IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 09.02.2009 C O R A M : THE HONOURABLE MRS.JUSTICE PRABHA SRIDEVAN and THE HONOURABLE MR. JUSTICE K.K.SASIDHARAN W.A.No.480 of 2007 1.S. Sundaram 2.V. Chidambaram 3.AL.N. Alagappan ...Appellants/Petitioners Vs. 1.ICICI Bank Limited rep. by its Chairman and Managing Director Corporate Office, ICICI Bank Tower Bandra Kurla Complex Mumbai – 400 051 2.The Personal Manager HR Department ICICI Bank Limited 192, Anna Salai Chennai – 600 002. ...Respondents/Respondents PRAYER: Appeal filed under Clause 15 of the Letters Patent against the order dated 09.02.2007 in W.P.No.34351 of 2003 on the file of this court. For appellant : Mr. Balan Haridass For respondents : Mr. A.L. Somayaji, Senior Counsel for Mr. V. Perumal J U D G M E N T (JUDGMENT OF THE COURT WAS DELIVERED BY PRABHA SRIDEVAN,J.) The petitioners were originally employees of the Bank of Madura which has since been amalgamated with ICICI Bank, the respondent herein, and they prayed for a writ of mandamus that they should be granted pension in accordance with the Bank of Madura Employees' Pension Regulations. The prayer was not granted both on https://hcservices.ecourts.gov.in/hcservices/ the ground of maintainability and on merits. Hence the employees have filed this appeal. 2. The facts are as follows: On 30.01.1996, the Bank of Madura introduced for the first time the Bank of Madura Employees' Pension Regulations(BoMPR). This was modified in 1999, incorporating provisions relating to the optees of Bank of Madura Employees' Voluntary Retirement Scheme (VRS in short). Then on 10-03-2001, the Scheme of amalgamation of BoM with ICICI came into effect with the sanction of RBI as per the Banking Regulations Act. 3. On 29-06-2001, the representatives of BoM Association and ICICI Bank worked out an agreement to facilitate the integration process and certain clauses of this agreement are relied on by the appellants. On 19-09-2002, another agreement was entered into between the ICICI, Bank Officers' Association(BOA) and the ICICI Bank. In this, the earlier settlement is specifically referred to and it also states that all earlier agreements are superceded. In 2003, the appellants agreed to the Early Retirement Option. In 2005, the All India Bank Officers' federation issued guidelines for calculating pension as per 8th bipartite settlement. This is the background against which the rights of the parties have to be decided. 4. The learned Counsel for the appellants submitted that pension is a right which cannot be mutilated. Article 226 of the Constitution can be invoked if this right is violated. He referred to various clauses in the Regulations and the Agreement to support his case. He submitted that the Dearness Allowance is the cushion for the pensioners against the rising inflation and that cannot be taken away. There can be no decision by the respondent which adversely affects the right of the BoM Employees. The learned Counsel submitted that it was agreed that the employees who had opted for the pension benefit will be eligible for the same as per the Regulations. It was submitted that the word the "emoluments" would include "dearness allowance" and the Scheme of amalgamation provides that the erstwhile BoM employees will be entitled to receive emoluments which are not less favourable than what they received earlier. He submitted that the deprivation of the right to recive dearness allowance affects the right to life as envisaged in Art. 21. He referred to the following decisions: (i) AIR 1969 SC 1306 (Praga Tools Corpn. Vs. C.V. Imanual) (ii) 1999 (3) LLN 310 (A.K. Ansari Vs. Bharat Overseas Ltd.) https://hcservices.ecourts.gov.in/hcservices/ (iii) W.P.No.32502 of 2003 etc. batch dated 26-11-2008 (V.Kannappan Vs. Additional Secretary, Ministry of Finance and Company Affairs) (iv) 2008 (3) LLN 320 = Manu/TN/0056/2008 (ICICI Bank Ltd. Vs. Lakshminarayanan) (v) 2004 SCC (L&S) 214 (Grid Corporation of Orissa Vs. Rasananda Das) (vi) 2005 WLR 820 (N. Venkatramani Vs. Indian Overseas Bank) 5. The learned Senior Counsel for the respondent submitted that the issue is squarely covered by the decision of the Supreme Court in the Federal Bank Ltd. Vs. Sagar Thomas (2003 (10) SCC 733). He referred to ICICI Bank Vs. Lakshmi Narayan (2008(3)LLN 320 = Manu/TN/0056/2008), in the case of the same respondent and in respect of the same Pension Regulations, a Division Bench of this Court had held that the writ is not maintainable. He also read out the various agreements to which at least two of the appellants were parties, where mutually acceptable terms have been agreed upon and now the appellant cannot claim anything beyond that. He further submitted that the ICICI Bank does not have a pension Scheme for its employees, and it is only to honour the commitment made to the erstwhile BoM employees that the