IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 28.6.2011 CORAM: THE HONOURABLE MR.JUSTICE ELIPE DHARMA RAO AND THE HONOURABLE MR.JUSTICE K.K.SASIDHARAN Writ Appeal No.1209 of 2007 1.G.Palani 2.Radha S.Kumar 3.K.B.Sivakumar 4.K.N.Rangasamy 5.V.V.Venkitaramani 6.S.Radhakrishnan 7.R.Ramachandran 8.G.Sivaramakrishnan 9.S.Krishnamoorthy 10.M.R.Visweswaran 11.V.Sundaresa Davey 12.T.S.Rangamani 13.N.Narayanaswamy 14.B.G.Krishnamurthy 15.T.V.Srinivasan 16.Mrs.K.Santhalakahsmi 17.R.Sampath ... Appellants Vs. 1.Bank of Baroda, rep.by The Chairman & Managing Director, Central Office, Baroda Corporate Centre, 'G' Block, C-26,Bandra-Kurla Complex, Bandra East, Mumbai-400051. 2.The Competent Authority for Pension Regulations, (Assistant General Manager), Bank of Baroda, Head Office, Baroda House, P.B.No.506, Mandvi, Baroda-390006. 3.Union of India, represented by its Secretary to the Banking Division, Ministry of Finance, New Delhi-110001. ... Respondents https://hcservices.ecourts.gov.in/hcservices/ Writ Appeal preferred under clause 15 of the Letters Patent, as against the order of the learned single Judge dated8.8.2007 made in W.P.No.8945 of 2001. Petition presented under Article 226 of the Constitution of India to issue a writ of mandamus directing the second respondent to pay the difference in Basic Pension and Additional pension and commutation of pension with interest at a rate to be determined by this Court, in terms of the Bank of Baroda (Employees') Pension Regulations, 1995. For appellants : Mr.AL.Somayaji, Senior Counsel for Mr.C.R.Chandrasekaran For R.1 & R.2 : Mr.A.P.S.Kasturi Rangan for M/s.Sampathkumar and Associates JUDGMENT ELIPE DHARMA RAO, J. The appellants are the retired employees of the respondents 1 and 2/Bank of Baroda between 30.11.1998 and 31.8.2000, either on superannuation or on voluntary retirement. 2. Originally, they have initiated these writ proceedings praying to issue a writ of mandamus directing the second respondent to pay the difference in basic pension and additional pension and commutation of pension with interest at a rate to be determined by this Court, in terms of the Bank of Baroda (Employees') Pension Regulations, 1995 (hereinafter referred to as the Regulations). 3. After the respondents brought in an amendment to the Regulations in April, 2003, by adding sub-clause (c) after 2(S)(b) with retrospective effect from 1.4.1998, the appellants have filed a petition to amend the prayer before the learned single Judge and on the same having been allowed, the prayer has been amended to one of a writ of Declaration, to 'declare that sub-clause (c) of clause (S) of Regulation 2 of Bank of Baroda (Employees) Pension Regulations, 1995 is null and void and direct the second respondent to pay the difference in basic pension and additional pension and commutation of pension with interest at a rate to be determined by this Court, in terms of the Bank of Baroda (Employees') Pension Regulations, 1995'. 4. From the materials placed on record, it is seen that Pension scheme was first introduced in 1995 in Banks and thereafter by virtue of the Joint Note signed by the Indian Banks' Association with various Bank Officers Unions on 14.12.1999, on salary revision for officers in Public Sector Banks, a salary revision was proposed and accepted. 5. Pay scales were revised from 1.4.1998 by the first respondent Bank and by the time they were implemented, according to https://hcservices.ecourts.gov.in/hcservices/ the appellants, they had retired and hence they have been paid after their retirement, the arrears of wages consequent upon the revision. In this Joint Note, clause 6 defined 'pension' as: 'Pay' for the purpose of pension shall be the aggregate of pre-revised pay and Dearness Allowance thereon at CPI (consumer price index) 1616 points." According to the appellants, this clause has resulted in payment of reduced amount of pension to them since the respondents 1 and 2 have not taken the last ten months enhanced salary for calculating the pension, but only the earlier unenhanced salary, citing the Joint Note. This, according to the appellants, is illegal and hence they have filed the present writ proceedings, the prayer of which has been subsequently amended, as stated above. 6. Since the learned single Judge has dismissed their plea, the appellants have come forward to prefer this appeal. 7. We have heard, at length, the submissions of the learned senior counsel appearing for the appellants and the learned standing counsel for the respondents 1 and 2. 8. The learned senior counsel appearing for the appellants would argue that once the pay revision has been effected, the respondents should take into consideration the last ten months salary to count the pension of the employees and the impugned amendment brought in by the respondents whereby 'pay' was defined only for the purpose of payment of reduced pension to the appellants, contrary to the pension regulations when they retired, as compared to payment of provident fund based on the revised pay from 1.4.1998, is illegal. Referring the act of the respondents an illegal one and need to be interfered with by this Court, the learned senior counsel would rely on a Three Judge Bench judgment of the Honourable Apex Court in SALABUDDIN MOHAMED YUNUS vs. STATE OF ANDHRA PRADESH [1984 LAB I.C. 1738]. In this case, a Government servant in the State of Hyderabad, who was governed by Rule 4 and 299(1)(b) of the