Holding

The employee is entitled to pension; the bank's forced retirement is not a voluntary retirement and is not excluded by the 1995 circular.

Summary

Satya Srinath, a former employee of Syndicate Bank, was absent from work due to illness and sought an extension of leave with a medical certificate. The bank deemed her to have voluntarily retired under Clause 17(a) of the Vth Bipartite Settlement and denied her pension under the Syndicate Bank (Employees') Pension Regulations, 1995. The employee challenged the denial, and while a single High Court judge dismissed her claim, a Division Bench allowed her pension. On appeal, the Supreme Court held that the bank’s action amounted to a forced, compulsory retirement, not a voluntary one, and that the circular of 4‑Nov‑1995 excluding those who had voluntarily or deemed voluntarily retired does not apply. Consequently, the employee is entitled to pension for her 20 years of service. The appeal by the bank was dismissed.

Issues considered

Whether an employee deemed to have voluntarily retired under Clause 17(a) but actually forced to retire due to medical illness is eligible for pension under the Syndicate Bank (Employees') Pension Regulations, 1995.
Whether the circular dated 4‑Nov‑1995 excluding employees who voluntarily or deemed voluntarily retired between 1‑Jan‑1986 and 31‑Oct‑1993 from pension benefits applies to the present case.
Whether the bank's action constitutes compulsory/premature retirement and, if so, whether such retirement is covered by the pension regulations.
Whether the bank’s decision violates principles of natural justice.

Subjects

pension entitlementdeemed voluntary retirementcompulsory retirementbank service regulationsmedical leaveeligibility for pensionforced retirementnatural justice

Judgment

A SYNDICATE BANK, BANGALORE
v.
r ..
SATYA SRINATH

APRIL 17, 2007

B [AK MA THUR AND TARUN CHATTERJEE, JJ.]

Syndicate Bank (Employees') Pension Regulations, 1995-Regulation >- -
29-Pension-Entitlement of-To employees in service during specified
period-However, those voluntarily retired or deemed to have voluntarily
c retired not eligible-Employee unathorisedly absent from work, explanation
not being satisfactory, deemed to have voluntarily retired from service-
Employee seeking pension, rejected by Single Judge of High Court, however,
granted by Division Bench-Correctness of-Held: Compulsory retirement/
premature retirement imposed by the Bank upon the employee-Not a case
D of voluntary retirement or premature retirement-Also employee has put in
20 years of service and had taken leave on medical ground which was denied
to her-Thus, employee entitled to pension.
', .
Respondent-employee remained unauthorisedly absent from work.
Appellant-bank issued notice to the respondent to explain her absence.
E Respondent explained that due to illness she could not report for duty; it was
supported by medical certificate. Not being satisfied with the explanation,
appellant informed the respondent that she was deemed to have voluntary
retired from service from 23.12.1992. Aggrieved respondent filed writ petition
for re-instatement in service which was dismissed. Meanwhile Syndicate Bank
(Employees') Pension Regulations, 1995 ca~J into force. Bank issued a
F
circular dated 4.11.1995 that the Regulatjifi"S were applicable to those who ,..-,
were in service of Bank on or after 01.01.1986 but had retired before
29.09.1995. However, the employees who had voluntary retired or deemed to
have voluntarily retired between 01.01.1986 and 31.10.1993 were not eligible
for pension under the Regulations. The circular also provided that ex-
G employees who had not exercised their option for pension under the Regulation
could exercise their option. Respondent was in service since 07.04.1969 and
had retired from 22.12.1992. Respondent applied for pension scheme but was { . ....
rejected. Respondent then filed writ petition. Single Judge of High Court
dismissed the petition holding that the respondent was not eligible for pension.
H 242
SYNDICATEBANK,BANGALOREv.SATYASRINATH 243

~ "\
However, Division Bench of High Court set aside the order and held that the A
respondent was entitled to pension as per the Regulations. Hence the present
appeal

