# UNITED BANK OF INDIA AND OTHERS v. UNITED BANK OF INDIA RETIREES' WELFARE ASSOCIATION AND OTHERS ETC

- **Citation:** [2018] 5 S.C.R. 436
- **Court:** Supreme Court of India
- **Decided:** 2018-05-16
- **Case number:** Civil Appeal Nos. 5252-5255 of 2018
- **Bench:** Adarsh Kumar Goel, Uday Umesh Lalit
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/united-bank-of-india-and-others-v-united-bank-of-india-retirees-welfare-32922
- **Pages:** 33

## Headnote

Service law: Pension - Dearness allowance - Claim of retirees
for full compensation against price rise on dearness relief -
Grievance of retirees was that appellant-bank made distinction in
terms of dearness relief on the basis of dates of retirement of
pensioners and that denial of benefit of full dearness relief to retirees
prior to 1.11.2002 was arbitrary - High Court held that there was
no justification for making distinction between pre November 2002
retirees and post November 2002 retirees and the appellant must
pay dearness relief to all pensioners at the same rate - Aggrieved,
Banks appealed - Held: Each class is governed by distinct and
different parameters - The conferral of advantages of benefits on
two different classes of retirees has a completely distinct formula
and rates and it is not possible to have a synthesis on any count or
to put both the sets of retirees on any common parameters - It is
thus hazardous to adopt a flat rate - Any attempt to tinker with
either the formula or the rate would make the whole scheme
unworkable - Both the categories of retirees, namely, pre November
2002 and post November, 2002 stand on different footing, the
parameters which govern the computation of dearness relief are
also on a different level - High Court failed to appreciate these
aspects - The impugned judgment was completely erroneous and is
set aside.
Allowing the appeals and dismissing writ petition, the Court
HELD: 1.1 Appendix II to the Pension Regulations had
categorized employees in three different segments and the
dearness relief payable on basic pension in respect of employees
in these three categories was on the basis of tapering formula
which differed in each of the categories. In respect of those who
were in the first category i.e. those who had retired earliest, the
[2018] 5 S.C.R. 436
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dearness relief was 0.67% on the first slab namely upto
Rs.1250/- of basic pension. The rate then tapered and finally
was 0.17% of basic pension in excess of Rs.2130/-. At the same
time in respect of retirees in the second category, the rate of
dearness relief was 0.35 per cent in respect of first slab namely
upto Rs.2400/-. Here also the dearness relief was on a tapering
formula and finally was 0.09% of basic pension in excess of
Rs.4100/-. The third category which was in respect of employees
who retired after 01.04.1998, the rate was 0.25% for the first
slab upto Rs.3380/-. Going by the tapering formula, the rate was
0.06 per cent of the basic pension in excess of Rs.5770/-. If
Clause 7(2) of the 9th Bipartite Settlement dated 27.04.2010 is
compared with the last category of the Appendix II of the Pension
Regulations, there is hardly any change in respect of retirees
during the period 01.04.1998 to 31.10.2002. Thus, whatever
benefit was conferred and was enjoyable by the employees who
retired before November 2002 was not taken away. [Para 21]
[464-G-H; 465-A-D]
1.2 If both categories dealt with by 9th Bipartite Settlement
dated 27.04.2010 are further compared, the retirees prior to
01.11.2002 would be entitled to dearness relief on a tapering
formula where the initial slab upto Rs.3550/- is to be governed
by quotient of 0.24%. The tapering formula then ends with 0.06%
of basic pension in excess of Rs.6010/-. The starting point is at a
level of 0.24% while the end point tapers to 0.06%. The maximum
advantage is sought to be given to those who are getting basic
pension at lower levels of slab who would get the dearness relief
at 0.24%. As against this, the retirees after 01.11.2002 are to be
given dearness relief at a flat rate of 0.18% of the basic pension.
Theoretically, the starting level for the retirees prior to 01.11.2002
is at a higher level of 0.24% as against the retirees after
01.11.2002. It could possibly be said that for those who are with
basic pension in the region of Rs.6000/-, on the basis of a tapering
formula may well, in t

## Text

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SUPREME COURT REPORTS
[2018] 5 S.C.R.
 UNITED BANK OF INDIA AND OTHERS
v.
UNITED BANK OF INDIA RETIREES' WELFARE
ASSOCIATION AND OTHERS ETC.
(Civil Appeal Nos. 5252-5255 of 2018)
 MAY 16, 2018
[ADARSH KUMAR GOEL AND UDAY UMESH LALIT, JJ.]
