Full Judgment Text
Reportable
2025 INSC 848
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
(Arising out of SLP (C) No.________of 2025
(@ D No.39502/2024)
Vijay Kumar …..Appellant(s)
VERSUS
Central Bank of India & Ors. …..Respondent(s)
J U D G M E N T
Joymalya Bagchi, J.
Delay condoned. Leave granted.
1.
2. Appeal is directed against judgment dated 22.04.2024 passed
by the Patna High Court to the extent the Court upheld
reduction of onethird of the pension payable to the appellant
under the Central Bank of India (Employees’) Pension
1
Regulations, 1995 .
3. Appellant while working as Chief Manager, a scale IV officer in
Signature Not Verified
Digitally signed by
SATISH KUMAR YADAV
Date: 2025.07.15
17:19:23 IST
Reason:
the respondent No.1bank was served with a Memorandum of
1 Hereinafter, Pension Regulations.
Page 1 of 14
Charge alleging that, during his tenure as Branch Manager,
Dhanbad Branch he sanctioned loans in respect of 12
accounts, inter alia , without proper appraisal of income, non
verification of KYC compliance, without postsanction
inspection etc. exposing the bank to potential financial loss of
huge amount.
4. A.K. Roy, Assistant General Manager (a scale V officer) was
appointed as the Inquiry Authority (IA). During the inquiry,
appellant attained superannuation on 30.11.2014 but the
enquiry was continued under Regulation 20(3)(iii) of Central
2
Bank of India (Officers’) Service Regulations, 1979 . He
submitted inquiry report holding the appellant failed to
discharge his duties with utmost integrity and honesty which
was unbecoming of a Bank officer and exposed the Bank to
huge financial loss for his pecuniary gain. Inquiry report was
served on the appellant, and he replied to it. After considering
his reply disciplinary authority i.e., Deputy General Manager (a
scale VI officer) upheld the findings of the inquiry officer and
imposed major penalty of compulsory retirement under Rule 4
(h) of Central Bank of India Officer Employees’ (Discipline and
2 Hereinafter, Service Regulations.
Page 2 of 14
3
Appeal) Regulations, 1976 with effect from date of
superannuation. Appellant submitted an appeal before
appellate authority i.e., Field General Manager (a scale VII
officer).
During pendency of the appeal, Regional Manager, Purnea, a
5.
scale IV officer, i.e., equivalent to scale of the appellant, on
05.08.2015 recommended minimum payable pension under
compulsory retirement i.e., twothird pension to the appellant.
Field General Manager by order dated 07.08.2015 concurred
with the Regional Manager and recommended award of two
third compulsory retirement pension. Thereafter, on
30.12.2015 the said Field General Manager as the appellate
authority dismissed the appellant’s appeal and upheld the
penalty imposed on the latter.
6. The appellant initially approached the High Court challenging
validity of Regulation 20(3)(iii) of Service Regulations which
enabled the Bank to continue disciplinary proceedings even
after superannuation and for setting aside the order of
compulsory retirement including disbursal of full retiral
3 Hereinafter, Discipline and Appeal Regulations.
Page 3 of 14
benefits but subsequently he restricted his challenge only to
disbursal of full retiral benefits.
7. During hearing High Court was informed while the Bank had
not passed any order forfeiting gratuity, it had taken decision
to award twothird of the pension payable to the appellant. In
these circumstances, High Court while directing release of
gratuity upheld the decision of the Bank to reduce onethird of
the pension payable to the appellant.
Being aggrieved by the reduction of onethird pension,
8.
appellant has approached this Court. Bank has contested the
appellant’s plea and produced additional documents, namely,
recommendation letter of Regional Manager, Purnea for grant
of minimum pension and the sanction letter of such pension
by Field General Manager awarding twothird pension to the
appellant.
9. Mr. Neeraj Shekhar contended pension is not a bounty and
appellant’s right to pension is constitutionally protected under
Article 300A. Such right could not be taken away save and
except by a clear prescription of law. High Court erred in
holding that a compulsorily retired employee is not entitled to
pension at all unless an order under regulation 33(1) of the
Page 4 of 14
Pension Regulations is passed. Regulation 33 (1) and (2) must
be harmoniously construed to mean in cases where penalty of
compulsory retirement is imposed, such employee has a right
to receive pension not less than twothird of the full pension
and such deduction can be made only after prior consultation
with the Board of Directors.
