Holding

The proviso to Regulation 17 requires a direction by the sanctioning authority at the end of the employee's service; absent such direction, extraordinary leave on loss of pay does not count as qualifying service for pension.

Summary

The respondents, employees of Indian Bank who had served for more than ten years, opted for voluntary retirement and sought to have periods of extraordinary leave on loss of pay counted as qualifying service for pension benefits. The bank rejected their claim, relying on Regulation 17 of the Indian Bank (Employees') Pension Regulations, 1995, which excludes such leave unless a direction is issued by the sanctioning authority at the end of service. The Madras High Court allowed the respondents, invoking Rule 21 of the Central Civil Services Pension Rules, and directed the bank to consider the leave as qualifying service. On appeal, the Supreme Court held that the grant of leave is governed by the Service Regulations, while pension entitlement is governed by the Pension Regulations, and that the proviso to Regulation 17 requires a specific direction at the end of service. Since no such direction was issued, the extraordinary leave could not be counted as qualifying service, and the High Court's reliance on Rule 21 was misplaced. Consequently, the Supreme Court set aside the High Court judgment and allowed the appeal.

Issues considered

Whether extraordinary leave on loss of pay can be counted as qualifying service for pension under Regulation 17 of the Indian Bank (Employees') Pension Regulations, 1995 without a direction from the sanctioning authority at the end of service.
Whether Rule 21 of the Central Civil Services Pension Rules can be invoked to interpret the Pension Regulations of Indian Bank.
Interpretation of the interplay between Regulation 17 of the Pension Regulations and Regulation 37 of the Service Regulations.

Legislation cited

Central Civil Services (Pension) Ruless. Rule 21
Indian Bank Employees Pension Regulations, 1995s. Regulation 17

Subjects

service lawpensionextraordinary leaveloss of payqualifying servicestatutory constructionvoluntary retirementbank employees

Judgment

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MANAGEMENT OF INDIAN BANK AND ANR. A
V.
G. RAMACHANDRAN AND ORS .
• NOVEMBER 2, 2007
B
~,. [S.B. SINHA AND P.P. NAOLEKAR, JJ.]

Service Law:
Indian Bank (Employees) Pension Regulations, 1995; Proviso to c
. Regulation 17!Indian Bank Officers' Service Regulations, 1979;
Regulation 3 7:
Voluntary Retirement-Leave availed by employees on loss of
pay-Consideration for getting pensionary benefits-Held: Grant of
leave governed by Service Regulations whereas grant of pension D
,).-.
I ' governed by Pension Regulations-In terms ofr. 21 ofthe Civil Services
Pension Rules, in case leave is granted on medical ground, appointing
=i authority could allow such period to be counted as qualifying service-
However, the same has no application in the instant case since for the
purpose of construing a statute, reference to another statute not E
permissible-Thus, High Court committed an error in relying on the
provision under Civil Services Pension Rules-In terms ofproviso to
Regulation 17 ofPension Regulations, employees ofBank entitled to
such benefit in the event a direction allowing the. period of leave so
,_, granted to be counted as qualifying service issued by sanctioning F
,> authority at the end of service of the employee concerned and not at
the time when leave granted-Since no such direction issued, the
question ofgranting leave by the competent authority for the purpose
ofpensionary benefits would not arise-Hence, impugned judgment
of High Court could not be sustained and set aside-Central Civil G
Services Pension Rules-Rule 21 .
....,
Respondent-employees after serving the appellant-Bank for
more than 10 years sought for voluntary retirement from services

