Kerala High Court

C.Gokulraj vs Union Of India on 16 August, 2022

Author:
V.G.Arun

Bench:
V.G.Arun

IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
TUESDAY, THE 16TH DAY OF AUGUST 2022 / 25TH SRAVANA, 1944
WP(C) NO. 29890 OF 2018
PETITIONER/S:

M.K. RAVINDRAN
AGED 73 YEARS
SON OF LATE SHRI.O.V.GOVINDAN NAMBIAR, RESIDING
AT L-11, CHANGAMPUZHA NAGAR, SOUTH KALAMASSERY,
ERNAKULAM DISTRICT, KERALA-682033.
BY ADVS.
GEORGE CHERIAN (SR.)
K.S. SANTHI
LATHA SUSAN CHERIAN

RESPONDENT/S:

1 UNION OF INDIA
REPRESENTED BY THE SECRETARY TO GOVERNMENT,
GOVERNMENT OF INDIA, MINISTRY OF FINANCE,
BANKING DIVISION, DEPARTMENT OF FINANCIAL
SERVICES, PARLIAMENT STREET, NEW DELHI-110001.
2 UNION BANK OF INDIA
REPRESENTED BY ITS CHAIRMAN AND MANAGING
DIRECTOR, UNION BANK BHAVAN, NARIMAN POINT,
MUMBAI-400021.
BY ADVS.
SMT.C.G.PREETHA, CGC
SRI.A.S.P.KURUP, SC, UBI
SRI.SADCHITH.P.KURUP
K.K.SETHUKUMAR, CGC

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 01.04.2022, ALONG WITH WPC 41327/2018, THE COURT ON
16.08.2022 DELIVERED THE FOLLOWING:
W.P.(C) No.29890/2018 & 41327/2018

-2-

IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE V.G.ARUN
TUESDAY, THE 16TH DAY OF AUGUST 2022 / 25TH SRAVANA, 1944
WP(C) NO. 41327 OF 2018
PETITIONER/S:

C.GOKULRAJ
AGED 78 YEARS
SON OF LATE SHRI. C. GOPALAN, RESIDING AT
SREERUPA, CHANDRANAGAR, PALAKKAD, PALAKKAD
DIST., KERALA-678 007
BY ADVS.
SRI.GEORGE CHERIAN (SR.)
SMT.K.S.SANTHI
SMT.LATHA SUSAN CHERIAN

RESPONDENT/S:

1 UNION OF INDIA
REPRESENTED BY THE SECRETARY(BANKING DIVISION),
MINISTRY OF FINANCE, GOVERNMENT OF INDIA,
DEPARTMENT OF FINANCIAL SERVICES, PARLIAMENT
STREET, NEW DELHI-110 001
2 UNION BANK OF INDIA
CENTRAL OFFICE UNION BANK BHAVAN, NARIMAN
POINT, MUMBAI-400 021, REPRESENTED BY ITS
MANAGING DIRECTOR AND CEO.
BY ADV SRI.R.PRASANTH KUMAR, CGC

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 01.04.2022, ALONG WITH WPC 29890/2018, THE COURT ON
16.08.2022 DELIVERED THE FOLLOWING:
W.P.(C) No.29890/2018 & 41327/2018

-3-

JUDGMENT

Dated this the 16th day of August, 2022

The petitioners are retired employees of the

Union Bank of India/second respondent. The

grievance of the petitioners is regarding non-

updation of their pension in consonance with the

increase in pay band arising out of bi-partite

settlements between the management of the Bank

and the employees union from time to time. The

writ petitions are hence filed seeking the

following reliefs;

WP(C)29890/2018

"(a) To issue a writ of mandamus or any
other writ order or direction directing the
respondents to update the pension of petitioner
as mandated by regulation 35(1) and 56 of the
Pension Regulations and to pay arrears of
pension with interest at the rate of 12 percent
per annum yearly compounding as the amounts
detained has been earning similar interest to
the Pension Fund.

b) To issue such other writ, order or
direction which this Hon'ble Court find fit and
proper in the interest of justice and in the
circumstances of this case."

