Holding

Clause (1) and clause (2) of Regulation 33 must be read conjointly, and any reduction of pension below the full amount mandates prior consultation of the Board of Directors.

Summary

Vijay Kumar, a former Chief Manager of Central Bank of India, was compulsorily retired after an inquiry found him guilty of sanctioning loans without proper appraisal. The disciplinary authority imposed retirement and the Field General Manager, acting as appellate authority, reduced his pension to two‑thirds without consulting the Board of Directors. The High Court upheld this reduction, but the Supreme Court examined the interpretation of Regulation 33 of the Bank's Pension Regulations. The Court held that clauses (1) and (2) of Regulation 33 must be read together, requiring prior Board consultation whenever pension is reduced below the full amount, even when the reduction is made by a superior authority exercising appellate powers. Consequently, the post‑factum approval by the Board was deemed insufficient, and the reduction was set aside. The Bank was directed to reconsider the pension reduction after giving the appellant a hearing and consulting the Board, failing which full pension must be paid.

Issues considered

Whether reduction of pension of a compulsorily retired employee under Regulation 33 requires prior consultation of the Board of Directors.
Whether the Field General Manager, as a competent authority exercising appellate powers, could lawfully reduce the pension without such prior consultation.
How Regulation 33(1) and 33(2) of the Central Bank of India (Employees’) Pension Regulations, 1995, should be interpreted – mutually exclusive or conjointly.

Legislation cited

Central Bank of India (Employees’) Pension Regulations, 1995s. Regulation 33(1), s. Regulation 33(2)
Central Bank of India Officer Employees’ (Discipline and Appeal) Regulations, 1976s. Regulation 17, s. Rule 4(h), s. Schedule 4
Central Bank of India (Officers’) Service Regulations, 1979s. Regulation 20(3)(iii)

Headnote

Issue for Consideration The High Court upheld reduction of one-third of the pension payable to the appellant under the Central Bank of India (Employees’) Pension Regulations, 1995. Headnotes† Central Bank of India (Employees’) Pension Regulations, 1995 – Central Bank of 1979 – Central Bank of India Officer Employees’ (Discipline and Appeal) Regulations, 1976 – Allegation against the appellant that he sanctioned loans without proper appraisal – Inquiry was initiated – Inquiry report held the appellant guilty – Consequent

Subjects

Service LawPensionReduction of pensionCompetent AuthorityRegulation 33 of the Central Bank of India (Employees’) Pension Regulations, 1995Prior consultation of the Board of DirectorsEmployee’s constitutional right to pension

Judgment

[2025] 7 S.C.R. 523 : 2025 INSC 848

Vijay Kumar
v.
Central Bank of India & Ors.
(Civil Appeal No. 9496 of 2025)
15 July 2025
[Pamidighantam Sri Narasimha and
Joymalya Bagchi,* JJ.]

Issue for Consideration
The High Court upheld reduction of one-third of the pension payable
to the appellant under the Central Bank of India (Employees’)
Pension Regulations, 1995.

Headnotes†
Central Bank of India (Employees’) Pension Regulations,
1995 – Central Bank of India (Officers’) Service Regulations,
1979 – Central Bank of India Officer Employees’ (Discipline and
Appeal) Regulations, 1976 – Allegation against the appellant
that he sanctioned loans without proper appraisal – Inquiry was
initiated – Inquiry report held the appellant guilty – Consequent
to which, appellant was compulsory retired by Deputy General
Manager – Appellant submitted an appeal before Appellate
Authority i.e., Field General Manager – During pendency
of appeal, Field General Manager recommended award of
two-third compulsory retirement pension – Later, appeal before
the Appellate Authority was also dismissed – Appellant sought
full retiral benefits before the High Court – The High Court
upheld the decision of the Bank to reduce one-third of the
pension payable to the appellant – Correctness:
Held: A plain reading of regulation 33 of the Pension Regulations
would show award of pension less than full pension is to be done
with prior consultation of the Board of Directors – Such prior
consultation with the highest authority of the Bank i.e., Board of
Directors must be understood as a valuable mandatory safeguard
before an employee’s constitutional right to pension is curtailed – In
these circumstances, a post facto approval cannot be a substitute
of prior consultation with the Board before the decision is made –

* Author
524 [2025] 7 S.C.R.

