2025 (4) TMI 240 - SC - Indian Laws

Bank cannot deny pension benefits to removed employee after appellate authority granted terminal benefits

UCO BANK & ANR. Versus VIJAY KUMAR HANDA

The SC dismissed the bank's appeal regarding pensionary benefits for an employee removed from service for misconduct. The employee was initially dismissed ... Entitlement to pensionary benefits under the applicable legal framework, to respondent, who was removed from service for misconduct - applicability and interpretation of the Bipartite Settlement and the UCO Bank (Employees') Pension Regulations, 1995 - HELD THAT:- In the instant case, the initial penalty imposed on the respondent by the appellant was dismissal from service with immediate effect after having been found guilty of gross misconduct as per Clause 19.5(c) of the Bipartite Settlement. Appellate authority vide the order dated 16.02.2000 modified the penalty order dated 14.12.1999 passed by the disciplinary authority by substituting the penalty of dismissal from service by removal from service with terminal benefits. The substituted penalty in terms of the appellate order dated 16.02.2000 reads as under: Shri V.K. Handa (PFM No. 22488) is hereby removed from the bank’s service with immediate effect. However, he will be entitled to receive the terminal benefits for the period of service he has rendered. Removal from service will not be a disqualification for his future employment. The respondent had raised an industrial dispute which culminated in an award dated 13.02.2004. As per this award, Labour Court had invoked the provisions of Section 11A of the Industrial Disputes Act and substituted the penalty of removal from service with terminal benefits by the penalty of stoppage of four increments for one year with further direction for reinstatement in service with 75 percent back wages. This award of the Labour Court failed to stand judicial scrutiny as learned Single Judge of the High Court set aside the same which decision was affirmed by the Division Bench in letters patent appeal. This sequence of events demonstrates that the modified penalty as imposed by the appellate authority attained finality as this appellate order was not questioned by the appellant. Learned Single Judge also held that objection of the appellant to the claim of pension by the respondent was without any basis in as much as the appellate authority had specifically held that respondent would be entitled to receive terminal benefits for the period of service he had rendered. This order of the appellate authority has attained finality. Therefore, it was held that respondent was entitled to receive pension in view of the order passed by the appellate authority. Conclusion - There are no doubt that such of the employees who are otherwise eligible for superannuation benefit are removed from service in terms of Clause 6(b) of the Bipartite Settlement shall be entitled to superannuation benefits. The civil appeal is dismissed. ISSUES PRESENTED and CONSIDEREDThe core legal questions considered in the judgment are:1. Whether the respondent, who was removed from service for misconduct, is entitled to pensionary benefits under the applicable legal framework.2. The applicability and interpretation of the Bipartite Settlement and the UCO Bank (Employees') Pension Regulations, 1995, particularly in relation to the eligibility for pension of an employee removed for misconduct.3. Whether the High Court was correct in directing the appellant Bank to process the respondent's case for pension and release pensionary benefits.ISSUE-WISE DETAILED ANALYSIS1. Entitlement to Pensionary BenefitsRelevant legal framework and precedents: The case revolves around the interpretation of Clause 6(b) of the Bipartite Settlement and Regulation 22 of the UCO Bank (Employees') Pension Regulations, 1995. The Bipartite Settlement provides for removal with superannuation benefits, while Regulation 22 states that removal entails forfeiture of past service, disqualifying an employee from pensionary benefits.Court's interpretation and reasoning: The Court examined the interplay between the Bipartite Settlement and the Pension Regulations. It referred to the decision in S.K. Kool, which harmonized the two provisions by allowing employees eligible for superannuation benefits under the regulations to receive them even if removed for misconduct.Key evidence and findings: The appellate authority had modified the penalty from dismissal to removal with terminal benefits, which was not challenged by the appellant and thus attained finality.Application of law to facts: The Court applied the precedent set in S.K. Kool, concluding that the respondent, having completed the minimum pensionable years of service, was entitled to pensionary benefits despite being removed for misconduct.Treatment of competing arguments: The appellant argued that the respondent was not entitled to pension due to the removal penalty and failure to opt for pension before removal. However, the Court found these arguments unpersuasive in light of the appellate authority's order and the precedent in S.K. Kool.Conclusions: The Court concluded that the respondent was entitled to pensionary benefits as per the appellate authority's order and the harmonized interpretation of the Bipartite Settlement and Pension Regulations.SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning: 'From the conspectus of what we have observed we have no doubt that such of the employees who are otherwise eligible for superannuation benefit are removed from service in terms of Clause 6(b) of the Bipartite Settlement shall be entitled to superannuation benefits.'Core principles established: The judgment reinforces the principle that an employee removed for misconduct but eligible for superannuation benefits under the regulations is entitled to those benefits, harmonizing the Bipartite Settlement and Pension Regulations.Final determinations on each issue: The Court upheld the High Court's decision directing the appellant Bank to process the respondent's case for pension and release the pensionary benefits due, dismissing the appeal.