Syndicate Bank v. N. R. Bhat

Case Details & Bench

Court: High Court
Hon'ble Judges: Hima Kohli
Ahsanuddin Amanullah
Judgment Date: 2023-10-10
Court Decision / Holding: The Supreme Court disposed of the petition by ruling that while the belated pension option in 2019 would not be permissible, the bank’s illegal withholding of the Joint Memo settlement amount warranted compensation. It directed the petitioner-bank to pay simple interest at 12% per annum on the withheld settlement amount from 01.07.2019 until actual release, with payment due within four weeks of the order; failing which the rate would rise to 15% per annum. The Court also mandated that the Joint Memo dated 17.06.2019 be implemented.
Final Disposition: Petition disposed of.

Parties to the Case

Appellants / Petitioners

Syndicate Bank

Respondents

N. R. Bhat

Legal Representation & Advocates

Counsels for Petitioners

• Puneet Taneja
• Manmohan Singh Narua
• Amit Yadav

Counsels for Respondents

• Ayush Negi
• Ms. Vishakha Upadhaya
• Shikhar Chanda

Case Synopsis & Summary

This Special Leave Petition (Civil) No.7277 of 2020 arises from a long-drawn service-dispute involving Syndicate Bank and its employee N. R. Bhat. The respondent was dismissed in 1997 following disciplinary proceedings, a decision later set aside by the Karnataka High Court in 2005 and remitted for reconsideration. While the writ petition was pending, the parties settled amicably through a Joint Compromise Memo dated 17 June 2019, whereby the bank agreed to substitute the dismissal with a four-step reduction in time-scale without affecting retiral benefits, and the respondent was granted liberty to exercise an option to avail retiral benefits. The High Court allowed this pension option and directed the bank to pass orders within eight weeks. The bank challenged the order, arguing that the entire matter had already been settled by the Joint Memo and that pension rights could not be revived or benefited when the employee had prior opportunities (notably in 1995 under the Pension Regulations and via a 2010 circular). The Supreme Court noted that the employee’s relationship with the Bank was reinstated after the 2005 judgment but held that allowing pension belatedly in 2019 would be improper. Nonetheless, it found the bank’s withholding of settlement dues to be unlawful and directed payment of simple interest at 12% per annum from 01.07.2019 until release, with a four-week deadline and a potential rise to 15% for non-compliance, disposing of the petition.

Provisions of Law Cited

Syndicate Bank Employees (Pension Regulations)Circular dated 16.04.2010Circular dated 16.09.2010

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner-bank submitted that the High Court erred in allowing the respondent to pursue pension rights under a Joint Compromise Memo dated 17 June 2019, as the entire matter had been settled and the respondent had opportunities to opt for pension as early as 1995 under the Pension Regulations and later via a 2010 circular. It contended that the dismissal stood ceased after the 1997 orders and the subsequent 2005 judgment did not restore any right to pension. Implementing the Joint Memo would undermine the prior settlement and pension regime, and the option to retire should not be revived belatedly in 2019. The bank also argued that the relationship had ceased and that the option, if any, should have been exercised long ago; hence, the pension claim should be barred.

Contentions of Respondents

The respondent-employee argued that the Joint Memo and the High Court’s directions were aimed at enabling him to exercise retiral benefits consistent with the settlement. He relied on the 1995 Pension Regulations and the subsequent 2010 circular to claim pension rights, and contended that the remitted matter had never been proscribed from pension options. He asserted that the bank’s resistance to implementing the memo resulted in wrongful withholding of settled dues, and sought due compensation and pension entitlements as per the applicable rules.

Extracted Judgment Text

Exact text extracted from official judgment records.

