Supreme Court Upholds Pension Rights for Bank Employee Removed from Service
The Supreme Court of India recently delivered a significant judgment in the case of UCO Bank & Anr. vs. Vijay Kumar Handa, addressing the critical issue of whether a bank employee removed from service due to misconduct is entitled to pensionary benefits. The judgment, delivered on April 3, 2025, by Justices Abhay S. Oka and Ujjal Bhuyan, dismissed the appeal filed by UCO Bank and upheld the decision of the Punjab and Haryana High Court, which had directed the bank to release the respondent’s pensionary benefits.
Background of the Case
The case revolves around Vijay Kumar Handa, who was employed as a Clerk in UCO Bank. In 1998, he was charged with gross misconduct for allegedly assaulting a fellow employee within the bank premises. After a disciplinary enquiry, the bank initially imposed the penalty of dismissal from service. However, the appellate authority later modified this penalty to removal from service, allowing Handa to receive terminal benefits for the period of service he had rendered.
Handa raised an industrial dispute, and the Labour Court, invoking Section 11A of the Industrial Disputes Act, 1947, substituted the penalty with a lighter punishment of stoppage of four increments and directed his reinstatement with 75% back wages. The bank challenged this award, and the High Court set it aside, restoring the appellate authority’s order of removal from service with terminal benefits. Handa then filed a writ petition seeking his pensionary benefits, which was allowed by the High Court. The bank appealed this decision to the Supreme Court.
Arguments of the Parties
Petitioner’s Arguments (UCO Bank)
The bank, represented by its senior counsel, made the following key arguments:
- Ineligibility for Pension: The bank contended that Handa was not entitled to pension as he had been removed from service for gross misconduct. They relied on Regulation 22 of the UCO Bank (Employees’) Pension Regulations, 1995, which states that removal from service entails forfeiture of past service and disqualification from pensionary benefits.
- Distinguishing Precedent: The bank argued that the case of Bank of Baroda vs. S.K. Kool, relied upon by the High Court, was distinguishable. In that case, the employee had opted for pension before the penalty was imposed, whereas Handa had never exercised such an option.
- Bipartite Settlement: The bank emphasized that the ninth Bipartite Settlement dated April 27, 2010, did not include employees removed from service as eligible for pension.
Respondent’s Arguments (Vijay Kumar Handa)
Handa’s counsel countered the bank’s claims as follows:
- Finality of Appellate Order: Handa argued that the appellate authority’s order, which allowed him terminal benefits, had attained finality as the bank did not challenge it. This order explicitly stated that he would be entitled to terminal benefits for his rendered service.
- Applicability of S.K. Kool: Handa relied heavily on the Supreme Court’s decision in S.K. Kool, which held that employees removed from service under Clause 6(b) of the Bipartite Settlement are entitled to superannuation benefits if they otherwise qualify for pension.
- Pension Option Exercised: Handa submitted that he had exercised his option for pension on October 5, 2010, and had completed the minimum pensionable service.
Supreme Court’s Analysis and Decision
The Supreme Court meticulously examined the interplay between the Bipartite Settlement and the Pension Regulations, 1995. The key points from the judgment are:
1. Interplay Between Bipartite Settlement and Pension Regulations
The Court noted that Clause 6(b) of the Bipartite Settlement provides for removal from service with superannuation benefits, including pension, if otherwise due under the rules. The Court referred to its earlier decision in S.K. Kool, where it had harmonized this clause with Regulation 22 of the Pension Regulations. The Court reiterated:
“The Bipartite Settlement tends to provide a punishment which gives superannuation benefits otherwise due. The construction canvassed by the employer shall give nothing to the employees in any event. Will it not be a fraud on the Bipartite Settlement? Obviously it would be.”
2. Finality of Appellate Order
The Court emphasized that the appellate authority’s order, which allowed Handa terminal benefits, had attained finality as the bank did not challenge it. The Court observed:
“The appellate authority had specifically held that respondent would be entitled to receive terminal benefits for the period of service he had rendered. This order of the appellate authority has attained finality.”
3. Eligibility for Pension
The Court held that Handa, having completed the minimum pensionable service and having exercised his option for pension, was entitled to pensionary benefits. The Court dismissed the bank’s appeal, stating:
“We do not find any compelling reason to interfere with the concurrent findings of the learned Single Judge and the Division Bench while exercising our jurisdiction under Article 136 of the Constitution of India.”
Conclusion
The Supreme Court’s judgment reaffirms the principle that employees removed from service under Clause 6(b) of the Bipartite Settlement are entitled to pensionary benefits if they otherwise qualify for pension. The decision underscores the binding nature of settlements with statutory backing and the importance of harmonious interpretation of conflicting provisions. The Court’s ruling ensures that employees are not unjustly deprived of their rightful benefits due to technicalities.
This judgment serves as a significant precedent for similar disputes in the banking sector and highlights the judiciary’s role in protecting employees’ rights while balancing the interests of employers.
Petitioner Name: UCO Bank & Anr..Respondent Name: Vijay Kumar Handa.Judgment By: Justice Abhay S. Oka, Justice Ujjal Bhuyan.Place Of Incident: Jalandhar, Punjab.Judgment Date: 03-04-2025.
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