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                REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.   256             OF 2014 (Arising out of S.L.P. (C) No.9953 of 2008)

National Insurance Co. Ltd. & Anr. …Appellants

Versus

Kirpal Singh …Respondent

With

CIVIL APPEAL NO.     257           OF 2014 (Arising out of S.L.P. (C) No.10548 of 2008)

United India Insurance Co. Ltd. & Ors. …Appellants

Versus

Shamsher Singh Puri      … Respondent

And

CIVIL APPEAL NO.   258              OF 2014 (Arising out of S.L.P. (C) No.10756 of 2008)

The New India Assurance Co. Ltd. & Ors.       …Appellants

Versus

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Davinder Singh              …Respondent

J U D G M E N T

T.S. THAKUR, J.

1. Leave granted.

2. The short question that falls for determination in these  

appeals is whether the respondents who opted for voluntary  

retirement from the service of the appellant-companies are  

entitled  to  claim  pension  under  the  General  Insurance  

(Employees) Pension Scheme 1995.  The High Court having  

answered  the  question  in  the  affirmative,  the  appellant-

Insurance Companies have appealed to assail that view.

3. The controversy arises in the following backdrop:

4. In  exercise  of  its  powers  under  Section  17A  of  the  

General Insurance Business (Nationalisation) Act, 1972, the  

Central  Government  made  what  is  described  as  General  

Insurance Employee’s Special Voluntary Retirement Scheme,  

2004 (hereinafter referred to as “SVRS of 2004”). Para 3 of  

the scheme stipulating the eligibility conditions for employees  

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who could opt for voluntary retirement from the services of  

the insurance company is as under:

“Eligibility

(1) All  permanent  full  time  employees  will  be  eligible  to  seek  special  voluntary  retirement   under  this  Scheme  provided  they  have   attained the age of 40 years and completed 10   years of qualifying services as on the date of   notification.

(2) An  employee  who  is  under  suspension  or   against  whom  disciplinary  proceedings  are   pending or contemplated shall not be eligible   to opt for the scheme;

Provided that the case of an employee who is   under suspension or against whom disciplinary   proceeding is pending or contemplated made  be considered by the Board of the Company   concerned  having  regard  to  the  facts  and  circumstances  of each case and the decision   taken by the Board shall be final.”

5. In  para  5  of  the  scheme  those  seeking  voluntary  

retirement  were  held  entitled  to  ex-gratia  amount  to  be  

determined according to the said provision.  In Para 6 of the  

scheme  were  stipulated  other  benefits  to  which  the  

employees opting for voluntary retirement under the scheme  

would be entitled.  It reads as under:

“6. Other benefits.-

(1) An employee opting for the scheme shall also   be eligible for the following benefits in addition   to the ex-gratia amount mentioned in para 5  namely:-

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(a) Provident Fund,

(b) Gratuity as per Payment of Gratuity Act,   1972  (39 of  1972)  or gratuity  payable   under  the  Rationalisation  Scheme,  as   the case may be;

(c) Pension  (including  commuted  value  of    pension)  as  per  General  Insurance   (Employee’s)  Pension  Scheme  1995,  if   eligible. However, the additional notional   benefit of the five years of added service   as  stipulated  in  para  30  of  the  said  pension Scheme shall not be admissible   for  the  purpose  of  determining  the   quantum of pension and commutation of   pension.

(d) Leave encashment.

(2)  An employee who is  opting for the scheme   shall  not  be  entitled  to  avail  Leave  Travel   Subsidy and also encashment of leave while in   service during the  period of  sixty  days from  the date of notification of this scheme.”  

(emphasis supplied)

6. The respondents who opted for voluntary retirement in  

terms of the SVRS of 2004 afore-mentioned appear to have  

claimed pension as one of the benefits admissible to them  

under  para  6  above.  The  claim  was  rejected  by  the  

appellants  forcing  the  respondents  to  agitate  the  matter  

before  the  High  Court  in  separate  writ  petitions  filed  by  

them.  The High Court has by a common order dated 25th  

January,  2008,  allowed  the  said  petitions  holding  the  

respondents to be entitled to claim pension. The High Court  

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has taken the view that para 6 of the SVRS of 2004 read  

with para 14 of the General Insurance (Employees) Pension  

Scheme 1995 entitled  the  employees  to  claim pension so  

long as they had rendered a minimum of ten years of service  

in the Corporation/Company from whose service they were  

seeking retirement.  Para  14 of  the  Pension Scheme 1995  

reads as under:

“Qualifying Service: Subject to the other condition  contained  in  this  scheme,  an  employee  who  has   rendered  a  minimum  ten  years  of  service  in  the   Corporation or a Company, on the date of retirement   shall qualify for pension.”