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The order of the Field General Manager reducing pension without
prior consultation of Board of Directors and the order of the High
Court is set aside – Thus, the Bank directed to take appropriate
decision regarding reduction of pension after giving an opportunity
of hearing to the appellant and with prior consultation of the Board.
[Paras 21, 24]

Central Bank of India (Employees’) Pension Regulations,
1995 – Regn.33 (1) and (2) must be read conjointly:
Held: Clause (1) and clause (2) of regulation 33 must be read
conjointly and in all cases when the full pension admissible to a
compulsorily retired employee under the regulations is reduced, a
prior consultation with the Board is necessary. [Para 19]

Central Bank of India (Employees’) Pension Regulations, 1995 –
Regn. 33 – Central Bank of India Officer Employees’ (Discipline
and Appeal) Regulations, 1976 – Competent Authority:
Held: ‘Competent Authority’ is defined in both Discipline and Appeal
Regulations and Pension Regulations as an authority appointed by
the Board for the purpose of such regulations – In the Discipline
and Appeal Regulations, it is further clarified Competent Authority
must be superior to the delinquent and not an officer holding rank
lower than scale IV officer – Clause 3(b) of Discipline and Appeal
Regulations read with Schedule shows that an officer not below
rank of Assistant General Manager and holding a rank higher
than the disciplinary authority is the appellate authority under
such regulation – A combined reading of the provisions in both
the regulations would indicate a Field General Manager (holding
a rank superior to disciplinary authority and higher than Assistant
General Manager) is not only an authority superior to the disciplinary
authority empowered to reduce pension under clause (1) but also
the appellate authority under Discipline and Appeal Regulations
who could exercise appellate powers to reduce pension under
clause (2) of Pension Regulations. [Para 13]

Case Law Cited
Rao Shiv Bahadur Singh v. State of Uttar Pradesh [1953] 1 SCR
1188 : (1953) 2 SCC 111 – referred to.
Indian Administrative Service (S.C.S.) Association, U.P. & Ors. v.
Union of India & Ors. [1992] Supp. 2 SCR 389 : (1993) Supp. 1
SCC 730 – relied on.
[2025] 7 S.C.R. 525

Vijay Kumar v. Central Bank of India & Ors.

List of Acts
Central Bank of India (Employees’) Pension Regulations, 1995;
Central Bank of India (Officers’) Service Regulations, 1979;
Central Bank of India Officer Employees’ (Discipline and Appeal)
Regulations, 1976.

List of Keywords
Service Law; Pension; Reduction of pension; Competent Authority;
Regulation 33 of the Central Bank of India (Employees’) Pension
Regulations, 1995; Prior consultation of the Board of Directors;
Employee’s constitutional right to pension.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9496 of 2025
From the Judgment and Order dated 22.04.2024 of the High Court
of Judicature at Patna in CWJC No. 7831 of 2017

Appearances for Parties
Advs. for the Appellant:
Neeraj Shekhar, Mrs. Kshama Sharma, Rajesh Kumar Maurya,
Ujjwal Ashutosh, Ramendra Vikram Singh, Ram Bachan Choudhary,
Amrendra Singh.
Advs. for the Respondents:
Dhruv Mehta, Sr. Adv., Ashish Wad, Manoj Wad, Ms. Swati Arya, Ms.
Akriti Arya, Ms. Nishi Sangtani, Mohd. Hadi, M/s. J S Wad And Co.

Judgment / Order of the Supreme Court

Judgment

Joymalya Bagchi, J.

1. Delay condoned. Leave granted.
2. Appeal is directed against judgment dated 22.04.2024 passed by
the Patna High Court to the extent the Court upheld reduction of
one-third of the pension payable to the appellant under the Central
Bank of India (Employees’) Pension Regulations, 19951.

