# [1998] Supp. 2 S.C.R. 269

- **Citation:** [1998] Supp. 2 S.C.R. 269
- **Court:** Supreme Court of India
- **Decided:** 1998-10-09
- **Case number:** Civil Appeal No. 5048 of 1998
- **Bench:** S.B. Majmudar, M. Jagannadha Rao
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1998-supp-2-s-c-r-269-16461
- **Pages:** 26

## Headnote

Service Law :
State Bank of India Employees' Pension Fund Rules, 1979:
c
Rule 22(J)(c)-Pension-Additional benefit-Retired employeeEntitlement to-Held: If a person is entitled to pension at the time of his
retirement, he is entitled to enhanced pension brought into force after his
retirement, since he is a member of the same class of pensioners when the
additional benefit is conferred on all of them-In such a situation, the D
additional benefit cannot be denied to him on the ground that he has retired
prior to the date of coming into force of the additional benefit-Constitution
of India, 1950, Art. 14--State Bank of India Officers (Determination of Terms
and Conditions of Service) Order, 1979, Regn. 45--State Bank of India Act,
1950, S.50.
E
Rule 22(/)(c)-Pension--Retired employees-Person drawing pension
and person not drawing pension-Classification between-Employee retired
after putting in more than 20 years but less than 25 years-Employee not
given pension since qualifying service was 25 years-Subsequently, qualifying
service reduced to 20 years prospectively-Entitlement-Held: If an employee F
is not eligible for pension at the time of his retirement, he is not entitled to
extension of pension scheme unless such extension is retrospective-In the
circumstances of the case, the said employee is not entitled to the benefit of
extended pension scheme since it is prospective-Such an employee will
remain outside its sweep.
The appellant voluntarily retired from the service of the respondentBank after putting in a service of more than 20 years but less than 25 years.
G
The appellant was not given pension as the minimum qualifying service for
earning pension was 25 years under Rule 22(l)(c) of the State Bank of India
Employees' Pension Fund Rules, 1979. Subsequently, the Rules were amended H
269
270
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.
A w.e.f. 20-9-1986 whereby the minimum qualifying service for earning pension·
was reduced to 20 years.
The appellant made a representation before the respondent that as he
had already put in a service of more than 20 years he should get his pension
at least prospectively i.e. from the date on which the amended provision came
B into force, which was rejected. Single judge of the High Court allowed the
writ petition filed by the appellant. However, the Division Bench allowed the
Writ Appeal filed by the respondent. Hence this appeal, which raised the
following question :
C
Whether the appellant was entitled to get the benefit of the amended
Rule 22(1)(c) of the Rules from 20-9-1986?
Dismissing the appeal, this Court
HELD: I. From the various decisions of this Court spread over years,
D the following legal position clearly gets projected: (293-B)
Category I
If the person retiring is eligible for pension at the time of his retirement
and if he survives till the time by subsequent amendment of the relevant
pension scheme, he would become eligible to get enhanced pension or would
E become eligible to get more pension as per the new formula of computation
of pension subsequently brought into force, he would be entitled to get the
benefit of the amended pension provision from the date of such order as he
would be a member of the very same class of pensioners when the additional
benefit if being conferred on all of them. In such a situation the additional
F benefit available to the same class of pensioners cannot to denied to him on
the ground that he had retired prior to the date on which the aforesaid
additional benefit was conferred on all the members of the same class of
pensioners who had survived by the time the scheme granting additional
benefit to these pensioners came into force. (293-C-D)
G
D.S. Nakara v. Union of India, 11983) 1 SCC 305, followed.
Indian Ex-Services League v. Union of India, [1991) 2 SCC 104;
Krishena Kumar v. Union of India, [1990) 4 SCC 207; All India Reserve
Bank Retired Officers Association v. Union of India, [19921 Supp. 1 SCC
664; State of Punjab v. Justice S. S. Dewan

## Text

_Characters 0–39,908 of 65,882. This is a partial read: ask again with offset=39908 for what follows._

V. KASTURI
A
11.
MANAGING DIRECTOR,
STA TE BANK OF INDIA, BOMBAY AND ANR.
OCTOBER 9, 1998
B
[S.B. MAJMUDAR AND M. JAGANNADHA RAO, JJ.]
Service Law :
State Bank of India Employees' Pension Fund Rules, 1979:
c
Rule 22(J)(c)-Pension-Additional benefit-Retired employeeEntitlement to-Held: If a person is entitled to pension at the time of his
retirement, he is entitled to enhanced pension brought into force after his
retirement, since he is a member of the same class of pensioners when the
additional benefit is conferred on all of them-In such a situation, the D
additional benefit cannot be denied to him on the ground that he has retired
prior to the date of coming into force of the additional benefit-Constitution
of India, 1950, Art. 14--State Bank of India Officers (Determination of Terms
and Conditions of Service) Order, 1979, Regn. 45--State Bank of India Act,
1950, S.50.
