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IN THE SUPREME COURT OF INDIA       CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL Nos.10364-10371 OF 2014      (Arising out of SLP(C)Nos.12059-12066 of 2010)      

V. KANNAPPAN & ORS.                               ......APPELLANTS

VERSUS

ADDITIONAL SECY & ORS.(MIN.FIN&COM.AFRS)          ......RESPONDENTS  

WITH      CIVIL APPEAL No.10372 OF 2014

            (Arising out of SLP(C)No.20331 of 2011)   

J U D G M E N T

J.S.Khehar, J.

Leave granted.

The appellants in these appeals were originally inducted into  

the  service  of  Bank  of  Madura.  By  virtue  of  a  scheme  of  

amalgamation sanctioned by the Reserve Bank of India, the Bank of  

Madura  was  merged  with  the  Industrial  Credit  and  Investment  

Corporation of India Bank (hereinafter referred to as the `ICICI  

Bank') with effect from 10.03.2001.  Consequent upon the aforesaid  

merger, the appellants became the employees of the ICICI Bank.   

All the appellants are retirees, having sought voluntary  

retirement from the ICICI Bank.  Their retirement was operative  

with effect from 31.07.2003.  The appellants' claim is for pension.  

The  instant  claim  emerges  from  the  Bank  of  Madura  Employees'  

Pension  Regulation,  1995  (hereinafter  referred  to  as  the  `1995

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Regulations').   The  1995  Regulations  define  the  voluntary  

retirement scheme in Regulation 2(ze).  The same is being extracted  

hereunder:

“`V.R.S.' means Bank of Madura Employees' Voluntary  Retirement  Scheme  enclosed  to  the  circular  CO.STF:39/94-95 dated July 21, 1994,  or any other  specific scheme, that may be implemented in future  bringing such scheme under the definition of this  regulation. The  employees  who  have  completed  20  years of service in the bank and who have retired  subsequent to the expiry of the scheme mentioned in  the Circular CO:GM:CIR:2/93-94 dated May 20, 1993,  and who were extended the additional benefits in  addition to the normal retirement benefits shall be  deemed and considered to have retired under V.R.S.”

 (emphasis is ours)

During the course of hearing, learned senior counsel for  

the  appellants  contended,  that  the  voluntary  retirement  scheme  

contemplated  under  Regulation  2(ze),  would  include  any  other  

specific scheme, that may be implemented in future, bringing such  

scheme under the 1995 Regulations. It is the submission of the  

learned  senior  counsel  for  the  appellants,  that  the  Early  

Retirement Option 2003 (hereinafter referred to as the `ERO 2003)  

issued by the ICICI Bank on 17.06.2003, was such a scheme, which  

was implemented after the promulgation of the 1995 Regulations,  

and was brought within the definition of Regulation 2 (ze). In  

order  to  substantiate  the  instant  contention,  learned  senior  

counsel  for  the  appellants  invited  our  attention  to  Regulation  

2(zea).  The same is being extracted hereunder:

“Voluntary  Retirement  Scheme  means  and  to  be  understood  as  ICICI  Bank  Early  Retirement  Option  2003  scheme and  this  amendment  in  benefits  will  cover only those employees who avail of such early  retirement option under ICICI Bank Early Retirement

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option 2003 scheme. (effective from 01.7.2003)”  (emphasis is ours)

In view of Regulation 2(zea) there can be no doubt whatsoever, that  

the ERO 2003 must be deemed to be a voluntary retirement scheme  

within the meaning of Regulation 2(ze) of the 1995 Regulations.   

Having satisfied this Court, that the appellants would be  

entitled to the benefits of the 1995 Regulations, on the basis of  

ERO 2003, learned senior counsel for the appellants invited our  

attention to Regulation 35. The Regulation, as it was originally  

framed, comprised of (iv) clauses.  The same is being extracted  

hereunder:

“35. Pension to Employees retiring under VRS (i) An  employee  who  has  opted  for  pension  and  who  retired  under  VRS  enumerated  in  Regulation  2(ze)  of  these  regulations  and  who  has  completed  twenty  years  of  service in the bank shall be eligible for pension from  the date of his attaining the age of  superannuation  i.e., the date on which he would have retired had he  continued in the employment if he is otherwise eligible  under these regulations.