W.P.(C) No.29890/2018 & 41327/2018

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W.P.(C) No.41327/2018

"a.To issue a writ of mandamus or any other
writ or order directing the second respondent
to update the pension of the petitioner in tune
with the revised pay scale arising out of the
Bipartite Settlements in compliance with
regulation 35(1) and 56 and to pay the same to
the petitioner."

2. The essential facts are as under;

Prior to 1985, the employees of the second

respondent were covered by the Contributory

Provident Fund Scheme under the
Employees

Provident Fund and Miscellaneous Provisions Act,
. While so, based on a memorandum of

settlement arrived at between the managements of

58 banks represented by the Indian Banks

Association and workmen represented by the All

India Bank Employees Association, it was decided

to introduce a pension scheme for the workmen in

lieu of employers contribution to the provident

fund. Accordingly, the first respondent

formulated and notified the Union Bank of India

(Employees) Pension Regulations, 1995 ('the
W.P.(C) No.29890/2018 & 41327/2018

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Regulations') and constituted a pension fund

called 'the Union Bank of India (Employees)

Pension Fund' under an irrevocable trust. The

petitioners opted for pension under the

Regulations and authorised the bank to transfer

the entire contribution with interest thereon

to the newly created pension fund. Transfer was

effected accordingly and from then onwards,

contributions to the employees provident fund,

which was part of the petitioners' wages, was

paid to the pension fund. The petitioners rely

on Regulation 35(1), as amended on 18.05.2002, to

contend that their basic pension is bound to be

updated in consonance with the increase in the

pay band. Reliance is also placed on Regulation

56 which provides that, in case of doubt as

regards application of the Regulations,

corresponding provisions of the Central Civil

Service Rules, 1972 or Central Civil Services

(Commutation of Pension) Rules, 1981, applicable
W.P.(C) No.29890/2018 & 41327/2018

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for Central Government Employees, can be adverted

to. The petitioners therefore contend that their

basic pension is liable to be revised in the same

manner as that of retired Central Government

Employees whenever pay band is revised.

3. Adv. George Cherian, learned Senior

Counsel appearing for the petitioners contended

that Pension Regulations is the outcome of a

Memorandum of Settlement entered between the

managements and employees unions on 29.10.1993.

As per the recital in the Memorandum of

Settlement, the bank was to introduce a pension

scheme for workmen employees in lieu of

employers' contribution to the provident fund.

The pension scheme is to be in tandem with the

Central Government/Reserve Bank of India pattern.

The rate of basic pension was decided to be 50%

of the average pay as defined in the pension

scheme, subject to a minimum of Rs.375 per

mensem. Clause 12 of the Settlement contemplated
W.P.(C) No.29890/2018 & 41327/2018

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the making of provisions prescribing qualifying

service, amounts of pension, payment of pension,

commutation of pension, family pension, updating

and other general conditions on the same lines

as is in force in the Reserve Bank of India.

Attention is drawn to Ext.P9 in W.P.(C) No.29890

of 2018, issued by the Government of India,

declining the recommendation for updating the

pension of Reserve Bank employees on the premise

that any change in the manner of calculating

pension is likely to result in similar demands

from employees of public sector banks and

financial institutions, most of which are facing

financial difficulties. It is pointed out that,

in spite of its earlier stand that any change in

the mode of calculation of pension of the Reserve

Bank employees will result in a contagion effect,

the Government, by Ext.P10, approved the

recommendation for increase in the pension and DA

of RBI employees. It is hence contended that the
W.P.(C) No.29890/2018 & 41327/2018

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benefit of such increase ought to have been

extended to the employees of Public Sector Banks

like the second respondent also.

4. Referring to Regulation 35(1), it is

submitted that the Regulation, as originally

notified, was to the effect that, 'in respect of

employees who retired between first day of

January 1986, but before 31st day of October

1987, basic pension and additional pension will

be updated as per the formula given in Appendix-

I'. The Regulation, as amended on 18.05.2002,

reads as under;

'Basic pension and additional
pension, wherever applicable, shall be
updated as per the formula given in
Appendix-I'.