respondent had decided to continue the existing Scheme. He submitted that it was agreed by the parties that the DA would be merged with the Basic Salary, and after the total merger of the FDA no DA will be payable. To demand DA after agreeing to this is unacceptable. He also submitted that actually when the pension was calculated for the petitioners it was found that the pesnsion calculated on the basis of the present Basic Pay was less than the pension payable on the basic pay as received in BoM together with the appropriate increments and DA. So what was paid was according to the latter calculation. Therefore, it is incorrect to say that the appellants were adversely affected. He finally submitted that there is no violation of Article 21 of the Constitution of India and the writ must be dismissed both on maintainability and on merits. The learned Senior Counsel relied on the following judgments: (i) 2003 (10) SCC 733 (Federal Bank Ltd. Vs. Sagar Thomas) (ii) Manu/TN/0056/2003 = 2008(3)LLN 320 (ICICI Bank Vs. Lakshmi Narayan) (iii) 2005 (6) SCC 637 (Binny Vs. Sadasivan) (iv) 2004 (3) CTC 1 (P. Pitchumani Vs. Management & Anrs) (v) 2005 (2) CTC 55 (Nadar Sangam Vs. RBI & Others) https://hcservices.ecourts.gov.in/hcservices/ (vi) 2006 (1) CTC 776 (Nadar Sangam Vs. RBI & Others) (vii) 2006 (11) SCC 634 (S. S. Rana Vs. Registrar & Other) (viii) 1991 (2) SCC 104 (Indian Ex-Service & Others Vs. Union of India) (ix) 1997 (6) SCC 7 (K.L. Rathee Vs. Union of India) (x) 2006 (13) SCC 215 (K.S. Krishnaswami Vs. Union of India) (xi) 1994 (Supp.) (2) SCC 108 (Noida Entrepreneurs Association Vs. U.P. Financial Corporation & Other) 6. The important extracts from the various documents relied on are as follows. (i) In BoM Regulations, "w) 'Retirement' means cessation from Bank's service,- i) ... ii) on voluntary retirement in accordance with provisions contained in regulation 9 of these regulations; .. ze) 'V.R.S.' means Bank of Madura Employees' Voluntary Retirement Scheme enclosed to the circular CO.STF:39/94-95 dated July 21, 1994, or any other specific scheme that may be implemented in future bringing such scheme under the definition of this regulation. The employees who have completed 20 years of service in the bank and who have retired subsequent to the expiry of the scheme mentioned in the Circular CO:GM:CIR:2/93-94 dated May 20, 1993 and who were extended the additional benefits in addition to the normal retirement benefits shall be deemed and considered to have retired under V.R.S." 36. Amount of Pension: (1) In respect of employees who retired between the 1st day of January 1986, but before the 31st day on October 1987, basic pension and additional pension will be updated as per the formula given in Appendix-I https://hcservices.ecourts.gov.in/hcservices/ (2) In the case of an employee retiring in accordance with the provisions of the Service Rules or Settlement after completing a qualifying service of not less than thirty three years the amount of basic pension shall be calculated at fifty per cent of the average emoluments. (3) (a) Additional pension shall be fifty per cent of the average amount of the allowances drawn by an employee during the last ten months of his services; (b) no dearness relief shall be paid on the amount of additional pension. ... 38. Dearness Relief: (1) Dearness relief shall be granted on basic pension or family pension or invalid pension or an compassionate allowance or on pension to employees retiring under VRS in accordance with the rates specified in Appendix II. (2) Dearness relief shall be allowed on full basic pension even after commutation. (3) (a) Additional pension shall be fifty per cent of the average amount of the allowances drawn by an employee during the last ten months of his service; (b) no dearness relief shall be paid on the amount of additional pension. Explanation: For the purpose of this sub-regulation "allowances" means allowances which an admissible to the extent counted for making contributions to the Provident Fund. 39. Determination of the period of ten months for average emoluments:- (1) The period of the proceeding ten months for the purpose of average emoluments shall be reckoned from the date of retirement. (2) In the case of voluntary retirement of premature retirement or employees retiring under VRS the period of the preceeding ten months for the purpose of average emoluments shall be reckoned from the date on which the https://hcservices.ecourts.gov.in/hcservices/ employee voluntarily retires or is premature retired by the Bank or the employee retired under VRS as the case may be. (3) In the case of dismissal or removal or compulsory retirement or termination of service the period of the preceeding ten months for the purpose of average emoluments shall be reckoned from the date on which the employee is dismissed or removed or compulsorily retired or terminated by the Bank. (4) If during the last ten months of the service an employee had been absent from duty on extraordinary leave on loss of pay or had been under suspension and the period whereof does not count as service, the aforesaid period of extraordinary leave or suspension shall not be taken into account in the calculation of the average emoluments and an equal period before the ten months shall be included. 