Holding

An award staff who retired on medical grounds under a non‑statutory scheme is not a "voluntarily retired" employee and therefore is not entitled to pension under Regulation 29 of the Union Bank of India (Employees') Pension Regulations, 1995.

Summary

Venkatesh Gopal Mahishi, an award staff of Union Bank of India, retired on medical grounds in November 1993 and secured a compassionate appointment for his son. The Bank later framed the Union Bank of India (Employees') Pension Regulations, 1995, offering pension to employees who voluntarily retired between 1 January 1986 and 31 October 1993. Mahishi applied for pension under these regulations, but the Bank rejected his claim, stating that he was not a voluntary retiree and that award staff were excluded from Regulation 29. The High Court had allowed his writ petition, relying on a prior decision concerning officers, which the Supreme Court found inapplicable to award staff retiring under a non‑statutory scheme. The Supreme Court held that the term “voluntarily retired” in a bank letter could not alter Mahishi’s status as award staff, and thus Regulation 29 did not apply to him. Consequently, his claim for pension was dismissed and the High Court’s order set aside.

Issues considered

Whether an award staff who retired on medical grounds under a non‑statutory scheme can be deemed to have "voluntarily retired" within the meaning of Regulation 29 of the 1995 Pension Regulations.
Whether such a retiree is eligible for pension under the Union Bank of India (Employees') Pension Regulations, 1995.
Whether the classification of employees (award staff vs. officers) and the cut‑off date affect entitlement to pension benefits.

Legislation cited

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

Subjects

pension eligibilityaward staffvoluntary retirementcompassionate appointmentbanking regulationsretirement categoriesRegulation 29

Judgment

A UNION BANK OF INDIA
v.
VENKATESH GO PAL MAHI SHI AND ANR.

JANUARY 12, 2007

B [G.P. MATHURAND LOKESHWAR SINGH PANTA, JJ.]

Union Bank of India (Employees') Pension Regulations, 1995-
Regulation 29-Award staff-Retired voluntarily on medical grounds
seeking compassionate appointment to his dependent-Appointment to
dependent given-Thereafter pension scheme framed by Bank-The retired
c employee sought pension thereunder-Rejection challenged-Courts below
granted pension-On appeal, held: The retiree being award staff and
having been retired under different scheme cannot be considered having
voluntarily retired-Hence not entitled to pension under the Scheme-
Service Law-Pension.
D Respondent No. 1 an employee of the appellant-Bank, sought retirement
on medical grounds with request to give employment to his dependent on r
compassionate ground. His application was dealt with and considered under
non-statutory scheme namely 'Appointment of Dependents of Employees
Retiring Voluntarily on Medical Grounds'. He was retired w.e.f. 1.11.1993.
E His dependant was also given employment.

Appellant-Bank framed Union Bank of India (Employees') Pension
Regulations 1995, whereunder pension option was made available to the
employees of the appellant. Bank called for option to be exercised by the
employees who had retired between 1.1.1986 and 31.10.1993. Respondent
F No. 1 submitted an application for pension under the Regulations, but his
claim was rejected by the Competent Authority on the ground that he was
not eligible as he was an award staff and was retired under different
scheme. Indian Bank's association also advised the Bank that the concept
of voluntary retirement for the purpose of receiving pension on voluntary
G retirement under Regulation 29 was not available to the award staff.
Respondent filed Writ Petition seeking grant of pension and the same was
allowed by Division Bench of High Court Hence the present appeal.

