M.R.PRABHAKAR vs. CANARA BANK .

1 REPORTABLE IN THE SUPREME COURT OF INDIA

M.R. Prabhakar and Others .. Appellants Versus Canara Bank and Others .. Respondents WITH Civil Appeal Nos._7185-7187 of 2012 [Arising out of SLP (C) Nos. 30975-30977 of 2008] Civil Appeal Nos. 7192-7193 of 2012 [Arising out of SLP (C) Nos. 30987-30988 of 2008] Civil Appeal Nos. 7194-7195 of 2012 [Arising out of SLP (C) Nos. 30989-30990 of 2008] JUDGMENT J U D G M E N T K. S. RADHAKRISHNAN, J. 1. Leave granted. Page 1 2 2. We may, for the disposal of these appeals, deal with the facts in Civil Appeals arising out of SLP (C) Nos. 30983-30986 of 2008, since

for pension in lieu of Contributory Provident Fund (for short ‘CPF’) of some officers of the Canara Bank who had resigned and stood relieved from their respective posts prior to 3.6.1993, i.e. prior to signing of the Statutory Settlement dated 29.10.1993 under the Industrial Disputes Act, 1947, the Joint Note dated 29.10.1993, followed by the Canara Bank Pension Regulations, 1995 (for short ‘Regulations 1995’), which was notified in the Gazette of India on 29.9.1995. 4. The learned single Judge of the High Court held in favour of the appellants but the Division Bench of the High Court held otherwise. JUDGMENT Hence, these appeals. 5. We may, as already indicated, refer to the facts of the case in civil appeals arising out of SLP (C) Nos. 30983-30986 of 2008. The appellants’ date of appointment and their resignation are as under:

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out that an employee who had resigned from the bank was not JUDGMENT disentitled to pension except by operation of Regulation 22. If this regulation was held operative against the appellants, it would result in absurd consequences since by forfeiture of entire past service, such employees would not be entitled to any pensionary benefits including gratuity and provident fund. Further, it was pointed out that Regulation 22 admittedly never existed when the appellants had submitted their resignation letters and, therefore, the said regulation Page 3 4 could not operate to disentitle the appellants from any pensionary benefits. Further, it was also pointed out when appellants had

Regulations, 1979 (for short ‘Regulations 1979’). Regulation 1979, it was pointed out, neither defined the expression ‘resignation’ legally nor the expression ‘voluntary retirement’. In other words, the concept of ‘voluntary retirement’ was required to be defined only because of the introduction of pension as a retiral benefit with effect from 29.9.1995. 6. Learned counsel appearing for the appellants submitted that, in the absence of legal definition of ‘voluntary retirement’ or in the absence of any legally prescribed consequence of ‘resignation’, it may JUDGMENT be understood in the sense of ‘voluntary retirement’ of service. Further, it was also urged that the conceptual difference between ‘resignation’ and ‘voluntary retirement’ comes in only if it is made by legal prescription and not in the ordinary sense as perceived in the realm of appointment. Learned counsel also pointed out that pension regulations must be read and interpreted keeping in mind its intended Page 4 5 object and cannot be applied to deprive those employees who left services honourably either on the grounds of superannuation,

New India Assurance Company Limited and Others (2011) 12 SCC 197 and submitted that the principle laid down in that judgment would squarely be applicable to the facts of the present case. Further, it was also pointed out that the beneficial construction placed by this Court in Madan Singh Shekhawat v. Union of India and Others (1996) 6 SCC 459 is also applicable by way of extending the pensionary benefits to the appellants. 7. Learned senior counsel appearing for the respondents banks submitted that the High Court had rightly denied the claim of pension JUDGMENT to the appellants who had resigned from their respective service before the settlement reached between All India Bank Officers Federation and Indian Bank Association (for short ‘IBA’) and that Regulations 1995 would not apply to the appellants. Further, it was pointed out that the appellants had resigned prior to 1.1.1993 and were not covered by the Statutory Settlement or the Joint Note dated Page 5 6 29.10.1993 and the Regulations 1995. It was pointed out that the reliance placed by the appellants either on Regulation 29 or Regulation

