Writ Petition No.1804 of 2014

27th October, 2016.

Petitioner Counsel: Mr. SANJAY KHER i/by Mr. AMIT ASHOK GHARTE
Respondent Counsel: LANCY D'SOUZA with VISHWAMBHAR MAHADEV PARKAR, Mr. H.V. MEHTA, with Mr. ASHOK R. VARMA

Cases Cited:
Ramesh Gajanan Nigudkar Vs. Bank of Baroda, Mumbai, 2016 (5) ABR 533 [Para 14]

JUDGMENT

Anoop V. Mohta, J. :- The Petitioner, who retired as Chairman and Managing Director of Respondent No.1 Bank of India, has challenged impugned order dated 7 January 2014, passed by Respondent No.1-Bank and also seeks to quash and set aside Regulation 14 of the Bank of India (Employees) Pension Regulations, 1995 and also prays for directions to Respondent Nos. 1 and 3 to pay enhanced all pensionary benefits, along with accrued interest in accordance with law.

2. The brief facts are as under:-

The Petitioner began his career as a Probationary Assistant in the State Bank of India with effect from 1st July 1957. The Petitioner thereafter served in various capacities with the State Bank of India during the period June 1957 to December 1976. Whilst being so employed with the State Bank of India (SBI), the Petitioner's rise in SBI was steady and rapid. By 1976, the Petitioner was the Chief Officer (Merchant Banking Division) at SBI. The Petitioner joined Respondent No. 1 bank in 1976. The Petitioner's rise in Respondent No. 1 bank is stated as under:

On 19.03.1977, the Petitioner joined Respondent No. 1 bank as Chief Manager in its Merchant Banking Division. On 19.09.1978, Respondent No. 1 promoted the Petitioner as its Regional Manager, Maharashtra Region (Pune). On 09.04.1979, Respondent No. 1 promoted the Petitioner as its Assistant General Manager (A.G.M). On 10.11.1980, Respondent No. 1 promoted the Petitioner as its Deputy General Manager (D.G.M). On 19.06.1984, Respondent No. 1 promoted the Petitioner as its General Manager. On 21.02.1986, After serving at the post of General Manager for a period of 1 year and 6 months, the Petitioner was ordered by Respondent No. 3 to move from his 'Career-Level' post and to assume 'Board-Level' charge as the Whole Time Director of Respondent No. 2 Bank. On the day he was promoted, Petitioner had served 8 years and 11 months in Respondent No.1 bank, and was only 51 years old and still had another 7 years to retire.

However, Respondent No.3 (despite being aware of the 10-years service eligibility requirement for payment of PF, Gratuity and Pension exercised its Executive Powers over public sector banks, and ordered the Petitioner to assume higher responsibility of a Director, in 'National Interest'.

It is submitted that in accordance with Respondent No. 1's Provident Fund, Gratuity and Pension Rules, upon being promoted to 'Board-level' position, an employee is 'deemed to have retired' from his 'career-level' post Respondent No. 1 bank. The Provident Fund, Gratuity and Pension Rules further mandate that to qualify for Provident Fund, Gratuity and Pension, an employee would have to render a minimum of 10 years service in the bank as on the date of retirement (the term retirement includes 'deemed retirement'). It is submitted that on the date the Petitioner was 'deemed retired' from Respondent No. 1 bank, the Petitioner had completed 8 years and 11 months in Respondent No. 1 bank and being only 51 years of age, still had another 7 years to serve in Respondent No. 1 bank. However, it was on the orders of Respondent No. 3 that the Petitioner was not allowed to complete his 10 years eligibility requirement for Provident Fund, Gratuity and Pension, and was asked to join Respondent No. 2 as its Whole Time Director in 'National Interest'. It is submitted that since Respondent No. 3 did not permit Petitioner to complete his 10-year eligibility requirement for PR and Gratuity payment (Pension scheme came later in 1995), Respondent No. 3 immediately waived the 'deemed requirement' clause by condoning the short-fall and ordering Respondent No. 1 to pay Provident Fund and Gratuity dues to the Petitioner. Accordingly, Respondent No. 1, in June 1986, paid Petitioner's PF and Gratuity.

