In a significant judgment clarifying the interplay between service regulations and disciplinary penalties, the Supreme Court of India has ruled that an employee removed from service “with superannuation benefits” is entitled to pension only if he or she is otherwise eligible under the applicable Pension Regulations. The ruling came in the case of UCO Bank & Anr. vs. Vijay Kumar Handa (Civil Appeal No. 5922 of 2024), decided by a Bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan.
Background of the Case
Vijay Kumar Handa, the respondent, served as a clerk in UCO Bank. He was removed from service after being found guilty of gross misconduct for allegedly assaulting another officer inside the bank premises in 1998. The disciplinary authority initially dismissed him from service in December 1999. However, upon appeal, the appellate authority modified the punishment to “removal from service,” entitling him to terminal benefits and clarifying that such removal would not disqualify him from future employment.
The respondent then raised an industrial dispute, and the Labour Court substituted the punishment with stoppage of increments and ordered reinstatement with 75% back wages. However, this award was set aside by the Punjab and Haryana High Court, restoring the bank’s original penalty of removal from service with terminal benefits.
Later, Handa filed a writ petition in 2014, seeking release of pensionary dues, which the High Court allowed. The bank’s appeal against this decision was also dismissed by the Division Bench of the High Court in 2017, prompting UCO Bank to approach the Supreme Court.
Legal Issues Involved
The primary legal question before the Supreme Court was whether an employee, who was removed from service with superannuation benefits under Clause 6(b) of the Bipartite Settlement, is entitled to pension under the UCO Bank (Employees’) Pension Regulations, 1995, despite being found guilty of gross misconduct.
The bank, represented by Senior Advocate Kavita Pahuja, argued that Regulation 22(1) of the 1995 Pension Regulations explicitly disqualifies employees who are removed from service from claiming pension. It was further submitted that the Bipartite Settlement must be read harmoniously with the Regulations and cannot override statutory provisions.
On the other hand, the respondent contended that the appellate authority’s order granting him terminal benefits had attained finality and entitled him to pension, especially as he had completed the minimum years of qualifying service.
Supreme Court’s Decision and Observations
Upholding the respondent’s right to pension in this specific case, the Court relied heavily on its previous ruling in Bank of Baroda vs. S.K. Kool [(2014) 2 SCC 715], where it had harmoniously interpreted Clause 6(b) of the Bipartite Settlement with Regulation 22 of the Pension Regulations.
Quoting from S.K. Kool, the Court reiterated:
“Such of the employees who are otherwise entitled to superannuation benefits under the Regulations if visited with the penalty of removal from service with superannuation benefits shall be entitled for those benefits…”
The Bench emphasized that the words “as would be due otherwise” in Clause 6(b) of the Bipartite Settlement cannot be rendered meaningless and must be interpreted to mean that only those employees who are otherwise eligible under the Pension Regulations will be entitled to receive pension.
Importantly, the Court pointed out that the appellate authority’s order clearly stated that Handa would be entitled to terminal benefits and that this order was never challenged by the bank. The respondent had also submitted his pension option within the stipulated time. As such, the Court found no reason to interfere with the concurrent findings of the Single Judge and Division Bench of the High Court.
Key Quote from Judgment
“Such of the employees who are otherwise entitled to superannuation benefits under the Regulations if visited with the penalty of removal from service with superannuation benefits shall be entitled for those benefits… This is the only construction which would harmonise the two provisions.” — Justice Ujjal Bhuyan, para 21 of the judgment.