the respective banks with effect from 1.11.1993. Learned counsel appearing for the banks submitted that the judgment of this Court in UCO Bank and Others v. Sanwar Mal (2004) 4 SCC 412 squarely applies to the facts of the present case. In that case, the very same regulation came up for interpretation and the identical reliefs sought for, which were rejected by the Court. Further, it was also pointed out that Sheelkumar Jain’s case (supra) was interpreting an insurance scheme which is, not comparable with the Regulations 1995 applicable to the banks. JUDGMENT 8. The appellants, in these two main appeals were officers of the Canara Bank, who had resigned and stood relieved from their respective service between 24.7.1986 and 3.6.1993. IBA, representing 58 banks and their workmen had entered into a Memorandum of Settlement on 29.10.1993 under Section 2(p) and Section 18(1) of the Industrial Disputes Act, 1947 read with Rule 58 of Page 6 7 the Industrial Disputes (Central) Rules, 1957. During the course of negotiations of service conditions of the workmen employees in

provident fund. The pension scheme agreed to by IBA was to be broadly based on Central Government/Reserve Bank of India pattern, details of the scheme were worked out later. A Joint Note was also made with regard to the introduction of pension as a second retiral benefit in lieu of CPF. Clause (4) of the Joint Note reads as follows: “(iv) The Pension Scheme will also be extended to retired Officers’ who retired on or after 1.1.1986. They will be entitled for monthly pension as well as commutation facility as from 1.1.1993. Those officers who avail of the Pension Scheme will be required to refund Bank’s contribution to the Provident Fund with interest thereon drawn by them together with simple interest at 6% from the date of withdrawal of the Provident Fund to the date of refund.” JUDGMENT 9. In furtherance of the Statutory Settlement and Joint Note dated 29.10.1993, draft of the Pension Regulations was negotiated and settled. Clause 17(1), so far as it is relevant for the present purpose, is extracted hereunder: “17(1) Notwithstanding anything contained in the Service Regulations/Service Rules an employee may be Page 7 8 permitted to voluntarily retire after he has completed 20 years of qualifying service, after given three months’ notice in writing to the competent authority.”

section (2) of Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, the Board of Directors of the Canara bank, after consultation with the RBI and with the previous sanction of the Central Government, made the regulations called Canara Bank (Employees’) Pension Regulations, 1995. The same were made applicable to the employees’/officers and were notified in the Gazette of India on 29.9.1995. Chapter II of the Regulations deals with the application and eligibility, the operative portion of Regulation 3(1)(a) to 3(1)(c)reads as under: JUDGMENT “3. Application: These regulations shall apply to employees who,- (1) (a) were in the service of the Bank on or after the st 1 day of January 1986 but had retired before st the 1 day of November, 1993; and (b) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and (c) refund within sixty days after the expiry of the said period of one hundred and twenty days Page 8 9

XXX XXX XXX XXX XXX XXX” 11. Regulation 22, which finds a place in Chapter IV of the Regulations, reads as follows: “22 Forfeiture of service – (1). Resignation or dismissal or removal or termination of an employee from the service of the Bank shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits; JUDGMENT (2) An interruption in the service of a Bank employee entails forfeiture of his past service, expect in the following cases, namely :- (a) authorised leave of absence; (b) suspension, where it is immediately followed by reinstatement, whether in the same or a different post, or where the bank employee dies or is permitted to retire or is retired on attaining the age of compulsory retirement while under suspension; Page 9 10

(3) Notwithstanding anything contained in sub- regulation (2), the appointing authority may, by order, commute retrospectively the periods of absence without leave as extraordinary leave. (4) (a) In the absence of a specific indication to the contrary in the service record, an interruption between two spells of service rendered by a bank employee shall be treated as automatically condoned and the pre- interruption service treated as qualifying service; (b) Nothing in clause (a) shall apply to interruption caused by resignation, dismissal or Removal from the service or for participation in a strike: JUDGMENT Provided that before making an entry in the service record of the Bank employee regarding forfeiture of past service because of his participation in strike, an opportunity of representation may be given to such bank employees.” Page 10 11 12. Classes of Pension are dealt with in Chapter V of the Regulations. Regulation 28 deals with superannuation pension and the same reads as follows:

