High CourtSingle Judge2006-11-30Appeal disposed of.

N.V. Subba Rao v. Corporation Bank and Ors.

Case / Petition Number:Civil Appeal No. 5601 of 2006

Neutral Citation:2006 (Supp) SCR 9

Case Details & Bench

Court: High Court
Hon'ble Judges: Dr. AR. Lakshmanan
Judgment Date: 2006-11-30
Court Decision / Holding: The Bank is directed to treat the suspension period from 3 July 1985 to 6 February 1997 for reckoning pension and gratuity. The appeal is disposed of on these terms with no costs.
Final Disposition: Appeal disposed of.

Parties to the Case

Appellants / Petitioners

N.V. Subba Rao

Respondents

Corporation Bank and Ors.

Legal Representation & Advocates

Counsels for Petitioners

• Roy Abraham; Ms. Seema Jain; Himinder Lal

Counsels for Respondents

• Dhruv Mehta; Harshvardhan Jha; Yashraj Deora; Mannoj Mehta (for Mis. K.L. Mehta & Co.)

Case Synopsis & Summary

This appeal arises from a High Court decision in W.A. No. 1354/2000, where the management of Corporation Bank decided to revert the appellant to the post of clerk by modifying the order of dismissal. The appellant, N.V. Subba Rao, was suspended on 3 July 1985 and dismissed on 28 July 1988; that dismissal order was subsequently modified, by consent of the parties before the High Court, to a reversal to the post of clerk, and the matter proceeded to the High Court. The High Court did not adjudicate merits and disposed of the matter on the basis of the parties’ submissions; the appellant was reinstated as a clerk on 6 February 1997. The central issue before this Court is whether the period of suspension is to be reckoned for pension and gratuity. The Bank’s position, reflected in correspondence, was that the period would not be treated for pension and gratuity; the employee contends that once dismissal is set aside and the employee is reverted to the clerk post, he is entitled to service benefits including pension and gratuity for the period of suspension up to reinstatement. The Court ultimately held that the suspension period should be reckoned for pension and gratuity, directing the Bank to treat this period accordingly, and disposed of the appeal with no costs.

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant contends that the core issue before this Court is whether the period of suspension, culminating in reinstatement as a Clerk after the modification of the dismissal order, can be reckoned for pension and gratuity. He submits that once the earlier dismissal is set aside and the employee is reverted to the lower post, he acquires (and retains) the service benefits attached to that post, including pension and gratuity. The High Court’s disposal, which proceeded on the basis that the parties had agreed to reversal to the clerk’s post without addressing pension rights, did not decide the merits of the pension claim. The bank’s refusal to treat the suspension period for pension and gratuity is argued to be contrary to the principle that “service benefits” attach to the post to which the employee is allowed to continue in service. The Court’s prior directions in 3.4.2006 and 5.7.2006 directing consideration of this limited issue reflect a willingness to resolve the question of retirement benefits, and the appellant seeks a ruling that the suspension period from 3 July 1985 to 6 February 1997 must be counted toward pension and gratuity. He prays for payment of pension and gratuity for that period and retroactive adjustment as necessary.

Contentions of Respondents

Respondents contend that pension and gratuity are payable only for the period of actual service in the post to which the employee is posted or assigned, and that the suspension period until reinstatement does not in itself establish service in the clerk post for pension accrual. They argue that the High Court properly disposed of the merits on the basis that the parties had agreed to revert the appellant to the lower post, and that the Bank's decision not to treat the suspension period was a policy matter, not a question of right to pension to be answered by this Court in this case. They maintain that reckoning the suspension period would unjustly extend service benefits beyond the actual service performed, and that the Court should respect the Bank’s position unless the statute or contract compels otherwise. They further submit that any retroactive pension entitlement cannot be presumed merely because the employee was reinstated; the court should limit the remedy to the terms agreed between the parties or determined by the High Court's order.

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Extracted Judgment Text

Exact text extracted from official judgment records.

