Central Bank of India v. O. Vijayan

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN &** **THE HONOURABLE MR. JUSTICE ASHOK MENON** **MONDAY, THE 6TH DAY OF AUGUST 2018 / 15TH SRAVANA, 1940** **WA.No. 1043 of 2018 IN WPC. 21470/2014** **AGAINST THE ORDER/JUDGMENT IN WP(C) 21470/2014 of HIGH COURT OF KERALA DATED 09-01-2018** ## **APPELLANT(S)/RESPONDENT** **CENTRAL BANK OF INDIA, REPRESENTED BY ITS REGIONAL MANAGER,REGIONAL OFFICE, 1ST FLOOR, METRO PALACE,OPPOSITE ERNAKULAM TOWN RAILWAY STATION,ERNAKULAM NORTH,KOCHI-682018.** **BY ADVS.SRI.K.M.ANEESH SRI.ADARSH KUMAR** ## **RESPONDENT(S):/PETITIONER** **O.VIJAYAN, S/O OF CHATHAN,EX-HEAD CASHIER-II,CENTRAL BANK OF INDIA, CHENGANNUR BRANCH,CHENGANNUR.** **BY ADV. SRI.B.ASHOK SHENOY BY ADV. SRI.K.V.GEORGE BY ADV. SRI.P.N.RAJAGOPALAN NAIR BY ADV. SRI.P.S.GIREESH** **THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 06-08-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WA 1043/18** ## **APPENDIX** ## **APPELLANT'S EXHIBITS** **ANNEXURE-A1 : COPY OF LETTER DATED 23.12.2015 ISSUED BY THE INDIAN BANKS ASSOCIATION TO THE CHIEF EXECUTIVES OF THE MEMBER BANKS.** **//TRUE COPY//** **PS TO JUDGE.** jg-13/8 K.VINOD CHANDRAN & ASHOK MENON, JJ. ------------------------------------------W.A.No.1043 of 2018 ------------------------------------------Dated this the 6[th] day of August, 2018 ## J U D G M E N T Vinod Chandran, J. Central Bank of India ('Bank', for short) is the appellant, who seeks to decline an employee discharged from service as a punishment for misconduct; from the benefit of encashment of privilege leave. The brief facts to be noticed are that the employee who is the respondent herein, filed writ petition against the denial of superannuation benefits, including encashment of privilege leave on a discharge effected from the services of the Bank. The learned Single Judge allowed the entire claim of the employee. The appellant Bank is aggrieved only with the direction to grant encashment of the privilege leave. 2. Admittedly, the respondent-employee was discharged from the services of the Bank as per Ext.P1, a punishment awarded under clause 6(d) of the Bipartite Settlement produced as Ext.P3, which is dated 10.4.2002. The Bank declined the entire benefits relying on Regulation 31(1) of the Central Bank of WA 1043/18 -2- India (Employees) Pension Regulations, 1995. Regulation 31(1) provided that an employee who is dismissed or removed or terminated from service, shall forfeit his pension. The Bank relying on the Regulation before the learned Single Judge asserted its right to so exercise the option to forfeit the pension due. 3. The learned Single Judge relied on the decision of the Honourable Supreme Court in 2014 (2) SCC 715 [Bank of Baroda v. S.K.Kool] . The Honourable Supreme Court concerned with the very same regulation for forfeiture and clause 6(b) of the Bipartite Settlement ruled in favour of the employee and directed payment of the entire superannuation benefits, including encashment of leave, which was included in the reference order to the Industrial Tribunal as is seen from the judgment itself. The learned Single Judge following the judgment of the Honourable Supreme Court found that the Bipartite Settlement of the year 2002 was far later to the Regulations of 1995. With open eyes, the Management of the Bank had entered into a settlement, wherein the punishments for gross WA 1043/18 -3- misconduct were clearly laid down; one of such punishments was discharge from service with superannuation benefits. Following the decision of the Honourable Supreme Court, the learned Single Judge held the discharged employee to be entitled to the entire superannuation benefits, including encashment of privilege leave. 4. The learned Standing Counsel for the Bank pointed out that superannuation benefits as spoken of in the settlement, itself confined the same to pension and/or provident fund, gratuity as would be due otherwise under the rules or regulations prevailing at the relevant time. Hence, no benefit other than pension and/or provident fund and gratuity can be made available to an employee terminated from service. It is also contended that in the instant case, after the settlement was entered into in 2002, Ext.R1(b) dated 6.6.2005 was brought out by the Bank. The said circular dealt with the effect of punishment, on encashment of privilege leave. It denied such encashment to those who are compulsorily retired from service or removed from the Banks service as a WA 1043/18 -4- punishment. The respondent-employee admittedly was terminated from service by way of punishment and hence, there could be no encashment of leave granted to the employee on his discharge. The learned Standing Counsel would also contend that though encashment of leave was one of the issues in the case dealt with by the Honourable Supreme Court, the same was not specifically considered. There was also no contention by the employer therein that a specific denial of encashment on termination as a punishment, as is available in Ext.R1(b), was available in the other case. Ext.R1(b) is the distinguishing factor on which the claim can be denied here, asserts the learned Counsel. In such circumstances, the learned Standing Counsel persuades us to take a different view, by virtue of the prohibition contained under Ext.R1(b). 