Dismissing the appeal, the Court

HELD: 1.1. The respondent submitted her explanation and sought B
extension of time on medical ground. But the management of the Bank instead
of considering the matter sympathetically ordered for premature retirement
under the purported exercise of Clause 17(a). It is not the case that she had
voluntarily retired but it is a case where the bank has retired her as a
measure of punishment because they were not satisfied with her explanation.
Therefore, it is not a case which can be covered by the clarification issued by
c
the Bank and it cannot be deemed that she has voluntarily retired. The
contingency in the instant case is not covered by the Circular dated 4.11.1995.
In Clause 17 (a) a person who deliberately does not join the office and leaves
the office without any satisfactory explanation, then it is open for the
management to resort to Clause 17(a). But in the instant case, the facts are D
very glarin that incumbent has put in 20 years of service and unfortunately
she fell sick and sought for extension of leave on medical ground, that was
't denied to her. Therefore, it is not the case of the abandoned service or she did
not send any reply to the notice sent by the management. However, she has
mad a humble reply to satisfy her authorities, that taking leave was beyond
her control, i.e., ill health. But the authorities retired her prematurely and E
denied the pension of 20 years of service. Therefore, this kind of action is
unfair arbitrary which cannot be accepted. In fact the order passed by the
bank clearly states it is not the case of premature reitrement and it is not the
case that she has sought voluntary retirement or premature retirement. It is
the bank who has retired her and that kind of contingency is not covered in F
-~ the clarification made by the bank. It is case of deemed voluntary retirement
forced on her. The said contingency is not covered under the aforesaid order
of authorities. It was a forced retirement by the respondent-bank.
[Para 9) [248-G-H; 249-A-D)

1.2. The observation by the Bank that the letter rejecting her G
representation for pension was because of her deemed retirement brought
; - ). about by her, on account of her own action is not correct. The decision of
management, "deemed to have been voluntarily retired" to totally misconceived.
[Para 10) (249-E-F)

Punjab & Sind Bank and Ors. v. Sakattar Singh, [2001] I SCC 214, H
244 SUPREME COURT REPORTS [2007] 5 S.C.R.

A referred to. I- ~· -
1.3. The expression 'resignation' and 'voluntary retirement' are
deliberate abandonment of service. Each expression carries different
' -
connotation and each case has to be examined whether it was a case of
voluntary retirement sought by the employee or he has been retired on account
B of superannuation or he has resigned or he has been retired compulsorily as
a measure of punishment. In case, the compulsory retirement/the premature
retirement has been imposed by the appellant, it is not voluntarily sought by
the respondent. It is a clear case of compulsory retirement ordered by the ~- -
Management and that contingency has not been contemplated in the circular
c issued on 4.11.1995. Therefore, in any case, she could not be denied the benefit
of her 20 years' of service when she comes within the pension scheme that
she was employed prior to 1986 and retired before 29.9.95. Therefore, she is
entitled to pension. (Para 121 (250-C-E)

UCO Bank and Ors. v. Sanwar Mal, (20041 4 SCC 412, referred to.
D
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6721 of2004.

From the Judgment and Order dated 07.04.2003 of the High Court of
Kamataka at Bangalore in Writ Appeal No. 6017 of 1999. '
Adarsh B. Dial, Sumati Anand and Rajiv Nanda for the Appellant.
E
Anitha Shenoy and Naveen R. Nath for the Respondent.

The Judgment of the Court was delivered by

A.K. MATHUR, J. I. This appeal is directed against the order dated 7th
F April, 2003 passed by the Division of the Kamataka High Court whereby the -r-,
Division Bench has set aside the order of the learned Single Judge and
allowed the writ petition No. 25322 of 1999, quashed the impugned order
dated 26th June, 1999 and directed the management of the appellant-Bank to
pay the pension to the respondent from 1.11.1993.
G
2. The respondent was the employee of the Syndicate Bank. The
respondent remained unauthorisedly absent w.e.f. 11.3.1992 and a notice
dated 18.11.1992 was issued to her calling upon her either to report back for
duty or submit explanation for her absence within 30 days i.e. on or before
.{ -
-
21.12.1992. It was also stipulated that if she failed to comply with the directions
H she would be deemed to have voluntarily retired from the service of the bank
SYNDICATEBANK,BANGALOREv.SATYASRINATH[A.K.MATHUR,J.] 245

