Supreme Court Orders Pension Benefits for Widow in Coal Mines Pension Scheme Case

The case of Veena Pandey v. Union of India & Ors. deals with a significant issue concerning pensionary benefits under the Coal Mines Pension Scheme, 1998. The case highlights the struggles faced by retired employees and their dependents in securing their rightful pension benefits, particularly when administrative decisions affect their entitlements.

The Supreme Court intervened in this case to ensure that the widow of a retired coal sector employee, who was denied pension benefits due to the retrospective cancellation of a pension provision, was granted the financial relief she was entitled to. The Court emphasized that pension is a deferred compensation for long years of service and is a right, not a privilege.

Background of the Case

The appellant, Veena Pandey, is the widow of Ramashankar Pandey, a retired employee of the South Eastern Coal Fields Ltd., Bilaspur. After serving in Bharat Coking Coal Ltd., he was transferred to Bilaspur, where he retired on May 31, 2004, as Chief Personnel Manager. Under the Coal Mines Pension Scheme, 1998, he opted to receive 90% of his pension during his lifetime, with a provision that after his death, his widow would receive a lump sum amount equal to 100 times his full monthly pension.

However, after his demise on January 12, 2011, when the widow applied for the lump sum amount as per the scheme, her request was denied. The Coal Mines Provident Fund Organization (CMPFO) informed her that the relevant provision of the pension scheme had been abolished effective February 21, 2011. Instead of the lump sum amount, she was only refunded the 10% of the pension that her late husband had surrendered along with interest, totaling Rs. 49,289.

Arguments by the Petitioner

Veena Pandey, through her legal counsel, contended:

The pension scheme at the time of her husband’s retirement allowed for the lump sum payment, and the retrospective cancellation of the provision should not affect her entitlement.
The CMPFO’s decision to refund the surrendered amount instead of providing the lump sum was arbitrary and unjust.
Pension is a fundamental right under the Constitution, and its denial violates the principles of fairness and justice.
She was suffering financial hardships due to the denial of the rightful pension amount.

Arguments by the Respondent

The Union of India and the CMPFO countered:

The pension provision allowing lump sum payments was abolished before the widow’s application was processed, making her ineligible.
The refund of the surrendered amount with interest was in line with the revised pension scheme.
The Patna High Court had dismissed the widow’s case on technical grounds, stating that it lacked territorial jurisdiction.
The administrative decision to abolish the provision was lawful and applied uniformly to all pensioners.

Supreme Court’s Judgment

After reviewing the case, the Supreme Court ruled in favor of the widow and ordered that she be granted the lump sum pension benefits. The Court observed:

“Pension as is well known, is the deferred portion of the compensation for rendering long years of service. It is a hard-earned benefit accruing to an employee and has been held to be in the nature of property by this Court.”

The Court criticized the High Court’s decision to dismiss the case on jurisdictional grounds without examining the merits. It emphasized that the widow had been forced to litigate for over a decade to secure her rightful pension benefits.

The Court ruled:

“In the above peculiar circumstances of this case, without commenting on the legality of the decision to discontinue the said provision in the pension scheme by the employer, as the pensioner was not alive on the date of discontinuance, we consider it appropriate to pass necessary orders in her favor in this proceeding itself.”

The Supreme Court directed the authorities to compute and disburse the pension benefits within eight weeks, adjusting the amount already refunded to her.

Conclusion

The judgment reaffirms the principle that pension is a vested right and cannot be denied arbitrarily. The ruling ensures that administrative changes in pension schemes do not unfairly disadvantage dependents of retired employees. The case serves as a crucial precedent in protecting the financial security of pensioners and their families.

Petitioner Name: Veena Pandey.
Respondent Name: Union of India & Ors..
Judgment By: Justice R. Subhash Reddy, Justice Hrishikesh Roy.
Place Of Incident: Bilaspur, Chhattisgarh.
Judgment Date: 18-11-2021.

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