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Thursday, December 12, 2013

Service matter - dismissed from service - claim for superannuation benefits - Since the order speaks that he was removed from service with superannuation benefits as would be due other wise and with out disqualification from future employment - Tribunal - High court rightly held that he is entitled for the same - Apex court confirmed the same = BANK OF BARODA …. APPELLANT Versus S.K. KOOL(D)THROUGH LRS.AND ANR. …. RESPONDENTS = Published in / Cited in / Reported in judis.nic.in/supremecourt/filename=41066

     Service matter -  - dismissed from service - claim for superannuation benefits - Since the order speaks that he was removed from service with superannuation benefits as would be due other wise and with out disqualification from future employment - Tribunal - High court rightly held that he is entitled for the same - Apex court confirmed the same =

  S.K. Kool, respondent no. 1 herein (since deceased), was working as  a
clerk with the petitioner, Bank of Baroda and  while working as  such  after
a departmental inquiry,  as  a  measure  of  punishment,  visited  with  the
penalty of ‘removal from service with superannuation benefits  as  would  be
due otherwise and without disqualification from future employment’. =


 “Whether the action of the management  of  Bank  of  Baroda  in
             denying pension and encashment of leave to Shri  S.K.  Kool  is
             legal and justified?  If not, what relief the concerned workman
             is entitled to?”


The  Tribunal
considered the rival plea, upheld the contention of the employee and  passed
an award in his favour, and while doing so, observed as follows:
             “12. Therefore, in view of  the  facts  and  circumstances  and
             settled legal position, the tribunal  feels  no  hesitation  in
             holding that the action of the opposite party bank  in  denying
             superannuation benefits to the workman  is  neither  legal  nor
             justified.  Accordingly it is held that the workman is entitled
             for his superannuation benefits under the final orders  of  the
             disciplinary authority passed on 19.09.03 and any  other  order
             passed by some other officer  denying  superannuation  benefits
             stands set aside.  Accordingly the workman is held entitled for
             all  termination  benefits  like  pension,  leave   encashment,
             gratuity and commutation of pension subject  to  adjustment  of
             any amount paid under these heads to the workman.”

 The employer assailed the aforesaid award in a writ petition  but  the
same has been  dismissed  by  the  High  Court,  inter  alia,  observing  as
follows:

             “It is true that both the provisions  have  to  be  harmonized.
             What logically follows  from  bare  reading  of  the  aforesaid
             provisions  is  that  the  disciplinary   authority   has   the
             competence to inflict punishment of removal from service with a
             condition that such removal from service shall not in  any  way
             result in  forfeiture  of  pensionary  benefits  to  which  the
             workman concerned is otherwise eligible.  
Only  simple  reading
             of the words “AS  WOULD  BE  DUE  OTHERWISE”  
would  mean  that
             irrespective  of  the  order  of  punishment  of  removal  from
             service, workman would be entitled to superannuation  benefits,
             if it is found due otherwise  i.e.  if  the  workman  concerned
             satisfies the  other  requirement  of  superannuation  benefits
             under Regulations, 1995, namely,  he  has  completed  requisite
             number of years of working etc.” =

                    


 “6. An employee found guilty of gross misconduct may;


                 a) ………….


                 b) be removed from  service  with  superannuation  benefits
                    i.e. Pension and/or Provident Fund and Gratuity as would
                    be  due  otherwise  under  the  Rules   or   Regulations
                    prevailing   at   the   relevant   time   and    without
                    disqualification from future employment, or


                       xxx         xxx        xxx”

      The employee undisputedly has been visited with the aforesaid  penalty
in terms of the       Bipartite Settlement.


      Article 22 of the Regulation, which is relied on to deny the claim  of
the employee reads        as follows:
                 “22.  Forfeiture of service:
                     (1)Resignation or dismissal or removal or  termination
                       of an employee from the service  of  the  Bank  shall
                       entail forfeiture of  his  entire  past  service  and
                       consequently  shall  not   qualify   for   pensionary
                       benefits.”




      From a plain reading of the aforesaid Regulation, it is  evident  that
removal of an employee shall entail forfeiture of his  entire  past  service
and  consequently  such  an  employee  shall  not  qualify  for   pensionary
benefits.  If we accept this submission, no employee  removed  from  service
in any event would be entitled for pensionary benefits.   But  the  fact  of
the matter is that  the  Bipartite  Settlement  provides  for  removal  from
service with pensionary benefits “as would be due otherwise under the  Rules
or Regulations prevailing at the relevant time”.         

