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IN

REPORTABLE
IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

    CIVIL APPEAL NO(S).   297­298    OF 2022
(Arising out of SLP(Civil) No(s). 1940­1941 of 2020)

THE PUNJAB STATE COOPERATIVE
AGRICULTURAL DEVELOPMENT BANK LTD. ….APPELLANT(S)

VERSUS

THE REGISTRAR, COOPERATIVE
SOCIETIES AND OTHERS ….RESPONDENT(S)

WITH

CIVIL APPEAL NO(S).   303      OF 2022
     (Arising out of SLP(Civil) No(s). 1934 of 2020)

CIVIL APPEAL NO(S).     311      OF 2022
      (Arising out of SLP(Civil) No(s). 12822 of 2020)

CIVIL APPEAL NO(S).    312        OF 2022
       (Arising out of SLP(Civil) No(s). 1935 of 2020)

CIVIL APPEAL NO(S).    310         OF 2022
(Arising out of SLP(Civil) No(s). 1936 of 2020)

CIVIL APPEAL NO(S).      300        OF 2022
(Arising out of SLP(Civil) No(s). 1949 of 2020)

CIVIL APPEAL NO(S).     306         OF 2022
(Arising out of SLP(Civil) No(s). 1943 of 2020)

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CIVIL APPEAL NO(S).    299        OF 2022
(Arising out of SLP(Civil) No(s). 1944 of 2020)

CIVIL APPEAL NO(S).     308        OF 2022
(Arising out of SLP(Civil) No(s). 1859 of 2020)

CIVIL APPEAL NO(S).      309       OF 2022
(Arising out of SLP(Civil) No(s). 1942 of 2020)

CIVIL APPEAL NO(S).     301        OF 2022
(Arising out of SLP(Civil) No(s). 1932 of 2020)

CIVIL APPEAL NO(S).     302        OF 2022
(Arising out of SLP(Civil) No(s). 1931 of 2020)

CIVIL APPEAL NO(S).     304        OF 2022
(Arising out of SLP(Civil) No(s). 1939 of 2020)

CIVIL APPEAL NO(S).      305       OF 2022
(Arising out of SLP(Civil) No(s). 1937 of 2020)

CIVIL APPEAL NO(S).    307          OF 2022
(Arising out of SLP(Civil) No(s). 1945 of 2020)

           CIVIL APPEAL NO(S).     313         OF 2022
               (Arising out of SLP(Civil) No(s).12864 of 2020)

J U D G M E N T

Rastogi, J.

1. Leave granted.

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2. Civil   Appeals   @   SLP(Civil)   Nos.   1940­1941   of   2020   and   the

cognate appeals arise from the self­same common judgment dated

29th July, 2019 and 4th October, 2019 passed by the Division Bench

of the High Court of Punjab and Haryana at Chandigarh.

3. The facts have been noticed by this Court from Civil Appeals @

SLP(Civil) Nos. 1940­1941 of 2020.

4. The appellant in the present batch of appeals, is the Punjab

State Cooperative Agricultural Development Bank Ltd. (hereinafter

referred   to   as   ‘the   Bank’),   a   registered   cooperative   society   and

connected Civil Appeal @ Special Leave Petition (Civil) No.12864 of

2020 has been preferred by the serving employees of the bank who

also claim to be aggrieved by the self­same impugned judgment in

the proceedings.  At the same time, the respondents are the original

writ   petitioners   who   are   the   retired   employees   and   the   service

conditions   of   the   employees   are   governed   by   the   Punjab   State

Cooperative   Agricultural   Land   Mortgage   Banks   Service   (Common

Cadre)   Rules,   1978(hereinafter   being   referred   to   as   the   “Rules

1978”) and became members of the Bank Pension Scheme, which

was introduced w.e.f. 1st April, 1989.  

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5. The appellant Bank is a registered cooperative society which

was   earlier   known   as   “Punjab   State   Cooperative   Land   Mortgage

Bank Ltd.”  The principal object of the Bank is to provide long term

loans   to   the   farming   community   and   to   protect   them   from   the

clutches of money lenders.  The main funding of the appellant Bank

is  by  way  of   loans  from  National Bank for  Agriculture and Rural

Development(NABARD) as per the norms laid down.  The appellant

Bank   has   two   tier   structure   comprising   of   “Punjab   State

Cooperative   Agricultural   Development   Bank   Ltd.”   at   Apex

level(SADB)   and   the   “Primary   Agricultural   Development

Banks”(PADB)   at   the   grass   root   level.     These   two   banks   ensure

timely delivery of credit to the farmers, who are its members and

directly   benefitted   with  various  schemes which  provide long  term

and short­term loans to them.

6. Prior   to   1989,   the   employees   of   the   appellant   Bank   were

covered   under   the   Employees   Provident   Fund   and   Miscellaneous

Provisions   Act,   1952(hereinafter   being   referred   to   as   the   “Act

1952”).     The   scheme   was   being   duly   adhered   to   and   necessary

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contributions  were regularly paid by employees and the employer

Bank.

7. The   Department   of   Finance,   Government   of   Punjab,   vide   its

letter dated 22nd September 1988, pursuant to recommendations of

the   Punjab   Pay   Commission   to   bring   the   employees   serving   in

various   Public   Sector   Undertakings   and   State   aided   institutions

under   purview   of   the   State   Pension   Rules,   solicited   the

views/comments   of   the   concerned   organisations   to   inter­alia

communicate the additional financial burden involved in each case

and   whether   the   organisation/organisations   could   bear   the

additional   liability   out   of   their   own   resources.     These

recommendations were placed before the Administrator of the Bank

who vide Resolution dated 22nd June 1989 decided to implement the

recommendations of the State Government and as a consequence

thereof, the pension scheme of the employees and Officers in the

common cadre was introduced w.e.f. 1st April, 1989.

8. Resolution No.24 passed by the Administrator of the appellant

Bank dated 22nd June, 1989 is reproduced as under:­

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Item Agenda Decision

No.
1 (i) To   consider   to 1 (i) Resolved that the existing Common Cadre
amend   Common Rule No. 15 be numbered as 15(i) and a new
Cadre   Rules   for rule 15(ii) be incorporated as under:
introducing 15(ii)   The   Board   of   Directors   may   formulate
Pension Scheme. Pension Rule with the approval of RCS Punjab.
(ii) To   consider   to (ii)   (a)   Resolved   that   the   Pension   Scheme   for
introduce the employees/officers  in the  Common Cadre
Pension   Scheme of   the   Punjab   State   Cooperative   Agricultural
for   the Development   Bank   be   introduced   for   the
employees/office adoption w.e.f. 1.4.89.
rs   in   the (b) It is further resolved that the pension rules
Common   Cadre enclosed   are   approved.   Any   matter   which   is
of   the   Punjab not specifically mentioned in these Rules shall
State be governed by Chapter XIII of the Punjab Civil
Cooperative Service Rules Vol. II.
Agricultural (c)   It   is   further   resolved   that   the   Regional
Development Provident Fund Commissioner, Chandigarh be
Bank requested   to   exempt   the   bank   from   the
payment   of   contributory   provident   fund
scheme   and   refund   the   entire   existing
contribution   with   them   along   with   family
pension   contribution   and   deposit   linked
insurance fund along with up to date interest
on these amounts.

