K.A. Jacob and Others v. State Bank of Travancore and Indian Banks' Association

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU** **MONDAY, THE 17TH DAY OF NOVEMBER 2014/26TH KARTHIKA, 1936** ## **WP(C).No. 22452 of 2011 (F)** **----------------------------** **PETITIONER(S): --------------** **1. K.A. JACOB, AGED 56 YEARS, S/O. K.O.ANTONY, KANNOTH HOUSE, DON BOSCO ROAD, P.O. KURIACHIRA, THRISSUR-680 006.** **2. K.SWAMIDAS, AGED 62 YEARS, S/O. CHOYI.K.C., CHOLAKUZHIYIL HOUSE, T.C. 1/20, LENIN NAGAR STOP, PONKUNNAM.P.O., THRISSUR-680002.** **3. P.A. FRANCIS, AGED 60 YEARS, S/O. ANTONY, PANENGADEN HOUSE, CHELAKKOTTUKARA, KARIPPAI LANE, THRISSUR-680 005.** **4. G. SURENDRAN, AGED 60 YEARS, S/O. GOPALAN, REKELORE MYTHRI NAGAR G-25, KAIRALI LANE, VALIYAVILA, THIRUMALA P.O., THIRUVANANTHAPURAM-695 006.** **5. P.K. HARSHA VARMA, AGED 55 YEARS, S/O. M.R.K. VARMA, SREE CHITHIRA, NEAR DEVI NURSING HOME, RAM NAGAR, PALAKKAD-678 012.** **6. K. PADMANABHAN, AGED 61 YEARS, S/O. KANNAN NAMBIAR, CHITHIRA, EMBATE P.O., PARIYARAM MEDICAL COLLEGE, ANNUR DISTRICT-670 503.** **7. GEORGE JOSEPH, AGED 61 YEARS, S/O. M.K.JOSEPH, MUNDIYANICKAL HOUSE, KUMMANNOOR.P.O., KOTTAYAM DISTRICT-686 572.** **8. N.C. JOSEPH, AGED 57 YEARS, S/O. CHACKO, NADUVILEDATH HOUSE, KARIMANNOOR P.O., THODUPUZHA-685 581.** **9. JACOB MATHEW, AGED 58 YEARS, S/O. MATHEW, KADAVIL HOUSE, CARMEL MOUNT, KANJIRAPPALLY-686 507.** _WP(C).No. 22452 of 2011 (F)_ **10. R. RAJEEV, AGED 61 YEARS, S/O. M. RAMAKRISHNA PILLAI, DOMINIC THOMMAN ROAD (DT ROAD), KANJIRAPPALLY-686 507, KOTTAYAM DISTRICT.** **11. D. SAVITHRI AMMA, AGED 56 YEARS, W/O. T.M. DAMODARAN NAMBISSAN, "AMBILI", KPRA-69,** **MANKULAM LANE, MARAPPALAM, PATTOM, TRIVANDRUM-695 004.** **BY ADVS.SRI.G.BALAMURALEEDHARAN (PARAVUR) SRI.N.T.NANDAKUMAR (PARAVUR) SRI.ASHISH MOHAN.** ## **RESPONDENT(S):** - **---------------** **1. STATE BANK OF TRAVANCORE, HEAD OFFICE, POOJAPURA.P.O., THIRUVANANTHAPURAM, PIN-695 012, REPRESENTED BY ITS MANAGING DIRECTOR.** **2. INDIAN BANK'S ASSOCIATION, WORLD TRADE CENTER COMPLEX, CENTRE-1, 6TH FLOOR, CUFFE PARADE, MUMBAI-400 006 REPRESENTED BY ITS SECRETARY.** **BY ADV. SRI.P.RAMAKRISHNAN.** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17-11-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **RVS.** _WP(C).No. 22452 of 2011 (F)_ ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS :** **------------------------** **EXT. P1:TRUE COPY OF THE EXIT OPTION SCHEME IMPLEMENTED BY THE 1ST RESPONDENT.** **EXT. P2:TRUE COPY OF THE EMPLOYEE'S PENSION REGULATIONS SCHEME 1995 IMPLEMENTED BY THE 1ST RESPONDENT.** **EXT. P3:COPY OF THE JOINT NOTE.** **EXT. P4:COPY OF THE CIRCULAR ISSUED BY THE 2ND RESPONDENT.** **EXT. P5:COPY OF THE STAFF CIRCULAR NO.21/2010 ISSUED BY THE 1ST RESPONDENT.** **EXT. P6:COPIES OF THE REQUESTS FOR PENSION OPTION SUBMITTED BY PETITIONERS 1 AND 2.** - **EXT. P7:COPIES OF THE REJECTION LETTERS RECEIVED BY THE PETITIONERS FROM THE 1ST RESPONDENT.** **EXT. P8:COPY OF THE CIRCULAR NOI.PAD 5/2013 ISSUED BY THE 1ST RESPONDENT.** **EXT. P9:COPY OF THE CORRESPONDENCE BETWEEN THE 6TH PETITIONER AND THE 1ST RESPONDENT.** **EXT. P10:- COPY OF THE COMMUNICATION RECEIVED BY THE 8TH PETITIONER FROM THE 1ST RESPONDENT.** ## **RESPONDENT(S)' EXHIBITS :** **----------------------NIL.** **/TRUE COPY/** **P.A.TO JUDGE** **RVS.** **C.R.** # **DAMA SESHADRI NAIDU, J.** --------------------------------------- ## **W.P.(c) No. 22452 of 2011** ---------------------------------------- Dated this the 17[th] day of November, 2014 ## JUDGMENT The writ petition concerns itself with the issue of providing pensionary benefits to those employees who voluntarily retired during the years 2006-2007 under a Scheme called ‘Exit Option Scheme’. 2. The facts in brief are that all the petitioners, while working in the respondent Bank, an associate Bank of State Bank of India, availed themselves of the option to retire on voluntary basis, based on Ext.P1 ‘Exit Option Scheme’ introduced by the respondent Bank in 2006. The bone of contention is their entitlement to be provided the pensionary benefits. 