SUPREME COURT DISTINGUISH M R PRABHAKAR Vs CANARA BANK JUDGEMENT ON RESIGNATION
It
is now known fact that Banks and IBA [ Voluntary Association of
Management of Bank] are unjustifiedly denying the legitimate claim of
the Bank Resignees despite clear cut judgments in following cases:-
1) D. Malleshwar Rao Vs Andhra Bank
2) S. K Kool Vs Bank of Baroda
3) Smt. Shashikala Devi Vs Central Bank of India
4) Vijaya Bank Vs M Narsimhappa
Banks
and IBA are not only denying lawful claims of Resignee [ Left Over
Category] but also through battery of lawyers taking advantage of its
own wrong and seeking judgments against financially weak litigants by
suppressing the facts & also filing special leave petitions and
review in the High Courts.
Banks
and IBA are relying on UCO Bank Vs Sanwarmal, Canara Bank Vs M R
Prabhakar judgments and with forceful argument from battery of lawyers
made successful attempt to sideline the principle laid down in Sheel
Kumar Jain Vs New India assurance Company.
The
very good example of such attempt is reflected in the recent judgment
of Delhi High Court in the matter of IDBI Bank Vs Roshan Lal Gupta [RSA
189 of 2010] dated 16/05/2014, wherein honorable Justice by allowing
appeal of Bank made following observations:-
“This judgment in the case of Anand Parkash Batra (supra) reads as under:-
“1.
The issue to be decided in the present writ petition is the claim of
the petitioner to pensionary benefits in accordance with the 1995
Pension Scheme of the respondent-bank. Respondent denies entitlement of
the petitioner to the 1995 Pension Scheme on the ground that the scheme
will not apply as per para 22 of the 1995 Pension Scheme when a person
has resigned from service as distinguished from having voluntary
retired.
2.
Before this Court two judgments of the Supreme Court are cited. First
is the judgment of Supreme Court in the case of Sheel Kumar Jain Vs. New
India Assurance Company Limited & Ors. (2011) 12 SCC 197 on behalf
of the petitioner, and the second is the judgment in the case of
M.R.Prabhakar and ors VS. Canara Bank and ors (2012) 9 SCC 671 on behalf
of the respondent-bank.
3.
The ratio of the judgment in the case of Sheel Kumar (supra) shows that
a Division Bench of two judges of the Supreme Court held that if an
employee is not expected to know that in spite of serving a qualifying
service period which would entitle grant of pension under a subsequent
implemented pension scheme (which operates from a retrospective date)
his resignation will lead to forfeiture of services, then, once an
employee has otherwise completed the requisite period of qualifying
service for grant of pension under the retrospectively operating pension
scheme, the language of a resignation letter should not be treated as
one seeking a resignation by the employee, but that letter should be
treated as an application for voluntary retirement.
4. It
is clear that in Sheel Kumar’s case (supra) a Division Bench of the
Supreme Court took an equitable view because a person is not expected to
know the adverse consequences against him unless so provided by the
relevant rules and especially when benefits of pension scheme is given
retrospectively whereby qualifying service completes many years earlier/
prior to the introduction of the pension scheme (i.e in the
retrospective period) and in which period there would be persons who had
‘resigned’ but who on the date of resignation had otherwise completed
the qualifying service period for grant of pension.
5. I must concede that my heart really is in accordance with the ratio in the case of Sheel Kumar’s case (supra). This
is all the more so because in the counter-affidavit filed by the
respondent-bank there is no reference to the earlier service rules of
the respondent-bank that in such service rules prior to application of
the 1995 Pension Scheme a distinction was in fact drawn between
resignation and voluntary retirement. However, I am bound by the ratio in the case of M.R.Prabhakar’s case (supra) which
distinguishes the judgment in Sheel Kumar’s case (supra) on the ground
that the judgment in Sheel Kumar’s case (supra) dealt with the pension
schemes of insurance companies and not the pension schemes of the banks,
and that as per para 22 of the 1995 Pension Scheme of the Banks if a
person had resigned there results forfeiture of his services and such a
person is not entitled to benefits of 1995 Pension Scheme.
6(i)I
must state that it is a moot point for consideration at an appropriate
time by the Supreme Court that if a scheme operates retrospectively i.e
it commences at a date for its implementation many years prior to the
same being introduced, then surely an adverse consequence of denial of
benefits of such retrospectively operating scheme should not be denied
to an employee whose services come to an end in the retrospective period
unless such employee was made aware of the adverse consequences. In
this regard it bears note that it is held by the Supreme Court in a
catena of judgments that terminal benefits are not a bounty but are
natural entitlements which become due to an employee for the services
rendered by the employee with the employer-organization. Therefore,
once the necessary qualifying service period has been completed by the
employee, terminal benefits should be granted as a matter of course
because they flow from the aspect of rendering continuous service with
the bank for the qualifying period and they be not denied on the
technical ground that the employee had ‘resigned’.
(ii)
A most important aspect for giving benefit of pension scheme is noted
and stated by the Supreme Court in the case of UCO Bank Vs. Sanuwar Mal
(2004) 4 SCC 412, as “The pension scheme herein is based on actuarial
calculation; it is a self financing scheme, which does not depend
budgetary support and consequently it constitutes a complete code by
itself. The scheme essentially covers retires as the credit balance to
their provident fund account is larger as compared to employees who
resigned from service.” Thus,
clearly there is a valid reason to treat resignation as retirement qua
those employees who have at the time of resignation rendered the
requisite qualifying service for grant of pension and they ought to be
treated differently for being entitled to grant of pension under the
scheme than those persons who on resignation have not completed the
period of qualifying service inasmuch as the employee who renders the
qualifying service has that much credit to his provident fund by which
no budgetary support is required for payment of pension.
