Page 1

1

REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.  172  OF 2010

STATE OF BANK OF PATIALA        … APPELLANT

VERSUS

PRITAM SINGH BEDI & ORS.       … RESPONDENTS

WITH CIVIL APPEAL NO.173 OF 2010, CIVIL APPEAL NO.177 OF 2010 CIVIL APPEAL NO.178 OF 2010 CIVIL APPEAL NO.179 OF 2010 CIVIL APPEAL NO.180 OF 2010 CIVIL APPEAL NO.186 OF 2010 CIVIL APPEAL NO.187 OF 2010 CIVIL APPEAL NO.1916 OF 2011

J U D G M E N T  

Sudhansu Jyoti Mukhopadhaya, J.

All these appeals have been preferred by the State Bank  

of  Patiala  (hereinafter  referred  to  as  “Bank”)against  

different judgments and orders passed by Punjab and Haryana  

High  Court  at  Chandigarh  but  since  common  issues  were  

involved they were heard together and disposed of by the  

impugned common judgment.  

2. A number of employees who were allowed to retire from  

the Bank pursuant to scheme called State Bank of Patiala  

Voluntary Retirement Scheme, 2000(herein after referred to as  

the “Scheme”) introduced by Circular dated 20th January, 2001,

Page 2

2

and had completed more than 19 and ½ years of service, in  

whose  favour  pension  was  not  released  by  the  Bank  in  

accordance with the State Bank of Patiala (Employees) Pension  

Regulations,  1995  (hereinafter  referred  to  as  the  

“Regulations, 1995”). They moved before the High Court for  

direction to the Bank and its authorities to release pension  

in their favour in accordance with the Scheme. By one of the  

judgments dated 22nd October, 2008, learned Single Judge of  

the High Court allowed the writ petitions preferred by some  

of the aggrieved employees (respondents) in C.A. No.172 of  

2010 and directed to pay pension in their favour. Against the  

said order the Bank preferred LPA No.312 of 2008 before the  

Division  Bench,  which  by  the  impugned  judgment  dated  9th  

January, 2009 dismissed the LPA and affirmed the order passed  

by the learned Single Judge. The said impugned judgment dated  

9th January,  2009  passed  in  LPA  No.312  of  2008  is  under  

challenge in C.A.No.172 of 2010.

Some  other  similarly  situated  employees  who  had  

completed more than 19 and ½ years of service and retired  

persons to Voluntary Retirement Scheme also preferred similar  

writ  petitions which  were allowed.  Against the  respective  

judgments Bank filed different LPAs which were also dismissed  

by different orders in view of the judgment dated 9th January,  

2009. Against the judgments which have followed the earlier  

decision, the rest of the civil appeals have been preferred  

by the Bank.

Page 3

3

3. The High Court by the impugned judgment referring to  

earlier Division Bench decision of the High Court in Dharam  

Pal Singh v. Punjab National Bank, 2008 (1) PLR 745 held that  

the  pension  was  payable  under  Regulation  28  and  that  

Regulation 29 will not apply. The Division Bench of the High  

Court further held as follows:

“12. A  perusal  of  the  Regulation  28  shows  that on attaining the age of superannuation  specified  in  Regulations  or  settlements  pension is payable. The age of superannuation  has  been  laid  down  in  Service  Regulations  which is said to be 60 years now and earlier  it  was  58  years.  But  under  the  Voluntary  Retirement  Scheme,  which  according  to  the  writ  petitioners  will  be  at  par  with  Settlement, the requirement is 15 years of  service or 40 years of age, which admittedly  the writ petitioners had. Under Regulation 32  of  the  pension  is  payable  on  premature  retirement on account of orders of the Bank  if  the  employee  was  otherwise  entitled  to  pension/superannuation on that day. Read with  Regulations 14 and 28, the said age is 10  years and if read with the Scheme, it is 15  years of age or 40 years of service and in  either case the employees were covered by the  pension  scheme.  The  Hon’ble  Supreme  Court  held that Regulation 29 relating to voluntary  retirement  was  not  applicable.  Thus,  contention  on  behalf  of  the  Bank  that  Regulation 29 applied and therefore, pension  payable only after 20 years service cannot be  accepted.”

The view taken by the learned Single Judge was affirmed  

by the Division Bench and the LPA was dismissed.