3. The Indian Banks Associate (IBA), a consortium of about 59 member banks, and the Trade Unions of those banks agreed on 21.10.1993 to formulate the pensionary W.P.(c) No. 22452 of 2011 2 scheme on a par with R.B.I., for their employees as well. On 29.10.1993, the IBA and the Trade Unions signed a Memorandum of Agreement fixing 1.11.1993 as the effective date for providing the pensionary benefit as a second retirement benefit, as against the contributory provident fund. 4. Initially, when Employees' Pension Regulations were introduced in the respondent Bank through Exhibit P2, there remained certain apprehensions and misgivings concerning a few conditions incorporated in the said regulations, such as the dis-entitlement of the employees for pension in the event of his/her participation in the strike etc. Accordingly, some of the employees did not choose to opt for the pensionary benefits. At a later point of time, in terms of Exhibit P3 Joint Note executed by the IBA and and various Officers’ Associations of Nationalized Banks, a second chance was given to the employees to opt for the pension. At any rate, while extending the benefit in terms of Exhibit P3 Joint Note, the first respondent issued Exhibit P5 Staff Circular restricting the option only to those who took voluntary retirement under 2001 Scheme alone. W.P.(c) No. 22452 of 2011 3 5. As the petitioners retired subsequently in the years 2006 & 2007 in terms of Exit Option Scheme, they were not extended the benefit that came to be provided to the other employees in terms of Exhibit P3 Joint Note. Aggrieved thereby, they have approached this Court by filing the present writ petition assailing Exhibits P5 and P7, the letter of rejection. 6. In the above factual background, the learned counsel for the petitioners has strenuously contended that the action of the respondents is grossly discriminatory and cannot be sustained. Expatiating on his submissions, the learned counsel has submitted that the Scheme was introduced initially for a period of three years, subject to review based on the response from the optees, that the provisions of State Bank of Travancore (Officers') Service Regulations, 1979, and other instructions issued by the Bank from time to time shall continue to apply even concerning the Scheme, and that it being voluntary, those who seek retirement under any scheme are eligible for pension under Regulation 29 of SBT (Employees') Pension Regulations, 1995, if the retiree has put in 20 years of W.P.(c) No. 22452 of 2011 4 pensionary service. 7. The learned counsel has submitted that all the petitioners had put in more than 20 years of service by the date of their taking voluntary retirement under the Scheme. According to him, Exhibits P4 and P5 cannot be sustained on the anvil of Article 14 of the Constitution of India, inasmuch as they clearly discriminate against those retirees who had availed themselves of the option other than under the Scheme of 2001. He has further contended that once an employee retires in terms of a particular policy of voluntary retirement, by merely giving a different nomenclature to that policy, the retirees cannot be deprived of the benefits which are otherwise available for them. Accordingly, the learned counsel urges this Court to allow the writ petition declaring that the petitioners are also entitled to the pensionary benefits in terms of Exhibit P3 Joint Note. 8. _Per contra_ , the learned Standing Counsel for the respondents has strenuously opposed the claims and contentions of the petitioners. Though he has initially conceded that all the petitioners have more than 20 years of service, the learned Standing Counsel has singularly W.P.(c) No. 22452 of 2011 5 contended that all the petitioners were made to retire under a distinct and different scheme, which did not have any the benefit of pension. In elaboration of his submissions, the learned Standing Counsel has drawn my attention to certain Clauses in Exhibit P1. According to him, only those Officers who have not been promoted to the next higher grade/scale after availing themselves of one chance and those who are also superseded by their juniors shall be eligible to retire under the present scheme. He has also drawn my attention to Sub-Clause (viii) of Clause 12 of Exhibit P1 to contend that the Exit Option Scheme being a distinct one shall not be construed as a revival of the earlier scheme introduced in 2000-2001. 