Service law: Pension - Dearness allowance - Claim of retirees
for full compensation against price rise on dearness relief -
Grievance of retirees was that appellant-bank made distinction in
terms of dearness relief on the basis of dates of retirement of
pensioners and that denial of benefit of full dearness relief to retirees
prior to 1.11.2002 was arbitrary - High Court held that there was
no justification for making distinction between pre November 2002
retirees and post November 2002 retirees and the appellant must
pay dearness relief to all pensioners at the same rate - Aggrieved,
Banks appealed - Held: Each class is governed by distinct and
different parameters - The conferral of advantages of benefits on
two different classes of retirees has a completely distinct formula
and rates and it is not possible to have a synthesis on any count or
to put both the sets of retirees on any common parameters - It is
thus hazardous to adopt a flat rate - Any attempt to tinker with
either the formula or the rate would make the whole scheme
unworkable - Both the categories of retirees, namely, pre November
2002 and post November, 2002 stand on different footing, the
parameters which govern the computation of dearness relief are
also on a different level - High Court failed to appreciate these
aspects - The impugned judgment was completely erroneous and is
set aside.
Allowing the appeals and dismissing writ petition, the Court
HELD: 1.1 Appendix II to the Pension Regulations had
categorized employees in three different segments and the
dearness relief payable on basic pension in respect of employees
in these three categories was on the basis of tapering formula
which differed in each of the categories. In respect of those who
were in the first category i.e. those who had retired earliest, the
[2018] 5 S.C.R. 436
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dearness relief was 0.67% on the first slab namely upto
Rs.1250/- of basic pension. The rate then tapered and finally
was 0.17% of basic pension in excess of Rs.2130/-. At the same
time in respect of retirees in the second category, the rate of
dearness relief was 0.35 per cent in respect of first slab namely
upto Rs.2400/-. Here also the dearness relief was on a tapering
formula and finally was 0.09% of basic pension in excess of
Rs.4100/-. The third category which was in respect of employees
who retired after 01.04.1998, the rate was 0.25% for the first
slab upto Rs.3380/-. Going by the tapering formula, the rate was
0.06 per cent of the basic pension in excess of Rs.5770/-. If
Clause 7(2) of the 9th Bipartite Settlement dated 27.04.2010 is
compared with the last category of the Appendix II of the Pension
Regulations, there is hardly any change in respect of retirees
during the period 01.04.1998 to 31.10.2002. Thus, whatever
benefit was conferred and was enjoyable by the employees who
retired before November 2002 was not taken away. [Para 21]
[464-G-H; 465-A-D]
1.2 If both categories dealt with by 9th Bipartite Settlement
dated 27.04.2010 are further compared, the retirees prior to
01.11.2002 would be entitled to dearness relief on a tapering
formula where the initial slab upto Rs.3550/- is to be governed
by quotient of 0.24%. The tapering formula then ends with 0.06%
of basic pension in excess of Rs.6010/-. The starting point is at a
level of 0.24% while the end point tapers to 0.06%. The maximum
advantage is sought to be given to those who are getting basic
pension at lower levels of slab who would get the dearness relief
at 0.24%. As against this, the retirees after 01.11.2002 are to be
given dearness relief at a flat rate of 0.18% of the basic pension.
Theoretically, the starting level for the retirees prior to 01.11.2002
is at a higher level of 0.24% as against the retirees after
01.11.2002. It could possibly be said that for those who are with
basic pension in the region of Rs.6000/-, on the basis of a tapering
formula may well, in the ultimate analysis, average to the same
level of 0.18%.[Para 22] [465-E-G]
2. The parity that was sought in the petition was not so
much regarding applicability of same rate of 0.18% but was in
respect of "flat rate" idea. The calculation of dearness allowance
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO.
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SUPREME COURT REPORTS
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of Rs.14274/- on basic pension of Rs.7880/- in the case of
Santipriya Roy is in keeping with tapering formula as given in the
Bipartite Settlement dated 27.04.2010. The tabular chart then
proceeds to calculate full compensation on account of dearness
allowance with slab rate of 0.24% on the entire basic pension of
Rs.7880/- which figure comes to Rs.18912/-. Thus the submission
was that the dearness relief be computed on 0.24% for the entirety
of basic pension and not just for the first slab upto Rs.3550/-.