9. All the employees of the Transferor Bank in service on the Effective Date shall become the employees of the Transferee Bank on such date without any break or interruption in service and on emoluments which are not less favourable than those subsisting with reference to the Transferor bank as on the Effective Date. (ii) In Memorandum of Settlement dated 27-10-1999, iii) The pension amount shall be calculated based on average emoluments i.e., average of pay drawn by an employee during the last ten months of his service as per Regulation 39. However, subsequent wage revisions shall be given effect to notionally to arrive at the average emoluments." (iii) In the RBI's order dated 26th February 2001 Ref.No.DBOD.No.PSBS.725/16.01.128/2000-2001, "Agreement between the representatives of Bank of Madura Officers' Association and ICICI Bank: ... The eBoM structure has a component of variable DA linked to Consumer Price Index which is absent in the ICICI Bank structure. While there are varied number of allwoance in eBoM not linked to the performance, a significant portion of compensation come through performance linked bonus in ICICI Bank. .. https://hcservices.ecourts.gov.in/hcservices/ Against this backdrop the new compensation structure is designed. The new structure will be effective from July 1, 2001. This is a major step in the integration process now underway. .. • As a second step, the FDA (FDA+3.5% of the Basic) will be divided in three equal parts. One part so arrived at will be added to the Basic pay and balance amount will be paid as FDA for the year. • Inflation neutralisation worked out on the above formula will be for a period of three years i.e. till the time the FDA gets fully merged with Basic salary. While calculating neutralisation, the Basic Pay will be the one as described above without adding performance- linked rise in Basic salary, if any, earned by the officers. Examples have been given as to how it is calculated. (iii) Provident Fund/Pension Fund Provident Fund contribution by the officer and the Bank is currently @ 10% of Basic salary. For those who have opted for Pension, the Bank's contribution is credited to the Pension Fund. It is decided to continue the existing scheme for the time being. It is however intended to offer the scheme obtainable in ICICI Bank to the eBoM officers. Keeping in mind the complexities involved in calculations and the cost impact it is decided to engage a reputed Actuarial Firm to help the Bank in arriving at appropriate decision. It is expected that by the end of March 2002 a clear picture will emerge for taking a view on the retirement benefits. Till such time the new scheme is made applicable on mutual acceptance, the existing scheme would continue. (iv) IBA Settlement The new compensation structure and service conditions are quite different from the IBA structure. It is also a much higher package. This is a significant change in the compensation structure which was successfully conceived through mutual discussions. Any change to this package or any change to any other related matter will be after mutual discussions and agreement, irrespective of any present or future IBA settlements and or guidelines or any other agreements, understandings with eBoM officers by the earlier establishment in this regard. https://hcservices.ecourts.gov.in/hcservices/ (v) Agreement between the representatives of ICICI Bank Officers' Association and ICICI Bank The representatives of the above parties have arrived at an understanding on January 16, 2001 and June 29, 2001. While the agreement of January 16, 2001 helped create an atmosphere of trust and understanding to facilitate integration process between the erstwhile Bank of Madura and ICICI Bank, the agreement of June 29, 2001, details steps taken in respect of integration on aspects like Compensation structure linked to performance, Service Conditions and Code of Conduct. The parties have all along enjoyed each others' confidence and trust and have maintained an atmosphere of cordial relations over period. The parties agree that there is a need to arrive at an understanding and re-write the agreements due to significant development during the intervening period. The merger of ICICI Ltd., ICICI PFS Ltd., and ICICI Capital Services Ltd., with ICICI bank has necessitated arriving at new understanding between the parties such that this integration process runs smoothly. With this