;
Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.
(3) (a) An employee referred to in sub-regulation(1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than three months giving reasons thereof;
(b) On receipt of a request under clause (a), the appointing authority may, subject to the provisions of sub-regulation(2), consider such request for the curtailment of the period of notice of three months on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of three months on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of three months.
(4) An employee, who has elected to retire under this regulation and has given necessary notice to that effect to the appointing authority, shall be precluded from withdrawing his notice except with the specific approval of such authority; Provided that the request for such withdrawal shall be made before the intended date of his retirement.
(5) The qualifying service of an employee retiring voluntarily under this regulation shall be increased by a period not exceeding fiver years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty-three years and it does not take him beyond the date of superannuation.
(6) The pension of an employee retiring under this regulation shall be based on the average emoluments as defined under clause(d) of Regulation 2 of these Regulations and the increase, not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating his pension.
20. It is apparent from these regulations that after the employee concerned completes 20 years of qualifying service on or after 1st day of November, 1993, he is required to give notice of not less than 3 months in writing to the appointing authority for voluntary retirement. However, to certain class of employees, who are on deputation or on study leave abroad, this would not apply unless they return to the country or after they are transferred, if on deputation, then, sub-regulation will not apply to an employee, who is deemed to be have retired in accordance with clause 1 of Regulation 2.
A deeming fiction is provided whereby the appointing authority if does not refuse such permission for retirement before the expiry of the period specified in the notice, retirement before the expiry of the period specified in the notice, shall become effective from the date of expiry of the said period. Employee referred to in sub-regulation (1) is also entitled to make a request to the appointing authority to accept his notice of voluntary retirement of less than 3 months, if there are cogent reasons for so doing and the appointing authority may consider such request for the curtailment of the period of three months on merits, if no administrative inconvenience is caused thereby.
21. It appears that service of the officers of Bank are still governed by BOBOSR. Such regulations in terms of Regulation 19 provides for voluntary retirement. The petitioners did not opt for pension and later on they applied for voluntary retirement under Regulation 19 of BOBOSR. On their request having been acceded to by the Bank, they stood voluntarily retired, as per the provisions of Regulation 19. It would be profitable to reproduce Regulation 19, at this stage.
EXTRACT OF REGULATION 19 OF BANK OF BARODA (OFFICERS) SERVICE REGULATIONS, 1979.
Age of Retirement:
(1) The age of retirement of an officer employee shall be as determined by the Board in accordance with the guidelines issued by the Government from time to time.
Provided that the Bank may, at its discretion, on review by the special committee/ special committees as provided hereinafter in sub-regulation(2) retire, if it is considered necessary to do so in the public interest, an officer employee on or at any time after the completion of 55 years of age or on or at any time after the completion of 30 years of total service as an officer employee or otherwise, whichever is earlier;
Provided further that before retiring an officer employee, at least three months' notice in writing or an amount equivalent to three months' substantive salary/ pay and allowances, shall be given to such officer employee;
Provided further that an officer aggrieved by the order of the Competent Authority as provided in sub-regulation (2) may, within one month of the passing of the order given in writing a representation to the Board of Directors against the decision of the Competent Authority and on receipt of such representation from the concerned officer, the Board of Directors shall consider his representation and take a decision within a period of three months. Where the Board of Directors decides that the order passed by the Competent Authority is not justified the concerned officer shall be reinstated as though the Competent Authority has not passed the order.
Provided also that nothing in this regulation shall be deemed to preclude an officer employee from retiring earlier pursuant to the option exercised by him in accordance with the rules in the Bank.
An officer employee will retire on the last day of the month in which he completes his age of retirement.
Provided that an officer employee whose date of birth is on the first day of a month shall retire from service on the afternoon of the last day of the preceding month on attaining the age of retirement.
(Ref: HO:BR:92:290 dated 12.10.2000)
The Bank shall constitute a special committee/ Special Committees consisting of not less than three members to review, whether an officer employee should be retired in accordance with the first proviso to this regulation. Such committee/ committees shall, from time to time, review the case of each officer employee and no order of retirement shall be made unless the Special Committee/ Special Committee recommends, in wiring to the Competent Authority the retirement of the officer employee.
Guidelines issued by the Government in terms of Regulation 19(1):
The age of retirement of an officer in the Bank shall be determined in accordance with the following conditions:
I. An officer employee of the Bank recruited/ promoted prior to 19th July 1969 shall retire on completion of the 60 years of age.