Allowing the appeal, the Court

H HELD: Respondent No.1, having retired as award staff, is not entitled
878
UNION BANK OF INDIA v. VENKATESH GOPAL MAHISHI [PANTA, J.] 879

to the grant of pension under the Pension Regulations 1995. The respondent A
No.1 has not denied his status as an award staff when he sought retirement
on medical grounds. Thus, respondent No.1 cannot take the benefit of the
letter received by him from the Chief Manager of the appellant-bank,
treating him as voluntarily retired from the service of the bank w.e.f.
01.11.1993 under the Pension Regulations as nomenclature of the words
'voluntarily retired' used in the said letter will not change the status of the B
respondent No.I from award staff to any other category of the employee of
.the appellant-bank. Thus, Regulation 29, upon which reliance is placed by
respondent No.I, is not attracted in his case and his claim for pension is
not covered thereunder. [Paras 28 and 24) (887-E, 886-F-G)

Madhav K. Kirtikar v. Bank of India, 1997 (2) Born. C.R. 524,
c
distinguished.

Bank of India v. lndu Rajagopalan and Ors., 200 I (9) SCC 318,
referred to.
D
CIVIL AP PELLATE JURISDICTION: Civil Appeal No. 5503 of2003.
1

From the final Judgment/Order dated 2.4.2002 of the High Court of
Judicature at Bombay in W.P. No. 567/2002.

Raju Ramachandran, O.P. Gaggar, for the Appellant. E
Nitin S. Tambwekar, B.S. Sai and K. Rajeev, for the Respondents.

The Judgment of the Court was delivered by

LOKESHWARSINGHPANTA,J.: F
1. This appeal is directed against the judgment and order dated
02.04.2002 passed by the High Court of Judicature at Bombay in Writ
Petition No.567 of2002 whereby and whereunder Venkatesh Gopal Mahishi
has been held entitled for pension under the Union Bank oflndia (Employees')
Pension Regulations, 1995. G

2. The facts, in brief, are that Venkatesh Gopal Mahishi, respondent
No. l herein, joined the services of the Union Bank of India (hereinafter
referred to as 'the appellant-bank') as a Peon on 02.05. 1960. On 19.02.1991,
the respondent No. I had submitted an application to the authority seeking H
880 SUPREME COURT REPORTS [2007] 1 S.C.R.

A retirement on medical grounds with further request to give employment to "·
his dependent son on compassionate ground. The request of the respondent
No. I was accepted by the appellant-bank and he was retired as Daftary from
the service w.e.f. 0 l. I l .1993 and later on his son has been given employment.

3. The appellant-bank, in exercise of the powers conferred by clause
B (t) of sub-section (2) of Section I 9 of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970 (5 of I970), after consultation with
the Reserve Bank of India and with the previous sanction of the Central
Government, framed regulations called Union Bank of India (Employees')
Pension Regulations, 1995 (for short "Pension Regulations"), whereunder
c pension option was made available to the employees of the appellant-bank
in lieu of the employer's contribution in the Provident Fund on the employees
surrendering the same to the bank. The appellant-bank called for option to
be exercised by the employees who had retired from service between
01.01.1986 and 31.10.1993. The respondent No. I accordingly submitted an
application on 28 .06 .1994 for pension under the Pension Regulations, but his
D claim was rejected by the competent authority on I2.1 l.l994 inter alia on
the ground that the respondent No. I was not eligible to the pension scheme
as he was retired under different scheme prior to the date of enforcement
of the Pension Regulations.

4. The respondent No. I, after about seven years from the date of the
E rejection of his claim for the grant of the benefits of the pension scheme to
him, filed Civil Writ Petition No.567 of 2002 before the High Court of
Judicature at Bombay seeking grant of pension. A Division Bench of the
High Court allowed the writ petition primarily relying on an earlier decision
of learned Single Judge in the case of Madhav K. Kirtikar v. Bank of India,
F (1997) 2 Born. C. R. 524. Now, the appellant-bank is before us in this appeal.

5. We have heard the learned counsel for the parties at length and have
gone through the judgment of the Division Bench of the High Court and
other material on record.

