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Friday, February 27, 2015

"Provided that pension shall also be granted to an employee who opts to retire before attaining the age of superannuation, but after having served for a minimum period of 15 years in terms of any scheme that may be framed for the purpose by the Bank's Board with the concurrence of the Government."= by insertion of the proviso in Regulation 28 (in the year 2002 with effect from 1-9-2000), all classes of employees under VRS, 2002 were intended to be covered, such amendment in Regulation 28, needs to be harmonized with Regulation 29......" 29. While answering Point no, 2 in favour of the respondents, I held that the State Bank of India should implement the amendment made to Rule 28 of the Employees Pension Regulation in granting pension to the employees seeking voluntary retirement under SBI-VRS. I therefore, answer point no 3 in favour of the respondents and direct the appellant Bank to grant pension to the employees seeking voluntary retirement under the SBI-VRS after completing 15 years of pensionable service. Therefore, the respondent Radhey Shyam Pandey, having completed 19 years 8 months and 18 days of service, respondent M.P. Hallan, having completed 19 years and 4 months of service and the respondent R.P. Nigam, having completed 16 years and 6 months of service, become eligible for pension as per the amended Regulation 28 of Employees Pension Rules, 1995. By virtue of power vested in this Court under Article 142 Constitution of India, I hold that the pension relief is also extended to all the other employees who have availed SBI-VRS 2000 after having completed 15 years of pensionable service. Thus, C.A. No.@ SLP (C) No.3686 of 2007, C.A. Nos.2287- 2288 of 2010 and C.A. No. 10813 of 2013 are dismissed. 30. The C.A. Nos.5035-5037 of 2012 of the appellant Bank succeed in that respondent Mihir Kumar Nandi, having completed 12 years 3 months and 4 days of service, becomes ineligible for pension benefits.

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.2463 OF 2015
              [Arising out of S.L.P. (Civil) No. 3686 OF 2007]


Assistant General Manager, State Bank of
India & Others                                     ... Appellants

                                   Versus

Radhey Shyam Pandey                           ... Respondent

                                    WITH

                     CIVIL APPEAL NOS. 2287-2288 OF 2010
                     CIVIL APPEAL NOS. 5035-5037 OF 2012
                       CIVIL APPEAL NO. 10813 OF 2013


                               J U D G M E N T


Dipak Misra, J.

            Leave granted in S.L.P. (Civil) No. 3686 of 2007.
Having regard to the commonality of controversy in this batch of appeals  it
was heard together and is disposed of by a singular judgment.  For the  sake
of clarity and convenience, I shall adumbrate the facts  from  Civil  Appeal
Nos. 2287-2288 of 2010 and at the  appropriate  stage  refer  to  the  views
expressed in other  appeals.   The  1st  respondent,  M.P.  Hallan,  an  ex-
serviceman joined as a clerk on 18.5.1981 in the  appellant-Bank  which  has
been constituted under the State Bank of India Act, 1955 (for  brevity  'the
Act').  The Indian Banks  Association  (I.B.A.),  after  obtaining  approval
from the Government of India evolved a Voluntary Retirement Scheme  (V.R.S.)
and the  appellant-Bank  adopted  the  Scheme  with  certain  modifications,
despite it having its  own  Voluntary  Retirement  Scheme  in  the  existing
service   conditions   meant   for   its   employees   to   seek   voluntary
retirement/premature retirement/resignation.   The  Scheme,  namely,  S.B.I.
Voluntary Retirement Scheme (for short 'the Scheme')   was  adopted  by  the
State Bank of India on 29.12.2000.  The Scheme was  to  remain  open  during
the period 15.1.2001 to 31.1.2001 with the option either to close  it  early
or extend the period, without assigning any reason.
After adoption of the Scheme, the Deputy Managing  Director,  the  competent
authority, issued a Circular No. HRD/CDO/  VRS/1  on  29.12.2000  clarifying
certain aspects of the Scheme.  Another  Circular  being  No.  HRD/CDO/VRS/5
was issued on 10.1.2001.  On 11.01.2001, the said Circular  was  brought  to
the notice of  all  the  Branches/offices  of  all  the  Circles,  including
Chandigarh Circle.
As per the Scheme, the  applications  for  voluntary  retirement  under  the
Scheme were to be submitted during the period i.e. 15.1.2001  to  31.1.2001.
The 1st respondent submitted his application  seeking  voluntary  retirement
and it was accepted on 17.3.2001 with effect from 31.3.2001.  On  27.3.2001,
the respondent No. 1 submitted an application to withdraw  his  request  for
voluntary retirement.  The said application was  declined  by  the  Bank  on
18.4.2001 stating that the date for withdrawal of  application  had  already
expired on 15.2.2001.  It is apt to note that here the  respondent  wrote  a
letter on 12.4.2001 claiming pension under the Pension Fund Rules,  1995  in
terms of State Bank  of  India  Employees  Pension  Rules  (for  short  'the
Rules').  The claim of the 1st respondent for withdrawal of his  application
for voluntary retirement and grant  of  pension  and  leave  encashment  was
refused by the Bank on 4.7.2001.  Being grieved  by  the  aforesaid  refusal
and declination of the prayer, the 1st respondent  preferred  writ  petition
being CWP No. 14325 of 2001.
The Writ Court took note of the fact there was acceptance of  the  voluntary
retirement on 17.3.2001 with  a  stipulation  that  the  employee  would  be
relieved from his duties at the close of business hours on  31.3.2001.   The
Division Bench referred to the decision in Mohinder Pal Singh v. Punjab  and
Sind Bank and others[1] and the decision of this Court in Bank of India  and
others v. O.P. Swarankar etc.[2] and after  reproducing  the  directions  of
from Swarankar's case came to hold as follows:-
"In view of the aforesaid finding, the moment a decision  is  taken  by  the
Bank, the jural relationship of  employer  and  employee  stood  terminated.
The  petitioner  has  admittedly  sought  to  withdraw  his  offer  to  seek
voluntary retirement after the acceptance was conveyed  to  the  petitioner.
Mere fact that the date of voluntary retirement was fixed as 31.03.2001,  is
wholly inconsequential as employer and  employee  relationship  has  already
come to an end with the  communication  of  acceptance.   It  was  only  the
procedural  part  under  which  the  petitioner  continued  to   work   till
31.03.2001."

In the ultimate analysis, the High Court did not find any merit with  regard
to refusal by the Bank in  not  accepting  the  application  for  withdrawal
submitted by the employee.   Determination on the said score  is  not  under
assail in any of the appeals before this court.
 The next question that emerged for consideration before the High Court  was
whether the employee  was  entitled  to  pension  in  terms  of  the  rules,
including  computed  value  of  pension.   It  was  contended  by  the   1st
respondent in the  writ  court  that  the  pension  rules  were  amended  on
9.3.2001 and the said rules were in vogue when the petitioner had  submitted
his application for voluntary retirement, and hence, he was entitled to  get
the pensionary benefits.  It was also urged that in  terms  of  the  amended
Rule 22 of the  pension  rules,  he  was  entitled  to  pension.   The  said
submission was resisted by the Bank that Rule 22 did  not  cover  the  cases
like that of the petitioner.   In  justification  of  the  said  submission,
reliance was placed on the Division Bench judgment  of  the  High  Court  of
Delhi in Vipin Kalia and Ors. v. State Bank of India  and  Ors.  decided  on
28.2.2007 in L.P.A. No. 410 of 2002 and also on a decision rendered  by  the
High Court of Andhra Pradesh in C.W.P. No. 2098 of 2006.
The Division Bench referred to the anatomy of Rule 22  and  after  analyzing
the scope of the rule distinguished the decision of the High Court of  Delhi
as well as that of Andhra Pradesh and came to  hold  that  it  was  apparent
from the record that the writ petitioner was  in  service  of  the  Bank  on
01.11.1993 and had completed 10 years of  pensionable  service  and  further
had attained the age of 58 years.  Therefore, in terms of  Rule  22  of  the
Pension Rules, he was entitled to  pension.   Dealing  with  the  claim  for
leave encashment which  is  based  upon  the  circular  of  the  Bank  dated
23.09.1986, it opined that the leave encashment was payable to  an  employee
of the Bank, who had been discharged if he was eligible for pension  and  as
it had been found that the petitioner was entitled to pension  in  terms  of
the Pension Rules he would be entitled to leave encashment as well.
In this batch of appeals,  the  question  that  emanates  for  consideration
whether the respondent-employees are entitled to get pension.  There can  be
no cavil over the fact that their right to seek withdrawal from  the  scheme
of voluntary retirement has been negatived by the impugned judgments  passed
by various High Courts and, therefore, I am not  required   to  address  the
said issue.   It is essential to advert to the issue  whether  the  employee
would be entitled to pension under the four corners of the  Rules.  Rule  22
which squarely falls for consideration is as follows:-

"22. (i)  A member shall be entitled to  a  pension  under  these  rules  on
retiring from the Bank's service -

After having completed twenty years' pensionable service  provided  that  he
has attained the age of fifty years or if he is in the service of  the  Bank
on or after 1.11.93, after having completed ten  years  pensionable  service
provided that he has attained the age of fifty eight years or if  he  is  in
the service of the Bank on or after 22.5.1998, after  having  completed  ten
years pensionable service provided that he has attained  the  age  of  sixty
years;

After having completed twenty years' pensionable  service,  irrespective  of
the age he shall have attained, if he shall satisfy the authority  competent
to sanction his retirement by  approved  medical  certificate  or  otherwise
that he is incapacitated for further active service;

After having completed twenty years  pensionable  service,  irrespective  of
the age he shall have attained at his request in writing.

After twenty five years' pensionable service.
A member who has attained the age  of  fifty-five  years  or  who  shall  be
proved to the satisfaction  of  the  authority  empowered  to  sanction  his
retirement to be permanently incapacitated by  bodily  or  mental  infirmity
from further  active  service  (such  infirmity  not  being  the  result  of
irregular or intemperate habits) may, at the discretion of the trustees,  be
granted a proportionate pension.

A member who has been permitted to retire under Clause 1(c) above  shall  be
entitled to proportionate pension."

Keeping the aforesaid Rule in view,  it  is  obligatory  to  scrutinize  the
analysis made by the High Court in the backdrop  of  the  facts.   The  High
Court has taken note of the fact that the 1st respondent had completed  more
than 19 years and 10 months of service as on 31.3.2001 and,  therefore,  the
first part of Clause (a) is not applicable to him.  The High Court has  also
opined that the third part of Clause (a) is not applicable to him as he  had
completed more than 19 years of service but  not  attained  the  age  of  60
years.  The case of the 1st respondent was that his case was  covered  under
second part of Clause (a) which enables an employee to  get  pension  if  he
was in service of the Bank as on 1.11.1993 and had completed ten  years'  of
service and attained the age of 58 years.  The High Court took note  of  the
fact that the counter-affidavit was silent regarding the claim  of  the  1st
respondent under second part of  Clause  (a).   Analysing  further  in  this
regard, the High Court opined as follows:-
"The petitioner has submitted his offer for voluntary  retirement  in  terms
of the Pension Rules existing in the month of January, 2001.   On  the  said
date a member of the Pension Funds was entitled to pension on completion  of
20 years of pensionable service provided he  has  attained  the  age  of  50
years.  Alternatively, if a member is in service of the  Bank  on  or  after
01.11.1993 and has  completed  10  years  of  pensionable  service  and  has
attained the age of 58 years, he shall be  entitled  to  the  pension.   The
petitioner fulfils the second part of Clause (a) of Rule  22  which  was  in
existence  on  the  day  when  the  petitioner  submitted  his  request  for
voluntary retirement.  Even  after  the  amendment  on  09.03.2001,  another
clause has been added i.e. 3rd part of Clause (a) as mentioned above,  which
does not affect the claim of the petitioner for pension as  he  is  entitled
to pension in the second part of Rule 22(1)(a)."


The High Court referred  to  the  voluntary  Retirement  Scheme  floated  on
29.12.2000, and reproduced the relevant part of the said Scheme which is  as
follows:-
"5.  Amount of Ex-Gratia:

The staff  member  whose  request  for  retirement  under  SBIVRS  has  been
accepted by Competent Authority will be paid an amount of  ex-gratia  of  60
days' salary (pay plus stagnation increments plus special pay plus  dearness
allowance) for each completed year of service (for this purpose fraction  of
service of six months and above will be taken as one  year  and  accordingly
service of less than six months will be counted) or salary  for  the  number
of months service is left, whichever is less, fraction of a month,  if  any,
will be ignored.  'Relevant Date' means  the  date  on  which  the  employee
ceases to be in service of the Bank as a consequence of  the  acceptance  of
the request for voluntary retirement under the scheme.

For the purpose of calculation of ex-gratia, 60  days  salary  mentioned  in
the Scheme is to be taken as equivalent to 2 months salary  (with  reference
to salary for the month in  which  employee  is  relieved  from  service  on
(Voluntary Retirement).

Income Tax shall be deducted at source in  respect  of  ex-gratia  exceeding
Rs.5.00 lakhs or such other ceiling as may be prescribed  under  the  Income
Tax Act as on the relevant date.

Other benefits:

Gratuity as payable under the extent instructions on the relevant date.

Provident Fund Contribution as per State Bank of India  Employees  Provident
Fund Rules as on relevant date.

Pension in terms of State Bank of India Employees'  Pension  Fund  Rules  on
the relevant date (including commuted value of pension).

Encashment of balance of privilege Leave,  as  applicable  on  the  relevant
date.

Respective facilities extended  to  officers/others  such  as  retention  of
accommodation, telephone, car, continuation of housing loan  etc.,  will  be
extended  to  officers/others  retiring  under   SBIVRS   as   per   present
dispensations, at the discretion of Competent Authority.  However,  in  such
cases of retention of physical facilities, 50% of the  amount  of  ex-gratia
payable will be released only after the employee surrenders the  facilities.
 No interest, however, will be paid for the amount so withheld.   All  other
outstanding loans/advances will have to be repaid before date of  retirement
under SBIVRS, failing which the  amount  of  ex-gratia  and  other  terminal
benefits  payable  to  the  employee  will  be   appropriate   towards   the
outstanding loans/advances and the balance amount only will  be  payable  to
the employee."


