IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 10.12.2009 C O R A M: THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA and THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.A.No.2768 of 2002 C.P.Krishnaswamy .. Appellant vs. 1. Union of India, rep. by the Secretary Ministry of Finance, New Delhi. 2. The Reserve Bank of India, rep. by its Governor, Bombay – 400 001. 3. The Board of Directors of Punjab National Bank, rep. by its Chairman and Managing Director, New Delhi. 4. Punjab National Bank, rep. by its Manager (Personnel), Regional Office, Greams Road, Madras. .. Respondents Writ Appeal filed under Clause 15 of the Letters Patent Act against the order of this Court in W.P.No.9572 of 1999 dated 14.05.2002. This Petition presented to this Court under Article 226 of Constitution of India to issue a writ of Certiorarified Mandamus after calling for the records relating to order No.RM/PER/Mr.381/99 dated 26.4.99 issued by the 4th respondent and quash the same as being illegal, arbitrary and unconstitutional and Consequently direct the 3rd and 4th respondents to pay pension to the petitioner with all arrears and Interest at the rate of 12% P.a from 1.11.93 fill actual date of payment, after deducting the Bank's Contribution of provident fund with interest under the Punjab National Bank Employee pension regulations 1995. https://hcservices.ecourts.gov.in/hcservices/ For Appellant : Mr.N.G.R.Prasad for M/s. Rao and Reddy For Respondent 1 : Mr.A.Kalaiselvan, SPC For Respondent 2 : No Appearance For Respondents 3 & 4 : Mr.S.Jayaraman J U D G M E N T F.M.IBRAHIM KALIFULLA, J. This appeal is directed against the order of the learned single Judge dated 14.05.2002, passed in W.P.No.9572 of 1999. 2. The brief facts are that the appellant joined the third respondent Bank hereinafter called 'the bank' in September, 1953 as a clerk. In September, 1975 he was promoted as an Officer. He was posted as an Officer-in-charge at Pombur Branch near Tindivanam in South Arcot District in the position as Assistant Manager. He was posted in the said branch on 14.04.1984 and he worked therein till December 1987. He was issued with a charge sheet on 07.07.1989, in relation to certain irregularities in the matter of disbursal of Government sponsored loans under the priority sector. Based on the disciplinary proceedings and the ultimate outcome of the said proceedings, by an order dated 25.01.1990, he was compulsorily retired from service as a measure of penalty. In the normal course, the appellant would have retired on reaching the age of superannuation of 60 years on 28.02.1990. 3. Subsequent to his compulsory retirement, his terminal benefits except Bank's contribution to P.F. was paid. The appellant filed W.P.No.9574 of 1991 for payment of bank's contribution and thereafter that was also paid to him on 28.01.1998. 4. In the meantime, the Punjab National Bank (Employees) Pension Regulations, 1995, came to be issued. The said regulations provided for payment of pension to all those employees who were in service on or after 01.01.1986 and the payment of such pension was with effect from 01.11.1993. For the employees who have already retired prior to 01.11.1993, the regulations provided for grant of pension subject to such employees exercising their option within the specified time limit and also pay back the bank's contribution to the P.F. with interest at 6% from the date of settlement till the date of refund. 5. The appellant is stated to have exercised his option on 08.07.1994. However, the bank did not come forward to accept the https://hcservices.ecourts.gov.in/hcservices/ option of the appellant and grant the pension under the above referred to regulations. The appellant made a representation on 20.04.1998. There was a reply by the bank on 28.04.1998. The appellant once again sent a detailed representation on 16.12.1998. By its reply dated 26.04.1999, the respondent bank by referring to regulation 33(1) of the Pension Regulations rejected the claim of the appellant for pension. 6. Challenging the same, the appellant preferred the present writ petition in W.P.No.9572 of 1999. The learned single Judge having dismissed the writ petition on 14.05.2002, the appellant has come forward with this appeal. 