BANK OF BARODA Vs S.K. KOOL (D) THR LRS
Bench: CHANDRAMAULI KR. PRASAD,JAGDISH SINGH KHEHAR
Case number: C.A. No.-010956-010956 / 2013
Diary number: 20329 / 2009
Advocates: ARUN AGGARWAL Vs
SHILPA SINGH
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REPORTABLE
IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 10956 OF 2013 (@SPECIAL LEAVE PETITION (CIVIL) NO. 17054 OF 2009)
BANK OF BARODA …. APPELLANT Versus
S.K. KOOL(D)THROUGH LRS.AND ANR. …. RESPONDENTS
J U D G M E N T
CHANDRAMAULI KR. PRASAD, J.
S.K. Kool, respondent no. 1 herein (since
deceased), was working as a clerk with the
petitioner, Bank of Baroda and while working as
such after a departmental inquiry, as a measure of
punishment, visited with the penalty of ‘removal
from service with superannuation benefits as would
be due otherwise and without disqualification from
future employment’.
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S.K. Kool, hereinafter referred to as ‘the
employee’, made a request for leave encashment,
which was declined by the petitioner Bank of
Baroda, hereinafter referred to as ‘the employer’,
on the ground that ‘where cessation of service
takes place on account of employee’s resignation or
his dismissal/termination/compulsory retirement
from the Bank’s service, all leaves to his
credit lapse.’
The employee laid claim for pensionary benefits
but the same was also declined. However, the
employer advised the employee to ask for sanction
of compassionate allowance not exceeding two-thirds
of the pension which would have been admissible to
him otherwise. A dispute was raised and the
competent Government referred the dispute for
adjudication by the Industrial Tribunal. The
dispute referred to the Industrial Tribunal,
hereinafter referred to as ‘the Tribunal’, reads
as follows:
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“Whether the action of the management of Bank of Baroda in denying pension and encashment of leave to Shri S.K. Kool is legal and justified? If not, what relief the concerned workman is entitled to?”
The employee filed his statement of claim and
so did the employer. The employee founded his
claim by relying on the order of punishment itself
which, according to him, entitles him the
superannuation benefit. It was resisted by the
employer on the ground that such employees who are
removed from the service of the Bank are not
entitled to pension. The Tribunal considered the
rival plea, upheld the contention of the employee
and passed an award in his favour, and while doing
so, observed as follows:
“12. Therefore, in view of the facts and circumstances and settled legal position, the tribunal feels no hesitation in holding that the action of the opposite party bank in denying superannuation benefits to the workman is neither legal nor justified. Accordingly it is held that the workman is entitled for his superannuation benefits under
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the final orders of the disciplinary authority passed on 19.09.03 and any other order passed by some other officer denying superannuation benefits stands set aside. Accordingly the workman is held entitled for all termination benefits like pension, leave encashment, gratuity and commutation of pension subject to adjustment of any amount paid under these heads to the workman.”
The employer assailed the aforesaid award in a
writ petition but the same has been dismissed by
the High Court, inter alia, observing as follows:
“It is true that both the provisions have to be harmonized. What logically follows from bare reading of the aforesaid provisions is that the disciplinary authority has the competence to inflict punishment of removal from service with a condition that such removal from service shall not in any way result in forfeiture of pensionary benefits to which the workman concerned is otherwise eligible. Only simple reading of the words “AS WOULD BE DUE OTHERWISE” would mean that irrespective of the order of punishment of removal from service, workman would be entitled to superannuation benefits, if it is found due otherwise i.e. if the workman
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concerned satisfies the other requirement of superannuation benefits under Regulations, 1995, namely, he has completed requisite number of years of working etc.”
Petitioner assails the award and the order of
the High Court in the present special leave
petition.
Leave granted.
Mr. Jaideep Gupta, learned Senior Counsel
appearing on behalf of the appellant Bank, submits
that employees of the Bank of Baroda are governed
by the Bank of Baroda (Employees) Pension
Regulation, 1995, hereinafter referred to as ‘the
Regulation’. According to the learned Senior
Counsel, the Regulation has been made in exercise
of powers conferred by clause (f) of sub-section
(ii) of Section 19 of the Banking Companies
(Acquisition and Transfer of Undertaking) Act, 1970
after consultation with the Reserve Bank of India
and the previous sanction of the Central
Government. The Regulation, therefore, in his
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submission is statutory in nature and in terms of
Article 22(1) of the Regulation, removal of an
employee from the service of the Bank would entail
forfeiture of entire past service and consequently
he shall not be entitled to pensionary benefits.
According to him, such an employee at the most,
would be entitled for compassionate allowance in
terms of Article 31 of the Regulation. According
to Mr. Gupta, though clause 6(b) of the Bipartite
Settlement provides that an employee found guilty
of gross misconduct may be removed from service
with superannuation benefits i.e. pension and/or
provident fund and gratuity as would be due
otherwise under the Rules or Regulations prevailing
at the relevant time and without disqualification
from future employment, but this, in his
submission, would not override or supersede Article
22(1) of the Regulation, which in no uncertain
terms provides for forfeiture of entire past
service on removal from service. Any
interpretation other than what has been suggested
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by him would obliterate Article 22(1) of the
Regulation, contends Mr. Gupta.