The High Court opined that the said paragraphs, when  properly  appreciated,
convey that the amount of ex-gratia is to be paid and  what  are  the  other
benefits to be paid have also been enumerated.  Referring  to  Clause  6  it
ruled that it deals with  gratuity, provident fund contribution, pension  in
terms of the Rules  on  the  relevant  date  (including  commuted  value  of
pension), encashment  of  balance  of  privilege  leave  and  certain  other
benefits.  The Court also took note of the clarificatory circular issued  by
the Bank on 10.1.2001.  While answering the question, whether  or  not,  the
employee completing 15 years of pensionable service as on relevant date  the
Court held he would be entitled for pension benefit.
Presently I shall refer to the relevant part of  Clarificatory circular:-
"In this connection, we invite a  reference  to  para  6(c)  of  the  Scheme
forwarded under  the  cover  of  Circular  No.  CIR.DO/PER  &  HRD/99  dated
29.12.2000.  The payment of pension to the employee  retiring  under  SBIVRS
would be governed by State Bank of India Employees  Pension  Fund  Rules  on
the relevant date (including commuted value of pension).   However,  as  per
existing rules, employees who have not completed  20  years  of  Pensionable
Service are not eligible for pension."

Having noted the rule relating to pension on which the case is  founded  and
the scheme on which reliance has been  placed  by  the  High  Court,  it  is
necessary to notice how various High Courts have  approached  this  problem.
I have already stated that the High Court of Punjab and Haryana  has  opined
that the employee who had opted for  voluntary  retirement  is  entitled  to
pension in the second part of Rule 22 (1) (a).   Now, I shall advert to  the
analysis made by the High Court of Calcutta which is the subject  matter  of
C.A. No. 5035-37 of 2002.  The learned Single Judge of  the  High  Court  of
Calcutta took note of the contention that when an offer  of  acceptance  had
become a concluded contract any subsequent change of the pension fund  rules
could  not  have  adversely  affected  his  rights,  for   the   explanatory
memorandum issued by the bank on 9th March 2001  stipulated  to  the  effect
that no employee/pensioner of the State  Bank  of  India  is  likely  to  be
effected adversely by the notification  being  given  retrospective  effect.
He repelled the contention of the bank that the voluntary retirement  scheme
itself provided that  payment  of  pension  was  dependent  upon  the  rules
prevalent on the date on which the employee would cease to be in service  of
the bank and admittedly the writ petitioner therein  had  ceased  to  be  an
employee on 31st March 2001 and, thereafter, the amendment  of  the  pension
rules effecting from that day was binding upon him and as such  he  was  not
liable to get any pension.  The learned Single Judge formulated  two  issues
namely, (i) whether the right of the petitioner to receive  pension  as  per
the existing rules could have been taken away by  the  amended  rules  which
became effective on 31st March, 2001?  and  (ii)  was  the  writ  petitioner
estopped  from espousing his cause  of  action  due  to  delay,  laches  and
acquiescence and answered both the issues in the negative against  the  bank
and in favour of the writ petitioner.
On an appeal being preferred the division bench referred to Section  17  and
19 of the Contract Act and came to hold as follows:-
"In the case before us, on the date of acceptance of the  contract,  it  was
known to the bank that it had already decided to amend its pension rules  by
which the appellant would be deprived of his right to get  pension  although
on the date of acceptance  if  he  retired  he  would  be  entitled  to  get
pension.  The employee ad no means of knowledge of such  change  of  pension
rules at the time of agreement.  In such a situation, the  relation  between
the parties being that of employer and employee, it  was  the  duty  of  the
employer to inform the employee about the future amendment  of  the  pension
rules which would deprive the employee  of  his  right  to  get  pension  by
entering into the voluntary retirement scheme.  If he had known  this  fact,
he would not definitely enter into the scheme because if he had  retired  in
due course without opting for voluntary retirement, he would be entitled  to
get  pension  even  under  the  amended  rules.   Therefore,   the   silence
maintained by the employer in such a situation  amounted  to  fraud  on  its
part.  As pointed out in illustration (b) to S. 17 of the Contract  Act,  if
it becomes a duty of a father to disclose the defect of the  horse  proposed
to be sold to his just grown up daughter, in the same  manner,  it  is  also
the duty of the employer to inform his employee about the  future  amendment
of the pension rules causing prejudice to his employee at the last stage  of
his service life before accepting the  terms  of  the  voluntary  retirement
scheme declared by it when such source of prejudice is know to the  employer
and the employee had no manner of knowledge of such perilous condition."

            Thereafter, the Bench referred to Food Corporation of  India  v.
Kamdhenu Cattle Feed Industries[3] and opined thus:-
"Therefore, on that ground also the writ petitioner is entitled to  get  the
pensionary benefit which was available to him on the date of declaration  of
the scheme and also on the date of acceptance of the offer of  the  employee
under voluntary retirement scheme.  If the proposed amendment was  disclosed
to the  writ  petitioner  in  advance,  he  would  not  have  accepted  such
prejudicial terms  of  voluntary  retirement  scheme  and  offered  for  the
scheme.  We do no for a moment dispute the submission of Mr. Gupta, the  Ld.
Sr. Advocated appearing on behalf of the appellant  that  the  contract  was
competed by acceptance of the offer of the  employee  under  the  scheme  as
laid down in the  case  of  Bank  of  India  v.  O.P.  Swarnanakar  but  the
appellant having committed  fraud  upon  the  writ  petitioner  by  adopting
silence in the matter of proposed amendment of  the  pension  rules  on  the
last date of the service of the employee, the writ  petitioner  is  entitled
to the relief claimed by taking aid of Article 14  of  the  Constitution  of
India."

Be it stated, as the Single Judge had not  granted  interest,  the  division
bench thought it appropriate to grant interest at the rate 12% per annum  on
arrears amount of pension.
As far as the High Court of  Allahabad  is  concerned,  the  learned  Single
Judge had remitted the matter to the bank to consider the case of  the  writ
petitioner for his entitlement for grant of  pension.   In  the  intra-court
appeal, the Division Bench addressed to  the  lis  on  merits,  referred  to
clause 6 (c) of the scheme which provides that pension shall be  granted  in
terms of State Bank of India Employees' Pension Fund Rules on  the  relevant
date (including  commuted value pension)  and opined that  the  said  clause
was a binding contract between the writ  petitioner  and  on  18.3.2001  the
bank accepted the offer of retirement made by the writ  petitioner,   though
the employee did in fact retire on 31.3.2001.   The High Court took note  of
the  fact  although  the  amendments  were  sufficiently  formulated  before
31.03.2001 yet the trustees of the pension fund accepted the  amended  rules
only on the 30.10.2001.  The High Court referred to the existing  rules  and
the amended rules which  I  shall  refer  to  at  a  later  stage.   It  was
contended by the writ petitioner before  the  Division  Bench  that  he  was
covered under second part of the Rule 22 (i) (a)  inasmuch as he was in  the
service of the Bank on and after 1.11.1993 and he had completed 10 years  of
pensionable service, and attained the age of 58 years  before  the  date  he
retired.   The  bank  resisting  the   said   stand   contended   that   the
clarificatory circular issued by the bank and contended  that  the  employee
was not entitled to get pensionary benefits.   The High Court observed  that
the clarification had  no  greater  status  in  law  than  the  reading  and
understanding the terms of the contract according to one party.   It  opined
that the pension rules should apply to the writ petitioner not by any  force
of special statutory law but only by force  of  agreement.   Eventually  the
Court ruled thus:-
"The second important point raised by the Bank was that  under  22(1)(c)  of
the Pension Fund Rules, when an employee retires upon a request  in  writing
being made by him, he has  to  complete  20  years  of  service.   Thus  the
voluntary retirement being a retirement pursuant to the employees'  request,
it is this clause which will be applicable to him and it will not be  proper
to give him pension because he comes under another clause i.e.  Clause  (a),
which was merely introduced to accommodate late entrants into  service  when
the retirement age  was  raise  to  58  on  1.11.1993  and  then  to  60  on
22.5.1998.  Clause (a) was inserted so  as  to  give  employees  benefit  of
pension after 10 years of pensionable service even if they had joined  late.
 According to the Bank the writ petitioner is seeking to take  advantage  of
this clause although this clause was never intended to cover it.

         It is also said that if  in  cases  of  retirement  on  request  in
writing clause (a) is made applicable then clause (c) will have no field  of
operation at all.  Everybody will be entitled  to  pension  after  10  years
and, therefore, the 20 years'  requirement  of  Clause  (c)  will  lose  all
meaning."

Thereafter the division bench referred to Clause 15 of the Bank  Fund  Rules
which permits  retirement  on  request  by  the  bank  employee  provided  a
sanction is made by the competent authority.  After referring  to  the  said
clause the court held thus:-
"In our opinion, the voluntary retirement under the  scheme  should  not  be
equated to a retirement to clause 15 of the Pension Fund  Rules.   It  might
be  that  Clause  22(c)  made  to  cover  pension  aspects  for  Clause   15
retirements and Clause 22(i)(a) was  made  to  cover  normal  superannuation
retirements, but voluntary retirement was a special contract made  available
for special purpose, and that too for a very small period of time which  was
practically  one  moment  or  just  one  short  fleeting  period  during  an
employee's service career.  For this scheme  and this contract  the  pension
rules did not apply as  rules.   The  rules  apply  only  as  words  in  the
contract. Therefore, if a contracting party is entitled to take  benefit  of
a permissive clause, then that cannot be denied  to  him  on  the  basis  of
purpose if construction  of  a  statutory  rule.   This  type  of  purposive
construction is far less, if at all,  applied to contracts.   Contacts  are,
generally speaking, strictly  interpreted  on  the  basis  of  the  language
agreed upon by the parties.  The  Court  does  not  make  out  the  parties'
contract, they make their own contact.

        On this basis of strict interpretation, the writ petitioner  clearly
comes within Rule 22(i)(a) although this is better put  as  Clause  22(i)(a)
of the Pension Fund Rules in reference to the contract.

Regarding the other aspect of Clause 22(i)(c) having no field  of  operation
at all, one bare look will show that the said clause  will  operate  in  all
cases where the retiring employee has  not  even  attained  the  age  of  58
years.  If the pensionable period of 20  years  has  been  completed  before
that, and the competent authority grants sanction to retire under  Rule  15,
then and in that event one would get pension although one  would  not  under
the second or third parts  of  Clause  22(i)(a).   Thus  each  part  of  the
contractual document is left with a meaning even if  the  interpretation  in
favour of the writ petitioner is wholly accepted."

At this juncture, it is apt to appreciate the decision rendered in  case  of
Vipin Kalia (supra) by the division  bench of  Delhi  High  Court.   In  the
said case the division bench dealing with the State Bank of India  Voluntary
Retirement Scheme whereunder the  option  exercised  by  the  employees  was
accepted by the respondent bank on 31.3.2001.  All  the  appellants  therein
had either completed 15 years of service or were of 40 years of  age  as  on
31.12.2000 and accordingly, as per the provision of the State Bank of  India
Employees Pension and Provident Fund Rules they had claimed pension  as  per
the rules. The court referred to  Indian  Bank's  Association  letter  dated
11.12.2000 which was the fulcrum of the scheme  to  get  the  pension.   The
division bench reproduced the said letter which I think  it  appropriate  to
reproduce.
"Indian Bank's Association Stadium House 6th Floor,  Block  2  Veer  Nariman
Road Mumbai-400020

PD/CIR/76/G2/G4/
December 11,2000

Designated officers of all Public Sector Banks.

Dear Sirs,

Voluntary Retirement Scheme  in  Public  Sector  Banks-Amendments  To  Bank,
(Employees') Pension Regulations, 1995.


Please refer to our circular letter No. PD/CIR/76/G4/933 dated  31st  August
2000 convening the 'No Objection' of the Government in  banks  adopting  and
implementing a voluntary retirement scheme for employees  on  the  lines  of
what was contained in the Annexure to the circular.


As per the scheme, an employee who is eligible  and  applies  for  voluntary
retirement is entitled  for  the  benefit  of  CPF,  Pension,  Gratuity  and
encashment of accumulated privilege leave, as per rules.


Bank (Employees') Pension Regulations, 1955 do not have provisions  enabling
payment of pension to an employee who retires before attaining  the  age  of
super annuation except under circumstances as in Regulations 29, 30, 32  and
33. We had, therefore, taken up with the Government the need to  incorporate
necessary provisions in the Pension Regulations  by  way  of  amendments  to
Regulation 28 so that employees who retire as  above  under  special/ad  hoc
schemes formulated by the banks, after  serving  for  a  prescribed  minimum
period would be eligible for pro rata pension.


Government of India has after examining the proposal conveyed  its  approval
and desired that IBA advise banks to  make  necessary  amendments  to  their
Pension Regulations as in the  Annexure.  We  request  banks  to  take  note
accordingly.


Please note  that  with  the  above  amendments,  employees  who  apply  for
voluntary retirement after having rendered a minimum of 15 years of  service
under a special/ad hoc scheme formulated with the specific approval  of  the
Government and the Board of Directors will be eligible for pro rata  pension
for the period of service rendered as they are to retire  on  attaining  the
age of superannuation on that date.

