REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPEALATE JURISDICTION

CIVIL APPEAL NOS. 1982-1983 OF 2011 (Arising out of SLP (C) Nos. 34172-34173 of 2009)

Sudhir Kumar Consul                   ………….. Appellant

versus

Allahabad Bank                                .....………. Respondent

J U D G M E N T

H.L. Dattu, J.

1) Leave granted.

2) These  appeals,  by  special  leave,  are  directed  against  the  

Judgment  and Order  dated  25.02.2009 of  the  High Court  of  

Uttarakhand in Writ Petition No. 69 of 2007.  By the impugned  

order,  the  Court  has  rejected  the  Writ  Petition  filed  by  the  

appellant for granting certain reliefs which would include claim  

for pensionary benefits under the New Pension Scheme, known  

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as  Allahabad  Bank  Employees  (Pension)  Regulations,  1995  

[hereinafter referred to as, “the 1995 Regulations”].  

3) The issue involved in the present appeals for our consideration  

is:  Whether  the  appellant  is  eligible  and  entitled  for  the  

pensionary  benefits  under  the  Allahabad  Bank  Employees  

Pension Scheme, 1890 [hereinafter referred to as “Old Pension  

Scheme”]  in  terms  of  the  Allahabad  Bank  Officers  Service  

Regulations,  1979  [hereinafter  referred  to  as  “the  1979  

Regulations”].

4) The factual matrix in brief is as under :  

The appellant was appointed as a Clerk in the Nainital  

Branch  of  the  Allahabad  Bank,  the  respondent  herein,  on  

21.02.1976. Subsequently,  the appellant  was promoted to the  

post  of  JMG-Scale-I  Officer  Grade  on  02.05.1983.   The  

services of the appellant, after promotion, were governed by the  

1979  Regulations.  The  Regulation  46  of  1979  Regulations  

provides retirees an option of gratuity or pension in lieu thereof,  

and  further,  the  pension  benefits  for  the  retirees  opting  for  

pension are available under the Old Pension Scheme. Pursuant  

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to  the  Tripartite  Memorandum  of  Settlement  [hereinafter  

referred  to  as  “the  Tripartite  Settlement”],  among  the  

management, workers and officers of the various banks dated  

29.10.1993,  the  respondent  formulated  a  draft/proposed  

Allahabad  Bank  Employees  (Pension)  Regulation  1993  

[hereinafter  referred  to  as  “the  draft/proposed  1993  

Regulations”]  vide Instruction  Circular  no.  3904  dated  

06.09.1994. The draft/proposed 1993 Regulations provided the  

option to the employees, who were on the rolls of the Bank as  

on  31.10.1993,  to  opt  for  pension  as  per  the  Old  Pension  

Scheme plus Contributory Provident Fund [hereinafter referred  

to as “the CPF”]. Accordingly, the appellant claimed pension  

under the Old Pension Scheme in terms of the draft/proposed  

1993 Regulations on 30.11.1994. Subsequently, on 29.09.1995,  

the respondent formally adopted the 1995 Regulations pursuant  

to the Tripartite Settlement.  The 1995 Regulations superseded  

the  draft/proposed  1993  Regulations  vide Circular  No.  4318  

dated  16.11.1995  by  further  extending  the  benefit  under  the  

draft/proposed 1993 Regulations to the employees who were on  

the rolls of Bank as on 29.09.1995 to opt for pension as per the  

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Old Pension Scheme plus CPF.  Further, the 1995 Regulations,  

in express terms, have validated the earlier options exercised by  

the  employees  in  accordance  with  the  draft/proposed  1993  

Regulations.  The appellant applied for the voluntary retirement  

pursuant  to  the  Allahabad  Bank  Employees  Voluntary  

Retirement Scheme, 2000 [hereinafter referred to as “the VRS-

2000”],  which was accepted on 12.04.2001 and the appellant  

stood relieved from the services of  the  Bank on 30.04.2001.  

After retirement, the appellant was offered gratuity under the  

Payment  of  Gratuity  Act,  1972 by the respondent  vide letter  

dated  01.09.2001,  which  the  appellant  declined  to  accept.  