9. In furtherance thereof, the appellant Bank sent a letter dated

27th  June,   1989   to   the   Registrar,   Cooperative   Societies,   Punjab,

seeking   approval   for   introduction   of   the   pension   scheme   for   its

employees   covered   under   the   Rules,   1978.     The   Registrar,

Cooperative   Societies,   Punjab,   by   its   communication   dated   7 th

February,   1990   conveyed   its   approval   for   introduction   of   the

pension scheme proposed by the appellant Bank to its employees

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covered   under   the   Rules   1978.     In   pursuance   thereof,   the

amendment was carried out in the Rules, 1978 and Rule 15(ii) was

introduced authorizing the Board of Directors to formulate pension

scheme   with   the   approval   of   the   Registrar   Cooperative   Societies,

Punjab.     For   the   purpose   of   reference,   Rule   15(ii)   is   extracted

hereunder:­

“15  (i) PROVIDENT FUND:­

The employees shall be entitled to the benefit of the General
Provident Fund as provided in the employees Provident Fund Act,
1952 and scheme framed thereunder.

(ii) THE PENSION SCHEME FOR THE EMPLOYEES/OFFICES IN
THE   COMMON   CADRE   RULES   OF   THE   PUNJAB   STATE
COOPERATIVE   AGRICULTURAL   DEVELOPMENT   BANK   W.E.F.
1.4.89.

1. Short title and commencement:­

(i) The   rules   shall   be   called,   the   Punjab   State   Cooperative

Agricultural   Development   Banks   Employees   Pension,   Family
Pension and General Provident Fund Rules.
(ii) These Rules shall come into force with effect from 1.4.89.

2. Application

(i) These   rules   shall   apply   to   all   the   posts   in   the   services
specified in the Appendix ‘I’ of the Common Cadre Rules, provided
that   in   case   of   the   employees   appointed   by   transfer   from
Government   Departments,   these   rules   shall   only   apply   to   the
extent specified in their terms and conditions of deputation agreed
upon with the Government Department concerned.

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Provided   further   that   nothing   in   these   rules   shall   affect   the

application   of   any   other   law,   statutory   rules,   bye­laws   and
regulations for time being in force.

    Provided further that an employee who joins service on or after
coming into force of these rules and such existing employees, who
opt for these rules, shall be covered by these rules. All category of
employees   shall   have   to   exercise   this   option   in   Form­A   to   these
rules   within   three   months   from   the   date   of   notification   of   these
rules.

(ii) The   employees   who   do   not   opt   for   these   rules   shall   be
governed by the Employees Provident Fund Act and Rules.

3. Definition:­

XXX XXX XXX XXX
(o) Pay:­ Pay means the pay as defined in Rule 2.44 of the Punjab
Civil Services Rules Volume­I Part­I.
Note:­ Unless the contrary appears from the context or subject
to   term   ‘pay’   defined   in   Rule   2.44   of   the   Punjab   Civil   Services,
Volume­I, Part­I, does not include “Special Pay.”

10. In   furtherance   thereto,   the   amended   Rule   15(ii)   came   into

force with effect from 1st April, 1989.  In sequel to the introduction

of   implementation   of   the   scheme,   the   contributions   made   by   the

employees  and   the   appellant Bank were transferred to create the

pension corpus fund to make it functionally viable and a trust was

created   by   a  trust   deed   dated  24 th  March,  1993  for  management

and effective implementation of the scheme.

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11. It reveals from the record that the employees of the appellant

Bank who had opted for pension became members of the pension

scheme  and   continued  to derive the benefit of pension after they

had opted for it till the year 2010.  Later, when the appellant Bank

found   the   scheme   to   be   unviable   on   account   of   financial

constraints,   the   Board   of   Directors   of   the   appellant   Bank   in   its

meeting   dated   29th  May,   2010   in   reference   to   Agenda   No.   15

reconsidered   the   matter   about   giving   pension   to   the   bank

employees and resolved as under:­

1. Pension to the retired employees and those going to retire in future
be communicated.
2. Pension   Scheme   will   not   be   applicable   in   case   of   employees
employed on or after 1.1.2004.
3. Pensioners   be   not   given   the   benefit   of   commutation   of   pension,
medical reimbursement and LTC.
4. As   per   existing   rules,   the   contribution   equal   to   the   12%   GPF
deduction of employees to be continued by bank.
5. As   per   letter   No.CA3/64/13717   dated   29.8.2008   of   Registrar,
Cooperative   Societies,   12%   of   the   profits   of   SADB   &   PADBs   be
allocated   to   employees   benefit   fund   and   its   90%   share   be
contributed to the pension fund.
6. Bank to continue pension from its funds/expenses by stopping the
commutation of pension, medical reimbursement and LTC facilities
to its employees and retired employees, imposing 25% deduction
on   eligible   amount   of   pension   and   after   adjusting   the   pension
amount against SADB/PADBs profits according to rules be made
up on the basis of outstanding loans of SADB and PADBs.
7. As and when there is improvement in financial condition of bank,
the payment of full pension may be considered.

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12. The appellant Bank sent a letter dated 9 th  June, 2010 to the

Registrar,   Cooperative   Societies,   Punjab,   seeking   approval   of   the

aforesaid Resolution.  The Registrar, Cooperative Societies, Punjab,

vide   its   letter   dated   3rd  September,  2010  issued  directions  to  the

appellant   Bank   to   review   its   proposal.     Pursuant   thereto,   the

appellant   Bank   submitted   its   revised   proposal   to   the   Registrar,

Cooperative Societies, Punjab, on 30th March, 2011 to proceed with

the   pension   scheme   in   accordance   with   Resolution   No.   15   dated

29th  May,  2010.    Although the proposal was turned down by the

Registrar, Cooperative Societies, Punjab, Chandigarh still the Board

of   Directors   of   the   appellant   Bank   vide   its   Resolution   dated   17 th

August, 2012 decided to discontinue the pension scheme and revert

to the scheme of Contributory Provident Fund with a proposal of

One Time Settlement.  The Board of Directors, later in exercise of its

powers vested in Section 84A(2) of the Punjab Cooperative Societies

Act,   1961   with   the   prior   approval   of   the   Registrar,   Cooperative

Societies made amendment in Rule 15 of the Rules, 1978 by order

dated   11th  March,   2014.     Pursuant   thereto,   Rule   15(ii)   stood

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deleted.     The   order   dated   11th  March,   2014   is   reproduced

hereunder:­

O/o Registrar, Cooperative Societies, Punjab, Chandigarh
(Credit Branch­1)

To
The Managing Director,
The Punjab State Cooperative Agri. Dev. Bank Ltd.,
Chandigarh.

