REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOs. 7188-7191 OF 2012
[Arising out of SLP (Civil) Nos. 30983-30986 of 2008]
M.R. Prabhakar and Others .. Appellants
Versus
Canara Bank and Others .. Respondents
WITH
Civil Appeal Nos._7185-7186 of 2012
[Arising out of SLP (C) Nos. 30975-30977 of 2008]
Civil Appeal Nos. 7192-7193 of 2012
[Arising out of SLP (C) Nos. 30987-30988 of 2008]
Civil Appeal Nos. 7194-7195 of 2012
[Arising out of SLP (C) Nos. 30989-30990 of 2008]
J U D G M E N T
K. S. RADHAKRISHNAN, J.
1. Leave granted.
2. We may, for the disposal of these appeals, deal with the facts in
Civil Appeals arising out of SLP (C) Nos. 30983-30986 of 2008, since common
questions arise for consideration in all these appeals.
3. We are, in these appeals, concerned with the legality of the claim
for pension in lieu of Contributory Provident Fund (for short ‘CPF’) of
some officers of the Canara Bank who had resigned and stood relieved from
their respective posts prior to 3.6.1993, i.e. prior to signing of the
Statutory Settlement dated 29.10.1993 under the Industrial Disputes Act,
1947, the Joint Note dated 29.10.1993, followed by the Canara Bank Pension
Regulations, 1995 (for short ‘Regulations 1995’), which was notified in the
Gazette of India on 29.9.1995.
4. The learned single Judge of the High Court held in favour of the
appellants but the Division Bench of the High Court held otherwise. Hence,
these appeals.
5. We may, as already indicated, refer to the facts of the case in civil
appeals arising out of SLP (C) Nos. 30983-30986 of 2008. The appellants’
date of appointment and their resignation are as under:
|Position of the |Date of Appointment |Date of Resignation |
|Petitioner as per Cause | | |
|List | | |
|M.R. Prabhakar |27-05-1970 |04-06-1991 |
|S. Ananda Rao |09-09-1970 |22-09-1990 |
|N. Anand |17-12-1969 |19-04-1993 |
|S. K. Mehta |15-12-1965 |01-05-1991 |
|N.V. Rangaswamy |24-07-1968 |09-01-1991 |
|S. Sathyanarayan |07-0701970 |03-06-1993 |
|K. S. Seshadri |18-02-1970 |20-07-1992 |
|(since deceased) | | |
|K. Suresh Rao |02-05-1970 |30-06-1990 |
|P. Govinda Pai |03-04-1968 |30-03-1988 |
| 10. K. V. Puranik |01-02-1963 |24-07-1986 |
The above mentioned appellants had submitted their resignations between
24.7.1986 and 3.6.1993 prior to the signing of the Statutory Settlement
dated 29.10.1993 under the Industrial Disputes Act, 1947 and the Joint Note
dated 29.10.1993, with regard to the introduction of ‘pension’ as a second
retiral benefit in lieu of CPF. Appellants, placing reliance on the
various provisions of Regulations 1995, submitted that the pension
regulations were introduced as an additional benefit to the serving and
retired employees. It was pointed out that an employee who had resigned
from the bank was not disentitled to pension except by operation of
Regulation 22. If this regulation was held operative against the
appellants, it would result in absurd consequences since by forfeiture of
entire past service, such employees would not be entitled to any pensionary
benefits including gratuity and provident fund. Further, it was pointed
out that Regulation 22 admittedly never existed when the appellants had
submitted their resignation letters and, therefore, the said regulation
could not operate to disentitle the appellants from any pensionary
benefits. Further, it was also pointed out when appellants had submitted
their letters of resignation prior to 1.1.1993 the concept of ‘voluntary
retirement’ did not exist under the Bank Officers Regulations, 1979 (for
short ‘Regulations 1979’). Regulation 1979, it was pointed out, neither
defined the expression ‘resignation’ legally nor the expression ‘voluntary
retirement’. In other words, the concept of ‘voluntary retirement’ was
required to be defined only because of the introduction of pension as a
retiral benefit with effect from 29.9.1995.