                                                           Yours faithfully,
                                                                        sd/-
                                                         (Allen C A Pereira)
                                                          PERSONNEL ADVISER"

It was contended before the High Court that under  the  said  recommendation
the bank was obliged to pay pension to them but the said contention was  not
accepted by the Single Judge on the ground the said letter is not a  binding
circular under Section 18 of  the  State  Bank  of  India  Act,  1955.   The
learned Single Judge had also opined that voluntary retirement scheme was  a
package by itself  and  it  was  not  open  to  the  employees  to  ask  for
modification of the scheme and if the  employees  wanted  to  avail  of  the
benefit of pension, they should not have opted under the  scheme  and  after
completing requisite years of service, would have been entitled to  pension.
  The Court examined the SBIVRS dated 30.12.2000 and opined that it  was  an
invitation to  the  employees  to  make  an  offer  and  opt  for  voluntary
retirement.  The scheme, as analysed by  the  Division  Bench,  specifically
stipulated that the employees who were eligible and the period during  which
an offer for voluntary retirement could be  made.   Reference  was  made  to
Clause 5 and 6 of the scheme that provides  for  ex-gratia  payment  to  the
officers who had opted for voluntary retirement.   The  court  referring  to
the letter dated  11.1.2001  opined  that  the  payment  of  pension  to  an
employee retiring under the voluntary retirement scheme are to  be  governed
by the relevant pension rules, and as per the existing  rules,  an  employee
who had not completed 20 years of pensionable service would not be  eligible
for pension.  Thereafter the Division Bench observed that the  employee  who
has opted under voluntary retirement scheme was fully  conscious  and  aware
of the fact that he would not be entitled to pension under the scheme as  he
had not completed 20 years of pensionable service and  pension  was  payable
only to those employees who were eligible for pension  under  the  rules  as
applicable o the relevant date.   Reference was made to Bank of  India  O.P.
Swarankar (supra) and accordingly it was held as follows:-
"The appellants, therefore, cannot be allowed to wriggle out  of  the  terms
and conditions accepted  and  agreed  upon  by  the  two  parties  viz.  the
appellants and the respondent-bank. The  appellants  had  entered  into  the
said contract with open eyes and fully conscious and aware of what  benefits
they would be entitled to by opting under the Voluntary  Retirement  Scheme.
They were conscious and aware and in fact specifically informed  by  way  of
clarification by the respondent that the employees who had not completed  20
years of service, would not be  eligible  for  pension  under  the  relevant
rules. The appellants by way of  appeal  are  seeking  modification  of  the
terms of the concluded contract which in equity is not just and fair."

      Eventually concurring with the Single Judge the Division Bench ruled:-

"13. The State Bank of  India,  as  already  stated,  has  its  own  pension
regulations. The employees of the State Bank  of  India  are  bound  by  the
same. Letter/circular dated 11th December, 2000 refers to amendment to  Bank
(Employees')  Pension  Regulations,  1995.  The  said  regulations  are  not
applicable to the employees of State Bank of India. The Pension  regulations
applicable to the State Bank of India employees are  different.  As  far  as
employees of State Bank of India are concerned, the Bank Employees'  Pension
Regulations,  1995  are  not  applicable.   The   amendment   suggested   by
letter/circular dated 11th December, 2000 by Indian Bank's  Association  was
not applicable to the appellants and the employees  of  the  State  Bank  of
India. We may also point out here that State Bank of India  in  the  counter
affidavit has explained that its Voluntary Retirement Scheme was  a  special
and a distinct scheme offering a handsome  package  for  the  employees  who
were ready and willing to opt for retirement. It is also  pointed  out  that
the State Bank of India's employees  unlike  employees  belonging  to  other
public sector banks were entitled to both contributory  provident  fund  and
membership of a pension fund. It is stated that employees  of  other  public
sector  bank  are  eligible  either  for  contributory  provident  fund   or
membership of pension fund.

14. Learned  Counsel  for  the  appellants,  however,  also  relied  on  the
judgment of a single Judge of this Court in  the  case  of Punjab  and  Sind
Bank Officers Association and Ors. v. Union of India and Anr. on  11th  May,
2006. In the said case, learned single Judge was  examining  regulations  28
and 29 of the Bank (Employees') Pension Regulations,  1995.  The  issue  was
which of the two regulations would apply. It was  held  that  Regulation  29
would apply to employees who had taken voluntary  retirement  whether  under
normal circumstances or under a special scheme. It  was  further  held  that
the scheme or package cannot be  altered  unilaterally.  The  said  decision
does not support the contention of the appellants. The terms and  conditions
of the Voluntary Retirement Scheme were clear and specific. The  terms  were
not ambiguous. The employees including the appellants were  fully  conscious
of the decision taken by them and the benefits they would  be  entitled  to.
The appellants voluntarily, with open eyes entered  into  an  agreement  and
after having retired and enjoyed the benefits, they  cannot  go  behind  the
concluded contract and claim further benefits. It must be remembered that  a
Voluntary Retirement Scheme is formulated and conceived in public  interest.
Interest of the respondent bank is also to be taken into consideration."


Having stated the various views taken by the High Courts I may now refer  to
certain authorities dealing with these kind of schemes.
In Arikaravula  Sanyasi  Raju  v.  Branch  Manager,  State  Bank  of  India,
Visakhapatnam (A.P.) and others[4]  the question arose  whether  an  officer
who is removed from service on finding of misconduct would  be  entitled  to
get the relief of pension under Rule 22 of the State Bank of  India  Service
Rules.  In the said  case  the  High  Court  had  directed  the  payment  of
provident fund in terms of rules but denied  the  relief  of  pension.   The
Court referred to Rule 22 of the rules and opined  had  the  officer  sought
retirement on that basis and allowed the retirement from  service  he  would
have been entitled to pension on  completion  of  20  years  of  pensionable
service but removal would not entitle  him  to  get  pension.   Interpreting
Clause 22(i)(c) the two-Judge observed thus:-
"Clause  22(i)(c)  envisage  only  that  after  completing   20   years   of
pensionable service, if an incumbent retired at his request in  writing  and
was permitted to retire, he would be entitled to pension.  In  other  words,
for voluntary retirement, on completion of 20 years of pensionable  service,
clause (c) of Rule 22(1) gets attracted"

In V. Kasturi  v.  Managing  Director,  State  Bank  of  India,  Bombay  and
another[5] though the Court was dealing with eligibility to be entitled  for
pension under Rule 22(i)(c) yet it reproduced  the  rule,  referred  to  the
contentions and came to hold as follows:-
"12. On a close look at the relevant provisions of  the  Rules,  it  is  not
possible to agree with this contention. The  appellant,  in  order  to  earn
pension under Rule 22(1) clause (c) as amended in 1986 has  to  satisfy  the
following twin conditions:

(i) at the time when the amended clause (c) applied, i.e.,  from  22-9-1986,
he should be a member of the pension fund;

(ii) he should have by then completed 20 years of pensionable  service,  and
should have put forward his requisition in writing for availing the  benefit
of the said provision.

Unless both these conditions are satisfied the amended clause  (c)  of  Rule
22(1) cannot apply in his case."

The afore-referred two decisions show how the Court had perceived  the  rule
position.
In Vice-Chairman and Managing Director, A.P. SIDC  Ltd.  and  another  v  R.
Varaprasad and  others[6]  while  dealing  with  the  concept  of  voluntary
retirement schemes the Court has ruled that:-
"All employees who accepted VRS could be relieved at  a  time  or  batch  by
batch depending  on  availability  of  funds.  Further  funds  may  be  made
available early or late. If the argument of the respondents  that  relieving
date should be taken as effective date  for  calculating  terminal  benefits
and financial package under VRS, the dates may be fluctuating  depending  on
availability of funds. Hence it is not possible  to  accept  this  argument.
When the employees have opted for VRS on their own  without  any  compulsion
knowing fully well about the Scheme, guidelines and circulars governing  the
same, it is not open to them  to  make  any  claim  contrary  to  the  terms
accepted. It is a  matter  of  contract  between  the  Corporation  and  the
employees. It is not for the courts to rewrite the terms  of  the  contract,
which were clear to the contracting parties, as indicated in the  guidelines
and circulars  governing  them  under  which  Voluntary  Retirement  Schemes
floated."

In O.P. Swarnakar (supra)  the question arose whether an employee  who  opts
for voluntary retirement pursuant or in furtherance  of  scheme  floated  by
the Nationalised Banks and the State Bank of India would be  precluded  from
withdrawing the  said  offer.    The  court  dealing  with  the  concept  of
voluntary retirement held as follows:-
"59. The request of employees seeking voluntary retirement was not  to  take
effect until and  unless  it  was  accepted  in  writing  by  the  competent
authority. The competent authority had the absolute  discretion  whether  to
accept or reject the request of the employee  seeking  voluntary  retirement
under the Scheme. A  procedure  has  been  laid  down  for  considering  the
provisions of the said Scheme to the effect that an employee who intends  to
seek  voluntary  retirement  would  submit  duly  completed  application  in
duplicate  in  the  prescribed  form  marked  "offer   to   seek   voluntary
retirement" and the application so  received  would  be  considered  by  the
competent authority on  first-come-first-serve  basis.  The  procedure  laid
down therefor suggests that the applications of the  employee  would  be  an
offer which could be considered by the bank in terms of the  procedure  laid
down therefor. There is no assurance  that  such  an  application  would  be
accepted without any consideration.

60. Acceptance or otherwise of the request of an employee seeking  voluntary
retirement is required to be communicated to him in writing. This clause  is
crucial in view of the fact that therein  the  acceptance  or  rejection  of
such request has been provided. The decision of the authority rejecting  the
request is appealable to the Appellate Authority. The  application  made  by
an employee as an offer as well as the decision of the bank thereupon  would
be communicated to the  respective  General  Managers.  The  decision-making
process shall take place at various levels of the banks."

      Eventually analyzing the stand of various banks  the  court  expressed
thus:-

"90. The basic concept of the Scheme, therefore, underwent  a  change  which
also goes to show that the  banks  had  sought  to  invoke  their  power  of
amending the Scheme. Once the Scheme is amended and/or  an  apprehension  is
created in the mind of the employees that they would not  even  receive  the
entire benefits as envisaged under the Scheme, they were entitled to  revoke
their offers. Their action in our considered opinion is reasonable.  It  may
be that some of the employees only opted  for  the  provident  fund  benefit
which did not undergo any amendment  but  the  same  would  not  change  the
attitude on the part of the banks."

In HEC Voluntary Retd.  Employees  Welfare  Society  and  Another  v.  Heavy
Engineering Corpn. Ltd. and others[7] the  Court  referring  to  concept  of
voluntary retirement opined that an offer for voluntary retirement in  terms
of a scheme, when accepted,  leads  to  a  concluded  contract  between  the
employer and the employee. In terms of such a scheme,  an  employee  has  an
option either to accept or  not  to  opt  therefor.  The  scheme  is  purely
voluntary, in terms whereof the tenure of service  is  curtailed,  which  is
permissible in law. Such a scheme is ordinarily floated with  a  purpose  of
downsizing the employees. It is beneficial both to the employees as well  as
to the employer. Such a scheme is issued for effective  functioning  of  the
industrial undertakings.  The  court  further  observed  that  although  the
Company is a "State" within the meaning of Article 12 of  the  Constitution,
the terms and conditions of service would be governed  by  the  contract  of
employment. Thus, unless the terms and conditions of  such  a  contract  are
governed by a statute or statutory rules, the  provisions  of  the  Contract
Act would be applicable both at the formulation of the contract as also  the
determination thereof. By reason of such a scheme, it only is an  invitation
of offer floated. When pursuant to or in furtherance  of  such  a  Voluntary
Retirement Scheme an employee opts therefor, he makes an  offer  which  upon
acceptance by the employer gives rise to a contract.  Thus,  as  the  matter
relating to voluntary  retirement  is  not  governed  by  any  statute,  the
provisions of the Contract Act, 1872, therefore, would  be  applicable  too.
In this context reliance  was  placed  on  O.P.  Swarankar's  case  (supra).
After so stating, the Court ruled:
"We have noticed that  admittedly  thousands  of  employees  had  opted  for
voluntary retirement during the period in question. They  indisputably  form
a distinct and different  class.  Having  given  our  anxious  consideration
thereto, we are of the opinion that neither are  they  discharged  employees
nor  are  they  superannuated  employees.  The  expression  "superannuation"
connotes a distinct meaning. It ordinarily means, unless otherwise  provided
for in the statute, that not only  he  reaches  the  age  of  superannuation
prescribed therefor, but also  becomes  entitled  to  the  retiral  benefits
thereof including pension. "Voluntary retirement" could have  fallen  within
the aforementioned expression, provided it was so stated  expressly  in  the
Scheme.

Financial considerations are, thus, a relevant factor both  for  floating  a
scheme of voluntary retirement  as  well  as  for  revision  of  pay.  Those
employees who opted for  voluntary  retirement,  make  a  planning  for  the
future. At the time of giving option, they know where they  stand.  At  that
point of time they did not anticipate that they would  get  the  benefit  of
revision in the scales of pay. They prepared themselves to contract  out  of
the jural relationship by resorting to "golden handshake".  They  are  bound
by their own act. The  parties  are  bound  by  the  terms  of  contract  of
voluntary retirement. We have noticed hereinbefore that unless a statute  or
statutory provision interdicts, the relationship between the parties to  act
pursuant to  or  in  furtherance  of  the  Voluntary  Retirement  Scheme  is
governed by contract. By such contract, they  can  opt  out  of  such  other
terms and conditions as may be agreed upon.  In  this  case  the  terms  and
conditions of the contract are  not  governed  by  a  statute  or  statutory
rules."