7. A conjoint reading of para 6 of SVRS of 2004 and para  

14 of the Pension Scheme 1995, would leave no manner of  

doubt  that  any employee  retiring from the  service  of  the  

company/corporation would qualify for payment of pension if  

he/she has rendered a minimum of ten years of service on  

the date of retirement.  The expression ‘retirement’ has been  

defined in para 2 (t) of the Pension Scheme 1995 as under:

“2 Definition:-  In this  Scheme,  unless the context   otherwise requires:-

xxx xxx xxx    

(t) "retirement" means –

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(i) the  retirement  in  accordance  with  the   provisions  contained  in  paragraph  12  of   General  Insurance  (Rationalisation  and  Revision of Pay Scales and Other Conditions of   Service  of  Supervisory,  Clerical  and  Subordinate Staff) Scheme,1974 notified under   the notification of Government of India, in the   Ministry  of  Finance(Department  of  Revenue   and Insurance) number S.O.326(E) dated the   27th May, 1974;

(ii) the  retirement  in  accordance  with  the   provisions  contained  in  paragraph  4  of  the   General  Insurance  (Termination,   Superannuation and Retirement of Officers and  Development  Staff)  Scheme,  1976notified   under  notification  of  Government  of  India,  in   the  Ministry  of  Finance  (Department  of   Economic  Affairs)  number  S.O.627(E)  dated   21st September,1976;

(iii) voluntary  retirement  in  accordance  with  the   provisions  contained  in  paragraph  30  of  this   scheme;

8. It was contended on behalf of the appellant-companies  

that in terms of para 6 of SVRS of 2004 (supra) pension will  

be admissible to those seeking voluntary retirement only if  

they were eligible for the same under the Pension Scheme  

1995. Para 30 of the Pension Scheme 1995 in turn made  

only such employees eligible for pension who had completed  

twenty  years  of  qualifying  service.  Inasmuch  as  the  

respondents had not admittedly completed twenty years of  

qualifying service on the date of their voluntary retirement,  

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they were not eligible for pension under the Pension Scheme  

1995.  

9. On behalf of the respondents, it was argued that the  

respondents had not sought voluntary retirement in terms of  

para  30  of  the  Pension  Scheme 1995  which  is  a  general  

provision  and  which  stipulates  twenty  years  of  qualifying  

service for being eligible to claim pension nor was it a case  

where the SVRS of 2004 either specifically or by necessary  

implication adopted para 30 of the Pension Scheme 1995 for  

determining the eligibility of those seeking retirement under  

the said scheme.  The respondents had, it was contended,  

voluntarily retired pursuant to the SVRS of 2004 which was  

different  from what  was  envisaged  under  para  30  of  the  

Pension Scheme 1995. The condition of eligibility for pension  

stipulated  under  para  30  viz. twenty  years  of  qualifying  

service  had,  therefore,  no  application  to  the  respondents  

implying thereby that the claim for pension ought to be seen  

in the light of Para 14 of the Pension Scheme 1995 treating  

retirement  under  the  Special  Scheme  of  2004  also  as  a  

retirement for the purposes of that para.     

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10. We find considerable force in the contention urged on  

behalf  of  the  respondents.  The  Pension  Scheme  1995  

provides  for  “superannuation  pension”  and  “pension  on  

voluntary retirement”. Superannuation pension is regulated  

by  para  29  of  the  Pension  Scheme  1995  while  voluntary  

retirement pension is governed by para 30 which read as  

under:                      

“29.  Superannuation  Pension:  Subject  to  the  other  condition  contained  in  this  scheme,  an   employee who has rendered a minimum ten years of   service  in  the  Corporation  or  a  Company,  on  the   date of retirement shall qualify for pension.   