But such calculation completely disregards that rate which is a
flat rate applicable in case of post 01.11.2002 retirees is not 0.24%
for the entire amount of basic pension but at a different level of
0.18% and the threshold requirement of quarterly average of
the Index is also different. If we were to simply borrow the same
rate of 0.18% in the case of retirees prior to 01.11.2002, the
concerned retirees may well be at a disadvantage. For instance,
the basic pension of Rs. 7880/- of said Santipriya Roy would yield
a figure of Rs. 14184/- with flat rate of 0.18%. It will not therefore
be correct to adopt and apply the same rate as is made applicable
in case of post 01.11.2002 retirees. [Para 23] [465-G-H; 466-A-C]
3. The tapering formula undoubtedly begins with 0.24%
for the first segment of Rs.3550/- of basic pension and then
progressively steps down and finally reaches the level of 0.06%
where the basic pension is in excess of Rs.6010/-. What is devised
by way of such tapering formula is higher rate at the lower levels
of segments so that larger number of peoples would get maximum
advantage and the rate thereafter keeps stepping down. The
benefit which is sought to be conferred by the tapering formula
lies in the averaging which comes to near about the same quantum
as is given to the post 01.11.2002 retirees. No illustration has
been placed on record to submit that even with 0.18% dearness
allowance those who retired after November 2002 walk away with
substantially greater advantage as against pre November 2002
retirees. Each class is governed by distinct and different
parameters. Both classes are distinct and do not form a
homogenous group. It would be extremely difficult and hazardous
to adopt a flat rate as is sought to be projected. [Para 24] [466-EG; 467-A-B]
4. Any attempt to tinker with either the formula or the rate
would make the whole scheme unworkable. It is true that the
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tapering formula was done away with by Reserve Bank of India
but that by itself cannot entitle the retirees prior to 01.11.2002
either to be conferred the advantage at the same rate made
applicable by Reserve Bank of India or at the flat rate of 0.24%
as was sought to be projected. [Para 25] [467-C, E]
Indian Ex-Services League and Others v. Union of India
and Others (1991) 2 SCC 104 : [1991] 1 SCR 158;
Union of India v. P. N. Menon and Others (1994) 4
SCC 68; Kunhayammed and Others v. State of Kerala
and Another (2000) 6 SCC 359 : [2000] 1 Suppl. SCR
538 - relied on.
D. S. Nakara v. Union of India (1983) 1 SCC 305 :
[1983] 2 SCR 165; Kallakkurichi Taluk Retired
Officials Association Tamil Nadu and others v. State of
Tamil Nadu (2013) 2 SCC 772 : [2013] 4 SCR 883;
Krishena Kumar v. Union of India and Others (1990) 4
SCC 207 : [1990] 3 SCR 352; State of Punjab v. Justice
S. S. Dewan (Retired Chief Justice) and Others (1997)
4 SCC 569 : [1997] 3 SCR 1027; Col. B. J. Akkara
(Retd.) v. Government of India and Others (2006) 11
SCC 709 : [2006] 7 Suppl. SCR 58- referred to.
Case Law Reference
[2013] 4 SCR 883
referred to Para 12
[1990] 3 SCR 352
referred to Para 13
[1991] 1 SCR 158
relied on Para 19
(1994) 4 SCC 68
relied on Para 19
[1997] 3 SCR 1027 referred to Para 19
[2006] 7 Suppl. SCR 58 referred to Para 19
[2013] 4 SCR 883 referred to Para 19
[2000] 1 Suppl. SCR 538 relied on Para 19
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 52525255 of 2018
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO.
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From the Judgment and Final Order dated 26.09.2016 read with
Order dated 05.12.2016 of the High Court at Calcutta in APO No. 315
of 2015, APO No. 316 of 2015 and RVWO No. 57 of 2016 respectively.
Dhruv Mehta, V. K. Bali, Jitendra Sharma, A.S. Nambiar, Ms. V.
Mohana, Sr. Advs., Rajesh Kumar, Gaurav Kumar Singh, Rakesh
Chaurasiya, Bhumit Solanki, M/s Mitter & Mitter Co., Arun K. Sinha,
P.N. Jha, Ms. Richa Nayak, Ms. Ritu Puri, Aditya Soni, Sumit Sinha,
Sinha Shrey Nikhilesh, Harsh B., Sewa Ram, C.S. Waliya, P. K. Manohar,
Rajshekhar Rao, Kotla Harshvardhan, Ms. Amita Singh Kalkal,
Ms. Aditi Gupta, Advs. for the appearing parties.
The Judgment of the Court was delivered by
UDAY UMESH LALIT, J. 1. Leave granted.
2. These appeals by special leave are directed against (i) the
common Judgment and Final Order dated 26.09.2016 passed by the High
Court at Calcutta in APO Nos.315 and 316 of 2015; and (ii) against the
order dated 05.12.2016 passed by the High Court at Calcutta in RVWO
Nos.57 and 58 of 2016 in aforementioned APO Nos.315 and 316 of
2015. By its Judgment and Orders under appeal, the High Court held
that there was no justification for making a distinction between pre
November, 2002 retirees and post November, 2002 retirees and the
appellant must pay dearness relief to all pensioners at the same rate.
3. A Memorandum of Settlement dated 29.10.1993 was entered
into between the managements of 58 banks as represented by the Indian
Banks' Association on one hand and their workmen as represented by
the All India Bank Employees' Association on the other. Said
memorandum recited that the parties had agreed to introduce pension
scheme in banks for the workmen/employees in lieu of employers'
contribution to the provident fund and that the pension scheme so agreed
was to be broadly on Central Government/Reserve Bank of India pattern.