      In the said case the court referred to V.  Kasturi  Case  (supra)  and
understood it in the following manner:-
"It has not been suggested that voluntary retirement, in the absence of  any
express statutory rule governing the field, would  bring  about  a  case  of
superannuation. In V. Kasturi, a  new  rule  was  introduced  providing  for
pension of an employee  after  retirement  on  completion  of  20  years  of
service, provided he requested in  writing  therefor.  The  questions  which
fell for consideration therein were  that  if  a  person  was  eligible  for
pension at the time of his retirement and if he survives till  the  time  of
subsequent amendment of  the  relevant  Pension  Scheme,  whether  he  would
become entitled to enhanced pension or would become  eligible  to  get  more
pension as per the new formula  of  computation  of  pension.  In  the  fact
situation obtaining therein, it was held that employees could be divided  in
two [pic]categories i.e. those who were eligible for pension at the time  of
their retirement and those who were  not.  Whereas  in  the  case  of  first
category the benefit of the amended provisions would be applicable,  but  in
the second it would not. V. Kasturi also,  thus,  in  our  opinion,  is  not
applicable to the fact of the present case."

In this backdrop, I am required to scan the  anatomy  of  Rule  22  and  the
appropriate interpretation is required to  be  placed  on  the  same.   Rule
22(i) (a) postulates that members shall be entitled  to  pension  under  the
said rule on retiring from the  bank's  service.   Thus,  the  key  word  is
retiring from bank's service.  The  said  rule  when  understood  in  proper
perspective, covers cases of normal  retirement/superannuation.   There  are
various compartments and  each  compartment  has  different  criterion.   An
employee, who  has  completed  20  years  of  pensionable  service  and  has
attained the age of 50 years, would be entitled to  get  the  pension  under
the rules.  This is one compartment.  Second one, as  is  envisaged,  carves
out an exception to the first part, which stipulates that when  an  employee
who is working in the bank on or  after  01.11.1993  and  has  completed  10
years of pensionable service, shall be entitled for pension provided he  has
attained the age of 58 years.  The third part of the  rule  stipulates  that
all employees who are in service of the bank or after  22.05.1998  and  have
put in 10 years of pensionable service, to be eligible for pension  provided
they have attained the age of 60 years i.e. age of superannuation.   As  the
facts would demonstrate, in the  instant  case,  the  employees/respondents,
before attaining the age  of  superannuation,  sought  voluntary  retirement
under the Scheme.
At this juncture, it is relevant to state Rule 22(i)(b) which provides  that
an employee who has completed 20 years of pensionable service,  irrespective
of age, if he satisfies the authority competent to  sanction  retirement  by
appropriate medical certificate or otherwise that he  is  incapacitated  for
further active service, he would be entitled to pension.  This  clause  does
not cover the present respondents.   Clause 22(i)(c) deals with  entitlement
of pension by an employee if  he  has  completed  20  years  of  pensionable
service irrespective of age, if he seeks retirement at his  own  request  in
writing.  It is the stand of the  Bank  that  Rule  22(i)(c)  was  added  on
20.09.1986 for the specific purpose of granting pension to  those  who  have
voluntary retired.  As is evident from the factual score under the SBI  VRS,
the  employees  were  required  to  submit  written   applications   seeking
voluntary retirement under the Scheme.  When the scheme  was  in  operation,
the competent authority i.e. Deputy Managing Director had issued a  circular
dated  10/15.1.2001  clarifying  the  position  that  the  employees   could
withdraw their applications made  under  SBI  VRS  by  15.2.2001  and  those
employees who have not completed 20 years of pensionable  service,  are  not
eligible for pension.  There can be no doubt, by abundant caution, the  bank
issued a clarificatory circular.  The said  circular  cannot  be  given  any
type of nomenclature other than a clarificatory  circular,  despite  treated
as such.  It is graphically clear from the same that  an  employee  who  has
completed 20 years of pensionable service  would  be  entitled  to  pension,
even if they seek voluntary retirement under SBI VRS.  It was  open  to  the
employees to withdraw their applications under SBI VRS  by  15.2.2001.   The
respondent-employees, as is manifest,  chose  not  to  withdraw.   In  these
circumstances, the question arises whether any part of Rule 22  would  apply
to the respondent  for  extension  of  benefit  of  pension.   As  has  been
elaborated earlier, Clause 22(i)(a)  and  22(i)(b)  are  not  applicable  to
them.
Mr. Rohtagi, learned Attorney General, has submitted that on 30.1.2001,  the
SBI Employees Pension Fund Rules was amended by the Central  Board  of  SBI.
The SBI VRS was in operation from 15.1.2001  to  31.1.2001.   The  employees
were at liberty, as has been  stated  earlier,  to  withdraw  by  15.2.2001.
Admittedly, the Rule was in force on 30.1.2001.   The  employees  were  very
well aware about the amended Rule.   There can  be  no  scintilla  of  doubt
that the Rule existed as on 31.1.2001.  If an employee wanted  to  withdraw,
he could have withdrawn prior to 15.2.2001 but as is the admitted  position,
none of the employees withdrew.  There is no cavil over the  fact  that  the
employees had accepted all the benefits of the VRS.  The crux of the  matter
is whether the respondents  can  get  the  benefit,  despite  the  amendment
brought to the Rules.
In Arikaavula Sanyasi Raju (supra), it has been clearly held, for  voluntary
retirement on completion of 20 years of pensionable service, clause  (c)  of
Rule 22(i) gets attracted.  Another aspect  needs  to  be  noted.   The  SBI
Pension Rules have been framed under Section 50 of the SBI Act,  1955.   The
Rules  have  statutory  force.   The  concept  of  any  kind  of  promissory
estoppel, if any, could not be applicable to promote or condone  the  breach
of law.
In Bangalore Development Authority & Ors. Vs. R. Hanumaiah & Ors.[8] it  has
been held that rule of promissory estoppel cannot be availed  to  permit  or
condone a breach of law.  It cannot be invoked to compel the  Government  to
do an act prohibited by law, for such  a  direction  would  be  against  the
statute.  To arrive at the  said  conclusion,  the  two-Judge  Bench  placed
reliance on TISCO Ltd. V.  State  of  Jharkhand[9],  Hira  Tikkoo  V.  Union
Territory,  Chandigarh[10]  and  Savitaben  Somabai  Bhatiya  V.  State   of
Gujarat[11].
The High Court, to sustain its conclusion, has referred to  Clause  6(c)  of
the Scheme which postulates that  the  benefits  shall  be  granted  to  the
employee which include the pension and the said pension shall be granted  in
terms of the State Bank  of  India  Employees  Pension  Fund  Rules  on  the
relevant date.   The  High  Court  referred  to  Rule  22(i)  prior  to  the
amendment i.e. 09.03.2001.  The unamended  portion  of  the  Rule  reads  as
follows:
"After having completed 20 years' pensionable service provided that  he  has
attained the age of 50 years or if he is in service of the Bank on or  after
01.11.1993, after having completed 10  years  pensionable  service  provided
that he has attained the age of 58 years."

After the amendment that was incorporated on 9.3.2001,  the  Rule  reads  as
under:
"After having completed 20 years' pensionable service provided that  he  has
attained the age of 50 years or if he is in service of the Bank on or  after
01.11.1993, after having completed 10  years  pensionable  service  provided
that he has attained the age of 58 years or if he is in the service  of  the
Bank on or after 22.05.1998, after having  completed  10  years  pensionable
service provided that he has attained the age of 60 years".


Analysing the said Rule, the High Court opined that the employees  would  be
covered under second  part  of  clause  (a)  of  Rule  22(i)  which  was  in
existence on  the  date  when  the  petitioner  submitted  his  request  for
voluntary retirement.  That apart, the High Court has also held  even  after
amendment on 09.03.2001, by which another clause has been  added,  that  is,
third part of clause (a), would not affect the claim of  the  employees  for
pension as he is entitled to pension in the second part of Rule  22(i)  (a).
Here, as I find, the High Court has opined as the respondent was in  service
of Bank on 1.11.1993 and had completed 10 years of pensionable  service  and
attained the age of 58 years, he would be entitled to pension.  There is  no
doubt that the Government of India, on 22.5.98, advised all the  banks  that
the age of retirement would be 60 years.  Accordingly, the Board of SBI,  on
22.5.1998  itself,  passed  a  resolution  whereby  it  fixed  the  age   of
retirement 60 years w.e.f. that date.  As a consequence  of  re-fixation  of
age of retirement, the rules were amended and third part  of  Rule  22(i)(a)
was added for all employees who were in service of the  bank  on  or  before
22.5.98 and had put in 10 years of pensionable service to  be  eligible  for
pension benefit provided that they have attained the age of  60  years.   As
has been stated earlier, the respondents had not retired  on  attaining  the
age of superannuation but sought voluntary retirement  under  the  SBI  VRS.
The Bank has placed reliance on the clarificatory  circular  issued  by  the
Deputy Managing Director  on  10/15.1.2001,  which  lays  a  postulate  that
employees who have not completed 20 years of  pensionable  service  are  not
eligible for pension.
In this context, reference may be made to a decision in  Bank  of  Baroda  &
Others V. Ganpat Singh Deora[12], wherein the Court  was  interpreting  Bank
of Baroda (Employees) Pension Regulations 1995.  In the said case, the  Bank
of Baroda had introduced "Bank  of  Baroda  Employees  Voluntary  Retirement
Scheme 2001" and under the Scheme along with terminal  benefits  pension  in
terms of 1995 Regulations was to be provided to the employees who opted  for
the VRS Scheme.  The respondent-employee therein, after accepting  voluntary
retirement, filed an application for claiming pension which was  opposed  by
the Bank in terms of Regulations 14, 28 and 29 of  the  Pension  Regulations
1995.  Eventually, the matter  travelled   to  the  Tribunal,  who,  by  its
award, allowed the respondent's claim and directed the Bank to  pay  to  the
respondent pension according  to  the  Pension  Regulations.    Against  the
award passed by the Industrial Disputes Tribunal, the Bank preferred a  writ
petition before the High Court but the said challenge did not meet with  any
success.  This Court referred to the language of the Scheme  and  opined  as
follows:
"27. The conditions relating to completing 15 years  of  service  for  being
eligible to apply for BOBEVRS, 2001 are special to the  Scheme  as  also  to
the case of those employees who wished to  apply  for  voluntary  retirement
under the aforesaid Scheme, if they had completed or would be completing  40
years of age. The latter condition appears  to  have  been  incorporated  in
view of the provisions of Regulations 14 and 32 of the Pension  Regulations,
1995, [pic]to enable employees who had completed  10  years  of  service  to
also become eligible to apply for premature  retirement  under  the  Pension
Regulations, 1995.

28. However, we are inclined to agree with Ms Bhati that Regulation 29  does
not contemplate voluntary retirement under the Voluntary  Retirement  Scheme
and applies only to such employees who themselves wish to retire dehors  any
scheme  of  voluntary  retirement,  after  having  completed  15  years   of
qualifying service for the said purpose.  There  is  a  distinct  difference
between the two situations and Regulation 29 would not cover the case of  an
employee opting to retire on the basis of a voluntary retirement scheme.

29. Furthermore, Regulation 2 of the Voluntary Retirement  Scheme,  2001  of
the appellant Bank merely prescribes a period of qualifying service  for  an
employee to be eligible to apply for voluntary retirement.

30. On the other hand, Regulations 14 and 29  of  the  Pension  Regulations,
1995, relate to the period of qualifying service for pension under the  said
Regulations, in two different situations. While Regulation 14 provides  that
in order to be eligible for pension an  employee  would  have  to  render  a
minimum of 10 years' service, Regulation 29 is applicable to  the  employees
choosing to retire from service prematurely, and in their  case  the  period
of qualifying service would be 15 years".

After so stating, the Court further opined thus:
"31. The facts of the present case, however, do not attract  the  provisions
of Regulation 29 since  the  respondent  accepted  the  offer  of  voluntary
retirement under the Scheme framed by the Bank and not on his  own  volition
dehors any scheme of voluntary retirement. In such  a  case,  Regulation  14
read with Regulation 32 providing for premature retirement  would  not  also
apply to the case of the respondent. While  Regulation  2  of  the  BOBEVRS,
2001 speaks of eligibility for applying under the Scheme, Regulation  14  of
the Pension  Regulations,  1995,  contemplates  a  situation  whereunder  an
employee would be eligible for premature pension.  The  two  provisions  are
for two different  purposes  and  for  two  different  situations.  However,
Regulation 28  of  the  Pension  Regulations,  1995,  after  amendment  made
provision for situations similar to the one in the instant case.

32. In the absence of any particular provision for  payment  of  pension  to
those who opted for BOBEVRS,  2001  other  than  Regulation  11(ii)  of  the
Scheme, we are once again left to fall  back  on  the  Pension  Regulations,
1995, and the amended provisions of Regulation 28  which  bring  within  the
scope of superannuation  pension  employees  who  opted  for  the  Voluntary
Retirement Scheme, which will be  clear  from  the  explanatory  memorandum.
However, the period of qualifying service has been retained as 15 years  for
those opting for BOBEVRS, 2001 and is  treated  differently  from  premature
retirement where the minimum period of qualifying service has been fixed  at
10 years in keeping with Regulation 14 of the Pension Regulations, 1995.

33. We are, therefore, of the view that not having  completed  the  required
length of qualifying service as provided under Regulation  28  of  the  1995
Regulations, the respondent was not eligible for pension under  the  Pension
Regulations, 1995 of the appellant Bank."

      Being of this view, the Court allowed  the  appeal  preferred  by  the
Bank.
In Bank of India and Another  V.  K.  Mohandas  and  Others[13],  the  Court
referred to Regulation 28 of the Employees' Pension Regulations 1995,  which
had provided superannuation pension and Regulation 29  provided  pension  on
voluntary retirement.  After referring to series  of  decisions,  the  Court
held thus:
"31. It is also a well-recognised principle of construction  of  a  contract
that it must be read as a whole in order to ascertain the  true  meaning  of
its several clauses and the words of each clause should  be  interpreted  so
as  to  bring  them  into  harmony  with  the  other  provisions   if   that
interpretation does no violence to the meaning of which they  are  naturally
susceptible. (North Eastern Railway Co. v. Lord Hastings[14])

32. The fundamental position is that it is the banks  who  were  responsible
for formulation of the terms in the contractual Scheme that  the  optees  of
voluntary retirement under that Scheme will be  eligible  to  pension  under
the Pension Regulations, 1995, and, therefore, they bear the  risk  of  lack
of clarity, if any. It is  a  well-known  principle  of  construction  of  a
contract that if [pic]the  terms  applied  by  one  party  are  unclear,  an
interpretation against that party  is  preferred  (verba  chartarum  fortius
accipiuntur contra proferentem)".