10. Per contra, Mr. Dhruv Mehta, learned Senior Counsel
submitted a plain reading of regulation 33 (1) and (2) would
show the clauses are mutually exclusive and operate in
different circumstances which do not overlap each other. As
per clause (1), an authority higher than the authority
competent to impose compulsory retirement penalty may grant
pension at a rate not less than twothird whereas clause (2)
permits the competent authority awarding compulsory
retirement to award less than full pension in exercise of its
original, appellate or reviewing powers. Only in the latter case
consultation with Board of Directors is necessary. As the
pension was reduced by the Field General Manager, a scale VII
officer who is an authority higher in rank than the disciplinary
authority, a scale VI officer no prior consultation was
Page 5 of 14
necessary, and the impugned decision did not call for
interference.
11. The controversy centres around interpretation of regulation
33 of the Pension Regulations which provides for compulsory
retirement pension as follows:
“33. Compulsory Retirement Pension 1. An employee
compulsorily retired from service as a penalty on or after 1st
day of November, 1993 in terms of Central Bank of India
Officer Employees' (Discipline and Appeal) Regulations, 1976
or awards/settlements may be granted by the authority
higher than the authority competent to impose such penalty,
pension at a rate not less than twothirds and not more than
full pension admissible to him on the date of his compulsory
retirement if otherwise he was entitled to such pension on
superannuation on that date.
2. Whenever in the case of a bank employee the Competent
Authority passes an order (whether original, appellate or in
exercise of power of review) awarding a pension less than the
full compensation pension admissible under these
regulations, the Board of Directors shall be consulted before
such order is passed.
3. A pension granted or awarded under clause (1) or, as the
case may be, under clause (2), shall not be less than the
amount of rupees three hundred and seventyfive per
mensem.”
Clause (1) provides for granting pension at a rate not less
12.
than twothird and not more than full pension by an authority
higher than the authority competent to impose penalty of
compulsory retirement. Clause (2) enjoins whenever a
competent authority passes an order awarding pension less
than full compensation pension in exercise of original,
Page 6 of 14
appellate or review powers, Board of Directors must be
consulted before such order is passed. In no case the pension
awarded shall be less than Rs.375/ per mensem.
‘Competent Authority’ is defined in both Discipline and
13.
Appeal Regulations and Pension Regulations as an authority
appointed by the Board for the purpose of such regulations. In
the Discipline and Appeal Regulations, it is further clarified
Competent Authority must be superior to the delinquent and
not an officer holding rank lower than scale IV officer. Clause
4
3(b) of Discipline and Appeal Regulations read with Schedule
shows that an officer not below rank of Assistant General
Manager and holding a rank higher than the disciplinary
authority is the appellate authority under such regulation. A
combined reading of the provisions in both the regulations
would indicate a Field General Manager (holding a rank
superior to disciplinary authority and higher than Assistant
General Manager) is not only an authority superior to the
disciplinary authority empowered to reduce pension under
clause (1) but also the appellate authority under Discipline
4 Schedule to Discipline and Appeal Regulations “2. Any Officer employee of the Bank
higher in rank and status than the Disciplinary Authority but no lower in rank and status
than an Assistant General Manager shall be competent to act as the Appellate Authority
within the meaning of Regulation 17.”
Page 7 of 14
and Appeal Regulations who could exercise appellate powers
to reduce pension under clause (2) of Pension Regulations.
14. The bank would argue as pension was reduced under
regulation 33(1) by Field General Manager as an authority
superior to disciplinary authority competent to impose
penalty, no prior consultation with Board was necessary,
unlike cases where Competent Authority i.e., disciplinary
authority while awarding compulsory retirement directs
pension less than full compensation pension.
Such argument is fallacious for following reasons. Clause
15.
(2) permits the Competent Authority to award pension in
exercise of not only original but also appellate or reviewing
powers. If the expression ‘Competent Authority’ in clause (2) is
restricted to disciplinary authority alone, reduction of pension
in exercise of appellate or review power would become
nugatory. Any interpretation which renders words or
5
expressions in a statute otiose ought to be eschewed.
16. Given this situation to accept the bank’s interpretation
that the two clauses ought to be read independent of one
another would give rise to a piquant situation where the self
5 Rao Shiv Bahadur Singh v. State of Uttar Pradesh, (1953) 2 SCC 111.
Page 8 of 14
same authority, i.e., Field General Manager reducing pension
under clause (1) would not require prior consultation with the
Board which is mandatory while exercising similar power
under clause (2). To avoid this anomaly whenever a superior
authority reducing pension under regulation 33(1) is also
appellate authority or reviewing authority who is empowered
to exercise power under clause (2), the requirement of prior
consultation with the Board must be held to be mandatory,
failing which requirement of such prior consultation may be
circumvented by the bank to the prejudice of the employee.