Memo. Credit/CA­3/2841  Dated: 11.03.2014
Sub:­   Amendment   in   Clause   15   of   Punjab   State   Cooperative   Agricultural
Development Bank Service Common Cadre Rules, 1978.
Ref: Your office letter No. Admn/S07/11984 dated 27.01.2014

This office has received a proposal on the subject cited above.
After examining the proposal and the legal opinion sent by the Bank, in
exercise   of   powers   vested   vide   Section   84A(2)   of   the   Punjab   Cooperative
Societies   Act   1961,   Registrar   Cooperative   Societies,   is   pleased   to   allow   the
following   amendments   in   the   Punjab   State   Cooperative   Agricultural
Development Bank Service Common Cadre Rules 1978 as under:

Rule Existing Amended

15 (i) PROVIDENT FUND (i)   The   employees   shall   be
The employees shall be entitled to entitled to the benefits of the
the benefit of the General Provident Contributory Provident Fund
Fund as provided in the employees as   provided   in   the
Provident   Fund   Act,   1952   and Employees Provident Fund &
scheme framed thereunder. Miscellaneous Act, 1952 and
schemes framed thereunder.

(ii)   The   Pension   Scheme   for   the (ii) Deleted.

employees/officers   in  the   common

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cadre   rules   of   the   Punjab   State

Cooperative   Agricultural
Development   Bank   w.e.f.
01.04.1989.

13. It reveals from the record that since the appellant Bank much

before the amendment had stopped making payments of pension in

terms of Rule 15(ii) of the Rules 1978, the employees approached

the High Court under Article 226 of the Constitution by filing writ

petitions and various interim orders were passed from time to time

and even at one stage, it was decided to introduce a proposal of one

time   settlement   which   was   furnished   by   the   appellant   Bank   on

16th  October,   2012   in   the   pending   proceedings   before   the   High

Court   and,   as   informed,   few   of   the   employees   have   settled   their

claims under the One Time Settlement but it will be appropriate to

notice at this stage that while the proceedings were pending before

the Division Bench of the High Court, by Order dated 24 th January

2014, it was made clear that one time settlement which has been

implemented   after   seeking   approval   of   the   competent   authority

shall   be   without   prejudice   to   the   legal   rights   of   the

applicant/respondent   employees.   The   Order   dated   24 th  January,

2014 is reproduced hereunder:­

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“CM­109­LPA­2014
Allowed as prayed for.
Document Annexure A1 is taken on record subject to such
exceptions.
CM stands disposed of.

CM­71­LPA­2014 in LPA­2001­2013
Notice   to   the   non­applicant/appellants.     Ms.   Jaishree
Thakur, Advocate accepts notice.
After hearing learned counsel for the parties and keeping in
view the fact that since One Time Settlement scheme has already
been   implemented   after   seeking   approval   of   the   competent
authority, this application is disposed of with a clarification that
the implementation of the said scheme shall be without prejudice
to the legal rights of the applicant/respondents.”

14. This fact can be further noticed that the learned Single Judge

of the High Court decided the writ petitions by a Judgment dated

31st August 2013 and Rule 15(ii) was deleted by the appellant Bank

by   Order   dated   11th  March,   2014   while   the   proceedings   were

pending in LPA before the High Court.

15. The   learned   Single   Judge   of   the   High   Court   held   that   the

employees   of   the   appellant   Bank,   having   served   the   Bank   were

covered under the scheme which was applicable at the given time

under the Act 1952 (prior to 1989). It is the appellant Bank which

accepted   the   recommendations   of   the   State   Government   and

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solicited options from the employees as to whether they wanted to

opt   for   a   pension   scheme   which   became   applicable   after   the

amendment was made under the Rules 1978 and after a conscious

decision,   Rule   15(ii)   was   introduced,   it   could   not   be   justified   to

circumvent   the   impact   of   the   amended   rule   and   thus   create   a

situation which would have the effect of defeating the rights which

are conferred upon the employees to seek pension under the rules

which became applicable with effect from 1 st April, 1989 and finally

held   that  the   employees   are entitled to regular  pension including

revised   rates   of   dearness   allowance,   to   all   the   employees   who

became member of the pension scheme under the Rules 1978.

16. When the matter travelled to the Division Bench of the High

Court, by that time, the amendment was made by an Order dated

11th March, 2014 and Rule 15(ii) was deleted.  The Division Bench,

after taking note of the submissions made by the parties observed

that   the   decision   to   frame   the   pension   scheme   was   a   conscious

decision   of   the   appellant   Bank   taken   in   its   own   wisdom   and

corresponding rules were introduced and made applicable from 1 st

April, 1989 and Rule 15(ii) was deleted on 11th March, 2014.   In

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the   interregnum,   the   employees   became   members   of   the   pension

scheme   and   were   paid   their   regular   pension   for   sufficient   time

which   cannot   be   defeated   and   taken   away   retrospectively

detrimental   to   their   interest.     The   amendment   which   has   taken

away the vested and accrued right of the employees to get pension

and that too with retrospective effect would be violative of Article 14

of the Constitution and disposed of the LPA with a declaration that

amendment dated 11th  March, 2014 under Rules 1978 shall apply

prospectively.

17. The judgment of the Division Bench of the High Court dated

29th July, 2019 became subject matter of challenge at the instance

of   the   appellant   Bank   and   by   the   serving   employees   who   have

claimed that their right to get pension may be affected in futuro,

and have approached this Court ventilating their grievances in the

instant proceedings.

18. It   may   be   relevant   to   note   that   before   the   High   Court,   at

different   stages,   different   counter   affidavits   were   filed   by   the

Regional Provident Fund Commissioner(RPFC) with reference to the

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grant   of   exemption   after   the   Employees   Pension   Scheme   1995

became the part of the Act 1952.

19. It has been stated in the counter affidavit filed by the RPFC

under   the   Act   1952   that   earlier   it   was   erroneously   mentioned

“granted exemption from pension scheme”, but that was a factually

incorrect   statement   recorded   and   the   RPFC   has   made   an

unconditional apology for making such a statement of fact.  It is the

admitted case of RPFC that neither any application was filed by the

appellant   Bank   seeking   exemption   from   the   employees   pension

scheme nor it was granted or refused.

20. The   stand   of   the   EPFC   is   that   Employees’   Provident   Funds

Scheme,   1952   and   Employees’   Pension   Scheme,   1995   both   are

designed   to   secure   a   minimum   core   of   old   age/terminal   social

security.   Neither of these schemes exhaust an employee’s right to

social   security.     According   to   the   EPFC,   the   bank’s   promise   to

supplementary pension outside of EPF must be evaluated in that

light.