967 H
MANAGEMENT OF INDIAN BANK v. G. 969
RAMA CHAND RAN [SINHA, J .]
operate in the matter of grant of leave. It may be possible that the A
highest authority had granted leave in favour of the respondents but
the same would not mean that in all such events, the authority to
grant leave in terms of Service Regulations i.e. the sanctioning
authority under Regulation 17 would be one and the same.
Construction of a statute should not be premised on surmises and B'
conjectures. [Para 13] [972-F, G; 973-A]
1.4. The question of application of mind on the part of
sanctioning authority in.terms of proviso appended to Regulation
17 of the Pension Regulations would arise only at the end of the
service of the employee concerned and not at the time when the leave C
is granted. Service Regulations and Pension Regulations, thus,
operate in different fields. An employee of the Bank would be entitled
to the benefit of the proviso appended to Regulation 17 of the
Pension Regulations in the event a direction is issued by the
)' sanctioning authority. If no such direction is issued, the question of D
•• granting leave by the competent authority for the purpose of
pensionary benefits wou:d not arise. Hence, the impugned judgment
of the High Court cannot be sustained and it is set aside
accordingly. [Paras 14 and 15] [973-A, B, C]
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5238-
5242 of 2007.
From the final Judgment and Order dated 13.9.2005 of the High
Court of Judicature at Madras in W.P. Nos. 44153, 44157, 44158,
44178 of 2002 and 3700 of 2003. F
Raju Ramachandran, Y.K. Rao, Saket Sikri and Madhu Sikri for
the Appellants.
Jugal Kishore Tiwari and P. V. Yogeswaran for the Respondents.
G
The Judgment of the Court was delivered by
S.B. SINHA, J. 1. Leave granted.
2. This appeal is directed against the judgment and order dated
13.9.2005 passed by a Division Bench of the Madras High CoUii in civil H
970 SUPREME COURT REPORTS [2007] 11 S.C.R.

A writ petitions filed by the respondents herein.
3. The short question involved in these appeals related to
interpretation of Regulation 17 of the Indian Bank (Employees') Pension
Regulations, 1995 (hereinafter referred to as "Pension Regulations"), vis-
B a-vis Regulation 37 of the Indian Bank Officers' Service Regulations,
1979, (hereinafter referred to as "Service Regulations").
4. Respondents have joined the service of the appellant-Bank on
diverse dates. They, indisputably, have served the Bank for more than
10 years. They opted for the Pension Regulation as and when the same
C was framed and sought for voluntary retirement from services in 2001.
The said offer of retirement has been accepted.
5. The representation of the respondents that their entire period of
service, including the period ofleave availed by them on loss of pay, should
be taken into consideration for the purpose of computing the pensionary
D benefits, having been rejected by the Bank by its order dated 16.8.2001
and 17.8.2001, several writ applications came to be filed by_ the ' .
respondents. The High Court by an order dated 23.9.2002 directed the
appellant-Bank to give a personal hearing to them. The said order was
complied with. However, by an order dated 11.10.2002 passed by the
E Bank, the representations of the respondents were rejected.
6. Respondent Nos. 1, 3, 4 & 5 herein again filed writ applications
in November 2002 challenging the aforesaid order dated 11.10.2002;
whereas respondent No.2 filed a writ petition before the High Court in
F March 2003, questioning the validity or otherwise of the order dated
3.8.2001. By reason of the impugned judgment a Division Bench of the .. '_{
High Court allowed the said writ applications filed by the respondents
herein. Appellants are, thus, before us.
7. Before embarking on the rival contentions advanced by the
G learned counsel for the parties, we may notice that Chapter VII of the
Service Regulations provide for different kinds ofleave, namely, casual
leave, privilege leave, sick leave, special sick leave, maternity leave,
extraordinary leave on loss of pay and special casual leave and special
leave.
H
MANAGEMENT OF INDIAN BANK v. G. 971
RAMACHANDRAN [SINHA,J.]
-"
8. The fact that the concerned respondents had obtained leave on A
medical ground, without pay is not in dispute.
9. Extraordinary leave is granted in terms of Regulation 37 of the
Service Regulations which reads thus:
"An officer shall be eligible for extraordinary leave on loss of pay B
for not more than 360 days during the entire period of service.
Such leave may not be availed of except for sufficient reasons on
more than 90 days at a time provided that in very special
circumstances the Board may grant extraordinary leave on loss of
pay to an officer upto a total period of 720 days." c
10. Whereas grant of leave is governed by the Service Regulations,
grant of pension and/or determination of the quantum thereof is governed
by the Pension Regulations. Regulation 14 of the Pension Regulations
provides for qualifying service in the following terms:
b
{.
>-- "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 the date on which he is
deemed to have retired shall quality for pension."
11. Regulation 17 provides that all leave during service in the Bank E
for which leave salary is payable shall count as qualifying service. The
proviso appended to Regulation 17, however, categorically states that
extraordinary leave on loss of pay shall not count as qualifying service
except when the sanctioning authority has directed that such leave, not
~-
exceeding twelve months during the entire service, may count as service F
for all purposes including pension. The High Court in its impugned
judgment opined that while granting extraordinary leave, the sanctioning
authority must be held to have sanctioned leave in tenns of Regulation
17 of the Pension Regulations as well. For the said proposition, reliance
has been placed on Rule 21 of the Central Civil Services Pension Rules. G
_.., With a view to complete the narration of facts, we may take note of
Regulation 21 also.
"Counting of period spent on leave. All leave during service for
which leave salary is payable and all extraordinary leave granted
B
972 SUPREME COURT REPORTS (2007] 11 S.C.R.