Hyderabad Civil Service Rules and was entitled to receive pension of Rs.1,000/=, was retired before 1.11.1956 i.e. the date of reorganisation of States. But, by the subsequent amendment brought in, his pension was brought down to Rs.857.15 with retrospective effect by notification dated 3.2.1971. In these circumstances, the Honourable Apex Court has held the said action of reducing the pension as illegal 'as the right to receive pension flowed immediately on retirement and was property within meaning of Articles 19(1)(f) and 31(1) of the Constitution i.e. a fundamental right and could not be taken away either under Clause (5) of Article 19(1) and such deprivation was also not justified under Article 31(1) since the same could not be said to be for public purpose and no compensation was being paid to the public servant." 9. The learned senior counsel would also place reliance on a judgment of a Division Bench of Kerala High Court in SYNDICATE BANK https://hcservices.ecourts.gov.in/hcservices/ AND OTHERS vs. CELINE THOMAS AND OTHERS [2006-II-LLJ 413]. In this case, the employer Bank denied to its employees who retired between November 1, 1992 and October 31, 1994, gratuity payable to them on the basis of revised pay granted after their retirement with retrospective effect, by invoking provision in a Memorandum of Understanding reached between Nationalised Banks and employees in June 1995. In these circumstances, the Division Bench of the Kerala High Court has held: "... the payment of gratuity is a statutory benefit. It had to be computed on the basis of monthly pay of an employee. Memorandum of Understanding could not meddle with statutory prescriptions." 10. Citing the above judgments, the learned senior counsel for the appellants would argue that unfortunately, the learned single Judge has not considered these facts, leading to erroneous conclusions having been arrived at by him and would pray to allow this writ appeal. 11. On the other hand, the learned standing counsel for the respondents 1 and 2 would argue that the power of the Bank to amend the Pension Regulations is derived from Section 19(1) of the Banking Companies (Acquisition and Transfer of Undertakings) Act and in this case, by virtue of a settlement entered into by the Indian Banks' Association with the Unions, revised pay scales have been brought into effect from 1.4.1998 and regarding the persons like the appellants, it has been agreed that such enhancement in the emoluments is only for the sake of salary and not for computing the pension. The learned counsel would further argue that pursuant to the revision effected, the appellants have also received enhanced pay scales, but when it came to the matter of pension, they started agitating, which should not be encouraged by this Court. The learned counsel would further argue that the present writ proceedings are not maintainable on account of laches since the appellants have sought to challenge the definition of 'pay' in the Joint Note dated 14.12.1999 and Bipartite Settlement dated 27.3.2000 almost four to five years after the same was agreed upon by the Officers Association representing a majority of the bank officers at the apex industry level and such amendment as agreed being otherwise notified thorough circulars to all the offices by the Bank. He would further argue that there is no contradiction between the Joint Note/Bipartite settlement and the Pension Regulations. He would further argue that while negotiating the next settlement with the officers and the workmen, IBA, after mutual agreement with the representative Unions/Associations, has signed a settlement dated 2.6.2005 wherein it has been agreed between the parties that in respect of retirees retiring on or after 1.5.2005, 'average emoluments' as defined in Pension Regulations for the purpose of pension, be calculated with reference to the pay drawn during the last ten months of service of the employee's service in the Bank. https://hcservices.ecourts.gov.in/hcservices/ 12. In support of his arguments, the learned counsel would place reliance on the following judgments: 1. TATA ENGINEERING AND LOCOMOTIVE COMPANY LIMITED vs. THEIR WORKMEN [(1981) 4 SCC 627] 2. NATIONAL ENGINEERING INDUSTRIESLTD. vs. STATE OF RAJASTHAN AND OTHERS [AIR 2000 SC 469], 3. I.T.C.LTD. WORKERS WELFARE ASSOCIATION AND ANOTHER vs. THE MANAGEMENT OF ITD LTD. AND OTHERS [AIR 2002 SC 937] and 4. TRANSMISSION CORPORATION A.P. LTD. & OTHERS vs. P.RAMACHANDRA RAO & ANOTHER. 13. In the first judgment cited above, a Three Judge Bench of the Honourable Apex Court has held that: "A settlement cannot be weighed in any golden scales and the question whether it is just and fair has to be answered on the basis of principles different from those which come into play when an industrial dispute is under adjudication. If the Settlement had been arrived at by a vast majority of the concerned workers with their eyes open and was also accepted by them in its totality, it must be presumed to be just and fair and not liable to be ignored while deciding the reference merely because a small number of workers were not parties to it or refused to accept it, or because the Tribunal was of the opinion that the workers deserved marginally higher emoluments than they themselves thought they did." 14. In the second judgment cited above, another Three Judge Bench of the Honourable Apex Court has held: "A settlement of dispute between the parties themselves is to be preferred, where it could be arrived at, to industrial adjudication, as the settlement is likely to lead to more lasting peace than an award. Settlement is arrived at by the free will of the parties and is a pointer to there being goodwill between them. When there is a dispute that the settlement is not bona fide in nature or that it has been arrived at on account of fraud, misrepresentation or concealment of facts or even corruption and other inducements it could be subject matter of yet another industrial dispute which an appropriate Government may refer for adjudication after examining the allegations as there is an underlying assumption that the settlement reached with the help of Conciliation Officer must be fair and reasonable." 