There is no cavil that pension is not a discretion of the
17.
employer but a valuable right to property and can be denied
only through authority of law. When an authority is vested
with the discretion to grant pension less than full pension
admissible under the Pension Regulations, all procedural
safeguards in favour of the employee including prior
consultation must be strictly followed.
18 . High Court failed to read the regulation in its proper
perspective and went a step ahead to hold that a compulsorily
retired employee would not be entitled to any pension unless an
order is passed under regulation 33 (1). A combined reading of
Page 9 of 14
the clauses in regulation 33 clearly indicates that the pension
payable to an employee who has been compulsorily retired as a
penalty shall not be less than twothird of his full pension or Rs.
375 per mensem, whichever is higher. The word ‘ occurring
may’
in clause (1) does not give discretion to superior authority to
award pension less than twothird of the full pension. High
Court misinterpreted the word ‘may’ in the clause to hold that
grant of pension is discretionary. The word ‘may’ must be read
in its proper context, that is to say, it was used in the regulation
not to vest discretion in the superior authority to grant pension
less than twothird of full pension payable but to clarify that the
aforesaid clause will not entitle a compulsorily retired employee
to pension if he is not otherwise entitled to such pension on
superannuation on that day. For example, if an employee is
compulsorily retired without completing ‘qualifying service’
making him eligible to pension under the regulations.
19. In fine , we hold clause (1) and clause (2) of regulation 33
must be read conjointly and in all cases when the full pension
admissible to a compulsorily retired employee under the
regulations is reduced, a prior consultation with the Board is
necessary.
Page 10 of 14
20. It would be argued the Field General Manager’s order to
reduce pension may be placed before the Board for
expost
facto approval. Whether ‘prior consultation’ is mandatory or a
post facto approval would suffice would depend on various
factors including nature of consultation, status of the
authority consulted, and the rights affected by the decision.
. A plain reading of regulation 33 would show award of
21
pension less than full pension is to be done with prior
consultation of the Board of Directors. Such prior consultation
with the highest authority of the Bank i.e., Board of Directors
must be understood as a valuable mandatory safeguard before
an employee’s constitutional right to pension is curtailed. In
these circumstances, a post facto approval cannot be a
substitute of prior consultation with the Board before the
decision is made. Reference may be made to
Indian
Administrative Service (S.C.S.) Association, U.P. & Ors. vs.
6
Union of India & Ors. wherein the parameters to decide
whether prior consultation is mandatory or directory have
been succinctly elucidated:
6 (1993) Supp (1) SCC 730.
Page 11 of 14
“26. The result of the above discussion leads to the following
conclusions:
(1) Consultation is a process which requires meeting of minds
between the parties involved in the process of consultation on
the material facts and points involved to evolve a correct or at
least satisfactory solution. There should be meeting of minds
between the proposer and the persons to be consulted on the
subject of consultation. There must be definite facts which
constitute the foundation and source for final decision. The
object of the consultation is to render consultation meaningful to
serve the intended purpose. Prior consultation in that behalf is
mandatory.
(2) When the offending action affects fundamental rights or to
effectuate builtin insulation, as fair procedure, consultation is
mandatory and nonconsultation renders the action ultra vires
or invalid or void.
(3) When the opinion or advice binds the proposer, consultation
is mandatory and its infraction renders the action or order
illegal.
(4) When the opinion or advice or view does not bind the person
or authority, any action or decision taken contrary to the advice
is not illegal, nor becomes void.
(5) When the object of the consultation is only to apprise of the
proposed action and when the opinion or advice is not binding
on the authorities or person and is not bound to be accepted,
the prior consultation is only directory. The authority proposing
to take action should make known the general scheme or
outlines of the actions proposed to be taken be put to notice of
the authority or the persons to be consulted; have the views or
objections, take them into consideration, and thereafter, the
authority or person would be entitled or has/have authority to
pass appropriate orders or take decision thereon. In such
circumstances it amounts to an action “after consultation”.
