TaxTMI 
TaxTMI 
2022 (1) TMI 1408
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.... 2020), Civil Appeal No. 304 of 2022 (Arising out of SLP (Civil) No. 1939 of 2020), Civil Appeal No. 305 of 2022 (Arising out of SLP (Civil) No. 1937 of 2020), Civil Appeal No. 307 of 2022 (Arising out of SLP (Civil) No. 1945 of 2020) and Civil Appeal No. 313 of 2022 (Arising out of SLP (Civil) No. 12864 of 2020) Hon'ble Judges Ajay Rastogi And Abhay Shreeniwas Oka JJ. For the Appellant : Niharika Ahluwalia For the Respondent : Tushar Bakshi, Sanjay Kapur, Siddharth And Ranjeeta Rohatgi JUDGMENT AJAY RASTOGI, J. 1. Leave granted. 2. Civil Appeals @ SLP(Civil) Nos. 1940-1941 of 2020 and the cognate appeals arise from the self-same common judgment dated 29th July, 2019 and 4th October, 2019 passed by the Division Bench of the High Court of Punjab and Haryana at Chandigarh. 3. The facts have been noticed by this Court from Civil Appeals @ SLP(Civil) Nos. 1940-1941 of 2020. 4. The Appellant in the present batch of appeals, is the Punjab State Cooperative Agricultural Development Bank Ltd. (hereinafter referred to as 'the Bank'), a registered cooperative society and connected Civil Appeal @ Special Leave Petition (Civil) No. 12864 of 2020 has been ....
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....ent and as a consequence thereof, the pension scheme of the employees and Officers in the common cadre was introduced w.e.f. 1st April, 1989. 8. Resolution No. 24 passed by the Administrator of the Appellant Bank dated 22nd June, 1989 is reproduced as under: Item No. Agenda Decision 1. (i) To consider to amend Common Cadre Rules for introducing Pension Scheme. 1. (i) Resolved that the existing Common Cadre Rule No. 15 be numbered as 15(i) and a new rule 15(ii) be incorporated as under:15(ii) The Board of Directors may formulate Pension Rule with the approval of RCS Punjab. (ii) To consider to introduce Pension Scheme for the employees/officers in the Common Cadre of the Punjab State Cooperative Agricultural Development Bank (ii) (a) Resolved that the Pension Scheme for the employees/officers in the Common Cadre of the Punjab State Cooperative Agricultural Development Bank be introduced for the adoption w.e.f. 1.4.89. (b) It is further resolved that the pension rules enclosed are approved. Any matter which is not specifically mentioned in these Rules shall be governed by Chapter XIII of the Punjab Civil Service Rules Vol. II. (c) It is further res....
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.... of these Rules and such existing employees, who opt for these rules, shall be covered by these rules. All category of employees shall have to exercise this option in Form-A to these Rules within three months from the date of notification of these rules. (ii) The employees who do not opt for these Rules shall be governed by the Employees Provident Fund Act and Rules. 3. Definition: XXX XXX XXX XXX (o) Pay: Pay means the pay as defined in Rule 2.44 of the Punjab Civil Services Rules Volume-I Part-I. Note: Unless the contrary appears from the context or subject to term 'pay' defined in Rule 2.44 of the Punjab Civil Services, Volume-I, Part-I, does not include "Special Pay. 10. In furtherance thereto, the amended Rule 15(ii) came into force with effect from 1st April, 1989. In sequel to the introduction of implementation of the scheme, the contributions made by the employees and the Appellant Bank were transferred to create the pension corpus fund to make it functionally viable and a trust was created by a trust deed dated 24th March, 1993 for management and effective implementation of the scheme. 11. It reveals from the recor....