... 1 on expiry of 30 days from the date of notice in terms of Clause I 7(a) of the A
Vth Bipartite Settlement. The respondent (herein) sent her explanation but the
Bank Management did not find the explanation satisfactory. Therefore, the
appellant vide letter dated I0.12.1992 informed the respondent (herein) that
she was deemed to have voluntarily retired from service w.e.f. 23.12.1992 in
terms of Clause I 7(a) of the Vth Bipartite Settlement and she was deemed to
have ceased from the service of the bank from that date. The explanation sent B
by the respondent (herein) was that due to illness she was unable to report
for duty immediately and sought extension of time to report for duty and
submitted an application for extension of leave supported by a medical
certificate. Aggrieved against the order passed by the appellant, the respondent
filed the writ petition No. 1259/1995 in the High Court seeking a direction to C
the appellant bank to reinstate her into service with all benefits. Learned
Single Judge vide order dated 23.1.1995 dismissed the writ petition on the
ground that there was inordinate delay in assailing the validity of the order
dated 30.12.1992. Meanwhile the Syndicate Bank (Employees') Pension
Regulations, 1995 ( hereinafter to be referred to as the Regulation) came into
force on 29.9.1995 i.e. the date of publication of the Regulations in the Official D
Gazette. The appellant issued a circular dated 4.11.1995 stating the Regulations
)
were applicable to the following categories of employees:

(i) Those who were in the service of the Bank on or after 1.1.1986 but
had retired before 29.9.1995.
E
(ii) Those who were in the service of the Bank before 29.9.1995 and
continued to be in the service of the Bank on or after 29.9.1995.

(iii) Those who joined the services of the Bank on or after 29.9.1995.

(iv) to (viii) omitted as are not relevant.
... ••• •••
F

3. It was clarified that the ex-employees who had voluntarily retired in
terms of Bank's Service Regulations Clause No. 19(1) or deemed to have
voluntarily retired in terms of Vth Bipartite Settlement, between 1.1.1986 and G
31.10.1993 are not eligible for pension under the pension Regulations, 1995.

4. It was also mentioned that regulation 29 of Pension Regulations 1995
provided for voluntary retirement of the employees who had completed 20
years of qualifying service by giving notice of not less than 3 months, in
writing, subject to the conditions laid down therein. H
246 SUPREME COURT REPORTS [2007] 5 S.C.R.

A 5. The said circular also provided that ex-employees who had not r
exercised their option for pension under the Regulations earlier could exercise
"
their option under the scheme within 120 days from 29.9.1995. In pursuance
of that circular the respondent applied for pension scheme on 28.12.1995 but
the same was rejected by the management on 22.1.1996. Aggrieved against
the order, the respondent (herein) filed a writ petition No. 1370of1987 before
B the High Court. Learned Single Judge allowed the writ petition by order dated
17.2.1989 and held that since the respondent retired from service after 1.1.86
she was eligible for pensionary benefits under the Regulations and the High .._ --
Court remanded the matter to the Bank for fresh consideration of the claim
of the respondent(herein). After the remand the appellant bank reconsidered
c the matter and rejected the same by communication dated 26.6.1999. The
reasons given by the appellant-bank for the rejection read as under:

"You remained absent from duties continuously from 11.3 .1992.
Even after service of notice since you did not join the duties nor
submit any explanation for your absence, you were deemed to have
D voluntarily vacated/retired from the Bank's service with effect from
22.12.1992 in terms of Clause 17 of the Vth Bipartite Settlement.

Please note that such deemed retirement was not brought about
by any positive action on the part of the Bank but is wholly on
account of your own action. Your cessation in service became fini!l
E as the writ petition filed by you challenging the Bank's order dated
30.12.1992 was dismissed by the Hon'ble High Court by its order
dated 25.1.1995. It is, therefore, observed that you did not cease to
be in the bank's service on reaching the age of superannuation nor
did you seek and obtain voluntary retirement as per Regulation No.
29 of the Syndicate Bank (Employees) Pension Regulations, 1995. It
F is also not a case of premature retirement as described in the Pension
-r-,

Regulations because there is no positive action on the part of the
Bank. Your action in effect amounted to abandonment of service. It
is thus seen that you do not come within the scope of the Pension
Regulations entitling you to receive pension. Further the Bank's circular
G No. 226/95/BC/PD/6 l/SWD dated 4.11.1995, it has been clarified that
the ex-employees who have voluntary retired in terms of the Bipartite
.( -
Settlement, between 1.1.1986 and 31.10.1993 are not eligible for pension
under the Pension Regulations, 1995. You cease to be in the services
of the Bank w.e.f. 22.12.1992 and hence you are not entitled to pension.
Even assuming without conceding that you had retired voluntarily
H
SYNDICATE BANK, BANGALORE l'. SATYA SRINATH [AK. MATHUR, J.) 247
from the services of the Bank as per the Pension Regulations, 1995, A
you would not be entitled to pension under the Pension Regulations,
as you retired before 1.1 1. 1993."

