2011 (2) TMI 1372 - SC - Indian Laws

Court rules appellant ineligible for pension benefits under Old Pension Scheme, upholds Regulation 46(1)

Sudhir Kumar Consul Versus Allahabad Bank

The court dismissed the appeals, ruling that the appellant was not eligible for pensionary benefits under the Old Pension Scheme as per Regulation 46(1) ... Whether the appellant is eligible and entitled for the pensionary benefits under the Allahabad Bank Employees Pension Scheme, 1890 [hereinafter referred to as 'Old Pension Scheme'] in terms of the Allahabad Bank Officers Service Regulations, 1979 [hereinafter referred to as 'the 1979 Regulations']? Issues Involved:1. Eligibility for pensionary benefits under the Old Pension Scheme.2. Validity of Regulation 46 of the 1979 Regulations.3. Discrimination under Article 14 of the Constitution of India.4. Applicability of Section 12(2) of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970.Issue-wise Detailed Analysis:1. Eligibility for Pensionary Benefits under the Old Pension Scheme:The appellant claimed entitlement to pensionary benefits under the Old Pension Scheme based on his service with the Allahabad Bank. He argued that his promotion to an officer's grade in 1983 should not disqualify him from receiving benefits under the Old Pension Scheme, as he was an employee before the cutoff date of 01.07.1979. However, the court found that Regulation 46(1) of the 1979 Regulations clearly stipulated that only officers appointed on or before 01.07.1979 were eligible for the Old Pension Scheme. Since the appellant was promoted to an officer's position after this date, he was deemed ineligible.2. Validity of Regulation 46 of the 1979 Regulations:The appellant challenged the validity of Regulation 46 of the 1979 Regulations, arguing that it was beyond the scope of Section 12(2) of the Banking Act and violated his existing pensionary rights. The court held that Regulation 46(1) was introduced to standardize and provide a comprehensive set of rules for the officers of the bank. The regulation was found to be reasonable and not arbitrary, as it created a clear distinction between officers appointed before and after 01.07.1979. Therefore, the regulation was held to be valid and within the legal framework.3. Discrimination under Article 14 of the Constitution of India:The appellant contended that Regulation 46(1) created an arbitrary and unreasonable distinction between officers based on their date of appointment, violating Article 14 of the Constitution. The court examined various precedents and concluded that fixing a cutoff date for retirement benefits is a common practice and does not necessarily violate the principle of equality. The court cited several cases where similar cutoff dates were upheld as reasonable and rational. Consequently, Regulation 46(1) was found to be in consonance with Article 14, as it laid down a reasonable criterion for differentiation.4. Applicability of Section 12(2) of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970:The appellant argued that Section 12(2) of the Banking Act protected his existing pensionary rights and that Regulation 46(1) unjustifiably deprived him of these rights. The court noted that Section 12(2) was introduced in 1970, while Regulation 46 was implemented in 1979 specifically for officers. Since the appellant was promoted to an officer's position only in 1983, he could not invoke Section 12(2) to challenge the regulation. The court upheld the regulation, stating that it was in harmony with the Banking Act and did not violate any statutory provisions.Conclusion:The appeals were dismissed, with the court holding that the appellant was not entitled to pensionary benefits under the Old Pension Scheme due to the clear provisions of Regulation 46(1) of the 1979 Regulations. The regulation was found to be valid, reasonable, and in compliance with Article 14 of the Constitution. The court granted the appellant the liberty to exercise his option to join the 1995 Regulations within 30 days, with the respondent bank directed to consider this option sympathetically within 60 days. Each party was directed to bear its own costs.