TaxTMI 
TaxTMI 
2025 (6) TMI 676
X X X X Extracts X X X X
X X X X Extracts X X X X
....h approval from its Central Board of Directors introduced the RBI Pension Regulations, 1990. Employees were informed vide Administration Circular No. 6 to the effect that the said regulations would come into effect from 01.11.1990 giving an option to the existing employees to join the said Pension Scheme or to continue with the RBI's CPF. All new employees who joined on or after 01.11.1990 were to be governed by the 1990 Regulations. It also provided that the employees in service as on 01.01.1986 who retired before 01.11.1990 were also eligible for pension upon refunding the amount of CPF share of the RBI with accrued interest as received by them on their retirement, along with simple interest thereon at the rate of 6%. According to Regulation 31 thereof, employees retiring between 01.01.1986 and 31.10.1990, although eligible to join the Pension Scheme, would receive the pension only from 01.11.1990 onwards, with no arrears for the period before the said date. On 07.02.1992 RBI issued another Administration Circular No. 5 amending the Pension Regulations, 1990 effective from 06.02.1992. Existing employees (excluding those on leave preparatory to retirement) were given a fresh opti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hance for remaining CPF optee employees, both serving and retired, to opt for the Pension Scheme. No objection was conveyed by the Government to the RBI's proposal on 26.06.2020, for the CPF optees who were in service from 01.11.1990 till 15.11.2000. 9. This permission for the change of option was allowed to the employees subject to refund of the CPF amount with accrued interest as received from RBI on retirement and simple interest as may be decided by the RBI. RBI issued Administration Circular No. 1 on 14.09.2020 opening a last option for the serving and retiring employees who were in Bank service as on 01.11.1990 (the date of introduction of the Pension Scheme) and continued as on 15.11.2000 (the closing date of the last chance given to the employees to exercise pension option). This fresh option for switching over from CPF to Pension Scheme would be subject to certain terms and conditions which were to be specified as per the detailed instructions to be issued in this regard separately by the RBI. However, in this Administration Circular No. 1 itself it was clarified that the eligible employees and the family members would be entitled to draw monthly pension/family pension wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r 17, 2020, the Bank's contribution to Provident Fund and accrued interest thereon paid to them at the time of their retirement along with simple interest @3% per annum calculated from the date of receipt of the amount by the employee till the date of refund to the Bank. (ii) The duly filled in FORM-1 (R) (copy enclosed) along with details of family duly filled in Form 4 (copy enclosed) shall be submitted by the retired employee at the Regional Office/Central Office Department from where he/she retired. x x x x x x (vi) Pre - November 1, 2012 retirees will be eligible for revision of pension, prospectively i.e. from July 1, 2020, without payment of any arrears, as per the method indicated in circular CO HRMD No. G. 84/ 18491/21.01.00/2018-19 dated March 7, 2019 read with letter CO HRMD No. 27412/21.01.000/2018-19 dated June 26, 2019. (vii) Eligible retired employees who have exercised their option for pension and refunded Bank's contribution to Provident Fund and accrued interest thereon, along with simple interest @3% per annum as per para 4(i) above will be eligible for full pension from July 1. 2020 upto the date they opt for commutation of pension. x x x ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... extent, with a prayer for issuance of a writ of mandamus to the RBI to award 12% interest on arrears due to the petitioner by allowing him arrears with effect from the date of his retirement i.e. 30.11.2014. 12. The said amendment was allowed by the High Court on 18.03.2022, and an amended Writ Petition was filed. Upon the RBI filing a Counter to the amended Writ Petition, the Single Judge of the High Court proceeded to decide the Writ Petition, dismissing it vide Order dated 04.04.2023, holding therein that the Respondent had well-informed details regarding the non-grant of arrears of pension and eligibility for pension from a particular date i.e. 01.07.2020. Having accepted the same and taken benefit thereof, it was not open to the Respondent to challenge a part of the said Scheme. 13. Upon dismissal of the writ petition, the Respondent preferred a writ appeal which was allowed by the Division Bench on 18.12.2023 entitling the Respondent to pension benefits from the date of his retirement i.e. 30.11.2014, on the grounds that in the earlier administrative circulars, whenever an option had been granted to the serving or retired employees, they were entitled to arrears of pension....