     An  employee
who has rendered a minimum  of  ten  years  of  service  and  fulfils  other
conditions only can qualify for pension  in  terms  of  Article  14  of  the
Regulation.  
Therefore, the expression “as would  be  due  otherwise”  would
mean only such employees who are eligible and have put in minimum number  of
years of service to qualify for pension.  
However,  such  of  the  employees
who are not eligible and have  not  put  in  required  number  of  years  of
qualifying service shall not  be  entitled  to  the  superannuation  benefit
though removed from service  in  terms  of  clause  6(b)  of  the  Bipartite
Settlement.  Clause 6(b) came to be inserted as one of  the  punishments  on
account  of  the  Bipartite  Settlement.   
It  provides   for   payment   of
superannuation  benefits  as  would  be  due   otherwise.    The   Bipartite
Settlement  tends  to  provide  a  punishment  which  gives   superannuation
benefits otherwise due.  
The construction canvassed by  the  employer  shall
give nothing to the employees  in  any  event.   Will  it  not  be  a  fraud
Bipartite Settlement?  
Obviously it would be.  From the conspectus  of  what
we have observed we have no  doubt  that  such  of  the  employees  who  are
otherwise eligible for superannuation benefit are removed  from  service  in
terms of clause 6(b) of  the  Bipartite  Settlement  shall  be  entitled  to
superannuation  benefits.  This  is  the  only  construction   which   would
harmonise the two provisions. It is well settled rule of  construction  that
in case of apparent conflict between the two provisions, they should  be  so
interpreted that the effect is given to both.  Hence, we are of the  opinion
that such of the employees who  are  otherwise  entitled  to  superannuation
benefits under the Regulation if visited with the penalty  of  removal  from
service with superannuation benefits shall be entitled  for  those  benefits
and such of the employees though visited with the same penalty but  are  not
eligible for superannuation benefits  under  the  Regulation  shall  not  be
entitled to that.


      Accordingly, we  hold  that  the  employee’s  heirs  are  entitled  to
superannuation benefits.  The entire amount that  the  respondent  is  found
entitled to along with interest at the  rate  of  6%  per  annum  should  be
disbursed within 6 weeks from the  date  of  receipt/communication  of  this
Order.


      In the result, we do not find any merit  in  this  appeal  and  it  is
dismissed accordingly with costs of Rs.50,000/- (rupees fifty  thousand)  to
be paid by the appellant to the respondent No. 1 along with other  dues  and
within the time stipulated above.
                        


  REPORTABLE

           IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                       CIVIL APPEAL NO. 10956 OF 2013
             (@SPECIAL LEAVE PETITION (CIVIL) NO. 17054 OF 2009)


BANK OF BARODA                           …. APPELLANT

                        Versus

S.K. KOOL(D)THROUGH LRS.AND ANR.     …. RESPONDENTS



                               J U D G M E N T

CHANDRAMAULI KR. PRASAD, J.

      S.K. Kool, respondent no. 1 herein (since deceased), was working as  a
clerk with the petitioner, Bank of Baroda and  while working as  such  after
a departmental inquiry,  as  a  measure  of  punishment,  visited  with  the
penalty of ‘removal from service with superannuation benefits  as  would  be
due otherwise and without disqualification from future employment’.

      S.K. Kool, hereinafter referred to as ‘the employee’, made  a  request
for leave encashment, which was declined by the petitioner Bank  of  Baroda,
hereinafter referred to  as  ‘the  employer’,  on  the  ground  that  ‘where
cessation of service takes place on account  of  employee’s  resignation  or
his dismissal/termination/compulsory retirement  from  the  Bank’s  service,
all leaves to his     credit lapse.’

      The employee laid claim for pensionary benefits but the same was  also
declined.  However, the employer advised the employee to  ask  for  sanction
of compassionate allowance not exceeding two-thirds  of  the  pension  which
would have been admissible to him otherwise.
A dispute was  raised  and  the
competent  Government  referred  the  dispute  for   adjudication   by   the
Industrial Tribunal.
The  dispute  referred  to  the  Industrial  Tribunal,
hereinafter referred to as ‘the Tribunal’, reads   as follows:
             “Whether the action of the management  of  Bank  of  Baroda  in
             denying pension and encashment of leave to Shri  S.K.  Kool  is
             legal and justified?  If not, what relief the concerned workman
             is entitled to?”


