Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 256 OF 2014
(Arising out of S.L.P. (C) No.9953 of 2008)
National Insurance Co. Ltd. & Anr. …Appellants
Versus
Kirpal Singh …Respondent
With
CIVIL APPEAL NO. 257 OF 2014
(Arising out of S.L.P. (C) No.10548 of 2008)
United India Insurance Co. Ltd. & Ors. …Appellants
Versus
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Shamsher Singh Puri …
Respondent
And
CIVIL APPEAL NO. 258 OF 2014
(Arising out of S.L.P. (C) No.10756 of 2008)
The New India Assurance Co. Ltd. & Ors. …Appellants
Versus
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Davinder Singh …Respondent
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. The short question that falls for determination in these
appeals is whether the respondents who opted for voluntary
retirement from the service of the appellant-companies are
entitled to claim pension under the General Insurance
(Employees) Pension Scheme 1995. The High Court having
answered the question in the affirmative, the appellant-
Insurance Companies have appealed to assail that view.
3. The controversy arises in the following backdrop:
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4. In exercise of its powers under Section 17A of the
General Insurance Business (Nationalisation) Act, 1972, the
Central Government made what is described as General
Insurance Employee’s Special Voluntary Retirement Scheme,
2004 (hereinafter referred to as “SVRS of 2004 ”). Para 3 of
the scheme stipulating the eligibility conditions for employees
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who could opt for voluntary retirement from the services of
the insurance company is as under:
“Eligibility
(1) All permanent full time employees will be
eligible to seek special voluntary retirement
under this Scheme provided they have
attained the age of 40 years and completed 10
years of qualifying services as on the date of
notification.
(2) An employee who is under suspension or
against whom disciplinary proceedings are
pending or contemplated shall not be eligible
to opt for the scheme;
Provided that the case of an employee who is
under suspension or against whom disciplinary
proceeding is pending or contemplated made
be considered by the Board of the Company
concerned having regard to the facts and
circumstances of each case and the decision
taken by the Board shall be final.”
5. In para 5 of the scheme those seeking voluntary
retirement were held entitled to ex-gratia amount to be
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determined according to the said provision. In Para 6 of the
scheme were stipulated other benefits to which the
employees opting for voluntary retirement under the scheme
would be entitled. It reads as under:
“6. Other benefits.-
(1) An employee opting for the scheme shall also
be eligible for the following benefits in addition
to the ex-gratia amount mentioned in para 5
namely:-
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(a) Provident Fund,
(b) Gratuity as per Payment of Gratuity Act,
1972 (39 of 1972) or gratuity payable
under the Rationalisation Scheme, as
the case may be;
(c) Pension (including commuted value of
pension) as per General Insurance
(Employee’s) Pension Scheme 1995, if
eligible. However, the additional notional
benefit of the five years of added service
as stipulated in para 30 of the said
pension Scheme shall not be admissible
for the purpose of determining the
quantum of pension and commutation of
pension.
(d) Leave encashment.
(2) An employee who is opting for the scheme
shall not be entitled to avail Leave Travel
Subsidy and also encashment of leave while in
service during the period of sixty days from
the date of notification of this scheme.”
(emphasis supplied)
6. The respondents who opted for voluntary retirement in
terms of the SVRS of 2004 afore-mentioned appear to have
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claimed pension as one of the benefits admissible to them
under para 6 above. The claim was rejected by the
appellants forcing the respondents to agitate the matter
before the High Court in separate writ petitions filed by
th
them. The High Court has by a common order dated 25
January, 2008, allowed the said petitions holding the
respondents to be entitled to claim pension. The High Court
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has taken the view that para 6 of the SVRS of 2004 read
with para 14 of the General Insurance (Employees) Pension
Scheme 1995 entitled the employees to claim pension so
long as they had rendered a minimum of ten years of service
in the Corporation/Company from whose service they were
seeking retirement. Para 14 of the Pension Scheme 1995
reads as under:
“ Qualifying Service : Subject to the other condition
contained in this scheme, an employee who has
rendered a minimum ten years of service in the
Corporation or a Company, on the date of retirement
shall qualify for pension.”