4. Learned  counsel  for  the  appellant-Bank  referred  to  

Regulations  13,  28,29,  32  and  Clause  3  of  State  Bank  of  

Patiala Voluntary Retirement Scheme and submitted as follows:

Page 4

4

“(a) Regulation  14  which  refers  to  qualifying service is not applicable in view  of the judgment of this Hon’ble Court in the  case of PNB vs. Dharam Pal;

(b) Clause 3 of the SBP VRS would not apply  for pension, as it speaks of eligibility for  applying under the Scheme, particularly, in  view of the judgment of this Hon’ble Court  in the case of Bank of India (supra);

(c) Regulation  32  which  relates  to  premature retirement would also not apply as  the retirement of employee was not on the  orders of the Bank in public interest, by  way of punishment, further SBP VRS was not  by way of a settlement.

(d) Thus it is only Regulation 29 “pension  on  voluntary  retirement”  which  would  be  applicable for granting pension, in case of  those applying under SBP VRS.

(e) In case it is held that SBP VRS is not  a  voluntary  retirement  in  accordance  with  Regulation 29, then it would mean that the  respondent  employees  have  not  retired,  as  per  Regulation  2(y),  not  covered  under  Pension Regulations and hence not entitled  for pension.”

5. On the other hand, following submissions were made by  

the learned counsel for the respondents:

i) All the respondents have completed more  

than 19 and ½ years of service but less than  

20 years in the Bank, therefore, they are  

entitled  to  treat  the  broken  year  as  one  

year under Regulation 18. Therefore, in view  

of Regulation 18, the respondents should be  

treated  to  have  completed  20  years  of  

service.

ii) The  respondents  are  entitled  for  

pension under Regulation 32 otherwise also  

the respondents are entitled to pension even  

under Regulation 29.”

Page 5

5

6. Learned  counsel  for  the  appellant-Bank  relied  on  the  

decisions of this Court in  Bank of Baroda vs. Ganpat Singh  

Deora, 2009 (3) SCC 217 and Bank of India vs. K. Mohandas and  

others, 2009(5) SCC 313. On the other hand, according to the  

counsel for the respondents, the present case is different  

than the decisions in  Bank of Baroda (supra) and Bank of  

India (supra)  as the respondents are guided by Regulations  

18, 28, 29 and 32 of the State Bank of Patiala (Employees)  

Pension Regulations, 1995 which varies from the provisions of  

the other Banks.

7. In  the  present  case  the  question  arises  for  

consideration  is  whether  under  the  State  Bank  of  Patiala  

(Employees)  Pension  Regulations,  1995  the  respondents  are  

entitled for pension.  

8. Similar question was considered by this Court in Bank of  

Baroda (supra). In the said case Bank of Baroda employees  

were retired pursuant to Bank of Baroda Employees Voluntary  

Retirement Scheme, 2001. However, they had not completed 20  

years of service; therefore, they were denied the benefit of  

pension under their Pension Regulations, 1995. In the said  

case  this  Court  noticed  Regulation  28  of  Bank  of  Baroda  

Pension Regulations as it stood prior to the amendment made  

on 2nd January, 2004 which was as follows:

“28.Superannuation  pension.—Superannuation  pension shall be granted to an employee who  has  retired  on  his  attaining  the  age  of

Page 6

6

superannuation  specified  in  the  Service  Regulations or settlements.”

9. This Court also noticed the amended Regulation 28 in  

Bank of Baroda(supra) which was published in the Gazette of  

India on 2nd January, 2004 and provides 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 settlements:

Provided  that,  with  effect  from  1-9-2000  pension shall also be granted to an employee  who opts to retire before attaining the age of  superannuation,  but  after  rendering  service  for a minimum period of 15 years in terms of  any scheme that may be framed for such purpose  by  the  Board  with  the  approval  of  the  Government.”

10. Having noticed the aforesaid provisions and Regulation  

29 of the Bank of Baroda Pension Regulation which is  peri  

materia, similar one, this Court in view of the fact that the  

respondents  of  said  Bank  had  not  completed  the  required  

length of qualifying service as provided under Regulation 28  

of  Regulations,  1995,  held  that  the  respondents  were  not  

eligible for pension under the Pension Regulation, 1995 of  

the Bank of Baroda.