E
Rule 22(/)(c)-Pension--Retired employees-Person drawing pension
and person not drawing pension-Classification between-Employee retired
after putting in more than 20 years but less than 25 years-Employee not
given pension since qualifying service was 25 years-Subsequently, qualifying
service reduced to 20 years prospectively-Entitlement-Held: If an employee F
is not eligible for pension at the time of his retirement, he is not entitled to
extension of pension scheme unless such extension is retrospective-In the
circumstances of the case, the said employee is not entitled to the benefit of
extended pension scheme since it is prospective-Such an employee will
remain outside its sweep.
The appellant voluntarily retired from the service of the respondentBank after putting in a service of more than 20 years but less than 25 years.
G
The appellant was not given pension as the minimum qualifying service for
earning pension was 25 years under Rule 22(l)(c) of the State Bank of India
Employees' Pension Fund Rules, 1979. Subsequently, the Rules were amended H
269
270
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.
A w.e.f. 20-9-1986 whereby the minimum qualifying service for earning pension·
was reduced to 20 years.
The appellant made a representation before the respondent that as he
had already put in a service of more than 20 years he should get his pension
at least prospectively i.e. from the date on which the amended provision came
B into force, which was rejected. Single judge of the High Court allowed the
writ petition filed by the appellant. However, the Division Bench allowed the
Writ Appeal filed by the respondent. Hence this appeal, which raised the
following question :
C
Whether the appellant was entitled to get the benefit of the amended
Rule 22(1)(c) of the Rules from 20-9-1986?
Dismissing the appeal, this Court
HELD: I. From the various decisions of this Court spread over years,
D the following legal position clearly gets projected: (293-B)
Category I
If the person retiring is eligible for pension at the time of his retirement
and if he survives till the time by subsequent amendment of the relevant
pension scheme, he would become eligible to get enhanced pension or would
E become eligible to get more pension as per the new formula of computation
of pension subsequently brought into force, he would be entitled to get the
benefit of the amended pension provision from the date of such order as he
would be a member of the very same class of pensioners when the additional
benefit if being conferred on all of them. In such a situation the additional
F benefit available to the same class of pensioners cannot to denied to him on
the ground that he had retired prior to the date on which the aforesaid
additional benefit was conferred on all the members of the same class of
pensioners who had survived by the time the scheme granting additional
benefit to these pensioners came into force. (293-C-D)
G
D.S. Nakara v. Union of India, 11983) 1 SCC 305, followed.
Indian Ex-Services League v. Union of India, [1991) 2 SCC 104;
Krishena Kumar v. Union of India, [1990) 4 SCC 207; All India Reserve
Bank Retired Officers Association v. Union of India, [19921 Supp. 1 SCC
664; State of Punjab v. Justice S. S. Dewan (Retired Chief Justice), [1997)
H 4 SCC 569; Dhanraj v. State of J & K, (1998) 4 SCC 30; R. L. Marwaha
V. KASTURI v. MANAGING DIRECTOR, S.B.I.
271
v. Union of India, (1987] 4 SCC 31; T. S. Thiruvengadam v. Secretary to A
Government of India, Ministry of Finance, Department of Expenditure, New
Delhi, (1993] 2 SCC 174 and MC. Dhingra v. Union of India, (1996) 7 SCC
564, relied on.
Category II
However, if an employee at the time of his retirement is not eligible for
earning pension and stands outside the class of pensioners, if subsequently
B
by amendment of relevant pension Rules any beneficial umbrella of pension
scheme is extended to cover a new class of pensioners and when such a
subsequent scheme comes into force the erstwhile non-pensioner might have C
survived, then only if such extension of pension scheme to erstwhile nonpensioners is expressly made retrospective by the authorities promulgating
such scheme, the erstwhile non-pensioner who has retired prior to the
advent of such extended pension scheme can claim the benefit of such a new
extended pension scheme. If such new scheme is prospective only, old retiree
non-pensioners cannot get the benefit of such a scheme even if they survive D
such a new scheme. They will remain outside its sweep. (293-F-G)
Commander, Headquarter, Calcutta v. Capt. Biplabendra Chanda,
[1997] l SCC 208; Govt. ofT. N v. K. Jayaraman, [1997] 9 SCC 606 and
Union of India v. Lieut. (Mrs.) E. Jacats, [1997] 7 SCC 334, followed.