9. The learned Standing Counsel has also submitted that Exhibit P3 does not have any statutory force. According to him, unless it is adopted and implemented by the respondent Bank, the petitioners cannot compel the respondent Bank to extend to them any particular benefit which is not part of Exhibit P1 Scheme in the first place. The learned Standing Counsel has also submitted that in terms of Exhibit P3, it is very clear that the Officers must W.P.(c) No. 22452 of 2011 6 have ceased to be in service on or after 26.03.1996 in case of Associate Banks of State Bank of India on account of voluntary retirement under special scheme. By such time they must have rendered 15 years of minimum service to be eligible to exercise the option of joining the Pension Scheme, subject to the terms and conditions mentioned for retiring officers opting for the Scheme. Interpreting the said provision, the learned Standing Counsel contends that insofar as Exhibit P1 scheme is concerned, it clearly falls outside of Clause (7) of Exhibit P3, and as such the petitioners cannot be heard saying that they have any indefeasible right to the pensionary benefits. 10. The learned Standing Counsel has further submitted that Exhibit P3 Joint Note was issued on 27.04.2010, whereas the petitioners stood retired in the year 2006-2007. Drawing my attention to Exhibit P5, especially the eligibility criteria mentioned therein, the learned Standing Counsel would contend that the scheme under which the petitioners opted to retire is entirely different from Voluntary Retirement Scheme which was introduced way back in 2001. Drawing further distinction W.P.(c) No. 22452 of 2011 7 on the issue, he has contended that the scheme of voluntary retirement introduced in 2001 was across the board, whereas Exhibit P1 scheme was meant to serve only a particular class of employees of the respondent bank. Since it does not have any application for all the employees of the respondent corporation, the petitioners are not entitled to the benefit, which is not generic in nature. 11. Reiterating his earlier submissions, the learned Standing Counsel has contended that unless the benefit contemplated under Exhibit P3 is specifically incorporated in Exhibit P5, the petitioners cannot compel the respondent Bank to extend any such benefit. He has further drawn my attention to Exhibit P8, a Staff Circular issued on 09.02.2013. According to the learned Standing Counsel, this Circular is intended to protect the interests of the employees who are not covered by Exhibit P3 Joint Note. He has further contended that even under Exhibit P8, the petitioners could not get any benefit as they stand clearly excluded from its purview. Accordingly, the learned Standing Counsel has urged this Court to dismiss the writ petition as being without any merit. W.P.(c) No. 22452 of 2011 8 12. The issue required to be considered in this writ petition is whether Exhibit P1 Exit Option Scheme under which the petitioners were allowed to retire can be termed as a Voluntary Retirement Scheme on a par with the one that was introduced in 2001, or whether it is different in any manner, thus dis-entitling the petitioners from having the benefits allegedly meant for those employees who voluntarily retired under the Scheme of 2001. 13. It is axiomatic to observe that the name of the scheme may not have much bearing on determining the rights of the employees, inasmuch as it is the conditions of the scheme that determine their rights. As could be seen from Exhibit P1, the objective of the scheme is said to provide as exit route to the eligible officers from Top Executive Grade to Junior Management Grade, to whom the State Bank of Travancore (Officers') Service Regulations, 1979 are applicable. Indeed, lack of promotional avenues or supersession in the matters of promotion has been made one of the criteria for allowing any of the officers to take advantage of Exhibit P1 scheme. The salient aspect of the scheme under Exhibit P1 is that it does not address the W.P.