II. An officer employee of the Bank recruited prior to 19th July 1969 but promoted as an officer on or after 19th July 1969 shall retire on completion of 60 years of age.
III. An officer employee of the Bank recruited whether as an award staff or as an officer employee on or after 19th July 1969 shall retire on completion of 58 years of age.
IV. With effect from 22.5.1998, for all officers, retirement age will be -60- years as per revised Govt. Guidelines.
(Cir.No.HO:BR:90/209 dated 20.07.1998).
(a) If an officers date of birth is the first day of the month then he will retire on the close of the last day of the preceding month in which he completes his age of retirement.
For Example: An officer born on 1st April would retire on 31st March.
(b) if the last day of the month happens to be a holiday, then such officer may attend the office on the last working day of the month in which he completes his age of retirement. He would however, be eligible to get the salary for the full month, as he would be retiring on the last day of the month.
22. This regulation provides for voluntary retirement and compulsory retirement. It is to be noted, at the outset, that none of the petitioners herein before this Court has been compulsorily retired by the respondent bank on review by the Special Committee in the public interest. It can be thus noted that any employee who attains to the age of retirement can seek for retiring voluntarily. The age of retirement is being fixed by the Board in accordance with the guidelines issued by the Bank from time to time and, therefore, three categories of retirement are contemplated under Regulation 19, namely, (1) resignation (2) compulsory retirement and (3) voluntary retirement from the service.
23. It is emphatically submitted to this Court by the learned advocate appearing for the respondents that in two of the judgments of the Apex Court reported in, resignation is considered akin to the voluntary retirement and no pensionary benefits are made available if a person has resigned. As far as those who are compulsorily made to retire in the public interest, their case for the pension is not required to be considered by this Court in as much as not only both the sides are ad-idem on the issue but, the Court also is of the opinion that, that being a category where the officer/employee has been made to retire in the public interest, benefit of subsequent scheme naturally is not available nor is it contemplated for them and, therefore, the only category that is left for consideration is of those officers who have retired voluntarily under Regulation 19.
The question, therefore, would arise is as to whether those who retired under Regulation 19 can be denied the benefit of the said joint note even though they already fulfill the criteria of having completed 20 years of service as also of having given notice of three months at the time of taking voluntary retirement, with nothing adverse against any of these persons. Such denial of extension of benefit to these persons is only on the ground that at the relevant time, these persons did not opt for pension on admitted ground that they did not want to abide themselves by the terms of pension scheme which they possibly might have found onerous. Thus, the bank officers/employee applied for voluntary retirement under Regulation 19 and such request was accepted by the Bank. The question, therefore, would arise is as to whether acceptance of benefits available to them under Regulation 19, would preclude this class of persons from exercising their option for the pension, which is being made available even if they fulfill the criterias set out in the joint note of having been in service on or before 29.11.1995 and having retired thereafter on or before the stipulated date.
24. It is also necessary to make a mention at this stage that on enquiry learned advocates for the parties stated that such issues have also arisen in other banks and some of the employees have litigated in different parts of the country. It is also further mentioned that the scheme is known to be a self-sufficient scheme and no financial burden except the overall burden reflected in the joint note is to be given to any of the parties. On being specifically questioned on this issue as to what are the total number of employees/officers and the total amount of financial burden that would accrue, no specific detail is available.
25. It is surely the concern of the bank if financial burden is likely to arise the financial position of the Bank, quantum of non-performing assets like overdue loans etc. are not recorded by the Court while deciding any lis between the parties, in the opinion of this Court, even if the employees, who are challenging the action of the Bank, had agreed to accept the separate package, the same cannot be termed as inseparable. There could be hardly any dispute that the package is always inseparable and the entire formula is worked out considering the various factors including the economic factors like capacity to pay and the financial position of the banking industry as a whole. However, it is not possible for this Court to ratify the version of the respondents that the category of the petitioners and whom they represent is completely distinct and identifiable category and if those falling under such category are kept out of the purview of settlement, no fault could be found with them.
26. Retirement, as contemplated under three categories of retirement under Regulation 19 of BOBOSR in the opinion of this Court, would not disentitle the petitioners for the pension despite there being specific option made available for the second time to the retired employees, who had missed out the same earlier.