As mentioned hereinabove, from 19.03.1977 till 21.02.1986, the Petitioner served with Respondent No. 1 at a 'Career-Level' post. From 21.02.1986, the Petitioner was elevated to 'Board-Level' post on the orders of Respondent No. 3 and his service record at the 'Board-Level' post is as follows:-

On 03.03.1988, The Union Cabinet issued a notification and approved the proposal to appoint the Petitioner as the Chairman and Managing Director of Respondent No. 2. On 09.06.1988, Respondent No. 3 issued a notification in the Official Gazette and appointed the Petitioner as the Managing Director of the Respondent No. 2 for a period of five years from his taking charge. On 09.06.1988, On the same date, Respondent No. 3 issued another notification in the Official Gazette and appointed the Petitioner as Chairman of Respondent No. 2 for a period of five years from his taking charge. On 15.01.1992, Respondent No. 3 appointed the Petitioner as the Chairman and Managing Director of Respondent No. 1 bank. On 31.01.1995, Petitioner retired as Chairman and Managing Director of Respondent No. 1 bank. On 31.01.1995, On the Petitioner's retirement, Respondent No. 1 addressed a letter of appreciation. On 02.02.1995, Respondent No. 3's Secretary addressed a letter of appreciation to the Petitioner. Hence once again it can be observed that the Petitioner's rise at the 'Board Level Posts' also remained steady and constant.

3. A brief summary of the Petitioner's total service with Respondent No.3's public sector banks is as follows:-

Sr. No.	Period of Service	Bank	Length of service
1	July 1957 to December 1976	State Bank of India (Career level post)	About 20 years
2	March 1977 to February 1986	Respondent No. 1 (Career level post)	8 years and 11 months
3	February 1986 to February 1992	Respondent No. 2 (Board level post)	6 years
4	February 1992 to January 1995	Respondent No. 1 (Board level post)	2 years and 11 months
	Total Service in Public Sector Banks		38 years

On 29th September 1995 (notified date), The Bank of India (Employees) Pension Regulations, 1995 (hereinafter referred to as the said pension regulations) came into effect. These regulations contained the same 10-year employment clause as in the Provident Fund and Gratuity Rules. The Petitioner was not informed of these Rules by Respondent No.2 bank.

4. On or around 24th August 2010, Respondent No. 1 issued a circular stating that the option to join the Employees Pension Scheme was extended to certain categories of employees. It is however submitted that the Petitioner was not eligible to apply under the said option.

However upon receiving a copy of the said circular, the Petitioner began a correspondence with Respondent No. 1 in relation to the release of his pension benefits. The Petitioner's efforts to secure Pension are summarised hereunder:

5. On 14.03.2011, Petitioner addressed a letter to Respondent no. 3, requesting for relaxation of the '10-years service' requirement, as was earlier relaxed in 1986. Respondent No. 3 failed and neglected to give any reply. On 31.10.2011, Petitioner filed an RTI application seeking a status on his pension payment issue. On 03.01.2012, Petitioner wrote to Respondent no.3 requesting release of pension. Respondent No. 3 failed and neglected to give any reply. On 07.01.2012, Respondent no. 1 replied to the RTI application and reiterated the 10-year service rule, and further stated that the Petitioner's case was recommended to Respondent no. 3 for their decision. Respondent No. 3 failed and neglected to give any reply. On 23.01.2012, Respondent no. 1 wrote to Respondent No. 3 recommending payment of pension to Petitioner. Respondent No. 3 failed and neglected to give any reply. On 11.04.2012, Petitioner received a letter from Respondent no. 1 informing him that Respondent no.3 had extended pensionary benefits to whole-time directors of nationalized bank ; however, the said benefit was applicable only if "the whole-time Directors were otherwise eligible for pension in their 'career post'. On 14.05.2012, Petitioner filed a formal application exercising his right of pension, and requested Respondent no. 1 that its Chairman and Managing Director was fully entitled to pay the Petitioner's pension dues with approval of the Bank's Board of Directors. Respondent No. 1 bank did not take any action to release Pension to the Petitioner. On 13.07.2012, Respondent no. 1 forwarded the Petitioner's aforesaid application to the Reserve Bank of India. Respondent No.1 requested the Reserve Bank to use their good offices in extending the pension benefits to the Petitioner. It is submitted that Respondent No. 1 has all along supported the Petitioner's stand until issuance of the impugned letter. On 29.07.2012, The Petitioner once again wrote to Respondent no.3 requesting release of pension payment. Respondent No. 3 failed and neglected to give any reply. On 07.08.2012, Respondent No. 1 recommended to Respondent No. 3 that Petitioner's request for pensionary benefits should be considered favorably. On 03.01.2013, The Petitioner addressed a letter to the new chairman of Respondent No. 1 and requested her to look into the issue of pension. On 09.01.2013, Respondent no. 1 informed the Petitioner that his letter dated 22.09.2012 had been forwarded to Respondent no.3 for favourable consideration. Respondent No. 3 failed and neglected to give any reply. On 29.01.2013, Respondent no. 3 issued a departmental order extending the benefits of pension for the combined service to officers of nationalized banks. On 22.10.2013, Petitioner once again wrote to Respondent no.1 requesting for release of pension. On 07.01.2014, Respondent No. 1 issued the impugned letter and reiterated that the Petitioner was ineligible for pension on account of the 10-year service rule. These are the facts that have led to the filing of the present petition.

