Monday, February 21, 2011

Denial of Pension to VRS optees under Officers' regulations and empoyees retired under CRS - Writ Petiions in Chennai and Karnataka Highcourts

 AIBOA has issued circular regarding it's efforts to get  legal recourse for justice to the employees who have taken VRS under Officers' regulations and employees who were compulsorily retired by the bank. These employees were denied the pension option under 9th BPS.  The detailed circular is reproduced below. 
Circular Letter No: 1:V:2011

February 15, 2011



 Dear Comrade,

Vide our Circular No.15:V:2010 dated 25-08-2010, we had called upon the employees retired under VRS as per Officers’ Service Regulations and also those who were imposed with the punishment of “Compulsory Retirement” to fight collectively against denial of another pension option by bank managements.

Canara Bank Officers’ Union and All India Canara Bank Retirees’ Federation are extending secretarial assistance and coordinating the work relating to court cases with our counsels.

We wish to inform that 57 Officers joining together have filed the Writ Petition No.26916/2010 in the Madras High Court. Upon hearing our case argued by our Senior Counsel, Shri A.L.Somayaji, the Hon’ble Court was pleased to admit the Writ Petition on 30-11-2010 ordering notice to the respondents.

Also, we have finalised arrangements to file shortly another Writ Petition in Karnataka High Court to strengthen our case further in respect of denial of pension option to VRS optees.

Taking into account the current thinking of the Central Govt. on this issue and bearing in mind that the case would reach its finality only at the level of Supreme Court, we have already engaged and paid advocate fees to legal counsels at Chennai for arguing the court cases before High Courts of Chennai and Karnataka and Supreme Court.   The collections were enlisted from the VRS affected on a holistic basis to meet the entire expenses of Court case and all other expenses thereon at High Courts and Supreme Court in a common one time contribution.

While the anxiety and concern articulated by the affected retired employees through E-mails/SMS and telephonic contacts is understandable, the schedule of listing, hearing and prioritising the cases by the Hon’ble Court are beyond our control.  Our Units are following up the matter and petition may come up early.

As these two Writ Petitions at Chennai and Bangalore including Lawyers’ fees, paper work, documentation, court stamping etc., involve heavy expenditure, we may have to speed on Supreme Court appeal eventually given the Government’s mind as of now.  Supreme Court appeal,  even with a minimum of one or two appearances by Lawyers,  may cost us about 5 lacs.   As such, all the amounts received are being held for meeting all the two cases filed by us including Supreme Court case.  We shall meet required expected expenditure with your help.

Our Units are filing Writ petitions as per advice of legal counsel in Chennai and Karnataka High Courts.  Even though 57 VRS optees are represented in the Writ petitions in Chennai and Karnataka High Courts, the Supreme Court verdict will normally cover all VRS officers as law of the land.

Our Units will keep you informed of further developments in the court cases including date of hearing etc., from time to time.

With greetings,



  1. AIBOA is requested to file a writ petition in Court(s) with regard to modification of effective date of Increase in Gratuity Ceiling to Rs.10 lacs from 24.05.2010 to 01.01.2006, to bring parity with Central Govt Employees. Expenses will be shared by retirees. If not feasible a clear circular may be issued.

  2. Some times we wonder how the retirees between 1.11.2007 to 23.05.2010 are non responsive to the selection of new gratuity effective date i.e.24.05.2010. The message appeared in one of the websights will help to understand the impact and the damage happened to them. Hope this will help for self introspection for retirees between 1.11.2007 to 23.05.2010.


    The amendment in Payment of Gratuity Act 1972, notified on 18th May, 2010, will have a great impact on the amount to be received by the retiree bankers wef from that date. The amount they have to receive as a part of the gratuity will substantially increase who will retire after completion of 30 years or more of service.

    Most of the Banks have their own Employees Gratuity Funds, according to which gratuity is payable. However, the employees are also entitled for payment of gratuity as per Payment of Gratuity Act. This effectively means that Banks are required to calculate gratuity as per Banks' Gratuity Fund as well as as per Payment of Gratuity Act and pay the higher of the two amounts.

    Another point here to be noted is that salary under Payment of Gratuity Act includes DA and thus with the revised salaries, the payment of gratuity under Payment of Gratuity Act will be beneficial. Earlier due to ceiling of Rs.3.50 lacs under the Act, the amount payable was only Rs.3.50 lacs under the Act and thus for number of employees / officers, the payment under Banks' Gratuity Fund was more beneficial. However, the amount above Rs.3.50 lacs was taxable.

    Now after the amendment in Payment of Gratuity Act 1972, it will be beneficial to almost all the bankers to claim gratuity under this Act, as it will entitle them to higher amount and the same is not likely be taxable, as Income Tax Section 10 reads :