Thereafter, the Court adverted to intention of the  Banks  at  the  time  of
bringing out VRS 2000.  The Court observed that if the intention was not  to
give  pension  as  provided   under  Regulation  29  and  particularly  sub-
Regulation (5) thereof, they could have said so in the Scheme  itself.   The
Court  also  reproduced  the  communication  dated  5.9.2000  sent  by   the
Government of India, Ministry of Finance, Department  of  Economic  Affairs,
Banking Division to the Personnel  Advisor,  Indian  Banks  Association  and
came to hold as follows:
"39. Two things immediately become noticeable from the  said  communication.
One is that as per Regulation  29  of  the  Pension  Regulations,  1995,  an
employee can take voluntary retirement after 20 years of qualifying  service
and become eligible  for  pension.  The  other  thing  is  that  the  Scheme
provides that the employees with 15 years of service  or  40  years  of  age
shall be eligible to take voluntary retirement under the  Scheme  and  under
Regulation 29,  the  employees  having  rendered  15  years  of  service  or
completed 40 years of age but not completed 20 years of  service  shall  not
be [pic]eligible for pensionary  benefits  on  taking  voluntary  retirement
under the Scheme.

40. The use of the words "such employees" in the communication is  referable
to employees having rendered 15 years of service but not completed 20  years
of service and, therefore, it was decided  to  bring  an  amendment  in  the
Regulations so that the employees having not completed 20 years' service  do
not lose the benefit of pension. The  amendment  in  Regulation  28,  as  is
reflected from the afore referred communication, was intended to  cover  the
employees who had rendered 15 years' service but  not  completed  20  years'
service. It was not intended to cover the optees who had  already  completed
20 years' service as the provisions contained  in  Regulation  29  met  that
contingency.

                         xxx         xxx        xxx

43. It was submitted that by such construction  a  class  within  the  class
would be created which is impermissible. We  do  not  agree.  If  a  special
benefit under Regulation  29(5)  is  available  to  the  employees  who  had
completed 20 years of service or more, by no stretch of imagination, can  it
be said that it is discriminatory to those employees who  had  completed  15
years of service but not completed  20  years.  In  view  of  the  provision
contained in Regulation 29(5), if the  optees  who  have  not  completed  20
years get excluded from the weightage of five years which has been given  to
the optees who have completed  20  years  of  service  or  more,  it  is  no
discrimination. Such provision can neither be said to be arbitrary  nor  can
be held to be violative of any constitutional or statutory  provisions.  The
weightage of five years under Regulation 29(5) is applicable to  the  optees
having service of 20 years or more. There is,  thus,  basis  for  additional
benefit. Merely because the [pic]employees who have completed  15  years  of
service but not completed 20 years of service are not entitled to  weightage
of five years for qualifying service under Regulation 29(5),  the  employees
who have completed 20 years  of  service  or  more  cannot  be  denied  such
benefit.

                         xxx         xxx        xxx

46. The precise effect of the  Pension  Regulations,  for  the  purposes  of
pension,  having  been  made  part  of  the  Scheme,  is  that  the  Pension
Regulations, to the extent, these are applicable,  must  be  read  into  the
Scheme. It is pertinent to bear in mind that interpretation  clause  of  VRS
2000 states that the words and  expressions  used  in  the  Scheme  but  not
defined and defined in the rules/regulations shall  have  the  same  meaning
respectively assigned to them under the rules/regulations. The  Scheme  does
not define the expression "retirement" or "voluntary retirement".  We  have,
therefore,  to  fall  back  on  the  definition  of  "retirement"  given  in
Regulation 2(y) whereunder  voluntary  retirement  under  Regulation  29  is
considered to be retirement. Regulation 29 uses  the  expression  "voluntary
retirement under these Regulations". Obviously,  for  the  purposes  of  the
Scheme, it has to be understood to mean with necessary changes in points  of
details. Section 23 of the Contract Act has no application  to  the  present
fact situation.
                         xxx         xxx        xxx

50. It  is  true  that  VRS  2000  is  a  complete  package  in  itself  and
contractual in nature. However, in that package, it has been  provided  that
the optees, in addition to ex gratia  payment,  will  also  be  eligible  to
other benefits inter alia pension under the Pension  Regulations.  The  only
provision in the  Pension  Regulations  at  the  relevant  time  during  the
operation of VRS 2000 concerning voluntary retirement was Regulation 29  and
sub-regulation (5) thereof provides for weightage of addition of five  years
to qualifying service for pension to  those  optees  who  had  completed  20
years' service. It, therefore, cannot be accepted  that  VRS  2000  did  not
envisage grant of pension benefits under Regulation  29(5)  of  the  Pension
Regulations, 1995, to the optees of 20 years' service along with payment  of
ex gratia.

51. The whole idea in bringing out VRS 2000  was  to  right  size  workforce
which the banks had not been able to  achieve  despite  the  fact  that  the
statutory Regulations provided for voluntary  retirement  to  the  employees
having completed 20 years' service. It was for this  reason  that  VRS  2000
was made more attractive. VRS 2000, accordingly, was an  attractive  package
for the employees to go in for as they were getting special benefits in  the
form of ex gratia and in addition thereto, inter  alia,  pension  under  the
Pension Regulations which also provided  for  weightage  of  five  years  of
qualifying service for the purposes of pension  to  the  employees  who  had
completed 20 years' service".

In the said case, the decision  rendered  in  Bank  of  Baroda  (supra)  was
distinguished by stating thus:
"63. The decision of  this  Court  in  Bank  of  Baroda  is,  thus,  clearly
distinguishable  as  the  employee  therein  had  not  completed  qualifying
service much less 20 years of service for being eligible  to  the  weightage
under Regulation 29(5) and cannot be applied to the present controversy  nor
does that matter decide the question here  to  be  decided  in  the  present
group of matters".

            Eventually, the Court concluded thus:

"66. We hold, as it must be, that the employees who had completed  20  years
of service and were pension optees and offered  voluntary  retirement  under
VRS 2000 and whose offers  were  accepted  by  the  banks  are  entitled  to
addition of five years of notional service  in  calculating  the  length  of
service for the purposes of that Scheme  as  per  Regulation  29(5)  of  the
Pension Regulations, 1995. The contrary views expressed by some of the  High
Courts do not lay down the correct legal position."

Recently, in State Bank of Patiala V. Pritam Singh Bedi  &  Others[15],  the
Court was dealing with the State of Bank  of  Patiala  Voluntary  Retirement
Scheme, 2000, introduced by a circular dated 20.1.2001.   The  Court  quoted
in extenso  from  K.  Mohandas  &  Others  (supra).   Thereafter  the  Court
referred to Clause 3 and 7.  Clause 7  thereof  dealt  with  other  benefits
including pension or Bank's contribution  to  provident  fund  as  the  case
maybe as per rules applicable on the relevant date on the  basis  of  actual
years of service rendered.  The Court also took note of Regulation 2(w)  and
2(y) of  State  Bank  of  Patiala  (Employees)  Pension  Regulations,  1995.
Regulation 2(w) defined "qualifying service" and 2(y) defined  "retirement".
 Regulation 2(y)(b) referred to  voluntary  retirement  in  accordance  with
provisions contained in Regulation 29 of  the  Regulations.   Reference  was
also  made  to  Regulation  14  that  defined  "qualifying  service"   which
stipulates that employee who has rendered a minimum  of  ten  years  in  the
bank from the date of his retirement or on the date on which  he  is  deemed
to have retired shall qualify for  pension.   Reference  was  also  made  to
Regulation 18 which prescribes how the broken  period  of  service  of  less
than one year has to  be  computed.    Regulation  28  thereof   dealt  with
superannuation pension and Regulation 29 related  to  pension  on  voluntary
retirement.  Scanning the various provisions of the Regulations,  the  Court
held thus:
"22. The Respondents completed more than 10 years of service in the Bank  on
the  date  of  retirement;  therefore,  they  fulfill  the  requirement   of
qualifying service as per Regulation 14.

23. It has not been disputed by Appellant-Bank that the Respondents  in  all
the appeals have completed much more than 19 years 6 months  of  service  in
the Bank. For example, Respondent No. 1-Prakash Chand in  C.A.  No.  173  of
2010 had joined the Bank on 4th May, 1981 and relieved on 31st March,  2001.
Thus, he had completed 19  years,  10  months  and  28  days  of  qualifying
service on the date of relieving from service.

24. Regulation 18 of the Pension Regulations, 1995 provides that  if  broken
period is more than six months, it shall be treated as one year.  Therefore,
all the Respondents-writ Petitioners having completed  more  than  19  years
and 6 months of service in  the  Bank,  they  are  to  be  treated  to  have
completed 20 years of service. The aforesaid  question  was  neither  raised
nor decided in the case of 'Bank of Baroda' or 'Bank of India'.

25. In view of the aforesaid fact,  the  Appellant-Bank  cannot  derive  the
benefit of the decision of this Court in Bank  of  Baroda as  the  employees
who were parties before the Court in the said  case  had  not  completed  20
years of service. As per the decision of this Court in Bank  of  India,  the
Respondents-writ Petitioners  having  completed  20  years  of  service  are
entitled to the benefit of Regulation 29."

Keeping in  view  the  aforesaid  pronouncements,  I  shall  advert  to  the
Regulations and the Scheme in question.  From the aforesaid  two  decisions,
it  is  graphically  clear  that  the  Court  has  read  into  the   scheme,
Regulations governing the pension.  In the case at  hand,  as  I  find,  the
Regulation 22(i)(a) refers to three categories; twenty years of  pensionable
service and attaining age of fifty years, or as on 1.11.1993 an employee  in
service has completed ten years  of  pensionable  service  provided  he  has
attained the age of fifty-eight years, or an employee to be  in  service  of
the Bank on or after 22.05.1998  and has completed ten years of  pensionable
service provided that he has attained the age  of  sixty  years.   The  High
Court has held that the employees would be  covered  under  second  part  of
Clause (a).  I have already dealt with clause (b).  Mr. Rohtagi has  heavily
relied  on  Clause  22(i)(c).   It  really  requires  close  scrutiny.    It
stipulates that a member shall be entitled to pension on  completion  of  20
years of pensionable service irrespective of the age he has attained if  the
retirement is at his own request in writing.  Thus, there is  a  distinction
between a  normal  retirement  and  a  voluntary  retirement.   A  voluntary
retirement stands in a distinction to retirement and also  retirement  which
comes under Clause 22(i)(b) which dwells on sanction of competent  authority
and member being incapacitated.  A scheme has come  into  existence  because
of certain objectives.   The  objectives  of  the  scheme  were  to  have  a
balanced  age-profile  providing  for  mobility,  training,  development  of
skills and succession plans for higher-level positions, to  provide  for  an
exit for employees who have an honest feeling that they  should  now  retire
and take rest or that there are  better  opportunities  elsewhere,  to  have
overall reduction in the existing strength of the employees and to  increase
productivity  and  profitability.    Clause  3  of   the   Scheme   provides
eligibility criterion.  It reads as follows:
"The Scheme will be open to all  permanent  employees  of  the  Bank  except
those specifically mentioned as 'ineligible', who have put in  15  years  of
service or have completed 40 years of age as on  31st  December  2000.   Age
will be reckoned on the basis of  the  date  of  birth  as  entered  in  the
service record."

            Clause 4 deals with ineligibility which  need  not  be  referred
to.  Clause 5 deals with amount of ex-gratia.  Clause  6  deals  with  other
benefits which I have already referred to.   Clause 6(c) clearly  stipulates
that an employee seeking voluntary retirement  would  have  the  benefit  of
pension in terms of State Bank of India Employees'  Pension  Fund  Rules  on
the relevant date.
40.   In this context, what I have  noticed  in  the  case  of  K.  Mohandas
(supra) that the Court has referred to the Scheme  to  understand  the  true
meaning of several clauses; formulation  of  the  contractual  scheme  where
reference has been made to Pension Regulations 1995 of the Banks which  were
in appeal before this Court and the special salient features of  the  scheme
which  stipulated  that  an  employee  whose   application   for   voluntary
retirement is accepted and relieved from the  Bank  shall  be  eligible  for
contributory provident fund  or  own  contribution  of  provident  fund  and
pension in terms of the employees  Pension  Regulations  1995,  in  case  of
those who have opted for pension and have  put  in  20  completed  years  of
service in the Bank.  The Court also referred  to  Regulations  28  and  29,
which deals  with  superannuation  pension  and  the  pension  on  voluntary
retirement respectively.  The Court also took note  of  the  fact  that  all
employees who have completed 20  years  of  service  and  the  amendment  in
Regulation 28, which was carried out in 2002 with retrospective effect  from
1.9.2000 and the amendment inserted a proviso which  provided  that  pension
shall also be granted to an employee who opts  to  retire  before  attaining
the age of superannuation but after having served for a  minimum  period  of
13 years in terms of any scheme that may be framed for the  purpose  by  the
Bank's Board with the concurrence of the Government.   The Court  took  note
of the fact that the benefits provided under Regulation 29  were  not  found
to be attractive by the employees and, therefore, the  necessity  arose  for
floating a special scheme i.e. VRS-2000.  The grievance  of  the  optees  in
the case was that they were given the retiral benefits  by  the  respondent-
Bank under VRS-2000 save and except the benefit of pension under  Regulation
29(5).  Regulation 29(5) in the case of those banks is as follows:

"The qualifying service of  an  employee  retiring  voluntarily  under  this
Regulation shall be increased by a period not exceeding five years,  subject
to the  condition  that  the  total  qualifying  service  rendered  by  such
employee shall not in any case exceed thirty-three years  and  it  does  not
take him beyond the date of superannuation".

