Summary
A bank head cashier who, having opted for provident fund rather than pension, resigned in 2006 after about 36 years' service citing mental depression, later sought to exercise the 'another option for pension' offered by the IBA circular of 16.08.2010 to retired employees. The Court held that resignation and voluntary retirement are distinct concepts that cannot be substituted for each other on the basis of length of service, that Regulation 22 of the 1995 Pension Regulations, which forfeits past service on resignation, does not offend Article 14, and that a High Court under Article 226 cannot direct the bank's Board to amend the Regulation; it nonetheless granted the employee, under Article 142, a fortnight to opt for pension under the 2024 bipartite settlement or, failing that, a one-time financial relief of Rs. 5 lakh.
Issues
- Whether an employee who resigned citing mental depression after serving far beyond the qualifying period forfeits for all time his right to opt for pension under Regulation 22 of the 1995 Pension Regulations, or whether a beneficial approach treating the resignation as voluntary retirement is permissible.
- Whether Regulation 22, by clubbing resignation with dismissal, removal and termination for the purpose of forfeiture of service, violates Articles 14 to 16 of the Constitution.
- Whether the High Court, under Article 226, could direct the bank's Board of Directors to consider amending Regulation 22 and to determine the employee's pension claim within fixed timelines.
Provisions considered
- Regulation 22 (Forfeiture of service), United Bank of India (Employees') Pension Regulations, 1995Resignation, dismissal, removal or termination entails forfeiture of the employee's entire past service and disqualifies him from pensionary benefits. The Court held the clubbing of resignation with punitive modes of severance is a matter of policy that does not per se offend Article 14, is not manifestly arbitrary, and in any case did not affect the employee because in 2006 he had not opted for pension at all. (¶¶ 4.10, 47, 54, 55, 56, 57, 58, 59, 60)
- Regulation 14 (Qualifying service), United Bank of India (Employees') Pension Regulations, 1995Ten years' service on the date of retirement or deemed retirement qualifies for pension; the employee relied on his 36 years' service, but the Court held that qualifying service cannot convert a resignation into a voluntary retirement. (¶¶ 4.9, 4.12, 47, 52)
- Clauses 2 and 3, Indian Banks' Association circular dated 16.08.2010 ('another option for pension', following the bipartite settlement of 27.04.2010)The option was open to 'retired employees', defined as those who ceased to be in service on superannuation, voluntary retirement or VRS under a special scheme. Having resigned, the employee did not fall within the circular, whose terms cannot be read to extend coverage beyond the statutory regulations. (¶¶ 4.4, 4.5, 4.6, 64, 65)
- Article 14, Constitution of IndiaEmployees who resign and employees who retire voluntarily form two different classes and treating them differently does not offend Article 14; Anwar Ali Sarkar, which concerned an unreasoned classification among similarly placed accused, offered no comparison, and the Article 14 argument had already been rejected in Sanwar Mal. (¶¶ 49, 50, 51, 53, 54, 58, 59)
- Article 226, Constitution of IndiaA High Court cannot direct the legislature or executive to enact a law or frame or amend a regulation; it may at most request the executive to consider the desirability of doing so. The Division Bench's time-bound direction to 'consider' amending Regulation 22 was in substance a mandate and overstepped its bounds. (¶¶ 67, 68)
- Article 142, Constitution of IndiaInvoked to grant the septuagenarian employee, who had served without blemish for over 35 years, a further fortnight to opt for pension under clause 37 of the 2024 bipartite settlement or, alternatively, a one-time financial relief of Rs. 5 lakh, expressly not to be treated as a precedent. (¶¶ 71, 72, 73)
Held
- The consistent line of decisions from Sanwar Mal to BSES Yamuna Power, with the exception of Sheelkumar Jain and Shashikala Devi which turned on their own facts, treats resignation and voluntary retirement as distinct concepts with different consequences; substituting one for the other solely on the basis of the length of service runs counter to the statutory regulations. The larger Bench in Shree Lal Meena disapproved Asger Ibrahim Amin and, by the same reasoning, Sheelkumar Jain. (¶¶ 44, 45, 46, 47)
- Resignation is a voluntary relinquishment that may be tendered at any time and is ordinarily bilateral, taking effect on acceptance; voluntary retirement is available only where the employer provides for it and its conditions are met. Where a provision for voluntary retirement exists but the employee elects to resign, the resignation cannot be treated as voluntary retirement, whatever the length of service, unless the employee also satisfies the conditions for voluntary retirement; and where no such scheme exists, resignation is the only mode of severance and the employee submits to its consequences. (¶ 52)
- Whether the policy embodied in Regulation 22 is wise is not for the courts; judicial review of a codified policy is confined to whether it exceeds the regulation-making power, transgresses the parent enactment or violates constitutional limitations, none of which was shown. Regulation 22 is not manifestly arbitrary; the employee, having chosen provident fund and received his dues in 2006, was not affected by it. (¶¶ 55, 56, 57, 58)
- The contention that Shree Lal Meena did not consider Shashikala Devi was misconceived, since both the reference order and the larger Bench referred to it; S.K. Kool, which concerned removal with superannuation benefits, turns on its facts and is not a precedent where the punishment carries no financial benefit. (¶¶ 61, 62)
- The employee, in service for over a decade after the 1995 Regulations were introduced, is presumed to have known the consequences of resigning instead of seeking voluntary retirement on three months' notice; a bipartite settlement binds all employees of the participating banks but cannot be read to extend its coverage beyond the statutory regulations. He therefore resigned and did not retire voluntarily, and the Single Judge's relief based on S.K. Kool and Shashikala Devi was rightly set aside. (¶¶ 64, 65)
- The power under Article 226 does not extend to directing the legislature or executive to enact primary or subordinate legislation; the Division Bench's time-bound direction to the Board to 'consider' amending Regulation 22, coupled with directions to determine and process the pension claim, amounted to a mandate that could not be issued, especially when the vires of the Regulation was never challenged in the writ petition. (¶¶ 67, 68)
- The grievances of employees who resigned have been substantially addressed by the 2024 bipartite settlement, so nothing further was called for at the instance of the intervenors. (¶ 63)
Result
Employee's connected appeal dismissed; bank's lead appeal partly allowed: Division Bench direction (A) affirmed, directions (B) to (D) set aside. Under Article 142 the employee gets a fortnight to opt for pension under clause 37 of the 12th bipartite settlement of March 2024 on refunding the provident fund amount with interest; if ineligible or unable to refund, he may within a fortnight request financial relief, whereupon the bank shall pay Rs. 5,00,000 within two months, not to be treated as a precedent. Intervenors' applications dismissed.