6. Learned counsel appearing for the appellants submitted that, in the
absence of legal definition of ‘voluntary retirement’ or in the absence of
any legally prescribed consequence of ‘resignation’, it may be understood
in the sense of ‘voluntary retirement’ of service. Further, it was also
urged that the conceptual difference between ‘resignation’ and ‘voluntary
retirement’ comes in only if it is made by legal prescription and not in
the ordinary sense as perceived in the realm of appointment. Learned
counsel also pointed out that pension regulations must be read and
interpreted keeping in mind its intended object and cannot be applied to
deprive those employees who left services honourably either on the grounds
of superannuation, resignation or even pre-mature retirement. Considerable
reliance was placed on a recent judgment of this Court in Sheelkumar Jain
v. New India Assurance Company Limited and Others (2011) 12 SCC 197 and
submitted that the principle laid down in that judgment would squarely be
applicable to the facts of the present case. Further, it was also pointed
out that the beneficial construction placed by this Court in Madan Singh
Shekhawat v. Union of India and Others (1996) 6 SCC 459 is also applicable
by way of extending the pensionary benefits to the appellants.
7. Learned senior counsel appearing for the respondents banks submitted
that the High Court had rightly denied the claim of pension to the
appellants who had resigned from their respective service before the
settlement reached between All India Bank Officers Federation and Indian
Bank Association (for short ‘IBA’) and that Regulations 1995 would not
apply to the appellants. Further, it was pointed out that the appellants
had resigned prior to 1.1.1993 and were not covered by the Statutory
Settlement or the Joint Note dated 29.10.1993 and the Regulations 1995. It
was pointed out that the reliance placed by the appellants either on
Regulation 29 or Regulation 22 in support of their contentions was
completely misplaced since the appellants were not covered by the scheme of
pension introduced by the respective banks with effect from 1.11.1993.
Learned counsel appearing for the banks submitted that the judgment of this
Court in UCO Bank and Others v. Sanwar Mal (2004) 4 SCC 412 squarely
applies to the facts of the present case. In that case, the very same
regulation came up for interpretation and the identical reliefs sought for,
which were rejected by the Court. Further, it was also pointed out that
Sheelkumar Jain’s case (supra) was interpreting an insurance scheme which
is, not comparable with the Regulations 1995 applicable to the banks.
8. The appellants, in these two main appeals were officers of the Canara
Bank, who had resigned and stood relieved from their respective service
between 24.7.1986 and 3.6.1993. IBA, representing 58 banks and their
workmen had entered into a Memorandum of Settlement on 29.10.1993 under
Section 2(p) and Section 18(1) of the Industrial Disputes Act, 1947 read
with Rule 58 of the Industrial Disputes (Central) Rules, 1957. During the
course of negotiations of service conditions of the workmen employees in
February 1990, IBA agreed to introduce a pension scheme in banks for the
workmen employees in lieu of employers’ contribution to the provident fund.
The pension scheme agreed to by IBA was to be broadly based on Central
Government/Reserve Bank of India pattern, details of the scheme were worked
out later. A Joint Note was also made with regard to the introduction of
pension as a second retiral benefit in lieu of CPF. Clause (4) of the
Joint Note reads as follows:
“(iv) The Pension Scheme will also be extended to retired
Officers’ who retired on or after 1.1.1986. They will be entitled for
monthly pension as well as commutation facility as from 1.1.1993.
Those officers who avail of the Pension Scheme will be required to
refund Bank’s contribution to the Provident Fund with interest thereon
drawn by them together with simple interest at 6% from the date of
withdrawal of the Provident Fund to the date of refund.”
9. In furtherance of the Statutory Settlement and Joint Note dated
29.10.1993, draft of the Pension Regulations was negotiated and settled.
Clause 17(1), so far as it is relevant for the present purpose, is
extracted hereunder:
“17(1) Notwithstanding anything contained in the Service
Regulations/Service Rules an employee may be permitted to voluntarily
retire after he has completed 20 years of qualifying service, after
given three months’ notice in writing to the competent authority.”