One of the contentions canvassed by the Bank  was  that  the  Regulation  29
does not cover the persons  retired  under  VRS-2000  which  is  dehors  the
statutory scheme  for  voluntary  retirement.   The  counter  submission  on
behalf of the employees was that by making provisions  in  the  scheme  that
the optees would be eligible for the benefits in addition to  the  ex-gratia
amount, inter alia, pension  as  per  the  Pension  Regulations,  1995,  the
employees  understood  that  what  was  contemplated   was   pension   under
Regulation 29 and, therefore, any ambiguity in VRS 2000 ought to  have  been
construed and harmonized with the intention of the  parties;  Regulation  29
was the only regulation under the Pension Regulations, 1995,  applicable  to
the voluntary retirement and, therefore, Regulation 29, ipso  facto,  became
the terms of the contract; and that each and every paragraph  of  Regulation
29 can be made applicable to an optee of  more  than  20  years  of  service
without coming into conflict with any provision of the  scheme;  the  notice
period of three months in Regulation 29(3) can be waived at  the  discretion
of the banks.   The Court posed the questions as follows:
"The principal question that falls for our  determination  is:  whether  the
employees (having completed 20 years of service) of  these  banks  (Bank  of
India, Punjab National Bank, Punjab and Sind Bank, Union Bank of  India  and
United Bank of India) who had opted for voluntary retirement under VRS  2000
are entitled to addition of five years of notional  service  in  calculating
the length of service for the purpose of the said Scheme as  per  Regulation
29(5) of the Pension Regulations, 1995?"


To examine the question posed, the Court thought it appropriate  to  examine
the contract and the circumstances in which it was  made  in  order  to  see
whether or not from the nature of it,  the  parties  must  have  made  their
bargain on the footing that a particular thing  or  state  of  things  would
continue to exist.
I have already referred to Clause 6 of the Scheme, which deals  with  'other
benefits'.  Sub-clause (3) of Clause 6 stipulates that an employee would  be
entitled to get pension in terms  of  the  State  Bank  of  India  Employees
Pension Fund Rules on the relevant  date.    The  High  Courts  have  placed
reliance on the second part of Rule 22(i)(a).  Similar contention  has  been
advanced before us.  Per contra, Mr. Rohtagi would submit that  it  is  Rule
22(i)(c) which would be applicable.  I find force in  the  said  submission,
for Rule 22(i)(a) deals with the concept of retirement  and  22(i)(c)  deals
with the concept of retirement on request.   In  K.  Mohandas  (supra),  the
Rule was read into the Scheme in the absence of any other  postulate.   Same
is  the  case  here  and,  therefore,  I  read  the  Rule  to  the   Scheme.
Interpreting the 1995 Regulations, this Court had said that  it  will  apply
in entirety and, therefore, benefit was  extended  in  Rule  29(5).   Be  it
noted,  in  the  said  Regulation,  it  was  categorically   provided   that
pensionary benefits should  be  available  to  a  person  seeking  voluntary
retirement if he has put in 20 years of service.    Same  is  the  provision
here, that is, 20 years of  service  irrespective  of  the  age.    As  some
doubts  had  arose,  a  clarificatory  circular  was  issued  on  10.1.2001.
Relevant part has already been reproduced  earlier.   It  has  been  clearly
clarified that as per existing Rules, employees who have  not  completed  20
years  of  Pensionable  Service  are  not  eligible   for   pension.    This
clarification is in consonance with the Rules.  The  amendment  facet  which
has come into existence  afterwards  is  absolutely  inconsequential  as  it
deals with different facets of Rule 22(i)(a).  In  this  context,  reference
to circular dated 11.1.2001 is absolutely necessitous.   The  relevant  part
reads as follows:
"In this connection, queries  have  been  raised  whether  an  employee  who
submits his application for retirement under SBIVRS  can  withdraw  such  an
application subsequently.  Corporate Centre  have  examined  the  issue  and
have advised that the scheme is purely voluntary.  The role of the  employee
is active.  It is his conscious decision and there will  be  no  reason  for
his withdrawal of application at a later  date.   However,  there  could  be
few, yet genuine cases where  the  employees  would  like  to  withdraw  the
application submitted  under  the  scheme  for  various  reasons.   It  has,
therefore, been decided that the employee who has submitted  an  application
for retirement under SBIVRS may be permitted to withdraw the application  on
or before 15th February, 2001.  For this purpose, the employee will have  to
make a written request which must  reach  the  Branch  Manager/head  of  the
Department/ Head of the Unit i.e. authority  to  whom  the  application  for
retirement under SBIVRS has been submitted, on or  before  15.02.2001.   The
authority receiving the applications for withdrawal must forward it  to  the
competent authority immediately but not later than  the  following  day  and
obtain a confirmation to that effect from the competent authority."


Both the circulars  were  almost  simultaneous  and  both  were  within  the
knowledge of the employees and if an employee desired to withdraw, he  could
have done so as time was there till  15.2.2001.   None  of  the  respondents
chose to withdraw.  In the absence of withdrawal, there cannot be any  trace
of doubt that the employees would be governed by the rules existing  at  the
time of floating of the Scheme which has to be read  into  the  Scheme,  for
the Scheme clearly stipulates that the employees  availing  the  benefit  of
the Scheme would be entitled to pension as per the Pension  Rules.   I  have
already scanned the anatomy of the Rules  and  I  notice  that  there  is  a
categorical distinction between  'retirement'  and  'voluntary  retirement'.
In all the  impugned  judgments,  as  I  find,  the  High  Courts  have  not
appreciated the said distinction and applied the Rule pertaining  to  normal
retirement.  If the decisions in K. Mohandas (supra) and Ganpat Singh  Deora
(supra) are read carefully, it will go a long way to show that  a  voluntary
retirement    and     retirement     are     distinguishable,     if     the
Rule/Regulations/Scheme distinguishes. In the case at hand, it is  clear  as
day that the Rule carves out  two  categories  of  retirement,  one,  normal
retirement  on  superannuation  and  second,  retirement  on  request   i.e.
voluntary  retirement,  ordinarily  called   the   golden   handshake   and,
therefore, the scheme was floated.  In the instant case, as I perceive,  the
Scheme which is more beneficial was provided.  It had the  pension  and  the
ex-gratia.  However, it had a condition as enumerated in the  Rule  that  if
an employee had not completed 20 years of service, as per Rule 22(i)(c),  he
would not  get  pension.   In  K.  Mohandas  (supra),  if  an  employee  has
completed 20 years of service, apart  from  pensionary  benefits,  he  would
also get the benefit under  Regulation  29(5)  as  stipulated  therein.   To
elaborate, unless one is not  entitled  to  pension,  the  other  additional
benefits pertaining to pension do not arise.  I may hasten to add that I  am
only concerned with the concept of voluntary retirement under the Rules  and
the Scheme and as I find, the Rule cannot be interpreted as employees  would
be entitled to pension.  That is neither the intention  nor  the  spirit  of
the Rule, which has to be read into the Scheme as a part of it.
I have been apprised with regard to the relevant details of the  respondents
herein.  It is as follows:

|NAME OF THE   |LENGTH OF       |AGE AS OF   |EX-GRATIA AMOUNT PAID |
|RESPONDENT    |SERVICE         |31.03.2001  |(Apart from other     |
|              |                |            |benefits like PF &    |
|              |                |            |Gratuity)             |
|Radhey Shyam  |19 yrs. 8 months|59 yrs. 3   |Ex-Gratia-Rs.6,20,014/|
|Pandey        |18 days         |months      |-                     |
|SLP No.       |                |            |                      |
|3686/07       |                |            |                      |
|Mihir Kumar   |12 yrs. 3 months|58 yrs.     |Ex-Gratia-Rs.2,46,576/|
|Nandi C.A.No. |24 days         |1 month     |-                     |
|5035-5037/12  |                |            |                      |
|M.P. Hallan   |19 yrs. 4 months|58 yrs. 11  |Ex-Gratia-Rs.5,55,108/|
|C.A. Nos.     |                |months 25   |-                     |
|2287-88/10    |                |days        |                      |
|R.P. Nigam    |16 yrs 6 months |56 yrs. 11  |Ex-Gratia-Rs.4,40,037/|
|C.A. No.      |                |months 29   |-                     |
|10813/13      |                |days        |                      |


In the case at hand, unlike the decision  of  Ganpat  Singh  Deora  (supra),
there is no provision for  computation  of  broken  period  and,  therefore,
unless an employee has completed 20  years  of  service,  he  would  not  be
entitled to pension.  Therefore, I have no hesitation in  holding  that  the
impugned judgments and orders passed by various High  Courts,  namely,  High
Court of Judicature at Allahabad, Punjab & Haryana High Court at  Chandigarh
and High Court of Calcutta are unsustainable in law and  accordingly  I  set
aside the same.
Consequently, the appeals are allowed and the impugned judgments and  orders
are set aside.  In the facts and circumstances of the case, there  shall  be
no order as to costs.

                                             .............................J.
                                                               [Dipak Misra]

New Delhi;
February 26, 2015
                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.2463 OF 2015
                (ARISING OUT OF S.L.P. (C) NO. 3686 of 2007)

ASSISTANT GENERAL MANAGER,
STATE BANK OF INDIA & ORS.            .........APPELLANTS
                             VERSUS
RADHEY SHYAM PANDEY                        ....RESPONDENT
                                    WITH

                         C.A. NOS.2287-2288 of 2010

State Bank of India & Ors .          ....... APPELLANTS

                     VERSUS
M.P. HALLAN & ANR.                         ......... RESPONDENTS

                         C.A. NOS.5035-5037 of 2012

CHAIRMAN, State Bank of India & Ors.  ....... APPELLANTS

                     VERSUS

MIHIR KUMAR NANDI & ANR.            ......... RESPONDENTS

                                     AND

                           C.A. NO. 10813 of 2013

STATE BANK OF INDIA & ORS.              ......APPELLANTS
                           VERSUS
RAMESH PRASAD NIGAM                     .......RESPONDENT




                               J U D G M E N T

V. GOPALA GOWDA, J.

     I had the opportunity to read the opinion of my brother Judge,  Justice
Dipak Misra and I am in respectful disagreement with  the  opinion  rendered
by him in the present appeals.

2.  Leave granted in SLP (C) No. 3686 of 2007. The appellant Bank-the  State
Bank of India, on the recommendation of the  Indian  Banks  Association  (in
short "IBA"), introduced a scheme titled 'SBI Voluntary  Retirement  Scheme,
2000 (in short 'SBI-VRS'). This scheme was introduced by SBI  despite  there
being provisions in the State Bank of India       Employees' Provident  Fund
Rules,     for     its     employees            to      avail      premature
retirement/resignation/voluntary retirement. SBI-VRS was in operation for  a
limited period and was introduced by the appellant  Bank  with  package  for
the purpose specified in the scheme.

3. It is the claim of the appellant Bank that clause  6(c)  of  the  SBI-VRS
provided for "other benefits"  which  is,  "Pension  in  terms  of  the  SBI
Employees' Pension Fund Rules on the relevant date (including  the  commuted
value of pension).

4. It is the further claim of the appellant  Bank  that  the  employees  who
applied for retirement under SBI-VRS will be bound  by  the  circular  dated
11.01.01, issued by the competent authority viz., Dy. Managing  Director  of
the Bank clarifying that:-
".... However, as per existing rules employees who  have  not  completed  20
years of pensionable service are not eligible for pension."

The respondents, who were employees of the State Bank of India, applied  for
voluntary retirement under SBI-VRS on different dates between 15.1.2001  and
31.1.2001. Their applications got accepted and they stood retired  from  the
bank service with effect from 31.3.2001.

5. In  the  meanwhile,  a  parallel  development  had  taken  place  in  the
appellant Bank with  respect  to  its  employees'  Pension  Fund  Rules.  On
31.1.2001, the age of normal retirement of  the  employees  working  in  the
appellant Bank was extended from 58 years  to  60  years.  Accordingly,  the
Service Rule as well as Rule 22(i)(a) of the  SBI  Pension  Fund  Rules  was
amended wherein it was added that a member would be entitled to pension :
"..... if he is in the service of the bank  on  or  after  22.5.1998,  after
having completed 10 years pensionable service provided that he has  attained
the age of 60 years."

6. The respondents made representations  where  they  sought  pension  under
Rule 22(i)(a) and were advised by the bank that  they were not eligible  for
pension under Rule 22(i)(a). The respondents  filed  Writ  Petitions  before
respective High Courts of their jurisdictions  namely,  the  High  Court  of
Judicature at Allahabad, High Court of Judicature at Kolkata  and  the  High
Court of Punjab and Haryana, which were allowed by  both  the  Single  Bench
and the Division Bench of the High Court. Hence, the appeals  are  filed  by
the appellant Bank before this Court.

7. I am in respectful disagreement with the opinion rendered by  my  brother
Judge in the present appeals. However, I intend to  assign  my  reasons  for
the same, based on certain relevant considerations. The issues  arising  for
deliberation in this case are as under:
Whether the respondents in the present appeals  are  to  be  considered  for
pension benefits under the provisions of Rule 22(i)(c) of the State Bank  of
India Employee's Pension Fund Rules  alone,  as  claimed  by  the  appellant
Bank?

Whether the State Bank of India is entitled to  retain  its  own  employment
Rules which is not in consonance with the subsequent amendments made in  the
Employee's Pension Regulations, 1995 in all the  public  sector  undertaking
Banks in the light of the correspondence between the  Finance  Ministry  and
Indian Banks Association?

Under what legal provisions will the respondent  employees  be  entitled  to
make their claims for pension?