27. Even if it is assumed that petitioners herein had earlier found the pension scheme onerous and, therefore, they chose not to opt for it, that however would not ipso facto preclude them if otherwise their cases gets included for pension under the joint note. As mentioned hereinabove it speaks of five situations, under which a person can be said to be entitled to pension as per the joint note.
When pension under the said note is available to the retired employees and retirement since is defined under Regulation 29 of the pension regulations and there is no reference of retirement under Regulations 19, absence of that specific inclusion would not amount to explicit and conscious exclusion.
There is nothing to indicate although argued much that at the time of preparation of joint note, there was a deliberation to exclude those who retired under Regulations 19 of BOBOSR from opting for pension and in absence of any such specific exclusion in the joint note itself, it will not be permissible for the respondent Bank to interpret it the manner in which it is done nor can the Court ratify such action of the respondents. As rightly submitted by the petitioners, there is no reason for creating a class within the class and deny these persons who otherwise fulfill the criteria of taking voluntary retirement after 20 years of service on having given the notice of three months.
28. In the case of State of J. and K. v. Triloki Nath Khosa and others reported in AIR 1974 SC 1, the Apex Court held that it is well settled that Article 14 of the Constitution prohibits class legislation but not reasonable classification. Such classification, however, must satisfy two tests of distinguishing persons or things grouped together from those kept out of group and that such difference must bear just and rational relation to the object sought to be achieved.
29. In the case of Killol V. Shelat vs. Municipal Corporation of City of Ahmedabad and another (supra), the Division Bench of this Court held that discrimination is the essence of classification and does violence to the constitutional guarantee of equality only if it rests on an unreasonable basis.
30. Some of the findings of the Apex Court in case of D.S.Nakara and others vs. Union of India (supra) would be very relevant as far as attempt is made to exclude those who retired under Rule 19 of BOBOSR,1979 by clarifying at micro level.
All pensioners have equal right to receive the benefits of liberalized pension scheme as pensioners form a class as a whole and cannot be micro classified by an arbitrary and unreasonable eligibility criterion for the purpose of grant of revised pension. It also held that omitting the offending criterion will not make the scheme, having financial implication, retrospective in operation.
An unconstitutional portion which is unrelated to the object sought to be achieved can be severed and omitted from otherwise constitutional provision by reading down process.
8. Primary contention is that the pensioners of the Central Government form a class for purpose of pensionary benefits and there could not be mini-classification' within the class designated as pensioners. 'The expression 'pensioner' is generally understood in contra-distinction to the one in service. Government servants in service, in other words, those who have not retired, are entitled to salary and other allowances. Those who retire and are designated as 'pensioners' are entitled to receive pension under the relevant rules. Therefore, this would clearly indicate that those who render service and retire on superannuation or any other mode of retirement and are in receipt of pension are comprehended in the expression 'pensioners'.
9. Is this class of pensioners further divisible for the purpose of 'entitlement' and 'payment' of pension into those who retired by certain date and those who retired after that date? If date of retirement can be accepted as a valid criterion for classification, on retirement each individual Government servant would form a class by himself because the date of retirement of each is correlated to his birth date and on attaining a certain age he had to retire. It is only after the recommendations of the Third Central Pay Commission were accepted by the Government of India that the retirement dates have been specified to be 12 in number being last day of each month in which the birth date of the individual Government servant happens to fall. In other words, all Government servants who retire correlated to birth date on attaining the age of superannuation in a given month shall not retire on that date but shall retire on the last day of the month. Now, if date of retirement is a valid criterion for classification, those who retire at the end of every month shall form a class by themselves. This is too microscopic a classification to be upheld for any valid purpose. Is it permissible or is it violative of Art. 14?
10. The scope, content and meaning of Art. 14 of the Constitution has been the subject matter of intensive examination by this Court in a catena of decisions. It would, therefore, be merely adding to the length of this judgment to recapitulate all those decisions and it is better to avoid that exercise save and except referring to the latest decision on the subject in Maneka Gandhi v. Union of India, (1978) 2 SCR 621 : (AIR 1978 SC 597) from which the following observation may be extracted:
"........what is the content and reach of the great equalising principle enunciated in this article ? There can be no doubt that it a founding faith of the Constitution. It is indeed the pillar on which rests securely the foundation of our democratic republic. And, therefore, it must not be subjected to a narrow, pedantic or lexicographic approach. No attempt should be made to truncate its all- embracing scope and meaning for, to do so would be to violate its activist magnitude. Equality is a dynamic concept with many aspects and dimensions and it cannot be imprisoned within traditional and doctrinaire limits...... Article 14 strikes at arbitrariness in State action and ensures fairness and equality of treatment. The principle of reasonableness, which legally as well as philosophically, is an essential element of equality or non-arbitrariness pervades Art. 14 like a brooding omnipresence."