      The employee filed his statement of claim and  so  did  the  employer.
The employee founded his claim by relying on the order of punishment  itself
which, according to him, entitles him the superannuation  benefit.   It  was
resisted by the employer on the ground that such employees who  are  removed
from the service of the Bank are not  entitled  to  pension.  
The  Tribunal
considered the rival plea, upheld the contention of the employee and  passed
an award in his favour, and while doing so, observed as follows:
             “12. Therefore, in view of  the  facts  and  circumstances  and
             settled legal position, the tribunal  feels  no  hesitation  in
             holding that the action of the opposite party bank  in  denying
             superannuation benefits to the workman  is  neither  legal  nor
             justified.  Accordingly it is held that the workman is entitled
             for his superannuation benefits under the final orders  of  the
             disciplinary authority passed on 19.09.03 and any  other  order
             passed by some other officer  denying  superannuation  benefits
             stands set aside.  Accordingly the workman is held entitled for
             all  termination  benefits  like  pension,  leave   encashment,
             gratuity and commutation of pension subject  to  adjustment  of
             any amount paid under these heads to the workman.

      The employer assailed the aforesaid award in a writ petition  but  the
same has been  dismissed  by  the  High  Court,  inter  alia,  observing  as
follows:

             “It is true that both the provisions  have  to  be  harmonized.
             What logically follows  from  bare  reading  of  the  aforesaid
             provisions  is  that  the  disciplinary   authority   has   the
             competence to inflict punishment of removal from service with a
             condition that such removal from service shall not in  any  way
             result in  forfeiture  of  pensionary  benefits  to  which  the
             workman concerned is otherwise eligible.  
Only  simple  reading
             of the words “AS  WOULD  BE  DUE  OTHERWISE”  
would  mean  that
             irrespective  of  the  order  of  punishment  of  removal  from
             service, workman would be entitled to superannuation  benefits,
             if it is found due otherwise  i.e.  if  the  workman  concerned
             satisfies the  other  requirement  of  superannuation  benefits
             under Regulations, 1995, namely,  he  has  completed  requisite
             number of years of working etc.”




      Petitioner assails the award and the order of the High  Court  in  the
present special leave petition.


      Leave granted.


      Mr. Jaideep Gupta, learned Senior Counsel appearing on behalf  of  the
appellant Bank, submits that employees of the Bank of  Baroda  are  governed
by the Bank of Baroda  (Employees)  Pension  Regulation,  1995,  hereinafter
referred to as ‘the Regulation’.  According to the learned  Senior  Counsel,
the Regulation has been made in exercise of powers conferred by  clause  (f)
of sub-section (ii) of Section 19 of the Banking Companies (Acquisition  and
Transfer of Undertaking) Act, 1970 after consultation with the Reserve  Bank
of  India  and  the  previous  sanction  of  the  Central  Government.   The
Regulation, therefore, in his submission  is  statutory  in  nature  and  in
terms of Article 22(1) of the Regulation, removal of an  employee  from  the
service of the Bank would entail  forfeiture  of  entire  past  service  and
consequently he shall not be entitled to pensionary benefits.  According  to
him, such an employee at the  most,  would  be  entitled  for  compassionate
allowance in terms of Article  31  of  the  Regulation.   According  to  Mr.
Gupta, though clause 6(b) of  the  Bipartite  Settlement  provides  that  an
employee found guilty of gross misconduct may be removed from  service  with
superannuation benefits i.e. pension and/or provident fund and  gratuity  as
would be due otherwise under the Rules  or  Regulations  prevailing  at  the
relevant time and  without  disqualification  from  future  employment,  but
this, in his submission, would not override or supersede  Article  22(1)  of
the Regulation, which in no  uncertain  terms  provides  for  forfeiture  of
entire past service on removal from service.  Any interpretation other  than
what has been suggested  by  him  would  obliterate  Article  22(1)  of  the
Regulation, contends Mr. Gupta.

       Ms.  Shilpa  Singh,  learned  counsel  appearing  on  behalf  of  the
employee’s heirs, however,  submits  that  the  order  of  the  disciplinary
authority inflicting the punishment itself  entitled  the  employee  to  the
superannuation benefits and that having attained finality, the  same  cannot
be legally denied.  She does not join issue  that  an  interpretation  which
renders a provision redundant is to be avoided and,  in  fact,  invokes  the
same in support of her contention.  According to her, if the  interpretation
put by the employer is accepted, clause 6(b)  of  the  Bipartite  Settlement
shall be rendered otiose.