(6) No hard and fast rule could be laid, no useful purpose would
be served by formulating words or definitions nor would it be
appropriate to lay down the manner in which consultation must
take place. It is for the Court to determine in each case in the
light of its facts and circumstances whether the action is “after
consultation”; “was in fact consulted” or was it a “sufficient
consultation”.
(7) Where any action is legislative in character, the consultation
envisages like one under Section 3(1) of the Act, that the
Central Government is to intimate to the State Governments
concerned of the proposed action in general outlines and on
receiving the objections or suggestions, the Central Government
or Legislature is free to evolve its policy decision, make
Page 12 of 14
appropriate legislation with necessary additions or modification
or omit the proposed one in draft bill or rules. The revised draft
bill or rules, amendments or additions in the altered or modified
form need not again be communicated to all the concerned
State Governments nor have prior fresh consultation. Rules or
Regulations being legislative in character, would tacitly receive
the approval of the State Governments through the people's
representatives when laid on the floor of each House of
Parliament. The Act or the Rule made at the final shape is not
rendered void or ultra vires or invalid for nonconsultation.”
Mr. Mehta finally in a last bid endeavour requested us to invoke
22.
powers under Article 142 to do complete justice and endorse the
decision of the reduction of pension in the present case.
23. Though it is claimed that the delinquent acts of the appellant
had caused an approximate loss to the tune of Rs. 3.26 crores to
the bank, no evidence relating to the computation of such loss was
either considered by the disciplinary authority or by the appellate
authority. Further, no opportunity of hearing was given by the
authorities prior to reducing his pension. No exceptional case to
exercise our extraordinary powers under Article 142 is made out.
Accordingly, we allow the appeal and set aside the order of the
24.
High Court and order of the Field General Manager dated
07.08.2015 reducing pension without prior consultation of the
Board of Directors. It shall be open to the Bank to take appropriate
decision regarding reduction of pension after giving an opportunity
Page 13 of 14
of hearing to the appellant and with prior consultation of the Board
within two months from the date of this judgment failing which the
appellant shall be entitled to full pension from the date of
superannuation.
….……..…..……...……………………….J.
( PAMIDIGHANTAM SRI NARASIMHA)
….……..…..……...……………………….J
(JOYMALYA BAGCHI)
New Delhi;
July 15, 2025.
Page 14 of 14
2025 INSC 848
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2025
(Arising out of SLP (C) No.________of 2025
(@ D No.39502/2024)
Vijay Kumar …..Appellant(s)
VERSUS
Central Bank of India & Ors. …..Respondent(s)
J U D G M E N T
Joymalya Bagchi, J.
Delay condoned. Leave granted.
1.
2. Appeal is directed against judgment dated 22.04.2024 passed
by the Patna High Court to the extent the Court upheld
reduction of onethird of the pension payable to the appellant
under the Central Bank of India (Employees’) Pension
1
Regulations, 1995 .
3. Appellant while working as Chief Manager, a scale IV officer in
Signature Not Verified
Digitally signed by
SATISH KUMAR YADAV
Date: 2025.07.15
17:19:23 IST
Reason:
the respondent No.1bank was served with a Memorandum of
1 Hereinafter, Pension Regulations.
Page 1 of 14
Charge alleging that, during his tenure as Branch Manager,
Dhanbad Branch he sanctioned loans in respect of 12
accounts, inter alia , without proper appraisal of income, non
verification of KYC compliance, without postsanction
inspection etc. exposing the bank to potential financial loss of
huge amount.
4. A.K. Roy, Assistant General Manager (a scale V officer) was
appointed as the Inquiry Authority (IA). During the inquiry,
appellant attained superannuation on 30.11.2014 but the
enquiry was continued under Regulation 20(3)(iii) of Central
2
Bank of India (Officers’) Service Regulations, 1979 . He
submitted inquiry report holding the appellant failed to
discharge his duties with utmost integrity and honesty which
was unbecoming of a Bank officer and exposed the Bank to
huge financial loss for his pecuniary gain. Inquiry report was
served on the appellant, and he replied to it. After considering
his reply disciplinary authority i.e., Deputy General Manager (a
scale VI officer) upheld the findings of the inquiry officer and
imposed major penalty of compulsory retirement under Rule 4
(h) of Central Bank of India Officer Employees’ (Discipline and
2 Hereinafter, Service Regulations.
Page 2 of 14
3
Appeal) Regulations, 1976 with effect from date of
superannuation. Appellant submitted an appeal before
appellate authority i.e., Field General Manager (a scale VII
officer).