end in view, the representatives of the parties met on various dates and held detailed discussions. As a result of these, the representatives met again on September19, 2002 at Mumbai and have arrived at an agreement annexed hereto. THis agreement supercedes all the previous understandings/agreements/practices in respect of compensation structure, promotion process, and other matters referred to in the agreement annexed. The Code of Conduct described in the agreement of June 29, 2001 and circulated vide circular No.ICBK/HRD/2001-2002/1899 of September 29, 2001 remains unchanged. The parties agree to continue to work with the same level of understanding for the growth of the organisation and its employees. (vi) Agreement dated September 19, 2002 between the representatives of ICICI Bank Officers' Association and ICICI Bank 1. The compensation structure of the officers of erstwhile Bank of Madura (eBoM) in the grade of Assistant Manager and above, will now be aligned with the structure of the other employees in the similar grades. There will be no change in the basic salary on this alignment, except the amount of Fixed Dearness Allowance (FDA) drawn https://hcservices.ecourts.gov.in/hcservices/ by these officers will be emerged in the Basic salary effective from October 1, 2002. On the merger of FDA, as above, no FDA will be payable. (vii)Under Early Retirement Option 2003 (ERO) dated June 17, 2003, 8D Pension Benefit The Eligible Employees who have opted for pension benefit as per the erstwhile Bank of Madura Employees' Pension Regulations, 1995, will be eligible for the same as per the terms and conditions of the said Regulations. (viii) All India Bank Officers' Confederation sent a Circular No.43 to all the affiliates/members dated 2nd July, 2005 "Dearness Relief on basic pension computed as above shall be at rates as given in Annexure – III to this Circular." 7. The relevant portions from the decisions cited before us are as follows: (a) AIR 1969 SC 1306 (cited supra) Article 226 provides that every High Court shall have power to issue to any person or authority orders and writs including writs in the nature of habeas corpus, mandamus etc., or any of them for the enforcement of any of the rights conferred by Part III of the Constitution and for any other purpose. But it is well understood that a mandamus lies to secure the performance of a public or statutory duty in the performance of which the one who applies for it has a sufficient legal interest.... Therefore, the condition precedent for the issue of mandamus is that there is in one claiming it a legal right to the performance of a legal duty by one against whom it is sought. An order of mandamus is, in form, a command directed to a person, corporation or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. https://hcservices.ecourts.gov.in/hcservices/ (b) 1999 3 LLN 310 (cited supra) Constitution of India, Art.226- Bharat Overseas Bank Employees' (Pension) Regulations, 1995 – Writ- petitioners/appellants filing writ petition claiming pension, arrears of basic pay and dearness allowance – A learned Single Judge holding the writ petition maintainable but dismissing their claims – Hence these writ appeals – The principal question is whether writ petitions against the respondent private bank is maintainable at the instance of the employees of the bank claiming pension, etc. - After analysing the pronouncements in a number of decisions of the Supreme Court and of the Division Benches of High Court, the Court held that the appellants have no alternative or efficacious remedy except to invoke the writ jurisdiction of High Court – Right of pension is a matter of livelihood – Denial of such livelihood definitely offends the Constitution and this situation is monstrous in respect of retirees who lead a frugal life – Order of learned Single Judge holding in writ petition maintainable affirmed. From the above discussion, several principles were distilled, the relevant ones for this case are: (1) ....... (2) ......... (3) ............ (4)...... (5)......... (6) The framework of service regulations made in the appropriate rules or regulations should be consistent with and subject to the same public law, principles and limitations. (7) ...... (8) ........... (9)...... (10) The instrumentality, agency or person must have an element of authority or ability to effect the relations with its employees or public by virtue of power https://hcservices.ecourts.gov.in/hcservices/ vested in it by law, memorandum of association or bye- laws or articles of association. (11) The instrumentality, agency or person renders an element of public service and is accountable to health and strength of the workers, men and women, adequate means of livelihood, the security for payment of living wages, reasonable conditions of work, decent standard of life and opportunity