G 6. Mr. Raju Ramachandran, learned senior Advocate appearing on
behalf of the appellant-bank, has broadly made threefold submissions: (i)
that Pension Regulations do not apply to the respondent No. I as he is an
award staff; (ii) that the respondent No. I has sought retirement on medical
grounds covered by the non-statutory scheme, which is different scheme
H and on his request his son was appointed on compassionate grounds, thus,
UNION BANK OF INDIA v. VENKATESH GOPAL MAHISHI [PANTA, J.] 88I

the respondent No. I is not entitled to take two benefits under different A
schemes; and (3) that even if the respondent No. I is held eligible for
pension, the Pension Regulations will not be applicable to him as the
respondent No. I was retired on 01.11.1993 and the Pension Regulations are
made applicable to those employees only who have voluntarily retired w.e.f.
01.01.1986 to 31.10.1993 under the statutory scheme/rules of retirement.
B
7. Per contra, Mr. Nitin S. Tambwekar, learned counsel appearing on
behalf of respondent No. I, contended that the claim of the respondent No. l
- "f
for the grant of pension is fully covered by the Pension Regulations and the
stand of the appellant-bank that the Pension Regulations are not applicable
to the respondent No. I as he had sought voluntary retirement on medical
grounds, is not tenable and justified. According to the learned counsel, c
the appellant-bank cannot classify its employees into separate and different
categories who have retired on medical grounds or sought voluntary
retirement on any other ground as per the scheme/rules. The learned
counsel also submitted that the claim of the respondent No. I is covered by
Regulation 29 of the Pension Regulations and the Chief Manager of the D
appellant-bank vide communication dated 20.09.1993, addressed to the
respondent No. I, has categorically admitted that the respondent No.1 has
- 1 been treated as voluntarily retiree from the services of the Bank w.e.f.
OI. IO. I 993. The learned counsel lastly contended that this Court, in exercise
of the jurisdiction under Article I36 of the Constitution oflndia, should not
lightly interfere with the well-reasoned judgment and order of the Division E
Bench granting beneficial reliefs to the respondent No. I - retiree of the
appellant-bank.

8. We have duly considered the respective contentions of the learned
counsel for the parties. It is not in dispute that the appellant-bank framed
the above-said Pension Regulations for the grant of pension to its employees. F
Under Chapter III of the Pension Regulations, Bank shall constitute a Fund
to be called the Union Bank of India (Employees') Pension Fund. The
Provident Fund Trust shall, immediately after the constitution of the Fund,
transfer to the Union Bank of India (Employees') Pension Fund the
accumulated balance of the .:ontribution of the Bank to the Provident Fund G
and interest accrued thereon upto the date of such transfer in respect of
every employee.

9. Regulation 2 (k) defines 'date of retirement' to mean the last date of
the month in which an employee attains the age of superannuation or the
date on which he is retired by the Bank or the date on which the employee H
\

-A..
882 SUPREME COURT REPORTS (2007) 1 S.C.R.

A voluntarily retires; or the date on which the officer is deemed to have retired.
"·
10. Under Clause (n) 'Employee' means any person employed in the
service of the bank on full time work on permanent basis or on part-time
work on permanent basis on scale wages and who opts and is governed by
these regulations, but does not include a person employed either on
B contract basis or daily-wage basis or on consolidated wages.

11. Clause (x) deals with the definition of 'retired' to include 'deemed
to have retired' under Clause (l),whereas under Clause (l) 'deemed to have ,__
retired' means cessation from service of the Bank on appointment by Central "
Government as a whole-time Director or Managing Director or Chairman in
c the Bank or in any other Bank specified in column 2 of the First Schedule
of the Act or Banking Companies (Acquisition and Transfer of Undertakings)
Act, 1970(5.of1970).

12. 'Retirement' is defined in Clause (y), which reads as under:-

D "(a)· on attaining the age of superannuation specified in Service
Regulations or Settlements;
t ........
(b) on voluntary retirement in accordance with provisions contained
in Regulation 29 of these regulations; and

E (r.) on premature retirement by the Bank before attaining the age of
superannuation specified in Service Regulations or Settlements."