7. A conjoint reading of para 6 of SVRS of 2004 and para
14 of the Pension Scheme 1995, would leave no manner of
doubt that any employee retiring from the service of the
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company/corporation would qualify for payment of pension if
he/she has rendered a minimum of ten years of service on
the date of retirement. The expression ‘retirement’ has been
defined in para 2 (t) of the Pension Scheme 1995 as under:
“2 Definition:- In this Scheme, unless the context
otherwise requires:-
xxx xxx xxx
(t) "retirement" means –
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(i) the retirement in accordance with the
provisions contained in paragraph 12 of
General Insurance (Rationalisation and
Revision of Pay Scales and Other Conditions of
Service of Supervisory, Clerical and
Subordinate Staff) Scheme,1974 notified under
the notification of Government of India, in the
Ministry of Finance(Department of Revenue
and Insurance) number S.O.326(E) dated the
27th May, 1974;
(ii) the retirement in accordance with the
provisions contained in paragraph 4 of the
General Insurance (Termination,
Superannuation and Retirement of Officers and
Development Staff) Scheme, 1976notified
under notification of Government of India, in
the Ministry of Finance (Department of
Economic Affairs) number S.O.627(E) dated
21st September,1976;
(iii) voluntary retirement in accordance with the
provisions contained in paragraph 30 of this
scheme;
8. It was contended on behalf of the appellant-companies
that in terms of para 6 of SVRS of 2004 (supra) pension will
be admissible to those seeking voluntary retirement only if
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they were eligible for the same under the Pension Scheme
1995. Para 30 of the Pension Scheme 1995 in turn made
only such employees eligible for pension who had completed
twenty years of qualifying service. Inasmuch as the
respondents had not admittedly completed twenty years of
qualifying service on the date of their voluntary retirement,
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they were not eligible for pension under the Pension Scheme
1995.
9. On behalf of the respondents, it was argued that the
respondents had not sought voluntary retirement in terms of
para 30 of the Pension Scheme 1995 which is a general
provision and which stipulates twenty years of qualifying
service for being eligible to claim pension nor was it a case
where the SVRS of 2004 either specifically or by necessary
implication adopted para 30 of the Pension Scheme 1995 for
determining the eligibility of those seeking retirement under
the said scheme. The respondents had, it was contended,
voluntarily retired pursuant to the SVRS of 2004 which was
different from what was envisaged under para 30 of the
Pension Scheme 1995. The condition of eligibility for pension
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stipulated under para 30 viz. twenty years of qualifying
service had, therefore, no application to the respondents
implying thereby that the claim for pension ought to be seen
in the light of Para 14 of the Pension Scheme 1995 treating
retirement under the Special Scheme of 2004 also as a
retirement for the purposes of that para.
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10. We find considerable force in the contention urged on
behalf of the respondents. The Pension Scheme 1995
provides for “superannuation pension” and “pension on
voluntary retirement”. Superannuation pension is regulated
by para 29 of the Pension Scheme 1995 while voluntary
retirement pension is governed by para 30 which read as
under:
“ 29. Superannuation Pension: Subject to the
other condition contained in this scheme, an
employee who has rendered a minimum ten years of
service in the Corporation or a Company, on the
date of retirement shall qualify for pension.
30. Pension on voluntary retirement : (1) At any
time after an employee has completed twenty years
of qualifying service, he may, by giving notice of not
less than ninety days, writing to the appointing
authority, retire from service.
xxx xxx xxx
(5) The qualifying service of an employee retiring
voluntarily under this paragraph shall be increased
by a period not exceeding five years, subject to the
condition that the total qualifying service rendered
by the employee shall not in any case exceed thirty
years and it does not take him beyond the date of
retirement.”
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(6) The pension of an employee retiring under this
paragraph shall be based on the average
emoluments as defined under clause (d) of
paragraph 2 of this scheme and the increase, not
exceeding five years in his qualifying service, shall
not entitle him to any notional fixation of pay for the
purpose of calculating his pension”
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11. The SVRS of 2004 does not obviously rest the claim for
payment of pension on any one of the above two provisions.
That is because what is claimed by the employees-
respondents before us is not superannuation pension nor is it
pension on voluntary retirement within the meaning of para
30 (supra). As a matter of fact, para 6 (1)(c) of the SVRS of
2004 specifically provides that the notional benefit of
additional five years to be added to the service of the retiring
employee as stipulated in para 30 of the pension scheme
shall not be admissible for purposes of determining the
quantum of pension and commutation of pension. It follows
that the SVRS of 2004 did not for the purposes of grant of
pension adopt the scheme underlying para 30 of the Pension
Scheme 1995. Such being the case, the question is whether
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the provisions of para 6 of the SVRS of 2004 read with para
14 of the Pension Scheme 1995 which stipulates only ten
years qualifying service for an employee who retires from
service to entitle him to claim pension would entitle those
retiring pursuant to the SVRS of 2004 also to claim pension.