6. The Bank of India (Employees) Pension Regulations, 1995 made under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (for short, "the Banking Companies Act") (clause (f) of subsection (2) of Section 19) govern the issue in question. These Regulations are applicable to the employees who were in service of the Bank on or after the first days of January 1986 but who had retired before the first day of November 1993, subject to the condition for retired employees of refund within sixty days one who exercise an option in writing within 120 days from the notified date to become member of the Fund. The Regulations for qualifying service for the benefits of this Pension Scheme are provided in Chapter IV, clause 14.2 to 27. The basic clause is clause 14 which is reproduced as under :

"14 Qualifying Service :-

Subject to the other conditions contained in these regulations, an employee who has rendered a minimum of ten years of service in the Bank on the date of his retirement or the date on which he is deemed to have retired shall qualify for pension."

7. The Ministry of Finance, by communication dated 4 June 1986, on the request of the Petitioner regarding the payment of his provident fund and gratuity dues from the Bank of India for the service by him, has observed as under:-

"2. Government have examined the request of Shri Dahotre as you are aware, Shri Dahotre has been appointed as Executive Director of Dena Bank with affect from 22.2.86 in public interest and his resignation from Bank of India is therefore only technical in nature. It can be safely assumed Shri Dahote would have continued to serve Bank of India but his appointment as Executive Director, Dena Bank. It would not therefore, be fair to apply rigidly the norms in Bank of India in respect of payment of provident fund dues and gratuity to Shri Dahotre. Bank of India may therefore condone the shortfall in the period of service put by Shri Dahotre in the Bank of India and pay, provident fund and gratuity dues at furates for the period of service of 8 years and 11 months rent by him in Bank of India. These dues may however he paid to Shri. Dahotre in March, 1987, when he would have completed 10 in Bank of India had be continued in service in the bank, subject to the condition that he does not cease to serve in a public sector bank till that date."

8. The Respondent-Bank recommended the case of the Petitioner favourably by recording in communication/letter dated 23.01.2012 as under :

"4 Unfortunately, his request has been examined technically by applying the rules prevailing at the various Banks he served, instead of taking a broader view about his service at the various Public Sector Banks he served. He was denied pension by State Bank of India as he had not served for a continuous period of 30 years there. Similarly, in Bank of India, where he joined laterally at a higher grade, he was again denied retirement benefits as he served continuously for eight years ten months and twenty five days only, which incidentally is less than 10 years of service required for being eligible for Provident Fund as per Bank of India Provident Fund Regulation (Pension was not applicable in Bank of India at that time).

7 I understand that Government of India is modifying the pension rules for Government appointees, viz. Executive Directors and Chairman & Managing Director of Public Sector Banks. I feel that as Shri Dahotre had served the Public Sector Banks all along and then retired as Chairman & Managing Director of Bank of India after serving a total number of about nine years as Executive Director and Chairman, his representation for pension, as applicable to Chairman & Managing Director, merits special consideration.

8 I would, therefore, kindly request you that the Government may kindly examine Shri Dahotre's request in the right perspective to give him all the pension benefits as applicable to Chairman of Public Sector Banks. He may, therefore be allo0wed to exercise the option of pension."

9. It is relevant to note that pursuant to the representation of the Petitioner, the Respondent-Bank as in fact, by communication dated 7.8.2012 recommended the case of the Petitioner and in the alternative sought permission so as to enable them to take suitable decision. Para 6 of the communication is as under:-

"6 In the light of the aforesaid facts, it will be in all fairness that Shri Dahotre's request for pensionary benefits is considered favourably. However, if it is not considered at the level of Ministry of Finance, I request you to, please, permit the Board of Bank of India to take a suitable decision in the matter."