Subsequently, on 09.10.2001, the appellant made a request to  

the  competent  authority  for  sanction  of  pension  in  lieu  of  

gratuity, but his request was rejected by the General Manager  

(Personnel Administration), vide letter dated 13.11.2001 as not  

maintainable  on  the  ground  that  an  officer  employed  or  

appointed after 01.07.1079 is ineligible for pension under the  

Old  Pension  Scheme in  view  of  Regulation  46  of  the  1979  

Regulations.  In  this  backdrop,  the  appellant  alternatively  

requested the General Manager (Personnel Administration) vide  

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letter dated 05.03.2002 to accept his option for Pension under  

the  1995  Regulations  and  further  intimated  his  provisional  

acceptance  of  the  said  gratuity  of  `2,36,449/-  under  protest,  

which was not replied to by the respondent.   Eventually,  the  

respondent vide Instruction Circular no. 7331 dated 04.06.2002,  

lowered down the eligibility criteria from 25 years to 15 years  

for  sanction  of  proportionate  pension  under  Old  Pension  

Scheme to retirees under the VRS-2000. In  view of this, the  

appellant  again requested  vide letter  dated  06.08.2002 to  the  

competent  authority  for  the  grant  of  pension  under  the  Old  

Pension  Scheme  and  the  same  was  rejected  in  terms  of  

Regulation 46 of the 1979 Regulations.  The appellant further  

made  representations  before  the  Chairman  and  Managing  

Director  of  the  respondent  vide letters  dated  16.08.2006 and  

19.03.2007,  which  were  rejected  by  the  Assistant  General  

Manager  vide letter  dated 05.04.2007 on the  ground that  the  

appellant  was  not  eligible  to  claim  pension  under  the  Old  

Pension  Scheme  in  terms  of  the  1979  Regulations.   Being  

aggrieved,  the  appellant  approached  the  High  Court  of  

Uttarakhand by filing a writ petition under Article 226 of the  

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Constitution of India and the same was partly allowed by the  

judgment and order dated 25.02.2009, wherein the High Court  

directed the respondent to pay gratuity to the appellant as per  

Regulation  46(2)  of  the  1979 Regulations  after  adjusting the  

amount  of  gratuity  already paid  to  the  appellant  in  terms  of  

Payment of Gratuity Act, 1972. The appellant, aggrieved by the  

Judgment and Order of the High Court in Writ Petition, filed a  

Review  Application,  which  was  rejected  vide Order  dated  

31.03.2009.  Aggrieved by these Orders, the appellant is before  

us in these appeals.  

5) We have heard Shri Sudhir Kumar Consul, the appellant, who  

has appeared in person, and Shri Yashraj Singh Deora, learned  

counsel for the respondent - Bank.   

6) The appellant contends that he is entitled to claim the benefit of  

pension under the existing Old Pension Scheme in addition to  

CPF  in  view  of  exercise  of  his  option  in  terms  of  the  

draft/proposed 1993 Regulations.  The appellant submits that he  

is  an  officer  governed  by  the  1979  Regulations  and  duly  

eligible for pension under the existing Old Pension Scheme in  

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terms of the Regulation 46(1) of the 1979 Regulations. In other  

words, the appellant argued that he was the employee of the  

respondent  on  the  appointed  date  as  per  the  said  Regulation  

46  (1).  He  further  submits  that  the  respondent  has  wrongly  

deprived him of his pensionary benefits under the Old Pension  

Scheme by misinterpreting Regulation 46 (1).  In arguendo, the  

appellant  challenged  the  vires of  Regulation  46  of  1979  

Regulations, as being beyond the Scope of Section 12 (2) of the  

Banking Companies (Acquisition and Transfer of Undertaking)  

Act, 1970 [hereinafter referred to as “the Banking Act”] and in  

violation  of  the  guarantee  of  equality  before  law  and  equal  

protection of laws enshrined in Article 14 of the Constitution of  

India.  The appellant submits that Section 12 (2) of the Banking  

Act duly protects the existing pensionary and other rights of the  

employee and the introduction of  Regulation 46 (1)  of  1979  

Regulations unjustifiably deprives the appellant of his existing  

pensionary right under the Old Pension Scheme. The appellant  

further  submits  that  the  said  Regulation  46  (1)  creates  an  

arbitrary and unreasonable distinction between the same class  

of officers of the respondent, merely on account of their date of  

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appointment as employee with the respondent.  In other words,  

the appellant argued that the said Regulation 46 discriminates  

the  officers  appointed  on  and  before  01.07.1979  from those  

officers who are appointed, recruited or promoted after the said  

date.  