11. Subsequently, similar provisions of different Bank fell  

for consideration before a Bench of this Court in  Bank of  

India  (supra),  referring  to  the  scheme  and  different

Page 7

7

provisions which are almost similar to the present one held  

as under:

“33. What was, in respect of pension, the  intention  of  the  banks  at  the  time  of  bringing  out  VRS  2000?  Was  it  not  made  expressly clear therein that the employees  seeking  voluntary  retirement  will  be  eligible  for  pension  as  per  the  Pension  Regulations?  If  the  intention  was  not  to  give  pension  as  provided  in  Regulation  29  and particularly sub-regulation (5) thereof,  they  could  have  said  so  in  the  Scheme  itself. After all much thought had gone into  the formulation of VRS 2000 and it came to  be  framed  after  great  deliberations.  The  only provision that could have been in mind  while  providing  for  pension  as  per  the  Pension  Regulations  was  Regulation  29.  Obviously,  the  employees,  too,  had  the  benefit  of  Regulation  29(5)  in  mind  when  they  offered  for  voluntary  retirement  as  admittedly Regulation 28, as was existing at  that time, was not applicable at all. None  of Regulations 30 to 34 was attracted.   

37. The amendment to Regulation 28 can, at  best, be said to have been intended to cover  the employees with 15 years of service or  more but less than 20 years of service. This  intention  is  reflected  from  the  communication  dated  5-9-2000  sent  by  the  Government of India, Ministry of Finance,   Department  of  Economic  Affairs  (Banking  Division) to the Personnel Advisor, Indian  Banks’ Association.

39. Two  things  immediately  become  noticeable from the said communication. One  is that as per Regulation 29 of the Pension  Regulations,  1995,  an  employee  can  take  voluntary  retirement  after  20  years  of  qualifying service and become eligible for  pension. The other thing is that the Scheme  provides that the employees with 15 years of  service or 40 years of age shall be eligible  to  take  voluntary  retirement  under  the  Scheme  and  under  Regulation  29,  the  employees  having  rendered  15  years  of  service or completed 40 years of age but not  completed 20 years of service shall not be

Page 8

8

eligible for pensionary benefits on taking  voluntary retirement under the Scheme.

40. The use of the words “such employees”  in  the  communication  is  referable  to  employees  having  rendered  15  years  of  service  but  not  completed  20  years  of  service  and,  therefore,  it  was  decided  to  bring  an  amendment  in  the  Regulations  so  that the employees having not completed 20  years’ service do not lose the benefit of  pension. The amendment in Regulation 28, as  is  reflected  from  the  afore  referred  communication,  was  intended  to  cover  the  employees who had rendered 15 years’ service  but not completed 20 years’ service. It was  not  intended  to  cover  the  optees  who  had  already completed 20 years’ service as the  provisions  contained  in  Regulation  29  met  that contingency.

46. The  precise  effect  of  the  Pension  Regulations,  for  the  purposes  of  pension,  having been made part of the Scheme, is that  the  Pension  Regulations,  to  the  extent,  these are applicable, must be read into the  Scheme. It is pertinent to bear in mind that  interpretation  clause  of  VRS  2000  states  that the words and expressions used in the  Scheme but not defined and defined in the  rules/regulations  shall  have  the  same  meaning respectively assigned to them under  the rules/regulations. The Scheme does not  define  the  expression  “retirement”  or  “voluntary retirement”. We have, therefore,  to  fall  back  on  the  definition  of  “retirement”  given  in  Regulation  2(y)  whereunder  voluntary  retirement  under  Regulation  29  is  considered  to  be  retirement.  Regulation  29  uses  the  expression “voluntary retirement under these  Regulations”. Obviously, for the purposes of  the Scheme, it has to be understood to mean  with necessary changes in points of details.  Section  23  of  the  Contract  Act  has  no  application to the present fact situation.

48. It is true that validity and legality  of Regulation 28 has not been put in issue.  It  was  apparently  not  done  because,  according  to  the  employees,  amended  Regulation  28  although  made  retrospective  could  not  have  affected  the  concluded

Page 9

9

contract. We have already indicated above as  to how the amendment in Regulation 28 in the  year  2002  with  effect  from  1-9-2000  could  not  have  applied  to  the  optees  under  the  Scheme  who  had  completed  service  of  20  years. Lack of challenge to Regulation 28 by  the  employees  is,  therefore,  not  very  material. It is not correct to say that by  taking  recourse  to  Regulation  29,  the  amendment  to  Regulation  28  is  rendered  otiose.

50. It is true that VRS 2000 is a complete  package in itself and contractual in nature.  However,  in  that  package,  it  has  been  provided that the optees, in addition to ex  gratia  payment,  will  also  be  eligible  to  other benefits inter alia pension under the  Pension Regulations. The only provision in  the Pension Regulations at the relevant time  during the operation of VRS 2000 concerning  voluntary retirement was Regulation 29 and  sub-regulation  (5)  thereof  provides  for  weightage  of  addition  of  five  years  to  qualifying  service  for  pension  to  those  optees who had completed 20 years’ service.  It, therefore, cannot be accepted that VRS  2000  did  not  envisage  grant  of  pension  benefits  under  Regulation  29(5)  of  the  Pension Regulations, 1995, to the optees of  20 years’ service along with payment of ex  gratia.