7. Mr.N.G.R.Prasad, learned counsel appearing for the appellant, contended that when the appellant exercised his option on 08.07.1994, for grant of pension, the same was also recommended by the Manager of the Chennai office of the Bank on 02.03.1996 and that the appellant was also ready and willing to pay back the bank's share of P.F. contribution, that going by the provisions contained in the regulations, under clause 2(y), 3(1)(a), 29, 32 and 33, the appellant was entitled for the grant of pension and therefore the rejection of the same by the impugned letter of the respondent bank dated 26.04.1999, was not justified. The learned counsel contended that the cut-off date of 01.11.1993, stipulated under regulation 33(1) of the regulations cannot deprive the appellant of the payment of pension. The learned counsel by relying upon the Division Bench judgment of this Court dated 31.08.2006, passed in W.A.No.1076 of 2006, which related to a case of voluntary retirement which is governed by regulation 29 of the regulations, contended that whatever stated with reference to a case of voluntary retirement will equally apply to the case of compulsory retirement and therefore applying the ratio of the said Division Bench judgment, the appellant should be granted pension by setting aside the impugned order of the respondent bank. 8. The learned counsel placed before this Court the judgment dated 31.08.2006, of the Division Bench passed in W.A.No.1076 of 2006, the decision reported in 2000 (1) LLJ 1617 (Bank of India Vs. Indu Rajagopalan), (1981) 4 SCC 335 (Air India Vs. Nergesh Meerza), 2007 (2) LLN 169 (C.Damodarasamy Vs. Government of India) in support of his submissions. 9. As against the above submissions Mr.S.Jayaraman, learned counsel for the respondent bank by taking us through the various provisions viz., 2(r), 2(y), 29, 32 and 33 of the regulations contended that the cut-off date viz., 01.11.1993, fixed in regulation 33(1) has got a definite purpose and intent and which date was fixed based on the settlement reached with the employees union of the respondent bank and therefore the said cut-off date cannot be altered. https://hcservices.ecourts.gov.in/hcservices/ 10. According to the learned counsel, the employees who were compulsorily retired on and after 01.11.1993, alone were entitled for pension under the regulations and that the learned Judge was therefore justified in declining to interfere with the order of the bank dated 26.04.1999. According to the learned counsel the fixing of the cut-off date did not make any artificial discrimination; that since the payment of pension came to be introduced in banking service for the first time under the above regulations and the same being a new scheme providing for pension, the prescription of a cut-off date cannot be found fault with. The learned counsel relied upon the decisions reported in 2005 AIR SCW 5664 (State of Punjab Vs. Amar Nath Goyal), 2007 (3) SLR 697 (Bank of India Retired Officers Association Vs. Bank of India), (1997) 2 SCC 342 (State of Rajasthan Vs. Amrit Lal Gandhi), AIR 1986 SC 1907 (State Government Pensioners' Association Vs. State of Andhra Pradesh), an unreported decision of a learned Single Judge of the Delhi High Court dated 30.08.1999, passed in C.W.No.3830 of 1998 and 2009 IV LLJ 57 (SC) (Manjula Bhashini Vs. Managing Director, A.P.Women's Co-operative Finance Corporation Ltd.). 11. Having heard the learned counsel for the appellant and the respondents and after perusal of the various provisions contained in the 1995 regulations, we find that the crucial question to be decided in this appeal is as to whether the cut-off date fixed in regulation 33(1) viz., 01.11.1993, for an employee who was compulsorily retired prior to the said date, though he was in service after 01.01.1986, be disentailed for grant of pension can be approved ? 12. To answer the said question, the various other provisions contained in the regulations viz., regulations 2(k) definition of 'date of retirement', 2(r) definition of 'notified date', 2(u) definition of 'pensioner', 2(y) definition of 'retirement' and regulation 3(1)(a) to (c), the relevant parts of regulation 29(1) with its 3rd proviso as well as regulations 32, 33(1) and 34 are relevant and are extracted below: "2(k) "date of retirement" means the last date of the month in which an employee attains the age of superannuation or the date on which he is retired by the Bank or the date on which the employee voluntarily retires; or the date on which the officer is deemed to have retired; 2(r) "notified date" means the date on which these regulations are published in the official Gazette; 2(u) "pensioner" means an employee eligible for pension under these regulations; https://hcservices.ecourts.gov.in/hcservices/ 2(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 provisions 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 Settlement; 3. Application These regulations shall apply to employees who,- 1) a) were in the service of the Bank on or after the 1st day of January, 1986 but had retired before the 1st day of November, 1993; and b) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and c) refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (b) the entire amount of the Bank's contribution to the Provident Fund including interest accrued thereon together with a further simple interest at the rate of six per cent per annum on the said amount from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Bank or till the 1st day of April, 1995 whichever is earlier. 