A on medical certificate shall count as qualifying service.
Provided that in the case of e'i.:traordinary leave other than
extraordinary leave granted on medical certificate, the appointing
authority may, at the time of granting such leave, allow the period
of that leave to count as qualifying service if such leave is granted
B to a Government servant -
(i) Omitted.
(ii) Due to his inability to join or rejoin duty on account of civil
commotion or;
c (Iii) For prosecuting higher scientific and technical studies."
12. We, at the outset, must express our reservation in regard to the
approach of the High Court in so far as reference has been made to a
regulation which is not applicable to the case of the respondents herein.
D Regulation 21 itself clearly suggests that only in a case where leave has
been granted on medical ground, the appointing authority at the time of ,, )

granting such leave may allow the period thereof to be counted as qualifying
service if such leave is granted to a Government servant. The limited area
in which Regulation 21 operates is evidently centres round grant of medical
E leave which is not the case here. Pension Regulations framed by the '
appellants do not postulate such a contingency. It is now a trite law that
for the purpose of construing a statute, reference to ariother statute is not
permissible and, thus, Regulation 21 of the Civil Services Pension Rules
contemplates a different situation, the same will have no application in the
F instant case. The High Court, t11erefore, committed an eimr in relying on
the said provision.
13. The High Court has held that the "entries regarding service being
qualifying or otherwise are required to be made simultaneously with the
event, but in this case it is not done." We are afraid that such an inference
G could not have been drawn in the instant case. Service Regulations operate
in the matter of grant ofleave. It may be possible that the highest authority
had granted leave in favour of the respondents but the same would not
mean that in all such events, the authority to grant leave in terrns of Service
Regulations i.e. the sanctioning authority under Regulation 17 would be
H
MANAGEMENTOFINDIANBANKv. G. 973
RAMA CHANDRAN [SINHA, J.]
one and the same. Construction of a statute should not be premised on A
surmises and conjectures.
14. The question of application of mind on the part of sanctioning
authority in terms of proviso appended to Regulation 17 of the Pension
Regulations would arise only at the end of the service of the employee B
concerned and not at the time when the leave is granted. Service
Regulations and Pension Regulations, thus, operate in different fields. An
employee of the Bank would be entitled to the benefit of the proviso
appended to Regulation 17 of the Pension Regulations in the event a
direction is issued by the sanctioning authority. If no such direction is
issued, the question of granting leave by the competent authority for the C
purpose of pensionary benefits would not arise.
15. We, therefore, are of the opinion that the impugned judgment
of the High Court cannot be sustained and it is set aside accordingly. The
appeal is allowed. However, in the facts and circumstances of this case, D
there shall be no orders as to costs .
,..)1>-..
S.K.S. Appeals allowed.