E
Indian Ex-Services League v. Union (JI India, (1991] 2 SCC 104;
Krishena Kumar v. Union of India, (1990) 4 SCC 207; All India Reserve
Bank Retired Officers Association v. Union of India, (1992) Supp. 1 SCC
664; State of Punjab v. Justice S. S. Dewan, (Retired Chief Justice, (1997)
4 SCC 569; Dhanraj v. State of J & K, (1998] 4 SCC 30; R. L. Marwaha
v. Union of India, (1987) 4 SCC 31; T. S. Thiruvengadam v. Secretary to F
Government of India, Ministry of Finance, Department of Expenditure, New
Delhi, [1993) 2 SCC 174 and MC. Dhingra v. Union of India, (1996] 7 SCC
564, held inapplicable.
2. If the claimant for pension benefit satisfartorily brings his case G
within the first category of cases he would be entitled to get the additional
benefits of pension computation even if he might have retired prior to
enforcement of such additional beneficial provisions. But if on the other hand
the case of a retired employee falls in the second category, the fact that he
retired prior to the relevant date of coming into operation of the new scheme
would disentitle him from getting such a new benefit. In the instant case, the H
272
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.
A appellant falls in the second category of cases. Hence he is not entitled to
the benefit. [294-A-B]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 5048 of
1998.
B
From the Judgment and Order dated 12.08.97 of the Madras High Court
in W. A. No. 838of1993.
c
N.G.R. Prasad and S. R Setia for the Appellant.
Anil B. Divan, Rajiv Kapur, K. Mohandas and Sanjay Kapur for the
Respondents.
The Judgment of the Court was delivered by
S.B. MAJMUDAR, J. Leave granted.
We have heard learned counsel for the parties finally in this appeal. The
short question involved in this appeal is: whether the appellant - original writ
D petitioner before the High Court was entitled to get the benefit of pension
scheme available to the State Bank employees under the State Bank of India
Employees Pension Fund Rules (for short the Rules). The learned Single
Judge of the High Court held that the appellant was so entitled. The Division
Bench set aside the said decision and rejected the claim of the appellant. In
E order to highlight the grievance of the appellant in this appeal, it is necessary
to note background skeletal facts.
BACKGROUND SKELETAL FACTS:
The appellant joined the respondent State Bank of India as an officer
on 22.10.1963. In the year 1979 the respondent Bank framed the pension
F scheme under Regulation 45 of the State Bank of India Officers (Determination
of Terms and Conditions of Service) Order of 1979. The State Bank of India
also had framed State Bank oflndia Employees Pension Fund Rules in exercise
of powers conferred by Section 50 of the State Bank of India Act. The
appellant became a member of the said Fund as required of him while joining
G the service of the Bank. He resigned from the Bank service on 3 lst July, 1984.
By that time he had completed 20 years and 9 months of pensionable service.
At the time of his resignation which was treated as voluntary retirement, he
was not entitled to get pension under the aforesaid Rules as the eligibility
requirement for earning pension as per Rule 22(1)(c) of the said Rules was to
the effect that the employee should have retired from Bank service after 25
H years of pensionable service. However, on account of various representations
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR, J.]
273
from the Bank employees the said eligibility condition was relaxed with effect A
from 20th September, 1986 whereby the original clause (c) Rule 22(1) was
replaced by another clause ( c) which provided that an employee retiring after
completion of 20 years of pensionable service irrespective of the age could
get benefit of the pension scheme by his request in writing. The appellant's
contention before the respondent authorities was that though he had resigned B
on 31st July, 1984 as he had already completed 20 years of pensionable
service by that time the benefit of the amended provision of Clause ( c) of Rule
22(1) of the Rules could be available to him at least prospectively from 20th
September, 1986 i.e. from the date on which amended provision came into
force. The said request was rejected by the respondent Bank authorities on
the ground that the said amended provision which introduced a new pension C
scheme for covering the additional class of retiring employees on completion
of 20 years of pensionable service, instead of earlier requirement of 25 years
of pensionable service, could not retrospectively apply in the case of the
appellant who had resigned and ceased to be a Bank employee more than two
years prior to coming into force of this amended pension scheme. The appellant
thereafter carried the matter by way of a writ in the High Court of Judicature D
at Madras. The learned Single Judge who heard the writ petition, following
the Constitution Bench judgment of this Court in the case of D.S. Nakara and
Ors. v. Union of India, [1983] 1 SCC 305; held that the appellant was entitled
to the benefit of amended provision of Rule 22( 1 )( c) from the date of coming
into operation of the said provision as he was a member of the employees E
pension fund at the time when he ceased to be a Bank employee and he had
already completed the requisite 20 years of pensionable service by that time.