In the recent judgment ASGER IBRAHIM AMIN Vs LIFE INSURANCE CORPORATION OF INDIA , the issue before the supreme court was “ The
second issue which confronts us is whether the termination of service
of the Appellant remains unalterably in the nature of resignation, with
the consequence of disentitling him from availing of or
migrating/mutating the pension scheme or whether it instead be viewed as
a voluntary retirement or whether it requires to be regarded so in
order to bestow this benefit on the Appellant; who had ‘resigned’ after
reaching the age of fifty and after serving the LIC for over twenty
three years”.
Further Court observed that:-
“12 What is unmistakably evident in the case at hand is that the Appellant
had
worked continuously for over 20 years, that he sought to discontinue
his services and requested waiver of three months notice in writing, and
that the said notice was accepted by the Respondent Corporation and the
Appellant was thereby allowed to discontinue his services. If one would
examine Rule 31 of the Pension Rules juxtaposed with the aforementioned
facts, it would at once be obvious and perceptible that the essential
components of that Rule stand substantially fulfilled in the present
case. In Sheelkumar, this Court was alive to the factum that each case calls for scrutiny on its own merits, but that such scrutiny should not be detached from the purpose and objective of the concerned statute.
13 The Appellant ought not to be deprived of pension benefits merely because he styled his termination of services as “resignation” or because there was no provision to retire voluntarily at that time. The
commendable objective of the Pension Rule is to extend benefits to a
class of people to tide over the crisis and vicissitudes of old age, and
if there are some inconsistencies between the statutory provisions and
the avowed objective of the statute so as to discriminate between the
beneficiaries within the class, the end of justice obligates us to
palliate the differences between the two and reconcile them as far as
possible. We would be failing in our duty, if we go by the letter and
not by the laudatory spirit of statutory provisions and the fundamental
rights guaranteed under Article 14 of the Constitution of India.
14 Reserve
Bank of India v. Cecil Dennis Solomon, (2004) 9 SCC 461 relied upon by
the Respondent, although distinguishable on facts, has ventured to
distinguish “voluntary retirement” from “resignation” in the following
terms:
10. In
service jurisprudence, the expressions “superannuation”, “voluntary
retirement”, “compulsory retirement” and “resignation” convey different
connotations. Voluntary
retirement and resignation involve voluntary acts on the part of the
employee to leave service. Though both involve voluntary acts, they
operate differently. One of the basic distinctions is that in case of
resignation it can be tendered at any time, but in the case of voluntary
retirement, it can only be sought for after rendering prescribed period
of qualifying service. Other fundamental distinction is that in case of
the former, normally retiral benefits are denied but in case of the
latter, the same is not denied. In case of the former, permission or
notice is not
mandated, while in case of the latter, permission of the employer concerned is a requisite condition.Though
resignation is a bilateral concept, and becomes effective on acceptance
by the competent authority, yet the general rule can be displaced by
express provisions to the contrary. In Punjab National Bank v. P.K.
Mittal (1989 Supp (2) SCC 175) on interpretation of Regulation 20(2) of
the Punjab National Bank Regulations, it was held that resignation would
automatically take effect from the date specified in the notice as
there was no provision for any acceptance or
rejection
of the resignation by the employer. In Union of India v.Gopal Chandra
Misra ((1978) 2 SCC 301) it was held in the case of a judge of the High
Court having regard to Article 217 of the Constitution that he has a
unilateral right or privilege to resign his office and his resignation
becomes effective from the date which he, of his own volition, chooses.
But where there is a provision empowering the employer not to accept the
resignation, on certain circumstances e.g. pendency of disciplinary
proceedings, the employer can exercise the power. (emphasis is ours)
The
legal position deducible from the above observations further amplifies
that the so-called resignation tendered by the Appellant was after
satisfactorily serving the period of 20 years ordinarily qualifying or
enabling voluntary retirement. Furthermore, while there was no
compulsion to do so, a waiver of the three months notice period was
granted by the Respondent Corporation. The State being a model employer
should construe the provisions of a beneficial legislation in a way that
extends the benefit to its employees, instead of curtailing it.
15 The cases of Shyam Babu Verma v. Union of India, (1994) 2 SCC 521;
State
of M.P. v. Yogendra Shrivastava, (2010) 12 SCC 538; M.R. Prabhakar v.
Canara Bank, (2012) 9 SCC 671; National Insurance Co. Ltd. v. Kirpal
Singh, (2014) 5 SCC 189; UCO Bank v. Sanwar Mal, (2004) 4 SCC 412 relied
upon by the parties are distinguishable on facts from the present case.
16 We
thus hold that the termination of services of the Appellant, in
essence,was voluntary retirement within the ambit of Rule 31 of the
Pension Rules of 1995. The Appellant is entitled for pension, provided
he fulfils the condition of refunding of the entire amount of the
Corporation’s contribution to the Provident Fund along with interest
accrued thereon as provided in the Pension Rules of 1995.
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Regards,
E.R.Iyer
