Service matter – – dismissed from service – claim for superannuation benefits – Since
Bank of Baroda in Dubai (Photo credit: Wikipedia)
the order speaks that he was removed from service with superannuation benefits as would be due other wise and with out disqualification from future employment – Tribunal – High court rightly held that he is entitled for the same – Apex court confirmed the same =
S.K. Kool, respondent no. 1 herein (since deceased), was working as a
clerk with the petitioner, Bank of Baroda and while working as such after
a departmental inquiry, as a measure of punishment, visited with the
penalty of ‘removal from service with superannuation benefits as would be
due otherwise and without disqualification from future employment’. =
“Whether the action of the management of Bank of Baroda in
denying pension and encashment of leave to Shri S.K. Kool is
legal and justified? If not, what relief the concerned workman
is entitled to?”
The Tribunal
considered the rival plea, upheld the contention of the employee and passed
an award in his favour, and while doing so, observed as follows:
“12. Therefore, in view of the facts and circumstances and
settled legal position, the tribunal feels no hesitation in
holding that the action of the opposite party bank in denying
superannuation benefits to the workman is neither legal nor
justified. Accordingly it is held that the workman is entitled
for his superannuation benefits under the final orders of the
disciplinary authority passed on 19.09.03 and any other order
passed by some other officer denying superannuation benefits
stands set aside. Accordingly the workman is held entitled for
all termination benefits like pension, leave encashment,
gratuity and commutation of pension subject to adjustment of
any amount paid under these heads to the workman.”
The employer assailed the aforesaid award in a writ petition but the
same has been dismissed by the High Court, inter alia, observing as
follows:
“It is true that both the provisions have to be harmonized.
What logically follows from bare reading of the aforesaid
provisions is that the disciplinary authority has the
competence to inflict punishment of removal from service with a
condition that such removal from service shall not in any way
result in forfeiture of pensionary benefits to which the
workman concerned is otherwise eligible.
Only simple reading
of the words “AS WOULD BE DUE OTHERWISE”
would mean that
irrespective of the order of punishment of removal from
service, workman would be entitled to superannuation benefits,
if it is found due otherwise i.e. if the workman concerned
satisfies the other requirement of superannuation benefits
under Regulations, 1995, namely, he has completed requisite
number of years of working etc.” =
“6. An employee found guilty of gross misconduct may;
a) ………….
b) be removed from service with superannuation benefits
i.e. Pension and/or Provident Fund and Gratuity as would
be due otherwise under the Rules or Regulations
prevailing at the relevant time and without
disqualification from future employment, or
xxx xxx xxx”
The employee undisputedly has been visited with the aforesaid penalty
in terms of the Bipartite Settlement.
Article 22 of the Regulation, which is relied on to deny the claim of
the employee reads as follows:
“22. Forfeiture of service:
(1)Resignation or dismissal or removal or termination
of an employee from the service of the Bank shall
entail forfeiture of his entire past service and
consequently shall not qualify for pensionary
benefits.”
From a plain reading of the aforesaid Regulation, it is evident that
removal of an employee shall entail forfeiture of his entire past service
and consequently such an employee shall not qualify for pensionary
benefits. If we accept this submission, no employee removed from service
in any event would be entitled for pensionary benefits. But the fact of
the matter is that the Bipartite Settlement provides for removal from
service with pensionary benefits “as would be due otherwise under the Rules
or Regulations prevailing at the relevant time”.
An employee
who has rendered a minimum of ten years of service and fulfils other
conditions only can qualify for pension in terms of Article 14 of the
Regulation.
Therefore, the expression “as would be due otherwise” would
mean only such employees who are eligible and have put in minimum number of
years of service to qualify for pension.
However, such of the employees
who are not eligible and have not put in required number of years of
qualifying service shall not be entitled to the superannuation benefit
though removed from service in terms of clause 6(b) of the Bipartite
Settlement. Clause 6(b) came to be inserted as one of the punishments on
account of the Bipartite Settlement.
It provides for payment of
superannuation benefits as would be due otherwise. 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
Bipartite Settlement?
Obviously it would be. From the conspectus of what
we have observed we have no doubt that such of the employees who are
otherwise eligible for superannuation benefit are removed from service in
terms of clause 6(b) of the Bipartite Settlement shall be entitled to
superannuation benefits. This is the only construction which would
harmonise the two provisions. It is well settled rule of construction that
in case of apparent conflict between the two provisions, they should be so
interpreted that the effect is given to both. Hence, we are of the opinion
that such of the employees who are otherwise entitled to superannuation
benefits under the Regulation if visited with the penalty of removal from
service with superannuation benefits shall be entitled for those benefits
and such of the employees though visited with the same penalty but are not
eligible for superannuation benefits under the Regulation shall not be
entitled to that.
Accordingly, we hold that the employee’s heirs are entitled to
superannuation benefits. The entire amount that the respondent is found
entitled to along with interest at the rate of 6% per annum should be
disbursed within 6 weeks from the date of receipt/communication of this
Order.