The Division Bench of the High Court in Writ Appeal moved by the respondent
Bank took a contrary view and came to the conclusion that the amended
provision of the rule introduced a new scheme for covering entirely a distinct
class of erstwhile employees who had retired from Bank service and the said F
provision coul.d not have any retrospective effect and could not cover the
case of the appellant who had retired more than two years prior to the coming
into force of the amended scheme of pension. That is how the appellant is
before us in these proceedings.
RIVAL CONTENTIONS:
Learned counsel for the appellant, Shri N.G.R. Prasad, placing reliance
on a number of decisions of this Court and especially the Constitution Bench
decision of this Court in Nakara's case (Supra) vehemently contended that
G
the appellant who had completed 20 years of pensionable service at the time H
274
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.
A he retired after his resignation, formed the very same class of Bank employees
who retired after completing 20 years pensionable service and hence they had
all to be treated uniformly; that pension was not a bounty but was a reward
for meritorious past service and once the eligibility for earning the said
pension after completion of 20 years of pensionable service became available
B to an employee, whether he retired at one .point of time or other would not
make any difference. All such employees formed the same class. Hence, it was
not open to the respondent authorities to deny the appellant pensionary
benefit only on the ground that when he retired in 1984 after his resignation,
even though he had completed 20 years of pensionable service by then, the
then existing pension rules did not render him eligible to earn pension, when
C subsequently the said rules were relaxed for this very class of employees with
effect from September, 1986. In this connection it was submitted that the
appellant was not claiming any pension for the period from !st August, 1984
till 19th September, 1986 but at least from the date on which the amended
provision came into force and as the appellant was alive by then he was
entitled to proportionate pension at least from that date onwards to the extent
D of the pensionable service put in by him. The denial of the said benefit to
the appellant was purely arbitrary and unreasonable and was not justified on
the touchstone of Article 14 of the Constitution of India. He made it clear that
he was not challenging the cut off date fixed by the respondent authorities
while amending sub-clause (c) of Rule 22(1) of the Pension Rules. All that he
E submitted was that as the appellant falls in the same class of other Bank
employees who had completed 20 years of pensionable service by the time
of retirement the appellant was entitled to earn pension from 20th September,
1986 as he had survived on that date, his earlier retirement notwithstanding.
Learned senior counsel Shri Anil B. Divan for the respondent Bank
F authorities on the other hand submitted placing reliance on a number of
decisions of this Court that the Constitution Bench Judgment of this Court
in Nakara's case (supra) did not apply to the facts of the present case as the
appellant was not a 'pensioner' within the scheme of the pension when he
resigned from Bank job on 3 lst July, 1984. Consequently subsequent
G amendment of the rule after his retirement which extended the net of coverage
of eligible pensioner could not apply to him as he was outside the said sweep
of the amended provision when it came into force in September, 1986. That
the appellant cannot be said to be forming the same class of eligible pensioners
who had completed 20 years of pensionable service on 20th September, 1986.
By his own volition he had opted out from the Bank service two years prior
H thereto. That the amended provision would apply only to those Bank employees
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR,J.]
275
who had completed 20 years of pensionable service by 20th September, 1986 A
when the amended provision applied. Consequently, the claim of the appellant
was rightly rejected by the Division Bench of the High Court.
Point for consideration:
In view of the aforesaid rival contentions, the following solitary point B
arise for our consideration:
(I) Whether the appellant was entitled to get the benefit of amended
Rule 22(1) (c) of the Rules from 20th September, 1986 onwards?
We shall examine this solitary point for determination in the light of the rival C
contentions placed before us by learned counsel for the respective parties
based on a number of decisions of this Court to which we will make reference
at an appropriate place in the later part of this judgment.
The Pension Scheme before 20.09.1986:
Before we proceed to examine the rival contentions centering round this
point, it will be necessary to note the salient features of the pension scheme
applicable to Bank employees at the relevant time when the appellant resigned
from Bank service on 31st July, 1984 and also the change brought about in
the said scheme with effect from 20th September, 1986.
The respondent Bank, as noted earlier, in exercise of its powers conferred
under Section 50 of the State Bank oflndia Act (23of1955), the Central Board
of the State Bank of India, after consultation with the Reserve Bank of India
and with the previous sanction of the Central Government, framed regulations
fo.r providing for establishment and maintenance of pension fund for the
benefit of its employees. The said pension fund was created in pursuance of
clause (o) of sub-section (2) of Section 50 of the State Bank of India Act, 1955.
The regulations so framed were styled as the 'State Bank oflndia Employees'
Pension Fund Rules" which are being referred to by us in this judgment as
D
E
F
"the Rules'. Rule I thereof provided for constitution of a fund called "THE
STATE BANK OF INDIA EMPLOYEES' PENSION FUND". The said fund was G
deemed to have come into.existence on !st July, 1955. It is not in dispute
between the parties that the appellant when he joined the Bank service
became a member of the said fund. The term "Member" is defined in Rule 2
to mean:
"any person in the service of the Bank who has been admitted to the H
276
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.
