Anomaly in computation of Pension – Supreme Court Judgement

Anomaly in computation of Pension – Supreme Court Judgement

Anomaly in computation of Pension – Supreme Court Judgement

anomaly-in-computation-in-pension-sc-judgement


Anomaly in computation of Pension Civil Appeal No. 5525 of 2012, Filed
in the Hon`ble Supreme Court of India by Bank of Baroda & Ors with
other Civil Appeals 
 
HR & INDUSTRIAL RELATIONS
No.HR&IR/2018-19/G2/4786
April 3, 2018 
Chief Executives of Member Banks which 
are parties to the 7th Bipartite Settlement 
Dear Sir, 
Anomaly in computation of Pension Civil Appeal No. 5525 of 2012, Filed in
the Hon’ble Supreme Court of India by Bank of Baroda & Ors with other
Civil Appeals. 
On 9-10-1993, a Bi-partite Settlement was signed at Industry level between
Indian Banks’ Association (representing member Banks) and Workmen Unions
(representing Workmen) under the provisions of Industrial Dispute Act, 1947
for introduction of Pension as a second retiral benefit in lieu of “Banks
contribution to Provident fund.” On similar lines a Joint Note dated
29-10-1993 between Indian Banks’ Association (representing member Banks)
and Officers Associations (representing Officers) was signed. 
2. The respective member Banks in exercise of their power under Section 19
of Banking Companies (Acquisition & transfer of undertakings) Act,
1970/1980 pursuant to above referred Bi-partite Settlement/Joint Note,
framed and notified in the Gazette of India “Bank Employees Pension
Regulations, 1995.” 
3. Another Joint Note/Bi-partite Settlement was signed between respective
parties as mentioned herein above on 14-12-1999 and 27-3-2000 respectively
relating to Wage revision. As per the provisions of said Joint Note /
Bi-partite Settlement, 1684 points of Consumer Price Index (CPI) were
merged with existing basic pay of Officers/employees and revised basic pay
was worked out accordingly. However, as per agreed terms & conditions,
pay for the purpose of pension was worked out after merging 1616 points of
CPI as against 1684 points. These provisions were made effective w.e.f.
1-4-1998. As such, pay for the purpose of pension was less than the actual
Pay the Employee/Officer concerned was getting on or after 1-4-1998. This
anomaly was removed vide Joint Note/Bi-partite Settlement signed on
2-6-2005. However, monetary benefits were given w.e.f. 1-5-2005. 
4. Due to this anomaly, the employees/Officers who retired after 1-4-1998,
including those who retired under Special Voluntary Retirement Scheme, 2000
filed various Writ Petitions before different Hon’ble High Courts, praying
that they be held entitled to Payment of Pension on the basis of actual
average pay drawn by them during last 10 months as per the provisions of
Bank Employees Pensions Regulations, 1995. 
5. When the matter came up before Hon’ble High Court of Karnataka and
Madras, the Hon’ble Courts decided the matter against Banks and ultimately
concerned Banks approached Hon’ble Supreme Court by filing Civil Appeals
viz., CA No 5525/2012, 6254/2012, 5611/2012, 3026-3253/2013,
3257-3262/2013, 11205-11340/2014, 11342-11435/2014, 9533-9646/2014,
8557/2014, 4711-4800/2014 and 1880/2018, 1881-1888/2018, 1890/2018,
1892-1912/2018, 1918/2018, 1919-2087 and 2088-2092/2018. 
6. The Hon’ble Supreme Court vide its order dated 13/2/2018 (copy enclosed)
have dismissed these appeals filed by the Banks and inter-alia has held
that:- 
“17…the provisions contained in Regulation 35 also make an incumbent
entitled for opting the pension on the basis of average emoluments. The
average emoluments have to be calculated on the basis of the preceding ten
months. Adding Explanation (c) to Regulation 2(s), as done, could have
created no fictional basis in view of clear and unambiguous provisions in
other provisions of the Regulations. Besides, the definition of the average
emoluments in Regulation 2(d) itself makes it clear that it is average pay
drawn “during the last ten months” of his service by an employee. It cannot
mean pay drawn by the employee even before several years. Mentionably there
is no amendment made in the aforesaid provision of Regulation 2(d) and the
expression during the preceding last ten months before date of retirement
is clearly culled out in Regulation 38(1) and 38(2). Thus, in our
considered opinion, the view taken by the then Chief Justice Vikramajit Sen
as he then was, at Karnataka High Court and by the High Court of Madras are
appropriate and the view taken by the Delhi High Court cannot be said to be
sustainable for the various other reasons too mentioned hereinafter. 
29. Thus, in our opinion, the Regulations which were in force till 2003,
