Holding

An employee who fails to exercise the option to join the pension scheme within the period prescribed in the Gazette‑published regulations is not eligible for the scheme, and the 2002 Government letter does not extend this right to such employees.

Summary

Jai Singh B. Chauhan, a clerk of Punjab National Bank, sought to be covered by the bank's pension scheme after missing the deadline to opt in. The pension regulations, framed under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, were published in the Official Gazette on 29 September 1995, giving employees 120 days to exercise the option. The employee did not opt within this period and later applied in 1998, which the bank rejected, leading to a writ petition that the Bombay High Court dismissed. On appeal, the Supreme Court examined whether the Gazette publication constituted sufficient notice and whether a 2002 Government of India letter permitting belated options applied to the employee. The Court held that the Gazette notice was adequate, the employee had not exercised the option within the prescribed time, and the Government letter only covered employees dismissed or compulsorily retired as of 29 September 1995 who were later reinstated, a category that did not include the appellant. Consequently, the appeal was dismissed and the employee remained ineligible for the pension scheme.

Issues considered

Whether publication of the pension regulations in the Official Gazette constitutes sufficient notice for employees to exercise the option within the prescribed period.
Whether the Government of India letter dated 19 February 2002 allows banks to accept belatedly exercised options for employees who missed the deadline.
Whether an employee who failed to exercise the option within the stipulated time can be deemed to have exercised it belatedly.
Whether utilization of the Provident Fund account precludes later inclusion in the pension scheme.

Legislation cited

Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970s. 19(2)(f)

Subjects

service lawpension schemeofficial gazette noticeemployee rightsbanking regulationsoption deadlinegovernment circularprovident fundreinstatement

Judgment

JAi SINGH B. CHAUHAN A
v.
PUNJAB NATIONAL BANK AND ORS.

JULY 20, 2005

[ARIJIT PASAYAT AND H.K. SEMA, JJ.] B

Service Law:

Punjab National Bank (Employees) Pension Regulations, 1955:
c
Pension scheme introduced by Bank-Published in Official Gazette-
Option exercised by employees belatedly-Rejected by Management-Held,
employee having not exercised option within time, not eligible to be covered
by Pension Scheme-It cannot be said that publication in Official Gazette
cannot be treated as notice-Notice.
D
Respondent No. 1, the employer-Bank, in exercise of power under
s.19(2)(f) of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970, framed the Punjab National Bank (Employees)
Pension Regulations, 1995 giving option to the employees to opt for Pension
Scheme on or before a specified date. During the draft stage the time for option E
was further extended. After finalization· of the scheme, it was published in
the Official Gazette. Again as per the Gazette Notification, the option was to
be exercised within 120 days from the dat~ of notification. Appellant-employee
did not exercise the option withil;l the prescribed period, and made. a
representation after two years with a request to be .covered by the Scheme.
The Bank rejected his claim. The High .court ·dismissed his writ petition F ·
observing that the employee not only did not exercise the option within time,
but also utilized the amounts deposited in the P·rovident Fund Account which
was substituted by the Pension Scheme for those who ·exercised the option.

In the appeal filed by the empfoyee it was contended that he could not
exercise the op!ion within time as during the relevant period initially he was G
on leave and later he w~s not allowed to join the duty; and even otherwise, in
view of the letter dated 9.2.2002 issued by the Central Government, the Bank
. was permitted to accept options exercised belatedly,

143 H
744 SUPREME COURT REPORTS [200S) SUPP. I S.C.R.

A Dismissing the appeal, the Court

HELD: High Court was right in holding that the employees having not
exercised the option within the prescribed period was not eligible to be covered
by the Bank's Pension Scheme. It cannot be said that the publication or the ,,
Pension Scheme in the Official Gazette cannot be treated as notice to the
B appellant. The letter of the Govemment oflndia dated 19th February, 2002
applies to those cases where the employee could not exercise the option beeause
he stood either dismissed or compulsorily retired as oa 29.9.1995, but later
on got reinstated either due to the decision of any Court or Appellate Authority.
Appellant's case does not fall in either of the two categories.
C 1744-F, 746-C, DI

Mis. Pankaj Jain Agencies v. Union of India and Ors.. 119941 5 SCC
198, relied on.