Our answer is in the affirmative. If paras 29 and 30 do not
govern the entitlement for those seeking the benefit of SVRS
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of 2004, the only other provision which can possibly be
invoked for such pension is para 14 (supra) that prescribes a
qualifying service of ten years only as a condition of
eligibility. The only impediment in adopting that
interpretation lies in the use of the word ‘retirement’ in Para
14 of the Pension Scheme 1995. A restricted meaning to that
expression may mean that Para 14 provides only for
retirements in terms of Para (2)(t) (i) to (iii) which includes
voluntary retirement in accordance with the provisions
contained in Para 30 of the Pension Scheme. There is,
however, no reason why the expression ‘retirement’ should
receive such a restricted meaning especially when the
context in which that expression is being examined by us
would justify a more liberal interpretation; not only because
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the provision for payment of pension is a beneficial provision
which ought to be interpreted more liberally to favour grant
rather than refusal of the benefit but also because the
Voluntary Retirement Scheme itself was intended to reduce
surplus manpower by encouraging, if not alluring employees
to opt for retirement by offering them benefits like ex-gratia
payment and pension not otherwise admissible to the
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employees in the ordinary course. We are, therefore, inclined
to hold that the expression “Retirement” appearing in Para
14 of the Pension scheme 1995 should not only apply to
cases which fall under Para 30 of the said scheme but also to
a case falling under a Special Voluntary Retirement Scheme
of 2004. So interpreted, those opting for voluntary
retirement under the said SVRS of 2004 would also qualify
for payment of pension as they had put in the qualifying
service of ten years stipulated under Para 14 of the Pension
Scheme 1995.
12. We are mindful of the fact that the word ‘means’ used
in statutory definitions generally implies that the definition is
exhaustive. But that general rule of interpretation is not
without an exception. An equally well-settled principle of
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interpretation is that the use of the word ‘means’ in a
statutory definition notwithstanding the context in which the
expression is defined cannot be ignored in any forensic
exercise meant to discover the real purport of an expression.
Lord Denning’s observations in Hotel and Catering
Industry Training Board v. Automobile Proprietary
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Ltd. (1968) 1 W.L.R. 1526 are, in this regard, apposite
when he said:
“It is true that 'the industry' is defined; but a definition
is not to be read in isolation. It must be read in the
context of the phrase which it defines, realising that
the function of a definition is to give precision and
certainty to a word or phrase which would otherwise be
vague and uncertain-but not to contradict it or
supplant it altogether”
13. In The Vanguard Fire & General Insurance Co. Ltd.
Madras v. Fraser & Ross & Anr. AIR 1960 SC 971 one
of the questions that fell for determination before this Court
was whether the definition of the word “insurer” included a
person intending to carry on a business or a person who has
ceased to carry on a business. It was contended that the
definition started with the words “insurer means” and,
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therefore, is exhaustive. This Court repelling that contention
held that statutory definitions or abbreviations must be read
subject to the qualification variously expressed in the
definition clauses which created them and it may be that
even where the definition is exhaustive inasmuch as the
word defined is said to mean a certain thing, it is possible for
the word to have a somewhat different meaning in different
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sections of the Act depending upon the subject or the
context. That is why all definitions in statutes generally begin
with the qualifying words “unless there is anything repugnant
in the subject or context”. This Court observed:
“The main basis of this contention is the definition of
the word "insurer" in the s.2(9) of the Act. It is
pointed out that that definition begins with the
words "insurer means" and is therefore exhaustive.
It may be accepted that generally the word "insurer"
has been defined for the purposes of the Act to
mean a person or body corporate, etc., which is
actually carrying on the business of insurance, i.e.,
the business of effecting contracts of insurance of
whatever kind they might be. But s.2 begins with
the words "in this Act, unless there is anything
repugnant in the subject or context" and then come
the various definition clauses of which (9) is one. It
is well settled that all statutory definitions or
abbreviations must be read subject to the
qualification variously expressed in the definition
clauses which created them and it may be that even
where the definition is exhaustive inasmuch as the
word defined is said to mean a certain thing, it is
possible for the word to have a somewhat different
meaning in different sections of the Act depending
upon the subject or the context. That is why all
definitions in statues generally being with the
qualifying words similar to the words used in the
present case, namely, unless there is anything
repugnant in the subject or context. therefore in
finding out the meaning to the word "insurer" in
various sections of the Act, the meaning to be
ordinarily given to it is that given in the definition
clause. But this is not inflexible and there may be
sections in the Act where the meaning may have to
be departed from on account of the subject or
context in which the word has been used and that
will be giving effect to the opening sentence in the
definition section, namely, unless there is anything
repugnant in the subject or context. In view of this
qualification, the court has not only to look at the
words but also to look at the context, the collocation
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and the object of such words relating to such matter
and interpret the meaning intended to be conveyed
by the use of the words under the circumstances.