7) Shri  Yashraj  Singh  Deora,  learned  counsel  for  respondent,  

submits that the appellant is not eligible to claim any pension  

under the Old Pension Scheme in terms of Regulation 46 (1) of  

the 1979 Regulations as the appellant had admittedly become  

officer after 01.07.1979 on his promotion on 02.05.1983. It is  

also submitted that the appellant, prior to his promotion, was a  

Clerk with the respondent on the appointed date in terms of the  

said Regulation 46 (1).  Hence, the appellant cannot claim any  

pensionary benefit under the Old Pension Scheme. In response  

to appellant’s alternative submissions, the learned counsel for  

the respondent submits that Section 12 (2) of the Banking Act  

was  introduced  in  1970  after  nationalization  of  the  Banks.  

Section  12  (2)  of  the  Banking  Act  cannot  be  invoked  by  

appellant  as  Regulation  46  of  the  1979  Regulations  was  

introduced  on  01.07.1979  only  for  officers  whereas  the  

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appellant became officer only in 1983 by way of promotion. In  

other words, the appellant, being a Clerk at the relevant time  

when the said Regulation 46 was introduced as applicable to  

officers, cannot challenge its vires on the touchstone of Section  

12 (2) of the Banking Act. The learned counsel further submits  

that the Regulation 46 (1) of 1979 Regulations is in harmony  

with Article 14 of the Constitution of India.

8)  We  have  carefully  considered  the  rival  submissions  of  the  

appellant in person and the learned counsel for the respondent-

Bank.   In our opinion, the appellant is not entitled to claim  

pensionary benefit  in view of Regulation 46 (1)  of the 1979  

Regulations.  The said Regulation 46 (1)  provides  pensionary  

benefit under existing supplementary pension Scheme in lieu of  

gratuity  only  to  those  officers  who  were  officers  on  the  

appointed date i.e. the officers who were appointed on or before  

01.07.1979. Moreover, Provision 3 of the Old Pension Scheme  

stipulates that the officers who are recruited or promoted after  

01.07.1979,  i.e.  the  date  of  implementation  of  the  1979  

Regulations,  are  not  entitled  for  pension  as  per  the  said  

Regulations.   It  is  an  admitted  fact  that  the  appellant  was  

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working with the respondent as a Clerk on 01.07.1979 and was  

promoted as an officer only in 1983. Therefore, the appellant is  

not eligible to claim any benefit under the Old Pension Scheme.

9) It  is  well  settled law that  the  vires of  any subordinate  

legislation can be challenged on the ground that it is arbitrary,  

unreasonable  and  offends  Article  14  of  the  Constitution  of  

India.  The 1979 Regulations were introduced with a view to  

standardize  and  provide  comprehensive  and  compact  set  of  

rules in respect of wages and perquisites of the officers of the  

Bank.  In furtherance of this  object,  Regulation 46 (1)  of the  

1979 Regulations provides pension in lieu of gratuity only to  

the  officers  appointed  prior  to  or  on  01.07.1979  and  not  to  

officers  appointed,  recruited  or  promoted  thereafter.  In  this  

view, we are of the opinion that the said Regulation 46 (1) lays  

down  a  reasonable  criteria  for  differentiation  between  the  

officers appointed prior to or on 01.07.1979 and after the said  

date. Hence the said Regulation 46 (1) is in consonance with  

the Article 14 of the Constitution of India. Moreover, the fixing  

of  the  cut-off  date  for  granting  retirement  benefits  such  as  

gratuity or pension under the different schemes incorporated in  

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the subordinate  legislation,  thereby,  creating two distinct  and  

separate  classes  of  employees  is  well  within  the  ambit  of  

Article 14 of the Constitution. The differential treatment of  two  

sets of officers appointed prior to the notified date would not  

offend Article 14 of the Constitution. The cut off date may be  

justified  on the ground that additional outlay as involved or the  

fact that under the terms of appointment, the employee was not  

entitled to the benefit of pension or retirement.    

