Pension option to Compulsorily retired employees

IBA has sent advice to member banks to offer pension option to the compulsorily retired employees in terms of the settlement of 2010.
IBA has sought legal opinion from a law firm whose services are engaged as  retainer ,which is reproduced below

 “Having considered the decisions rendered by the Hon'ble 
High Courts of Andhra Pradesh,Madras, Madhya Pradesh,
 Punjab & Haryana, Patna which have ruled in favour of the 
employees/officers who were compulsorily retired by way of 
punishment on the ground that they are covered by the Joint 
Note as well as decision of the Hon'ble Delhi High Court which
 has taken a contrary view on the technical ground and the
 fact that SLPs preferred against the judgments of the High 
Courts which had ruled in favour of the employees were 
dismissed, though such dismissal cannot be considered as 
law laid down by the SC, we are of the considered view that
 the banks are bound to give 2nd option to all the employees/
 officers who were compulsorily retired and who fall within the
 ambit of the Joint Note to exercise 2nd option for the following
 reasons: -

> The Joint Note does not distinguish between voluntary retirement, superannuation, premature retirement, compulsory retirement. Even the employees/ officers who are compulsorily retired by way of punishment are eligible for pension under the pension regulations. Banks being "State" within the ambit of Article 12 of the Constitution of India should act in a fair and reasonable manner and should not restrict it only those who demand it. Such stand, if any, adopted by the banks may invite strictures from the Courts. "

 Click here to view Letter by IBA to banks

Supreme Court Judgment on Re-fixation of Basic Pension and payment of arrears for those retired between April 1998 and October 2002

Circular issued by CBPRO on the above subject is reproduced below

Quote

CBPRO Circular No: 006/2018                              Dated: 07.03.2018

Dear Comrades,

Supreme Court Judgment on Re-fixation of Basic Pension and payment of arrears for those retired between April 1998 and October 2002.

In continuation of our Circular No. 005/2018 dated 14.02.2018, we are pleased to advise that the Hon’ble Supreme Court has been gracious in considering the issues raised by the affected Pensioners who filed various petitions challenging the settlement which deprived those who Retired between 1st April, 1998 and 31st October, 2002 full Pension @ 50% of their last drawn Basic Pay. The Hon'ble Supreme Court in its judgment pronounced by Hon’ble Justice Mr. Arun Mishra and Hon’ble Justice Mr. Amitava Roy on 13th Feb 2018 restored the same as per Pension Regulations 2(d), 35(2), 38(1) and 38(2) and ordered payment of arrears for those who retired during the above period with interest at 9% within four months from the date of the order.

For the benefit of our members we wish to state that in the wage settlement of 1998 the merger point of DA was irrationally fixed at 1616 points for the purpose of fixing the Basic Pension to the Retirees of the relevant period where as for the serving employees and Officers it was fixed at 1684 points. This reduced the Basic Pension to about 41% of the last drawn Basic Pay instead of 50% of the last drawn Basic Pay as per the Bank Employees’ Pension Regulations 1995.

The Hon’ble Supreme Court held that there cannot be two different Pay scales one for the purpose of calculating Pension and other one for the purpose of calculating Salary. It also observed that Joint Note/Award made under the Industrial Disputes Act 1947 cannot be inconsistent with the law laid by the legislature or by the Supreme Court and if it does so it is illegal and cannot be forced.

The Hon’ble Supreme Court of India in its order dated 13th February 2018 in case of Bank of Baroda and ANR v/s G. Palani and ORS while setting aside the Judgment rendered by the Hon’ble High Court of Delhi also affirmed the Judgments of Hon’ble High Court of Karnataka at Bangalore and the Hon’ble High Court of Madras has also upheld the following principles with regard to Pensioners:

                a. The Bank Employees’ Pension Regulations having been framed in exercise of powers conferred by Section 19 of Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 have statutory force and are binding. These Regulations could not be supplanted or over-ridden by any executive fiat or order which has no statutory basis.

                b. The interpretation of any Regulation as per deeming fiction is wholly impermissible and it is not permissible to add or subtract any word in a provision in view of the settled principles of statutory interpretation.

                c. Pension is not a bounty or charity or gratuitous payable on the sweet will and pleasure of the Government.

                d. Right to Pension is a valuable right vested in a Government Employee and cannot be dealt with arbitrarily.

                e. Right to receive Pension is property under the Act and Article 19 of the Constitution.

                f. Pension is a deferred portion of compensation for the past service and is in the nature of social security to provide for the December (Evening) of life of a Retired Employee.

                g. While a benefit can be given with retrospective effect, no Settlement or Award can withdraw the existing benefit with retrospective effect. Taking away a benefit already available to the Employees under existing rules is arbitrary, discriminatory and violative of rights granted under Articles 14 and 16 of the Constitution.

                h. The Pension is closely akin to wages in that it consists of payment provided by an Employer, is paid in consideration of past service and serves the purpose of helping the recipient to meet the expenses of living.

                i. A Joint Note or Award cannot create estoppel as against the enforcement of statutory provisions contained in the Pension Regulations.