11. The decisions clearly lay down that though Art. 14 forbids class legislation, it does not forbid reasonable classification for the purpose of legislation. In order, however, to pass the test of permissible classification, two conditions must be fulfilled, viz., (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group; and (ii) that that differentia must have a rational relation to the objects sought to be achieved by the statute in question. (See Ram Krishna Dalmia v. S. R. Tendolkar, 1959 SCR 279 at P. 296: (AIR 1958 SC 538 at p. 547)). The classification may be founded on differential basis according to objects sought to be achieved but what is implicit in it is that there ought to be nexus i.e. causal connection between the basis of classification and object of the statute under consideration. It is equally well settled by the decisions of this Court that Art .14 condemns discrimination not only by a substanstive law but also by a law of procedure.
12. After an exhaustive review of almost all decisions bearing on the question of Art. 14, this Court speaking through Chandrachud, C. J. in Re. Special Courts Bill, (1979) 2 SCR 476 at p. 534: (AIR 1979 SC 478 at P. 509) restated the settled propositions which emerged from the judgments of this Court undoubtedly in so far as they were relevant to the decision on the points arising for consideration in that matter. Four of them are apt and relevant for the present purpose and may be extracted. They are :
"3. The constitutional command to the State to afford equal protection of its laws sets a goal not attainable by the invention and application of a precise formula. Therefore, classification need not be constituted by an exact or scientific exclusion or inclusion of persons or things. The Courts should not insist on delusive exactness or apply doctrinaire tests for determining the validity of classification in any given case. Classification is justified if it is not palpably arbitrary.
4. The principle underlying the guarantee of Article 14 is not that the same rules of law should be applicable to all persons within the Indian territory or that the same remedies should be made available to them irrespective of differences of circumstances. It only means that all persons similarly circumstanced shall be treated alike both in privileges conferred and liabilities imposed. Equal laws would have to be applied to all in the same situation, and there should be no discrimination between one person and another if as regards the subject matter of the legislation their position is substantially the same.
6. The law can make and set apart the classes according to the needs and exigencies of the society and as suggested by experience. It can recognise, even a degree of evil, but the classification should never be arbitrary, artificial or evasive.
7. The classification must not be arbitrary but must be rational, that is to say, it must not only be based on some qualities or characteristics which are to be found in all the persons grouped together and not in others who are left out but those qualities or characteristics must have a reasonable relation to the object of the legislation. In order to pass the test, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentia which distinguishes those that are grouped together from others, and (2) that differentia must have a rational relation to the object sought to be achieved by the Act."
13. The other facet of Article 14 which must be remembered is that it eschews arbitrariness in any form. Article 14 has, therefore, not to be held identical with the doctrine of classification. As was noticed in Maneka Gandhi's case (AIR 1978 SC 597) in the earliest stages of evolution of the Constitutional law, Art. 14 came to be identified with the doctrine of classification because the view taken was that Article 14 forbids discrimination and there will be no discrimination where the classification making the differentia fulfils the aforementioned two conditions. However, in E. P. Royappa v. State of Tamil Nadu, (1974) 2 SCR 348: (AIR 1974 SC 555) it was held that the basic principle which informs both Articles 14 and 16 is equality and inhibition against discrimination. This Court further observed as under :
"From a positivistic point of view, equality is antithetic to arbitrariness. In fact, equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch. Where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Art. 14 and if it affects any matter relating to public employment, it is also violative of Art. 16. Articles 14 and 16 strike at arbitrariness in State action and ensure fairness and equality of treatment."