A
membership of the fund".
Rule 7 of the Rules provide that:
" ..... every permanent employee in the service of the Bank who is
entitled to pension benefits under the terms and conditions of his
B
service shall become a member of the Fund from (a) the date from
which he is confirmed in the service of the Bank or (b) the date from
which he may be required to become a member of the Fund under the
terms and conditions of his service."
It is not in dispute between the parties that the appellant being a confirmed
C permanent employee became a member of the said Fund and he continued to
be so till the date of his resignation from the Bank service. Rule 3 of the Rules
provide that:
"The trustees of the fund shall be the Director of the Bank for the time
being and at every meeting of such trustees the Chairman of the Bank
D
shall be the Chairman of the meeting and in his absence one of the
Directors not being an executive officer shall be elected Chairman of
the meeting."
Rule 8 lays down the criteria for ruling out employees from membership of the
pension fund, the excluded categories of employees are mentioned in subE clauses (a) to (d) of Rule 8 who were not eligible to become members of the
fund. The appellant did not fall in any of these excluded categories. He,
therefore, by the thrust of rule 7 became a member of the pension fund. Rule
9 sub-rule (I) lays down that:
F
"Subject as hereinafter provided every employee shall, as from the
date of his admission to the fund, contribute to the fund every month
an amount equal to five per cent of his salary subject to a maximum
provjded therein".
Sub-rule (2) thereof entitles the powers of the trustees at their discretion to
G suspend the operation of sub-rule(!) or reduce the percentage of the members'
contribution at any time in the case of any class or category of employees
and for such period as they shall think necessary and to re-impose the
contribution should they consider it necessary but without retrospective
effect. As per sub-rule (3) of rule 9:
H
"Each employee's contributions to the fund under sub-rule (I) shall
-
V. KASTURI v. MANAGING DIRECTOR, S.B.l. [S.B. MAJMUDAR, J.]
277
be credited in the books of the fund to an account in his name and A
a statement of the account shall be supplied to him half-yearly".
Sub-rule (5) of Rule 9 provided that:
"In the event of member retiring from the Bank's service, or in the
event of a member dying, in each case before such member has B
qualified for a pension there shall be payable to him or, in the event
of his death, to the persons and in the manner named in sub-rule (7)
hereof, the amount of such member's own contributions with interest
accrued thereon".
Amended Rule 10 lays down that:
"The Bank will subscribe monthly to the fund a sum equal to ten per
cent of the salary payable by the Bank in respect of all employees who
are members of the fund. However, when an employee ceases to be
c
in pensionable service in terms of Rule 20, no subscription will be
made by the Bank for the period of such service. No amount subscribed D
by the Bank shall be credited to the individual account of any member".
By Rule 13 the trustees were given powers to invest the moneys of the fund
or any portion thereof in stock, funds and securities in which a trustee is
authorized to invest trust money by any law for the time being in force. Rule E
15 provided that:
" ... the retirement of all other employees of the Bank shall be subject
to the sanction of the Executive Committee or the Local Board
concerned with employment...".
It also lay down that
" .... any officer or other employee who shall leave the service without
sanction as required by this rule shall forfeit all claims upon the funds
for pension".
Rule 17 lays down that:
"Pensions shall begin to accrue on the first day succeeding that of
retirement and shall be payable monthly to the beneficiary personally
or to his order ... ".
As per rule 18:
F
G
H
278
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.
A
"Pensions shall in each case be debited to the member's account in
the fund until the balance thereof is exhausted and thereafter to the
general balance of the fund".
We may also in this connection refer to Rule 26 which provides that:
B
"Every employee when joining the fund shall subscribe an agreement
in the following form:-
c
D
I hereby declare that I have read and understood the Rules of the State
Bank of India Employees, Pension Fund and I hereby subscribe and agree to
be bound by the said Rules.
Name in full ........ .
Date of Birth ............. .
Nature of appointment. ................... .
Date of joining service .................. "
The next relevant rule is Rule 22 which is required to be extracted hereunder
in the form in which it existed at the time when the appellant ceased to be
a Bank employee on his resignation from Bank service on 31st July, 1984. Rule
E 22(1) sub-rules (a) to (c) read as follows:
F
G
"22 ( 1) A member shall be entitled to a pension under these Rules on
retiring from the Bank's service-
(a)
after having completed twenty years' pensionable service
provided that he has attained the age of fifty years;
(b) after having completed twenty years' pensionable service,
irrespective of the age he shall have attained, if he shall satisfy
the authority competent to sanction his retirement by approved
medical certificate or otherwise that he is incapacitated for further
active service;
(c)
after twenty-five years pensionable service."