      Having considered the rival submissions we do not have  the  slightest
hesitation  in  accepting  the  broad  submission  of  Mr.  Gupta  that  the
Regulation in question is statutory in nature and the  court  should  accept
an interpretation which  would  not  make  any  other  provision  redundant.
Bearing in mind the aforesaid principle, we proceed to  consider  the  rival
contentions.  The terms and conditions  of  service  of  the  employees  are
governed and modified by the Bipartite Settlement. Various punishments  have
been provided under the Bipartite Settlement which can be inflicted  on  the
employee found guilty of gross misconduct.  In 2002, a Bipartite  Settlement
was signed by the Indian Banks’ Association and the Banks’  workmen’s  Union
with regard to disciplinary action procedure.  It is common ground  that  in
the light of the said Bipartite Settlement, clause 6(b) was inserted as  one
of the punishments which can be inflicted on an  employee  found  guilty  of
gross misconduct and the same reads as follows:
              “6. An employee found guilty of gross misconduct may;


                 a) ………….


                 b) be removed from  service  with  superannuation  benefits
                    i.e. Pension and/or Provident Fund and Gratuity as would
                    be  due  otherwise  under  the  Rules   or   Regulations
                    prevailing   at   the   relevant   time   and    without
                    disqualification from future employment, or


                       xxx         xxx        xxx”

      The employee undisputedly has been visited with the aforesaid  penalty
in terms of the       Bipartite Settlement.


      Article 22 of the Regulation, which is relied on to deny the claim  of
the employee reads        as follows:
                 “22.  Forfeiture of service:
                     (1)Resignation or dismissal or removal or  termination
                       of an employee from the service  of  the  Bank  shall
                       entail forfeiture of  his  entire  past  service  and
                       consequently  shall  not   qualify   for   pensionary
                       benefits.”




      From a plain reading of the aforesaid Regulation, it is  evident  that
removal of an employee shall entail forfeiture of his  entire  past  service
and  consequently  such  an  employee  shall  not  qualify  for   pensionary
benefits.  If we accept this submission, no employee  removed  from  service
in any event would be entitled for pensionary benefits.   But  the  fact  of
the matter is that  the  Bipartite  Settlement  provides  for  removal  from
service with pensionary benefits “as would be due otherwise under the  Rules
or Regulations prevailing at the relevant time”.  The  consequence  of  this
construction would be that the  words  quoted  above  shall  become  a  dead
letter.  Such a construction has to be avoided.


      The Regulation does not entitle every employee to pensionary benefits.
 Its application and  eligibility  is  provided  under  Chapter  II  of  the
Regulation whereas Chapter IV deals with qualifying  service.  
An  employee
who has rendered a minimum  of  ten  years  of  service  and  fulfils  other
conditions only can qualify for pension  in  terms  of  Article  14  of  the
Regulation.  
Therefore, the expression “as would  be  due  otherwise”  would
mean only such employees who are eligible and have put in minimum number  of
years of service to qualify for pension.  
However,  such  of  the  employees
who are not eligible and have  not  put  in  required  number  of  years  of
qualifying service shall not  be  entitled  to  the  superannuation  benefit
though removed from service  in  terms  of  clause  6(b)  of  the  Bipartite
Settlement.  Clause 6(b) came to be inserted as one of  the  punishments  on
account  of  the  Bipartite  Settlement.   
It  provides   for   payment   of
superannuation  benefits  as  would  be  due   otherwise.    The   Bipartite
Settlement  tends  to  provide  a  punishment  which  gives   superannuation
benefits otherwise due.  
The construction canvassed by  the  employer  shall
give nothing to the employees  in  any  event.   Will  it  not  be  a  fraud
Bipartite Settlement?  
Obviously it would be.  From the conspectus  of  what
we have observed we have no  doubt  that  such  of  the  employees  who  are
otherwise eligible for superannuation benefit are removed  from  service  in
terms of clause 6(b) of  the  Bipartite  Settlement  shall  be  entitled  to
superannuation  benefits.  This  is  the  only  construction   which   would
harmonise the two provisions. It is well settled rule of  construction  that
in case of apparent conflict between the two provisions, they should  be  so
interpreted that the effect is given to both.  Hence, we are of the  opinion
that such of the employees who  are  otherwise  entitled  to  superannuation
benefits under the Regulation if visited with the penalty  of  removal  from
service with superannuation benefits shall be entitled  for  those  benefits
and such of the employees though visited with the same penalty but  are  not
eligible for superannuation benefits  under  the  Regulation  shall  not  be
entitled to that.


      Accordingly, we  hold  that  the  employee’s  heirs  are  entitled  to
superannuation benefits.  The entire amount that  the  respondent  is  found
entitled to along with interest at the  rate  of  6%  per  annum  should  be
disbursed within 6 weeks from the  date  of  receipt/communication  of  this
Order.


      In the result, we do not find any merit  in  this  appeal  and  it  is
dismissed accordingly with costs of Rs.50,000/- (rupees fifty  thousand)  to
be paid by the appellant to the respondent No. 1 along with other  dues  and
within the time stipulated above.






                          …………………………………………………………J.
                                                   (CHANDRAMAULI KR. PRASAD)




                           .………………………………………………….…J.
NEW DELHI,                    (JAGDISH SINGH KHEHAR)
December 11, 2013
-----------------------
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