(c) No. 22452 of 2011 9 issue of pensionary benefits in particular. On the other hand, Exhibit P1 Scheme simply stipulates as follows: However, pension shall be payable to only those officers who are eligible for the same, in terms of SBT (Employees') Pension Regulations, 1995, SBT (Officers') Service Regulations, 1979. It is further clarified that officers exercising option under Exit Option Scheme and those who would be permitted to exit, would not be eligible for pension, unless they have completed 20 years of pensionable service under the applicable rules. 14. Thus, without any fear of controversy it can be concluded that to determine the issue of eligibility of the petitioners to avail themselves of the pensionary benefit, one may have to look elsewhere rather than Exhibit P1 scheme. 15. As has been observed earlier, though the pensionary scheme was introduced way back in 1995, owing to certain misgivings not all the employees opted for the said benefit. In that context, the respondent Bank did provide a second option to its employees later in course of time. In that context, Exhibit P3 has come into existence. 16. There is some force in the contention of the learned Standing Counsel that Exhibit P3 is non-statutory in W.P.(c) No. 22452 of 2011 10 nature. Having observed thus, in the same breath it is required to be stated that the said Joint Note was the outcome of deliberations and agreement between Indian Banks' Association and different Officers' Associations of member Banks. In other words, the petitioner being one of the signatories, apart from being a constituent of the IBA, in my considered opinion, Exhibit P3 Joint Note binds it, at least, on the principle of estoppel, unless there is any statutory provision interdicting its application. Despite my diligent perusal of the record, I do not seen any provision excluding the respondent Bank from applying the benefits that had been agreed to be provided to the employees by the member Banks through Exhibit P3 Joint Note. 17. In fact, Clause (D) of the Joint Note specifically observes that the United Forum of Bank Unions (UFBU) representing workmen and officers in Banks were requesting to allow another option to those who were in the service of the Banks prior to 29.09.1995 in case of Nationalized Banks/26.03.1996 in case of Associate Banks of State Bank of India. Accordingly, the pension scheme is sought to be extended to the following categories of people. W.P.(c) No. 22452 of 2011 11 (a) Those who were in the service of the Banks prior to 29[th] September 1995 in case of Nationalized Banks/26[th] March 1996 in case of Associate Banks of State Bank of India, did not opt for pension and had retired after that date. (b) The family of those officers who were in service of Banks prior to 29[th] September 1995 in case of Nationalized Banks/26[th] March 1996 in case of Associate Banks of State Bank of India, did not opt for pension and had died while in service after that date. (c) The family of those officers who were in service of the Banks prior to 29[th] September 1995 in case of Nationalized Banks / 26[th] March 1996 in case of Associate Banks of State Bank of India, retired from service of the Banks after that date and died thereafter. 18. Further, the respondent bank, pursuant to Ext.P3, issued Ext.P4 circular substantially reiterating the above criteria. It is not in dispute that the petitioners were in service of the respondent Bank prior to 26.03.1996. Further, is it required to be observed that all those Officers who ceased to be in service on or after 26.03.1996 in case of Associate Banks of State Bank of India on account of voluntary retirement under special scheme after rendering service for a minimum of 15 years shall be eligible to W.P.