2015 (2) TMI 1197 - SC - Indian Laws

Entitlement to pension - request for voluntary retirement - Held that - In the case at hand, it is clear as day that the Rule carves out two categories of retirement, one, normal retirement on superannuation and second, retirement on request i.e. voluntary retirement, ordinarily called the golden handshake and, therefore, the scheme was floated. In the instant case, as I perceive, the Scheme which is more beneficial was provided. It had the pension and the ex-gratia. However, it had a condition as enumerated in the Rule that if an employee had not completed 20 years of service, as per Rule 22(i)(c), he would not get pension. As there is no provision for computation of broken period and, therefore, unless an employee has completed 20 years of service, he would not be entitled to pension.

Issues Involved:
1. Entitlement to pension under the State Bank of India Employees Pension Rules.
2. Validity of withdrawal of voluntary retirement applications.
3. Interpretation of Rule 22 of the Pension Rules.
4. Applicability of the Voluntary Retirement Scheme (VRS) and its benefits.
5. Impact of amendments to the Pension Rules.
6. Applicability of promissory estoppel to the case.

Detailed Analysis:

1. Entitlement to Pension under the State Bank of India Employees Pension Rules:
The primary issue was whether the respondent-employees were entitled to pension under the State Bank of India Employees Pension Rules. The court scrutinized Rule 22, which outlines the conditions under which an employee is entitled to pension. The rule includes various clauses, such as completing 20 years of pensionable service and attaining the age of 50 years, or being in service on or after 1.11.1993 and having completed 10 years of service and attained the age of 58 years. The court concluded that the respondents did not meet the necessary criteria under Rule 22(i)(a) and (b) for normal retirement but fell under Rule 22(i)(c), which requires 20 years of service for voluntary retirement.

2. Validity of Withdrawal of Voluntary Retirement Applications:
The respondents had submitted applications for voluntary retirement, which were accepted by the bank. Subsequently, some respondents attempted to withdraw their applications. The court noted that the bank had issued a clarificatory circular allowing withdrawal of applications until 15.2.2001. Since the respondents did not withdraw their applications within this period, their attempts to withdraw were invalid.

3. Interpretation of Rule 22 of the Pension Rules:
The court examined Rule 22 in detail, distinguishing between normal retirement and voluntary retirement. It was determined that Rule 22(i)(a) pertains to normal retirement, while Rule 22(i)(c) specifically addresses voluntary retirement, requiring 20 years of pensionable service regardless of age. The court emphasized that the rule must be interpreted strictly according to its language and the contractual terms agreed upon by the parties.

4. Applicability of the Voluntary Retirement Scheme (VRS) and its Benefits:
The respondents had opted for the Voluntary Retirement Scheme (VRS) introduced by the bank. The scheme provided for ex-gratia payments and other benefits, including pension as per the pension rules. However, the court noted that the scheme explicitly stated that employees who had not completed 20 years of pensionable service were not eligible for pension. The court held that the respondents were bound by the terms of the VRS and could not claim pension benefits contrary to the scheme's provisions.

5. Impact of Amendments to the Pension Rules:
The court addressed the amendments made to the Pension Rules on 30.1.2001 and 9.3.2001. It was noted that the amendments did not affect the respondents' entitlement to pension as they had not completed the required 20 years of service. The court emphasized that the rules in force at the time of the VRS must be applied, and the respondents were aware of the rules when they opted for the scheme.

6. Applicability of Promissory Estoppel to the Case:
The respondents argued that the bank's actions created a promissory estoppel, entitling them to pension benefits. The court rejected this argument, stating that promissory estoppel cannot be invoked to condone a breach of law or compel the bank to act contrary to statutory provisions. The court cited previous judgments to support this conclusion and held that the respondents could not claim pension benefits based on promissory estoppel.

Conclusion:
The court set aside the judgments of the High Courts of Allahabad, Punjab & Haryana, and Calcutta, which had ruled in favor of the respondents. It concluded that the respondents were not entitled to pension benefits under the State Bank of India Employees Pension Rules as they had not completed the required 20 years of service. The appeals were allowed, and the High Court judgments were deemed unsustainable in law.

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