10) This Court, in  Union of India v. P.N. Menon, (1994) 4   

SCC 68, has held:  

“8. Whenever the Government or an authority, which   can be held to be a State within the meaning of Article   12 of the Constitution,  frames a scheme for persons   who have superannuated from service,  due  to  many  constraints,  it  is  not  always  possible  to  extend  the   same benefits to one and all, irrespective of the dates   of  superannuation.  As  such  any  revised  scheme  in  respect  of  post-retirement  benefits,  if  implemented  with a cut-off date, which can be held to be reasonable   and  rational  in  the  light  of  Article  14  of  the   Constitution, need not be held to be invalid. It shall   not amount to “picking out a date from the hat”, as   was  said  by  this  Court  in  the  case  of  D.R.  Nim  v.   Union of India, (1967) 2 SCR 325, in connection with  fixation of seniority. Whenever a revision takes place,   a cut-off date becomes imperative because the benefit   has  to  be  allowed  within  the  financial  resources  available with the Government.”

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The Court further observed:

“14…No scheme can be held to be foolproof, so as to  cover and keep in view all persons who were at one  time in active service. As such the concern of the court   should only be, while examining any such grievance,   to see, as to whether a particular date for extending a   particular  benefit  or  scheme,  has  been  fixed,  on   objective and rational considerations.”

11) In  State Government Pensioners’ Association v.  State of A.P.,  

(1986)  3  SCC  501, the  Order  in  question  provided  that  

retirement gratuity may be one-third of the pay drawn at the  

time of   retirement  for  every  six-monthly  service,  subject  to  

maximum of  20 months’  pay  limited  to  `30,000.  This  Order  

was made effective from 01.04.1978. The petitioners, who were  

government  employees  and  had  retired  before  01.4.1978,  

contended  that  the  gratuity,  being  a  part  and  parcel  of  the  

pensionary  benefits,  they  were  also  entitled  to  the  same  

retrospectively. On behalf of the State, it was pointed out that  

the  gratuity  which  had  accrued  to  the  petitioners  prior  to  

01.4.1978, was calculated on the then existing rules and pay,  

and such petitioners formed a distinct class, for the purpose of  

payment of gratuity, from others who retired after 01.04.1978,  

the  date  from  which  the  revised  pension  rules  were  made  

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applicable by the Government. This Court held that the upward  

revision of gratuity which took effect from a specified date i.e.  

1-4-1978 with prospective effect, was legal and not violative of  

Article 14 of the Constitution.

12) In  Action  Committee  South  Eastern  Railway  Pensioners v.  

Union  of  India, 1991  Supp  (2)  SCC  544, this  Court  has  

examined  the  concept  of  ‘dearness  pay’,  including  the  two  

options for retirement benefits given to the employees which  

had been framed fixing a cut-off date. This Court held:

“12.  …  Learned  counsel  for  the  petitioners  only   submitted that if  the formula adopted in the case of   employees having retired after March 31, 1985 vide   circular dated May 17, 1985 is applied in the case of   the  petitioners  then  it  would  make  substantial   difference in the calculation of the amount of gratuity   and commuted value of pension. As already discussed   above no such claim can be allowed nor the same can   be permissible on any principle of equality enshrined   under Article 14 of the Constitution inasmuch as the   petitioners form a different class from those who were  continuing in service on or after March 31, 1985. The   petitioners  of  their  own  accord  had  opted  for  the   choice given to them and the principle enunciated in  D.S. Nakara case (1983) 1 SCC 305 cannot be applied  in the case of the petitioners.”  

13) In  All  India  Reserve  Bank  Retired  Officers’  Association v.  