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 https://hcservices.ecourts.gov.in/hcservices/ 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. 32. Premature Retirement Pension: Premature Retirement Pension may be granted to an employee who,- (a) has rendered minimum ten years of service; and (b) retires from service on account of orders of the Bank to retire prematurely in the Public interest or for any other reason specified in service regulations or settlement, if otherwise he was entitled to such pension on superannuation on that date. 33. Compulsory Retirement Pension: (1) An employee compulsorily retired from service as a penalty on or after 1st day of November, 1993 in terms of Punjab National Bank Officer Employees' (Discipline and Appeal) Regulations, 1977 or awards/settlement may be granted by the authority higher than the authority competent to impose such penalty, pension at a rate not less than two-thirds and not more than full pension admissible to him on the date of his compulsory retirement if otherwise he was entitled to such pension on superannuation on that date. 34. Payment of pension or family pension in respect of employees who, retired or died between 1.1.1986 to 31.10.1993: https://hcservices.ecourts.gov.in/hcservices/ (1) Employees who have retired from the service of the Bank between the 1st day of January, 1986 and the 31st day of October, 1993 shall be eligible for pension with effect from the 1st day of November, 1993. (2) The family of a deceased employee governed by the provisions contained in sub-regulation (7) of regulation 3 shall be eligible for pension or family pension as the case may be, with effect from the 1st day of November, 1993." 13. In the case of the appellant, we find that he was proceeded against by way of disciplinary action for certain acts of misconduct. A perusal of the order of punishment dated 25.01.1990, discloses that while he was working as Assistant Manager of Pombur branch, he was alleged to have committed the following irregularities viz., (i) he utilised the services of middlemen in sanctioning and disbursing advances in contravention of Head Office guidelines; (ii) he did not conduct pre-sanction of appraisal in loan accounts; (iii) he failed to observe post-sanction safeguards which resulted in expiry of limitation and missing of securities in many loan accounts. According to the respondent bank, the said irregularities committed by the appellant jeopardised bank's interest to a great extent. While deciding the imposition of penalty of compulsory retirement, it was observed that the appellant should have conducted regular inspection of securities and ensured obtaining of balance confirmation letters periodically and the appellant's plea that he was not conversant with Bank's procedure relating to sticky accounts was not acceptable. The appellant was therefore compulsorily retired with immediate effect by an order dated 25.01.1990. 14. After the passing of the said order, the appellant's PF account namely his contribution and other terminal benefits was settled. In the normal course but for the order of punishment dated 25.01.1990, the appellant would have retired on 28.02.1990. Since the bank's contribution was not paid, the appellant moved this Court by filing W.P.No.9574 of 1991. Subsequent to the filing of the writ petition, the bank paid back its contribution of PF and the writ petition was stated to have been withdrawn by the appellant. https://hcservices.ecourts.gov.in/hcservices/ 15. Subsequently after the pension regulations was brought into effect, the appellant applied for sanction of pension by exercising his option to refund the bank's contribution of PF with accrued interest at the rate of 6% per annum from the date of receipt till the date of refund. The said application was submitted by him on 08.07.1994, which was rejected by the respondent bank by its order dated 26.04.1999, stating that in terms of clause 33(1) such of those employees who were compulsorily retired from service as a penalty on or after 01.11.1993, alone can be granted pension and since the appellant was compulsorily retired prior to 01.11.1993, his request cannot be acceded to. 16. When we examine the definition “date of retirement” under