CHANGES JN THE SCHEME AFTER 20.09.1986:
Sub-rule (2) of Rule 22 is not relevant for our present purpose. Rule 22
H sub-rule (J)(c) underwent a change and the revised form thereof with effect
-
J
V. KASTURI v. MANAGING DIRECTOR, S.B.l. [S.B. MAJMUDAR, J.]
279
from 20th September, 1986 read as under:
A
"( c) After having completed twenty years pensionable service,
irrespective of the age, he shall have attained, at his request in
writing.
(d) After twenty five years pensionable service.
22(3) A member who has been permitted to retire under clause l(c)
above shall be entitled to proportionate pension."
In other words, in clause ( c ), the period of twenty five years stood reduced
B
to twenty years w.e.f. 20th September, 1986.
C
Now a mere look at the aforesaid relevant provisions of the rules shows
that even though the appellant was a member of the pension Fund, when he
ceased to be a Bank employee after 3 lst July, 1984 on his resignation from
the Bank service, he was not entitled to pension as none of the conditions
of Rule 22(1) sub-rules (a) to (c) then existing applied in his case. Even though D
he had completed 20 years of pensionable service at that time he had not
attained the age of50 years. He was only 44 years of age. Hence Rule 22(l)(a)
did not apply in his case. Rule 22(1 )(b) also was out of picture for him as he
had not retired because of any incapacity. He was in good health but for his
own personal reasons he walked out of the Bank service at the age of 44 E
years. Then remains only clause ( c) of Rule 22( l) as then existing which laid
down that if a member of the fund who retired from bank service after 25 years
of pensionable service could get entitlement for full pension to be charged
on the said fund. Thus as Rule 22(1) stood in those days when the appellant
resigned from Bank service he was not eligible to earn any pension at all.
Once that happened, he could invoke the benefit of only Rule 9 sub-rule (5) F
and claim the amount of his own contributions remaining to the credit of his .
account in the fund with the interest accrued thereon. It is not in dispute that
he did receive the said amount of his personal contribution with interest
accrued thereon. As the situation then existed no further relief could have
been given or was available to the appellant and he could not have claimed G
any more amount from the fund. However, the appellant stakes his case for
pension under the said scheme only on the basis of the amended Rule 22( ! )
by insertion of a new sub-rule (c) with effect from 20th September, 1986. It
is also not in dispute between the parties that the said amended sub-clause
(c) became operative only from 20th September, 1986 and that it had no
retrospective effect. The short question is Whether the appellant could stake H
280
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.
A his claim for pension on the ground that he had completed 20 years of
pensionable service by the time he ceased to be a Bank employee in 1984,
when he had survived till the amended clause ( c) Rule 22( 1) came into force.
For supporting the aforesaid claim of the appellant, learned counsel for
the appellant vehemently contended that all the Bank employees who had
B completed 20 years of meritorious pensionable service by the time ofretirement
or resignation from Bank service, would form one class and if that is so, the
moment Rule 22(l)(c) get amended the pension scheme which had already
applied in the case of appellant being a member of the said scheme from the
inception of his bank service can be said to be not a new scheme but it can
C be said to be conferment of an additional advantage available to all the
members of the very same scheme and if all such pensioners similarly situated
being members of the same class namely, employees retiring after having
completed 20 years pensionable service, were treated differently on the specious
plea that only those who retire after the cut-off date of 20th September, 1986
would get pension and not those who retired earlier though having completed
D 20 years of pensionable service, a clear case of hostile discrimination would
result. The employees like the appellant who had retired earlier can be said
to be arbitrarily being denied the benefit of the pension scheme which got
further amended for the benefit of the very same class of employees. This
action on the part of the Bank would therefore, remain violative of Article 14
E of the Constitution of India.
F
G
On a close look of the relevant provisions of the Rules it is not possible
to agree with this contention. The appellant, in order to earn pension under
Rule 22(1) sub-clause (c) as amended in 1986 has to satisfy the following twin
conditions:
(i)
At the time when the amended sub-clause (c) applied i.e. from
22nd September, 1986, he should be a member of the pension
fund;
(iJ)
He should have by then completed 20 years of pensionable
service, and should have put forward his requisition in writing
for availing the benefit of the said provision.
Unless both these conditions are satisfied the amended clause (c) of Rule
22(1) cannot apply in his case. We have to note that the service bio-data of
the appellant contra indicates the applicability of those two conditions. He
H was not a member of the fund on 21st September, 1986. He had ceased to be
(
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR, J.)