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.... to discontinue the pension scheme and revert to the scheme of Contributory Provident Fund with a proposal of One Time Settlement. The Board of Directors, later in exercise of its powers vested in Section 84A(2) of the Punjab Cooperative Societies Act, 1961 with the prior approval of the Registrar, Cooperative Societies made amendment in Rule 15 of the Rules, 1978 by order dated 11th March, 2014. Pursuant thereto, Rule 15(ii) stood deleted. The order dated 11th March, 2014 is reproduced hereunder: O/o Registrar, Cooperative Societies, Punjab, Chandigarh (Credit Branch-1) To The Managing Director, The Punjab State Cooperative Agri. Dev. Bank Ltd., Chandigarh. Memo. Credit/CA-3/2841 Dated: 11.03.2014 Sub: Amendment in Clause 15 of Punjab State Cooperative Agricultur....
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....-LPA-2014 in LPA-2001-2013 Notice to the non-applicant/Appellants. Ms. Jaishree Thakur, Advocate accepts notice. After hearing learned Counsel for the parties and keeping in view the fact that since One Time Settlement scheme has already been implemented after seeking approval of the competent authority, this application is disposed of with a clarification that the implementation of the said scheme shall be without prejudice to the legal rights of the applicant/Respondents. 14. This fact can be further noticed that the learned Single Judge of the High Court decided the writ petitions by a Judgment dated 31st August 2013 and Rule 15(ii) was deleted by the Appellant Bank by Order dated 11th March, 2014 while the proceedings were pending in LPA before the High Court. 15. The learned Single Judge of the High Court held that the employees of the Appellant Bank, having served the Bank were covered under the scheme which was applicable at the given time under the Act 1952 (prior to 1989). It is the Appellant Bank which accepted the recommendations of the State Government and solicited options from the employees as to whether they wanted to opt for a pension scheme ....
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....y mentioned "granted exemption from pension scheme", but that was a factually incorrect statement recorded and the RPFC has made an unconditional apology for making such a statement of fact. It is the admitted case of RPFC that neither any application was filed by the Appellant Bank seeking exemption from the employees pension scheme nor it was granted or refused. 20. The stand of the EPFC is that Employees' Provident Funds Scheme, 1952 and Employees' Pension Scheme, 1995 both are designed to secure a minimum core of old age/terminal social security. Neither of these schemes exhaust an employee's right to social security. According to the EPFC, the bank's promise to supplementary pension outside of EPF must be evaluated in that light. 21. It is further stated that the benefits under bank's pension scheme can only be understood as supplementary and not substitutionary because the bank's pension scheme did not provide for dependents' pension, nominees' pension, childrens' pension or withdrawal benefits. This only provides a far narrower pensionary cover to its employees. Its pension scheme could not be considered for exemption Under Section 1....
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.... Ors. 2016(10) SCC 77. 26. Learned Counsel further submits that the pension scheme introduced by the Bank later became financially unviable and the number of retirees in comparison to the existing employees recruited after 1st January, 2004 is almost three times and if the Appellant Bank is mandated to continue to make payment of pension under Bank Pension Scheme, the Bank will become defunct and the contribution towards pension made by the serving employees will be futile and they will get nothing at the time of their retirement. The Bank has earned a meagre profit in the later years and still, in the given circumstances, the Appellant Bank, if allowed to made over pension in terms of the judgment impugned, there will be no option left except to close down the Institution in such an eventuality and that apart it has created a wide gap of inequality between the serving employees and the retirees without resorting to exemption from the RPFC. 27. Learned Counsel submits that the RPFC has initiated separate proceedings Under Section 7A of the Act 1952 for the year April 1989 to March 2015 and for the year April 2015 to June 2017, imposing liability on the Bank by an Order dated ....