51. The  whole  idea  in  bringing  out  VRS  2000 was to right size workforce which the  banks had not been able to achieve despite  the  fact  that  the  statutory  Regulations  provided  for  voluntary  retirement  to  the  employees  having  completed  20  years’  service.  It  was  for  this  reason  that  VRS  2000  was  made  more  attractive.  VRS  2000,  accordingly, was an attractive package for  the  employees  to  go  in  for  as  they  were  getting special benefits in the form of ex  gratia and in addition thereto, inter alia,  pension under the Pension Regulations which  also provided for weightage of five years of  qualifying  service  for  the  purposes  of  pension to the employees who had completed  20 years’ service.”

Page 10

10

12. In the said case of  Bank of India (supra), this Court  

noticed the observation made by this Court in the case of  

Bank of Baroda (supra) but distinguished the same with the  

following observation:

“61. The observations made by this Court in  Bank of Baroda, (2009) 3 SCC 217, which have  been quoted above and relied upon by the banks  in  support  of  their  contention  have  to  be  understood  in  the  factual  backdrop,  namely,  that the employee had completed only 13 years  of  service  and,  was  not  eligible  for  the  pension  under  the  Pension  Regulations,  1995  and for the benefit of addition of five years  to qualifying service under Regulation 29(5),  an employee must have completed 20 years of  service.  The  question  therein  was  not  identical in form with the question here to be  decided.

62. The following observations in  Bank of  

Baroda(supra) are  significant:  (SCC  p.  221,  para 21)

“21. … since both the Tribunal as well as  the High Court appear not to have considered  or taken note of the fact that the respondent  was not eligible for pension as he had not  completed 15 years of qualifying service….”

63. The  decision  of  this  Court  in  Bank  of  Barod(supra)is, thus, clearly distinguishable  as  the  employee  therein  had  not  completed  qualifying  service  much  less  20  years  of  service for being eligible to the weightage  under Regulation 29(5) and cannot be applied  to  the  present  controversy  nor  does  that  matter decide the question here to be decided  in the present group of matters.”

13. For determination of the issue, it is desirable to refer  

to  the  relevant  provisions  of  the  State  Bank  of  Patiala  

Voluntary  Retirement Scheme,  2001, the  background of  such  

Scheme  and  relevant  provisions  of  State  Bank  of  Patiala  

(Employees) Pension Regulations, 1995.

Page 11

11

14. Pursuant  to  Government  of  India,  Indian  Banks  

Association  advice  different  Banks  introduced  Voluntary  

Retirement  Scheme  including  the  State  Bank  of  Patiala  

Voluntary Retirement Scheme, 2000 introduced by the Bank,  by  

its Circular No. Per/VRS/48 dated 20th January, 2001.

Clause  3  of  the  Scheme  prescribed  eligibility  of  

voluntary retirement as follows:

“Clause 3: Eligibility  

The  scheme  will  be  open  to  all  permanent  employees  of  the  Bank,  except  those  specifically  mentioned  as  ‘ineligible  who  have  put  in  15  years  of  service  or  have  completed  40  years  of  age  as  on  31st  

December, 2000. Age will be reckoned on the  basis  of the  date of  birth as  entered in  service record.

While  calculating  the  period  of  service,  absence,  which  is  reckoned  as  service, will be excluded.

If  an  officer,  who  has  not  completed  mandatory  rural  or  semi-urban  assignment  (either  wholly  or  partly)  submits  an  application  for  retirement  under  SBP  VRS  before  approving  his  case,  his  promotions  would  stand  withdrawn  if  confirmation  subsequent  to  promotion  is  subject  to  completing such mandatory service.”

15. Apart  from  ex  gratia  which  were  offered  under  the  

Scheme, the following other benefits were prescribed therein:

“Clause 7:

Other benefits

(i) Gratuity as payable under the extant  instructions on the relevant date.

Page 12

12

(ii) Provident  Fund  contribution  as  per  SBP Employees’ Provident Rules as on  relevant date.

(iii) Pension  or  Bank’s  contribution  to  Provident Fund as the case may be as  per rules applicable on the relevant  date on the basis of actual years of  service rendered.

xxx xxx xxx xxx”

 16. The respondents who had completed more than 19 and ½  

years of service applied for and were allowed to Voluntary  

Retirement Scheme aforesaid. They have been paid most of the  

benefits  but  pensionary  benefits  were  not  paid  to  them.  