(ii) The eligible employees who have already retired  under  VRS  may  exercise  their  irrevocable  option  in  writing in the format prescribed by the Bank within  sixty days from the date of notice to be sent to them.  Such  employees  have  to  refund  the  bank's  entire  contribution to the Provident Fund  including interest  received with further simple interest at the rate of  six percent per annum from the date of withdrawal of  the  Provident  Fund  amount  till  the  date  of  refund.  The refund of the amount shall be made to the bank  within thirty days from the date of superannuation to  enable the employee to get the benefits under pension  scheme.  Otherwise it will be deemed that the member  has opted out of the pension scheme.

(iii) If an employee who has opted for pension dies  before the date of superannuation but after the date of  his relief under VRS, his family shall be paid family  pension subject to regulation under chapter VII of this  scheme provided the condition stipulated in regulation

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35(ii) is complied with.    

(iv)  The pension amount shall be calculated based on  average  emolument  i.e.  average  of  pay  drawn  by  an  employee during the last ten months of his service as  per Regulation.”

After the introduction of the ERO 2003 Scheme with effect from  

17.06.2003, Regulation 35 was amended so as to add thereto clause  

(v).  The same is being extracted hereunder:

“(V) An employee who has opted for pension under  this Regulations and who opts for retirement under  ICICI  Bank  Early  Retirement  Option  2003  as  enumerated in  regulation 2(zea) of this Regulation,  and who has completed 20 years of services in the  Bank shall be eligible for pension from the date of  retirement thereunder and the payment of pension to  him shall commence from the succeeding month.”

(emphasis is ours)

The solitary question that arises for our consideration  

is,  whether  the  appellants  are  entitled  to  pensionary  benefits  

under Regulation 35 of the 1995 Regulations. Insofar as the instant  

aspect of the matter is concerned, it is necessary to mention, that  

all the appellants were in the service of the Bank of Madura when  

the 1995 Regulations were introduced.  Whilst in the employment of  

the Bank of Madura options, were invited under Regulation 35 thrice  

over.  On the first occasion, the existing employees of the Bank of  

Madura were required to exercise their option under Regulation 35,  

and to indicate whether they would like to draw pensionary benefits  

under the existing voluntary retirement scheme. Right to furnish  

the option was to be exercised within a period of 6 months from  

25.01.1995  i.e.  upto  25.07.1995.   The  second  opportunity  was  

afforded to the employees of the Bank of Madura on 22.07.1995. The

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right to furnish the option was thereby extended for a further  

period of three months from 25.07.1995 i.e. upto 25.10.1995. Yet,  

again a third opportunity to furnish options was given by the Bank  

of Madura to its existing employees on 01.02.1996.  Through the  

aforesaid  Circulars,  employees  were  required  to  furnish  their  

option  under  Regulation  35  of  the  1995  Regulations  up  to  

30.05.1996.  It is not a matter of dispute that eversince their  

induction  into  the  service  of  Bank  of  Madura,  and  thereafter,  

whenever options were sought under the 1995 Regulations, none of  

the appellants opted for the pension scheme under Regulation 35.  

No further opportunity for tendering an option, for grant  

of pension under a voluntary retirement scheme, was sought after  

the amalgamation of Bank of Madura with the ICICI Bank (with effect  

from 10.03.2001).  In sum and substance therefore, it is apparent  

that even after the absorption of the appellants in the employment  

of the ICICI Bank, the appellants never chose to be governed by  

Regulation 35, of the 1995 Regulations.   

On 17.06.2003, ICICI Bank introduced the ERO 2003 Scheme.  

It  afforded  an  opportunity  to  its  employees  to  avail  of  the  

voluntary retirement scheme contemplated thereunder.  Eligibility  

therefor was expressed in paragraph 4 of the scheme.  The same is  

being reproduced hereunder:

“4.  Eligibility     All permanent employees of the Bank who have  completed at least 7 Years of Service and are 40  years of age as on July 31, 2003 will be considered  eligible to opt for the benefits under the Scheme.  For  the  purpose  of  this  clause,  the  services  rendered  by  the  permanent  employees  in  the  organization  merged  with  the  Bank  will  be  considered  as  eligible  service  in  terms  of

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respective schemes of amalgamation.”