CIVIL APPEL LA TE JURISDICTION : Civil Appeal No. 3845 of 2005.
•,

D From the Judgment and Order dated 19.3.2004 of the Bombay High
Court in Writ Petition No. 5136 of2000.

Mahabir Singh, Ms. Madbusmita Bora, Gagandeep Shanna and O.
Mahesh Babu with him for the Appellant.

E Mukul Rohtagi, Dhruv Mehta, Mohit Chaudhary and Harshvardhan Jha
with him for the Respondents.

The Judgment of the Court was delivered by

ARIJIT PASA VAT, J. Leave granted.
F
Challenge in this appeal is to the judgment of a Division Bench of the
Bombay High Court dismissing the writ petition No. 5136 of2000 tiled by the
appellant. High Court held that ·the appellant having not exercised option
within the prescribed period was not eligible to be covered by the respondent
no. I-Bank's Pension Scheme.
G
The factual controversy lies within a very narrow compass and it is
essentially follows:

The appellant joined as clerk in the erstwhile New Bank of India Ltd.
(in short the 'NBI') on 10th February, 1979. Later on, he joined the Punjab
H National Bank, the Respondent No. I (hereinafter referred to as the 'Employer-
JAi SINGH B. CHAUHAN v. PUNJAB NATIONAL BANK [PASA YAT, J. ] 745

Bank'). In exercise of power conferred by clause (t) of sub-section (2) of A
Section 19 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (in short the 'Act'), the Board of Directors of
Respondent No. I-Bank framed Punjab National Bank (Employees) Pension
Regulations, 1995 (hereinafter referred to as the 'Regulations'). Originally,
option was given to the employees to opt for the Pension Scheme, which was B
called for vide Circular dated 27.6.1994. As per the said Circular, eligible
employees were required to exercise the option on or before 13.9.1994.
Subsequently, it was extended up to 30.11.1994. This was at the Draft Scheme
stage. After the Pension Scheme was finalized it was published in the Official
Gazette dated 29.9.1995. Undisputedly, the appellant had not exercised the
option within the time indicated at the Draft Scheme stage. As per the Gazette C
Notification, the option was to be exercised within 120 days from the date of
Gazette Notification. Therefore, the last date was 27.1.1996. The appellant
undisputedly had not exercised the option within the time stipulated in the
scheme. Appellant made representation on 4.5.1998 with a request to be
covered by the scheme. That representation was not in the requisite form. The
respondents rejected the claim of appellant that he is to be governed by the D
, , Pension Scheme. The said decision dated 22.7.2000 of the respondent No. 1-
Bank was challenged by filing the writ petition. The High Court found that
not only the option was not exercised within time, but also the appellant was
utilizing the amounts deposited in the Provident Fund Account. It was noted
that the Provident Fund was substituted by the Pension Scheme for those E
who exercise the option.

Mr. Mahabir Singh, learned counsel submitted that the appellant was
not aware of the Circular issued calling for options or the Gazette Notification.
As a matter of fact the respondent No. I-Bank and its functionaries were
exhibiting hostile attitude to the appellant. Though he wanted to join duty F
after availing leave from I0.2.1994 to 16.8.1995, he was not permitted to join
between 17.8.1995 to 22.10.1996 and he had to ultimately move to Guwahati
High Court for relief. Because of that and not on account of any !aches he
failed to exercise option within the stipulated periods. Reliance was placed to
certain portions of Draft Pension Scheme as contained in Circular dated G
27.6.1994. According to learned counsel, the circular clearly stated that
employees who were not attending office for any reason such as suspension,
long leave, unauthorised absence etc. were to be provided with the letter
requiring exercise of option, at the last known address for their doing the
needful. It was submitted that in the absence of any such intimation to the
appellant the respondent no. I-Bank could not have refused to accept the H
•
----\
~(
746 SUPREME COURT REPORTS [2005] SUPP. 1 S.C.R.

A option exercised. It was further submitted that the Government of India,
Ministry of Finance, Department of Economic Affairs, Banking Division by its.·
letter dated 9.2.2002 had permitted the employer Banks to accept options
exercised belatedly.

