Does the issue of Second Option of Pension to Resignees needs more time?

While advising member banks to extend 2nd option of pension to Retirees in terms of agreement dated 27/04/2010, IBA clarified that those retired compulsorily, retired voluntarily under OSR 19(1)(including exit optees in Associate Banks of SBI) and resigned under OSR 20(2)/Bipartite were not to be extended pension option. But subsequently,i.e., on 09-11-2012, IBA retracted from its earlier stand or rather selectively honoured the KHC Judgement dated 30/8/2012 and advised PSBs to extend 2nd option of pension to those voluntarily retired under OSR 19(1). Much later, presumably at the instance of IBA, SBI Board saw reason and merit in the plea of the exit optees and with due respect to the Division Bench Judgement of Kerala High Court, without preferring an appeal before the Apex court, advised the Associate Banks during the last quarter of 2015 to extend the similar benefit to those who were "released" under Exit Option.

IBA clarification on Resignations in Bank of Maharashtra

IBA vide letter dated 06/2/2013 in reply to a query raised by Bank of Maharashtra clarified that "those resigned" despite being eligible for voluntary retirement as per the scheme framed under OSR 19(1) (on completion of 55 years of age) were eligible for 2nd option of pension. It is an admission by IBA that the word "resignation" in the exit applications do not disentitle pension when they were eligible for voluntary retirement. Andhra Bank also extended 2nd option of pension to all those "resigned" with qualifying service between 27-04-2010 and 01-09-2010.

Legal initiatives by the affected Individuals/organizations

Punjab National Bank extended 2nd option of pension to a resignee officer in the first quarter of 2016, as per Punjab and Haryana High court order under LPA 735/2012 without preferring an appeal in Supreme Court. Contrarily, in the case of an award staff resignee with 33 years of service, Bank of India preferred an SLP (C)12912/2016 against the Gujarat High Court Judgement of LPA 1074/2012 dated 18/02/2016 extending 2nd option of pension. It is presumed that IBA either saw a subtle distinction in the facts of these two cases or left it to the discretion or wisdom of individual banks to appeal or not to appeal in Apex Court. On 08/12/2013, when the Apex Court dismissed the SLP of Vijaya Bank, Bank extended pension to 22 Resignee writ petitioners of KHC, who include officers and award employees. A number of writ petitions seeking 2nd option of pension for those resigned with qualifying service are pending disposal before different High Courts, especially in Karnataka (Bangalore) and Delhi High Courts.

IBA's latest Initiatives:

In this back drop, IBA called for data from PSBs on the Number of resignees (during the period 25-09-1995 – 27-04-2010) with qualifying pensionable service " for assessing the cost factor as well as provision requirement as per the actuarial calculation" and "for putting up the same to the Management Committee for deliberation and further course of action". On the other hand, it continues to be a party in litigation in various courts.

Settled Law

It must be noted that the law settled by the Apex Court in UCO Bank vs. Sanwarlmal and M.R. Prabhakar vs. Canara Bank went against the resignees prior to 01.11.1993, when there was no scheme of voluntary retirement prior to the introdduction of Bank Employees Pension Regulations. The court was of the view that when there was no provision for voluntary retirement, Resignation cannot be equated with voluntary retirement, Resignation means – Resignation simplicitor. In CA No.11488/2014 dated 17-12-2014 - Sashikala devi (legal heir of resignee of 2007) vs. Central Bank of India, Supreme Court of India summed up the position of the Court that "In the case where the employee has requisite qualifying service for grant of pension, and where under the services applicable can seek voluntary retirement, the benefit of pension has been allowed by treating the purported resignation as voluntary retirement"

Ironically the same Apex Court settled the law in favour of the resignees prior to 01.11.1993 also in Public Sector Insurance Companies vide Sheelkumar Jain vs. New India Assurance Company and Asgar Ibrahim Amin vs. LIC of India. The Honourable Court tried to distinguish the facts in the above cases and hence awarded conflicting judgements.

What is the issue before the Larger Bench?

But in the case of CA 14739/2015, Sr. Divisional Manager, LIC of in India vs. Lal Meena, the Honourable Court differed with the authority in Asgar Ibrahim Amin vs. LIC of India( which was within the fours of Sheelkumar Jain vs. New India ) and referred the matter on 26/11/2015 to the Chief Justice of India for resolution by a Larger Bench. In this case, the court was of the view that

" Rule 31 (voluntary retirement in Pension Regulations) expressly has not been made retrospective. Retrospectivity creates a given fiction and, therefore, unless there is express provision or it can be impliedly inferred from the plain and unambiguous language used, a provision should not be given retrospectivity. To arrive at the real meaning, it is always necessary to understand the scope and object of the whole enactment or the rules. In the said context, the relevant factors are general scope and purview of the statute; remedy sought to be achieved; former state of law and what was contemplated. Unless these conditions are satisfied, it is difficult to treat Rule 31 of the 1995 Rules as retrospective, in the absence of any deemed clause that the employees who had earlier resigned shall be treated as employees as if they had voluntarily retired. In fact, if such an interpretation is placed on the said Rule, it will be travelling beyond 31 the language employed therein. In Asger Ibrahim Amin(supra), retrospectivity has been given to Rule 31, and for said purpose the amendment to the 1960 Regulations, specifically Regulation 19(2A) has been taken recourse to. In our view, when Rule 31 covers the field of voluntary retirement and does not make it retrospective, there being a real difference between resignation and retirement, it is not seemly to read the amended regulations to the rules to make the same retrospective. Therefore, we are unable to concur with the view expressed in Asger Ibrahim Amin(supra)."

The Bench has also referred to the case of Shashikala devi vs. Central Bank of India, but did not disagree with the view taken there. Further the SLP No.5716-5719 M.Venkateswara Rao and 3 others vs. Andhra Bank were also tagged to the larger bench case. Neither the LIC nor the respondent have so far submitted the Statement of the Case to the court for enabling the court to take up the hearing. The controversy to be resolved by larger bench is with regard to the pronouncement on "treating the resignation(with pensionable service) prior to 01.11.1993 as voluntary retirement", but not the pronouncement on treating the resignation(with pensionable service , substantially fulfilling the essential conditions of voluntary retirement in Pension Regulations 1995) after 01.11.1993 as voluntary retirement. The latter's case is a settled matter implicitly ,if not expressively, by the Apex Court. Similar was the view taken by High Courts of Chandigarh and Ahmedabaad while distinguishing the case of post 01/11/1993 resignees with that of the resignees in M.R. Prabhakar vs. Canara Bank. This is presumably the conceded view of the Indian Banks Association. Otherwise, they would not have taken initiatives to arrive at the cost factor in this regard.

What needs to be done by the post 01.11.1993 Resignees?

If the law is required to be pronounced unequivocally, it can be got done now in SLP (C) No. 12912/2016 against the Gujarath High Court Judgement of LPA 1074/2012 dated 18/02/2016 in Bank of India(Petiioner) vs. JAYANTILAL VASHRAM TERAIYA (Respondent). On 10/05/2016, the Court upon hearing the counsel for the petitioner ordered to issue notice to the respondent. The respondent in this case needs to be supported by all means by the organizations/individuals fighting the cause of the post 01.11.1993 resignees. They should own the case and strive to ensure that unlike in Vijaya Bank case, the law is unequivocally pronounced in favour of the resignees under article 141, if necessary by impleading, to make the order applicable to all the similarly placed resignees. There is no scope for referring the matter to larger bench. The solution for the problem of post 01.11.1993 resignees can best be secured through this case alone at the earliest regardless of the nature of judgement by the Larger Bench.

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