Paragraph 6 of the memorandum dealt with Dearness Allowance relief
to the pensioners and it stipulated:
"Dearness relief to pensioners will be granted at such rates as
may be determined from time to time in line with the Dearness
Allowance formula in operation in Reserve Bank of India"
4. In exercise of powers conferred by Clause (f) of sub-Section
(2) of Section 19 of Banking Companies (Acquisition and Transfer of
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Undertakings) Act, 1970, the Board of Directors of the Union Bank of
India after consultation with the Reserve Bank of India and with the
previous sanction of the Central Government made "Union Bank of India
(Employees') Pension Regulations, 1995 (hereinafter referred to as the
"Pension Regulations"). Paragraph 2(d) defined "average emoluments"
to be the average of pay drawn by an employee during last 10 months of
service in the bank while Para 2(s) defined "pay". Para 37 of the Pension
Regulations was as under:
"Dearness Relief- (1) Dearness relief shall be granted on basic
pension or family pension or invalid Pension or on compassionate
allowance in accordance with the rates specified in Appendix II."
Appendix II to the Pension Regulations dealt with Dearness
Allowance on basic pension. It categorized employees as under:-
"(a) Those workmen who had retired on or after 01.01.1986 and
before 01.11.1992 and those officers who had retired on or
after 01.01.86 but before 01.07.1993.
(b) Those workmen who retired on or after 01.11.1992 and officers
who retired on or after 01.07.1993 and
(c) Those employees who would retire on or after 01.04.1998."
Different rates of Dearness Allowance relief as percentage of
basic pension were prescribed in respect of aforesaid three categories
in said appendix II as under:
"APPENDIX-II
(See Regulation 37)
Dearness relief on basic pension shall be as under:
(1) In the case of employees who were in the workmen cadre
and who retired on or after the 1st day of January, 1986, but
before the 1st day of November, 1992; and in the case of employees
who were in the officers cadre and who retired on or after the
1st day of January, 1986, but before the 1st day of July, 1993,
dearness relief shall be payable for every rise or be recoverable
for every fall, as the case may be, of every 4 points over 600
points in the quarterly average of the all India Average Consumer
Price Index for Industrial Workers in the series 1960 = 100. Such
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO. [UDAY UMESH LALIT, J.]
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increase or decrease in dearness relief for every said four points
shall be calculated in the manner given below:-
(2) In the case of employees who are in workmen cadre and who
retire on or after 1st day of November, 1992; and in the case of
employees who are in the officers' cadre and who retire on or
after 1st day of July, 1993, dearness relief shall be payable for
every rise or be recoverable for every fall, as the case may be, of
every 4 points over 1148 points in the quarterly average of All
India Average Consumer Price Index for Industrial workers in
the series 1960=100. Such increase or decrease in dearness relief
for every said four points shall be calculated in the manner given
below:
Scale of basic pension
Per month
(1)
The rate of dearness relief as a per
month percentage of basic pension
(2)
Scale of basic pension
(1)
The rate of dearness relief as a per
month
percentage
of
basic
pension
(2)
(i)
Up to Rs. 1250
(ii)
Rs.1251 to Rs. 2000
(iii)
Rs. 2001 to Rs.2130
(iv) Above Rs.2130
0.67 per cent.
0.67 per cent of Rs. 1250 plus
0.55 per cent of basic pension in
excess of Rs. 1250.
0.67 per cent of Rs. 1250 plus
0.55 per cent of the difference
between Rs. 2000 and Rs. 1250
plus 0.33 per cent of basic
pension in excess of Rs. 2000.
0.67 per cent of Rs.1250 plus
0.55 per cent of the difference
between Rs. 2000 and Rs. 1250
plus
0.33
per cent of the
difference between Rs. 2130 &
Rs. 2000 plus 0.17 per cent of
basic pension in excess of Rs.
2130.
Sc
Pe
(i
(ii
(ii
(iv
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3. In the case of employees who retire on or after the 1st day of
April, 1998, dearness relief shall be payable for every rise or be
recoverable for every fall, as the case may be, of every 4 points over
1616 points in the quarterly average of the All India Average Consumer
Price Index for Industrial workers in the series 1960=100. Such increase
or decrease in dearness relief for every said four points shall be calculated
in the manner given below:
a per
nsion
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO. [UDAY UMESH LALIT, J.]
as a per
basic
0 plus
sion in
0 plus
ference
. 1250
basic
00.
0 plus
ference
. 1250
f the
130 &
cent of
of Rs.
(i)
Up to Rs.2400
(ii)
Rs.2401 to
Rs.3850
(iii)
Rs.3851 to
Rs.4100
(iv)Above Rs.4100
0.35 per cent.
0.35 per cent of Rs.2400 plus 0.29
per cent of basic pension in excess
of Rs.2400.
0.35 per cent of Rs.2400 plus 0.29
per cent of the difference between
Rs.3850 and Rs.2400 plus 0.17 per
cent of basic pension in excess of
Rs.3850.