The words 'will be' in the original text having

been replaced with 'shall be', by way of

amendment, it is unambiguous that basic pension

is bound to be updated in accordance with the
W.P.(C) No.29890/2018 & 41327/2018

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increase in pay bands. That apart, Regulation 56

also makes it abundantly clear that the pension

scheme is in tandem with the Central Civil

Services Pension Rules.

5. Another forceful contention urged by the

Senior Counsel is that, pension fund of the

second respondent has grown manifold over a

period of time and as on 31.03.2017, Rs.11,032.28

Crores is available in the fund. Relying on

Regulation 5(2)
, it is contended that the pension

fund can be utilised only for payment of pension

or family pension in accordance with the

Regulations. It is pointed out that the average

payment made towards pension/family pension is a

meager 23.91% of the annual growth. Moreover, the

employees who joined service after 31.03.2010 are

covered under the PFRDA Scheme of pension of the

first respondent. As such, the pension liability

of the second respondent will get extinguished

over a period of time. It is alleged that, the
W.P.(C) No.29890/2018 & 41327/2018

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second respondent is withholding the pension

legitimately due to retired employees like the

petitioners, with the evil design of utilising it

for payment of dividend and other purposes.

Reference is made to the decisions of the Apex

Court to contend that pension is no longer a

bounty to be disbursed according to the whims of

the employer and has acquired the status of

property under
Article 300A
of the Constitution

of India.

6. Learned Standing Counsel for the Bank

argued that the contentions urged on behalf of

the petitioners have no legal backing and the

only question to be considered is whether pension

is being disbursed in accordance with the

stipulations in the Regulations. It is submitted

that Regulation 35(1) clearly states that the

basic pension shall be updated as per the formula

given in Appendix I. The petitioners have no case

that the periodical updation of pension is not in
W.P.(C) No.29890/2018 & 41327/2018

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accordance with Appendix I. The contention that

the updation ought to be in accordance with the

Central Civil Service Pension Rules or at least

in tandem with revision of pension of RBI

employees, is too far fetched to be accepted.

Finally, it is submitted that the same issue was

considered and rejected by the Punjab and Haryana

High Court in
M.C.Singla v Union of India
[2012

SCC OnLine P&H 7136].

7. In the Memorandum of Settlement dated

29.10.1993 between the managements of banks and

the employees association, the precursor to the

Regulations, the understanding was to introduce a

pension scheme broadly on Central

Government/Reserve Bank of India pattern. The

Pension Regulations does not contain any such

provision, except Regulation 56, which stipulates

that, in case of doubt in the matter of

application of the Regulations, regard can be had
W.P.(C) No.29890/2018 & 41327/2018

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to the corresponding provisions of Central Civil

Service Rules, 1972 or Central Civil Services

(Commutation of Pension) Rules, 1981 applicable

for Central Government employees. The contention

of the respondent Bank is that there is no scope

for doubt in the application of the Regulations,

since Regulation 35(1) is categoric to the effect

that basic pension and additional pension,

wherever applicable, shall be updated as per the

formulae given in Appendix-I. The further

contention is that even the petitioners have no

case that the basic pension is not being updated

in accordance with the formulae in Appendix-I.

To buttress this argument, reliance is placed on

the decision of the Punjab and Haryana High Court

in
M.C.Singla
(supra).

8. In my considered opinion the judgment in

M.C.Singla was rendered by considering Regulation

56 in isolation. In the instant case, the
W.P.(C) No.29890/2018 & 41327/2018

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petitioners contend that there cannot be any

consideration distinct from the purpose behind

constitution of the pension fund. I find the

submission to be well founded.
Regulation 5(2)

makes it abundantly clear that the sole purpose

of the fund is payment of pension or family

pension to the employee or his family in

accordance with the Regulations. Going by the

undisputed figures, only 23.91% of the fund is

being utilised for payment of pension and family

pension. Another crucial aspect is that the

employees who have after 2010 are covered by

another scheme. Therefore, the beneficiaries of

the Pension Regulations are a vanishing class.

