Thursday, January 26, 2012

HC raps bank for stopping old staffer's pension

MUMBAI: Stating that depriving former employees of their pension rights was an arbitrary move, the Bombay High Court has directed Allahabad Bank to restart the fund of an 87-year-old man.

"Pension constitutes an important source of wherewithal for senior citizens so that they can live the twilight years in dignity," the HC said. Criticizing the nationalized bank's conduct in withholding the pension of an old employee, the court said service conditions set by the state authorities could not be modified arbitrarily.

"The deprivation in the present case has taken place patently in violation of law and flouts the guarantee of equal protection under Article 14 of the Constitution," said a bench of Justice D Y Chandrachud and Justice Amjad Sayed on January 19, while deciding in favour of Shapoor Mehta who retired from Allahabad Bank in 1986 after working there for 39 years.

Last October, the bank discontinued the pension scheme in lieu of gratuity pending amendment to the Officers Service Regulations and stopped paying Mehta a monthly pension of Rs 5,660. In HC, Mehta's counsel K J Presswala said retirement benefits were not a largesse and sudden stopping of pension of an 87 year old who was an "award staff", was blatantly unlawful, unconstitutional and against natural justice. Pension was governed by the Pension Rules that were in force even prior to nationalization of banks and the same terms were to continue later, he said.

Opposing the petition, bank's counsel Ashish Mehta said as the bank, following a Supreme Court order, had to pay gratuity under the Payment of Gratuity Act 1972 only, it was within its rights to stop paying pension. Finding "no merit" in the argument, the HC said, "As a matter of first principle,

Retirement benefits, including pension and gratuity, constitute a valuable right in property.... Where the employer is a public sector firm, the rights are constitutionally protected and their deprivation must stand scrutiny. Employers cannot grant or withhold retirement benefits at their whim and caprice."

Pointing to the flaw in the bank's argument, the HC said the SC held that "pension and gratuity were separate retirement benefits and so, the statutory right to paying gratuity could not be withheld on the grounds that the employees received pension". The HC said the SC judgment "has been met with a reprisal by depriving employees their right to a pension. Nothing more arbitrary can be conceived of." Stopping such payment unilaterally by an executive act was arbitrary as the SC had held that the employees were entitled to gratuity in addition to pension as getting gratuity was a statutory right.

Source: Times of India dtd 25/01/o

1 comment:

  1. In SUPREME COURT TODAY A special bench of Justices G. S. Singhvi and A. K. Ganguly said there should be a set time frame, and added that all matters of sanction should be decided within three months.

    "If consultations are required, then another one month can be taken. If in four months the authority does not give sanction, then it shall be deemed that a sanction has been given," the bench said. SIMILAR TIME FRAME AND ACCOUNTABILITY FOR WRONG DECISIONS REQUIRED FOR TOP DECISION MAKERS.