21. It   is   further   stated   that   the   benefits   under   bank’s   pension

scheme   can   only   be   understood   as   supplementary   and   not

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substitutionary because the bank’s pension scheme did not provide

for dependents’ pension, nominees’ pension, childrens’ pension or

withdrawal benefits.   This only provides a far narrower pensionary

cover to its employees.  Its pension scheme could not be considered

for exemption under Section 17(1C) of the Act.

22. Learned   counsel  for   the  appellant  Bank submits that  it  has

not been considered by the High Court that the appellant Bank had

framed   a   pension   scheme   subject   to   approval   of   the   competent

authority.     Even   though,   the   appellant   Bank   had   not   applied   for

seeking   approval/exemption   from   the   authority,   still   the   fact

remains that in the absence of the approval being granted by the

competent   authority,   the   retirees  were  entitled  to  receive  pension

until the scheme remain in operation, i.e., upto 31 st October, 2013.

23. Learned   counsel   further   submits   that   if   the   employees   are

being permitted to get pension under the scheme of the Bank after

31st  October   2013   and   also   statutory   pension   from   Regional

Provident   Fund   Commissioner   under   the   Act   1952,   indeed   there

shall   be   payment   of   double   pension   which   is   in   either   way   not

permissible in law.

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24. Learned counsel further submits that the employee is entitled

for   pension   but  how   the   pension   is  to   be  computed,  no   one  can

claim   any   vested/accrued   right.     It   is   not   the   case   of   the

respondents   that   they   are   not   being   paid   pension.     It   was   paid

earlier under the pension scheme introduced by the Bank from the

year   1989   until   it   remained   in   force   till   31 st  October   2013   and

thereafter, the employees are entitled to get a statutory pension as

per the Employees Pension Scheme 1995 under the provisions of

the Act 1952.  Thus, plea of vested right which has been considered

by   the   High   Court   is   completely   misplaced   and   as   long   as   the

appellant Bank fulfils its statutory liability under the provisions of

the Act 1952, which they are under an obligation to comply with,

the employees are not entitled to claim pension under the scheme

introduced by the Bank after it stands withdrawn with effect from

31st  October,   2013   and   thus   no   vested/accrued   right   of   the

employee   is   in   any   manner   has   been   defeated   and   a   finding

recorded by the High Court to continue the bank pension scheme

after it stood deleted is not sustainable in law and deserves to be

interfered by this Court.

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25. In support of his submissions, learned counsel placed reliance

on   the   judgments   of   this   Court   in  Marathwada   Gramin   Bank

Karamchari   Sanghatana   and   Another  Vs.  Management   of

Marathwada Gramin Bank and Others1, State of Rajasthan Vs.

A.N. Mathur and Others2  and  State of Himachal Pradesh and

Others Vs. Rajesh Chander Sood and Others3.

26. Learned   counsel   further   submits   that   the   pension   scheme

introduced by the Bank later became financially unviable and the

number   of   retirees   in   comparison   to   the   existing   employees

recruited after 1st  January, 2004 is almost three times and if the

appellant   Bank   is   mandated   to   continue   to   make   payment   of

pension   under   Bank   Pension   Scheme,   the   Bank   will   become

defunct and the contribution towards pension made by the serving

employees will be futile and they will get nothing at the time of their

retirement.  The Bank has earned a meagre profit in the later years

and still, in the given circumstances, the appellant Bank, if allowed

to made over pension in terms of the judgment impugned, there will

1 2011(9) SCC 620
2 2014(13) SCC 531
3 2016(10) SCC 77

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be no option left except to close down the Institution in such an

eventuality and that apart it has created a wide gap of inequality

between the serving employees and the retirees without resorting to

exemption from the RPFC.

27. Learned counsel submits that the RPFC has initiated separate

proceedings   under   Section   7A   of   the   Act   1952   for   the   year   April

1989   to   March   2015   and   for   the   year   April   2015   to   June   2017,

imposing liability on the Bank by an Order dated 14th  September,

2015   and   31st  August,   2017   respectively.     At   the   same   time,

separate proceeding under Section 14B for damages and Section 7Q

for interest were also instituted and in terms of orders passed by

the Authority, demand raised pursuant thereto has been deposited

by   the   appellant.     In   the   given   circumstances,   the   Regional

Provident Fund Commissioner has recovered towards pension fund

contribution   along   with   damages   and   interest   for   the   period

commencing from April 1989 to August 2017.   At the same time,

the appellant has been asked to pay pension to the retirees under

the Bank Pension Scheme in terms of the impugned judgment to

the employees who are covered at one stage under the scheme. It

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will almost be a double payment to the employees which is over and

above the payment which was admissible to the employees in terms

of   statutory   pension   scheme   1995   under   the   Act   1952   and   that

apart,   there   are   categories   of   employees   who   have   settled   their

accounts   under   one   time   settlement   which   was   approved   by   the

Government and if the Judgment is to be implemented in rem, it

will not only be a double payment of pension but a great financial

distress to the Bank which is otherwise not permissible in law.

28. Per contra, Mr. P.S. Patwalia, learned senior counsel for the

respondents   submits   that   indisputedly   the   present   respondents

who   were   writ   petitioners   before   the   High   Court   are   the   retired

employees   and   after   amendment   was   made   under   the   scheme   of

Rules 1978, they became its member and started getting pension in

terms of the scheme under the Rules with effect from 1 st April, 1989

and   without   any   justification,   the   appellant   Bank   unilaterally

stopped full pension to the respondent pensioners in the year 2010

and   that   was   the   stage   when   the   retired   employees   were

constrained to approach the High Court wherein it was held that

these pensioners are entitled to pension in terms of the scheme.  To

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overcome   the   judgment   dated   31st  August,   2013   of   the   learned

Single Judge of the High Court of Punjab and Haryana, by Order

dated 11th March 2014, Rule 15(ii) was deleted and by deleting the

said   rule,   it   has   taken   away   the   vested   right   of   the   retired

employees   and   their   service   conditions   have   been   altered

retrospectively  to  the   detriment of the retired employees which is

violative of Articles 14 and 21 of the Constitution.

29. Learned   counsel   further   submits   that   so   far   as   the   scheme

under the Act  1952 is  concerned, the employees pension scheme

was introduced under the Act 1952 for the first time in 1995 and it

is   nowhere   related   to   the   pension   scheme   introduced   by   the

appellant under its Resolution No. 24 dated 22 nd  June, 1989 with

effect from 1st  April, 1989 and the appellant Bank neither sought

any   exemption   under   Section   17(1C)   of   the   Act   1952   nor   it   was

required   for   the   reason   that   the   Bank   introduced   the   pension

scheme in the year 1989.  At that time, there was no such pension

scheme   under   the   Act   1952   and   once   it   is   made   clear   that

exemption was never sought by the appellant Bank, under the Act

1952,   at   least   the   vested   right   which   has   been   accrued   to   the

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respondents   cannot   be   taken   away   retrospectively   which   is   not

sustainable   and   this   what   the   Division   Bench   has   held   in   the

impugned judgment.

