Summary
Construing Regulation 33 of the Central Bank of India (Employees') Pension Regulations, 1995, the Supreme Court held that clauses (1) and (2) must be read together: a compulsorily retired employee is entitled to not less than two-thirds of full pension, and any reduction below full pension requires prior consultation with the Board of Directors, for which post facto approval is no substitute. The Field General Manager's order reducing the appellant's pension by one-third without such consultation was set aside.
Issues
- Whether clauses (1) and (2) of Regulation 33 of the Pension Regulations operate independently, so that a superior authority reducing pension under clause (1) need not consult the Board of Directors, or whether they must be read conjointly.
- Whether the word 'may' in Regulation 33(1) confers a discretion to grant a compulsorily retired employee pension below two-thirds of full pension, or no pension at all absent an order under clause (1).
- Whether the requirement of prior consultation with the Board of Directors before awarding less than full pension is mandatory, and whether ex post facto approval by the Board would suffice.
- Whether the Court should invoke Article 142 of the Constitution to endorse the reduction of pension notwithstanding the procedural lapse.
Provisions considered
- Regulation 33(1), (2) and (3), Central Bank of India (Employees') Pension Regulations, 1995Clause (1) permits an authority higher than the one competent to impose compulsory retirement to grant pension between two-thirds and full pension; clause (2) requires consultation with the Board of Directors whenever the Competent Authority, in original, appellate or review capacity, awards less than full pension. The Court read the clauses conjointly, holding that any reduction of full pension requires prior Board consultation, that 'may' in clause (1) confers no discretion to go below two-thirds, and that post facto approval cannot substitute prior consultation. (¶¶ 11, 12, 15, 16, 18, 19, 21)
- Regulation 3(b) and Schedule; Rule 4(h), Central Bank of India Officer Employees' (Discipline and Appeal) Regulations, 1976The definition of Competent Authority and the Schedule show that an officer higher than the disciplinary authority and not below Assistant General Manager is the appellate authority; a Field General Manager is therefore both the superior authority under Regulation 33(1) and the appellate authority capable of exercising power under Regulation 33(2). Compulsory retirement was imposed as a major penalty under Rule 4(h). (¶¶ 4, 13)
- Regulation 20(3)(iii), Central Bank of India (Officers') Service Regulations, 1979Enabled continuation of the disciplinary inquiry after the appellant's superannuation; the appellant's initial challenge to its validity was given up before the High Court. (¶¶ 4, 6)
- Article 300A; Article 142, Constitution of IndiaPension was treated as a valuable right to property deniable only by authority of law, so procedural safeguards such as prior consultation must be strictly followed; the Court declined to invoke Article 142 to endorse the reduction since no evidence of the alleged loss was considered and no hearing was given before reducing pension. (¶¶ 9, 17, 21, 22, 23)
Held
- The expression 'Competent Authority' in Regulation 33(2) cannot be confined to the disciplinary authority, because clause (2) expressly covers orders passed in appellate or review capacity; an interpretation rendering those words otiose must be eschewed. (¶ 15)
- Reading clauses (1) and (2) of Regulation 33 independently would produce the anomaly that the same Field General Manager would need prior Board consultation when reducing pension under clause (2) but not under clause (1); to avoid circumvention, whenever a superior authority reducing pension under clause (1) is also the appellate or reviewing authority, prior consultation with the Board is mandatory. In all cases where the full pension of a compulsorily retired employee is reduced, prior consultation with the Board is necessary. (¶¶ 16, 19)
- Pension is not a bounty or a matter of employer discretion but a valuable right to property that can be denied only by authority of law; where an authority has discretion to grant less than full pension, every procedural safeguard in favour of the employee, including prior consultation, must be strictly followed. (¶ 17)
- The pension of an employee compulsorily retired as a penalty cannot be less than two-thirds of full pension or Rs 375 per month, whichever is higher. The word 'may' in Regulation 33(1) does not vest discretion to award less than two-thirds; it merely clarifies that the clause confers no pension on an employee who was not otherwise entitled to pension on superannuation, for instance for want of qualifying service. The High Court erred in treating grant of pension as discretionary. (¶ 18)
- Whether prior consultation is mandatory or post facto approval suffices depends on the nature of the consultation, the status of the authority consulted and the rights affected; consultation with the Board of Directors, the Bank's highest authority, before curtailing a constitutionally protected right to pension is a mandatory safeguard, and ex post facto approval cannot substitute for it. (¶¶ 20, 21)
- No exceptional case for exercising power under Article 142 to endorse the reduction was made out, since no evidence of the computation of the alleged loss had been considered by the disciplinary or appellate authority and no hearing had been given before reducing the pension. (¶ 23)
Result
Appeal allowed. The High Court's order and the Field General Manager's order dated 07.08.2015 reducing pension without prior consultation of the Board of Directors set aside. The Bank is free to take a fresh decision on reduction of pension, after hearing the appellant and with prior consultation of the Board, within two months of the judgment, failing which the appellant is entitled to full pension from the date of superannuation.