Voluntary retirement pension weightage under existing regulations was upheld for qualifying employees, but interest on arrears was refused.

Employees who opted for a special voluntary retirement scheme and had completed 20 years of service were held entitled to the five years' notional service weightage under Regulation 29(5) of the Pension Regulations, 1995 for pension computation. The scheme's pension component was read with the existing regulations, and the later amendment to Regulation 28, aimed at a different class of retirees, could not deny the specific benefit attached to voluntary retirement under Regulation 29. The employees were therefore entitled to recomputation of pension, but interest on unpaid pension was declined because the banks' position was not wholly frivolous and High Court views had differed.

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Issues: (i) Whether employees who opted for voluntary retirement under the bank's special voluntary retirement scheme and had completed 20 years of service were entitled to the five years' notional service weightage under Regulation 29(5) of the Pension Regulations, 1995 for computation of pension. (ii) Whether the employees were entitled to interest on unpaid pension.

Issue (i): Whether employees who opted for voluntary retirement under the bank's special voluntary retirement scheme and had completed 20 years of service were entitled to the five years' notional service weightage under Regulation 29(5) of the Pension Regulations, 1995 for computation of pension.

Analysis: The special voluntary retirement scheme was contractual in nature, but its pension component expressly referred to pension under the Pension Regulations, 1995. The scheme had to be read with the regulations as they then stood. Regulation 29 was the relevant provision for voluntary retirement pension, and sub-regulation (5) granted addition of qualifying service up to five years to an employee retiring voluntarily under that regulation, subject to the prescribed ceiling. The later amendment to Regulation 28 was meant to protect employees with 15 years' service but less than 20 years' service and could not be used to deny the earlier and specific benefit available to employees who had already completed 20 years of service. The construction adopted had to be fair, non-arbitrary, and consistent with the terms of the scheme.

Conclusion: Yes. Employees who had completed 20 years of service and opted under the scheme were entitled to the benefit of Regulation 29(5) and to recomputation of pension accordingly.

Issue (ii): Whether the employees were entitled to interest on unpaid pension.

Analysis: Although the employees were found entitled to the pensionary benefit under Regulation 29(5), the Court took note of the conflicting views taken by different High Courts on the issue and the fact that the banks' stand was not wholly frivolous. In those circumstances, an award of interest was considered unwarranted.

Conclusion: No. Interest on unpaid pension was declined.

Final Conclusion: The banks' appeals failed and the employees' appeals succeeded to the extent of pensionary recomputation under Regulation 29(5), but without any award of interest on the arrears.

Ratio Decidendi: Where a special voluntary retirement scheme incorporates entitlement to pension under the existing pension regulations, the scheme must be construed with those regulations as they stood at the relevant time, and employees who satisfy the qualifying requirement under the applicable voluntary retirement pension provision cannot be deprived of the statutory weightage by a later amendment meant for a different class of retirees.

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