30. The   reliance   has   been   placed   on   the   Constitution   Bench

Judgment of this Court in Chairman, Railway Board and Others

Vs.  C.R.   Rangadhamaiah   and   Others4  followed   with  U.P.

Raghavendra Acharya and Others Vs. State of Karnataka and

Others5  and  Bank   of   Baroda   and   Another  Vs.  G.   Palani   and

Others6.

31. Learned   counsel  further  submits  that  more  than  half  of  the

respondents are in the age group of 73 to 80 years and one­third of

the retirees have already expired during pendency of litigation and

it is the appellant Bank who had in its own volition introduced the

scheme and the respondent employees have exercised their option

to   be   governed   by   the   said   scheme  and   the   employees   have  also

foregone   their   Contributory   Provident   Fund.     In   the   given

circumstances, the rights which are conferred and vested in favour

4 1997(6) SCC 623
5 2006(9) SCC 630
6 2018 SCC Online SC 3691

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of the respondent employees could not be divested by the appellant

in   an   arbitrary   manner   which   is   in   violation   of   Article   14   of   the

Constitution.

32. Learned   counsel   submits   that   so   far   as   the   One   Time

Settlement scheme is concerned, it was introduced to mitigate the

problem   due   to   withdrawal   of   pension   scheme   as   an   interim

measure under the orders passed by the High Court.   Since there

was no option left to the employees who became hand to mouth,

some   of   them   have   accepted   under   the   One   Time   Settlement

scheme but the Division Bench by its interim order made it clear

that acceptance of one time settlement shall be without prejudice to

their legal rights, in the given circumstances, what has been paid

under   One   Time   Settlement   scheme   to   few   of   the   employees   is

always adjustable under the scheme to which they are entitled for

under   the   law.     The   scheme   was   in   vogue   for   more   than   two

decades and it is not open for the appellant Bank to take away their

vested rights in an arbitrary manner and deprive them the benefit of

pension   which   is   in   vogue   since   1989   so   far   as   the   retirees   are

concerned.

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33. Mr.   Siddharth,   learned   counsel   for   the   Regional   Provident

Fund   Commissioner   submits   that   the   appellant   bank   is   covered

under   the   provisions   of   the   Act   1952   and   under   the   Act,   three

schemes   have   been   framed,   firstly,   Employees   Provident   Fund

Scheme   1952(EPFS)   which   establishes   a   contributory   provident

fund under Sections 5 and 6 of the Act.  Employers and employees

contribute to the provident fund in equal measure at the prescribed

rates notified by the authority competent under the law from time

to   time.     However,   presently   there   is   12%   employees’   monthly

wages.   Secondly,   there   is   Employees’   Pension   Scheme   1995(EPS)

scheme framed under Section 6A of the Act, 1952 which replaces

the earlier Employees’ Family Pension Scheme, 1971(FPS).  Family

Pension   Scheme   provided   for   pension   to   the   dependents   of   such

employees   who   died   in   harness.     EPS,   on   the   other   hand,   is   a

comprehensive   pension   scheme   that   provides   superannuation

pension, early pension and dependents’ pension.   It is funded by

diverting   a   part   of   the   employers’   share   of   contribution   made   to

EPFS   into   the   pension   fund(presently   8.33%   of   monthly   wages).

Employees   do   not   contribute   under   EPS.     The   third   scheme   is

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Employees’ Deposit Linked Insurance Scheme, 1976.       The Bank

sought   exemption   from   EPFS   under   Section   17(1)(b)   and   from

EDLIS   under   Section   17(2A).     The   fate   of   exemption   and   its

consequence   may   not   be   relevant   so   far   as   the   present   dispute

raised in the instant proceedings is concerned, at the same time, it

is being specifically stated that the appellant Bank did not seek any

exemption from the operation of Employees’ Pension Scheme after

16th November, 1995.

34. Learned counsel further states that, in the interregnum, since

the   appellant   Bank   failed   to   deposit   its   due   contributions,   first

under the Family Pension Scheme and later under the Employees

Pension Scheme for the period commencing from 1 st  April 1989 to

31st  March   2015   and   from   April   2015   to   June   2017,   separate

proceedings were initiated under Section 7A followed with damages

under   Section   14B   and   interest   under   Section   7Q   and   final

assessments   have   been   made   after   affording   opportunity   to   the

appellant Bank.   Pursuant thereto, money has been deposited but

that has nothing to do with the pension scheme introduced by the

Bank   which   can   only   be   understood   as   supplementary   and   not

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substitutionary for the reason that the Bank Pension Scheme did

not   provide   for   dependent’s   pension,   children’s   pension   or

withdrawal benefits and such benefits are designed only under the

Employees Pension Scheme 1995 introduced under the provisions

of the Act 1952.  

35. Mr. Gurminder Singh, learned senior counsel for the serving

employees submits that that as per the pension scheme introduced

by   the   appellant   Bank,   the   employees   have   to   make   their   own

contribution   and   looking   to   the   depleting   strength   of   the   serving

employees,   their   contribution   is   being   utilized   for   payment   of

pension to the retired employees and bank is throughout harping

upon the plea that because of financial distress, it is not possible

for the Bank to continue with the pension scheme any more and

that is the reason for which the pension scheme was withdrawn by

the Bank at a later stage and that affects the interest of the serving

employees   whose   entire   employees’   contribution   is   being   utilized

against   the   payment   of   pension   to   the   retirees   and   consistently,

there is a shortfall of employer’s share of in­service employees and

this practice if being continued any more, by the time the serving

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employee will retire, they will not be able to get pension despite they

have undertaken their contribution while in service.

36. The indisputed fact according to the learned counsel is that

the retirees are being paid their pension under the Bank pension

scheme   at   the   cost   of   the   serving   employees   and   it   affects   the

interest of the serving employees which is being jeopardized.

37. Learned counsel in alternate further submits that the class of

the employees either retired/serving should be dealt with the same

standards/yardsticks and one retiral scheme should be followed for

all   the   employees   regardless   of   the   fact   that   whether   they   are

serving or retired and it will be unjust if the Bank pension scheme

is allowed to continue at the cost of serving employees which would

deprive them of their right to pension introduced by the Bank to

which they are otherwise entitled for under the law.

38. We  have heard  the learned counsel for the parties and with

their assistance perused the material available on record.