A perusal of the eligibility clause of the scheme reveals, that an  

employee who had rendered at least 7 years of service and had  

attained the age of 40 years on 31.07.2003, was eligible to apply  

for voluntary retirement, under the ERO 2003 Scheme.  It is not a  

matter  of  dispute,  that  all  the  appellants  were  eligible  for  

seeking voluntary retirement, under the ERO 2003 Scheme. All the  

appellants  actually  applied  for  voluntary  retirement,  under  ERO  

2003  Scheme.  Their  applications  for  voluntary  retirement  were  

submitted well before the last date i.e.31.07.2003. Consequent upon  

the acceptance of their voluntary retirement, all the appellants  

availed of the monetary benefits due to them under the ERO 2003  

Scheme. On 10.08.2003, all monetary post retiral benefits including  

provident fund, were duly paid to the appellants. Having availed of  

the aforesaid benefits, the appellants raised a claim for grant of  

pension under Regulation 35 of the 1995 Regulations, on 14.08.2003.  

At  this  juncture,  it  is  necessary  to  delineate  the  

benefits, that would flow to those who sought voluntary retirement  

under  the  ERO  2003  Scheme.   These  benefits  were  expressed  in  

paragraph 8 of the scheme. They include “One Time Cash Benefit” (as  

per paragraph 8A), “Annuity Benefit” (as per paragraph 8B), “Other  

Benefits”, including group medical insurance, encashment of balance  

privilege  leave,  amounts  payable  on  retirement  date  under  the  

Bank's  Provident,  Gratuity,  Superannuation  Funds,  and  payments  

under Pension/Family Pension Scheme, if any, as per the Rules of  

the  respective  Funds/Scheme  of  the  Bank  (as  per  paragraph  8C).  

Insofar as the benefit of pension claimed by the appellants is

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concerned, the same was provided for under the heading “Pension  

Benefit” in paragraph 8D of the ERO 2003 Scheme. Paragraph 8D is  

being extracted hereunder:

“8D  Pension Benefit   The Eligible Employees who have opted for the  

pension benefit as per the erstwhile Bank of Madura  Employees'  Pension  Regulations,  1995,  will  be  eligible  for  the  same  as  per  the  terms  and  conditions of the said Regulations.”  

A perusal of paragraph 8D of the ERO 2003 Scheme reveals, that such  

employees  who  “have  opted  for  the  pension  benefits  as  per  the  

erstwhile  Bank  of  Madura  Employees'  Pension  Regulations,  1995”,  

alone would be eligible for pension.

The determination of the claim of the appellants would,  

therefore, essentially emerge from an interpretation of Regulation  

35 of the 1995 Regulations. This is so because paragraph 8D of the  

ERO 2003 Scheme, mandates it as such.  It is, therefore, that we  

shall advert to Regulation 35 aforementioned to determine the claim  

of the appellants.  To draw a legitimate inference, Clauses (i) and  

(ii) of Regulation 35 need to be read together. Clause (ii) of  

Regulation  35  relates  to  employees  who  had  already  retired  by  

accepting voluntary retirement i.e., the employees who had retired  

before the promulgation of the 1995 Regulations. Such employees  

were allowed to exercise their irrevocable option in writing in the  

format prescribed by the Bank, within sixty days from the date of  

notice to be sent to them. We are not concerned with this clause  

inasmuch as all the appellants were in service of the Bank of  

Madura when the 1995 Regulations were promulgated.  Clause (i) read  

with Clause (ii) of Regulation 35 would reveal, that a claim for

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pension, whether the employee was in service or had retired at the  

time of promulgation of the 1995 Regulations, was sustainable only  

on behalf of such employees “who have opted for pension”, and who  

retire under a voluntary retirement scheme, governed by Regulation  

2(ze)/2(zea)  of  the  1995  Regulations.  Therefore,  employees  were  

only to be entitled to pensionary benefits, if they had exercised  

their options for pension. Concededly, none of the appellants had  

exercised such option for pension under the 1995 Regulations.  The  

submission on behalf of the appellants was, that exercise of option  

prior to the promulgation of a voluntary retirement scheme would be  

inconceivable.  How could one opt for what is not known?  It was  

therefore  the  contention  of  the  learned  senior  counsel  for  the  

appellants, that the question of the appellants having opted before  

the VRS scheme introduced by the ICICI Bank in 2003 could not  

arise, as their right to opt would emerge only when they chose to  

retire voluntarily under the ERO 2003 Scheme.  