281
a member of the fund on his retirement in 1984. As laid down in the definition A
of the term "member" the concerned employee should be in service of the
Bank and he should have been admitted to the membership of the fund. So
far as the admission into the membership of the fund is concerned, the
appellant has not satisfied the requirement inasmuch as he was a member of
the fund but the second requisition of the definition was not fulfilled by him B
in 1986 as he was not in service of the Bank on 20th September, 1986 when
clause 22(1)(c) as amended came into force. Consequently the first condition
for applicability of the amended clause (c) of Rule 22(1) did not apply to the
facts of the present case. Consequently, the question of compliance of the
second condition that he should have completed 20 years of pensionable
service would pale into insignificance as even though he had completed 20 C
years of pensionable service when he ceased to be a Bank employee in 1984
he did not come within the beneficial sweep of Rule 22( I) clause ( c) as
amended, as he was not a member of the pension fund in 1986 as he had
ceased to be a member of the fund after 31st July, 1984. He was, therefore,
out of the sweep of the pension fund scheme on 20th September, 1986 when D
Rule 22(1 )( c) got amended. The very opening part of Rule 22(1) lay down that
a member should be entitled to pension under the Rules if he satisfies the
conditions laid down in the said Rule but if he is not a member on the relevant
date, the question of his being covered by any of the clauses of the said rule
would not survive at all. Thus on the very scheme of the Rules and the
amended provision of sub-rule ( c) of Rule 22(1) the appellant's case would E
fail and consequently he would not be entitled to claim any benefit from the
aforesaid amended provision even prospectively from 20th September, 1986
as he was not at all covered by the said provision on that date.
We may also note that the second requirement for the applicability of
Rule 22(l)(c) as amended is that after having completed 20 years of pensionable F
service the concerned member of the fund irrespective of age i.e. even being
less than 50 years of age can invoke the benefit of the said provision by
making a request in writing for getting proportionate pension. Even if such
request is made it is in the hands of the Executive Committee of the Central
Board of the Bank to accept such a request or not as seen from Rule 15. Any G
officer who leaves the service without such sanction would forfeit all the
claims under the fund for pension. Consequently occasion for an employee
who is a member of the fund to make a request in writing to the Bank for
getting the benefit of pension scheme as per Rule 22(1)(c) as amended would
· arise provided such an employee has completed 20 years of pensionable
service and has obtained the right under the amended sub-clause (c) of Rule H
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SUPREME COURT REPORTS [''.98] SUPP. 2 S.C.R.
A 22(1) to make his request in writing. Thus, even the second condition for
applicability of Rule 22(\) sub-clause (c) as amended would pre-suppose that
the concerned member of the fund having completed 20 years of service must
be in a position at the time of retirement to make his request in writing for
getting the benefit of the said provision and such an eventuality would arise
only on and from the date on which the said amended provision came into
B force. Meaning thereby those employees like the appellant who had ceased
to be members prior to the said date and who might have completed 20 years
of service jn past will not be able to invoke the amended clause ( c) Rule 22(1)
at any time after their earlier retirement. Thus even the second condition of
giving a requisition in writing would not be available to such employees like
C the appellant. It is also axiomatic that when the appellant resigned on 31st
July, 1984 at the age of 44 years there was no occasion for him to give any
such written request for proportionate pension as in those days clause ( c) in
amended form was not available for being invoked by him. The second
condition for applicability of the amended clause (c) of Rule 22(1) must of
necessity therefore, mean that only those employees who were even less than
D 50 years of age and who retired on and after 20th September, 1986 having then
completed 20 years of pensionable service could invoke the said amended
provision by requesting in writing. The appellant did not and could not
comply with this second condition for invoking amended clause (c) of Rule
22(1).
E
We must also keep in view rule 26 of the pension Rules which clearly
shows that when a person enters the Bank service, he becomes a member of
the fund and agrees to be governed by the Rules of the scheme. He becomes
the beneficiary of the trust fund if he satisfies all the requisite conditions of
the pension fund. If he is not a beneficiary of the fund at the time when he
F retires, as it happened in the case of the appellant in 1984, no benefit under
the said scheme of the fund would be available to him subsequently as he
will be out of the class of beneficiaries. Consequently, no question of his
being given any discriminatory treatment vis-a-vis other existing beneficiaries
under the scheme of the fund that were already in Bank service as members
of the fund on 20th September, 1986 when the beneficial provisions of the
G amended Rule 22(l)(c) came into force, would at all survive for consideration.
For all these reasons, the solitary point for consideration has to be
answered against the appellant.
However, as learned counsel for the parties invited our attention to
H number of decisions of this Court in support of their respective cases, we
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR, J.]
283
deem it fit to refer to them and consider their sweep.