to enjoy full leisure and social and cultural activities to the workman. (12) ............... (13) If the exercise of the power is arbitrary, unjust and unfair, the public authority, instrumentality, agency or the person acting in public interest, though in the field of private law, is not free to prescribe any unconstitutional conditions or limitations in their actions." The Division Bench held that the writ petition was mainatainable against the Bank in the facts and circumstances. (c) In W.P.No.32502 of 2003 dated 26-11-2008 which was against the same respondent, the learned Single Judge held that the writ was maintainable. The following two paragraphs are relevant. "35. By analysis of the above decisions, it emerges that powers under Art.226 of Constitution is very wide and powers are to be exercised by applying Constitutional provisions and if there is violation of fundamental rights or statutory provisions or arbitrariness in discharging the public duty when there is public law element involved. Of course, in the matter of employment of workers by private companies on the basis of contracts entered between them, Court's have been reluctant to exercise power of judicial review and whenever powers were exercised as against the private employers it was solely done based on public law element involved therein. 36. In the present case, it is the case of payment of Pension to number of employees. Payment of Pension is not a bounty payable on the sweet will of the employer. As held by the Apex Court, it is the proprietary right under Art.31(1) and 19(1)(f) of Constitution. It is the measure of social security. Though Pension is often described as deferred portion of compensation over the past service, it is in fact in the nature of social security plan to provide for evening life of superannuated employee. Such social security plan are https://hcservices.ecourts.gov.in/hcservices/ concerned with socio-economic requirements of the Constitution." (d) 2004 SCC L&S 214 (cited supra) "Conditions of service – Alteration of – Held, cannot be altered to the disadvantage of the employees by reducing their pay scales or withdrawing any service benefit – But there is no bar to offer such employees better prospects – .. – There cannot be two types of pay scales, one for the purpose of continuing in service up to the age of retirement and the other for the period between 58 and 60 years – Pension is not a bounty but a hard- earned benefit for long service, which cannot be taken away – Electricity (Supply) Act, 1948, S.60" (e) 2005 WLR 820 (cited supra) 22. When the above consistent ratio of the Hon'ble Supreme Court as well that of the English cases are applied to the case on hand, we have no hesitation in holding that the interpretation made by us in the earlier paragraphs of the order would alone achieve the object and purport of the Regulation especially when the petitioner had put in as many as 14 years, 9 months and 17 days and by construing his last spell of employment of 9 months and 17 days as one full year, he would be well within his rights to claim pension as provided under the amended Regulation 28 of the Indian Bank Voluntary Employees' Pension Regulations, 1995. Therefore, the contrary stand of the respondent in the impugned order dated 22-3-2003 is liable to be set aside. (f) 2003 10 SCC 733 (cited supra) "Private companies would normally not be amenable to the writ jurisdiction under Article 226 of the Constitution. But in certain circumstances a writ may issue to such private bodies or persons as there may be statutes which need to be complied with by all concerned including the private companies. For example, there are certain legislations like the Industrial Disputes Act, the Minimum Wages Act the Factories Act or for maintaining proper environment say Air (Prevention and Control of Pollution) Act, 1981 or Water (Prevention and Control of Pollution) Act, 1974 etc. or statutes of the like nature which fasten certain duties and responsibilities statutorily upon such private bodies which they are bound to comply with. If they violate such a statutory provision a writ would certainly be issued for compliance of those https://hcservices.ecourts.gov.in/hcservices/ provisions. For instance, if a private employer dispense with the service of its employee in violation of the provisions contained under the Industrial Disputes Act, in innumerable cases the High Court interfered and have issued the writ to the private bodies and the companies in that regard. But the difficulty in issuing a writ may arise where there may not be any non-compliance or violation of any statutory provision by the private body. In that event a writ may not be issued at all. Other remedies, as may be available, may have to be resorted to. Merely because the Reserve Bank of India lays the banking policy in the interest of