A ## N.V. SUBBA RAO _v._ CORPORATION BANK AND ORS. ## NOVEMBER 30, 2006 B [DR. AR. LAKSHMANAN AND T ARUN CHATTERJEE, JJ.] ## _Service Law:_ _Pension and Gratuity-Dismissal order by employer revised to that of_ c _reversion to the post of clerk-Reinstatement on the post of Clerk as per order of High Court-Appeal to this Court seeking to treat the suspension period for reckoning pension and gratuity-Held: Employee entitled to the benefits of pension and gratuity from the date of suspension till the date of reinstatement._ D Appellant was suspended and consequently dismissed by the respondent-Bank. The dismissal order was modified to that.of reversion to the post ofclerk as agreed to by both the parties before High Court. On the judgment of High Court, appellant was reinstated as a Clerk. Present appeal is limit.ed to the question whether the appellant was E[entitled to ][treat ][the suspension period for reckoning the pension and ] gratuity. Disposing of the appeal, the Court HELD: When the order of dismissal is set aside and the appellant is F reverted to the post of clerk he will be entitled to the service benefits including pension and gratuity available to the said post. It cannot be said that appellant will be entitled to the benefits only for the period from the date of suspension till the date of dismissal. The respondent-Bank is directed to treat the suspension period from the date of suspension till the G[date when ][he ][was ][reinstated ][as ][a Clerk, for reckoning pension and gratuity ] only.1878-F-H; 879-A-B) CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5601 of2006. H From the Judgment and final Order dated 4.6.2002 of the High Court 876 _I'_ ## N.V. SUBBA RAO _v._ CORPORATION BANK [LAKSHMANAN, J.] 877 of Judicature, Andhra Pradesh at Hyderabad in W.A. No. 1354/2000. · Roy Abraham, Ms. Seema Jain and Himinder Lal for the Appellant. Dhruv Mehta, Harshvardhan Jha, Yashraj Deora and Mannoj Mehta (for _Mis._ K.L. Mehta & Co.) for the Respondents. B The Judgment of the Court was delivered by ## **DR. AR. LAKSHMANAN, J.** Leave granted. Heard Mr. Roy Abraham, learned counsel for the appellant and Mr. Dhruv Mehta, learned counsel for the respondents. We have perused order C impugned in this appeal. The learned counsel appearing for the Corporation Bank submitted before the High Court that the Management had decided to revert the appellant to the lowest post of clerk by revising impugned order of dismissal. For the said proposal, the counsel for the respondent-employee had also submitted before the High Court that the employee was agreeable D to accept the punishment of reversal to the lower post. In view of the submission made as above, the High Court has not gone into the merits of the case and disposed of the same on the said submissions. On the basis of the above order passed by the High Court, the appellant herein was reinstated as a clerk on 6.2.1997. The grievance of the appellant is that he was not given any benefit to the post in question namely the clerk from the date of E suspension up to the date of reinstatement. When the special leave petition came before this Court for admission, this Court on 19.12.2003, after condoning the delay, issued notice to the respondent-Bank. F On 3.4.2006, this Court passed the following order: "Let the counsel for the respondents take instructions as to whether the bank will be willing to treat the suspension period for reckoning pension and gratuity of the petitioner. We make it G clear that in all other respects we are not inclined to interfere with the impugned order." On 5,7,2006, after hearing the respective counsel, this Court passed the following order: H SUPREME COURT REPORTS {2006] SUPP. 9 S.C.R. 878 A "Heard Mr. L.N. Rao, learned Senior Counsel for the petitioner and Mr. Dhruv Mehta, learned counsel for the respondents. On 3.4.2006, this Court passed the following order B "Let the counsel for the respondents take instructions as to whether the bank will be willing to treat the suspension period for reckoning pension and gratuity of the petitioner. We make it clear that in all other respects we are not inclined to interfere with the impugned order." c Mr. Dhruv Mehta, appearing for the respondent-Bank, placed before us a letter dated 30.6.2006 received by him in regard to the above direction. The letter is thus placed on record. D It is seen from the letter that the competent authority of the respondent-Bank is not agreeable to treat the suspension period of the petitioner herein for reckoning pension and gratuity. Therefore, we have to hear the parties in regard to only question as to whether the suspension period can be treated for reckoning pension and gratuity. Both the parties will be at liberty to address arguments only on this issue. E Post the special leave petition for final disposal on 29th August, 2006." Since the Bank was not agreeable to treat the suspension period of the appellant for reckoning pension and gratuity, we heard the parties in regard to the only question as to whether the suspension period can be treated for reckoning pension and gratuity. We heard both parties at length. F In the instant case, the appellant was suspended on 3.7.1985 and dismissed from service on 28. 7 .1988. Thereupon, the said order of dismissal was modified to that of reversion to the post of clerk as agreed to by both the parties before the High Court. Now, the only question is whether the appellant _is_ entitled to treat the suspension period for reckoning the pension G and gratuity. It is not in dispute that no service benefit as clerk was given to the appellant from the date of suspension till the date of reinstatement. When the order of dismissal is set aside and the appellant is reverted to the post of clerk, we are of the view that he will be entitled to the service benefits including pension and gratuity available to the said post. Mr. Dhruv Mehta H submitted that the appellant , if at all will be entitled to the benefits only for N.V. SUBBA RAO v. CORPORATION BANK [LAKSHMANAN, J.] 879 the period from 3.7.1985 to 28.7.1988. There is no merit in the said submission. We, therefore, direct the respondent-Bank to treat the suspension period from 3.7.1985 to 6.2.1997 for reckoning pension and gratuity only. The appeal stands disposed of on the above terms. There shall be no orders as to costs. K.K.T. Appeal disposed of. /