It  is  not  possible  for  us  to  accept  the  aforesaid  

submissions  of  the  learned  senior  counsel  for  the  appellants.  

Regulation 35 Clause (i) would make a lot of difference in terms of  

evaluating  the  rights  of  the  appellants.  If  the  appellants  had  

exercised  their  option  for  drawing  pension,  then  they  would  

simultaneously opt out of the provident fund scheme.  Viewed in the  

manner  expressed  above,  option  for  pension  assumes  great  

significance under Regulation 35(i). Consequent upon an employee  

not  exercising  an  express  option  for  pension,  the  employer  (on  

behalf of the employee, as also on its own behalf) shall regularly  

deduct  and  deposit  an  appropriate  amount  in  the  provident  fund

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account  of  the  concerned  employee.   This  exercise  would  cease  

immediately on the exercise of a positive option for pension.  As  

already noticed hereinabove, none of the appellants had opted for  

the pension under Regulation 35(i), and therefore, they continued  

to  be  governed,  for  post  retiral  benefits,  by  the  other  

alternatives available to them.   

In  addition  to  Clauses(i)  and  (ii)  of  Regulation  35,  

Clause  (v)  of  Regulation  35,  which  has  also  been  extracted  

hereinabove,   is also of great significance.  The binding words of  

Clause (v) are clear and express. The mandate is, that “an employee  

who has opted for pension under the 1995 Regulations, and who opts  

for  retirement  under  ICICI  Bank  Early  Retirement  Option  2003”,  

shall be eligible for pension. Clause (v) of Regulation 35 has to  

be read with paragraph 8D of the ERO 2003 Scheme which provides,  

that eligible employees who had opted for the pension benefit as  

per the erstwhile 1995 Regulations, will be eligible for the same  

as per the terms and conditions of the said Regulations. We are  

satisfied that since the appellants had not opted for pension under  

the  1995  Regulations,  they  are  clearly  disentitled  to  claim  

pensionary benefits under Regulation 35 of the 1995 Regulations,  

even  after  the  ERO  2003  Scheme  was  made  a  part  and  parcel  of  

Regulation  2  (ze)/2(zea),  and  even  after  the  amendment  of  

Regulation 35 by adding clause (v) thereto.

It is essential for us while determining the controversy  

in  hand  to  refer  to  Regulation  3(9)(a)  and  (b)  of  the  1995  

Regulations, which were relied upon, on behalf of the appellants.  

The same are being extracted hereunder:

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“3. Application:-  These  regulations  shall  apply  to  employees who, 1(a) to (8) xxxxxxxxxxxxxx

“(9)(a): Retired under VRS as defined in Regulation  2(ze);

(b)  exercise  an  option  in  writing  within  the  stipulated time as contained in Regulation 35 to  become member of the Fund.”

It was the vehement contention of the learned senior counsel for  

the appellants, that exercise of option has to be with reference to  

the acceptance of voluntary retirement under a voluntary retirement  

scheme, and therefore, exercise of such option would be made when  

the  employee  chooses  to  voluntarily  retire  under  a  voluntary  

retirement  scheme.   It  is  not  possible  for  us  to  accept  the  

contention advanced at the hands of the learned senior counsel for  

the appellants, because Regulation 3(9)(b) explicitly clarifies,  

that  the  exercise  of  option  should  be  in  writing  within  the  

stipulated time expressed in Regulation 35 of the 1995 Regulations.  

For the reasons recorded hereinabove, we find no merit in  

these appeals and the same are accordingly dismissed. As  a  sequel  

to dismissal of the appeals, the applications for intervention do  

not  survive  for  consideration,  and  the  same  are  accordingly  

dismissed.

                ...........................J.               (JAGDISH SINGH KHEHAR)  

                 ...........................J.           (ARUN MISHRA)

NEW DELHI; NOVEMBER 18, 2014.