Answer to Point no. 1

8.  Pension  benefits  accrue  upon  an  employee  on  retirement  from  his
employment.  Therefore,  we  first  need  to  assess   the   definition   of
'retirement' before answering the  question  on  pension  benefits  for  the
respondents herein. Neither the State Bank of India Act, 1955 nor the  State
Bank of India Employees' Pension Fund Rules defines  retirement.  Therefore,
I am inclined to read the definition of retirement as has been mentioned  in
the State Bank of Patiala Employee's Pension Regulation 1995 which  provides
for the definition of retirement from employment  since  the  same  is  pari
materia to the Employees' Pension  Regulation  1995.  Section  2(y)  of  the
Regulation reads thus:
"2(y) "retirement" means cessation from the Bank's service-

On attaining the age of superannuation specified in Service  Regulations  or
Settlements;

On  voluntary  retirement  in  accordance  with  provisions   contained   in
regulation 29 of these regulations;

On  premature  retirement  by  the  Bank  before  attaining   the   age   of
superannuation specified in Service Regulations or Settlements."

In the present case, however, clause (b) of  the  definition  will  also  be
read in the light of  the  amended  Regulation  28  which  was  intended  to
provide relief to the employees seeking voluntary retirement under  the  VRS
2000, after providing 15 years of pensionable service. Thus, from the  above
definition, one is left with no doubt that the  employees  who  availed  VRS
2000 have 'retired' from the Bank as per the definitions.

It is pertinent now to highlight the object and purpose of the  SBI-VRS.  At
a meeting conducted on 13.6.2000 between the Finance Minister and the  Chief
Executives of the Public Sector  Banks,  the  human  resource  and  manpower
planning in Public Sector Banks was reviewed. A  committee  was  constituted
to examine the issues confronting the Public Sector  Banks  in  this  regard
and to suggest suitable remedial measures. The committee had  observed  that
high establishment costs and low productivity in Public Sector Banks  affect
their  profitability.  It  was  hence,  necessary  to  convert  their  human
resources into assets compatible with business strategies through a  variety
of measures including constant upgradation of skills, achieving  proper  age
and skill profile, creating opportunities for lateral as  well  as  vertical
career progression and including fresh skilled personnel with technical  and
professional skills for new business opportunities.

9. The data available with IBA indicated that 43%    of employees in  Public
Sector Banks are in the 46+ age group and only 12% are in  the  25-35  years
age group. This pattern of jobs in the public  sector  Banks,  according  to
the committee, had serious implications for  the  Banks  with  reference  to
mobility, training, development of skills  and  succession  plans  for  high
level positions. This, coupled with  excess  manpower  wherever  it  exists,
would come in  the  way  of  induction  of  new  skills  and  proper  career
progression.

The  Committee  had  therefore  recommended  introduction  of  a   Voluntary
Retirement Scheme that would assist the Bank in  their  effort  to  optimize
their human resources and achieve a balanced age skills profile  in  keeping
in mind with the business strategies. The Banks were further advised by  the
IBA to implement the scheme in right earnest.

10. From the memorandum of the Voluntary Retirement Scheme presented by  the
appellant Bank itself, it is clear that the SBI-VRS  scheme  was  introduced
for the purpose of  business  enhancement  and  profitability  of  the  Bank
itself and not for the benefits of the employees per se.  The  intention  of
the Public Sector Banks including the appellant  Bank,  in  introducing  the
VRS 2000, is rightfully highlighted in the decision of this  Court  in  Bank
of India v. K. Mohandas & Ors.[16] which read as under:
"36. ...........The banks decided to shed surplus manpower.  By  formulation
of the special scheme (VRS  2000),  the  banks  intended  to  achieve  their
objective of  rationalizing  their  force  as  they  were  overstaffed.  The
special Scheme was, thus, oriented to  lure  the  employees  to  go  in  for
voluntary retirement. In this background,  the  consideration  that  was  to
pass between the parties assumes significance and a harmonious  construction
to the Scheme and the Pension Regulations, therefore, has to be given".
                                                         (emphasis supplied)

In ordinary situation, an employee who retires either on  reaching  the  age
of superannuation, or by request in writing after completing the  prescribed
number of years, become eligible to pension under the State  Bank  of  India
Employee's Pension Rules. The pertinent provisions under the  SBI  Employees
Pension Rules relating to pension of employees, read as under:

"22. (i). A member shall be entitled to  a  pension  under  these  rules  on
retiring from the Banks service-

a). After having completed twenty years' pensionable service  provided  that
he has attained the age of fifty years or if he is in  the  service  of  the
Bank on or after 1.11.93,  after  having  completed  ten  years  pensionable
service provided that he has attained fifty eight years or if he is  in  the
service of the Bank on or  after  22.05.1998,  after  having  completed  ten
years pensionable service provided that he has attained  the  age  of  sixty
years.

      XXX       XXX      XXX

c). After having completed twenty years  pensionable  service,  irrespective
of the age he shall have attained at his request in writing. "

11. This situation is altered temporarily by the introduction  of  the  SBI-
VRS. Therefore, it is also important to understand  the  framework  of  SBI-
VRS. In the absence of the  SBI-VRS,  the  respondents  had  the  option  of
seeking  voluntary  retirement  under  Rule  22(i)(c)  which  in  fact,  the
respondents  did  not  avail.  Instead  they  availed  the  SBI-VRS.  It  is
therefore pertinent to see how the SBI-VRS  was  functioning  and  what  the
respondents  seeking      SBI-VRS  might  have  reasonably  foreseen   while
availing the  scheme.  When  the  application  of  voluntary  retirement  of
respondent Radhey Shyam  Pandey  was  accepted  by  the  appellant  Bank  on
18.3.2001, he still had about 9 months services left and  he  was  59  years
and 3 months old.

As on 31st March, 2001, when his voluntary retirement  from  service  became
effective, he had been on pensionable service for 19 years, 9 months and  18
days.

12.  If  the  respondent  had  chosen  to  retire  by  superannuation  after
attaining 60 years of age which was the normal age of retirement,  he  would
have put in  a  little  more  than  20  years  of  pensionable  service.  He
consequently, would have  become  eligible  to  pension.  However,  when  he
retired on 31.3.2001, he still had 2 and    months  short  to  complete  20
years of service. It is pertinent to understand what  prompted  him  to  opt
for the SBI-VRS at this stage.

13. In clause 5 of the scheme, the incentive  of  the  Voluntary  Retirement
Scheme is mentioned. It is an ex-gratia payment of 60 days salary for  every
year of completed service. Since, the respondent had finished  20  years  of
service approximately, he would have been entitled to 40  months  of  salary
as ex-gratia.

Pension on the other hand, is calculated as half month's salary  per  month.
Therefore, by utilizing the SBI-VRS, although the respondent had given up  9
months service still left, he would have gained 40 months incentive. To  add
to this, he becomes eligible for pension, then he in addition to  ex-gratia,
will get half month's salary as his pension from the time he  retires.  This
can be considered  as  a  good  bargain  from  availing  the  SBI-  VRS.  On
reasonable presumption, it can  be  ascertained  that  it  is  this  benefit
provided by the SBI-VRS through ex-gratia payment along with  pension  which
prompted the employees in availing the benefits of the  scheme  rather  than
retiring on superannuation under the Rules.

14. On the other hand, if he is not entitled to pension, then availing  SBI-
VRS is unwise since the respondent has given  up  his  half  month's  salary
worth pension for his working period in return of 40 months' salary.

SBI-VRS is admittedly a contract between the Bank and its employees  as  has
been recognized in the case of Bank of India v. K. Mohandas  case  mentioned
supra. The application of the Voluntary Retirement  Scheme  meant  that  the
Bank employees agreed with the Bank that it would be  bound  by  the  scheme
thereby entering into a contract. However, clause 6(c) of SBI-VRS states:

"6. Other Benefits :

    XXX          XXX      XXX

    XXX          XXX      XXX


(c) Pension in terms of State Bank of India Employees'  Pension  Fund  Rules
on the relevant date (including commuted value pension)."

15. Considering that  the  incentives  of  SBI-VRS  are  distinct  from  the
benefits provided under Rule 22(i)(c) of the State  Bank  Employees  Pension
Fund Rules and also, that Clause  6(c)  of  SBI-VRS  does  not  specifically
state that the pension benefits are to be provided under  rule  22(i)(c)  of
SBI Employees Pension Fund Rules, the claim for pension by  the  respondents
cannot be decided solely on the basis of the provision of Rule  22(1)(c)  of
the State Bank of India Employees' Pension Rules.

Answer to Point no. 2

16. It has been claimed by the appellant Bank that State Bank of  India  has
its own Pension  Rules  that  are  different  from  the  Employees'  Pension
Regulations 1995 which operate in the other Public Sector Banks.  The  claim
made by the appellant Bank that it is not bound by the  Pension  Regulations
1995, is premised on the assumption that the employees of the State Bank  of
India form a distinct class of employment from the employees  of  the  other
Public  Sector  Banks  on  the  ground  of   reasonable   and   intelligible
differentia.

This conclusion by the  appellant  Bank  is  not  warranted  since  all  the
employees of Public Sector Bank forms one homogenous  class  since  all  the
fourteen Public Sector Banks which were formed under the  Banking  Companies
(Acquisition and Transfer of Undertakings)  Act,  1970  and  the  six  banks
under the Banking Companies (Acquisition and Transfer of Undertakings)  Act,
1980, are subject to the control of the Central Government. It is  pertinent
to note that Section 19 of both-  The  Banking  Companies  (Acquisition  and
Transfer of Undertakings) Acts of 1970 and 1980 and Section 50 of the  State
Bank of India Act, 1955, vest the power on the Central  Government  to  make
consistent rules for all the Public Sector Banks.

Section 50(2)(o) of State Bank of India Act, 1955 reads thus:

"50. Power of Central Government to make regulations: (1) The Central  Board
may, after  consultation  with  the  Reserve  Bank  and  with  the  previous
sanction  of  the  Central  Government  [by  notification  in  the  Official
Gazette] make regulations, not inconsistent with  this  Act  and  the  rules
made  thereunder,  to  provide  for  all  matters  for  which  provision  is
expedient for the purpose of giving effect to the provisions of this Act.

(2) In particular and without prejudice to the generality of  the  foregoing
power, such regulation may provide for-

  XXX                  XXX              XXX

(o) The establishment and maintenance of superannuation, pension,  provident
or other funds for the benefit of the employees of the State Bank or of  the
dependent of such employees or for the purposes of the State Bank,  and  the
granting of superannuation allowances, annuities and  pensions  payable  out
of any such fund;]"

17. The Central Government through a  letter  dated  5.9.2000  directed  the
Indian Banks Association to  formulate  a  uniform  norm  for  pensions  for
employees  voluntarily  retiring  under  SBI-VRS  2000  and  the  same   was
formulated by the Indian Banks Association  on  11.12.2000.  Therefore,  the
State Bank of India is bound by the directions issued in this regard by  the
Indian Banks Association under Section 50(2)(o) of the State Bank  of  India
Act, 1955.

18. The appellant Bank, State Bank of India is  an  instrumentality  of  the
State as has been held by this Court in the case of Bank of India & Ors.  v.
O.P. Swarnakar & Ors.[17]  which reads as under:

"48...But the State Bank  of  India  as  also  the  nationalized  banks  are
"States" within the meaning of Article 12 of the Constitution of India.  The
services of the workman are also governed by  several  standing  orders  and
bipartite settlements which have the force of  law.  The  banks,  therefore,
cannot take recourse to "hire and fire" for the purpose of  terminating  the
services of the  employees.  The  banks  are  required  to  act  fairly  and
strictly in terms of the norms laid down therefor.  Their  actions  in  this
behalf must satisfy the test of Articles 14 and 21 of  the  Constitution  of
India.


Therefore, the appellant Bank cannot engage in acts which  are  antithetical
to equality. In the case of E.P. Royappa v. State  of  Tamil  Nadu[18],  the
constitution Bench of this Court held as under:
"Equality is a dynamic concept with  many  aspects  and  dimensions  and  it
cannot be "cribbed cabined and confined" within traditional and  doctrinaire
limits. From a  positivistic  point  of  view,  equality  is  antithetic  to
arbitrariness. In fact equality and arbitrariness  are  sworn  enemies;  one
belongs to the rule of law in a republic while the other, to  the  whim  and
caprice of an absolute monarch. Where an act is arbitrary it is implicit  in
it that it is unequal both according to political logic  and  constitutional
law and is therefore violative of Art. 14, and  if  it  affects  any  matter
relating to public employment, it is also violative of  Art.  16.  Arts.  14
and 16 strike at arbitrariness in  State  action  an(  ensure  fairness  and
equality of treatment. They require that  State  action  must  be  based  on
valent relevant principles applicable alike to all similarly situate and  it
must not be guided by any extraneous or  irrelevant  considerations  because
that would be denial of equality.  Where  the  operative  reason  for  State
action, as distinguished from motive inducing from the  antechamber  of  the
mind, is not legitimate and relevant but is extraneous and outside the  area
of permissible considerations, it would :amount to  mala  fide  exercise  of
power and that is hit by Arts. 14 and 16."

19.   Even though the SBI-VRS is in the nature of contract,  it  has  to  be
interpreted under the scanner of Article 14 of the  Constitution  of  India.
In the process of implementation of the Voluntary Retirement Scheme  on  its
own terms, the appellant Bank being an associate Bank of  the  Indian  Banks
Organization, it cannot set rules and procedures  which  deviates  from  the
standard and safeguards set by the Central Government in consensus with  the
Indian Banks Association.

20. It is the claim of the appellant Bank  that  the  SBI-VRS  provides  the
optees with handsome ex-gratia amount on retirement.  It  does  not  however
mean that the appellant  is  entitled  to  deprive  the  respondent  of  his
pension on the ground that he  has  been  given  handsome  ex-gratia  amount
under the scheme. Pension received by an employee  upon  his  retirement  is
not a bounty as has been held in the case of Deokinandan Prasad v. State  of
Bihar[19] as under:
"Pension is not a bounty payable on the  sweet  will  and  pleasure  of  the
Government and that, on the other hand, the right to pension is  a  valuable
right..."

