Summary
The Court protected retired bank employees’ accrued rights under a pension scheme introduced in 1989 and enjoyed before its later withdrawal. Retrospective deletion of the governing rule could not take away those vested benefits; financial distress did not justify doing so. Future service expectations were distinguished from benefits already accrued. The bank could adjust earlier one-time settlements against pension arrears and discharge arrears through December 2021 in twelve monthly instalments during 2022, while paying current pension from January 2022. Separate provident-fund assessment disputes were left to appropriate proceedings.
Issues
- Whether deletion of the bank pension rule could retrospectively deprive retired members of accrued pension rights.
- Whether financial constraints or serving employees’ concerns justified withdrawal, and how outstanding pension should be paid.
Provisions considered
- Articles 14, 16 and 21, Constitution of IndiaArbitrary retrospective deprivation of vested service benefits was impermissible; the retirees’ accrued pension rights received constitutional protection. (¶ 43-50)
- Rule 15(ii); amendment dated 11 March 2014, Punjab State Cooperative Agricultural Land Mortgage Banks Service (Common Cadre) Rules, 1978Deletion could not retrospectively extinguish pension rights accrued to retired members under the operative scheme. (¶¶ 8-12, 39-41, 47-48)
Held
- The retirees had opted into the authorised pension scheme and received benefits under it. Their rights had accrued, and a later retrospective amendment could not strip them of those rights. The High Court’s protection against retrospective withdrawal was upheld. (¶ 39-48)
- Rules governing future promotion, seniority or retirement may alter expectations of existing employees prospectively. That differs from retrospectively reversing benefits already granted or enjoyed; the latter engages protection of vested or accrued rights. (¶ 44-50)
- The bank consciously introduced the scheme with the competent approvals and was presumed to understand its financial consequences. Subsequent lack of resources did not justify retrospective deprivation of the retirees’ pension, which was not a bounty. The precedents concerning different schemes and unaccrued or unauthorised benefits did not support withdrawal here. (¶ 51-55)
- The serving employees’ challenge failed. Their statutory pension contributions were not to be diverted to the respondent retirees’ bank-scheme pension; the bank had to reserve resources to meet that obligation. (¶ 56)
- Arrears through 31 December 2021 could be paid in twelve monthly instalments by December 2022, adjusting amounts already received under one-time settlements without prejudice to the employees’ rights. Current pension was payable from January 2022. Separate provident-fund assessment, interest and damages orders were outside these proceedings and could be challenged through appropriate legal recourse. (¶ 57-59)
Result
Appeals dismissed with directions permitting twelve monthly instalments for pension arrears through December 2021, adjustment of prior settlements and payment of current pension from January 2022.