14. Justice Iyer has in his inimitable style dissected Article 14 as under :
"The article has a pervasive processual potency and versatile quality, equalitarian in its soul and allergic to discriminatory diktats. Equality is the antithesis of arbitrariness and ex cathedra ipse dixit is the ally of demagogic authoritarianism. Only knight-errants of 'executive excesses', if we may use current cliche, can fall in love with the Dame of despotism, legislative or administrative. If this Court gives in here it gives up the ghost. And so it is that I insist on the dynamics of limitations on fundamental freedoms as implying the rule of law; Be you ever so high, the law is above you." ((1978) 2 SCR 621 at p. 728: AIR 1978 SC 597 at p. 661). Affirming and explaining this view, the Constitution Bench in Ajay Hasia etc. v. Khalid Mujib Sahravardi, (1981) 2 SCR 79 : (AIR 1981 SC 487) held that it must, therefore, now be taken to be well settled that what Article 14 strikes at is arbitrariness because any action that is arbitrary must necessarily involve negation of equality. The Court made it explicit that where an act is arbitrary it is implicit in it that it is unequal both according to political logic and constitutional law and is, therefore, violative of Article 14. After a review of large number of decisions bearing on the subject, in Air India etc. v. Nargesh Meerza, (1982) 1 SCR 438 : (AIR 1981 SC 1829) the Court formulated propositions emerging from an analysis and examination of earlier decisions. One such proposition held well established is that Article 14 is certainly attracted where equals are treated differently without any reasonable basis.
15. Thus the fundamental principle is that Article 14 forbids class legislation but permits reasonable classification for the purpose of legislation which classification must satisfy the twin tests of classification being founded on an intelligible differentia which distinguishes persons or things that are grouped together from those that are left out of the group and that differentia must have a rational nexus to the object sought to be achieved by the statute in question.
After discussing extensively the decisions concerning Article 14 of the Constitution the Apex Court concluded emphasizing importance of pension for all the retired employees in the following words:-
31. From the discussion three things emerge: (i) that pension is neither a bounty nor a matter of grace depending upon the sweet will of the employer and that it creates a vested right subject to 1972 Rules which are statutory in character because they are enacted in exercise of powers conferred by the proviso to Article 309 and Clause (5) of Article 148 of the Constitution, (ii) that the pension is not an ex gratia payment but it is a payment for the past service rendered; and (iii) it is a social welfare measure rendering socio-economic justice to those who in the hey day of their life ceaselessly toiled for the employer on an assurance that in their old age they would not be left in lurch. It must also be noticed that the quantum of pension is a certain percentage correlated to the average emoluments drawn during last three years of service reduced to ten months under liberalised pension scheme. Its payment is dependent upon an additional condition of impeccable behaviour even subsequent to retirement, that is, since the cessation of the contract of service and that it can be reduced or withdrawn as a disciplinary measure.
31. These findings can be further buttressed by the fact that there is a specific inclusion of those employees who retired under Voluntary Retirement Scheme (VRS) circulated on 31.8.2000. Those employees who retired before attaining the age of superannuation, but, after rendering service for a minimum period of 15 years in terms of such scheme are extended pensionary benefits on pro rata basis. This is done on the ground that no provisions in pension regulations are available for them.
32. Although it is sought to be argued that on account of absence of any provision for pensionary benefits that this inclusion is made for those employees. Nonetheless, when persons who retired voluntarily on completing 15 years of services are found entitled to pensionary benefits, excluding present petitioners only on the count that their voluntary retirement after putting in service of 20 years and 3 months notice period to the competent authority was under Regulation 19 of BOBSOR, cannot be held a reasonable classification founded on intelligible differentia.
This Court is conscious of the settled position of law that unless palpably arbitrary, classification is to be held as justifiable. Again, there can be no exact or scientific inclusion or exclusion of persons or things, while constituting classification. Similarly situated persons need to be treated alike as the same set of law or rules is impossible to be applied to all citizens, if they are not similarly circumstanced.
And, as can be held form the discussion above that those persons who are sought to be excluded are also similarly situated as they too are retired employees. Attempt to further classify and create a class of retired employees at micro level does not appear to be the reasonable classifications as the same leads to negation of equality and even without expecting scientific inclusion of exclusion, such classification requires to be held as forbidden by Article 14 of the Constitution. This also has no rational relation to the objects sought to be achieved nor is there any persuasive reason to uphold the said artificial division.
34. Coming to the question of the financial implication, in such matters that would surely have some relevance and bearing and various authorities are sought to be depended upon to drive home the point that inclusion would entail additional financial liability on the respondents and Court must not add anything by rewriting the understanding arrived at by and between the parties.