0.35 per cent of Rs.2400 plus 0.29
per cent of the difference between
Rs.3850 and Rs.2400 plus 0.17 per
cent of the difference between
Rs.4100 & Rs. 3850 Plus 0.09 per
cent of basic pension in excess of
Rs.4100.
Scale of basic pension
Per month
(1)
The rate of dearness relief as a per
month percentage of basic pension
(2)
(i)
Up to Rs. 3380
(ii)
Rs. 3381 to
Rs. 5420
(iii)
Rs. 5421 to
Rs. 5770
(iv) Above Rs.5770
0.25 per cent.
0.25 per cent of Rs.3380 plus 0.21
per cent of basic pension in excess
of Rs.3380.
0.25 per cent of Rs. 3380 plus 0.21
per cent of the difference between
Rs.5420 and Rs.3380 plus 0.12 per
cent of basic pension in excess of
Rs.5420.
0.25 per cent of Rs.3380 plus 0.21
per cent of the difference between
Rs.5420 and Rs.3380 plus 0.12 per
cent of the difference between
Rs.5770 & Rs. 5420 Plus 0.06 per
cent of basic pension in excess of
Rs.5770.
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5. On 02.06.2005 a Bipartite Settlement was arrived at between
the managements of 50 banks, represented by the Indian Banks'
Association on one hand and their workmen, represented by the All
India Bank Employees' Association, National Federation of Bank
Employees, Bank Employees' Federation of India, Indian National Bank
Employees' Federation and National Association of Bank Workers on
the other. It was inter alia recited:
"(D) The AIBEA, NCBE, BEFI, INBEF and NOBW (hereafter
jointly called the Unions) submitted their Charter of Demands on
various dates between 10th June 2002 and 5th September 2002
for revision in wages and other service conditions of workmen to
IBA and requested for negotiations on the same, with a view to
arriving at an amicable settlement.
(E) Simultaneously, IBA also raised with the Unions, issues on
behalf of the managements of banks concerned, to be discussed
and settled with a view to improving efficiency of operations,
customer service, utilisation of manpower, discipline and
maintaining harmonious industrial relations.
(F) The parties initially agreed after negotiations that the total
quantum of wage increase arising out of a Settlement to be signed
in this regard shall be Rs.1,288 crores per annum including the
cost of superannuation benefits and accordingly exchanged
minutes on 23
rd November 2004 at Mumbai. It is agreed that for
the purpose of this settlement, the additional cost of pension be
shared between the parties at the ratio as agreed and pension
costed accordingly."
Para 7 of the Settlement dealt with Dearness Allowance which
was provided at following rates:
"1. (i) Subordinate Staff
 0.18% of 'pay'
 (ii) Clerical Staff
 (a) 0.18% of 'pay' upto Rs.9,650/- plus
 (b) 0.15% of 'pay' above Rs.9,650/- and upto Rs.15,350/-
 plus
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(c) 0.09% of 'pay' above Rs.15,350/- and upto Rs.16,350/-.
 (d) 0.04% of 'pay' above Rs.16,350/-.
 2. On and from 1
st February, 2005, Dearness Allowance shall
be payable at 0.18% of Pay."
Para 38 provided for implementation of various provisions of the
Settlement and insofar as "Dearness Allowance- Single Slab Rate (0.18%
of pay)", the date of implementation was stated to be 01.02.2005.
6. On 02.06.2005 itself, a Joint Note with caption, "Salary Revision
for Officers-Conclusion of Discussions between the Indian Banks and
the Officers' Association" was prepared. It recited, "The representatives
of the Officers' Associations have also agreed that the existing service
conditions be modified to the extent what has been stated in Annexure
I." Annexure I to the Joint Note inter alia dealt with Dearness Allowance
and the relevant paragraph of said Annexure I was to the following
effect:
"2) Dearness Allowance
(a) For the period from 1
st November 2002 to 31
st January,
2005, Dearness Allowance shall be payable for every rise or
fall of 4 points over 2288 points in the quarterly average of the
All India Average Working Class Consumer Price Index
(General) Base 1960=100 at the following rates:
(i) 0.18% of 'pay' upto Rs.9,650/- plus
(ii) 0.15% of 'pay' above Rs.9,650/- and upto Rs.15,350/-
plus
(iii) 0.09% of 'pay' above Rs.15,350/- and upto Rs.16,350/-.
(iv) 0.04% of 'pay' above Rs.16,350/-.
(b) On and from 1
st February, 2005, Dearness Allowance shall be
payable for every rise or fall of 4 points over 2288 in the quarterly
average of the All India Average Working Class Consumer Price
Index (General) Base 1960=100 at 0.18 of Pay."