would apply with full force and as a matter of fact, the amendments made in
it by addition of Explanation (c) in Regulation 2(s) did not have the
effect of amending the Regulations relating to pension, as contained in
Regulation 38 read with Regulations 2(d) and 35 of the Regulations of 1995.
Even otherwise, if it had the effect of amending the pay and perks ‘average
emoluments’, as specified in Regulation 2(d), it could not have operated
retrospectively and taken away accrued rights. Otherwise also, it would
have been arbitrary exercise of power. Besides, there was no binding
statutory force of the so called Joint Note of the Officers’ Association,
as admittedly, to Officers’ Association even the provisions of Industrial
Disputes Act were not applicable and Joint note had no statutory support,
and it was not open to forgo the benefits available under the Regulations
to those officers who have retired from 1.4.1998 till December 1999 and
thereafter, and to deprive them of the benefits of the Regulations. Thus,
by the Joint Note that has been relied upon, no estoppel said to have been
created. There is no estoppel as against the enforcement of statutory
provisions. The Joint Note had no force of law and could not have been
against the spirit of the statutory Regulations and the basic service
conditions, as envisaged under the Regulations framed under the Act of
1970. They could not have been tinkered with in an arbitrary manner, as has
been laid down by this Court in Central Inland Water Transport Corporation
Limited & Anr. vs. Brojo Nath Ganguly & Anr., (1986) 3 SCC 156
& Delhi Transport Corporation vs D.T.C. Mazdoor Congress, (1991) Supp.1
SCC 600. 
33. The only purpose of the addition of Explanation (c) to Regulation 2(s),
was to take away the actual computation of the pension on the basis of the
salary, which was drawn in the preceding ten months. Thus, we have to
hesitation to strike it down being arbitrary and repugnant to other
provisions/Regulations namely 2(d), 38(1)(2) and 35. The Explanation (c) to
Regulation 2(s) is hereby struck down, as it could not have been enacted
retrospectively to take away accrued rights. Even otherwise also it is held
to be arbitrary and irrational. More so, in view of the fact that only by
way of a temporary measure, that discrimination was created and the
Explanation was deleted with effect from 1.5.2005.” 
34. Thus, we set aside the judgment rendered by the High Court of Delhi and
affirm that of High Courts of Karnataka at Bangalore and the High Court of
Madras. The appeals filed by the Banks are dismissed and the appeal filed
by the Association is allowed. Resultantly, let the amount which was due
and payable be paid with 9% interest, be calculated and paid within four
months from today.
Read also :  Enhancement of Superannuation age of doctors to 65 years
35. All pending applications stand disposed of.” 
7. The matter was put up to the Managing Committee of IBA in its meeting
held on 28.3.2018. The committee resolved that the judgement of the Hon’ble
Supreme Court may be forwarded to all member banks which are party to above
mentioned Joint Note / Bipartite Settlement for their necessary action. As
such, a copy of the judgement of Hon’ble Supreme Court is enclosed. 
8. As directed by Managing Committee we have taken a Legal Opinion to know
the impact of the judgement on various Banks which is given below: 
(a) All Nationalized Banks who have Pension Regulations, 1995 will have to
give effect to the judgement and pay the differential arrears in the amount
of Pension which was due and payable with 9% interest within 4 months from
the date of judgement i.e. 13.02.2018. 
(b) Banks incorporated under special statutes will also have to give effect
to the judgement if they have implemented provisions of the above mentioned
Joint Note / 7th Bipartite Settlement. 
(c) Private Banks which are not amenable to the Writ jurisdiction of the
Hon’ble High Courts/Supreme Court, though can take the plea that captioned
judgement is not applicable to them, should also give effect and comply
with the captioned judgement if they have implemented provisions of the
above mentioned Joint Note/7th Bipartite Settlement. The view expressed in
this point Is based on the possibility that if the employees of the Private
Banks approach the Civil Court on the basis of said Hon’ble Supreme Court
judgement, they would procure a favourable verdict.
Read also :  RBE No. 169/2018: Minimum rates of wages and variable dearness allowance w.e.f. 01.10.2018
Yours faithfully,
Sd/-
B Raj Kumar
Deputy Chief Executive 

  SUPREME COURT JUDGMENT
 [http://www.iba.org.in/documents/SC%20JUDGEMNT.pdf]

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