39. The   facts   are   not   in   dispute   that   the   respondents   are   the

retired   employees   and   members   of   the   Punjab   State   Cooperative

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Agricultural Development Bank Limited, Chandigarh and they were

earlier   the   members   of   the   Employees   Provident   Fund   Scheme

under the Act 1952.   The scheme was being duly adhered to and

necessary   contributions   were   made   over   by   the   employees   and

employer Bank.  Later on, with the recommendation of the Punjab

Pay   Commission,   regarding   introducing   the   pension   scheme,   the

Administrator of the appellant Bank vide its Resolution dated 22 nd

June, 1989 decided to implement the recommendations of the State

Government and as a consequence thereof, the pension scheme for

the employees and Officers in the Rules 1978 was introduced with

effect from 1st April 1989.

40. Accordingly, the Rules 1978 were amended and Rule 15(ii) was

introduced authorizing the Board of Directors to formulate pension

scheme   with   the   prior   approval   of   the   Registrar   Cooperative

Societies,   Punjab.     Pursuant   thereto,   the   amendment   was   made

with   an   option   that   such   of   the   employees   who   opt   for   the

rules(pension scheme) shall be covered by these rules.  At the given

time,   such   employees   who   do   not   opt   for   these   rules   shall   be

governed by Act, 1952.

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 41. Indisputedly,   all   the   respondent   employees   were   given   the

option to become member of the pension scheme on being retired

from   service   and   they   continued   to   derive   the   benefit   of   pension

after   they   had   opted   continuously   until   the   year   2010   and   only

thereafter, the litigation started when the appellant Bank stopped

making payment of pension in terms of the Bank pension scheme.

Although   the   Bank   pension   scheme   will   not   apply   in   cases   to

employees  employed  on or  after 1 st  January 2004.   Later  on, the

Bank took a decision by deleting Rule 15(ii) of pension scheme by

an amendment dated 11th March, 2014 and that became the cause

of grievance of the employees in questioning the action of the Bank

by approaching the Courts for ventilating their grievance.

42. The question that emerges for consideration is as to what is

the concept of vested or accrued rights of an employee and at the

given time whether such vested or accrued rights can be divested

with retrospective effect by the rule making authority.  

43. The   concept   of   vested/accrued   right   in   the   service

jurisprudence   and   particularly   in   respect   of   pension   has   been

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examined by the Constitution Bench of this Court in  Chairman,

Railway Board and Others(supra) as follows:­

“11. On   the   basis   of   the   said   decision   of   the   Full   Bench   of   the
Tribunal, other Benches of the Tribunal at Bangalore, Hyderabad,
Allahabad, Jabalpur, Jaipur, Madras and Ernakulam have passed
orders   giving   relief   on   the   same   grounds.   These   appeals   and
special leave petitions have been filed against the decision of the
Full Bench and those other Benches of the Tribunal. Some of these
matters were placed before a Bench of three learned Judges of this
Court on 28­3­1995 on which date the following order was passed:

“Two   questions   arise   in   the  present   case,   viz.,   (i)   what   is   the
concept   of   vested   or   accrued   rights   so   far   as   the   government
servant is concerned, and (ii) whether vested or accrued rights can
be taken away with retrospective effect by rules made under the
proviso to Article 309 or by an Act made under that article, and
which of them and to what extent.

We   find   that   the   Constitution   Bench   decisions   in Roshan   Lal

Tandon v. Union of India (1968) 1 SCR 185; B.S. Vadera v. Union of
India  (1968) 3 SCR 575 and State of Gujarat v. Raman Lal Keshav
Lal Soni (1983) 2 SCC 33  have been sought to be explained by two
three­Judge   Bench   decisions   in K.C.   Arora v. State   of   Haryana
(1984) 3 SCC 281 and K. Nagaraj v. State of A.P. (1985) 1 SCC 523
in   addition   to   the   two­Judge   Bench   decisions   in P.D.
Aggarwal v. State   of   U.P. (1987)   3   SCC   622   and K.
Narayanan v. State   of   Karnataka 1994   Supp   (1)   SCC   44.   Prima
facie,   these   explanations   go   counter   to   the   ratio   of   the   said
Constitution Bench decisions. It is not possible for us sitting as a
three­Judge   Bench   to  resolve   the   said  conflict.  It   has,   therefore,
become   necessary   to   refer   the   matter   to   a   larger   Bench.   We
accordingly refer these appeals to a Bench of five learned Judges.”

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44. This Court, after taking note of the earlier view on the subject

further   held   in  Chairman,   Railway  Board  and  Others(supra)as

under:­

“20. It can, therefore, be said that a rule which operates in futuro
so as to govern future rights of those already in service cannot be
assailed on the ground of retroactivity as being violative of Articles
14 and 16 of the Constitution,  but a rule which seeks to reverse
from an anterior date a benefit which has been granted or availed
of, e.g., promotion or pay scale, can be assailed as being violative
of Articles 14 and 16 of the Constitution  to the extent it operates
retrospectively.

24. In many of these decisions the expressions “vested rights” or
“accrued rights” have been used while striking down the impugned
provisions which had been given retrospective operation so as to
have   an   adverse   effect   in   the   matter   of   promotion,   seniority,
substantive   appointment,   etc.,   of   the   employees.   The   said
expressions have been used in the context of a right flowing under
the relevant rule which was sought to be altered with effect from
an   anterior   date   and   thereby   taking   away   the   benefits   available
under the rule in force at that time. It has been held that such an
amendment having retrospective operation which has the effect of
taking away a benefit already available to the employee under the
existing rule is arbitrary, discriminatory and violative of the rights
guaranteed under Articles 14 and 16 of the Constitution. We are
unable to hold that these decisions are not in consonance with the
decisions  in Roshan Lal  Tandon   (1968) 1  SCR 185, B.S. Vedera 
(1968) 3 SCR 575 and Raman Lal Keshav Lal Soni (1983) 2 SCC
33.

25. In these cases we are concerned with the pension payable to
the   employees   after   their   retirement.   The   respondents   were   no
longer   in   service   on   the   date   of   issuance   of   the   impugned
notifications.   The   amendments  in   the   rules   are   not   restricted   in
their   application in  futuro.  The  amendments  apply   to  employees
who had already retired and were no longer in service on the date
the impugned notifications were issued.

