Anomaly in Computation of Pension - SC Judgement
Anomaly
in computation of Pension Civil Appeal No. 5525 of 2012, Filed in the
Hon'ble Supreme Court of India by Bank of Baroda & Ors with other
Civil Appeals
HR & INDUSTRIAL RELATIONS
No.HR&IR/2018-19/G2/4786
April 3, 2018
Chief Executives of Member Banks which
are parties to the 7th
Bipartite Settlement
Dear Sir,
Anomaly
in computation of Pension Civil Appeal No. 5525 of 2012, Filed in the
Hon'ble Supreme Court of India by Bank of Baroda & Ors with other
Civil Appeals.
On 9-10-1993, a Bi-partite Settlement was signed at
Industry level between Indian Banks' Association (representing member
Banks) and Workmen Unions (representing Workmen) under the provisions of
Industrial Dispute Act, 1947 for introduction of Pension as a second
retiral benefit in lieu of "Banks contribution to Provident fund." On
similar lines a Joint Note dated 29-10-1993 between Indian Banks'
Association (representing member Banks) and Officers Associations
(representing Officers) was signed.
2. The respective member Banks
in exercise of their power under Section 19 of Banking Companies
(Acquisition & transfer of undertakings) Act, 1970/1980 pursuant to
above referred Bi-partite Settlement/Joint Note, framed and notified in
the Gazette of India "Bank Employees Pension Regulations, 1995."
3.
Another Joint Note/Bi-partite Settlement was signed between respective
parties as mentioned herein above on 14-12-1999 and 27-3-2000
respectively relating to Wage revision. As per the provisions of said
Joint Note / Bi-partite Settlement, 1684 points of Consumer Price Index
(CPI) were merged with existing basic pay of Officers/employees and
revised basic pay was worked out accordingly. However, as per agreed
terms & conditions, pay for the purpose of pension was worked out
after merging 1616 points of CPI as against 1684 points. These
provisions were made effective w.e.f. 1-4-1998. As such, pay for the
purpose of pension was less than the actual Pay the Employee/Officer
concerned was getting on or after 1-4-1998. This anomaly was removed
vide Joint Note/Bi-partite Settlement signed on 2-6-2005. However,
monetary benefits were given w.e.f. 1-5-2005.
4. Due to this
anomaly, the employees/Officers who retired after 1-4-1998, including
those who retired under Special Voluntary Retirement Scheme, 2000 filed
various Writ Petitions before different Hon'ble High Courts, praying
that they be held entitled to Payment of Pension on the basis of actual
average pay drawn by them during last 10 months as per the provisions of
Bank Employees Pensions Regulations, 1995.
5. When the matter
came up before Hon'ble High Court of Karnataka and Madras, the Hon'ble
Courts decided the matter against Banks and ultimately concerned Banks
approached Hon'ble Supreme Court by filing Civil Appeals viz., CA No
5525/2012, 6254/2012, 5611/2012, 3026-3253/2013, 3257-3262/2013,
11205-11340/2014, 11342-11435/2014, 9533-9646/2014, 8557/2014,
4711-4800/2014 and 1880/2018, 1881-1888/2018, 1890/2018, 1892-1912/2018,
1918/2018, 1919-2087 and 2088-2092/2018.
6. The Hon'ble Supreme
Court vide its order dated 13/2/2018 (copy enclosed) have dismissed
these appeals filed by the Banks and inter-alia has held that:-
"17…the
provisions contained in Regulation 35 also make an incumbent entitled
for opting the pension on the basis of average emoluments. The average
emoluments have to be calculated on the basis of the preceding ten
months. Adding Explanation (c) to Regulation 2(s), as done, could have
created no fictional basis in view of clear and unambiguous provisions
in other provisions of the Regulations. Besides, the definition of the
average emoluments in Regulation 2(d) itself makes it clear that it is
average pay drawn "during the last ten months" of his service by an
employee. It cannot mean pay drawn by the employee even before several
years. Mentionably there is no amendment made in the aforesaid provision
of Regulation 2(d) and the expression during the preceding last ten
months before date of retirement is clearly culled out in Regulation
38(1) and 38(2). Thus, in our considered opinion, the view taken by the
then Chief Justice Vikramajit Sen as he then was, at Karnataka High
Court and by the High Court of Madras are appropriate and the view taken
by the Delhi High Court cannot be said to be sustainable for the
various other reasons too mentioned hereinafter.