regulation 2(k) we find that while stating that the said definition would mean the last day of the month in which the employee attains the age of superannuation, it is also stated that such date of retirement would be the date on which the employee is retired by the bank. It also refers to the date on which the said employee voluntarily retires or the date on which the officer is deemed to have retired. Therefore amongst the retirees, there is one category namely an employee who is retired by the bank. When it comes to the question of application of the regulations, regulation 3(1)(a) makes it clear that the regulations would not apply to employees who were in the services of the bank on or after 01.01.1986, but who had retired before the first date of November, 1993. Therefore reading regulations 2(k), 2(x), 2(y) and 3(1)(a) together, it can be safely held that all types of retirement namely retirement on reaching the age of superannuation, deemed retirement, voluntary retirement or any other premature retirement would fall within the expression retirement as well as the other provisions of applicability namely regulation 3(1)(a). 17. A perusal of regulation 33(1) discloses that even an employee who is compulsorily retired from service as a penalty under the respondent's bank Discipline and Appeal Regulations or awards/settlement may be granted by an authority higher than the authority competent to impose such penalty, pension at a rate not less than two-thirds and not more than full pension admissible to the employee on the date of his compulsory retirement if he is otherwise entitled to such pension on superannuation on that date. The cut-off date prescribed under the said regulation 33(1) viz., 01.11.1993, only makes a distinction between the employee who was compulsorily retired prior to 1.11.1993 and after 01.11.1993, in order to be eligible for invoking the said regulation. 18. At this juncture, when we refer to the Division Bench decision relied upon by the learned counsel for the appellant viz., the one rendered in W.A.No.1076 of 2006, dated 31.08.2006, that was a case of an employee of Indian Overseas Bank, whose request for voluntary retirement came to be accepted and who was allowed to https://hcservices.ecourts.gov.in/hcservices/ retire voluntarily. The Division Bench was concerned with a provision contained in the very same regulations with which we are now concerned and in particular regulation 29 which relates to grant of pension for employees gone on voluntary retirement as well as regulation 32 which deals with premature retirement pension. Since in that case the voluntary retirement of the concerned employee occurred on 20.09.1988, i.e. before 01.11.1993, though after 01.01.1986, the Bank management in the said case declined to pay pension on the ground that regulation 29 does not provide for payment of such pension to the employees who had gone on voluntary retirement before 01.11.1993. The Division Bench dealt with the said issue as under in paragraphs 7 and 8 as well as followed a reported decision of the Bombay High Court in 1997 (1) LLJ 1094 (Madhav K. Kirthikar Vs. Bank of India) in paragraph 10, the Division Bench has referred to the said decision which is also relevant which are as under: “7.There is no dispute that in the present case the respondent has been given premature retirement vide letter dated 9.5.1989. The definition of 'retirement' provided in clause 2(y) covers all the retirements and also the voluntary premature retirement by the bank before superannuation. It is also not disputed that the Indian Overseas Bank (Employees') Pension Regulations, 1995 are applicable to all the employees who were in the service of the bank on or after first January, 1986 but had retired before the first day of November, 1993. Regulation 32 states that the premature retirement pension may be granted to an employee who has rendered minimum 10 years of service, retires from service on account of orders of the bank to retire prematurely in the public interest or for any other reasons specified in the service regulations or settlement, if otherwise, he was entitled to such pension or superannuation on that date. A combined reading of clause (c) of Regulation 2(y) with Regulation 32 and Regulation 34, clearly shows that the scheme is applicable in respect of employees who had retired or died between 1.1.1986 and 31.10.1993. The appellant bank has however contended that the respondent by his own accord voluntarily retired on medical grounds on 9.5.1989 as per non statutory circular bearing permanent EST 104/86 of 27.8.1986 which is based on Central Government's guidelines dated 25.5.1982 permitting the