On close perusal and also on verifying the details, figures do not appear to be frightening. Total number of employees being almost minuscule, this liability may not deter the Court from holding against discrimination.
Division Bench of this Court in the decision rendered in the case of Premji Khanji Masani vs. Regional Manager ( 2000(1) GLH 199), did not accept the claim of the appellant of treating resignation of services as his voluntary retirement essentially on two grounds, firstly because, pension scheme did not envisage both as one and secondly, because pension scheme was not retrospective in nature. This decision in light of decision of Apex Court rendered in case of Sheelkumar Jain vs. The New India Assurance Co.Ltd. and Ors.(supra) would not help the cause of the respondents herein.
35 Apex Court in the case of Sheelkumar Jain vs. The New India Assurance Co.Ltd. and Ors.(supra) was deciding the question of entitlement of pension of an employee of General Insurance, wherein the issue in question was whether termination was by way of resignation or a termination by way of voluntary retirement.
It was contended before the Apex Court that the resignation actually amounted to voluntary retirement in the given facts and circumstances, relying on decision of Sudhir Chandra Sarkar vs. Tata Iron and steel Co.Ltd. and Ors.(AIR 1984 SC 1064) and other decision. It was also argued before the Apex Court that pension is neither a bounty nor a matter of grace but is a payment for the past services rendered by an employee,basing the same on D.S.Nakara and others vs. Union of India (supra) so also on the decision rendered in Chairman, Railway Board and Ors. vs. C.R.Rangadhamaiah and ors. (AIR 1997 SC 3828).
Apex Court emphasized to regard legislative intent while interpreting a statute (Union of India & Anr. vs. Pradeep Kumari and others(1995) 2 SCC 736 and held that the Court requires to construe the statutory provisions in each case to find out whether termination of service of an employee was a termination by way of resignation or a termination by way of voluntary retirement and while construing these provisions, the Court shall regard the purposes of the provisions.
The general purpose of the Pension Scheme, 1995, read as a whole, is to grant pensionary benefits to employees, who had rendered service in the Insurance Companies and had retired after putting in the qualifying service in the Insurance Companies. Clauses 22 and 30 of the Pension Scheme, 1995 cannot be so construed as to deprive of an employee of an Insurance Company, such as the appellant, who had put in the qualifying service for pension and who had voluntarily given up his service after serving 90 days notice in accordance with sub-clause(1) of Clause 5 of the Scheme, 1976 and after his notice was accepted by the appointing authority.
This decision also referred to the cases of Reserve Bank of India and Anr. vs. Cecil Dennis Solomon and Anr. (supra) and that of UCO Bank and Ors. vs. Sanwar Mal etc. (supra) and held that In these two decisions, the Courts were not called upon to decide whether the termination of services of the employee was by way of resignation or voluntary retirement. In this case, on the other hand, we are called upon to decide the issue whether the termination of services of the appellant in 1991 amounted to resignation or voluntary retirement.
36. As can be noted from the discussion held hereinabove, all these petitioners have put in the qualifying service for pension of 20 years and have served notice of not less than 3 months in writing to the authority disclosing their intention to leave service which came to be accepted by the appointing authority.
Termination of service thus was on account of voluntary retirement having been accepted by the respondent and therefore, when the joint note of dated 27.4.2010 contemplates availing pension to the retired employees specifying certain criterias, petitioners cannot be excluded from such entitlement by artificially creating a class and not considering their cessation of service as retirement. Pension since is not meant to be a a bounty nor a matter of grace depending upon sweet will of the employee nor an ex gracia payment but a payment for the past services rendered, subsequent communication dated 29.9.2010 needs quashment.
Resultantly, all these writ petitions filed by the petitioners are allowed and direct the respondent No.1 to consider the claim of the petitioners for pension in accordance with the joint note ( Pension Scheme, 1995) and intimate the decision of the appellant within three months form the date of receipt of this decision.
Cost shall be the cost in cause.
(MS SONIA GOKANI, J.)
Learned advocate Mr. Parikh for the respondents, has made a request for stay of the judgment. Since this Court has already granted a period of three months to the respondents, no further time is required to be granted for the purpose of enabling the respondents to approach higher forum.
(MS SONIA GOKANI, J.)