6. Aggrieved against that order the respondent filed another writ petition
before the High Court. This came to be registered vide writ petition No. 25322
of 1999. Learned Single Judge held that the respondent was not entitled to B
pension under the relevant regulations and dismissed the writ petition vide
order dated 27.7.1999. Aggrieved against that order also, the matter was taken
up by the respondent (herein) in appeal before the Division Bench and the
Division Bench after considering the matter came to the conclusion that the
respondent was entitled to pension a~ per Regulations. Hence, the present C
appeal.

7. It is a fact that the respondent(herein) was in the service of the Bank
since 7th April, 1969 and she had retired from the bank service w.e.f. 22.12.1992
and as per the regulation, the employees of the Bank who opted for pension
were in the service of the Bank on or after 1.1.1986 but was retired before D
29.9.95. Therefore, this condition stands fulfilled. These two parameters are
not in dispute. The only question that calls for detennination is that as per
the Regulation and the circular dated 4.11.1995 issued by the Bank whether
the respondent is entitled to pension or not? As per the clarification issued
by the bank that ex-employees who had voluntarily retired from the bank's
service or deemed to have voluntarily retired between l . l .1986 and 31 . l 0.1993, E
would not be eligible for pension under the Pension Regulation.

8. Now, the question is whether the respondent was deemed to have
voluntarily retired as per Vth Bipartite Settlement or she has been retired by
the appellant-bank. There can be two class of persons; one who sought F
voluntary retirement or the other who was deemed to have voluntarily retired.
It is not the case of the voluntary retirement but she was made to retire by
the order of the management. Therefore, she does not fall in either of the two
categories. The respondent(herein) remained absent because of her ill-health
and she submitted her application for extension of leave on medical ground
but the management instead of taking sympathetic view, retired the respondent G
from the services of the bank. As she does not fall either of the above two
categories, this is the third category which is not contemplated in the
regulations. However, an attempt was made to bring her case in tenns of the
Clause l 7(a) which says that if an employee absents himself from work for
a period of 90 days or more consecutive days, without submitting leave H
248 SUPREME COURT REPORTS (2007) 5 S.C.R.

A application on his credit or beyond a period of leave sanctioned originally/
subsequently and ifthe management is reasonably satisfied that the incumbent
has no intention of joining duties, the management may at any time thereafter
give notice to the employee and call him/her to report for duty and require
the employee to furnish explanation within 30 days of the date of notice. If
the employee does not satisfy the management, he/she can be deemed to
B have retired on expiry of the notice. In the event, the employee satisfies the
bank , he/she can report for duty thereafter within 30 days of the expiry of
the notice without prejudice to the bank's rights to take action under the
service rules. In this regard Clause 17(a) of the Vth Bipartite Settlement reads
as under:
c "(a) when an employee absents himself from work for a period of 90
days or more consecutive days, without submitting an application for
leave on his credit or beyond period of leave sanctioned originally/
subsequently or when there is satisfactory evidence that he has taken
employment in India or when management is reasonably satisfied that
D he has no intention of joining duties, the management may at anytime
thereafter give a notice to the employee at his last known address
calling upon him to report for duty within 30 days of the date of
notice, stating inter alia the grounds for coming to the conclusion that
the employee had no intention of joining duties and furnishing
necessary evidence, where available. Unless the employee reports for
E duty within 30 days of the notice or gives an explanation for absence
within the said period of 30 days satisfying the management that he
has not taken up another employment or a vocation and that he has
no intention of not joining duties, the employee will be deemed to
have voluntarily retired from Bank's service on the expiry of the said
F notice. In the event of the employee submitting a satisfactory reply,
he shall be permitted to report for duty thereafter within 30 days of
the date of expiry of the aforesaid notice without prejudice to the
bank's right to take action undP.r the law or rules of service."