10. Later, in exercise of the powers conferred by Clause (f) of sub-
section (2) of Section 19 of the Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970, the Board of Directors of the Canara
bank, after consultation with the RBI and with the previous sanction of the
Central Government, made the regulations called Canara Bank (Employees’)
Pension Regulations, 1995. The same were made applicable to the
employees’/officers and were notified in the Gazette of India on 29.9.1995.
Chapter II of the Regulations deals with the application and eligibility,
the operative portion of Regulation 3(1)(a) to 3(1)(c)reads as under:
“3. Application: These regulations shall apply to employees
who,-
(1) (a) were in the service of the Bank on or after the 1st day
of January 1986 but had retired before the 1st day of
November, 1993; and
(b) exercise an option in writing within one hundred and
twenty days from the notified date to become member of
the Fund; and
(c) refund within sixty days after the expiry of the said
period of one hundred and twenty days specified in clause
(b) the entire amount of the Bank’s contribution to the
Provident Fund including interest accrued thereon
together with a further simple interest at the rate of
six percent per annum on the said amount from the date of
settlement of the Provident Fund account till the date of
refund of the aforesaid amount to the Bank; or
XXX XXX XXX
XXX XXX XXX”
11. Regulation 22, which finds a place in Chapter IV of the Regulations,
reads as follows:
“22 Forfeiture of service –
(1). Resignation or dismissal or removal or termination of an
employee from the service of the Bank shall entail
forfeiture of his entire past service and consequently
shall not qualify for pensionary benefits;
(2) An interruption in the service of a Bank employee entails
forfeiture of his past service, expect in the following
cases, namely :-
a) authorised leave of absence;
b) suspension, where it is immediately followed by
reinstatement, whether in the same or a different post,
or where the bank employee dies or is permitted to
retire or is retired on attaining the age of compulsory
retirement while under suspension;
c) transfer to non-qualifying service in an establishment
under the control of the Government or Bank if such
transfer has been ordered by a competent authority in
the public interest;
d) joining time while on transfer from one post to another.
(3) Notwithstanding anything contained in sub-regulation (2),
the appointing authority may, by order, commute
retrospectively the periods of absence without leave as
extraordinary leave.
(4) (a) In the absence of a specific indication to the contrary
in the service record, an interruption between two
spells of service rendered by a bank employee shall be
treated as automatically condoned and the pre-
interruption service treated as qualifying service;
(b) Nothing in clause (a) shall apply to interruption caused
by resignation, dismissal or Removal from the service or
for participation in a strike:
Provided that before making an entry in the service
record of the Bank employee regarding forfeiture of past
service because of his participation in strike, an
opportunity of representation may be given to such bank
employees.”
12. Classes of Pension are dealt with in Chapter V of the Regulations.
Regulation 28 deals with superannuation pension and the same reads as
follows:
“28. Superannuation Pension:- Superannuation pension shall be
granted to an employee who has retired on his attaining the age of
superannuation specified in the Service Regulations or Settlement.”
29 Pension on Voluntary Retirement –
1) On or after the 1st day of November 1993, at any time after
the 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 :
Provided that this sub – regulation shall not apply to an
employee who is on deputation or on study leave abroad unless
after having been transferred or having returned to India he
has resumed charge of the post in India and has served for a
period of not less than one year :
Provided further that this sub – regulation shall not apply
to an employee who seeks retirement from service for being
absorbed permanently in an autonomous body or public sector
undertaking or company or institution or body, whether
incorporated or not to which he is on deputation at the time
of seeking voluntary retirement :
Provided that this sub – regulation shall not apply to an
employee who is deemed to have retired in accordance with
clause (1) of regulation 2.
2. The notice of voluntary retirement given under sub –
regulation (1) shall require acceptance by the appointing
authority:
Provided that where the appointing authority does not refuse
to grant the permission for retirement before the expiry of
the period specified in the said notice, the retirement shall
become effective from the date of expiry of the said period.
3. (a) An employee referred to in sub regulation (1) may make a
request in writing to the writing to the appointing
authority to accept notice of voluntary retirement of less
than three months giving reasons therefore :
(b) On receipt of a request under clause (a), the appointing
authority may, subject to the provisions of sub –
regulation (2), consider such request for the curtailment
of the period of notice of three months on merits and if it
is satisfied that the curtailment of the period of notice
will not cause any administrative inconvenience, the
appointing authority may relax the requirement of notice of
three months on the condition that the employee shall not
apply for commutation of a part of his pension before the
expiry of the notice of three months.