21. The same proposition of law was reiterated by the Constitution Bench  of
this Court in the case of D.S. Nakara v. Union  of  India[20]  wherein  this
Court held as under:
"20. The antiquated notion of pension being a bounty, a  gratuitous  payment
depending upon the sweet will or grace of the employer not  claimable  as  a
right and, therefore, no right to pension can be enforced through court  has
been swept  under the carpet by the decision of the Constitutional Bench  in
Deokinandan Prasad v. State of  Bihar  wherein  this  court  authoritatively
ruled that pension is a right and the payment of it  does  not  depend  upon
the discretion of the  Government  but  is  governed  by  the  rules  and  a
government servant coming within rules is entitled to claim pension. It  was
 further held that the grant  of  pension  does  not  depend  upon  anyone's
discretion.  It is only for the purpose of  quantifying  the  amount  having
regard to service and other allied matters that it may be necessary for  the
authority to pass an order to that effect but the right to  receive  pension
flows to the officer not because of the order but by the  virtue  of  rules.
This view was reaffirmed in State of Punjab v. Iqbal Singh."
                                                         (emphasis supplied)

Therefore, depriving the respondents seeking      SBI-VRS of their right  to
pension solely on the ground that they  have  availed  voluntary  retirement
under a scheme while providing less than 20 years of  service  and  also  on
the ground that they have been provided with handsome  ex-gratia  amount  on
their retirement, is arbitrary and attracts the wrath of Article 14  of  the
Constitution  of  India.  This  is  particularly  so,  because  SBI-VRS  was
introduced for the benefit of the Public Sector  Banks  which  included  the
appellant Bank. It was not a welfare scheme which provided  the  respondents
with multiple offers to choose from. Therefore, the appellant Bank  at  this
stage, cannot  absolve  itself  from  the  responsibility  of  granting  the
respondents  what  is  due  to  them  by  virtue  of  providing  pensionable
services, on the pretext of having provided ex-gratia amount.

22.  In  another  case  of  Roop  Chand   Adlakha   v.   Delhi   Development
Authority[21], this Court held as under:
"To overdo classifications is to undo equality. The idea  of  similarity  or
dissimilarity of situations of persons, to justify  classifications,  cannot
rest on merely differentia which may, by themselves be rational or  logical,
but depends on whether the differences are relevant to the goals  sought  to
be reached by the law which seeks to  classify.  The  justification  of  the
classification  must   needs,   therefore,   to   be   sought   beyond   the
classification.  All  marks  of  distinction  do  not  necessarily   justify
classification irrespective of the relevance or nexus of objects  sought  to
be achieved by the law imposing the classification."
                                      (emphasis supplied)

23. In the case on hand,  the  classification  between  employees  who  have
voluntarily retired under the SBI-VRS and those who have retired  under  the
same scheme introduced by the other Public Sector  Banks,  is  not  rational
since they constitute the employees of the appellant Bank  into  a  distinct
class on the basis of the VRS 2000 scheme introduced by the  appellant  Bank
and the same scheme  introduced  by  other  Public  Sector  Banks,  with  no
intelligible differentia. The payment of ex-gratia cannot  be  held  against
the employees since it cannot be  expected  of  a  person  to  give  up  his
service  before  superannuation  without  reasonable  incentives.  What  the
appellant Bank intends to show as the benefit of the employees  seeking  VRS
under the scheme, is actually meant for the benefit of  the  appellant  Bank
itself.

24. In setting up schemes such as the SBI-VRS, the appellant Bank, which  is
the instrumentality of the  State  under  Article  12  of  the  Constituion,
cannot deviate from its constitutional duties as has been held in  the  case
of D.S. Nakara v. Union of India (supra) :
"36. Having set out clearly the society which we  propose  to  set  up,  the
direction in which the State action must move, the welfare  State  which  we
propose to build up, the constitutional  goal  of  setting  up  a  socialist
State and  the  assurance  in  the  Directive  Principles  of  State  Policy
especially of security in old age  at  least  to  those  who  have  rendered
useful service during their active years, it is  indisputable,  nor  was  it
questioned, that pension as a retirement benefit is in consonance  with  and
in furtherance of the  goals  of  the  Constitution.  The  goals  for  which
pension is paid themselves give a fillip and  push  [pic]to  the  policy  of
setting up a  welfare  State  because  by  pension  the  socialist  goal  of
security of cradle to grave is assured at least when  it  is  mostly  needed
and least available, namely, in the fall of life.


25. Moreover, this decision of the appellant  Bank  to  distinguish  between
two sets of employees, goes against Article 39 of the Constitution of  India
which directs the State to make policies  to  ensure  equal  pay  for  equal
work. The appellant Bank being an  instrumentality  of  the  State,  is  not
permitted to make such discriminations. Hence, the appellant Bank is  liable
to implement  the  amendments  made  by  the  Indian  Banks  Association  to
accommodate the grant of pension to those  employees  who  sought  voluntary
retirement through SBI-VRS.


Answer to point no. 3

26. Under Rule 22 of the State Bank of India Employees'  Pension  Rules,  an
employee's entitlement to pension accrues on retiring from the Bank  service
on one of the following conditions:
Under Rule 22(1)(a):
After having completed 20 years pensionable services provided  that  he  has
attained the age of 50 years OR
If he was in the service on or after 1.11.93, then  after  having  completed
10 years of service provided that he has attained the age of 58 years, OR
If he was in the service on or after 22.5.98, then  after  having  completed
10 years pensionable service provided, that he has attained the  age  of  60
years.

Under Rule 22(1)(c):
After 20 years of pensionable service, at his request in writing (where  the
entitlement is to proportionate pension).

On the other hand,  the  un-amended  Employee's  Pension  Regulations,  1995
provide for pension under the following condition:
Regulation 28 reads as under:
"28. Superannuation Pensions:-
Superannuation pension shall be granted to an employee who  has  retired  on
his  attaining  the  age  of  superannuation  specified   in   the   Service
Regulations and Settlements."

      Regulation 29 reads as under:

"29. Pension on Voluntary Retirement:
On or after the 1st day of November, 1993 at any  time,  after  an  employee
has completed twenty years of qualifying service he may,  by  giving  notice
of not less than three  months  in  writing   to  the  appointing  authority
retire from service; ......"

27. It can be observed that the  State  Bank  of  India  Employees'  Pension
Rules and the un-amended Employee's Pension Regulation, 1995 are  consistent
in so far as  both  Rules  set  the  eligibility  of  pension  on  voluntary
retirement service only after 20 years of pensionable service.  However,  it
is imperative to understand the amendment which the  correspondence  between
the  Finance  Ministry  and  Indian   Banks   Association,   following   the
introduction of the SBI-VRS, brought about.

28. By  a  letter  (F.no.4/8/4/2000-IR),  dated  5.9.2000,  written  by  the
Finance Ministry to the Indian Banks Association, the  Ministry  recommended
to  the  IBA  to  suggest  amendments  to  Regulation  29  of  the   Pension
Regulations in the following terms:
"I am directed to refer to this Division's Letter no. 11/1/99 IR dated 29-8-
2000 conveying the Government's no objection for  circulation  of  Voluntary
Retirement Scheme in public sector banks. The Scheme, inter  alia,  provides
that employees with 15 year of service or 40 years of age shall be  eligible
to take voluntary  retirement  under  the  Scheme.  As  per  the  provisions
contained in Regulation 29 of the Pension Regulations, an employee can  take
voluntary retirement after 20 years of  qualifying  service  and  thereafter
becomes eligible for pension. Thus employees having  rendered  15  years  of
service or completing 40 years of age, but not having completed 20 years  of
service shall not be eligible for pensionary benefits  on  taking  voluntary
retirement under the Scheme.

In order to ensure that such employees do not lose the benefits of  pension,
IBA may work out modalities and suggest amendments, if any, required  to  be
made in the Pension Regulations to ensure that these employees also get  the
benefits of pension".

Pursuant to this correspondence, the Indian Banks Association  suggested  an
amendment to the Regulations in the following terms:
"INDIAN BANKS ASSOCIATION
STADIUM HOUSE, 6th FLOOR
BLOCK 2 VEER NARIMAN ROAD
MUMBAI- 400020

PD/CIR/76/G2/G4/
December 11, 2000

VOLUNTARY RETIRMENT  SCHEME  IN  PUBLIC  SECTOR  BANKS  AMENDMENTS  TO  BANK
(EMPLOYEES') PENSION REGULATIONS, 1995
Designated officers of all Public Sector Banks.

Dear Sirs,
Please refer to our circular letter no. PD/CIR/76/G4/993 dated  31st  August
2000 convening the 'No Objection' of the Government in  banks  adopting  and
implementing a voluntary retirement scheme for employees  on  the  lines  of
what was contained in the Annexure to the circular.
As per the scheme, an employee who is eligible  and  applies  for  voluntary
retirement is entitled for  the  benefits  of  CPF,  Pension,  Gratuity  and
encashment of accumulates privilege leaves, as per rules.
Bank (Employees') Pension Regulations, 1955 do not have provisions  enabling
payment of pension to an employee who retires before attaining  the  age  of
superannuation except under circumstances as in Regulations 29, 30,  32  and
33.   We  had,  therefore,  taken  up  with  the  Government   the  need  to
incorporate necessary provisions  in  the  Pension  Regulations  by  way  of
amendments to Regulation 28 so that employees  who  retire  as  above  under
special/ ad hoc schemes  formulated  by  the  banks,  after  serving  for  a
prescribed minimum period would be eligible for pro rata pension.
Government of India has after examining the proposal conveyed  its  approval
and desired that IBA advise banks to  make  necessary  amendments  to  their
Pension Regulations as in the  Annexure.  We  request  banks  to  take  note
accordingly.
Please note  that  with  the  above  amendments,  employees  who  apply  for
voluntary retirement after having  rendered  minimum  15  years  of  service
under a special/ ad hoc scheme formulated with the specific approval of  the
Government and the Board of Directors will be eligible for pro rata  pension
for the period of service rendered as they are to retire  on  attaining  the
age of superannuation on that date.

Yours Faithfully,
Sd/-
(Allen C A Pareira)
PERSONNEL ADVISER"

Pursuant  to  this  suggestion,   Regulation   28   of   Employees   Pension
Regulations, 1995 was amended to  include  the  proviso  with  retrospective
effect from 1.9.2000 as under:
"Provided that pension shall also be granted to  an  employee  who  opts  to
retire before attaining the age of superannuation, but after  having  served
for a minimum period of 15 years in terms of any scheme that may  be  framed
for  the  purpose  by  the  Bank's  Board  with  the  concurrence   of   the
Government."

This Court, in the case of Bank of India  v.  K.  Mohandas  (supra)  further
clarified  the  intention  behind  amendment  of  Regulation  28   and   its
retrospective application. The relevant paragraphs read as under:
"40.........The amendment in Regulation 28, as is reflected from  the  afore
referred  communication,  was  intended  to  cover  the  employees  who  had
rendered 15 years' service but not completed 20 years' service. ....

41. Even if it be assumed that by insertion of the proviso in Regulation  28
(in the year 2002 with effect  from  1-9-2000),  all  classes  of  employees
under VRS, 2002 were intended to be covered, such  amendment  in  Regulation
28, needs to be harmonized with Regulation 29......"

29. While answering Point no, 2 in favour of the respondents,  I  held  that
the State Bank of India should implement the amendment made to  Rule  28  of
the Employees Pension  Regulation  in  granting  pension  to  the  employees
seeking voluntary retirement under SBI-VRS.

I therefore, answer point no 3 in favour of the respondents and  direct  the
appellant  Bank  to  grant  pension  to  the  employees  seeking   voluntary
retirement under the  SBI-VRS  after  completing  15  years  of  pensionable
service. Therefore, the respondent Radhey Shyam Pandey, having completed  19
years 8 months and 18 days  of  service,  respondent   M.P.  Hallan,  having
completed 19 years and 4 months of service and the  respondent  R.P.  Nigam,
having completed 16 years and 6  months  of  service,  become  eligible  for
pension as per the amended Regulation 28 of Employees Pension  Rules,  1995.
By virtue of power vested in this Court under Article  142  Constitution  of
India, I hold that the pension relief is also  extended  to  all  the  other
employees who have availed SBI-VRS 2000 after having completed 15  years  of
pensionable service. Thus, C.A. No.@ SLP (C) No.3686 of 2007, C.A. Nos.2287-
2288 of 2010 and C.A. No. 10813 of 2013 are dismissed.

30. The C.A. Nos.5035-5037 of 2012 of the appellant  Bank  succeed  in  that
respondent Mihir Kumar Nandi, having completed 12 years 3 months and 4  days
of service, becomes ineligible for pension benefits.

31.   All the appeals are disposed of accordingly. No costs.



                ......................................................... J.
                                           [V. GOPALA GOWDA]



New Delhi,
February 26, 2015


-----------------------
[1]    2002 (2) SLR 716
[2]    (2003) 2 SCC 721
[3]    AIR 1993 SC 1601
[4]    (1997) 1 SCC 256
[5]    (1998) 8 SCC 30
[6]    (2003) 11 SCC 572
[7]    (2006) 3 SCC 708
[8]    (2005) 12 SCC 508
[9]    (2005) 4 SCC 272
[10]   (2004) 6 SCC 765
[11]   (2005) 3 SCC 636
[12]    (2009) 3 SCC 217
[13]    (2009) 5 SCC 313
[14]    (1900) AC 260
[15]    2014 (8) SCALE 397
[16]   (2009) 5 SCC 313
[17]   (2003) 2 SCC 721
[18]   AIR 1974 SC 555
[19]   1971 SCR 634
[20]   (1983) 1 SCC 305
[21]   1988 (Supp 3) SCR 253

-----------------------
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