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33. Apart   from   being   violative  of   the   rights  then   available   under

Articles 31(1) and 19(1)(f), the impugned amendments, insofar as
they have been given retrospective operation, are also violative of
the rights guaranteed under Articles 14 and 16 of the Constitution
on the ground that they are unreasonable and arbitrary since the
said   amendments   in   Rule   2544   have   the   effect   of   reducing   the
amount of pension that had become payable to employees who had
already   retired   from   service   on   the   date   of   issuance   of   the
impugned   notifications,   as   per   the   provisions   contained   in   Rule
2544 that were in force at the time of their retirement.”
      (emphasis supplied)

45. Later, in U.P. Raghavendra Acharya and Others(supra), the

question   which   arose   for   consideration   was   that   whether   the

appellants   who   were   given   the   benefit   of   revised   pay   scale   with

effect   from   1st  January,   1996   could   have   been   deprived   of   their

retiral benefits calculated with effect therefrom for the purpose of

calculation of pension.  In that context, while examining the scheme

of   the   Rules   and  relying   on the Constitution Bench Judgment in

Chairman,   Railway   Board   and   Others(supra),   this   Court

observed as follows:­

“22. The State while implementing the new scheme for payment of
grant of pensionary benefits to its employees, may deny the same
to a class of retired employees who were governed by a different set
of rules. The extension of the benefits can also be denied to a class
of   employees   if   the   same   is   permissible   in   law.   The   case   of   the
appellants, however, stands absolutely on a different footing. They
had   been   enjoying   the   benefit   of   the   revised   scales   of   pay.
Recommendations have been made by the Central Government as
also the University Grant Commission to the State of Karnataka to

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extend the benefits of the Pay Revision Committee in their favour.
The pay in their case had been revised in 1986 whereas the pay of
the employees of the State of Karnataka was revised in 1993. The
benefits   of   the   recommendations   of   the   Pay   Revision   Committee
w.e.f.   1­1­1996,   thus,   could   not   have   been   denied   to   the
appellants.

30. In Chairman, Rly. Board v. C.R. Rangadhamaiah (1997) 6 SCC
623, a Constitution Bench of this Court opined : 

“33.   Apart   from   being   violative   of   the   rights   then

available   under   Articles   31(1)   and   19(1)(f),   the
impugned   amendments,   insofar   as   they   have   been
given retrospective operation, are also violative of the
rights   guaranteed   under   Articles   14   and   16   of   the
Constitution on the ground that they are unreasonable
and arbitrary since the said amendments in Rule 2544
have the effect of reducing the amount of pension that
had   become   payable   to   employees   who   had   already
retired   from   service   on   the   date   of   issuance   of   the
impugned   notifications,   as   per   the   provisions
contained in Rule 2544 that were in force at the time
of their retirement.”

31. The   appellants   had   retired   from   service.   The   State   therefore

could   not   have   amended   the   statutory   rules   adversely   affecting
their pension with retrospective effect.”

46. Later, in  Bank of Baroda and Another(supra), the question

arose   with   respect   to   the  employees  who  retired  or  died  while  in

service on or after 1st  April 1998 and before 31st  October, 2002 to

whom benefits were vested and accrued could be deprived of their

retiral benefits.  In this context, while taking note of the view relying

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on   the   Constitution   bench   Judgment   in  Chairman,   Railway

Board and Others(supra), this Court observed as under:­

“29. Thus, in our opinion, the Regulations which were in force till
2003,   would   apply   with   full   force   and   as   a   matter   of   fact,   the
amendments   made   in   it   by   addition   of   Explanation   (c)   in
Regulation 2(s) did not have the effect of amending the Regulations
relating   to   pension,   as   contained   in   Regulation   38   read   with
Regulations   2(d)   and   35   of   the   Regulations   of   1995.   Even
otherwise,   if   it   had   the   effect   of   amending   the   pay   and   perks
‘average emoluments’, as specified in Regulation 2(d), it could not
have   operated   retrospectively   and   taken   away   accrued   rights.
Otherwise   also,   it   would   have   been   arbitrary   exercise   of   power.
Besides, there was no binding statutory force of the so called Joint
Note   of   the   Officers’   Association,   as   admittedly,   to   Officers’
Association even the provisions of Industrial Disputes Act were not
applicable and joint note had no statutory support, and it was not
open to forgo the benefits available under the Regulations to those
officers   who   have   retired   from   1.4.1998   till   December   1999   and
thereafter, and to deprive them of the benefits of the Regulations.
Thus, by the Joint Note that has been relied upon, no estoppel said
to   have   been   created.   There   is   no   estoppel   as   against   the
enforcement of statutory provisions. The Joint Note had no force of
law   and   could   not   have   been   against   the   spirit   of   the   statutory
Regulations and the basic service conditions, as envisaged under
the Regulations framed under the Act of 1970. They could not have
been tinkered with in an arbitrary manner, as has been laid down
by   this   Court   in   Central   Inland   Water   Transport   Corporation
Limited & Anr. vs. Brojo Nath Ganguly & Anr., (1986) 3 SCC 156 &
Delhi Transport Corporation vs. D.T.C. Mazdoor Congress, (1991)
Supp.1 SCC 600.”

47. The   exposition   of   the   legal   principles   culled   out   is   that   an

amendment having retrospective operation which has the effect of

taking away the benefit already available to the employee under the

existing rule indeed would divest the employee from his vested or

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accrued rights and that being so, it would be held to be violative of

the rights guaranteed under Articles 14 and 16 of the Constitution.

48. In the instant case, the Bank pension scheme was introduced

from 1st April 1989 and options were called from the employees and

those who had given their option became member of the pension

scheme   and   accordingly   pension   was   continuously   paid   to   them

without   fail   and   only   in   the   year   2010,   when   the   Bank   failed   in

discharging its  obligations, respondent employees approached the

High   Court   by   filing   the   writ   petitions.     The   Bank   later   on

withdrawn   the   scheme   of   pension   by  deleting  clause   15(ii)   by   an

amendment   dated   11th  March,   2014   which   was   introduced   with

effect from 1st April, 1989 and the employees who availed the benefit

of pension under the scheme, indeed their rights stood vested and

accrued to them and any amendment to the contrary, which has

been   made   with   retrospective   operation   to   take   away   the   right

accrued to the retired employee under the existing rule certainly is

not   only   violative   of   Article   14   but   also   of   Article   21   of   the

Constitution.

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49. It may also be noticed that there is a distinction between the

legitimate expectation and a vested/accrued right in favour of the

employees.     The   rule   which   classifies   such   employee   for

promotional,   seniority,   age   of   retirement   purposes   undoubtedly

operates on those who entered service before framing of the rules

but it operates in futuro.  In a sense, it governs the future right of

seniority, promotion or age of retirement of those who are already in

service.

50. For   the   sake   of   illustration,   if   a   person   while   entering   into

service, has a legitimate expectation that as per the then existing

scheme of rules, he may be considered for promotion after certain

years   of   qualifying   service  or  with  the  age  of retirement  which  is

being prescribed under the scheme of rules but at a later stage, if

there is any amendment made either in the scheme of promotion or

the age of superannuation, it may alter other conditions of service

such scheme of rules operates in futuro.   But at the same time, if

the   employee   who   had   already   been   promoted   or   fixed   in   a

particular pay scale, if that is being taken away by the impugned

scheme   of   rules   retrospectively,   that   certainly   will   take   away   the

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vested/accrued   right   of   the   incumbent   which   may   not   be

permissible   and   may   be   violative   of   Article   14   and   16   of   the

Constitution. 

