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Issues: (i) Whether the deletion of the bank pension rule with retrospective effect could take away the vested and accrued pension rights of employees who had already become members of the pension scheme and were drawing pension; (ii) Whether financial constraints of the bank or the existence of statutory pension under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 could justify withdrawal of the bank pension scheme and defeat the retirees' claims; (iii) Whether the serving employees could successfully oppose continuation of the bank pension scheme on the ground of alleged double burden or inequitable use of their contributions.
Issue (i): Whether the deletion of the bank pension rule with retrospective effect could take away the vested and accrued pension rights of employees who had already become members of the pension scheme and were drawing pension.
Analysis: The pension scheme was consciously introduced with effect from 1 April 1989, options were invited, and the eligible employees who opted in became members and received pension for years. The later deletion of the rule operated retrospectively and affected benefits already enjoyed under the existing rule. A rule that operates prospectively may regulate future service conditions, but an amendment that reverses a benefit already crystallised under the operative rule divests accrued rights. Such retrospective deprivation of pensionary benefit was treated as arbitrary and unconstitutional.
Conclusion: The retrospective deletion could not take away the vested and accrued pension rights of the retirees and was invalid to that extent.
Issue (ii): Whether financial constraints of the bank or the existence of statutory pension under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 could justify withdrawal of the bank pension scheme and defeat the retirees' claims.
Analysis: The statutory pension under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 was distinct from the bank-created pension scheme. The bank scheme had already operated for years and the retirees had become entitled under that scheme. Financial difficulty was held not to be a defence for taking away pensionary rights already accrued. The statutory recovery proceedings under the 1952 Act did not alter the character of the bank scheme or extinguish the retirees' independent entitlement under it.
Conclusion: Neither financial unviability nor the statutory pension framework under the 1952 Act justified withdrawal of the bank pension scheme as against the retirees.
Issue (iii): Whether the serving employees could successfully oppose continuation of the bank pension scheme on the ground of alleged double burden or inequitable use of their contributions.
Analysis: The serving employees were held to have no locus to challenge the retirees' entitlement. Their pensionary rights under the statutory scheme for current employees were separate, and the Court rejected the contention that their contributions were being diverted to satisfy the retirees' claims. The apprehension of double pension or inequitable burden was found to be misplaced in the facts of the case.
Conclusion: The serving employees could not prevent continuation of the bank pension scheme on the grounds raised by them.
Final Conclusion: The appeals were rejected, and the retirees' entitlement to pension under the bank scheme was affirmed, with the retrospective deletion of the pension rule held impermissible.
Ratio Decidendi: A retrospective amendment cannot take away pension benefits that have already vested and accrued under an existing service rule, and financial difficulty cannot justify extinguishing such rights.
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