This will definitely result in the trust being

left with a huge some of money after the death of

the last beneficiary.

It is also to be noted that the employer's

contribution towards pension is also an

entitlement of the employee, earned by reason of
W.P.(C) No.29890/2018 & 41327/2018

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the service rendered by him.
In this context, it

is pertinent to take into account the position of

law emanating from the judgments in
D.S Nakara

and others v. Union of India
[(
1983) 1 SCC 305]

and Sudhir Chandra Sarkar v. Tata Iron and Steel

Co. Ltd and others
[(
1984) 3 SCC 369] and State

of Jharkhand v. Jitendra Kumar Srivastava and

another
[(2013) 12 SCC 210].

9.
In
D.S.Nakara
(supra), after detailed

consideration of this aspect, the Apex Court held

as under;

"31. From the discussion three things
emerge: (i) that pension is neither a bounty
nor a matter of grace depending upon the
sweet will of the employer and that it
creates a vested right subject to 1972 Rules
which are statutory in character because they
are enacted in exercise of powers conferred
by the proviso to
Article 309
and clause (5)
of
Article 148
of the Constitution; (ii) that
the pension is not an ex gratia payment but
it is a payment for the past service
rendered; and (iii) it is a social welfare
W.P.(C) No.29890/2018 & 41327/2018

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measure rendering socio-economic justice to
those who in the hey-day of their life
ceaselessly toiled for the employer on an
assurance that in their old age they would
not be left in lurch. It must also be noticed
that the quantum of pension is a certain
percentage correlated to the average
emoluments drawn during last three years of
service reduced to 10 months under
liberalised pension scheme. Its payment is
dependent upon an additional condition of
impeccable behaviour even subsequent to
retirement, that is, since the cessation of
the contract of service and that it can be
reduced or withdrawn as a disciplinary
measure.

10.
In
Sudhir Chandra Sarkar
(supra), it was

reiterated that pension is a right, the payment

of which does not depend upon the discretion of

the employer. The contextually relevant portion

of the judgment is extracted hereunder;

"18. For centuries the courts swung in
favour of the view that pension is either a
bounty or a gratuitous payment for loyal service
rendered depending upon the sweet will or grace
of the employer not claimable as a right and
W.P.(C) No.29890/2018 & 41327/2018

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therefore, no right to pension can be enforced
through court. This view held the field and a
suit to recover pension was held not
maintainable. With the modern notions of social
justice and social security, concept of pension
underwent a radical change and it is now well-
settled that pension is a right and payment of
it does not depend upon the discretion of the
employer, nor can it be denied at the sweet will
or fancy of the employer.
Deokinandan Prasad v.
State of Bihar
[(1971) 2 SCC 330 : AIR 1971 SC
1409 : 1971 Supp SCR 634 : (
1971) 1 LLJ 557] ,
State of Punjab v. Iqbal Singh
[(1976) 2 SCC 1 :

1976 SCC (L&S) 172 : AIR 1976 SC 667 : (
1976) 3
SCR 360] and D.S. Nakara v. Union of India

[(1983) 1 SCC 305 : 1983 SCC (L&S) 145 : (1983)
2 SCR 165 : (1983) UPSC 263 : (1983) 1 LLJ
104] . If pension which is the retiral benefit
as a measure of social security can be recovered
through civil suit, we see no justification in
treating gratuity on a different footing.

Pension and gratuity in the matter of retiral
benefits and for recovering the same must be put
on par."

11. It is pertinent to note that in
State of

Jharkhand and others v. Jitendra Kumar Srivastava

and another
[(2013) 12 SCC 210], the Apex Court
W.P.(C) No.29890/2018 & 41327/2018

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declared the right to receive pension as akin to

a right in property. The contextually relevant

portion of that judgment reads as under;

"The fact remains that there is an
imprimatur to the legal principle that the
right to receive pension is recognised as a
right in "property".
Article 300-A
of the
Constitution of India reads as under:

300-A.Persons not to be deprived of
property save by authority of law.--No person
shall be deprived of his property save by
authority of law.

