Case: National Insurance Co.Ltd.  Vs. Kirpal Singh

The High Court having answered the question in the affirmative, the appellant-Insurance Companies have appealed to assail that view.3. The controversy arises in the following backdrop:4. In exercise of its powers under Section 17A of the General Insurance Business (Nationalisation) Act, 1972, the Central Government made what is described as General InsuranceSpecial Voluntary Retirement Scheme, 2004 (hereinafter referred to as). Para 3 of the scheme stipulating the eligibility conditions for employees who could opt for voluntary retirement from the services of the insurance company is asAll permanent full time employees will be eligible to seek special voluntary retirement under this Scheme provided they have attained the age of 40 years and completed 10 years of qualifying services as on the date of notification.2) An employee who is under suspension or against whom disciplinary proceedings are pending or contemplated shall not be eligible to opt for the scheme;Provided that the case of an employee who is under suspension or against whom disciplinary proceeding is pending or contemplated made be considered by the Board of the Company concerned having regard to the facts and circumstances of each case and the decision taken by the Board shall be final.In para 5 of the scheme those seeking voluntary retirement were held entitled to ex-gratia amount to be determined according to the said provision. In Para 6 of the scheme were stipulated other benefits to which the employees opting for voluntary retirement under the scheme would be entitled. It reads asOther benefits.-1) An employee opting for the scheme shall also be eligible for the following benefits in addition to the ex-gratia amount mentioned in para 5 namely:-a) Provident Fund,b) Gratuity as per Payment of Gratuity Act, 1972 (39 of 1972) or gratuity payable under the Rationalisation Scheme, as the case may be;c) Pension (including commuted value of pension) as per General InsurancePension Scheme 1995, if eligible. However, the additional notional benefit of the five years of added service as stipulated in para 30 of the said pension Scheme shall not be admissible for the purpose of determining the quantum of pension and commutation of pension.d) Leave encashment.2) An employee who is opting for the scheme shall not be entitled to avail Leave Travel Subsidy and also encashment of leave while in service during the period of sixty days from the date of notification of this. The respondents who opted for voluntary retirement in terms of the SVRS of 2004 afore-mentioned appear to have claimed pension as one of the benefits admissible to them under para 6 above. The claim was rejected by the appellants forcing the respondents to agitate the matter before the High Court in separate writ petitions filed by them. The High Court has by a common order dated 25th January, 2008, allowed the said petitions holding the respondents to be entitled to claim pension. The High Court has taken the view that para 6 of the SVRS of 2004 read with para 14 of the General Insurance (Employees) Pension Scheme 1995 entitled the employees to claim pension so long as they had rendered a minimum of ten years of service in the Corporation/Company from whose service they were seekingof the Pension Scheme 1995 reads asService: Subject to the other condition contained in this scheme, an employee who has rendered a minimum ten years of service in the Corporation or a Company, on the date of retirement shall qualify for pension.A conjoint reading of para 6 of SVRS of 2004 and para 14 of the Pension Scheme 1995, would leave no manner of doubt that any employee retiring from the service of the company/corporation would qualify for payment of pension if he/she has rendered a minimum of ten years of service on the date of retirement. The expressionhas been defined in para 2 (t) of the Pension Scheme 1995 asDefinition:- In this Scheme, unless the context otherwise requires:-xxx xxx xxx(t) "retirement" means –(i) the retirement in accordance with the provisions contained in paragraph 12 of General Insurance (Rationalisation and Revision of Pay Scales and Other Conditions of Service of Supervisory, Clerical and Subordinate Staff) Scheme,1974 notified under the notification of Government of India, in the Ministry of Finance(Department of Revenue and Insurance) number S.O.326(E) dated the 27th May, 1974;(ii) the retirement in accordance with the provisions contained in paragraph 4 of the General Insurance (Termination, Superannuation and Retirement of Officers and Development Staff) Scheme, 1976notified under notification of Government of India, in the Ministry of Finance (Department of Economic Affairs) number S.O.627(E) dated 21st September,1976;(iii) voluntary retirement in accordance with the provisions contained in paragraph 30 of thisIt was contended on behalf of the appellant-companies that in terms of para 6 of SVRS of 2004 (supra) pension will be admissible to those seeking voluntary retirement only if they were eligible for the same under the Pension Scheme 1995. Para 30 of the Pension Scheme 1995 in turn made only such employees eligible for pension who had completed twenty years of qualifying service. Inasmuch as the respondents had not admittedly completed twenty years of qualifying service on the date of their voluntary retirement, they were not eligible for pension under the Pension Scheme 1995.

Court's reasoning:
16. In the case at hand Para 2 of the Pension Scheme 1995 (extracted earlier) defines the expressions appearing in the scheme. But what is important is that such definitions are good only if the context also supports the meaning assigned to the expressions defined by the definition clause. The context in which the question whether pension is admissible to an employee who has opted for voluntary retirement under the 2004 scheme assumes importance as Para 2 of the scheme starts with the wordsthis scheme, unless the context otherwiseThere is nothing in the context of 1995 Scheme which would exclude its beneficial provisions from application to employees who have opted for voluntary retirement under the Special Scheme 2004 or vice versa. The term retirement must in the context of the two schemes, and the admissibility of pension to those retiring under the SVRS of 2004, include retirement not only under Para 30 of the Pension Scheme 1995 but also those retiring under the Special Scheme of 2004. That apart any provision for payment of pension is beneficial in nature which ought to receive a liberal interpretation so as to serve the object underlying not only of the Pension Scheme 1995 but also any special scheme under which employees have been given the option to seek voluntary retirement upon completion of the prescribed number of years of service and age.