13. Chapter II of the Pension Regulations deals with 'Application and
Eligibility'. Regulation 3(l)(a) envisages that the Pension Regulations shall
apply to employees who were in the service of the Bank on or after the lst
F day of January, 1986 but had retired before the lst day ofNovember, 1993;
\
(b) exercise an option in writing within one hundred and twenty days from
the notified date to become member of the Fund; and (c) refund within sixty
days after the expiry of the said period of one hundred and twenty days
specified in clause (b) the entire amount of the Bank's contribution to the
Provident Fund including interest accrued thereon together with a further
G simple interest at the rate of six per cent per annum on the said amount from
the date of settlement of the Provident Fund account till the date of refund
of the aforesaid amount to the Bank.
t -
14. Chapter V deals with 'Classes of Pension'. Under Clause 28, an ~ '
employee who has retired on his attaining the age of superannuation
H
UNION BANK OF INDIA v. VENKATESH GOPAL MAHISHI [PANTA, J.] 883

specified in the Service Regulations or Settlements, is entitled to the A
superannuation pension.

15. Clause 29 to the extent it is relevant and relied upon by the
respondent No. l reads as under:-

"Pension on Voluntary Retirement:- (l) On or after the 1st day of B
November, 1993, at any time after an employee has completed
twenty years of qualifying service he may, by giving notice of not
less than three months in writing to the appointing authority retire
from service;

Provided ................................................... . c
Provided further ........................................ .

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." D

16. An employee is entitled to Invalid Pension under Regulation 30,
Premature Retirement Pension under Regulation 32 and Compulsory
Retirement Pension under Regulation 33 of the Pension Regulations.

17. The respondent No. l, admittedly, gave his option for the benefits E
of the Union Bank ofindia Employees' Pension Scheme 1993 on 28.05.1994.
He undertook to refund the bank's contribution to the provident fund,
amounting to Rs.46,464.33, including interest accrued thereon together with
further simple interest at the rate of 6% p.a., paid to the respondent No. l
on his retirement. The request of the respondent No. l was rejected by the F
competent authority of the appellant-bank on the ground that the respondent
No. l had sought voluntary retirement from the services of the appellant-
bank as Daftary w.e.f. 01.11.1993 vide his application dated 19 .02.1991 on
medical grounds under a non-statutory scheme and with further request to
give appointment to his son on compassionate grounds. The appellant-
bank accepted the req~est of the respondent No. l and he was paid al\ his G
legal dues including provident fund and gratuity, etc. on his retirement and
his son was also taken into services of the bank as Clerk/Typist. The
appellant-bank, in its counter affidavit filed in the High Court in opposition
to the writ petition of the respondent No. 1, has categorical1y stated that the
claim of the respondent No. I for the grant of pension under the Pension H
884 SUPREME COURT REPORTS [2007] I S.C.R.

A Regulations is not covered by the Pension Regulations as Pension
Regulations came into force from the date of its publication in the Official
Gazette, i.e. 29.09.1995, and were made applicable to the employees, who
were in the service of the bank on or after the l st day of January 1986, but
had retired before 1st day ofNovember, 1993 as per terms of Regulation 3(1).
It has also been stated that one category of employees, who sought
B voluntary re.tirement from the services of the bank in terms of a scheme
formulated by ~e bank under the provisions of Regulation 19( l) of the
Union Bank oflndia Officers' Service Regulations, 1979 (hereinafter referred
to as 'the Service Regulations') made a demand to consider the claims of
these employees, who had retired under this scheme between the period
c Ol.Ol.1986 and 01.11.1993 to be treated as pension optees as was done in
the case of those who had retired on superannuation, voluntary retirement
or premature retirement.