During pendency of the appeal, Regional Manager, Purnea, a
5.
scale IV officer, i.e., equivalent to scale of the appellant, on
05.08.2015 recommended minimum payable pension under
compulsory retirement i.e., twothird pension to the appellant.
Field General Manager by order dated 07.08.2015 concurred
with the Regional Manager and recommended award of two
third compulsory retirement pension. Thereafter, on
30.12.2015 the said Field General Manager as the appellate
authority dismissed the appellant’s appeal and upheld the
penalty imposed on the latter.
6. The appellant initially approached the High Court challenging
validity of Regulation 20(3)(iii) of Service Regulations which
enabled the Bank to continue disciplinary proceedings even
after superannuation and for setting aside the order of
compulsory retirement including disbursal of full retiral
3 Hereinafter, Discipline and Appeal Regulations.
Page 3 of 14
benefits but subsequently he restricted his challenge only to
disbursal of full retiral benefits.
7. During hearing High Court was informed while the Bank had
not passed any order forfeiting gratuity, it had taken decision
to award twothird of the pension payable to the appellant. In
these circumstances, High Court while directing release of
gratuity upheld the decision of the Bank to reduce onethird of
the pension payable to the appellant.
Being aggrieved by the reduction of onethird pension,
8.
appellant has approached this Court. Bank has contested the
appellant’s plea and produced additional documents, namely,
recommendation letter of Regional Manager, Purnea for grant
of minimum pension and the sanction letter of such pension
by Field General Manager awarding twothird pension to the
appellant.
9. Mr. Neeraj Shekhar contended pension is not a bounty and
appellant’s right to pension is constitutionally protected under
Article 300A. Such right could not be taken away save and
except by a clear prescription of law. High Court erred in
holding that a compulsorily retired employee is not entitled to
pension at all unless an order under regulation 33(1) of the
Page 4 of 14
Pension Regulations is passed. Regulation 33 (1) and (2) must
be harmoniously construed to mean in cases where penalty of
compulsory retirement is imposed, such employee has a right
to receive pension not less than twothird of the full pension
and such deduction can be made only after prior consultation
with the Board of Directors.
10. Per contra, Mr. Dhruv Mehta, learned Senior Counsel
submitted a plain reading of regulation 33 (1) and (2) would
show the clauses are mutually exclusive and operate in
different circumstances which do not overlap each other. As
per clause (1), an authority higher than the authority
competent to impose compulsory retirement penalty may grant
pension at a rate not less than twothird whereas clause (2)
permits the competent authority awarding compulsory
retirement to award less than full pension in exercise of its
original, appellate or reviewing powers. Only in the latter case
consultation with Board of Directors is necessary. As the
pension was reduced by the Field General Manager, a scale VII
officer who is an authority higher in rank than the disciplinary
authority, a scale VI officer no prior consultation was
Page 5 of 14
necessary, and the impugned decision did not call for
interference.
11. The controversy centres around interpretation of regulation
33 of the Pension Regulations which provides for compulsory
retirement pension as follows:
“33. Compulsory Retirement Pension 1. An employee
compulsorily retired from service as a penalty on or after 1st
day of November, 1993 in terms of Central Bank of India
Officer Employees' (Discipline and Appeal) Regulations, 1976
or awards/settlements may be granted by the authority
higher than the authority competent to impose such penalty,
pension at a rate not less than twothirds and not more than
full pension admissible to him on the date of his compulsory
retirement if otherwise he was entitled to such pension on
superannuation on that date.
2. Whenever in the case of a bank employee the Competent
Authority passes an order (whether original, appellate or in
exercise of power of review) awarding a pension less than the
full compensation pension admissible under these
regulations, the Board of Directors shall be consulted before
such order is passed.
3. A pension granted or awarded under clause (1) or, as the
case may be, under clause (2), shall not be less than the
amount of rupees three hundred and seventyfive per
mensem.”
Clause (1) provides for granting pension at a rate not less
12.
than twothird and not more than full pension by an authority
higher than the authority competent to impose penalty of
compulsory retirement. Clause (2) enjoins whenever a
competent authority passes an order awarding pension less
than full compensation pension in exercise of original,
Page 6 of 14
appellate or review powers, Board of Directors must be
consulted before such order is passed. In no case the pension
awarded shall be less than Rs.375/ per mensem.
‘Competent Authority’ is defined in both Discipline and
13.