The Hon’ble Supreme Court in para 33 of its judgment emphatically stated that it had no hesitation to strike down the explanation (c) to Regulation 2(s) being arbitrary and repugnant to the provisions of Regulations 2(d), 35, 38(1) and 38(2) as its purpose was to take away the actual computation of the pension on the basis of the salary which was drawn in preceding ten months.

We place on record our deep sense of appreciation to the comrades of Bank of Baroda and others who challenged the above provision of the wage settlement arguing that this would amount to violation of Bank Employees’ Pension Regulations 1995. The endurance and determination to fight against arbitrary and illegal explanation to the provisions of Pension Regulations 2(s) deserves all commendation. This is one more instance of display of irrationality and illegality by the IBA through a wage settlement which is again now SET ASIDE by the Hon'ble Supreme Court.

We thank and congratulate Bank of Baroda Retired Officers Association (Affiliated to RBONC) who spearheaded writ petitions by impleading and actively associating in taking up the issue both in Hon’ble High Court and Hon’ble Supreme Court.

We also thank and congratulate Com. K S Rengarajan, President Arise-IOB (affiliated to AIBPARC) for filing the writ petitions along with others in the Hon’ble High Court of Madras where they got favorable judgment on the same issue.

We advise our members that we have taken up with IBA for immediate implementation of the order of the Hon’ble Supreme Court of India and grant the benefit to the affected Retirees in all the Banks by making payment of arrears along with interest @ 9% as ordered by the Hon’ble Court.

With Comradely Regards,

Yours Comradely,

A.Ramesh Babu K.V.Acharya

Joint Conveners

Dated: 07.03.2018

Ms Usha Ananthasubramanian

Chairperson, IBA

MD & CEO

Allahabad Bank

2, Netaji Subhash Road

KOLKOTA 700 001

Respected Madam,

RE: Request for Updation of Pension payable to Bank Pensioners in terms of Regulation 35(1) of Bank Employees’ Pension Regulations 1995

We wish to introduce ourselves as a Coordinating Body of major Organisations of Retired Bank Employees and Officers consisting of Federation of SBI Pensioners’ Associations, AIBPARC, RBONC, AIRBEA and FORBE representing more than 400,000 members. We have been taking up the issues concerning Bank Pensioners and Retirees at various fora and have also met with occasional success. We are thankful to the concerned Authorities for helping us resolve some of the issues/grievances of our members.

We wish to submit that despite there being a well intended litigation policy of the Government of India, the Bank Pensioners have been constrained to knock at the doors of the judiciary in various High Courts and also the Hon’ble Supreme Court of India to seek redressal of their grievances which were duly provided under the Pension Regulations. The following issues were adjudicated in favour of Bank Pensioners by the Hon’ble Supreme Court of India in as much as the same were within the frame work of Pension Regulations having statutory force:

1. Additional Notional Service upto five years to those who retired under Special VRS Scheme 2000- Regulation 29(5).

2. Adding upto five years notional service in case of specialised Officers at the time of superannuation to determine qualifying service-Regulation 26.

3. Re-fixation of basic Pension for those who retired between 1st April, 1998 and 31st October, 2002 and payment of arrears to them upto 2005- Regulations 2(d), 35(2), 38(1) and 38(2)

It is worth submitting here that the Hon’ble Supreme Court of India in its order dated 13th February 2018 in case of Bank of Baroda and ANR v/s G. Palani and ORS while setting aside the Judgment rendered by the Hon’ble High Court of Delhi also affirmed the Judgments of Hon’ble High Court of Karnataka at Bangalore and the Hon’ble High Court of Madras has held the following principles with regard to Pensioners:

                j. The Bank Employees’ Pension Regulations having been framed in exercise of powers conferred by Section 19 of Banking Companies (Acquisition and Transfer of Undertakings) Act 1970 have statutory force and are binding. These Regulations could not be supplanted or over-ridden by any executive fiat or order which has no statutory basis.

                k. The interpretation of any Regulation as per deeming fiction is wholly impermissible and it is not permissible to add or subtract any word in a provision in view of the settled principles of statutory interpretation.

                l. Pension is not a bounty or charity or gratuitous payable on the sweet will and pleasure of the Government.

                m. Right to Pension is a valuable right vested in a Government Employee and cannot be dealt with arbitrarily.

                n. Right to receive Pension is property under the Act and Article 19 of the Constitution.

                o. Pension is a deferred portion of compensation for the past service and is in the nature of social security to provide for the December (Evening) of life of a Retired Employee and serves the purpose of helping the recipient meet the expenses of living.