7. The Bipartite Settlement dated 02.06.2005 was operational for
a period of five years from 01.11.2002. Thereafter 9
th Bipartite
Settlement was arrived at between the parties on 27.04.2010 and was
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO. [UDAY UMESH LALIT, J.]
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made operational for five years from 01.11.2007. Clause 7(2) of the 9
th
Bipartite Settlement was as under:-
 "(i) On and from 1.05.2005, in the case of employees who
retired during the period 1.04.1998 to 31.10.2002, dearness relief
shall be payable for every rise or be recoverable for every fall, as
the case may be, of every four points over 1684 points in the
quarterly average of the All India Average Consumer price Index
for Industrial Workers in the series 1960=100. Such increase or
decrease in dearness relief for every said four points shall be
calculated in the manner given below:
(ii) In respect of retirees for the period 01.11.2002 to 30.04.2005
for whom pension has been revised w.e.f. 01.05.2005 based on
definition of pay in terms of Clause 6 of the Bipartite Settlement
dated 2
nd June, 2005, dearness relief shall be payable w.e.f.
Scale of basic pension
Per month
(1)
The rate of Dearness Relief payable
as a percentage of Basic Pension 0.24
per cent
(2)
(i)
Up to Rs.3550
(ii)
Rs.3551 to
Rs. 5650
(iii)
Rs. 5651 to
Rs. 6010
(iv) Above Rs. 6010
0.24 per cent.
0.24 per cent of Rs.3550 plus 0.20 per
cent of basic pension in excess of
Rs.3550.
0.24 per cent of Rs.3550 plus 0.20 per
cent
of the
difference
between
Rs.5650 and Rs.3550 plus 0.12 per
cent of basic pension in excess of
Rs.5650.
0.24 per cent of Rs.3550 plus 0.20 per
cent
of the
difference
between
Rs.5650 and Rs.3550 plus 0.12 per
cent
of the
difference
between
Rs.6010 & Rs. 5650 Plus 0.06 per
cent of basic pension in excess of
Rs.6010.
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01.05.2005 for every rise or be recoverable for every fall as the
case may be of every four points over 2288 points in the quarterly
average of All India Average Consumer Price Index for Industrial
Workers in the series 1960=100@0.18% of the basic pension.
(iii) In respect of employees who retire on or after 1.05.2005,
dearness relief shall be payable for every rise or be recoverable
for every fall, as the case may be, of every four points over 2288
points in the quarterly average of All India Average Consumer
price index for Industrial Workers in the series 1960=100, at the
rate of 0.18 per cent of basic pension.
(iv) In respect of employees who retired or died while in service
on or after 1.05.2005 Dearness Relief shall be payable at 0.18%
of the basic pension or family pension or invalid pension or
compassionate allowance as the case may be. Dearness Relief
in the above manner shall be paid for every rise or fall of 4 points
over 2288 points in the quarterly average of the All India Average
Consumer Price Index for industrial workers in the series
1960=100.
Note: The Dearness Relief as above shall be payable for the half
year commencing from the 1
st day of February and ending 31
st
day of July on the quarterly average of index figures published for
the months October, November and December of the previous
year and for the half year commencing from 1
st day of August
and ending with the 31
st day of January on the quarterly average
of the index figures published for the months of April, May and
June of the same year."
8. Thus, in case of employees who had retired during the period
01.04.1998 to 31.10.2002, dearness relief at the rate of 0.24% was
awardable upto Rs. 3550/- of basic pension per month and thereafter
the percentage for amounts in excess of Rs. 3550/- was successively at
reduced rates. On the other hand, in case of employees who retired
during the period 01.11.2002 to 30.04.2005 the percentage of 0.18%
was without any such tapering formula. Further, comparison with
Appendix II as originally forming part of the Pension Regulations shows
that with respect to three categories of retirees the dearness relief was
earlier computed on tapering formula. The idea of tapering formula
under the Bipartite Settlement dated 27.04.2010 was retained with respect
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO. [UDAY UMESH LALIT, J.]
payable
on 0.24
0.20 per
cess of
0.20 per
between
.12 per
cess of
0.20 per
between
.12 per
between
.06 per
cess of
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to pre November 2002 retirees while the dearness relief to post November
2002 retirees was to be at the flat rate of 0.18 %.
9. Around this time, Reserve Bank of India, which initially was
not giving full compensation against price rise on dearness relief to
employees who retired prior to 01.11.2002 that is to say, was also giving
dearness relief on a tapering formula, started giving full compensation
i.e. without any tapering formula as would be evident from its circulars
as under:
(A) Circular dated 01.04.2008
"TELEGRAM: "RESERVE BANK RESERVE BANK OF
 INDIA
TELEPHONE: 022-2260100 CENTRAL OFFICE
FAX : 022-22661892 HUMAN RESOURCES
 022 - 22702524 DEVELOPMENT
 DEPARTMENT
E-MAIL : cgminchrdd@rbi.org.in MUMBAI - 400 001.
