A pension-option deadline cannot defeat eligible retirees’ claims absent proof of effective communication or actual knowledge.

Shobha Bajaj joined the State Bank of Patiala (“SBP”) as a Clerk on 16 April 1982 and took voluntary retirement under the SBP Voluntary Retirement Scheme, 2001 (“SBPVRS 2001”), being relieved on 31 March 2001. She had 18 years, 11 months and 15 days of qualifying service and was a provident-fund optee.

The Bipartite Settlement dated 27 April 2010 extended a pension option to specified employees who had retired under a special voluntary retirement scheme after completing at least fifteen years of service, subject to restoration of the provident-fund contribution and other financial conditions.

SBP’s Circular dated 17 November 2015 granted a second pension option to SBPVRS 2001 retirees, including provident-fund optees with at least fifteen years’ service; applications were required by 16 December 2015.

After the Supreme Court’s decision in Assistant General Manager, State Bank of India v. Radhey Shyam Pandey, Bajaj sought pension in June 2020, but the Bank rejected her claim solely on the ground that the cited decision concerned SBI employees.

She instituted the present writ petition in 2021 and died during its pendency on 27 July 2023; her legal representatives were substituted.

Whether a retiree under SBPVRS 2001 who had completed at least fifteen years of qualifying service was eligible to exercise the pension option under the Bipartite Settlement dated 27 April 2010 and the SBP Circular dated 17 November 2015, notwithstanding the absence of twenty years’ service under Regulation 29 of the Pension Regulations.

Whether the Bank could rely on the expiry of the 2015 pension option when it had not established that the option was communicated or otherwise brought to Bajaj’s knowledge in accordance with the Circular.

Whether Bajaj’s delayed claim was barred by laches, and whether her representation dated 9 June 2020 could be treated as an election to join the pension scheme subject to the applicable financial conditions.

What pensionary and family-pension relief, including the commencement date and adjustment of provident-fund amounts, was payable to Bajaj’s estate and eligible family members.

The Court distinguished eligibility for retirement under a special VRS from entitlement to pension, holding that the fifteen-year threshold under SBPVRS 2001 established eligibility for the scheme but did not automatically confer pension on a provident-fund optee.

Bank of Baroda v. Ganpat Singh Deora, (2009) 3 SCC 217, and Regional Manager, Punjab National Bank v. Dharam Pal Singh, (2014) 13 SCC 484, establish that special VRS retirees must be governed by the VRS read with the applicable pension scheme, rather than being treated identically to ordinary voluntary retirees under Regulation 29.

The 2010 Bipartite Settlement and 2015 Circular created a pension option for eligible VRS retirees, subject to restoration of the Bank’s provident-fund contribution with interest and payment of an additional 56% contribution.

Under Calcutta Port Trust v. Anadi Kumar Das, (2014) 3 SCC 617, where a pension option is extended to retired employees, the employer must adopt a suitable mechanism to bring it to their notice; mere internal circulation or display is insufficient where actual knowledge is not proved.

The principle in Union of India v. Tarsem Singh, (2008) 8 SCC 648, concerning recurring pension claims does not convert a time-bound option to enter a pension scheme into a continuing entitlement.

The Court held that the Bank’s own 2015 Circular expressly included SBPVRS 2001 retirees with at least fifteen years’ service, including provident-fund optees; consequently, the Bank could not contend that Bajaj was ineligible merely because she had not completed twenty years under Regulation 29.

However, pension was not automatic: Bajaj was required to exercise the option and satisfy the financial conditions.

The Bank nevertheless failed to produce evidence that the communication machinery prescribed by the Circular—contact through the last-serving branch or office, transmission of option forms, or publicity through retired employees’ associations—had been implemented in relation to Bajaj, or that she otherwise knew of the option before its expiry.

The Bank’s 2020 rejection also relied only on the supposed inapplicability of Radhey Shyam Pandey and did not refer to the 2010 or 2015 options, weakening its subsequent reliance on the deadline.

The Court rejected the delay objection because there was no evidence that Bajaj knew of the option before 16 December 2015; unlike a retiree who knowingly declined a time-bound option, she approached the Bank in 2020 and the Court in 2021.

Her 2020 representation and continued prosecution of the writ petition were therefore treated as an election to join the pension scheme.

Since the 2015 option adopted the 2010 financial arrangement, the Bank could recover the provident-fund contribution with the interest received at retirement and the additional 56% contribution, but could not impose further interest not contemplated by the Circular.

The Bank was directed to calculate the amount recoverable under the 2010 Settlement and 2015 Circular, comprising the Bank’s provident-fund contribution with the interest received at retirement plus the additional 56% contribution, without adding further interest.

That amount could be adjusted against pension and family-pension arrears; any shortfall was to be deposited by the legal representatives.

Pension was directed to be calculated from 27 November 2009 until Bajaj’s death on 27 July 2023, followed by family pension from 28 July 2023 to the person legally entitled to it.

No interest was payable on arrears released within twelve weeks, but delayed payment thereafter would carry simple interest at 6% per annum.

The claim for pension from 1 April 2001 and compensation of ₹1,00,000 was rejected.