29. Thus, in our
opinion, the Regulations which were in force till 2003, would apply with
full force and as a matter of fact, the amendments made in it by
addition of Explanation (c) in Regulation 2(s) did not have the effect
of amending the Regulations relating to pension, as contained in
Regulation 38 read with Regulations 2(d) and 35 of the Regulations of
1995. Even otherwise, if it had the effect of amending the pay and perks
‘average emoluments', as specified in Regulation 2(d), it could not
have operated retrospectively and taken away accrued rights. Otherwise
also, it would have been arbitrary exercise of power. Besides, there was
no binding statutory force of the so called Joint Note of the Officers'
Association, as admittedly, to Officers' Association even the
provisions of Industrial Disputes Act were not applicable and Joint note
had no statutory support, and it was not open to forgo the benefits
available under the Regulations to those officers who have retired from
1.4.1998 till December 1999 and thereafter, and to deprive them of the
benefits of the Regulations. Thus, by the Joint Note that has been
relied upon, no estoppel said to have been created. There is no estoppel
as against the enforcement of statutory provisions. The Joint Note had
no force of law and could not have been against the spirit of the
statutory Regulations and the basic service conditions, as envisaged
under the Regulations framed under the Act of 1970. They could not have
been tinkered with in an arbitrary manner, as has been laid down by this
Court in Central Inland Water Transport Corporation Limited & Anr.
vs. Brojo Nath Ganguly & Anr., (1986) 3 SCC 156 & Delhi
Transport Corporation vs D.T.C. Mazdoor Congress, (1991) Supp.1 SCC 600.
33.
The only purpose of the addition of Explanation (c) to Regulation 2(s),
was to take away the actual computation of the pension on the basis of
the salary, which was drawn in the preceding ten months. Thus, we have
to hesitation to strike it down being arbitrary and repugnant to other
provisions/Regulations namely 2(d), 38(1)(2) and 35. The Explanation (c)
to Regulation 2(s) is hereby struck down, as it could not have been
enacted retrospectively to take away accrued rights. Even otherwise also
it is held to be arbitrary and irrational. More so, in view of the fact
that only by way of a temporary measure, that discrimination was
created and the Explanation was deleted with effect from 1.5.2005."
34.
Thus, we set aside the judgment rendered by the High Court of Delhi and
affirm that of High Courts of Karnataka at Bangalore and the High Court
of Madras. The appeals filed by the Banks are dismissed and the appeal
filed by the Association is allowed. Resultantly, let the amount which
was due and payable be paid with 9% interest, be calculated and paid
within four months from today.
35. All pending applications stand disposed of."
7.
The matter was put up to the Managing Committee of IBA in its meeting
held on 28.3.2018. The committee resolved that the judgement of the
Hon'ble Supreme Court may be forwarded to all member banks which are
party to above mentioned Joint Note / Bipartite Settlement for their
necessary action. As such, a copy of the judgement of Hon'ble Supreme
Court is enclosed.
8. As directed by Managing Committee we have
taken a Legal Opinion to know the impact of the judgement on various
Banks which is given below:
(a) All Nationalized Banks who have
Pension Regulations, 1995 will have to give effect to the judgement and
pay the differential arrears in the amount of Pension which was due and
payable with 9% interest within 4 months from the date of judgement i.e.
13.02.2018.
(b) Banks incorporated under special statutes will
also have to give effect to the judgement if they have implemented
provisions of the above mentioned Joint Note / 7th Bipartite Settlement.
(c)
Private Banks which are not amenable to the Writ jurisdiction of the
Hon'ble High Courts/Supreme Court, though can take the plea that
captioned judgement is not applicable to them, should also give effect
and comply with the captioned judgement if they have implemented
provisions of the above mentioned Joint Note/7th Bipartite Settlement.
The view expressed in this point Is based on the possibility that if the
employees of the Private Banks approach the Civil Court on the basis of
said Hon'ble Supreme Court judgement, they would procure a favourable
verdict.
Yours faithfully,
B Raj Kumar
Deputy Chief Executive
Source: http://www.iba.org.in/
SC JUDGEMNT