9. In the present case, the respondent(herein) submitted her explanation
G and sought extension of time on medical ground. But the management of the
Bank instead of considering the matter sympathetically, ordered for premature
retirement under the purported exercise of Clause l 7(a) . It is not the case that
she had voluntarily retired but it is a case where the bank has retired her as
a measure of punishment because they were not satisfied by her explanation.
H Therefore, it is not a case which can be covered by the clarification issued
SYNDICATE BANK, BANGALORE v. SATYA SRJNATH [A.K. MATHUR, J.] 249

~ I by the Bank and it cannot be deemed that she has voluntarily retired. The A
contingency in the present case is not covered by the aforesaid Circular dated
4.11.1995. In the present case the respondent has put in almost 20 years' of
service and has taken leave on medical ground which is being denied to her.
In Clause 17 (a) what is contemplated is that a person who deliberately does
not join the office and leaves the office without any satisfactory explanation,
then it is open for the management to resort to Clause 17(a). But in the present
B
case, the facts are very glaring that incumbent has put in 20 years of service
. --,
and unfortunately she fell sick and sought for extension of leave on medical
ground, that was denied to.)ler. Therefore, it is not the case of the abandoned
service or she did not send any reply to the notice sent by the management.
However, she has made a humble reply to satisfy her authorities, that taking c
leave was beyond her control, i.e. ill health. But the authorities retired her
prematurally and denied the pension of 20 years of service. Therefore, this
kind of action is unfair, arbitrary which cannot be countenanced. In fact the
order passed by the bank clearly states it is not the case of premature
retirement and it is not the case that she has sought voluntary retirement or
premature retirement. It is the bank who has retired her and that kind of D
contingency is not covered in the clarification made by the bank. It is a case
:,/ of deemed voluntary retirement forced on her. The said contingency is not
covered under the aforesaid order of authorities. It was a forced retirement
by the respondent-bank.
E
10. Learned counsel has tried to persuade us that the letter rejecting her
representation for pension was because of her deemed retirement brought
about by her, on account of her own action. This observation of the bank is
not correct. In fact the retirement has been forced by the bank. It is not the
case that she was not willing to join the service but was unable to join due
___., to ill-health. The decision of management, "deemed to have been voluntarily F
retired" is totally misconceived.

11. Learned counsel has tried to place a strong reliance on the case of
Punjab & Sind Bank and Ors. v. Sakattar Singh, reported in [2001] I SCC
214 wherein no domestic inquiry was held and three letters were issued to the
incumbent directing him to join the duty and seeking explanation for G

- - ).
unauthorized absence. The respondent submitted the joining report that he
was suffering from eye ailment that was not accepted by the authorities and
the services were terminated. The High Court set aside the termination and
the matter came up before this Court and this Court in the facts and
circumstances of the case held that the rules of natural justice should be H
250 SUPREME COURT REPORTS [2007] 5 S.C.R.

A borne in mind in the relevant fact situation. But in the present case, as already
r '
mentioned above, the fact that she had submitted her explanation supported
by a medical certificate was not accepted by the bank- management and she
was forced to retire. This contingency is not covered under circular dated
4.11.1995.

B 12. Our attention was also invited to the case of UCO Bank and Ors.
v. Sanwar Mal, reported in (2004] 4 SCC 412 wherein their Lordships made
a distinction between "resignation and retirement", that it carries a different
meaning and it was observed that an employee can resign any time but he
retires only on superannuation or in case of voluntary retirement on completion
C of qualifying service. The expression 'resignation' and 'voluntary retirement'
are deliberate abandonment of service. Each expression carries different
connotation and each case has to be examined whether it was a case of
voluntary retirement sought by the employee or he has been retired on
account of superannuation or he has resigned or he has been retired
compulsorily as a measure of punishment. But so far as the present controversy
D is concerned, the compulsory retirement/ the premature retirement has been
imposed by the appellant, it is not voluntarily sought by the respondent. It
is a clear case of compulsory retirement ordered by the Management and that
contingency has not been contemplated in the circular issued on 4.11.1995.
Therefore, in any case, we are of the opinion that she could not be denied
E the benefit of her 20 years' of service when she comes within the pe'lsion
scheme that she was employed prior to 1986 and retired before 29.9.95.
Therefore, she is entitled to pension. In this view of the matter, we are of the
opinion that the view taken by the Division Bench of High Court is correct
and there is no merit in this appeal filed by the Bank. Hence, the same is
dismissed with no order as to costs.
F
NJ. Appeal is dismissed.

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