In view of the foregoing facts and circumstances we have been following up the issue of Updation of Pension with the Indian Banks’ Association and Department of Financial Services, Government of India as Regulation 35(1) of Bank Employees’ Pension Regulations 1995 explicitly provides that Basic Pension and Additional Pension wherever applicable shall be updated as per the formulae given in appendix 1.

In this connection it is also pertinent to submit that the Pension Updation as provided under Regulation 35(1) was in fact implemented by all the Banks at the time of introduction of Pension in the Banks in the year 1995-96 in respect of those eligible Pensioners who had Retired between 01.01.1986 and 31.10.1987. However the Banks in consultation with IBA refuse to update the Pension in subsequent years in violation of Regulation 35(1) which has the Statutory force and support of the notification in the Gazette of India.

It is very painful that the Banks, IBA and DOFS have been taking a position contrary to the provisions contained in Regulation 35(1) before the judiciary by irrelevantly quoting financial constraints, affordability etc. The position taken by the Employers disregards the principle of non applicability of such constraints in the matters which are Statutory in nature and the legal obligation of the Employer.

It may be appreciated that the resolution of our demand for implementation of Regulation 35(1) by granting updation of Basic Pension and Additional Pension wherever applicable shall spare the Judiciary of its precious time, Government, IBA and Banks of their time, money and other valuable resources while providing the legitimate entitlement to the Bank Pensioners. It will also help the Pensioners to get their dues without being hurt financially and emotionally apart from losing the value of money owing to considerable amount of time that is consumed by avoidable and forced litigation. Such a kind consideration of our demand on the part of Employer shall also uphold the sanctity of a well meaning and fair

litigation policy of the Government. The Bank Pensioners shall ever remain grateful for the same.

With regards

Yours Sincerely,

A.Ramesh Babu  K.V.Acharya

Joint Conveners

Unquote 

 

Officers retired between 01/04/1998 and 31/10/2002 Supreme Court Judgement in Bank of Baroda case

Supreme court of India has delivered judgement favouring Bank Officers on 13th Feb 2018 , ordering to fix pension according to pension rules and pay arrears along with 9% interest within four months of the date of order. For the Officers retired between 01/04/1998 and 31/10/2002 basic  pension was fixed by merging DA upto 1610 points instead of 1684 points. The pension was re fixed   w.e.f. from 01/05/2005 by merging DA upto 1684 points. But it was not revised from date of retirement,Now detailed judgement is delivered by SC. 

Following are extracts from  Supreme court Judgement

"First we come to the rigour of the Regulations. The
Regulations have statutory force, having been framed in
exercise of the powers under Section 19(2)(f) of the Act
of 1970 and are binding. They could not have been
supplanted by any executive fiat or order or Joint Note,
which has no statutory basis. The Joint Note of the
officers also had no statutory force behind it and could
not have obliterated any of the provisions of Act of 1970
or the existing Regulations. Thus, Joint Notes could, not
have taken away the rights that were available under the
Pension Regulations of 1995 to the Officer."

"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. "

"Reliance has also been placed on the decision of
this Court in D.S. Nakara vs. Union of India, (1983) 1 SCC
305. It was observed in the context of pension scheme
that was non-contributory in character that the benefit,
which was given under the scheme, was prospective. In all
cases wherever they retire, they would be governed by the
liberalized pension scheme, because the scheme was a
scheme for payment of the pension governed by 1972 Rules.
The date of retirement would be the relevant date. The
revised scheme would be operative from the date mentioned
in the scheme. It was also not a case of taking away the
benefit that had accrued with retrospective effect or
taking away of the vested or accrued rights. Thus, the
decision has no application, rather the spirit of the
decision runs counter to and fails to buttress the
submissions raised on behalf of the banks.
33. The only purpose of the addition of Explanation (c)
to Regulation 2(s), was to take away the actual
computation of the pension on the basis of the salary,
which was drawn in the preceding ten months. Thus, we have no hesitation to strike it down being arbitrary and
repugnant to other provisions/Regulations namely 2(d),
38(1)(2) and 35. The Explanation (c) to Regulation 2(s)
is hereby struck down, as it could not have been enacted
retrospectively to take away accrued rights. Even
otherwise also it is held to be arbitrary and irrational.
More so, in view of the fact that only by way of a
temporary measure, that discrimination was created and the
Explanation was deleted with effect from 1.5.2005.

34. Thus, we set aside the judgment rendered by the High
Court of Delhi and affirm that of High Courts of Karnataka
at Bangalore and the High Court of Madras. The appeals
filed by the Banks are dismissed and the appeal filed by
the Association is allowed. Resultantly, let the amount
which was due and payable be paid with 9% interest, be
calculated and paid within four months from today. "

 Click on the following link to view Supreme Court Judgement

Supreme Court Judgement in Bank Of Baroda officers' pension case