Union Bank Of India vs Venkatesh Gopal Mahishi & Anr

The facts, in brief, are that Venkatesh Gopal Mahishi, respondent No.1 herein, joined the services of the Union Bank of India (hereinafter referred to as `the appellant-bank') as a Peon on 02.05.1960. On 19.02.1991, the respondent No.1 had submitted an application to the authority seeking retirement on medical grounds with further request to give employment to his dependent son on compassionate ground. The request of the respondent No.1 was accepted by the appellant-bank and he was retired as Daftary from the service w.e.f. 01.11.1993 and later on his son has been given employment.

The appellant-bank, 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, 1970 (5 of 1970), after consultation with the Reserve Bank of India and with the previous sanction of the Central Government, framed regulations called Union Bank of India (Employees') Pension Regulations, 1995 (for short "Pension Regulations"), whereunder pension option was made available to the employees of the appellant-bank in lieu of the employer's contribution in the Provident Fund on the employees surrendering the same to the bank. The appellant- bank called for option to be exercised by the employees who had retired from service between 01.01.1986 and 31.10.1993. The respondent No.1 accordingly submitted an application on 28.06.1994 for pension under the Pension Regulations, but his claim was rejected by the competent authority on 12.11.1994 inter alia on the ground that the respondent No.1 was not eligible to the pension scheme as he was retired under different scheme prior to the date of enforcement of the Pension Regulations.

Chapter II of the Pension Regulations deals with 'Application and Eligibility'. Regulation 3(1)(a) envisages that the Pension Regulations shall apply to employees who 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; (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.

The respondent No.1, admittedly, gave his option for the benefits of the Union Bank of India Employees' Pension Scheme 1993 on 28.05.1994. He undertook to refund the bank's contribution to the provident fund, amounting to Rs.46,464.33, including interest accrued thereon together with further simple interest at the rate of 6% p.a., paid to the respondent No.1 on his retirement. The request of the respondent No.1 was rejected by the competent authority of the appellant-bank on the ground that the respondent No.1 had sought voluntary retirement from the services of the appellant-bank as Daftary w.e.f. 01.11.1993 vide his application dated 19.02.1991 on medical grounds under a non-statutory scheme and with further request to give appointment to his son on compassionate grounds. The appellant-bank accepted the request of the respondent No.1 and he was paid all his legal dues including provident fund and gratuity, etc. on his retirement and his son was also taken into services of the bank as Clerk/Typist. The appellant-bank, in its counter affidavit filed in the High Court in opposition to the writ petition of the respondent No.1, has categorically stated that the claim of the respondent No.1 for the grant of pension under the Pension Regulations is not covered by the Pension Regulations as Pension Regulations came into force from the date of its publication in the Official Gazette, i.e. 29.09.1995, and were made applicable to the employees, who were in the service of the bank on or after the 1st day of January 1986, but had retired before 1st day of November, 1993 as per terms of Regulation 3(1). It has also been stated that one category of employees, who sought voluntary retirement from the services of the bank in terms of a scheme formulated by the bank under the provisions of Regulation 19(1) of the Union Bank of India Officers' Service Regulations, 1979 (hereinafter referred to as 'the Service Regulations') made a demand to consider the claims of those employees, who had retired under this scheme between the period 01.01.1986 and 01.11.1993 to be treated as pension optees as was done in the case of those who had retired on superannuation, voluntary retirement or premature retirement.

We find from the reading of the counter affidavit of the appellant-bank that several writ petitions were filed before the Karnataka High Court and Bombay High Court in regard to the benefits of the Pension Regulations. The matters were later on carried to this Court by the Indian Banks' Association and the concerned Banks in Special Leave Petitions. The Special Leave Petitions were finally decided by this Court by an order dated 05.04.2000 in favour of the voluntarily retired officers of the concerned Banks. The benefits of pension were granted to those officers of the Bank who had voluntarily retired between 01.01.1986 and 01.11.1993 as per the judgment of this Court. It appears that the appellant-bank thereafter received a number of representations from its employees, both officers as well as the award staff including the respondent No.1, claiming to be treated as pension optees and be given the benefits of pension having voluntarily retired between 01.01.1986 and 01.11.1993 under the non-statutory scheme. The appellant-bank wrote a letter dated 09.11.2000 to the Under Secretary, Government of India, Ministry of Finance, Banking Division, seeking clarification of the claims of those officers who had voluntarily retired during the period between 01.01.1986 and 31.10.1993 on medical grounds and sought appointment of dependents on compassionate grounds as well, as per the Bank's own scheme. In response to the said communication, the Director (IR), Government of India, Ministry of Finance, Department of Economic Affairs, Banking Division, IR Section, vide letter dated 17.05.2001 informed the appellant-bank that the officers, who had retired with simultaneous appointment of the dependents on compassionate grounds, will constitute a separate class and hence cannot be extended the benefit of exercising option for pension as has been granted to the incumbents who had voluntarily retired under the scheme formulated by the Bank under Regulation 19(1) of the Officers' Service Regulations. The appellant-bank again sought clarification from the Indian Banks' Association on the subject in issue. The Indian Banks' Association vide its letter No. PD/GSN/UNION/G2/814 dated 01.10.2001 advised the appellant-bank as under:-

As we have held that the respondent No.1, having retired as award staff, is not entitled to the grant of pension under the Pension Regulations 1995, we do not consider it necessary and expedient to go into the other above-mentioned points raised by the learned counsel for the parties. In the result, for the afore-said reasons, the appeal is allowed to the extent indicated above. The impugned judgment dated 02.04.2002 of the Division Bench of the High Court of Judicature at Bombay allowing the Writ Petition No.567 of 2002 filed by the respondent No.1 cannot be sustained and it is accordingly set aside and the Writ Petition shall stand dismissed.

The parties are left to bear their own costs.