(c) No. 22452 of 2011 12 exercise an option to join the Pension Scheme, of course, subject to the terms and conditions stipulated for retiring officers opting for joining the scheme. There cannot, in my considered view, any caviling about the issue that Exhibit P1 is a special scheme under which the petitioners retired voluntarily. In other words, though this scheme has been applied to a certain category of persons, it is still voluntarily and those who have come within the ambit of the said scheme have not been compelled to retire, apart from letting them have an option either to avail themselves of the benefit or to continue in the organization. 19. If we examine Exhibit P5, the eligibility criteria incorporated therein exclude the candidates who retired voluntarily other than under 2001 scheme. In fact, the petitioners are aggrieved by this exclusionary clause under Ext.P5. As could be seen from the record, when the petitioners made their requests for the pensionary benefits through Ext.P6 representation, it was denied through Ext.P7, citing Ext.P5. 20. It is an established legal principle that once a particular class of people has to be excluded from the W.P.(c) No. 22452 of 2011 13 purview of any service benefit, the provisions that mandate the exclusion shall be strictly construed. In the present instance, neither Exhibit P3 nor Exhibit P1 has imposed any insurmountable condition or disability on the petitioners dis-entitling them from availing themselves of a beneficial provision of pension. 21. To opt for voluntary retirement under Clause 29 of the Pension Regulations, the employee must have: - (a) rendered minimum 20 years of qualifying service; - (b) by giving notice, not less than three months; - (c) subject to acceptance by the authority. The Regulation 29 also provides for exempting the requirement of giving three months' notice. 22. When an identical issue fell for consideration, the Karnataka High Court, per a learned Single Judge, in **N. Suresh Prabhu and Ors. v. Corporation Bank and Indian Banks Association and Ors.** (ILR 2013 KARNATAKA 400), summing up Regulations 29 in the manner indicated above, has held that it is not the case of the respondent Bank that any of the petitioners had not put W.P.(c) No. 22452 of 2011 14 in qualifying service or they violated any of the conditions under Clause 29 of the Pension Regulations. Eventually it concluded that if an employee has been qualified to opt for voluntary retirement, but has opted for a different mode of retirement, he cannot be discriminated against on the ground that his option is under a different scheme, not falling under Clause 29 of the Regulations. Such an interpretation would be discriminatory and violative of Article 14 of the Constitution of India. No two similarly situated employees could be discriminated against on the nomenclature or terminology of their cessation from service. 23. On an elaborate consideration of the issue, the High Court of Karnataka has eventually concluded that there is no distinction between the employees who retired under the Voluntary Retirement Scheme and those who retired under the Exit Policy Scheme or under any other nomenclature, as long as they have put in the requisite number of qualifying years and eligible for voluntary retirement. Considering the scope of Exit Policy, it is further observed that even in case of Exit Policy, the terms of the said policy themselves provide for pension. The Karnataka W.P.(c) No. 22452 of 2011 15 High Court has accordingly allowed the entire batch of writ petitions holding that all the officers who retired under Exit Policy are also entitled to the pensionary benefits which came to be reintroduced through Exhibit P3 as reflected in Exhibit P5 circular of the respondent Bank. 24. I do not see any cogent reason not to be guided or persuaded by the judicial dictum laid down in **N. Suresh Prabhu** (supra). Thus, being in respectful agreement with the ratio of the said judgment, I deem it appropriate allows the writ petition quashing Exhibits P5 and P7 in so far as they relate to the exclusion of the petitioners, who have taken voluntary retirement under a scheme other than the one introduced in 2001. Consequently, the respondent Bank is further directed to provide the pensionary benefits to the petitioners' in terms of Exts. P3 & P4. The writ petition therefore stands allowed. No order as to costs. ## **DAMA SESHADRI NAIDU JUDGE** DMR/-