**[2023] 15 S.C.R. 475 : 2023 INSC 1064** ## **CASE DETAILS** SYNDICATE BANK v. N. R. BHAT (Petition for Special Leave to Appeal (Civil) No.7277 of 2020) OCTOBER 10, 2023 ## **[HIMA KOHLI AND AHSANUDDIN AMANULLAH, JJ.] HEADNOTES** **Issue for consideration:** Matter was settled between the parties (respondent-employee and petitioner-bank) by virtue of the Joint Compromise Memo dated 17.06.2019, however, the High Court permitted the respondent-employee to exercise the option of availing retiral benefi ts and directed the petitioner-bank to pass appropriate orders. **Service Law – Respondent-employee was dismissed by petitionerbank – Before the High Court, the parties arrived at an amicable settlement in terms of a Joint Memo dated 17.06.2019 where under the petitioner-Bank agreed to substitute the penalty of dismissal from service imposed on the respondent-employee with the penalty of reduction of time scale of pay by four stages but without adversely aff ecting his retiral benefi ts – Further, the respondent-employee was granted liberty to exercise the option of availing retiral benefi ts and with a further direction to the petitioner-Bank to consider and pass appropriate orders – Aggrieved by the liberty granted to the respondentemployee, petitioner- bank fi led appeal:** **Held:** Submission of the petitioner–Bank accepted for the simple reason that even if the relationship of the employer-employee had ceased on the dismissal of the respondent-employee on 03.03.1997, once the dismissal order passed by the Disciplinary Authority and upheld by the Appellate Authority vide order dated 06.04.1997, was set aside by the High Court by virtue of the judgment dated 23.06.2005, the umbilical cord between the petitioner-Bank and the respondent-employee stood restored and there was ample opportunity for the respondent-employee to have exercised the option (pension) in terms of the Circular dated 16.04.2010, which he failed to do 475 476 SUPREME COURT REPORTS [2023] 15 S.C.R. – Having missed the bus, the respondent-employee could not have claimed any benefi t of pension that too after entering into a Joint Memo of Settlement with the petitioner-Bank – As far as release of amount as per Joint Memo is concerned, while issuing notice on 30.06.2020 this Court permitted Joint Memo between the parties to be implemented – The petitioner-Bank did not release the amounts payable to the respondent-employee in terms of the Memo of settlement and that the said amounts were fi nally released as recently as on 30.09.2023 – Therefore, the respondent-employee to be compensated for illegal withholding of the settlement dues payable to him in terms of the Joint Memo dated 17.06.2019 – Having regard to the fact that this is an issue relating to withholding of retiral benefi ts, it is deemed appropriate to direct the petitioner-Bank to pay simple interest at the rate of 12% per annum to the respondent-employee w.e.f. 01.07.2019, till the date the said amount is released in favour of the respondent-employee. [Paras 7, 9, 10] ## **OTHER CASE DETAILS INCLUDING IMPUGNED ORDER AND APPEARANCES** EXTRAORDINARY APPELLATE JURISDICTION: Special Leave Petition (Civil) No.7277 of 2020. From the Judgment and Order dated 17.06.2019 of the High Court of Karnataka at Bengaluru in WA No.3255 of 2005. ## **Appearances:** Puneet Taneja, Manmohan Singh Narua, Amit Yadav, Advs. for the Petitioner. Ayush Negi, Ms. Vishakha Upadhaya, Shikhar Chanda, Advs. for the Respondent. ## **JUDGMENT / ORDER OF THE SUPREME COURT** ## **ORDER** 1. The Petitioner-Bank is aggrieved by an order dated 17[th] June, 2019 passed by the Division Bench of the High Court in an Intra Court Appeal[1] > 1 Writ Appeal No.3255 of 2005 SYNDICATE BANK v. N. R. BHAT 477 whereby, while taking on record the Joint Memo dated 17[th] June, 2019 fi led by the parties, in view of the submission made by learned counsel for the respondent-employee that he would be submitting a request to the petitionerBank for opting for pension. The respondent-employee was permitted to exercise the option of availing retiral benefi ts and making a written request to the petitioner-Bank to pass appropriate orders within eight weeks thereafter. 2. Before adverting to the submissions made by learned counsel for the parties, a brief reference to the relevant facts is necessary: 3. The respondent-employee joined the services of the petitioner-Bank as an Offi cer Trainee on 31[st] March, 1969. On completion of probation, he was posted as a Probationary Junior Offi cer on 3[rd] October, 1969. On 6[th] August, 1982, the respondent-employee was suspended in contemplation of disciplinary proceedings. After the disciplinary proceedings were concluded, the Disciplinary Authority passed an order on 3[rd] March, 1997 dismissing the respondent-employee from service. The said order has been upheld by the Appellate Authority _vide_ order dated on 6[th] April, 1997. Aggrieved by the aforesaid orders, the respondent-employee preferred a writ petition[2] before the High Court. _Vide_ order dated 23[rd] June, 2005, the High Court set aside the two orders passed by the Disciplinary Authority and the Appellate Authority and the matter was remitted back to the Petitioner – Bank for reconsideration. 