30. Pension on voluntary retirement: (1) At any  time after an employee has completed twenty years   of qualifying service, he may, by giving notice of not   less  than  ninety  days,  writing  to  the  appointing   authority, retire from service.

xxx xxx xxx

(5) The qualifying service of an employee retiring   voluntarily under this paragraph shall  be increased   by a period not exceeding five years, subject to the   condition that the total qualifying service rendered   by the employee shall not in any case exceed thirty   years and it does not take him beyond the date of   retirement.”

(6) The pension of an employee retiring under this   paragraph  shall  be  based  on  the  average  emoluments  as  defined  under  clause  (d)  of   paragraph 2 of this  scheme and the increase,  not   exceeding five years in his qualifying service, shall   not entitle him to any notional fixation of pay for the   purpose of calculating his pension”   

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11. The SVRS of 2004 does not obviously rest the claim for  

payment of pension on any one of the above two provisions.  

That  is  because  what  is  claimed  by  the  employees-  

respondents before us is not superannuation pension nor is it  

pension on voluntary retirement within the meaning of para  

30 (supra).  As a matter of fact, para 6 (1)(c) of the SVRS of  

2004  specifically  provides  that  the  notional  benefit  of  

additional five years to be added to the service of the retiring  

employee as stipulated in para 30 of the pension scheme  

shall  not  be  admissible  for  purposes  of  determining  the  

quantum of pension and commutation of pension.  It follows  

that the SVRS of 2004 did not for the purposes of grant of  

pension adopt the scheme underlying para 30 of the Pension  

Scheme 1995. Such being the case, the question is whether  

the provisions of para 6 of the SVRS of 2004 read with para  

14 of the Pension Scheme 1995 which stipulates only ten  

years qualifying service for  an employee who retires  from  

service to entitle him to claim pension would entitle those  

retiring pursuant to the SVRS of 2004 also to claim pension.  

Our answer is in the affirmative.  If paras 29 and 30 do not  

govern the entitlement for those seeking the benefit of SVRS  

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of  2004,  the  only  other  provision  which  can  possibly  be  

invoked for such pension is para 14 (supra) that prescribes a  

qualifying  service  of  ten  years  only  as  a  condition  of  

eligibility.  The  only  impediment  in  adopting  that  

interpretation lies in the use of the word ‘retirement’ in Para  

14 of the Pension Scheme 1995. A restricted meaning to that  

expression  may  mean  that  Para  14  provides  only  for  

retirements in terms of Para (2)(t) (i) to (iii) which includes  

voluntary  retirement  in  accordance  with  the  provisions  

contained  in  Para  30  of  the  Pension  Scheme.  There  is,  

however, no reason why the expression ‘retirement’ should  

receive  such  a  restricted  meaning  especially  when  the  

context  in which that  expression is being examined by us  

would justify a more liberal interpretation; not only because  

the provision for payment of pension is a beneficial provision  

which ought to be interpreted more liberally to favour grant  

rather  than  refusal  of  the  benefit  but  also  because  the  

Voluntary Retirement Scheme itself was intended to reduce  

surplus manpower by encouraging, if not alluring employees  

to opt for retirement by offering them benefits like ex-gratia  

payment  and  pension  not  otherwise  admissible  to  the  

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employees in the ordinary course. We are, therefore, inclined  

to hold that the expression “Retirement” appearing in Para  

14 of the  Pension scheme 1995 should not  only apply to  

cases which fall under Para 30 of the said scheme but also to  

a case falling under a Special Voluntary Retirement Scheme  

of  2004.   So  interpreted,  those  opting  for  voluntary  

retirement under the said SVRS of 2004 would also qualify  

for  payment  of  pension as  they had put  in  the  qualifying  

service of ten years stipulated under Para 14 of the Pension  

Scheme 1995.   

12. We are mindful of the fact that the word ‘means’ used  

in statutory definitions generally implies that the definition is  

exhaustive.   But  that  general  rule  of  interpretation is  not  

without  an  exception.   An  equally well-settled principle of  

interpretation  is  that  the  use  of  the  word  ‘means’  in  a  

statutory definition notwithstanding the context in which the  

expression  is  defined  cannot  be  ignored  in  any  forensic  

exercise meant to discover the real purport of an expression.  