1 Hereinafter, Pension Regulations.
526 [2025] 7 S.C.R.

Supreme Court Reports

3. Appellant while working as Chief Manager, a scale IV officer in the
respondent No.1-bank was served with a Memorandum of Charge
alleging that, during his tenure as Branch Manager, Dhanbad Branch
he sanctioned loans in respect of 12 accounts, inter alia, without
proper appraisal of income, non-verification of KYC compliance,
without post-sanction inspection etc. exposing the bank to potential
financial loss of huge amount.
4. A.K. Roy, Assistant General Manager (a scale V officer) was appointed
as the Inquiry Authority (IA). During the inquiry, appellant attained
superannuation on 30.11.2014 but the enquiry was continued under
Regulation 20(3)(iii) of Central Bank of India (Officers’) Service
Regulations, 19792. He submitted inquiry report holding the appellant
failed to discharge his duties with utmost integrity and honesty which
was unbecoming of a Bank officer and exposed the Bank to huge
financial loss for his pecuniary gain. Inquiry report was served on the
appellant, and he replied to it. After considering his reply disciplinary
authority i.e., Deputy General Manager (a scale VI officer) upheld the
findings of the inquiry officer and imposed major penalty of compulsory
retirement under Rule 4 (h) of Central Bank of India Officer Employees’
(Discipline and Appeal) Regulations, 19763 with effect from date of
superannuation. Appellant submitted an appeal before appellate
authority i.e., Field General Manager (a scale VII officer).
5. During pendency of the appeal, Regional Manager, Purnea, a scale
IV officer, i.e., equivalent to scale of the appellant, on 05.08.2015
recommended minimum payable pension under compulsory retirement
i.e., two-third pension to the appellant. Field General Manager by
order dated 07.08.2015 concurred with the Regional Manager and
recommended award of two-third compulsory retirement pension.
Thereafter, on 30.12.2015 the said Field General Manager as the
appellate authority dismissed the appellant’s appeal and upheld the
penalty imposed on the latter.
6. The appellant initially approached the High Court challenging validity
of Regulation 20(3)(iii) of Service Regulations which enabled the
Bank to continue disciplinary proceedings even after superannuation
and for setting aside the order of compulsory retirement including

2 Hereinafter, Service Regulations.
3 Hereinafter, Discipline and Appeal Regulations.
[2025] 7 S.C.R. 527

Vijay Kumar v. Central Bank of India & Ors.

disbursal of full retiral benefits but subsequently he restricted his
challenge only to disbursal of full retiral benefits.
7. During hearing High Court was informed while the Bank had not
passed any order forfeiting gratuity, it had taken decision to award two-
third of the pension payable to the appellant. In these circumstances,
High Court while directing release of gratuity upheld the decision of
the Bank to reduce one-third of the pension payable to the appellant.
8. Being aggrieved by the reduction of one-third pension, appellant has
approached this Court. Bank has contested the appellant’s plea and
produced additional documents, namely, recommendation letter of
Regional Manager, Purnea for grant of minimum pension and the
sanction letter of such pension by Field General Manager awarding
two-third pension to the appellant.
9. Mr. Neeraj Shekhar contended pension is not a bounty and appellant’s
right to pension is constitutionally protected under Article 300A. Such
right could not be taken away save and except by a clear prescription
of law. High Court erred in holding that a compulsorily retired employee
is not entitled to pension at all unless an order under regulation 33(1)
of the Pension Regulations is passed. Regulation 33 (1) and (2)
must be harmoniously construed to mean in cases where penalty
of compulsory retirement is imposed, such employee has a right to
receive pension not less than two-third of the full pension and such
deduction can be made only after prior consultation with the Board
of Directors.
10. Per contra, Mr. Dhruv Mehta, learned Senior Counsel submitted a
plain reading of regulation 33 (1) and (2) would show the clauses
are mutually exclusive and operate in different circumstances which
do not overlap each other. As per clause (1), an authority higher
than the authority competent to impose compulsory retirement
penalty may grant pension at a rate not less than two-third whereas
clause (2) permits the competent authority awarding compulsory
retirement to award less than full pension in exercise of its original,
appellate or reviewing powers. Only in the latter case consultation
with Board of Directors is necessary. As the pension was reduced
by the Field General Manager, a scale VII officer who is an authority
higher in rank than the disciplinary authority, a scale VI officer no
prior consultation was necessary, and the impugned decision did
not call for interference.
528 [2025] 7 S.C.R.

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11. The controversy centres around interpretation of regulation 33 of
the Pension Regulations which provides for compulsory retirement
pension as follows: -
“33. Compulsory Retirement Pension - 1. An employee
compulsorily retired from service as a penalty on or after
1st day of November, 1993 in terms of Central Bank of India
Officer Employees’ (Discipline and Appeal) Regulations,
1976 or awards/settlements may be granted by the
authority higher than the authority competent to impose
such penalty, pension at a rate not less than two-thirds
and not more than full pension admissible to him on the
date of his compulsory retirement if otherwise he was
entitled to such pension on superannuation on that date.
2. Whenever in the case of a bank employee the Competent
Authority passes an order (whether original, appellate or
in exercise of power of review) awarding a pension less
than the full compensation pension admissible under these
regulations, the Board of Directors shall be consulted
before such order is passed.
3. A pension granted or awarded under clause (1) or, as
the case may be, under clause (2), shall not be less than
the amount of rupees three hundred and seventy-five per
mensem.”
12. Clause (1) provides for granting pension at a rate not less than two-
third and not more than full pension by an authority higher than the
authority competent to impose penalty of compulsory retirement.
Clause (2) enjoins whenever a competent authority passes an order
awarding pension less than full compensation pension in exercise
of original, appellate or review powers, Board of Directors must
be consulted before such order is passed. In no case the pension
awarded shall be less than Rs.375/- per mensem.
13. ‘Competent Authority’ is defined in both Discipline and Appeal
Regulations and Pension Regulations as an authority appointed by
the Board for the purpose of such regulations. In the Discipline and
Appeal Regulations, it is further clarified Competent Authority must
be superior to the delinquent and not an officer holding rank lower
than scale IV officer. Clause 3(b) of Discipline and Appeal Regulations
[2025] 7 S.C.R. 529