15. In the third judgment cited above, the Honourable Apex Court has held: "A settlement which is a product of collective bargaining is entitled to due weight and consideration, more so when a https://hcservices.ecourts.gov.in/hcservices/ settlement is arrived at in the course of conciliation proceeding. The settlement can only be ignored in exceptional circumstances viz. if it is demonstrably unjust, unfair or the result of mala fides such as corrupt motives on the part of those who were instrumental in effecting the settlement. That apart, the settlement has to be judged as a whole, taking an overall view. The various terms and clauses of settlement cannot be examined in piecemeal and in vacuum. In the instant case it cannot be said that the settlement which is otherwise valid and just suffers from any legal infirmity merely for the reason that one of the clauses in the settlement extends the benefits of life pension scheme only to the employees retiring after a particular date i.e. 24.8.1986. Exclusion of workmen retiring before that date is no ground to characterise the settlement as unjust or unfair. Moreover the allegations of mala fides such as corrupt motives have not been levelled against anyone and that aspect becomes irrelevant." 16. In the fourth judgment cited, the Honourable Apex Court has observed that 'exclusion of workmen retiring before date fixed in the settlement entered with recognised union is no good ground to characterise settlement as unjust or unfair, more so when there is no challenge to legality of settlement.' 17. Relying on the above judgments, the learned standing counsel for the respondents 1 and 2 would argue that since the impugned action has been resorted to on the part of the respondents 1 and 2 pursuant to a settlement entered into between the Unions and the Indian Banks' Association, the above judgments of the Honourable Apex Court squarely apply to the case on hand and would pray to dismiss this writ appeal. 18. The Bank of Baroda (Employees') Pension Regulations, 1995 are framed in exercise of the powers conferred by clause (f) of sub section (2) of Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act and thus, they are having statutory force in terms of the judgment of the Honourable Apex Court in VIDYA DHAR PANDE vs. VIDYUT GRIH SIKSHASAMITI [(1988) 4 SCC 734]. 19. Since the matter involves the consideration of the terms 'average emoluments' and 'amount of pension' as defined in Regulations 2(d) and 35(2), they are extracted hereunder for easy reference: "2(d): 'Average Emoluments' means the average of the pay drawn by an employee during the last ten months of his service in the Bank" "35. Amount of pension: (1) .... (2) In the case of an employee retiring in accordance with the provisions of the Service Regulations or https://hcservices.ecourts.gov.in/hcservices/ 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." 20. A plain reading of both these Regulations would make it clear that 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 i.e. average of the pay drawn by an employee during the last ten months of his service in the Bank. But, in the case on hand, the straight case of the appellants is that though their pay has been revised from 1.4.1998, this pay hike has not been taken into count by the respondents on the ground that it was not agreed upon between the Unions and the Indian Banks' Association. If we apply the clear meaning of Regulations 2(d) and 35(2), this action of the respondents 1 and 2, must be held as a non- est one. But, the respondents 1 and 2 take shelter under the Joint Note entered into between the Unions and the Indian Banks' Association, saying that whatever has been accepted in the Joint Note could alone be insisted upon by the appellants and having already enjoyed the pay hike and received the arrears, the appellants are not justified in seeking to quash the impugned action of the respondents 1 and 2. 21. When the Pension Regulations strictly define that the last ten months emoluments should be taken into count for calculating the pension and when it is not at all the case of the respondents 1 and 2 themselves that the Regulations 2(d) and 35(2) have also been suitably amended, to achieve the purpose of impugned action, we cannot attach any logic to the differentiation introduced into the definition of the term 'pay' by the impugned action of the respondents since by virtue of this impugned action of the respondents 1 and 2, a legal conflict and contradiction has been created between the terms of Regulations, particularly 2(d) and 35 (2), which are having the statutory force and the terms of the impugned amendment. 