Lord  Denning’s  observations  in  Hotel  and  Catering  

Industry  Training  Board  v.  Automobile  Proprietary   

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Ltd. (1968) 1 W.L.R. 1526 are,  in this regard, apposite  

when he said:  

“It is true that 'the industry' is defined; but a definition   is not to be read in isolation. It must be read in the   context of the phrase which it  defines, realising that   the  function  of  a  definition  is  to  give  precision  and   certainty to a word or phrase which would otherwise be   vague  and  uncertain-but  not  to  contradict  it  or   supplant it altogether”

13. In The Vanguard Fire & General Insurance Co. Ltd.   

Madras v.  Fraser & Ross & Anr. AIR 1960 SC 971 one  

of the questions that fell for determination before this Court  

was whether the  definition of the word “insurer” included a  

person intending to carry on a business or a person who has  

ceased to carry on a business. It was contended that the  

definition  started  with  the  words  “insurer  means”  and,  

therefore, is exhaustive.  This Court repelling that contention  

held that statutory definitions or abbreviations must be read  

subject  to  the  qualification  variously  expressed  in  the  

definition clauses  which  created them and it  may be that  

even  where  the  definition  is  exhaustive  inasmuch  as  the  

word defined is said to mean a certain thing, it is possible for  

the word to have a somewhat different meaning in different  

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sections  of  the  Act  depending  upon  the  subject  or  the  

context. That is why all definitions in statutes generally begin  

with the qualifying words “unless there is anything repugnant  

in the subject or context”.  This Court observed:

“The main basis of this contention is the definition of   the word "insurer" in the s.2(9)  of the Act.  It  is   pointed  out  that  that  definition  begins  with  the   words "insurer means" and is therefore exhaustive.   It may be accepted that generally the word "insurer"   has  been  defined  for  the  purposes  of  the  Act  to   mean  a  person  or  body  corporate,  etc.,  which  is   actually carrying on the business of insurance, i.e.,   the business of effecting contracts of insurance of   whatever kind they might be. But s.2 begins with   the  words  "in  this  Act,  unless  there  is  anything   repugnant in the subject or context" and then come  the various definition clauses of which (9) is one. It   is  well  settled  that  all  statutory  definitions  or   abbreviations  must  be  read  subject  to  the   qualification  variously  expressed  in  the  definition   clauses which created them and it may be that even   where the definition is exhaustive inasmuch as the   word defined is said to mean a certain thing, it is   possible for the word to have a somewhat different   meaning in different sections of the Act depending   upon  the  subject  or  the  context.  That  is  why  all   definitions  in  statues  generally  being  with  the   qualifying  words  similar  to  the  words used in  the   present  case,  namely,  unless  there  is  anything   repugnant  in  the  subject  or  context.  therefore  in   finding  out  the  meaning  to  the  word  "insurer"  in   various  sections  of  the  Act,  the  meaning  to  be   ordinarily given to it is that given in the definition   clause.  But this is not inflexible and there may be   sections in the Act where the meaning may have to   be  departed  from  on  account  of  the  subject  or   context in which the word has been used and that   will be giving effect to the opening sentence in the   definition section, namely, unless there is anything   repugnant in the subject or context. In view of this   qualification, the court has not only to look at the   words but also to look at the context, the collocation   

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and the object of such words relating to such matter   and interpret the meaning intended to be conveyed  by the use of the words under the circumstances.  Therefore,  though ordinarily  the word "insurer"  as   used  in  the  Act  would  mean  a  person  or  body  corporate  actually  carrying  on  the  business  of   insurance it may be that in certain sections the word   may have a somewhat different meaning.”

(emphasis supplied)

14. To the same effect is the decision of this Court in Paul  

Enterprises & Ors. v. Rajib Chatterjee and Co. & Ors.   