Vijay Kumar v. Central Bank of India & Ors.

read with Schedule4 shows that an officer not below rank of Assistant
General Manager and holding a rank higher than the disciplinary
authority is the appellate authority under such regulation. A combined
reading of the provisions in both the regulations would indicate a Field
General Manager (holding a rank superior to disciplinary authority
and higher than Assistant General Manager) is not only an authority
superior to the disciplinary authority empowered to reduce pension
under clause (1) but also the appellate authority under Discipline and
Appeal Regulations who could exercise appellate powers to reduce
pension under clause (2) of Pension Regulations.
14. The bank would argue as pension was reduced under regulation 33(1)
by Field General Manager as an authority superior to disciplinary
authority competent to impose penalty, no prior consultation with
Board was necessary, unlike cases where Competent Authority i.e.,
disciplinary authority while awarding compulsory retirement directs
pension less than full compensation pension.
15. Such argument is fallacious for following reasons. Clause (2) permits
the Competent Authority to award pension in exercise of not only
original but also appellate or reviewing powers. If the expression
‘Competent Authority’ in clause (2) is restricted to disciplinary authority
alone, reduction of pension in exercise of appellate or review power
would become nugatory. Any interpretation which renders words or
expressions in a statute otiose ought to be eschewed.5
16. Given this situation to accept the bank’s interpretation that the two
clauses ought to be read independent of one another would give rise
to a piquant situation where the self-same authority, i.e., Field General
Manager reducing pension under clause (1) would not require prior
consultation with the Board which is mandatory while exercising similar
power under clause (2). To avoid this anomaly whenever a superior
authority reducing pension under regulation 33(1) is also appellate
authority or reviewing authority who is empowered to exercise
power under clause (2), the requirement of prior consultation with
the Board must be held to be mandatory, failing which requirement

4 Schedule to Discipline and Appeal Regulations “2. Any Officer employee of the Bank higher in rank and
status than the Disciplinary Authority but no lower in rank and status than an Assistant General Manager
shall be competent to act as the Appellate Authority within the meaning of Regulation 17.”
5 Rao Shiv Bahadur Singh v. State of Uttar Pradesh, (1953) 2 SCC 111.
530 [2025] 7 S.C.R.

Supreme Court Reports

of such prior consultation may be circumvented by the bank to the
prejudice of the employee.
17. There is no cavil that pension is not a discretion of the employer
but a valuable right to property and can be denied only through
authority of law. When an authority is vested with the discretion to
grant pension less than full pension admissible under the Pension
Regulations, all procedural safeguards in favour of the employee
including prior consultation must be strictly followed.
18. High Court failed to read the regulation in its proper perspective
and went a step ahead to hold that a compulsorily retired employee
would not be entitled to any pension unless an order is passed under
regulation 33 (1). A combined reading of the clauses in regulation 33
clearly indicates that the pension payable to an employee who has
been compulsorily retired as a penalty shall not be less than two-third
of his full pension or Rs. 375 per mensem, whichever is higher. The
word ‘may’ occurring in clause (1) does not give discretion to superior
authority to award pension less than two-third of the full pension.
High Court misinterpreted the word ‘may’ in the clause to hold that
grant of pension is discretionary. The word ‘may’ must be read in its
proper context, that is to say, it was used in the regulation not to vest
discretion in the superior authority to grant pension less than two-third
of full pension payable but to clarify that the aforesaid clause will not
entitle a compulsorily retired employee to pension if he is not otherwise
entitled to such pension on superannuation on that day. For example,
if an employee is compulsorily retired without completing ‘qualifying
service’ making him eligible to pension under the regulations.
19. In fine, we hold clause (1) and clause (2) of regulation 33 must be
read conjointly and in all cases when the full pension admissible to
a compulsorily retired employee under the regulations is reduced,
a prior consultation with the Board is necessary.
20. It would be argued the Field General Manager’s order to reduce
pension may be placed before the Board for ex-post facto approval.
Whether ‘prior consultation’ is mandatory or a post facto approval
would suffice would depend on various factors including nature of
consultation, status of the authority consulted, and the rights affected
by the decision.
21. A plain reading of regulation 33 would show award of pension less
than full pension is to be done with prior consultation of the Board
[2025] 7 S.C.R. 531