18. We find from the reading of the counter affidavit of the appellant-
bank that several writ petitions were filed before the Karnataka High Court fl
D and Bombay High Court in regard to the benefits of the Pension Regulations.
The matters were later on carried to this Court by the Indian Banks'
Association and the concerned Banks in Special Leave Petitions. The
.___
Special Leave Petitions were finally decided by this Court by an order dated '
05.04.2000 in favour of the voluntarily retired officers of the concerned
Banks. The benefits of pension were granted to those officers of the Bank
E
who had voluntarily retired between Ol.Ol.1986 and Ol.l l.1993 as per the
judgment of this Court. It appears that the appellant-bank thereafter
received a number of representations from its employees, both officers as
well as ~he award staff including the respondent No. I, claiming to be treated
as pe:ision optees and be given the benefits of pension having voluntarily
F retired between 01.01.1986 and 01.11.1993 under the non-statutory scheme.

19. The appellant-bank wrote a letter dated 09.11.2000 to the Under
Secretary, Government of India, Ministry of Finance, Banking Division,
seeking clarification of the claims of those officers who had voluntarily
retired during the period between Ol.Ol.1986 and 31.10.1993 on medical
G grounds and sought appointment of dependents an compassionate grounds
as well, as per the Bank's own scheme. In response to· the said
communication, the Director (IR), Government oflndia, Ministry ofFinance,
Department of Economic Affairs, Banking Division, IR Section, vide letter
dated 17.05.2001 informed the appellant-bank that the officers, who had
H retired with simultaneous appointment of the dependents on compassionate
UNION BANK OF INDIA v. VENKATESH GOPAL MAHISHI [PANTA, J.] 885

grounds, will constitute a separate class and hence cannot be extended the A
benefit of exercising option for pension as has been granted to the incumbents
who had voluntarily retired under the scheme formulated by the Bank under
Regulation 19( l) of the Officers' Service Regulations.

20. The appellant-bank again sought clarification from the Indian
Banks' Association on the subject in issye. The Indian Banks' Association B
vide its letter No. PD/GSN/UNION/G2/814 dated 01.10.2001 advised the
appellant-bank as under:-

"1: Voluntary retirement as a concept and as a k>rm of retirement
was not available to award staff under the Bipartite Settlement prior
to the introduction of the Pension Scheme. Even after introduction
c
of the Pension Scheme, it is only those who have opted for pension
who can retire voluntarily, under Regulation 29 of Bank Employees'
Pension Regulations, 1995.

2. The decision of the Government of India, as conveyed to the D
Bank in case of officer, will equally hold good in the case of
workmen also."

21. As noticed earlier, the respondent No. I submitted an application
dated 19.02.1991 to the Chief Manager of the appellant-bank making request
for voluntary retirement on medical grounds and appointment of his son on E
compassionate grounds. 1-fis application was dealt with and considered
under non-statutory scheme, known as Scheme for ' Appointment of
Dependents of Employees Retiring Voluntarily on Medical Grounds'.

22. Having gone through the judgment of the High Court impugned in
this appeal, we find that the High Court has allowed the writ petition of the
F
respondent No. I simply relying upon the decision of the learned Single
Judge in Madav Kirtikar (supra) in which the learned Single Judge found
the officers of the bank who had voluntarily retired between 01.0 l.1986 and
31.10.1993 eligible for pension, irrespective of their retirement on attaining
the age of superannuation or under the scheme of voluntary retirement. G
The High Court has not given any finding on the fundamental issue whether
the claim of the respondent No. I who, admittedly, was an award staff at the
time of retirement on medical grounds in the year 1993, is covered under the
Pension Regulations 1995 or not. In our view, the decision of the learned
Single Judge in Madav Kirtikar (supra), as relied upon by the Division
H
886 SUPREME COURT REPORTS [2007) 1 S.C.R.

A Bench in its impugned order, is not of any help or assistance either on facts
or on law to the case of the respondent No. l . In that case, the employee
of the bank was an officer who sought volu~tary retirement under the
provisions of the Officers' Service Regulation governing the terms and
conditions of voluntary retirement under the scheme in the normal
circumstances and not on medical ground. Secondly, in that case there was
B no question of appointment of dependent of the retiree on compassionate
ground.