public sector banks to modify their scheme or appointment on compassionate grounds so as to extend the benefit to the dependants of the employees who retired on medical grounds. The submission is that the respondent retired on his own accord and therefore, https://hcservices.ecourts.gov.in/hcservices/ his case could not fall under clause (c) of Regulation 2(y) of the Pension Regulations. We are unable to accept the argument of the bank. In the first place there is nothing in the Regulations to indicate that the Scheme does not cover the employee who has prematurely retired as per the statutory circular. On the other hand the definition of 'retirement' in Regulation 2(y) is wide and cover all cases of premature retirement where the employee has retired before attaining the age of superannuation specified in Service Regulations or Settlement. Now the Bank has chosen to apply the scheme to the employees who have retired after 1.1.1986. The benefit of the scheme, therefore, must be given to all the employees who have retired after 1.1.1986. It will be totally impermissible to make artificially a further classification amongst the employees retired after 1st January, 1986 as it will be totally irrational, arbitrary and violative of Article 14 of the Constitution. This is more so because under the scheme the employees who have retired prematurely after 1st November, 1993 are expressly covered by the scheme. 8. In A.P.Srivastava Vs. Union of India & Others, (1995) 6 SCC 227, the question before the Supreme Court was whether an employee who was a temporary Government servant loses his right to receive pension when the employer exercises its option and retires the employee after he attains the age of 55 years in accordance with Rule 56(j)(ii) of the Fundamental Rules, even though the employee might have completed more than 20 years service? The Supreme Court held that if a temporary Government servant who has rendered 20 years of service, is entitled to pension there is no justification for denying the right to him when he is required to retire by the employer in the public interest as an order of compulsory retirement is not a punishment and pension is a right of the employee for service rendered. Therefore, a temporary Government servant would be entitled to pension after he has completed more than 20 years of service even if he is required to retire by the employer in exercise of power under Rule 56(j) of the Fundamental Rules. https://hcservices.ecourts.gov.in/hcservices/ 10. We may also refer to a reported judgment of the Bombay High Court in Madhav K. Kirtikar v. Bank of India, 1997 (I) L.L.J. 1094 to which one of us (A.P.Shah, CJ) was a party. In that case the writ petitioner was denied pension by his employer-bank for the reason that he had sought and obtained voluntary retirement prior to November 1, 1993. Allowing the petition it was held as follows: "With the assistance of the learned counsel for the parties, I have carefully gone through the pension scheme of 1995. I do not see any distinction in the scheme amongst retired employees. If a proper construction is given to the regulations, in my view, the Bank cannot make a distinction among employees who retire under the voluntary retirement scheme and employees who retire otherwise because the term "retirement" which occurs in the regulations enclose voluntary retirement. There is no reason to confine voluntary retirement only to regulation 29 of the regulations. If such a construction is given to regulation 29 it clearly violates Article 14. In Shri Govindlalji v. State of Rajasthan, AIR 1963 SC 1638 it was observed that if the impugned provisions of a statute are reasonably capable of a construction which does not involve the infringement of any fundamental rights, that construction must be preferred though it may reasonably be possible to adopt another construction which leads to the infringement of the said fundamental rights. This rule of interpretation was reiterated by the Supreme Court in M.K.B.Menon v. A.C.Estate Duty, AIR 1971 SC 2392. The Supreme Court held the Court ought not to interpret statutory provisions, unless compelled by their language, in such a manner as would involve its constitutionality because the legislature is presumed to enact a law which does not contravene or violate the constitutional provisions. We have already noted that by Rule 3(1)(a) the scheme is made applicable to the employees retired after January 1, 1986. Rule 34 then https://hcservices.ecourts.gov.in/hcservices/ provides that employees who have retired from service of the Bank between January 1, 1986 and October 31, 1993 shall be eligible for pension with effect from November