Vijay Kumar v. Central Bank of India & Ors.

of Directors. Such prior consultation with the highest authority of
the Bank i.e., Board of Directors must be understood as a valuable
mandatory safeguard before an employee’s constitutional right to
pension is curtailed. In these circumstances, a post facto approval
cannot be a substitute of prior consultation with the Board before the
decision is made. Reference may be made to Indian Administrative
Service (S.C.S.) Association, U.P. & Ors. vs. Union of India & Ors.6
wherein the parameters to decide whether prior consultation is
mandatory or directory have been succinctly elucidated:-
“26. The result of the above discussion leads to the
following conclusions:
(1) Consultation is a process which requires meeting of
minds between the parties involved in the process of
consultation on the material facts and points involved to
evolve a correct or at least satisfactory solution. There
should be meeting of minds between the proposer and
the persons to be consulted on the subject of consultation.
There must be definite facts which constitute the foundation
and source for final decision. The object of the consultation
is to render consultation meaningful to serve the intended
purpose. Prior consultation in that behalf is mandatory.
(2) When the offending action affects fundamental rights
or to effectuate built-in insulation, as fair procedure,
consultation is mandatory and non-consultation renders
the action ultra vires or invalid or void.
(3) When the opinion or advice binds the proposer,
consultation is mandatory and its infraction renders the
action or order illegal.
(4) When the opinion or advice or view does not bind the
person or authority, any action or decision taken contrary
to the advice is not illegal, nor becomes void.
(5) When the object of the consultation is only to apprise
of the proposed action and when the opinion or advice is
not binding on the authorities or person and is not bound

6 (1993) Supp. 1 SCC 730.
532 [2025] 7 S.C.R.

Supreme Court Reports

to be accepted, the prior consultation is only directory.
The authority proposing to take action should make known
the general scheme or outlines of the actions proposed to
be taken be put to notice of the authority or the persons
to be consulted; have the views or objections, take them
into consideration, and thereafter, the authority or person
would be entitled or has/have authority to pass appropriate
orders or take decision thereon. In such circumstances it
amounts to an action “after consultation”.
(6) No hard and fast rule could be laid, no useful purpose
would be served by formulating words or definitions nor
would it be appropriate to lay down the manner in which
consultation must take place. It is for the Court to determine
in each case in the light of its facts and circumstances
whether the action is “after consultation”; “was in fact
consulted” or was it a “sufficient consultation”.
(7) Where any action is legislative in character, the
consultation envisages like one under Section 3(1) of the
Act, that the Central Government is to intimate to the State
Governments concerned of the proposed action in general
outlines and on receiving the objections or suggestions,
the Central Government or Legislature is free to evolve its
policy decision, make appropriate legislation with necessary
additions or modification or omit the proposed one in draft
bill or rules. The revised draft bill or rules, amendments or
additions in the altered or modified form need not again be
communicated to all the concerned State Governments nor
have prior fresh consultation. Rules or Regulations being
legislative in character, would tacitly receive the approval of
the State Governments through the people’s representatives
when laid on the floor of each House of Parliament. The
Act or the Rule made at the final shape is not rendered
void or ultra vires or invalid for non-consultation.”
22. Mr. Mehta finally in a last bid endeavour requested us to invoke
powers under Article 142 to do complete justice and endorse the
decision of the reduction of pension in the present case.
23. Though it is claimed that the delinquent acts of the appellant had
caused an approximate loss to the tune of Rs. 3.26 crores to the
[2025] 7 S.C.R. 533

Vijay Kumar v. Central Bank of India & Ors.

bank, no evidence relating to the computation of such loss was either
considered by the disciplinary authority or by the appellate authority.
Further, no opportunity of hearing was given by the authorities
prior to reducing his pension. No exceptional case to exercise our
extraordinary powers under Article 142 is made out.
24. Accordingly, we allow the appeal and set aside the order of the High
Court and order of the Field General Manager dated 07.08.2015
reducing pension without prior consultation of the Board of Directors.
It shall be open to the Bank to take appropriate decision regarding
reduction of pension after giving an opportunity of hearing to the
appellant and with prior consultation of the Board within two months
from the date of this judgment failing which the appellant shall be
entitled to full pension from the date of superannuation.

Result of the case: Appeal allowed.

†
Headnotes prepared by: Ankit Gyan