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                    Allahabad Bank Rapped by Bombay High Court for Stopping Pension of 87 Year Old Ex-Banker

 

Allahabad Bank Rapped by Bombay High Court for Stopping Pension of 87 Year Old Ex-Banker

 

 

In a judgment which was delivered on 19th January, 2012, Bombay High Court has severely criticised Allahabad Bank for arbitrarily stopping the pension of a 87 year old man.    In this case, the  Petitioner  is  an  eighty  seven  year  old  man who retired from Allahabad Bank on  30 May   1986 as Special Assistant.  

 

In an earlier judgment while dismissing the appeal of Allahabad Bank, the   Supreme   Court  had  noted   that   pensionary   benefits   or   retirement benefits,  whether  governed by  a  scheme  or  rules,  constitute  a  packageand  pensionary  benefits  may  include  the  payment  of  pension  as  well as    gratuity.      However, upon  the  dismissal  of  the  appeal  filed  by  the  bank,  a circular   was   issued   on   30  October   2010  stating   that   it   had   been decided  to  discontinue  the  scheme  for  payment  of  pension  in  lieu  of  gratuity  pending  amendment  to  the  Officers  Service  Regulations.   

 

The  Petitioner  was  in  receipt  of  a  princely  sum  of  Rs.5,660/­  per  month  towards   pension   which   came   to   be   stopped   with   effect   from  1 October     2010.     Poor petition was left with no choice but to proceed against the Bank  under  Article  226.. 

 

While directing Allahabad Bank to start paying the pension, HC also allowed the pensioner to withdraw the deposit already made by the Bank on interim orders and also asked Allahabad Bank to pay Rs.15000 towards cost.   Some of the relevant extracts from the HC order are :

 

"Pension constitutes an important source of wherewithal for senior citizens so that they can live the twilight years in dignity," the HC said. Criticizing the nationalized bank's conduct in withholding the pension of an old employee, the court said service conditions set by the state authorities could not be modified arbitrarily.
 

 

"The deprivation in the present case has taken place patently in violation of law and flouts the guarantee of equal protection under Article 14 of the Constitution," said a bench of Justice D Y Chandrachud and Justice Amjad Sayed on January 19, while deciding in favour of Shapoor Mehta who retired from Allahabad Bank in 1986 after working there for 39 years.

 

While  opposing the petition, bank's counsel Ashish Mehta said as the bank, following a Supreme Court order, had to pay gratuity under the Payment of Gratuity Act 1972 only, it was within its rights to stop paying pension. Finding "no merit" in the argument, the HC said, "As a matter of first principle, Retirement benefits, including pension and gratuity, constitute a valuable right in property.... Where the employer is a public sector firm, the rights are constitutionally protected and their deprivation must stand scrutiny. Employers cannot grant or withhold retirement benefits at their whim and caprice."

 

Pointing to the flaw in the bank's argument, the HC said the SC held that "pension and gratuity were separate retirement benefits and so, the statutory right to paying gratuity could not be withheld on the grounds that the employees received pension". The HC said the SC judgment "has been met with a reprisal by depriving employees their right to a pension. Nothing more arbitrary can be conceived of." Stopping such payment unilaterally by an executive act was arbitrary as the SC had held that the employees were entitled to gratuity in addition to pension as getting gratuity was a statutory right.

 

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