Union of India,  1992 Supp (1) SCC 664, the Retired Officers’  

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Association  of  the  Reserve  Bank  of  India  questioned  the  

validity  of  introduction  of  pension  scheme  in  lieu  of  

Contributory  Provident  Fund  Scheme.  The  bank  employees,  

who retired prior to 01.01.1986, had not been given benefit of  

the said Pension Scheme. This Court held that the said cut-off  

date  was  neither  arbitrary  nor  artificial  or  whimsical.  It  was  

further observed:

“10. … The underlying principle is that when the State  decides  to  revise  and  liberalise  an  existing  pension  scheme with a view to augmenting the social security  cover granted to pensioners, it cannot ordinarily grant  the benefit to a Section of the pensioners and deny the  same  to  others  by  drawing  an  artificial  cut-off  line  which cannot be justified on rational grounds and is  wholly  unconnected  with  the  object  intended  to  be  achieved. But when an employer introduces an entirely  new scheme which has no connection with the existing  scheme,  different  considerations  enter  the  decision  making process.  One such consideration may be the  financial implications of the scheme and the extent of  capacity of the employer to bear the burden. Keeping  in view its capacity to absorb the financial burden that  the scheme would throw, the employer would have to  decide upon the extent of applicability of the scheme.”  

              (Emphasis  added)

14) In  University  Grants  Commission v.  Sadhana  Chaudhary,  

(1996) 10 SCC 536, this Court has observed:  

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“21. ... It is settled law that the choice of a date as a   basis  for  classification cannot  always  be dubbed as   arbitrary even if no particular reason is forthcoming  for the choice unless it is shown to be capricious or   whimsical in the circumstances. When it is seen that a   line  or  a  point  there  must  be  and  there  is  no  mathematical or logical way of fixing it precisely, the   decision  of  the  legislature  or  its  delegate  must  be   accepted unless it can be said that it is very wide off   the reasonable mark.”  

15) In T.N. Electricity Board v. R. Veerasamy, (1999) 3 SCC 414,  

the pension scheme was applied differently to persons who had  

retired from service before 01.07.1986, and those who were in  

employment on the said date. This Court held:

“15. … We are of the view that the retired employees   (respondents), who had retired from service before 1- 7-1986 and those who were in employment on the said   date, cannot be treated alike as they do not belong to   one  class.  The  workmen,  who  had  retired  after   receiving  all  the  benefits  available  under  the  Contributory  Provident  Fund  Scheme,  cease  to  be  employees  of  the  appellant-Board  w.e.f.  the  date  of   their retirement. They form a separate class.”

16) In State of Punjab v. Boota Singh case, (2000) 3 SCC 733, this  

Court  has  held  that  the  benefit  conferred  by  the  notification  

dated 9-7-1985 can be claimed by those who retire  after  the  

date stipulated in the notification and those who have retired  

prior to the stipulated date in the notification are governed by  

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different  rules.  They  are  governed  by the  old  rules,  i.e.,  the  

rules prevalent at the time when they retire. The two categories  

of persons are governed by different sets of rules. They cannot  

be  equated.  The  grant  of  additional  benefit  has  financial  

implications  and  the  specific  date  for  the  conferment  of  

additional benefits cannot be considered arbitrary. This Court  

held:

“In the case of Indian Ex-Services League v. Union of   India (1991) 2 SCC 104 this Court distinguished the  decision in  Nakara case  (1983) 1 SCC 305 and held  that the ambit of that decision cannot be enlarged to   cover  all  claim  by  retirees  or  a  demand  for  an   identical  amount  of  pension  to  every  retiree,   irrespective of the date of retirement even though the  emoluments for the purpose of computation of pension  be  different.  We  need  not  cite  other  subsequent   decisions which have also distinguished  Nakara case  (1983) 1 SCC 305. The latest decision is in the case of   K.L. Rathee v.  Union of India (1997) 6 SCC 7 where   this Court, after referring to various judgments of this   Court, has held that  Nakara case (1983) 1 SCC 305  cannot  be  interpreted  to  mean  that  emoluments  of   persons who retired after a notified date holding the   same  status,  must  be  treated  to  be  the  same.  The   respondents  are not  entitled to claim benefits  which  became  available  at  a  much  later  date  to  retiring   employees by reason of changes in the rules relating   to pensionary benefits.”