A
Learned counsel for the appellant, at the outset, invited our attention
to the Constitution Bench decision of this Court in D.S. Nakara, (supra). The
Constitution Bench in the aforesaid case, speaking through D.A. Desai, J, had
to consider the question of a cut-off date found in the pension scheme which
was uniformly applicable to all the Central Government employees who had B
formed one class at the time of retirement and who were entitled to pension.
The question was whether amount of pension which was computed for them
in the light of available formula could have been further enhanced on the
basis of a subsequent more beneficial formula and whether it could be denied
only on the ground that they had retired prior to the date on which such C
enhanced computation of pension was made available to the pensioners. In
the light of the aforesaid fact situation it was observed that all employees
governed by the pension scheme and had become eligible to earn pension at
the time of their retirement formed one class. It was held that such a cut off
date for granting additional benefits to only some of the pensioners in the
same class of employees could not be countenanced on the touchstone of D
Article 14 of the Constitution of India. In para 8 of the report it was noted
that the:
"Primary contention is that the pensioners of the Central Government
form a class for the purpose of pensionary benefits and there could
not be mini classification within the class designated as pensioners .... " E
A question was posed in para 9 of the report that can this class of pensioners
further be divisible for the purpose of' entitlement' and 'payment' of pension
into those who retired by certain date and those who retired after that date.
The aforesaid decision cannot be of any assistance to teamed counsel for the
appellant on the facts of the present case. In Nakara 's case admittedly all the F
Central Government servants were governed by pension scheme and were
eligible to draw pension on retirement. They therefore, formed one class. In
the facts of the present case, it is difficult to appreciate how the appellant can
be said to be forming the same class of employees who crune to be later on
governed for the first time in 1986 by the pension scheme by being conferred G
the benefit of newly introduced pension eligibility as per amended clause (c)
of Rule 22(1). The new class of employees covered by it was consisting of
all the then existing members of the fund who had completed 20 years of
pensionable service and who could be below the age of 50 years at the time
of their retirement as the earlier restriction of age of 55 years as found in
clause (a) of Rule 22(1) was revised by re-enacting clause (c). It is also to be H
284
SUPREME COURT REPORTS [1998] SUPP. 2 S.C.R.
A noted that earlier clause (a) gave retirees at the age of 50 years full pension.
And clause (c) sought to give retirees below 50 years only proportionate
pension for the first time after September, 1986. This new class of employees
were for the first time made eligible to get the benefit of pension scheme under
Rule 22(1). Such pensionary benefit was not available to them prior to the
B amendment of clause ( c) of Rule 22( 1 ). Hence, it was certainly a new pension
scheme for them and not old wine in a new bottle. For such class of employees
there was no question of any mini classification as for the entire class of such
employees for the first time the benefit of pension scheme was made available
by the amendment. The decision of the Constitution Bench in Nakara 's case
therefore, cannot advance the case of learned counsel for the appellant. We
G may also mention that the ratio of Nakara 's case was distinguished by two
later Constitution Bench decisions of this Court. In the case of India ExServices League and Ors. v. Union of India and Ors., (1991] 2 SCC 104, a later
Constitution Bench, speaking through Verma, J, (as he then was) made the
following pertinent observations in para 12 of the report:
D
E
F
G
H
"The liberalised pension scheme in the context of which the decision
was rendered in Nakara provided for computation of pension according
to a more liberal formula under which "average emoluments" were
determined with reference to the last ten months' salary instead of 36
months' salary provided earlier yielding a higher average, coupled
with a slab system and raising the ceiling limit for pension. This Court
held that where the mode of computation of pension is liberalised from
a specified date, its benefit must be given not merely to retirees
subsequent to that date but also to earlier existing retirees irrespective
of their date of retirement even though the earlier retirees would not
be entitled to any arrears prior to the specified date on the basis of
the revised computation made according to the liberalised formula. For
the purpose of such a scheme all existing retirees irrespective of the
date of their retirement, were held to constitute one class, any further
division within that class being impermissible. According to that
decision, the pension of all earlier retirees was to be recomputed as
on the specified date in accordance with the liberalised formula of
computation on the basis of the average emoluments of each retiree
payable on bis date of retirement. For this purpose there was no
revision of the .emoluments of the earlier retirees under the scheme.
It was clearly stated that if the pensioners form a class, their
computation cannot be by different formula affording unequal treatment
solely on the ground that 'some retired earlier and some retired later'.
V. KASTURI v. MANAGING DIRECTOR, S.B.I. [S.B. MAJMUDAR, J.]
285
This according to us is the decision in Nakara and no more".
A
Jn yet another later Constitution Bench judgment of this Court in the case of
Krishena Kumar etc. etc. v.