Appeal Regulations and Pension Regulations as an authority
appointed by the Board for the purpose of such regulations. In
the Discipline and Appeal Regulations, it is further clarified
Competent Authority must be superior to the delinquent and
not an officer holding rank lower than scale IV officer. Clause
4
3(b) of Discipline and Appeal Regulations read with Schedule
shows that an officer not below rank of Assistant General
Manager and holding a rank higher than the disciplinary
authority is the appellate authority under such regulation. A
combined reading of the provisions in both the regulations
would indicate a Field General Manager (holding a rank
superior to disciplinary authority and higher than Assistant
General Manager) is not only an authority superior to the
disciplinary authority empowered to reduce pension under
clause (1) but also the appellate authority under Discipline
4 Schedule to Discipline and Appeal Regulations “2. Any Officer employee of the Bank
higher in rank and status than the Disciplinary Authority but no lower in rank and status
than an Assistant General Manager shall be competent to act as the Appellate Authority
within the meaning of Regulation 17.”
Page 7 of 14
and Appeal Regulations who could exercise appellate powers
to reduce pension under clause (2) of Pension Regulations.
14. The bank would argue as pension was reduced under
regulation 33(1) by Field General Manager as an authority
superior to disciplinary authority competent to impose
penalty, no prior consultation with Board was necessary,
unlike cases where Competent Authority i.e., disciplinary
authority while awarding compulsory retirement directs
pension less than full compensation pension.
Such argument is fallacious for following reasons. Clause
15.
(2) permits the Competent Authority to award pension in
exercise of not only original but also appellate or reviewing
powers. If the expression ‘Competent Authority’ in clause (2) is
restricted to disciplinary authority alone, reduction of pension
in exercise of appellate or review power would become
nugatory. Any interpretation which renders words or
5
expressions in a statute otiose ought to be eschewed.
16. Given this situation to accept the bank’s interpretation
that the two clauses ought to be read independent of one
another would give rise to a piquant situation where the self
5 Rao Shiv Bahadur Singh v. State of Uttar Pradesh, (1953) 2 SCC 111.
Page 8 of 14
same authority, i.e., Field General Manager reducing pension
under clause (1) would not require prior consultation with the
Board which is mandatory while exercising similar power
under clause (2). To avoid this anomaly whenever a superior
authority reducing pension under regulation 33(1) is also
appellate authority or reviewing authority who is empowered
to exercise power under clause (2), the requirement of prior
consultation with the Board must be held to be mandatory,
failing which requirement of such prior consultation may be
circumvented by the bank to the prejudice of the employee.
There is no cavil that pension is not a discretion of the
17.
employer but a valuable right to property and can be denied
only through authority of law. When an authority is vested
with the discretion to grant pension less than full pension
admissible under the Pension Regulations, all procedural
safeguards in favour of the employee including prior
consultation must be strictly followed.
18 . High Court failed to read the regulation in its proper
perspective and went a step ahead to hold that a compulsorily
retired employee would not be entitled to any pension unless an
order is passed under regulation 33 (1). A combined reading of
Page 9 of 14
the clauses in regulation 33 clearly indicates that the pension
payable to an employee who has been compulsorily retired as a
penalty shall not be less than twothird of his full pension or Rs.
375 per mensem, whichever is higher. The word ‘ occurring
may’
in clause (1) does not give discretion to superior authority to
award pension less than twothird of the full pension. High
Court misinterpreted the word ‘may’ in the clause to hold that
grant of pension is discretionary. The word ‘may’ must be read
in its proper context, that is to say, it was used in the regulation
not to vest discretion in the superior authority to grant pension
less than twothird of full pension payable but to clarify that the
aforesaid clause will not entitle a compulsorily retired employee
to pension if he is not otherwise entitled to such pension on
superannuation on that day. For example, if an employee is
compulsorily retired without completing ‘qualifying service’
making him eligible to pension under the regulations.
19. In fine , we hold clause (1) and clause (2) of regulation 33
must be read conjointly and in all cases when the full pension
admissible to a compulsorily retired employee under the
regulations is reduced, a prior consultation with the Board is
necessary.
Page 10 of 14
20. It would be argued the Field General Manager’s order to
reduce pension may be placed before the Board for
expost
facto approval. Whether ‘prior consultation’ is mandatory or a
post facto approval would suffice would depend on various
factors including nature of consultation, status of the
authority consulted, and the rights affected by the decision.