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17) In State of Punjab v. J.L. Gupta, (2000) 3 SCC 736, this Court  

reiterating the views expressed in Boota Singh (supra), held:

“5. The controversy involved in the present appeal and   connected  appeals  is  squarely  covered  by  the   aforesaid  decision.  The  respondents  are  thus  not   entitled to claim benefits under the notification dated  9-7-1985 since the said benefits became available on a  much later date to the retiring employees by reason of   change in the rules relating to pensionary benefits. In   this view, the judgment of the High Court cannot be   sustained.”

18) In  Ramrao v.  All  India  Backward  Class  Bank  Employees   

Welfare Assn., (2004) 2 SCC 76, this Court has held that, even  

for the purpose of effecting promotion, fixing of a cut-off date  

was neither arbitrary, unreasonable nor did it offend Article 14  

of the Constitution. This Court further observed:

“32. If a cut-off date can be fixed, indisputably those  who  fall  within  the  purview  thereof  would  form  a  separate class. Such a classification has a reasonable   nexus with the object which the decision of the Bank to   promote  its  employees  seeks  to  achieve.  Such  classifications would neither fall within the category  of  creating  a  class  within  a  class  or  an  artificial   classification  so  as  to  offend  Article  14  of  the   Constitution of India.

33. Whenever such a cut-off date is fixed, a question   may  arise  as  to  why  a  person  would  suffer  only   because he comes within the wrong side of the cut-off   

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date, but, the fact that some persons or a Section of   society  would  face  hardship,  by  itself  cannot  be  a   ground for  holding  that  the  cut-off  date  so  fixed  is   ultra vires Article 14 of the Constitution.”

19) In State of Punjab v. Amar Nath Goyal, (2005) 6 SCC 754, this  

Court held:

“37. In the instant case before us, the cut-off date has   been  fixed  as  1-4-1995  on  a  very  valid  ground,   namely,  that  of  financial  constraints.  Consequently,   we reject the contention that fixing of the cut-off date  was arbitrary, irrational or had no rational basis or   that it offends Article 14.”

20) In State of Bihar v. Bihar Pensioners Samaj, (2006) 5 SCC 65,  

this Court held:  

“17. We think that the contention is well founded. The   only ground on which Article 14 has been put forward  by the learned counsel for the respondent is that the   fixation of the cut-off date for payment of the revised  benefits  under  the  two  notifications  concerned  was   arbitrary  and  it  resulted  in  denying  arrears  of   payments  to  certain  Sections of  the  employees.  This   argument is no longer res integra. It has been held in   a catena of judgments that fixing of a cut-off date for   granting of benefits is well within the powers of the   Government as long as the reasons therefor are not   arbitrary  and  are  based  on  some  rational   consideration.”

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21) We have sympathies for the appellant but,  in a society  

governed by Rule of law, sympathies cannot override the Rules  

and Regulations.  We may recall the observations made by this  

Court  while  considering  the  issue  of  compassionate  

appointment in public service.  In  Life Insurance Corporation  

of  India v.  Asha Ramachhandra Ambekar and Anr. (1994) 2  

SCC 718, wherein the Court observed: “The High Courts and  

the  Administrative  Tribunals  cannot  confer  benediction  

impelled  by  sympathetic  consideration....  Yielding  to  instinct   

will  tend  to  ignore  the  cold  logic  of  law.   It  should  be  

remembered  that  “law  is  the  embodiment  of  all  wisdom”.   

Justice according to law is a principle as old as the hills.  The  

Courts  are  to  administer  law  as  they  find  it,  however,   

inconvenient it may be.”   

22) In  view  of  the  above  discussion,  the  appeals  fail  and  are,  

accordingly,  dismissed.   However,  we  grant  liberty  to  the  

appellant,  if  he so desires,  to  exercise  his  option to  join  the  

1995  Regulations  in  terms  of  instruction  Circular  No.  

11143/PA/2010-11/27  dated  15.09.2010 within  30 days  from  

today.   If  such  an  option  is  exercised  by  the  appellant,  the  

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respondents are directed to consider the same sympathetically  

within 60 days from the date of the option.  Parties are directed  

to bear their own costs.   

         …………………………J.

                                                                                        [ D.K. JAIN ]

       …………………………J.                  [ H.L. DATTU ]

New Delhi,           February 21, 2011.

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