In response, learned counsel for the respondent submitted that the
B Regulations clearly stipulated the procedure to be adopted for exercise of
option. The appellant had not exercised the option within the stipulated time.
There was no necessity for giving any individual notice as claimed, as there
is no such requirement in the Regulations. Additionally the Scheme was
notified in the Official Gazette on 29 .9 .1995 and it is to be construed as a
C public notice. Further the letter of the Central Government dated 19th February,
2002 does not in any way assist the appellant and on the contrary goes
against him. An option was given to the Banks to take a decision with the
approval of their Board in those cases where the officer/employee could not
exercise the option because he stood either dismissed or compulsorily retired
as on 29.9.1995, but later on got reinstated either due to the decision of any
D Court or Appellant Authority. Appellant's case does not fall in to either of
the two categories indicated above.

For the purpose of adjudicating the dispute few provisions in the
Regulations need to be noted.

E "Notified Date" is defined in Regulation 2 as follows:

"notified date" means the date on which these regulations are
published in the official Gazette;"

In terms of Regulation 1, the Regulations were deemed to have come
F into force on the date of their publication in the Official Gazette.

Regulation 3, so far as relevant reads as follows:

"3. These regulations shall apply to employees who,-

xxx xxx xxx
G
(3) (a) are in the service of the Bank before the notified date and
continue to be in the service of the Bank of or after the notified date;
and

(b) exercise an option in writing within one hundred and twenty·~
H
.., .

JAi SINGH B. CHAUHAN v.PUNJAB NATIONAL BANK [PASA YAT, J.] 747

days from the notified date to become member of the Fund; and A
(c) authorize the trust of the Provident Fund of the Bank to
transfer the entire contribution of the Bank alongwith the interest
accrued thereon to the credit of the Fund constituted for the purpose
under regulation 5."
B
As per Regulation 3 (3)(b) option was to be exercised in writing within
one hundred and twenty days from the notified date to become member of
the fund. '

Regulation 3 (3)(c) is also of considerable importance. It required transfer
of the entire contribution of the Bank alongwith interest accrued thereon to C
the credit of the fund constituted for the purpose under Regulation 5, and
authorized trust of from the amount of the Provident Fund of the Bank to
effect the transfer.

As noted by the High Court, the appellant was participating in the
. Provident Fund Account and he was being paid provident Fund contribution D
which was being deposited to his Provident Fund Account.

So far as argument advanced by learned counsel for the appellant that
the publication in the Official Gazette cannot be treated as notice to the
appellant is concerned, the same has no substance and deserves to be E
'" rejected outright.

In Mis. Pankaj Jain Agencies v. Union of India and Ors., [I 994] 5 SCC
198 a three-Judge Bench of this Court held as follows:

"l 7. In the present case indisputably the mode of publication
prescribed by Section 25(1) was complied with. The notification was F
published in the official Gazette on the 13.2.1986. As to the effect of
the publication in the official Gazette, this court held (Srinivasan case
-[1987]'1SCC658,672;AIR(l987)SC1059, 1067):

"Where the parent statute is silent, but the subordinate legislation
itself prescribes the manner of publication, such a mode of publication· G
may be sufficient, if reasonable. If the subordinate legislation does
,. not prescribe the mode of publication or ifthe subordinate legislation
prescribes a plainly unreasonable mode of publication, it will take
effect only when it is published through the customarily recognized
official channel, namely, the Official Gazette or some other reasonable H
748 SUPREME COURT REPORTS [2005] SUPP. l S.C.R.

A mode of publication.

18. We, therefore, see no substance in the contention that
notwithstanding the publication in the Official Gazette there was yet
a failure to make the law know and that, therefore, the notification did
not acquire the elements of operativeness and enforceability. This
B contention of Shri Ganesh is unacceptable."

Further, as rightly submitted by learned counsel for the respondents the
letter of the Government of India dated 19" February, 2002 does not in any
way assist the appellant. It only applies to the two indicated categories of
employees and undisputedly the appellant does not belong to any of the said
C categories. -

The appeal is devoid of merit, deserves dismissal, which we direct.
Costs made easy.

RP. Appeal dismissed.