In the result, we do not find any merit in this appeal and it is
dismissed accordingly with costs of Rs.50,000/- (rupees fifty thousand) to
be paid by the appellant to the respondent No. 1 along with other dues and
within the time stipulated above.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 10956 OF 2013
(@SPECIAL LEAVE PETITION (CIVIL) NO. 17054 OF 2009)
BANK OF BARODA …. APPELLANT
Versus
S.K. KOOL(D)THROUGH LRS.AND ANR. …. RESPONDENTS
J U D G M E N T
CHANDRAMAULI KR. PRASAD, J.
S.K. Kool, respondent no. 1 herein (since deceased), was working as a
clerk with the petitioner, Bank of Baroda and while working as such after
a departmental inquiry, as a measure of punishment, visited with the
penalty of ‘removal from service with superannuation benefits as would be
due otherwise and without disqualification from future employment’.
S.K. Kool, hereinafter referred to as ‘the employee’, made a request
for leave encashment, which was declined by the petitioner Bank of Baroda,
hereinafter referred to as ‘the employer’, on the ground that ‘where
cessation of service takes place on account of employee’s resignation or
his dismissal/termination/compulsory retirement from the Bank’s service,
all leaves to his credit lapse.’
The employee laid claim for pensionary benefits but the same was also
declined. However, the employer advised the employee to ask for sanction
of compassionate allowance not exceeding two-thirds of the pension which
would have been admissible to him otherwise. A dispute was raised and the
competent Government referred the dispute for adjudication by the
Industrial Tribunal. The dispute referred to the Industrial Tribunal,
hereinafter referred to as ‘the Tribunal’, reads as follows:
“Whether the action of the management of Bank of Baroda in
denying pension and encashment of leave to Shri S.K. Kool is
legal and justified? If not, what relief the concerned workman
is entitled to?”
The employee filed his statement of claim and so did the employer.
The employee founded his claim by relying on the order of punishment itself
which, according to him, entitles him the superannuation benefit. It was
resisted by the employer on the ground that such employees who are removed
from the service of the Bank are not entitled to pension. The Tribunal
considered the rival plea, upheld the contention of the employee and passed
an award in his favour, and while doing so, observed as follows:
“12. Therefore, in view of the facts and circumstances and
settled legal position, the tribunal feels no hesitation in
holding that the action of the opposite party bank in denying
superannuation benefits to the workman is neither legal nor
justified. Accordingly it is held that the workman is entitled
for his superannuation benefits under the final orders of the
disciplinary authority passed on 19.09.03 and any other order
passed by some other officer denying superannuation benefits
stands set aside. Accordingly the workman is held entitled for
all termination benefits like pension, leave encashment,
gratuity and commutation of pension subject to adjustment of
any amount paid under these heads to the workman.”
The employer assailed the aforesaid award in a writ petition but the
same has been dismissed by the High Court, inter alia, observing as
follows:
“It is true that both the provisions have to be harmonized.
What logically follows from bare reading of the aforesaid
provisions is that the disciplinary authority has the
competence to inflict punishment of removal from service with a
condition that such removal from service shall not in any way
result in forfeiture of pensionary benefits to which the
workman concerned is otherwise eligible. Only simple reading
of the words “AS WOULD BE DUE OTHERWISE” would mean that
irrespective of the order of punishment of removal from
service, workman would be entitled to superannuation benefits,
if it is found due otherwise i.e. if the workman concerned
satisfies the other requirement of superannuation benefits
under Regulations, 1995, namely, he has completed requisite
number of years of working etc.”
Petitioner assails the award and the order of the High Court in the
present special leave petition.
Leave granted.
Mr. Jaideep Gupta, learned Senior Counsel appearing on behalf of the
appellant Bank, submits that employees of the Bank of Baroda are governed
by the Bank of Baroda (Employees) Pension Regulation, 1995, hereinafter
referred to as ‘the Regulation’. According to the learned Senior Counsel,
the Regulation has been made in exercise of powers conferred by clause (f)
of sub-section (ii) of Section 19 of the Banking Companies (Acquisition and
Transfer of Undertaking) Act, 1970 after consultation with the Reserve Bank
of India and the previous sanction of the Central Government. The
Regulation, therefore, in his submission is statutory in nature and in
terms of Article 22(1) of the Regulation, removal of an employee from the
service of the Bank would entail forfeiture of entire past service and
consequently he shall not be entitled to pensionary benefits. According to
him, such an employee at the most, would be entitled for compassionate
allowance in terms of Article 31 of the Regulation. According to Mr.
Gupta, though clause 6(b) of the Bipartite Settlement provides that an
employee found guilty of gross misconduct may be removed from service with
superannuation benefits i.e. pension and/or provident fund and gratuity as
would be due otherwise under the Rules or Regulations prevailing at the
relevant time and without disqualification from future employment, but
this, in his submission, would not override or supersede Article 22(1) of
the Regulation, which in no uncertain terms provides for forfeiture of
entire past service on removal from service. Any interpretation other than
what has been suggested by him would obliterate Article 22(1) of the
Regulation, contends Mr. Gupta.