Therefore, though ordinarily the word "insurer" as
used in the Act would mean a person or body
corporate actually carrying on the business of
insurance it may be that in certain sections the word
may have a somewhat different meaning.”
(emphasis supplied)
14. To the same effect is the decision of this Court in Paul
Enterprises & Ors. v. Rajib Chatterjee and Co. & Ors.
(2009) 3 SCC 709 where this Court once again reiterated
that the interpretation clause should be given a contextual
meaning and that all statutory definitions must be read
subject to the qualification variously expressed in the
interpretation clause, which created them. In State of
Maharashtra & Anr. v. B.E. Billimoria & Ors. (2003) 7
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SCC 336 also this Court restated the principle that meaning
of an expression must be determined in the context in which
the same has been used. Reference may also be made to
K.V. Muthu v. Angamuthu Ammal (1997) 2 SCC 53
where this Court made the following apposite observations:
“Apparently, it appears that the definition is
conclusive as the word "means" has been used to
specify the members, namely, spouse, son,
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daughter, grand-child or dependent parent, who
would constitute the family. Section 2 of the Act in
which various terms have been defined, open with
the words "in this Act, unless the context otherwise
requires" which indicates that the definitions, as for
example, that of "Family", which are indicated to be
conclusive may not be treated to be conclusive if it
was otherwise required by the context. This implies
that a definition, like any other word in a statute,
has to be read in the light of the context and
scheme of the Act as also the object for which the
Act was made by the Legislature.
While interpreting a definition, it has to be borne in
mind that the interpretation placed on it should not
only be not repugnant to the context, it should also
be such as would aid the achievement of the
purpose which is sought to be served by the Act. A
construction which would defeat or was likely to
defeat the purpose of the Act has to be ignored and
not accepted.
Where the definition or expression, as in the instant
case, is preceded by the words "unless the context
otherwise requires", the said definition set out in the
Section is to be applied and given effect to but this
rule, which is the normal rule may be departed from
if there be something in the context to show that
the definition could not be applied”.
(emphasis supplied)
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15. We may also gainfully refer to the decision of this Court
in Reserve Bank of India v. Peerless General Finance
(1987) 1 SCC 424 where this Court declared that the best
interpretation is the one in which the Court relies upon not
only the test but also the context in which the provision has
been made. We can do no better than to extract the
following passage from that decision:
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“Interpretation must depend on the text and the
context. They are the bases of interpretation. One
may well say if the text is the texture, context is
what gives the colour. Neither can be ignored. Both
are important. That interpretation is best which
makes the textual interpretation match the
contextual. A statute is best interpreted when we
know why it was enacted. With this knowledge, the
statute must be read, first as a whole and then
section by section, clause by clause, phrase by
phrase and word by word. If a statute is looked at,
in the context of its enactment, with the glasses of
the statutemaker, provided by such context, its
scheme, the sections, clauses, phrases and words
may take colour and appear different than when the
statute is looked at without the glasses provided by
the context. With these glasses we must look at the
Act as a whole and discover what each section, each
clause, each phrase and each word is meant and
designed to say as to fit into the scheme of the
entire Act. No part of a statute and no word of a
statute can be construed in isolation. Statutes have
to be construed so that every word has a place and
everything is in its place.”
(emphasis supplied)
16. In the case at hand Para 2 of the Pension Scheme 1995
(extracted earlier) defines the expressions appearing in the
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scheme. But what is important is that such definitions are
good only if the context also supports the meaning assigned
to the expressions defined by the definition clause. The
context in which the question whether pension is admissible
to an employee who has opted for voluntary retirement
under the 2004 scheme assumes importance as Para 2 of the
scheme starts with the words “In this scheme, unless the
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context otherwise requires”. There is nothing in the context
of 1995 Scheme which would exclude its beneficial provisions
from application to employees who have opted for voluntary
retirement under the Special Scheme 2004 or vice versa.
The term retirement must in the context of the two schemes,
and the admissibility of pension to those retiring under the
SVRS of 2004, include retirement not only under Para 30 of
the Pension Scheme 1995 but also those retiring under the
Special Scheme of 2004. That apart any provision for
payment of pension is beneficial in nature which ought to
receive a liberal interpretation so as to serve the object
underlying not only of the Pension Scheme 1995 but also any
special scheme under which employees have been given the
option to seek voluntary retirement upon completion of the
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prescribed number of years of service and age.
17. In the result these appeals fail and are hereby
dismissed but in the circumstances without any order as to
costs.
……………………….……….…..…J.
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(T.S. THAKUR)
…………..…………………..…..…J.
(VIKRAMAJIT SEN)
New Delhi
January 10, 2014
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