4. Aggrieved by the said order, the petitioner preferred an Intra Court Appeal[1] before the Division Bench of the High Court. During the pendency of the writ appeal, the parties arrived at an amicable settlement in terms of a Joint Memo dated 17[th] June, 2019 where under the petitioner-Bank agreed to substitute the penalty of dismissal from service imposed on the respondent-employee with the penalty of reduction of time scale of pay by four stages but without adversely aff ecting his retiral benefi ts. It was in the course of taking on record the aforesaid Joint Memo that the impugned order came to be passed granting liberty to the respondent-employee to exercise the option of availing retiral benefi ts and with a further direction to the petitioner-Bank to consider and pass appropriate orders on such a representation within eight weeks thereafter. 2 Writ Petition No.20386/1997 478 SUPREME COURT REPORTS [2023] 15 S.C.R. 5. Aggrieved by the aforesaid liberty granted to the respondentemployee, the petitioner-Bank has fi led the present petition stating _inter alia_ that the High Court ought not to have permitted the respondent-employee to apply for pensionary benefi ts considering the fact that the entire matter was settled between the parties by virtue of the Joint Compromise Memo dated 17[th] June, 2019; that there was no further scope of a settlement with the petitioner-Bank and that the respondent-employee had an opportunity to opt for a pension scheme in the year 1995 when the Syndicate Bank Employees (Pension Regulations) were fi rst notifi ed and at that time, he was an employee of the Bank but having failed to do so then, he cannot demand that pension be released in his favour. 6. Learned counsel for the petitioner-Bank further draws the attention of this Court to the Circular dated 16[th] September, 2010 fi led by the respondent-employee with counter affi davit (Annexure A) whereunder another opportunity was extended to those employees who had not opted for pension earlier, to enable them to do so in terms of the said circular. It is stated that despite the said option having been available to the respondentemployee in terms of the captioned circular, he had failed to exercise the same and therefore, is barred from raising the issue of exercising his option for pension as belatedly as in the year 2019. 7. We are inclined to accept the submission made by learned counsel for the petitioner–Bank for the simple reason that even if the relationship of the employer-employee had ceased on the dismissal of the respondent-employee on 3[rd] March, 1997, once the dismissal order passed by the Disciplinary Authority and upheld by the Appellate Authority _vide_ order dated 6[th] April, 1997, was set aside by the High Court by virtue of the judgment dated 23[rd] June, 2005, the umbilical cord between the petitioner-Bank and the respondent-employee stood restored and there was ample opportunity for the respondent-employee to have exercised the option in terms of the Circular dated 16[th] April, 2010, which he failed to do. Having missed the bus, the respondent-employee could not have claimed any benefi t of pension that too after entering into a Joint Memo of Settlement with the petitioner-Bank. 8. We are, therefore, of the opinion that no such option could have been permitted to be exercised by the respondent-employee at such a belated stage, in the year 2019. SYNDICATE BANK v. N. R. BHAT 479 9. At this stage, learned counsel for the respondent-employee submits that while issuing notice in the present petition on 30[th] June, 2020, it was made clear by this Court that directions of the Division Bench in para 6 shall not be implemented. However, the Joint Memo dated 17[th] June, 2019 fi led in the High Court was permitted to be implemented. It is stated that in the teeth of the said order, the petitioner-Bank did not release the amounts payable to the respondent-employee in terms of the Memo of settlement and that the said amounts were fi nally released as recently as on 30[th] September, 2023. He, therefore, states that that the respondent-employee ought to be compensated for illegal withholding of the settlement dues payable to him in terms of the Joint Memo dated 17[th] June, 2019. 10. We fi nd substance in the aforesaid submission made by learned counsel for the respondent-employee. It was made clear to the petitionerBank on the very fi rst date that the Joint Memo ought to be implemented. For reasons best known to the petitioner-Bank, the same has not been implemented. The petitioner-Bank is, therefore, directed to restitute the respondent-employee by paying him interest which in our opinion, should be more than the ordinary rate of interest on an FDR that the petitioner-Bank off ers to the public at large. Having regard to the fact that this is an issue relating to withholding of retiral benefi ts, it is deemed appropriate to direct the petitioner-Bank to pay simple interest at the rate of 12% per annum to the respondent-employee w.e.f. 1[st] July, 2019, till the date the said amount is released in favour of the respondent-employee. The interest component shall be paid within four weeks from today failing which, the same shall stand enhanced from 12% to 15% per annum. 11. The Petition for special leave to appeal is disposed of on the above terms. **Petition disposed of.** **Headnotes prepared by: Ankit Gyan**