Ms. Shilpa Singh, learned counsel appearing on behalf of the
employee’s heirs, however, submits that the order of the disciplinary
authority inflicting the punishment itself entitled the employee to the
superannuation benefits and that having attained finality, the same cannot
be legally denied. She does not join issue that an interpretation which
renders a provision redundant is to be avoided and, in fact, invokes the
same in support of her contention. According to her, if the interpretation
put by the employer is accepted, clause 6(b) of the Bipartite Settlement
shall be rendered otiose.
Having considered the rival submissions we do not have the slightest
hesitation in accepting the broad submission of Mr. Gupta that the
Regulation in question is statutory in nature and the court should accept
an interpretation which would not make any other provision redundant.
Bearing in mind the aforesaid principle, we proceed to consider the rival
contentions. The terms and conditions of service of the employees are
governed and modified by the Bipartite Settlement. Various punishments have
been provided under the Bipartite Settlement which can be inflicted on the
employee found guilty of gross misconduct. In 2002, a Bipartite Settlement
was signed by the Indian Banks’ Association and the Banks’ workmen’s Union
with regard to disciplinary action procedure. It is common ground that in
the light of the said Bipartite Settlement, clause 6(b) was inserted as one
of the punishments which can be inflicted on an employee found guilty of
gross misconduct and the same reads as follows:
“6. An employee found guilty of gross misconduct may;
a) ………….
b) be removed from service with superannuation benefits
i.e. Pension and/or Provident Fund and Gratuity as would
be due otherwise under the Rules or Regulations
prevailing at the relevant time and without
disqualification from future employment, or
xxx xxx xxx”
The employee undisputedly has been visited with the aforesaid penalty
in terms of the Bipartite Settlement.
Article 22 of the Regulation, which is relied on to deny the claim of
the employee reads as follows:
“22. Forfeiture of service:
(1)Resignation or dismissal or removal or termination
of an employee from the service of the Bank shall
entail forfeiture of his entire past service and
consequently shall not qualify for pensionary
benefits.”
From a plain reading of the aforesaid Regulation, it is evident that
removal of an employee shall entail forfeiture of his entire past service
and consequently such an employee shall not qualify for pensionary
benefits. If we accept this submission, no employee removed from service
in any event would be entitled for pensionary benefits. But the fact of
the matter is that the Bipartite Settlement provides for removal from
service with pensionary benefits “as would be due otherwise under the Rules
or Regulations prevailing at the relevant time”. The consequence of this
construction would be that the words quoted above shall become a dead
letter. Such a construction has to be avoided.
The Regulation does not entitle every employee to pensionary benefits.
Its application and eligibility is provided under Chapter II of the
Regulation whereas Chapter IV deals with qualifying service. An employee
who has rendered a minimum of ten years of service and fulfils other
conditions only can qualify for pension in terms of Article 14 of the
Regulation. Therefore, the expression “as would be due otherwise” would
mean only such employees who are eligible and have put in minimum number of
years of service to qualify for pension. However, such of the employees
who are not eligible and have not put in required number of years of
qualifying service shall not be entitled to the superannuation benefit
though removed from service in terms of clause 6(b) of the Bipartite
Settlement. Clause 6(b) came to be inserted as one of the punishments on
account of the Bipartite Settlement. It provides for payment of
superannuation benefits as would be due otherwise. 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
Bipartite Settlement? Obviously it would be. From the conspectus of what
we have observed we have no doubt that such of the employees who are
otherwise eligible for superannuation benefit are removed from service in
terms of clause 6(b) of the Bipartite Settlement shall be entitled to
superannuation benefits. This is the only construction which would
harmonise the two provisions. It is well settled rule of construction that
in case of apparent conflict between the two provisions, they should be so
interpreted that the effect is given to both. Hence, we are of the opinion
that such of the employees who are otherwise entitled to superannuation
benefits under the Regulation if visited with the penalty of removal from
service with superannuation benefits shall be entitled for those benefits
and such of the employees though visited with the same penalty but are not
eligible for superannuation benefits under the Regulation shall not be
entitled to that.
Accordingly, we hold that the employee’s heirs are entitled to
superannuation benefits. The entire amount that the respondent is found
entitled to along with interest at the rate of 6% per annum should be
disbursed within 6 weeks from the date of receipt/communication of this
Order.
In the result, we do not find any merit in this appeal and it is
dismissed accordingly with costs of Rs.50,000/- (rupees fifty thousand) to
be paid by the appellant to the respondent No. 1 along with other dues and
within the time stipulated above.
…………………………………………………………J.
(CHANDRAMAULI KR. PRASAD)
.………………………………………………….…J.
NEW DELHI, (JAGDISH SINGH KHEHAR)
December 11, 2013
———————–
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