29 Pension on Voluntary Retirement – st (1) On or after the 1 day of November 1993, at any time after the an employee has completed twenty years of qualifying service he may, by giving notice of not less than three months in writing to the appointing authority, retire from service : Provided that this sub – regulation shall not apply to an employee who is on deputation or on study leave abroad unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year : JUDGMENT Provided further that this sub – regulation shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or public sector undertaking or company or institution or body, whether incorporated or not to which he is on deputation at the time of seeking voluntary retirement : Provided that this sub – regulation shall not apply to an employee who is deemed to have retired in accordance with clause (1) of regulation 2. Page 11 12 2. The notice of voluntary retirement given under sub – regulation (1) shall require acceptance by the appointing authority:

3. (a) An employee referred to in sub regulation (1) may make a request in writing to the writing to the appointing authority to accept notice of voluntary retirement of less than three months giving reasons therefore : (b) On receipt of a request under clause (a), the appointing authority may, subject to the provisions of sub – regulation (2), consider such request for the curtailment of the period of notice of three months on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of three months on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of three months. JUDGMENT 4. An employee, who has elected to retire under this regulation and has given necessary notice to that effect to the appointing authority, shall be precluded from withdrawing his notice except with the specific approval of such authority: Provided that the request for such withdrawal shall be made before the intended date of his retirement. Page 12 13 5. The qualifying service of an employee retiring

6. The pension of an employee retiring under this regulation shall be based on the average emoluments as defined under clause (d) of regulation 2 of these Regulations and the increase not exceeding five years in his qualifying service, shall not entitle him any notional fixation of pay for the purpose of calculating his pension.” 13. In order to appreciate the scope of the above mentioned Regulations, it is necessary to refer to some of the definition clauses. The word ‘retired’ is defined in Regulation 2(x) of the Regulations 1995, which reads as under: JUDGMENT “2(x) “retired” includes deemed to have retired under clause(l).” The word ‘retirement’ is defined under Regulation 2(y) of the Regulations 1995, which reads as follows: “2(y) “retirement” means cessation from bank’s service,- (a) On attaining the age of superannuation specified in Service Regulations or Settlements; Page 13 14

14. The appellants, in our view, did not retire from the service, but resigned from the service. Appellants tried to build up a case that in the absence of a legal definition of ‘voluntary retirement’ or in the absence of legally prescribed consequences of ‘resignation’, it must be understood in the sense of voluntary relinquishment of service. It was pointed out that there can be no distinction between ‘voluntary retirement’ and ‘resignation’ and those expressions are to be understood in their ordinary literal sense. 15. We find it difficult to accept the contentions raised by the JUDGMENT appellants. There is no ambiguity in the definition clause under Regulation 2(y) which has statutorily brought in the ‘voluntarily retirement’ as ‘retirement’. Though the concept of ‘resignation’ is well known in Service Jurisprudence, the same has not been brought within the definition of ‘retirement’ under Regulation 2(y). Further, the words ‘retired’ and ‘retirement’ have some resemblance in their Page 14 15 meanings, but not ‘resignation’. Regulation 3(1)(a) specifically used the expression ‘retirement’ and the expression ‘resignation’ has not

between these two concepts ‘resignation’ and ‘retirement’, in the

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(emphasis added) In the above mentioned judgment, this Court has also held that there are different yardsticks and criteria for submitting the resignation, vis- à-vis voluntary retirement and exceptions thereof. In that context, the scope of Regulation 22 of Regulations 1995 was also considered and the Court held as follows:

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provisions of the Regulations 1995 and after examining the meaning of JUDGMENT the expressions ‘resignation’ and ‘retirement’, held that since Regulation 22 provided for disqualification of employees who had resigned, such employees could not claim membership of the fund.

Page 17 18 requires reconsideration. We find it difficult to accept the contention raised by the learned counsel appearing for the appellants.

banks, had specifically referred to the words ‘resignation’, unlike Para JUDGMENT 5 of the Insurance Rules. Further, it is also to be noted that, in that judgment, this Court in Para 30 held that the Court will have to construe the statutory provisions in each case to find out whether the termination of service of an employee was a termination by way of resignation or a termination by way of voluntary retirement. Page 18 19

governed by the Regulations 1979. Regulation 20(2) of Regulations

Regulation 29 or Regulation 22 in support of their contentions, cannot JUDGMENT be accepted, since they are not covered by the scheme of pension introduced by the banks with effect from 1.11.1993.

dismissed, with no order as to costs. ……………………………….J. Page 19 20 (K.S. Radhakrishnan) ..………………………………J. (Dipak Misra) New Delhi, October 3, 2012 JUDGMENT Page 20