Summary
The Supreme Court upheld the differing dearness-relief structures for bank retirees before and after 1 November 2002. Their distinct rates, pension slabs and index thresholds could not be selectively combined to confer a flat 0.24% rate on earlier retirees. The negotiated settlement had to be considered as a package; RBI’s separate changes did not create the claimed entitlement. The banks’ appeals were allowed, the Calcutta High Court orders set aside and the retirees’ writ petition dismissed.
Issues
- Whether the distinct dearness-relief formulas unlawfully discriminated between retirees before and after 1 November 2002.
- Whether RBI circulars or pension-parity precedents required extending a flat-rate formula to earlier bank retirees.
Provisions considered
- Clause 7(2), Ninth Bipartite Settlement dated 27 April 2010The earlier-retiree tapering structure and later-retiree flat rate were assessed with their distinct slabs and index thresholds; the Court declined selective combination or judicial replacement of these parameters. (¶¶ 7, 8, 21, 22, 23, 24, 25)
Held
- The earlier retirees retained a tapering formula beginning at 0.24%, while later retirees received a flat 0.18% with different index parameters. The earlier benefits were not taken away, and the two groups did not form a homogeneous class on these terms. (¶¶ 21, 22, 23, 24)
- Extending the earlier formula’s highest slab rate of 0.24% across the whole pension would confer a better rate than later retirees received; mechanically applying 0.18% could disadvantage earlier retirees. Selective synthesis of the distinct structures was unwarranted. (¶¶ 23, 24)
- D.S. Nakara does not require identical pension benefits across every retirement scheme or group. RBI’s abandonment of its tapering formula did not itself entitle these bank retirees to the RBI rate or the claimed flat 0.24%. (¶¶ 19, 24, 25)
- The settlement was a negotiated package and could not be divided into acceptable and unacceptable parts in the manner proposed. Its differential treatment was consistent with the governing pension precedents. (¶¶ 25, 26)
- The earlier Madras High Court decision had also been affirmed after leave to appeal was granted, attracting merger; independently, the Court found no impermissible distinction in the settlement. (¶ 26)
Result
Banks’ appeals allowed. Impugned Calcutta High Court judgments and orders set aside; Writ Petition No.507 of 2012 dismissed. No costs.