10. The Petitioner is otherwise eligible for the qualifying pension and all other related benefits, but denied for want of stated minimum 10 years of service in the Bank. The regulation covers the case of the Petitioner, but the Respondents, specifically Respondent No.3, not accepting even the recommendations with justification forwarded by the Respondent-Bank. The Petitioner was promoted to the board level of Respondent No.3, since February 1986 till January 1995. The regulations in question were not in existence, earlier. Now, in view of this, the objection and/or requirement of not completing 10 years of service in career level post, the Petitioner has been denied such benefits, even though he retired at board level post. By this way, the Petitioner is not able to get any pension though he opted in time as per the scheme, even after the retirement from the board level post. The situation so created was not taken care of by the Respondents concerned, though provided all the retirement benefits prior to 1995 itself. The Petitioner is not in position to change the facts and those circumstances, when he was promoted and that resulted into the denial of his pensionery benefits, though he worked in all 38 years in these respective banks, since the year 1977 till January 1995, for more than 18 years at both level. The earlier service of 20 years at career level for 1977 to 1996 in erstwhile bank is also relevant factor, which was overlooked. It is relevant to note that the regulations in question are statutory regulations made under the Banking Companies Act. The similar regulations are applicable and/or made compulsory in all the banks. The Petitioner, though has completed more than 10 years service in erstwhile bank, is not entitled to get these benefits. The Petitioner, who has completed more than 18 years of service in the Bank of India is also not entitled to get the said benefits, though other similarly situated persons are getting all the benefits.

11. The Petitioner has raised challenge to these relevant regulations also. However, we are not touching the same, as in the peculiar facts and circumstances, we are of the view that the service of erstwhile bank read with the service of the Petitioner at career level in the bank in question, apart from the service at board level from the year 1986 to 1995, in our view, need to be calculated for competing minimum 10 years service at the stated career level post. The term "deemed to have retired" may not be read in the facts and circumstances to mean that the Petitioner has completed 8 years and 11 months service only in Bank of India. The rules, which are applicable to the bank employees, who have completed more than 10 years service at the career level post, in the present facts and circumstances, need to be extended to the Petitioner also. There is no specific bar to overlook the career level post service, including of erstwhile career level post. Even if there is some issue, still in the peculiar facts and circumstances, we are inclined to observe that the Petitioner is entitled to all the pensionary benefits by treating the career level post service, which he has rendered, is admittedly more than 10 years.

12. A person like the Petitioner, cannot be denied his pensionary and all related benefits, though he has rendered 38 years service in the bank. The regulations in question, therefore, has brought into force in the year 1995 and may be applicable to the persons like the Petitioner who retired in 1995 by putting the rider and/or denying the benefits to the person like the Petitioner, on the ground of not completing 10 years of qualifying service, in the present facts and circumstances, in our view, definitely cause great injustice and hardship to the Petitioner. This amounts to denying the pensionary beneifts, which conferred upon on the employee for his unblemished career, such rights in our view, cannot be taken away by such technicality by overlooking the totality of the facts and circumstances of the case. The recommendations of the Respondent-bank and the earlier benefits so granted to the Petitioner after his retirement, in our view, Respondent No.3 ought to have accepted and extended the benefits as asked for. If not, could have permitted the Respondent Bank to take suitable decision in the matter. We have noted that the bank, by communication dated 7 August 2012, itself sought such permission. The Respondent bank, who is the employer itself, has no objection to grant such benefits and extension of such pensionary reliefs, in the facts and circumstances of the case and/or could have grant any other similar benefits. The Respondent has denied the same, though the regulations of pension scheme applicable to the Bank of India, at that time when he retired by completing 38 years of service in the Banking Industries.

13. We may note that the facts of the case clearly go to show that in the nature of the appointment, which are made, all are in the public sector banks. There is no dispute that the appointment of the petitioner of February 1986 is at the instance of Respondent no.3. It also cannot be denied that the appointment was in public interest and for the national benefit. In this situation, it can be safely concluded that the petitioner was not out of public service. The concept of public service in the present context cannot be considered so narrowly so as to mean service with Respondent No.1 of 8 years 11 months, when the Petitioner had risen to the call of duty for the benefit of the Government of India and termed with another nationalized bank. Such public service in fact needs to be recognized than considered to the disadvantage of the Petitioner in denying pension. If the Petitioner was not to be appointed in February 1986 by Respondent No.3, he would have continued in the service of Respondent No.3 and would have become eligible for pension. In fact, when Respondent No.2 recommended to the Government of India that the Petitioner be granted pension, it is this position of public service of the Petitioner which is recognized. We are completely in agreement with the stand of Respondent No.1. The undisputed finding in communication dated 4 June 1986 of Respondent No.3 regarding the provident fund and gratuity further crystalized the case of the Petitioner, even for the claim made in this Petition.