(2009) 3 SCC 709 where  this Court once again reiterated  

that the interpretation clause should be given a contextual  

meaning  and  that  all  statutory  definitions  must  be  read  

subject  to  the  qualification  variously  expressed  in  the  

interpretation  clause,  which  created  them.  In  State  of  

Maharashtra & Anr. v. B.E. Billimoria & Ors. (2003) 7   

SCC 336 also this Court restated the principle that meaning  

of an expression must be determined in the context in which  

the same has been used.  Reference may also be made to  

K.V.  Muthu v.  Angamuthu Ammal  (1997)  2  SCC  53  

where this Court made the following apposite observations:  

“Apparently,  it  appears  that  the  definition  is   conclusive as the word "means" has been used to   specify  the  members,  namely,  spouse,  son,   

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daughter,  grand-child  or  dependent  parent,  who   would constitute the family. Section 2 of the Act in   which various terms have been defined, open with   the words "in this Act, unless the context otherwise   requires" which indicates that the definitions, as for   example, that of "Family", which are indicated to be   conclusive may not be treated to be conclusive if it   was otherwise required by the context. This implies   that a definition, like any other word in a statute,   has  to  be  read  in  the  light  of  the  context  and   scheme of the Act as also the object for which the   Act was made by the Legislature.

While interpreting a definition, it has to be borne in   mind that the interpretation placed on it should not   only be not repugnant to the context, it should also   be  such  as  would  aid  the  achievement  of  the   purpose which is sought to be served by the Act. A   construction  which  would  defeat  or  was  likely  to   defeat the purpose of the Act has to be ignored and   not accepted.

Where the definition or expression, as in the instant   case, is preceded by the words "unless the context   otherwise requires", the said definition set out in the   Section is to be applied and given effect to but this   rule, which is the normal rule may be departed from  if  there be something in the context to show that   the definition could not be applied”.

(emphasis supplied)

15. We may also gainfully refer to the decision of this Court  

in  Reserve Bank of India v. Peerless General Finance  

(1987) 1 SCC 424 where this Court declared that the best  

interpretation is the one in which the Court relies upon not  

only the test but also the context in which the provision has  

been  made.   We  can  do  no  better  than  to  extract  the  

following passage from that decision:

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“Interpretation  must  depend  on  the  text  and  the   context. They are the bases of interpretation. One  may well  say if  the text is the texture, context is   what gives the colour. Neither can be ignored. Both   are  important.  That  interpretation  is  best  which   makes  the  textual  interpretation  match  the   contextual.  A statute  is  best  interpreted when we   know why it was enacted. With this knowledge, the   statute  must  be  read,  first  as  a  whole  and  then   section  by  section,  clause  by  clause,  phrase  by   phrase and word by word. If a statute is looked at,   in the context of its enactment, with the glasses of   the  statutemaker,  provided  by  such  context,  its   scheme,  the  sections,  clauses,  phrases  and words  may take colour and appear different than when the   statute is looked at without the glasses provided by   the context. With these glasses we must look at the   Act as a whole and discover what each section, each  clause,  each  phrase and each word is  meant  and  designed to  say  as  to  fit  into  the  scheme of  the   entire Act. No part of a statute and no word of a   statute can be construed in isolation. Statutes have   to be construed so that every word has a place and   everything is in its place.”

(emphasis supplied)

16. In the case at hand Para 2 of the Pension Scheme 1995  

(extracted earlier) defines the expressions appearing in the  

scheme. But what is important is that such definitions are  

good only if the context also supports the meaning assigned  

to  the  expressions  defined  by  the  definition  clause.  The  

context in which the question whether pension is admissible  

to  an  employee  who  has  opted  for  voluntary  retirement  

under the 2004 scheme assumes importance as Para 2 of the  

scheme starts with the words “In this scheme, unless the  

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context otherwise requires”. There is nothing in the context  

of 1995 Scheme which would exclude its beneficial provisions  

from application to employees who have opted for voluntary  

retirement  under  the Special Scheme 2004 or  vice versa.  

The term retirement must in the context of the two schemes,  

and the admissibility of pension to those retiring under the  

SVRS of 2004, include retirement not only under Para 30 of  

the Pension Scheme 1995 but also those retiring under the  

Special  Scheme  of  2004.  That  apart  any  provision  for  

payment of pension is beneficial in nature which ought to  

receive  a  liberal  interpretation  so  as  to  serve  the  object  

underlying not only of the Pension Scheme 1995 but also any  

special scheme under which employees have been given the  

option to seek voluntary retirement upon completion of the  

prescribed number of years of service and age.         

17. In  the  result  these  appeals  fail  and  are  hereby  

dismissed but in the circumstances without any order as to  

costs.                 

……………………….……….…..…J.

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       (T.S. THAKUR)

     …………..…………………..…..…J.              (VIKRAMAJIT SEN)

New Delhi January 10, 2014

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