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....far as the scheme under the Act 1952 is concerned, the employees pension scheme was introduced under the Act 1952 for the first time in 1995 and it is nowhere related to the pension scheme introduced by the Appellant under its Resolution No. 24 dated 22nd June, 1989 with effect from 1st April, 1989 and the Appellant Bank neither sought any exemption Under Section 17(1C) of the Act 1952 nor it was required for the reason that the Bank introduced the pension scheme in the year 1989. At that time, there was no such pension scheme under the Act 1952 and once it is made clear that exemption was never sought by the Appellant Bank, under the Act 1952, at least the vested right which has been accrued to the Respondents cannot be taken away retrospectively which is not sustainable and this what the Division Bench has held in the impugned judgment. 30. The reliance has been placed on the Constitution Bench Judgment of this Court in Chairman, Railway Board and Ors. v. C.R. Rangadhamaiah and Ors. 1997(6) SCC 623 followed with U.P. Raghavendra Acharya and Ors. v. State of Karnataka and Ors. 2006(9) SCC 630 and Bank of Baroda and Anr. v. G. Palani and Ors. 31. Learned Counsel further submi....
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....the dependents of such employees who died in harness. EPS, on the other hand, is a comprehensive pension scheme that provides superannuation pension, early pension and dependents' pension. It is funded by diverting a part of the employers' share of contribution made to EPFS into the pension fund (presently 8.33% of monthly wages). Employees do not contribute under EPS. The third scheme is Employees' Deposit Linked Insurance Scheme, 1976. The Bank sought exemption from EPFS Under Section 17(1)(b) and from EDLIS Under Section 17(2A). The fate of exemption and its consequence may not be relevant so far as the present dispute raised in the instant proceedings is concerned, at the same time, it is being specifically stated that the Appellant Bank did not seek any exemption from the operation of Employees' Pension Scheme after 16th November, 1995. 34. Learned Counsel further states that, in the interregnum, since the Appellant Bank failed to deposit its due contributions, first under the Family Pension Scheme and later under the Employees Pension Scheme for the period commencing from 1st April 1989 to 31st March 2015 and from April 2015 to June 2017, separate proceedin....
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.... by the Bank to which they are otherwise entitled for under the law. 38. We have heard the learned Counsel for the parties and with their assistance perused the material available on record. 39. The facts are not in dispute that the Respondents are the retired employees and members of the Punjab State Cooperative Agricultural Development Bank Limited, Chandigarh and they were earlier the members of the Employees Provident Fund Scheme under the Act 1952. The scheme was being duly adhered to and necessary contributions were made over by the employees and employer Bank. Later on, with the recommendation of the Punjab Pay Commission, regarding introducing the pension scheme, the Administrator of the Appellant Bank vide its Resolution dated 22nd June, 1989 decided to implement the recommendations of the State Government and as a consequence thereof, the pension scheme for the employees and Officers in the Rules 1978 was introduced with effect from 1st April 1989. 40. Accordingly, the Rules 1978 were amended and Rule 15(ii) was introduced authorizing the Board of Directors to formulate pension scheme with the prior approval of the Registrar Cooperative Societies, Punjab. Pursuan....
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....the Constitution Bench decisions in Roshan Lal Tandon v. Union of India (1968) 1 SCR 185; B.S. Vadera v. Union of India (1968) 3 SCR 575 and State of Gujarat v. Raman Lal Keshav Lal Soni (1983) 2 SCC 33 have been sought to be explained by two three-Judge Bench decisions in K.C. Arora v. State of Haryana (1984) 3 SCC 281 and K. Nagaraj v. State of A.P. (1985) 1 SCC 523 in addition to the two-Judge Bench decisions in P.D. Aggarwal v. State of U.P. (1987) 3 SCC 622 and K. Narayanan v. State of Karnataka 1994 Supp (1) SCC 44. Prima facie, these explanations go counter to the ratio of the said Constitution Bench decisions. It is not possible for us sitting as a three-Judge Bench to resolve the said conflict. It has, therefore, become necessary to refer the matter to a larger Bench. We accordingly refer these appeals to a Bench of five learned Judges. 44. This Court, after taking note of the earlier view on the subject further held in Chairman, Railway Board and Ors. (supra) as under: 20. It can, therefore, be said that a Rule which operates in futuro so as to govern future rights of those already in service cannot be assailed on the ground of retroactivity as being violative....