4. An employee, who has elected to retire under this regulation
and has given necessary notice to that effect to the
appointing authority, shall be precluded from withdrawing his
notice except with the specific approval of such authority:
Provided that the request for such withdrawal shall be made
before the intended date of his retirement.
5. 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.
6. The pension of an employee retiring under this regulation shall
be based on the average emoluments as defined under clause
(d) of regulation 2 of these Regulations and the increase not
exceeding five years in his qualifying service, shall not
entitle him any notional fixation of pay for the purpose of
calculating his pension.”
13. In order to appreciate the scope of the above mentioned Regulations,
it is necessary to refer to some of the definition clauses. The word
‘retire’ is defined in Regulation 2(x) of the Regulations 1995, which reads
as under:
“2(x) “retired” includes deemed to have retired under clause(l).”
The word ‘retirement’ is defined under Regulation 2(y) of the Regulations
1995, which reads as follows:
“2(y) “retirement” means cessation from bank’s service,-
a) On attaining the age of superannuation specified in Service
Regulations or Settlements;
b) On voluntary retirement in accordance with provisions
contained in regulation 29 of these regulations;
c) On premature retirement by the Bank before attaining the
age of superannuation specified in Service Regulations or
Settlement.”
14. The appellants, in our view, did not retire from the service, but
resigned from the service. Appellants tried to build up a case that in the
absence of a legal definition of ‘voluntary retirement’ or in the absence
of legally prescribed consequences of ‘resignation’, it must be understood
in the sense of voluntary relinquishment of service. It was pointed out
that there can be no distinction between ‘voluntary retirement’ and
‘resignation’ and those expressions are to be understood in their ordinary
literal sense.
15. We find it difficult to accept the contentions raised by the
appellants. There is no ambiguity in the definition clause under
Regulation 2(y) which has statutorily brought in the ‘voluntarily
retirement’ as ‘retirement’. Though the concept of ‘resignation’ is well
known in Service Jurisprudence, the same has not been brought within the
definition of ‘retirement’ under Regulation 2(y). Further, the words
‘retired’ and ‘retirement’ have some resemblance in their meanings, but not
‘resignation’. Regulation 3(1)(a) specifically used the expression
‘retirement’ and the expression ‘resignation’ has not been incorporated
either in the definition clause or in Regulation 3(1)(a). We need not
labour much on this issue, since the difference between these two concepts
‘resignation’ and ‘retirement’, in the context of the same Banking
Regulations 1995, came up for consideration before this Court in Sanwar Mal
(supra), wherein this Court has distinguished the words ‘resignation’ and
‘retirement’ and held as follows:
“9. ……… The words "resignation" and "retirement" carry different
meanings in common parlance. An employee can resign at any point of
time, even on the second day of his appointment but in the case of
retirement he retires only after attaining the age of superannuation
or in the case of voluntary retirement on completion of qualifying
service. The effect of resignation and retirement to the extent that
there is severance of employment but in service jurisprudence both the
expressions are understood differently. Under the Regulations, the
expressions "resignation" and "retirement" have been employed for
different purpose and carry different meanings. The pension scheme
herein is based on actuarial calculation; it is a self-financing
scheme, which does not depend upon budgetary support and consequently
it constitutes a complete code by itself. The scheme essentially
covers retirees as the credit balance to their provident fund account
is larger as compared to employees who resigned from service.
Moreover, resignation brings about complete cessation of master and
servant relationship whereas voluntary retirement maintains the
relationship for the purposes of grant of retiral benefits, in view of
the past service. Similarly, acceptance of resignation is dependent
upon discretion of the employer whereas retirement is completion of
service in terms of regulations/rules framed by the bank. Resignation
can be tendered irrespective of the length of service whereas in the
case of voluntary retirement, the employee has to complete qualifying
service for retiral benefits. …………”
(emphasis added)
In the above mentioned judgment, this Court has also held that there are
different yardsticks and criteria for submitting the resignation, vis-à-vis
voluntary retirement and exceptions thereof. In that context, the scope of
Regulation 22 of Regulations 1995 was also considered and the Court held as
follows:
9. …………….In our view, Regulation 22 provides for
disqualification of employees who have resigned from service and for
those who have been dismissed or removed from service. Hence, we do
not find any merit in the arguments advanced on behalf of the
respondent that Regulation 22 makes an arbitrary and unreasonable
classification repugnant to Article 14 of the Constitution by keeping
out such class of employees. The view we have taken is supported by
the judgment of this Court in the case of Reserve Bank of India v.