23. In the normal course, we could have remitted the case back to the
High Court for recording decision on the fundamental issue raised by the
appellant-bank in relation to the entitlement of pension to the respondent
c No. I, who had retired as an award staff, but looking to the time-gap between
the date of retirement of respondent No.1 w.e.f. 01.11.1993 and pendency of
the writ petition in the High Court and Civil Appeal in this Court and with
the consent of the learned counsel for the parties, we propose to deal with
and decide this funeamental issue in this appeal.
D
24. The appellant-bank in its affidavit filed before the High Court has
categorically stated and pleaded that as per the advise of the Director (IR),
Government of India, Ministry of Finance, Department of Economic Affairs,
Banking Division, IR Section, the benefit of exercising option for pension
cannot be extended to the employees who had retired on medical grounds
E with simultaneous appointment of the dependents on compassionate grounds.
The Indian Banks' Association also advised the appellant-bank that the
concept of voluntary retirement for the purpose of receiving pension on
voluntary retirement under Regulation 29 is not available to the award staff.
The respondent No. I has not denied his status as an award staff when he
sought retirement on medical grounds. Thus, the respondent No. l cannot
F
take the benefit of the letter dated 20.09.1993 received by him from the Chief
Manager of.the appellant-bank, treating him as voluntarily retiree from the
service of the bank w.e.f. 01.11.1993 under the Pension Regulations as
nomenclature of the words ' voluntarily retired' used in the said letter will not
change the status of the respondent No. I from award staff to any other
G category of the employee of the appellant-bank. Thus, Regulation 29, upon
which reliance is placed by the respondent No.l, is not attracted in his case
and his claim for pension is not covered thereunder.

25 . This Court in its order dated 03.12.2001 titled as Union of India v.
B. M. Ramachandra Rao & Ors., observed as under:-
H
)

UNION BANK OF INDIA v. VENKATESH GOPAL MAHISHI [PANTA, J.] 887

"Leaving the question of law open, inasmuch as connected appeals A
(C. A. Nos.6959 of 1997 and batch) have been dismissed, we see
no reason to interfere.

The appeals are dismissed. No costs."

26. It becomes clear from the reading of the above extracted order that B
the question of Jaw, i.e. imposition of the cut-off date for the grant of
benefits of pension to the employees of the banks who have voluntarily
retired between 01.01.1986 and 31.10.1993, was left open.

27. This Court in Bank of India v. Indu Rajagopalan & Ors., [2001]
9 SCC 318 in Civil Appeal No. 6959 of 1997 and batch, which were the c
subject matter in Civil Appeal Nos.1177-1411 of 2000 before this Court in
Union of India v. B.M Ramachandra Rao & Ors., did not consider it
necessary to go into the arbitrariness, validity or illegality of fixation of the
cut-off date for the grant of pension to those employees who had retired
between 01.01.1~86 and 31.10.1993. In this case, this Court simply observed D
"the number of employees who have retired in this manner and financial
implications being small, no interference was called for in the teeth of the
Bank (Employees') Pension Regulations, 1995, Regulatipns 2(y), 29, 2(t), ,
2(u), 3 and 5."

28. As we have held that the respondent No. l, having retired as award E
staff, is not entitled to the grant of pension under the Pension Regulations
1995, we do not consider it necessary and expedient to go into the other
above-mentioned points raised by the learned counsel for the parties.

29. In the result, for the afore-said reasons, the appeal is allowed to the
extent indicated above. The impugned judgment dated 02.04.2002 of the
F
Division Bench of the High Court of Judicature at Bombay allowing the Writ
Petition No.567 of 2002 filed by the respondent No. I cannot be sustained
and it is accordingly set aside and the Writ Petition shall stand dismissed.

30. The parties are left to bear their own costs. G
K.K.T. Appeal allowed.