X X X X Extracts X X X X
X X X X Extracts X X X X
....judgment of the Division Bench going contrary to the Administration Circular No. 1, dated 14.09.2020, and the instructions for implementation dated 18.09.2020, RBI approached this Court by filing the Special Leave Petition wherein, on notice having been issued, operation of the Impugned Order entitling Respondent No. 1 to pension from the date of his retirement was stayed. However, his entitlement for monthly pension with effect from 01.07.2020 onwards was ordered to be continued. 19. Learned Counsel for the Appellant has referred in detail to the Administration Circular No. 1 dated 14.09.2020 and 18.09.2020, to contend that the eligibility criteria had been clearly laid down therein and it was also made clear that the pension would be payable with effect from 01.07.2020 and not from the date of retirement. This is apparent from the clarification that no arrears prior to the said date would be paid to an optee for Pension Scheme from the CPF Scheme. 20. The Respondent, having unconditionally accepted all terms of these circulars and filled in the requisite forms etc. and fulfilled the conditions as laid down therein, cannot now be permitted to challenge unfavourable conditions. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or and complied, thus entitling them to the benefit as per the said Circular. Similarly, when the latest administrative circular of the year 2020 was issued, it was a complete package detailing therein the pros and cons. Once accepted, the benefits which were earlier conferred under the options made available to the thenretired and in-service employees at the relevant time cannot be claimed by the Respondent. It has also been pointed out that as per the circular of 2020, simple interest of 3% per annum is being charged upon the amount of RBI contributions to provident fund, whereas in the earlier occasions, interest was levied at 6% per annum on the first option followed by 12% per annum on the subsequent occasions. This 3% interest, as was being charged from the employees, was based on the financial calculations and economic considerations keeping in view the fact, that the pension would be payable with effect from 01.07.2020 to the fresh optees to the Pension Scheme. This aspect was clearly mentioned in the administrative circular as well as the detailed instructions which pointed out therein that arrears would not be payable prior to the said date. It has been pointed out that e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a-viz the similarly placed employees/retirees. 26. Prayer has thus been made for dismissal of the Appeal. 27. We have considered the submissions made by the Counsel for the parties and, with their assistance have gone through the records of the case. The first and foremost issue which requires to be considered and decided, and upon which all the ancillary submissions depend is; whether the fixing of the cut off date i.e. 01.07.2020 for grant of pensionary benefits and that too prospectively is in consonance with law or is discriminatory and arbitrary. 28. The details and factum with regard to the various four options which were available to the Respondent during the period he was in employment with the RBI and that he did not opt for switching over to the Pension Scheme in the year 1990, 1992, 1995 and 2000 is not questioned rather admitted. Respondent joined the service on 14.09.1981 and retired as Manager on 30.11.2014. The details with regard to and the requirements under each administrative circular issued on these four occasions have not been disputed. 29. What is apparent, therefore is, that each administrative circular was independent in itself where the competent author....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to the erstwhile CPF Scheme optee employees. 34. As per the pleadings, the retrospective financial burden would have resulted in an unjustified liability of over 900 crores for the RBI, which would have led to a financially unsustainable scenario. This aspect has also been pressed into service by the Counsel. The decision of the Government falls within the realm of policy decision, keeping in view of the considerations taken note of before ultimately approving the Scheme of switch-over as a last option to the persons who were eligible under it as laid down therein. 35. When this aspect is examined in the light of the law, as settled by this Court in the case of Mohammad Ali Imam and Others (supra), in Paragraph 11, this Court held thus: "11. Apart from this, there may be other considerations in the mind of the executive authority while fixing a particular date i.e. economic conditions, financial constraints, administrative and other circumstances, and if no reason is forthcoming from the executive for fixation of a particular date, it should not be interfered with by the Court unless the cut-off date leads to some blatantly capricious or outrageous result. In such cases, it h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... date holding the same status, must be treated to be the same [ Supra fn 13 SCC at p. 735 (para 8).]. 37. In the instant case before us, the cut-off date has been fixed as 1-4-1995 on a very valid ground, namely, that of financial constraints. Consequently, we reject the contention that fixing of the cut-off date was arbitrary, irrational or had no rational basis or that it offends Article 14." In State of Tripura (supra) the Supreme Court, in reaffirming its earlier rulings such as in Amar Nath Goyal (supra) and T.N Electricity Board vs. R. Veerasamy and Others ( 1999 ) 3 SCC 414, held that financial constraints can constitute a valid and non-arbitrary basis for fixing a cut-off date for extending pensionary benefits or pay revisions. It emphasized that economic considerations are germane to governmental policy decisions, and distinguishing between retirees based on such a date does not violate Article 14 of the Constitution. Accordingly, in the present case, the cutoff date fixed under the Pension Rules was constitutionally valid, and the High Court's judgment striking it down was found to be erroneous. In Hirandra Kumar (supra) the Court clarified that individual hardships ....