CO.HRDD.No.10139/21.01/2007-08 April 1, 2008
 Chaitra 12, 1930 (S)
The Regional Director/Principal Chief General Manager
Chief General Manager-in-Charge/
Chief General Manager/General Manager (Officer-in-Charge)/
Principal,
Reserve Bank of India,
- - - - --
Dear Sir,
Payment of Dearness Relief on pension/family pension
In respect of employees retired before November 1, 2002
Please refer to the instructions contained in paragraphs 2 (ii), (iii)
and (iv) of circular CO.HRDD.No.G.97/7704/17.06.05/2007-08
dated February 1, 2008 with regard to payment of Dearness Relief
in respect of employees retired before November 1, 2002.
Pen
Pay
Nov
Pay
Nov
Pay
Nov
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2. It has been decided that, with effect from March 1, 2008, in
supersession of the above instructions, the Dearness Relief in
respect of employees who retired/died in harness before
November 1, 2002, may be paid as per the rates indicated below:
 3. The instructions contained in the "Note" at the end of
paragraphs 2(iii) of the abovementioned circular will stand modified
to that extent. You are requested to recalculate the Dearness
Relief and make payment accordingly.
Yours faithfully,
(A.K. Sarangi)
General Manager"
(B) CIRCULAR DATED 01.08.2008
"RESERVE BANK OF INDIA
www.rbi.org.in
CO.HRDD.No.G 46/1344/17.06.05/2008-2009
 August 1, 2008
Shravana 10, 1929 (Saka)
The Principal Chief General Manager/
Regional Director/
Chief General Manager-in-Charge/
Chief General Manager/
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO. [UDAY UMESH LALIT, J.]
Pension/family pension based on
Rate of Dearness Relief for the
period March 1, 2008 to July
31, 2008.
Payscales
effective
from
November 1, 1997 (CPI = 1684)
82.32%
of
pension/family
pension.
Payscales
effective
from
November 1, 1992 (CPI = 1148)
166.95% of pension/family
pension
Payscales
effective
from
November 1, 1987 (CPI=600)
411.38% of
pension/family
pension
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General Manager (Officer-in-Charge),
Principal,
Reserve Bank of India
__________________
Dear Sir,
Payment of Dearness Allowance/Dearness Relief
Based on All-India Consumer Price Index numbers for Industrial
Workers (base 1960 = 100) available for the quarter ended June
2008, rate of Dearness Allowance for the quarter August 2008 to
October 2008 for employees in Classes I, III and IV, drawing pay
in the scales of pay based on CPI = 2288, works out to 39.78% of
pay, half of 79.56%.
2. The rates of Dearness Relief on Pension/Family Pension/ExGratia, for the period August 2008 to January 2009, shall be
worked out as under:
(i) On Pension based on the revised pay scales effective from
November 1, 2002 - 39.78% of basic pension.
(ii) The rates of Dearness Relief in respect of employees who
retired/died in harness before November 1, 2002:
Pension/family pension
based on
Rate of Dearness Relief for the
period August 2008 to January,
2009
Pay-scales effective from
November 1, 1997
(CPI = 1684)
89.28%
of
pension/family
pension
Pay-scales effective from
November 1, 1992
(CPI = 1148)
177.10% of pension/family
pension
Pay-scales effective from
November 1, 1987
(CPI = 600)
430.81% of pension/family
pension
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3. You may please arrange to calculate and pay the Dearness
Allowance on "Pay" Dearness Relief on Pension, Family Pension
and Ex-Gratia amount, on the above basis, unless you receive
instructions from Central Office contrary to above.
Yours faithfully,
(Neeraj Nigam)
Deputy General Manager"
10. Since the benefit of grant of full compensation against price
rise on dearness relief as was extended by Reserve Bank of India, was
not extended to the retirees of United Bank of India who had retired
prior to 01.11.2002, Respondent Nos.1 to 4 herein preferred Writ Petition
No.507 of 2012 in the High Court at Calcutta. It was submitted that
though Reserve Bank of India started giving full compensation against
price rise on dearness relief to retirees prior to 01.11.2002 vide circulars
dated 01.04.2008, 01.08.2008 and 01.07.2010, the Appellant Bank
continued to make distinction in terms of dearness relief on the basis of
dates of retirement of the pensioners and that such action on part of
appellant was clearly opposed to para 6 of the Settlement dated
29.10.1993. Submitting that the cut-off date fixed by Appellant Bank
was in violation of Reserve Bank of India formula as well as was arbitrary
and irrational, the respondent Nos.1 to 4 claimed full compensation against
price rise on dearness relief. By way of example cases of respondent
Nos.3 to 4 were presented in para 30 of the petition in support of the
submission that the retirees prior to 01.11.2002 were getting prejudiced.
Said para 30 of the petition is quoted here for ready reference.