22. The respondents have relied on the judgments to the effect that they have the power to prescribe a cut-off date and that the settlements entered into between the workers unions and the Management by virtue of collective bargaining cannot be thrown out simply. We have no quarrel with this well established principle of law. But, in the case on hand, it is not that unbridled power of the respondents, that is in dispute, but the challenge is to the way in which an unusual meaning has been sought to be introduced by the respondents, quite against the very purport of the Pension Regulations. 23. It is the strong case of the appellants that because of this unusual amendment brought into the Regulations by the respondents, they have been put to a loss of pension ranging from Rs.565/= to Rs.1380/= p.m. and commutation ranging from Rs.22,250/= to Rs.62,160/=. This contention of the appellants was attempted to https://hcservices.ecourts.gov.in/hcservices/ the pooh-poohed by the respondents on the ground that the Joint Note pertain only to the salary and not to the pension and that the appellants having accepted the pay revision and also received the arrears, cannot now turn around and say that they be given both the benefits, quite against the Joint Note. 24. At this juncture, the legal question that would fall for consideration is 'whether a settlement entered into by the Unions, contrary to the Regulations, would be legal'? 25. As has already been observed by us supra, in the case on hand, though the Joint Note talks about the pension, there is no mention therein about the Regulations 2(d) and 35(2). Therefore, it goes without saying that the 'average emoluments' for the purpose of counting the pension remained as the 'pay drawn by an employee during the last ten months of his service in the Bank' and that the basic pension shall be calculated at fifty per cent of the average emoluments. In the absence of any amendment to these Regulations, the attempt made on the part of respondents, curtailing this benefit to the appellants and such other similarly standing persons, by introducing the impugned amendment is illegal. It would have been a completely different thing, had the Joint Note agreed for all corresponding amendments, including the definitions for Regulations 2 (d) and 35(2), which is not the case herein. Therefore, without any hesitation we can say that the impugned amendment brought in by the respondents 1 and 2, quite against the Regulations 2(d) and 35 (2) and the very intent and purport of the Regulations is null and void. 26. Probably realising this, this mistake has now been cured by the respondents in the settlement arrived at by them with the representative Unions/Associations on 2.6.2005, wherein it has been agreed between the parties that in respect of retirees, retiring on or after 1.5.2005, 'average emoluments' as defined in Pension Regulations for the purpose of pension, be calculated with reference to the pay drawn during the last ten months of service of the employee's service in the Bank. While this being the position, we have no hesitation to hold that there is complete justification in the prayer of the appellants, since the respondents 1 and 2 have tried to make an illegal differentiation between 'salary' and 'pension', further ignoring to honour the Regulations 2(d) and 35(2). It is also to be held that the receipt of the arrears of pay by the appellants cannot, in any way, stand in their way of challenging the impugned action of the respondents 1 and 2, since being contrary to the very purport and intention of the Regulations. 27. The learned single Judge has not gone into this aspect of the case, but, has proceeded to dissect the case keeping in view the unassailable fact that the respondents are having power to amend the Regulations, by due process of law. 28. The other argument advanced on the part of the respondents 1 and 2 that the writ proceedings are liable to be dismissed on account of laches also cannot be accepted, since there is no undue https://hcservices.ecourts.gov.in/hcservices/ delay. To explain, the Joint Note on conclusions of discussions between IBA and Officers Associations is dated 14.12.1999 and the present writ proceedings have been initiated on 23.4.2001. For all the above reasons, this Writ Appeal is allowed, setting aside the order of the learned single Judge. The respondents 1 and 2 are directed to calculate and pay the difference of monetary benefits to the appellants within twelve weeks from from the date of receipt of a copy of this judgment. But, the prayer of the appellants to pay the difference in basic pension and additional pension and commutation of pension with interest at a rate to be determined by this Court, cannot be ordered and the same stands rejected. No costs. Sd/- Asst. Registrar //true copy// Sub Asst.Registrar Rao To 1.The Secretary to the Union of India, Banking Division, Ministry of Finance, New Delhi-110001. 2. The Chairman & Managing Director, Bank of Baroda, Central Office, Baroda Corporate Centre, 'G' Block, C-26,Bandra-Kurla Complex, Bandra East, Mumbai-400051. 3.The Competent Authority for Pension Regulations, (Assistant General Manager), Bank of Baroda, Head Office, Baroda House, P.B.No.506, Mandvi, Baroda-390006. 1 cc to M/s.Aiyar and Dolia, Advocate, Sr.No.37312 1 cc to M/s.Sampath Kumar & Associates, Advocate, Sr.No.37338 Judgment in W.A.No.1209/2007 JRG {CO} TP/14.7.2011. https://hcservices.ecourts.gov.in/hcservices/