. A plain reading of regulation 33 would show award of
21
pension less than full pension is to be done with prior
consultation of the Board of Directors. Such prior consultation
with the highest authority of the Bank i.e., Board of Directors
must be understood as a valuable mandatory safeguard before
an employee’s constitutional right to pension is curtailed. In
these circumstances, a post facto approval cannot be a
substitute of prior consultation with the Board before the
decision is made. Reference may be made to
Indian
Administrative Service (S.C.S.) Association, U.P. & Ors. vs.
6
Union of India & Ors. wherein the parameters to decide
whether prior consultation is mandatory or directory have
been succinctly elucidated:
6 (1993) Supp (1) SCC 730.
Page 11 of 14
“26. The result of the above discussion leads to the following
conclusions:
(1) Consultation is a process which requires meeting of minds
between the parties involved in the process of consultation on
the material facts and points involved to evolve a correct or at
least satisfactory solution. There should be meeting of minds
between the proposer and the persons to be consulted on the
subject of consultation. There must be definite facts which
constitute the foundation and source for final decision. The
object of the consultation is to render consultation meaningful to
serve the intended purpose. Prior consultation in that behalf is
mandatory.
(2) When the offending action affects fundamental rights or to
effectuate builtin insulation, as fair procedure, consultation is
mandatory and nonconsultation renders the action ultra vires
or invalid or void.
(3) When the opinion or advice binds the proposer, consultation
is mandatory and its infraction renders the action or order
illegal.
(4) When the opinion or advice or view does not bind the person
or authority, any action or decision taken contrary to the advice
is not illegal, nor becomes void.
(5) When the object of the consultation is only to apprise of the
proposed action and when the opinion or advice is not binding
on the authorities or person and is not bound to be accepted,
the prior consultation is only directory. The authority proposing
to take action should make known the general scheme or
outlines of the actions proposed to be taken be put to notice of
the authority or the persons to be consulted; have the views or
objections, take them into consideration, and thereafter, the
authority or person would be entitled or has/have authority to
pass appropriate orders or take decision thereon. In such
circumstances it amounts to an action “after consultation”.
(6) No hard and fast rule could be laid, no useful purpose would
be served by formulating words or definitions nor would it be
appropriate to lay down the manner in which consultation must
take place. It is for the Court to determine in each case in the
light of its facts and circumstances whether the action is “after
consultation”; “was in fact consulted” or was it a “sufficient
consultation”.
(7) Where any action is legislative in character, the consultation
envisages like one under Section 3(1) of the Act, that the
Central Government is to intimate to the State Governments
concerned of the proposed action in general outlines and on
receiving the objections or suggestions, the Central Government
or Legislature is free to evolve its policy decision, make
Page 12 of 14
appropriate legislation with necessary additions or modification
or omit the proposed one in draft bill or rules. The revised draft
bill or rules, amendments or additions in the altered or modified
form need not again be communicated to all the concerned
State Governments nor have prior fresh consultation. Rules or
Regulations being legislative in character, would tacitly receive
the approval of the State Governments through the people's
representatives when laid on the floor of each House of
Parliament. The Act or the Rule made at the final shape is not
rendered void or ultra vires or invalid for nonconsultation.”
Mr. Mehta finally in a last bid endeavour requested us to invoke
22.
powers under Article 142 to do complete justice and endorse the
decision of the reduction of pension in the present case.
23. Though it is claimed that the delinquent acts of the appellant
had caused an approximate loss to the tune of Rs. 3.26 crores to
the bank, no evidence relating to the computation of such loss was
either considered by the disciplinary authority or by the appellate
authority. Further, no opportunity of hearing was given by the
authorities prior to reducing his pension. No exceptional case to
exercise our extraordinary powers under Article 142 is made out.
Accordingly, we allow the appeal and set aside the order of the
24.
High Court and order of the Field General Manager dated
07.08.2015 reducing pension without prior consultation of the
Board of Directors. It shall be open to the Bank to take appropriate
decision regarding reduction of pension after giving an opportunity
Page 13 of 14
of hearing to the appellant and with prior consultation of the Board
within two months from the date of this judgment failing which the
appellant shall be entitled to full pension from the date of
superannuation.
….……..…..……...……………………….J.
( PAMIDIGHANTAM SRI NARASIMHA)
….……..…..……...……………………….J
(JOYMALYA BAGCHI)
New Delhi;
July 15, 2025.
Page 14 of 14