14. This Court, in Ramesh Gajanan Nigudkar Vs. Bank of Baroda, Mumbai, 2016(5) ABR 533, while considering the provisions of Articles 14 and 21 of the Constitution of India and the rights of pension, after considering the Supreme Court Judgments, has observed as under:-

"29. In our above view, we find ourselves supported by the decision of the Supreme Court in the case of "Sashikala A. Devi v. Central Bank of India" wherein in the context of entitlement of pension to a bank employee who had voluntarily retired and was entitled for pension, the Court held that pension not being the bounty is a right acquired by an employee on account of long years of sincere and good work. The Court would be slow in presuming that the employee who had assiduously acquired such a right to pension has really given up the right. The intention can be meticulously gathered from the various letters of the petitioner seeking pension. The significance being beneficial provision of a pension scheme/regulations are required to be interpreted liberally so as to further the object underlying such facility rather than denying the benefits to the beneficiary. In para 17 and 18 the Court thus observes:

........"

"33 Now coming to the next contention as urged on behalf of the 1st respondent that the petition is barred by delay or laches, we are not persuaded to accept the same. Admittedly this is a case where after initial rejection the petitioner had made representations. In the facts and circumstances of the case the petitioner expected that the 1st respondent would consider the detailed representations as made by the petitioner. There was a ray of hope in the heart of the petitioner that fairness would prevail with the 1st respondent and representations would bear fruits. It cannot be expected that in each and every case a citizen and more particularly a senior citizen and a pensioner should resort to a legal action. The petitioner has approached this Court after exhausting all remedies of representations and after all his hopes stood frustrated on account of his representations being mechanically turned down by the 1st respondent and finally in March 2013. The petition was immediately filed thereafter. It is settled principle of law that the issue of delay and laches is required to be considered in the facts and circumstances of each case. Considering the facts of the present case the 1st respondent is not correct in asserting that the petition is delayed or barred by laches."

15. Therefore, taking over all view of the matter, we are inclined to observe that the case is made out by the Petitioner to grant all the pensionary benefits, being otherwise eligible as per the regulations and has already completed more than 10 years of service at career level post and also in view of the recommendations forwarded/sent by Respondent No.1 bank to Respondent No.3. The action of Respondent No.3, in our view, in the facts and circumstances, is arbitrary, reflects non-application of mind to the facts and circumstances of the case, apart from the law laid down by the Hon'ble Supreme Court and this Court, so recorded above. The Petitioner, in our view, is entitled for the pensionary and all related reliefs as opted.

16. Resultantly, we pass the following order:-

ORDER

(a) The Writ Petition is allowed in terms of prayer (A), except bracketed portion, which now would read thus:-

"That this Hon'ble Court be pleased to issue a writ of Certiorari or any other appropriate writ or order or direction under Article 226 of the Constitution of India and to call for the records of the entire matter vide which the Petitioner has been denied his pension dues and to go into the legality and propriety thereof and to (a) quash and set aside the said Impugned Order dated 7th January 2014 issued by Respondent No.1."

(b) The Writ Petition is also allowed in terms of prayer (B), except bracketed portion, which now would read thus:-

"That this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ directing Respondent Nos. 1 and 3 to pay the Petitioner his pension (along with accrued interest thereon) under the Bank of India (Employees) Pension Regulations, 1995.

(c) Respondent Nos. 1 and 3 are directed to pay the Petitioner his entire pension along with accrued interest thereon under the Bank of India (Employees) Pension Regulations, 1995 as the Petitioner is entitled to the pension as claimed with all the related benefits as per the regulations as treated to have completed more than 10 years of service at requisite level.

(d) The Respondents are directed to grant pension and all related benefits within two months from today with simple interest at the rate of 9 per cent per annum.

(e) There shall be no order as to costs.

The learned counsel appearing for Respondent No.3 submitted to stay the effect and operation of the order so pronounced in the Court today. For the reasons already recorded, we are not inclined to accept the said submission. The request for stay is rejected.

Petition allowed.