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....their retirement. (emphasis supplied) 45. Later, in U.P. Raghavendra Acharya and Ors. (supra), the question which arose for consideration was that whether the Appellants who were given the benefit of revised pay scale with effect from 1st January, 1996 could have been deprived of their retiral benefits calculated with effect therefrom for the purpose of calculation of pension. In that context, while examining the scheme of the Rules and relying on the Constitution Bench Judgment in Chairman, Railway Board and Ors. (supra), this Court observed as follows: 22. The State while implementing the new scheme for payment of grant of pensionary benefits to its employees, may deny the same to a class of retired employees who were governed by a different set of rules. The extension of the benefits can also be denied to a class of employees if the same is permissible in law. The case of the Appellants, however, stands absolutely on a different footing. They had been enjoying the benefit of the revised scales of pay. Recommendations have been made by the Central Government as also the University Grant Commission to the State of Karnataka to extend the benefits of the Pay Revision....
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....e Officers' Association, as admittedly, to Officers' Association even the provisions of Industrial Disputes Act were not applicable and joint note had no statutory support, and it was not open to forgo the benefits available under the Regulations to those officers who have retired from 1.4.1998 till December 1999 and thereafter, and to deprive them of the benefits of the Regulations. Thus, by the Joint Note that has been relied upon, no estoppel said to have been created. There is no estoppel as against the enforcement of statutory provisions. The Joint Note had no force of law and could not have been against the spirit of the statutory Regulations and the basic service conditions, as envisaged under the Regulations framed under the Act of 1970. They could not have been tinkered with in an arbitrary manner, as has been laid down by this Court in Central Inland Water Transport Corporation Limited and Anr. v. Brojo Nath Ganguly and Anr. , (1986) 3 SCC 156 & Delhi Transport Corporation v. D.T.C. Mazdoor Congress, (1991) Supp. 1 SCC 600. 47. The exposition of the legal principles culled out is that an amendment having retrospective operation which has the effect of taking aw....
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....hat certainly will take away the vested/accrued right of the incumbent which may not be permissible and may be violative of Article 14 and 16 of the Constitution. 51. The judgment on which learned Counsel for the Appellant Bank has placed reliance in the case of Marathwada Gramin Bank Karamchari Sanghatana and Anr. (supra), the issue under consideration was with respect to provident fund. The Marathawada Gramin Bank had floated a provident fund scheme built on better rates of contributions than the rates mandated under the employees provident fund scheme. Hence, the better scheme of provident fund was statutorily recognized by grant of exemption Under Section 17(1). Later, Marathawada Gramin Bank discontinued its provident fund scheme for financial unviability, and reverted to rates mandated under paragraph 26 of the EPFS. The Bank later declined to exercise its voluntary contribution under Para 26 of the scheme after the exemption was declined and that came to be upheld by this Court which may not be of any assistance to learned Counsel for the Appellant in the instant case. 52. So far as the judgment in State of Himachal Pradesh and Ors. (supra) is concerned, it was a case ....
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....ld financial resources at its command to its retirees, would not be justified to withdraw the scheme retrospectively detrimental to the interests of the employees who not only became member of the scheme but received their pension regularly at least upto the year 2010 until the dispute arose between the parties and entered into litigation. 55. In our view, non-availability of financial resources would not be a defence available to the Appellant Bank in taking away the vested rights accrued to the employees that too when it is for their socio-economic security. It is an assurance that in their old age, their periodical payment towards pension shall remain assured. The pension which is being paid to them is not a bounty and it is for the Appellant to divert the resources from where the funds can be made available to fulfil the rights of the employees in protecting the vested rights accrued in their favour. 56. So far as the submission made by the serving employees is concerned, they have no locus to question. At the same time, their apprehension as being projected to this Court is completely misplaced for the reason that employer/employees contribution is being provided under t....