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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._7185-7187  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.

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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 Petitioner  as per Cause List

Date of Appointment Date of Resignation

1. M.R. Prabhakar 27-05-1970 04-06-1991 2. S. Ananda Rao 09-09-1970 22-09-1990 3. N. Anand 17-12-1969 19-04-1993

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4. S. K. Mehta 15-12-1965 01-05-1991 5. N.V. Rangaswamy 24-07-1968 09-01-1991 6. S. Sathyanarayan 07-0701970 03-06-1993 7. K. S. Seshadri

(since deceased) 18-02-1970 20-07-1992

8. K. Suresh Rao 02-05-1970 30-06-1990 9. 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

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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

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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

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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

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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

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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

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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;

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(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.”

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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.

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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.

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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  ‘retired’  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;

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(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

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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

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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

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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)

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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.   

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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.

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(K.S. Radhakrishnan)

..………………………………J. (Dipak Misra)

New Delhi, October 3, 2012