5. The learned counsel for the respondentemployee would, however, rely on S.K.Kool (supra) itself to contend that the Honourable Supreme Court has understood superannuation benefits to be of pension, provident fund, gratuity as also leave encashment. What is declared by the Honourable Supreme Court is WA 1043/18 -5- that on a harmonious construction of the Regulations as also the Bipartite Settlement, 'such of the employees who are otherwise eligible for superannuation benefits when removed from service in terms of clause 6(b) of the Bipartite Settlement would be entitled to superannuation benefits.' Encashment of leave is again a benefit provided under the Bipartite Settlement of 1979 which was carried over in all the subsequent settlements. In 1990, there was a restriction insofar as the encashment being only for 240 days. The encashment of accumulated leave can be availed of by the parties as per clause 15 of the agreement, only on retirement which is a retirement benefit or superannuation benefit. Hence, the respondent-employee is entitled to even the encashment of privilege leave is the contention raised. 6. Having gone through the decision of the Honourable Supreme Court in S.K.Kool (supra), we agree with the learned Standing Counsel for the Bank that therein the specific question of leave encashment was not dealt with by the Court, especially in the context of a restriction as available under Ext.R1(b). We WA 1043/18 -6- would have been persuaded to take a different view, but for the fact that Ext.R1(b), according to us, confines itself to removal and compulsory retirement. In this context, we also have to notice Regulation 22, which is a part of the record produced as Ext.P4 in the Writ Petition. The forfeiture of service as per the Regulation is on resignation, dismissal, removal or termination of an employee from the services of the Bank. However, the later settlements have watered down the clause considerably and even on resignation, it is an admitted fact that the entire service is not forfeited. We see from Ext.R1(b) also that a person resigning at his own option would be entitled to only one-half of the privilege leave encashment. As was noticed by the Honorable Supreme Court, the settlement coming up for consideration before us based on which the punishment was awarded, was subsequent to the Regulations of 1995. The settlement in clause 6 provided for various punishments for employees found guilty of gross misconduct. The most onerous punishment was a dismissal without notice under subclause (a); then under sub-clause (b) removal from WA 1043/18 -7- service; under sub-clause (c) compulsory retirement; and sub-clause (d) discharge from service. We need not refer to other punishments since they do not result in a termination of the employment. Except for dismissal without notice all other modes of severance from employment entitled the employee to superannuation benefits. Superannuation benefits as in the normal connotation would include all benefits entitled to an employee as per the Rules and Regulations of the Bank on retirement. The Honourable Supreme Court has also considered the effect of a removal from service in S.K.Kool (supra), where it was interpreted to be a severance with all benefits due on retirement as per the Rules and Regulations of the Bank. Looking at Ext.R1(b), which was after the Bipartite Settlement was entered into, the Bank has provided the restriction or prohibition insofar as encashment of privilege leave only to severance from employment as a punishment by way of removal or compulsory retirement. In the present case, the respondent-employee, admittedly, was discharged from service, which we understand from the manner in which the punishments are delineated under WA 1043/18 -8- clause 6 of the Settlement, is a lesser punishment than of dismissal, removal and compulsory retirement. The settlement having distinguished between the various modes of severance of employment, it has to be understood as they having different consequences, especially with reference to the gravity of the misconduct. A discharge from service not being specifically prohibited for entitlement of encashment of privilege leave, we do not think that Ext.R1(b) can be relied on by the Bank to deny such benefit to the discharged employee. We, hence, find no cause for interference with the judgment of the learned Single Judge and dismiss the Appeal, leaving the parties to suffer their respective costs. Sd/K.VINOD CHANDRAN JUDGE Sd/ASHOK MENON JUDGE jg