51. The   judgment   on   which   learned   counsel   for   the   appellant

Bank   has   placed   reliance   in   the   case   of  Marathwada   Gramin

Bank   Karamchari   Sanghatana   and   Another(supra),   the   issue

under   consideration   was   with   respect   to   provident   fund.     The

Marathawada Gramin  Bank had floated a provident fund scheme

built   on   better   rates   of   contributions   than   the   rates   mandated

under   the   employees   provident   fund   scheme.   Hence,   the   better

scheme   of   provident   fund   was   statutorily   recognized   by   grant   of

exemption under Section 17(1).  Later, Marathawada Gramin Bank

discontinued   its   provident   fund   scheme   for   financial   unviability,

and reverted to rates mandated under paragraph 26 of the EPFS.

The Bank later declined to exercise its voluntary contribution under

Para 26 of the scheme after the exemption was declined and that

came   to   be   upheld   by   this   Court   which   may   not   be   of   any

assistance to learned counsel for the appellant in the instant case.

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52. So far as the judgment in  State of Himachal Pradesh and

Others(supra)   is   concerned,   it   was   a   case   where   apart   from   the

scheme   under   the   provisions  of  Act  1952,  the   State   of  Himachal

Pradesh   framed   another   scheme   for   the   Himachal   Pradesh

Corporate Sector Employees Pension(Family Pension, Commutation

of Pension and Gratuity) Scheme, 1999.   It was made operational

with effect from 1st April 1999 but before the rights to the employees

could be vested/accrued, it was repealed on 2 nd  December, 2004.

The question arose whether such contingent right vested with the

employee on their having once opted under 1999 scheme was at all

be   binding   or   irrevocable   despite   being   repealed   by   a   later

notification dated 2nd  December, 2004.  In that context, this Court

observed that it was not the case of the right which accrued to the

employee and in that context, the repealing notification was upheld

by this Court.

53. In  State   of   Rajasthan(supra),   it   was   a   case   where   the

University   which   was   an   autonomous   body   created   under   the

provisions   of   the   Act   by   its   Resolution   introduced   the   pension

scheme, without taking recourse of the fact that the Resolution of

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the Board of the Management of the University can be enforced only

with prior approval from the Chancellor, i.e., the Governor of the

State in terms of Section 39 of the Act and it was never approved by

the Chancellor, in absence whereof, such resolution of the Board of

Management   was   unauthorized   and   was   not   open   to   be

implemented.     In  the   given  circumstances,  this  Court  was  of  the

view that in absence of the mandate of Section 39 being complied

with, the Board of Management of the University was not justified in

introducing the scheme of pension.

54. So   far   as   the   submission   made   by   learned   counsel   for   the

appellant   about   the   financial   distress   of   the   appellant   Bank   to

justify the impugned amendment to say that it may not be possible

to continue the grant of pension any more is concerned, suffice to

say,   that   the   rule   making   authority   was   presumed   to   know

repercussions of the particular piece of subordinate legislation and

once   the   Bank   took   a   conscious  decision  after  taking  permission

from   the   Government   of   Punjab   and   Registrar,   Co­operative,

introduced  the pension  scheme with effect from 1 st  April 1989, it

can   be   presumed   that   the  competent  authority  was  aware of  the

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resources   from   where   the   funds   are   to   be   created   for   making

payments to its retirees and merely because at a later point of time,

it   was   unable   to   hold   financial   resources   at   its   command   to   its

retirees,   would   not   be   justified   to   withdraw   the   scheme

retrospectively detrimental to the interests of the employees who not

only   became   member   of   the   scheme   but   received   their   pension

regularly   at   least   upto   the   year   2010   until   the   dispute   arose

between the parties and entered into litigation.

55. In our view, non­availability of financial resources would not

be   a   defence   available   to   the   appellant   Bank   in   taking   away   the

vested rights accrued to the employees that too when it is for their

socio­economic security.   It is an assurance that in their old age,

their periodical payment towards pension shall remain assured. The

pension which is being paid to them is not a bounty and it is for the

appellant to divert the resources from where the funds can be made

available to fulfil the rights of the employees in protecting the vested

rights accrued in their favour.

56. So   far   as   the   submission  made by   the  serving  employees is

concerned, they have no locus to question.  At the same time, their

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apprehension   as   being   projected   to   this   Court   is   completely

misplaced for the reason that employer/employees contribution is

being provided under the employees pension scheme(EPS) of the Act

1952 which is made applicable to the serving employees and they

are   entitled   to   get   pension   in   terms   of   the   provisions   of   the   Act

1952.  So far as their complaint regarding payment of contribution

is concerned, it is in no manner going to be adjusted for payment of

pension   to   retirees/respondents,   who   are   entitled   to   get   their

pension in terms of the pension scheme of which they are members

and it is for the appellant Bank to reserve the resources and make

payment to the retired employees seeking pension to the scheme in

vogue   when   they   became   members   and   took   benefits   pursuant

thereto.

57. Before we part with the judgment, we cannot be oblivious of

the situation that the complaint of the employees that they are not

being   paid   their   pension   since   2013,   at   the   given   time   few

employees   have   been   given   benefit   of   one   time   settlement   as

introduced by the Bank as an interim measure which was subject

to   their   rights   being   preserved,   in   the   pending   litigation,   taking

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grievance   of   the   either   party   into   consideration,   the   financial

constraints of the Bank and the rights of the employees who are

entitled to get pension under the bank pension scheme, we consider

appropriate to observe that so far as the arrears towards element of

pension   to   which   the   retired   employees   are   entitled   for,   the

appellant   Bank  is   at  liberty  to  pay  arrears towards pension upto

31st December, 2021 in 12 monthly instalments in the next one year

by   the   end   of   December,   2022   and   those   employees   who   have

accepted   payment   under   one   time   settlement   at   a   given   point   of

time,   what   is   being   paid   to   them   is   always   open   for   adjustment

against   arrears   of   their   due   pension.     Still   if   arrears   remain

outstanding, the same shall be paid in 12 monthly instalments. At

the same time, each of the employee who is member of the Bank

Pension scheme must get pension to which he/she is entitled from

the month of January 2022 as admissible under the law.  

58. So far as the complaint of the appellant Bank regarding orders

passed under Section 7A, Section 14B and Section 7Q of the Act

1952 for the period April 1989 to March 2015 and for April 2015 to

June 2017, copies of which has been placed on record is concerned,

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are not the subject matter of challenge in the instant proceedings, it

will   be   open   for   the   appellant   to   take   legal   recourse,   if   being

aggrieved in the appropriate proceedings available under the law.

59. Consequently, the appeals fail and are accordingly dismissed

with observations indicated above.

60. Pending applications, if any, stand disposed of.

………………………….J.
(AJAY RASTOGI)

…………………………..J.
(ABHAY S. OKA)
NEW DELHI
JANUARY 11, 2022

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