2nd Pension Option to Left Over Bankers Should Now Be Only A Matter of Few Days  - Karnataka HC Delivers Clear Cut Judgment

by

Rajesh Goyal   

I received the complete judgment of Karnatka High Court in WP 7245/2011 (Petitioner : N Suresh Prabhu and many others) a few days back.    I was expecting that IBA  will come out with  instructions based on this judgment and / or banks will issue the necessary circulars and our banker brothers who have been denied their right for pension will be able to opt for 2nd pension option by 15th October, 2012.

However, it appears IBA is not able to come out of the rude shock it has received from MoF and from High Courts of the country.  The master manipulators appears to be now struggling to find out some excuse to save their skin for the mess they created merely to please their bosses.   The moves of IBA were illegal and thus have failed the scrutiny of the Courts in India.    I have gone through the whole judgment of 130 pages (which you can also download from the link given at the end of this page).    The HC judgment is more or less a clear indictment of IBA and banks who have followed blindly the IBA instructions.  

At this website AllBankingSolutions.com, from 2010, we have been exposing the IBA's negative role and also the strong support of UFBU to the IBA's stand (later on they have preferred to keep silence).    We have been criticized by many union leaders for our proactive role for the retired personnel who were denied 2nd pension option.    We were dubbed as negative and novice in legal issues.     Now with HC decision, our stand has been vindicated.   The worst part of this whole episode is that even now Union Leaders are silent and are not taking up the issue for early issuance of instructions by banks.  

I will like to quote here some extracts from the judgment for the benefit of our readers who may not be able to decipher the whole judgment :

"Hence, if the employees who have been qualified to opt for voluntary retirement, but has opted for different mode of retirement, he can not be discriminated on the ground that, it does not fall under Caluse 29 of the Regulations.  Such an interpretation would be discriminating and violative of Article 14 of the Constitution of India.    No two similarly situated employees could be discriminated on the nomenclature or terminology of their cessation from service".

".....the grant of pensionary benefit to the employees, who had rendered service and retired after putting in qualifying service, cannot  be so construed as to deprive ofan employee of pension, who had voluntarily had given up his service.   The Apex Court even in case of "resignation" has treated that, it is the qualifying service that is important and not the terms of cessation of the employment, it is in this context observed that the Court will have to  construe the statutory provision having regard to the purpose of the statue.  Thus, from the said observation, it is clear that, the Court must consider the purpose for which the scheme is introduced.   This Court following the decision in Sheel Kumar's casein WP No 24158-24160/2011 has held that, even if it is resignation, if the officer has rendered qualifying service, he is entitled for the benefits under the pension scheme". 

In the final it reads "....I do not find there is any distinction between the employees retired under the VRS or under Exit Policy Scheme or under any other nomenclature as long as they have put in number of qualifying service and eligible for voluntary retirement, all will form class by themselves and are covered under the joint note, to opt for pension under the Pension Regulations 1995".

"Banks are directed to accept their option and grant pension by including them under the Pension Scheme in terms of the joint note and the Pension Regulations".

"Learned Counsel for the IBA submits that, three months' time may be given for compliance.   Accordingly, three months' time is granted for compliance from the date of receipt copy of this order".

A reading of the above indicates that HC has given the directions to Banks in the presence of counsel of IBA, and 2nd pension option needs to be accepted within three months from the receipt of the order.   The order is dated 30th August, 2012, and must have been delivered within few days thereafer.    Therefore, as per my interpretation, Banks (not necessarily through  IBA ) will have to comply with the orders and the process of accepting the 2nd Pension option must be completed within 3 months i.e. somewhere by the middel of December 2012.   Thus, Bank needs to issue circular immediately and last date for acceptance of 2nd pension option should be 1st / 2nd week of December, 2012.   However, some bankers and IBA may try to linger on with a plea that they are supposed to issue circular within 3 months and not complete the process.    UFBU and other union leaders needs to shed their ego and take up the issue on priority basis so that circular is issued by all banks before Diwali and left over bankers can have a stress free Diwali.

I wish all the 2nd pension left over bankers a good luck and hope this Diwali will bring greater joy.

Download : A Copy of the Karnataka High Court judgement WP 7245/2011