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Service matter – dismissed from service – claim for superannuation benefits – Since 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 = BANK OF BARODA …. APPELLANT Versus S.K. KOOL(D)THROUGH LRS.AND ANR. …. RESPONDENTS = Published in / Cited in / Reported in judis.nic.in/supremecourt/filename=41066

Service matter –  – dismissed from service – claim for superannuation benefits – Since

 

Bank of Baroda in Dubai

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
———————–
13

 

 

 

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