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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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