Therefore, they had to move before the High Court.

17.  State Bank of Patiala (Employees) Pension Regulations,  

1995  are  applicable  to  full  time  employees  of  the  Bank.  

Regulation 2(w) defines qualifying service and 2(y) defines  

retirement, they are as follows:

“2(w) “qualifying service” means the service  rendered  while  on  duty  or  otherwise  which  shall be taken into account for the purpose  of pension under these regulations;

2(y) “retirement”  means  cessation  from  Bank’s service:-

(a) on  attaining  the  age  of  superannuation  specified  in  – Service  Regulations  of  Settlements;

(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

Page 13

13

Service  Regulations  or  Settlement;”

18. Chapter IV relates to qualifying service. Regulation 14  

defines qualifying service as under:

“14.Qualifying Service- Subject  to  the  other  conditions  

contained in these regulations, an employee  who has rendered a minimum of ten years of  service  in  the  Bank,  on  the  date  of  his  retirement  or  on  the  date  on  which  he  is  deemed  to  have  retired  shall  qualify  for  pension.”

For the purpose of qualifying service, under the said  

Chapter IV Regulation 18 prescribes broken period of service  

of less than one year as under:

“  18.Broken period of service of less than one    year-

If the period of service of an employee  includes  broken  period  of  service  is  less  than one year, then if such broken period is  more than six months, it shall be treated as  one year and if such broken period is six  months or less it shall be ignored.”

19. Chapter  V  relates  to  Classes  of  Pension  (Classes  of  

Pension). Regulation 28 deals with superannuation pension as  

under:

“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 settlements.”

Page 14

14

20. Regulation  29  relates  to  Pension  on  Voluntary  

Retirement, relevant portion of which reads as under:

“29.Pension on Voluntary Retirement-

(1) On or after the Ist day of November,  1993, at any time after an employee  has  completed  twenty  years  of  qualifying  service  he  may,  by  writing  to  the  competent  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  a  public  sector  undertaking  or  company or institution 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.”

xxx xxx xxx xxx (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 years and  it does not take him beyond the date  of superannuation.”

Page 15

15

21. For  premature  retirement  pension  one  may  refer  to  

Regulation 32, which reads as under:

“32. Premature Retirement Pension

Premature  retirement  Pension  may  be  granted to an employee who, -

(a) has  rendered  minimum  ten  years  of  service;

(b) retires  from  service  on  account  of  orders  of  the  Bank  to  retire  prematurely in the public interest for  any other reason specified in service  regulations or settlement, if otherwise  he  was  entitled  to  such  pension  on  superannuation on that date.”

Regulation  33  deals  with  an  employee  compulsorily  

retired from service as a penalty and which is not applicable  

in the present case.

22. The respondents completed more than 10 years of service  

in  the  Bank  on  the  date  of  retirement;  therefore,  they  

fulfill  the  requirement  of  qualifying  service  as  per  

Regulation 14.  

23. It  has  not  been  disputed  by  appellant-Bank  that  the  

respondents in all the appeals have completed much more than  

19  years  6  months  of  service  in  the  Bank.  For  example,  

respondent  No.1-Prakash  Chand  in  C.A.  No.173  of  2010  had  

joined the Bank on 4th May, 1981 and relieved on 31st March,  

2001. Thus, he had completed 19 years, 10 months and 28 days  

of qualifying service on the date of relieving from service.  

24. Regulation 18 of the Pension Regulations, 1995 provides  

that if broken period is more than six months, it shall be

Page 16

16

treated  as  one  year.  Therefore,  all  the  respondents-writ  

petitioners having completed more than 19 years and 6 months  

of  service  in  the  Bank,  they  are  to  be  treated  to  have  

completed 20 years of service. The aforesaid question was  

neither raised nor decided in the case of ‘Bank of Baroda’ or  

‘Bank of India’.

25. In view of the aforesaid fact, the appellant-Bank cannot  

derive the benefit of the decision of this Court in Bank of  

Baroda as the employees who were parties before the Court in  

the said case had not completed 20 years of service. As per  

the decision of this Court in Bank of India, the respondents-

writ petitioners having completed 20 years of service are  

entitled to the benefit of Regulation 29.  

26. In view of the finding recorded above, the appeals do  

not have merit in reference with the impugned judgment,they  

are, accordingly, dismissed. No costs.

…………………………………………………J.                 (SUDHANSU JYOTI MUKHOPADHAYA)

…………………………………………………J.                (V. GOPALA GOWDA)

NEW DELHI, JULY 07,2014.