Cecil Dennis Solomon (2004) 9 SCC 461. Before concluding we may state
that Clause 22 is not in the nature of penalty as alleged. It only
disentitles an employee who has resigned from service from becoming a
member of the Fund. Such employees have received their retiral
benefits earlier. The pension scheme, as stated above, only provides
for a second retiral benefit. Hence there is no question of penalty
being imposed on such employees as alleged. The pension scheme only
provides for an avenue for investment to retirees. They are provided
avenue to put in their savings and as a term or condition which is
more in the nature of an eligibility criteria the scheme disentitles
such category of employees out of it.”
16. We may indicate that in Sanwar Mal (supra), the employee, who was
working on Class III post, resigned from the service of UCO Bank on
25.2.1988 after giving one month’s notice and also accepted his provident
fund without protest. On coming into force of the Regulations 1995, Sanwar
Mal opted for pension scheme. Since Sanwar Mal had resigned in the year
1988, UCO Bank declined its option for admitting him as a member of the
fund.
17. This Court, as already indicated, after referring to the various
provisions of the Regulations 1995 and after examining the meaning of the
expressions ‘resignation’ and ‘retirement’, held that since Regulation 22
provided for disqualification of employees who had resigned, such employees
could not claim membership of the fund.
18. Learned counsel appearing for the appellants have placed heavy
reliance on Sheelkumar Jain (supra) and submitted that in the light of that
judgment, the decision rendered in Sanwar Mal (supra) requires
reconsideration. We find it difficult to accept the contention raised by
the learned counsel appearing for the appellants.
19. We may point out in Sheelkumar Jain (supra) that this Court was
dealing with an insurance scheme and not the pension scheme, which is
applicable in the banking sector. The provisions of both the scheme and
the Regulation are not pari materia. In Sheelkumar Jain case (supra),
while referring to Para 5, this Court came to the conclusion that the same
does not make distinction between ‘resignation’ and ‘voluntary retirement’
and it only provides that an employee who wants to leave or discontinue his
service amounts to ‘resignation’ or ‘voluntary retirement’. Whereas,
Regulation 20(2) of the Canara Bank (Officers) Service Regulations 1979
applicable to banks, had specifically referred to the words ‘resignation’,
unlike Para 5 of the Insurance Rules. Further, it is also to be noted that,
in that judgment, this Court in Para 30 held that the Court will have to
construe the statutory provisions in each case to find out whether the
termination of service of an employee was a termination by way of
resignation or a termination by way of voluntary retirement.
20. The appellants, when tendered their letters of resignation, were
governed by the Regulations 1979. Regulation 20(2) of Regulations 1979
dealt with resignation from service and they tendered their resignation in
the light of that provision. We are of the view that the appellants have
failed to show any pre-existing rights in their favour either in the
Statutory Settlement/Joint Note dated 29.10.1993 or under the Regulations
1995. Appellants had resigned from service prior to 1.11.1993 and,
therefore, were not covered by the statutory settlement, Joint Note dated
29.10.1993 and the Regulations 1995. They could not establish any pre-
existing legal, statutory or fundamental rights in their favour to claim
the benefit of Regulations 1995. Consequently, the reliance placed by the
appellants either on Regulation 29 or Regulation 22 in support of their
contentions, cannot be accepted, since they are not covered by the scheme
of pension introduced by the banks with effect from 1.11.1993.
21. We, therefore, find no merit in these appeals and the same are
dismissed, with no order as to costs.
……………………………….J.
(K.S. Radhakrishnan)
..………………………………J.
(Dipak Misra)
New Delhi,
October 3, 2012