Ms. Shilpa Singh, learned counsel appearing on
behalf of the employee’s heirs, however, submits
that the order of the disciplinary authority
inflicting the punishment itself entitled the
employee to the superannuation benefits and that
having attained finality, the same cannot be
legally denied. She does not join issue that an
interpretation which renders a provision redundant
is to be avoided and, in fact, invokes the same in
support of her contention. According to her, if
the interpretation put by the employer is accepted,
clause 6(b) of the Bipartite Settlement shall be
rendered otiose.
Having considered the rival submissions we do
not have the slightest hesitation in accepting the
broad submission of Mr. Gupta that the Regulation
in question is statutory in nature and the court
should accept an interpretation which would not
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make any other provision redundant. Bearing in
mind the aforesaid principle, we proceed to
consider the rival contentions. The terms and
conditions of service of the employees are governed
and modified by the Bipartite Settlement. Various
punishments have been provided under the Bipartite
Settlement which can be inflicted on the employee
found guilty of gross misconduct. In 2002, a
Bipartite Settlement was signed by the Indian
Banks’ Association and the Banks’ workmen’s Union
with regard to disciplinary action procedure. It
is common ground that in the light of the said
Bipartite Settlement, clause 6(b) was inserted as
one of the punishments which can be inflicted on an
employee found guilty of gross misconduct and the
same reads as follows:
“6. An employee found guilty of gross misconduct may;
(a) ………….
(b) be removed from service with superannuation benefits i.e. Pension and/or Provident Fund and Gratuity as would
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be due otherwise under the Rules or Regulations prevailing at the relevant time and without disqualification from future employment, or
xxx xxx xxx”
The employee undisputedly has been visited with
the aforesaid penalty in terms of the
Bipartite Settlement.
Article 22 of the Regulation, which is relied
on to deny the claim of the employee reads
as follows:
“22.Forfeiture of service: (1)Resignation or dismissal or removal or termination of an employee from the service of the Bank shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits.”
From a plain reading of the aforesaid
Regulation, it is evident that removal of an
employee shall entail forfeiture of his entire past
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service and consequently such an employee shall not
qualify for pensionary benefits. If we accept this
submission, no employee removed from service in any
event would be entitled for pensionary benefits.
But the fact of the matter is that the Bipartite
Settlement provides for removal from service with
pensionary benefits “as would be due otherwise
under the Rules or Regulations prevailing at the
relevant time”. The consequence of this
construction would be that the words quoted above
shall become a dead letter. Such a construction
has to be avoided.
The Regulation does not entitle every employee
to pensionary benefits. Its application and
eligibility is provided under Chapter II of the
Regulation whereas Chapter IV deals with qualifying
service. An employee who has rendered a minimum of
ten years of service and fulfils other conditions
only can qualify for pension in terms of Article 14
of the Regulation. Therefore, the expression “as
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would be due otherwise” would mean only such
employees who are eligible and have put in minimum
number of years of service to qualify for pension.
However, such of the employees who are not eligible
and have not put in required number of years of
qualifying service shall not be entitled to the
superannuation benefit though removed from service
in terms of clause 6(b) of the Bipartite
Settlement. Clause 6(b) came to be inserted as one
of the punishments on account of the Bipartite
Settlement. It provides for payment of
superannuation benefits as would be due otherwise.
The Bipartite Settlement tends to provide a
punishment which gives superannuation benefits
otherwise due. The construction canvassed by the
employer shall give nothing to the employees in any
event. Will it not be a fraud Bipartite
Settlement? Obviously it would be. From the
conspectus of what we have observed we have no
doubt that such of the employees who are otherwise
eligible for superannuation benefit are removed
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from service in terms of clause 6(b) of the
Bipartite Settlement shall be entitled to
superannuation benefits. This is the only
construction which would harmonise the two
provisions. It is well settled rule of construction
that in case of apparent conflict between the two
provisions, they should be so interpreted that the
effect is given to both. Hence, we are of the
opinion that such of the employees who are
otherwise entitled to superannuation benefits under
the Regulation if visited with the penalty of
removal from service with superannuation benefits
shall be entitled for those benefits and such of
the employees though visited with the same penalty
but are not eligible for superannuation benefits
under the Regulation shall not be entitled to that.
Accordingly, we hold that the employee’s heirs
are entitled to superannuation benefits. The
entire amount that the respondent is found entitled
to along with interest at the rate of 6% per annum
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should be disbursed within 6 weeks from the date of
receipt/communication of this Order.
In the result, we do not find any merit in this
appeal and it is dismissed accordingly with costs
of Rs.50,000/- (rupees fifty thousand) to be paid
by the appellant to the respondent No. 1 along with
other dues and within the time stipulated above.
…………………………………………………………J. (CHANDRAMAULI KR. PRASAD)
.………………………………………………….…J. NEW DELHI, (JAGDISH SINGH KHEHAR) December 11, 2013
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