Once we proceed on that premise, the
answer to the question posed by us in the
beginning of this judgment becomes too
obvious. A person cannot be deprived of this
pension without the authority of law, which
is the constitutional mandate enshrined in

Article 300-A
of the Constitution. It
follows that the attempt of the appellant to
take away a part of pension or gratuity or
even leave encashment without any statutory
provision and under the umbrage of
administrative instruction cannot be
countenanced."

The legal position being as above, I find

substantial force in the contention that the
W.P.(C) No.29890/2018 & 41327/2018

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accumulated surplus ought to be utilised by

revising the pension periodically. In matters of

pension, there has to be a holistic approach and

not constrictive interpretation of certain

provisions.

In view of the above findings, the writ

petitions are disposed of permitting the

petitioners to file a detailed representation

highlighting their grievances. Thereupon, the

second respondent shall consider the

representation and pass appropriate orders

thereon within two months. For effective

consideration of the representation, the

petitioners shall make available copy of the writ

petitions along with certified copy of the

judgment.

Sd/-

V.G.ARUN
JUDGE
Scl/
W.P.(C) No.29890/2018 & 41327/2018

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APPENDIX OF WP(C) 29890/2018

PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY APPENDIX-I TO PENSION
REGULATIONS.

EXHIBIT P2 THE DETAILS OF PENSION FUND OF THE
SECOND RESPONDENT FOR LAST SEVEN YEARS
FROM 2010-11 TO 2016-17 PREPARED IN A
TABULAR FORM
EXHIBIT P3 THE TRUE COPY OF THE ORDER DATED
01.07.2015 OF THE HONOURABLE SUPREME
COURT IN CIVIL APPEAL NO.1123/15.
EXHIBIT P4 THE TRUE COPY OF THE ORDER DATED
13.02.2018 IN CIVIL APPEAL NO.5525/12.
EXHIBIT P5 TRUE COPY OF THE REPRESENTATION DATED
16.6.2018 MADE BY THE PETITIONER TO
THE SECOND RESPONDENT.

EXHIBIT P6 TRUE COPY OF THE STAFF CIRCULAR
NO.4904 DATED 08.10.2002 (WHICH HAS
DISAPPEARED FROM THE WEBSITE OF THE
BANK) SHOWING THE EFFECTIVE DATE OF
THE AMENDMENT AS 1ST SEPTEMBER, 2000.
EXHIBIT P7 TRUE COPY OF THE EXTRACT OF REGULATION
28 SOWING THE EFFECTIVE DATE AS 1ST
NOVEMBER, 2000 AND THE EXTRACT OF
REGULATION 29 ON "PENSION ON VOLUNTARY
RETIREMENT.

EXHIBIT P8 TRUE COPY OF THE EXCERPTS OF THE
NOTIFICATION DATED 06.11.2017 IN THE
GAZETTE OF INDIA CONTAINING THE FALSE
AVERMENT OF THE BANK.

EXHIBIT P9 TRUE COPY OF THE LETTER F
NO.11/5/2001-IR DATED 26.02.2018 OF
THE FIRST RESPONDENT TO RESERVE BANK
OF INDIA
EXHIBIT P10 TRUE COPY OF THE LETTER F
NO.11/5/2001-IR DATED 05.03.2019 OF
THE FIRST RESPONDENT TO RESERVE BANK
OF INDIA
W.P.(C) No.29890/2018 & 41327/2018

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APPENDIX OF WP(C) 41327/2018

PETITIONER EXHIBITS
EXHIBIT P1 THE TRUE COPY APPENDIX-I TO PENSION
REGULATIONS.

EXHIBIT P2 THE DETAILS OF PENSION FUND OF THE
SECOND RESPONDENT FOR THE PERIOD FROM
2010-11 TO 2016-17
EXHIBIT P3 THE TRUE COPY OF THE UNSTARRED
QUESTION NO. 2444 IN THE RAJYA SABHA
AND THE ANSWER TO IT BY MOS, FINANCE.
EXHIBIT P4 THE TRUE COPY OF THE LETTER DATED
15/09/2018 OF THE PETITIONER TO THE
SECOND RESPONDENT.