"30. The loss being suffered every month by the petitioner Nos. 3
and 4 for denial of RBI dearness relief formula on pension is as
follows:-
Santipriya Roy
Date of Retirement 30.09.2002
Basic Pension Rs.7880/-
Dearness Relief per slab on slab basis
 Rs. 3550/- x 0.24% Rs. 8,520/-
Next Rs. 2100/- x 0.20 % Rs. 4,200/-
or the
nuary,
family
family
family
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO. [UDAY UMESH LALIT, J.]
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Next Rs. 360/- x 0.12% Rs. 432/-
Next Rs. 1870/- x 0.06% Rs. 1,122/-
Rs. 7880/- Rs. 14,274/-
Dearness Relief for full compensation against price rise
Rs. 7880/- x 0.24% Rs. 18,912/-
Difference per slab Rs. 18,912/- (-) Rs. 14,274/- =Rs. 4,638/-
Total D.R. on Slab basis Rs.14,274/- x 708 slab Rs.10,105.99
Total D.R. on 100% Rs.18,912/- x 708 slab Rs.13,389.69
 ---------------
 Difference = Rs.3,283.70
 ---------------
Kalpataru Bhattachajee
Date of Retirement 31.10.2002
Basic Pension Rs. 5431/-
Dearness Relief per slab on slab basis
 Rs. 3550/- x 0.24% Rs. 8,520/-
Next Rs. 1881/- x 0.20% Rs. 3,762/-
 Rs. 5431/- Rs. 12,282/-
Dearness Relief per slab for full compensation against price rise.
 Rs. 5431/- x 0.24%
 Rs.13,034/-
Difference per slab Rs.13,034/- (-) Rs.12,282/- = Rs. 752/-
Total D.R. on Slab basis Rs.12,282/- x 708 slab Rs. 8,695.65
Total D.R. on 100% Rs.13,034/- x 708 slab Rs. 9,228.07
 ----------
 Difference Rs. 532.42"
 ----------
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11. In the affidavit in reply filed on behalf of the appellants it was
inter alia submitted that Pension Regulations having come into force in
1995 the settlement dated 29.10.1993 had no force and as such no benefit
could be drawn on the basis of Regulations or Circulars issued by Reserve
Bank of India. It was further submitted that the distinction in respect of
retirees prior to 01.11.2002 was on the basis of a Bipartite Settlement
dated 27.04.2010 and thus the genesis was stated to be in the agreement
between the parties.
12. The aforesaid writ petition was allowed by Single Judge of
the High Court vide judgment and order dated 04.03.2015. It was
observed that there was nothing in Pension Regulations indicating that
the Appellant Bank had abandoned its policy as spelt out in para 6 of the
Settlement of 1993 to follow the rates of relief and formula adopted by
Reserve Bank of India. Relying upon the decision of this Court in D.S.
Nakara v. Union of India1, it was observed that the classification made
in the instant case denying the benefit of full dearness relief to retirees
prior to 01.11.2002 was arbitrary and irrational. The Single Judge however
directed the Appellant Bank to take a reasoned decision with regard to
grant of 100% dearness relief to retirees prior to 01.11.2002.
13. The Judgment and order passed by the Single Judge directing
the appellant Bank to take fresh decision was questioned by the respondent
Nos.1 to 4 by filing APO No.315 of 2015, while the appellant bank
questioned the decision by filing APO No.316 of 2015, in so far as the
findings rendered and directions issued by the Single Judge were
concerned. Both these appeals were disposed of by the Division Bench
on 26.09.2016. The Division Bench relied upon the decision of this Court
in D.S. Nakara (supra) and in Kallakkurichi Taluk Retired Officials
Association Tamil Nadu and others v. State of Tamil Nadu2 and
observed as under:
"The effect of the joint note is that employees who retired before
the cut-off date would get dearness relief at a lower rate than
those who retired after that date. The dearness relief paid is
relatable to the cost of living index and varies in direct proportion
to the same. It must be borne in mind that dearness relief is an
amount paid to the retirees to neutralise the astronomical rise in
prices. The object of paying dearness relief is the same,
1 (1983) 1 SCC 305
2 (2013) 2 SCC 772
UNITED BANK OF INDIA v. UNITED BANK OF INDIA
RETIREES' WELFARE ASSO. [UDAY UMESH LALIT, J.]
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irrespective of the date on which the employee retires. Inflation
hits the employees who retire before the cut-off date as hard as it
does those who retire later. Therefore the dearness relief cannot
be different for two sets of retirees."
It further observed as under:
"There is no dispute that the Bank Pension Regulations, 1995
have not been amended. These Regulations have been framed in
consonance and under the powers conferred on the Bank under
the Banking Companies Act. They have a statutory force of law.
Clause 6 of the Pension regulations mandates that the dearness
relief will be paid to the employees of the member banks in
consonance with that paid by the Reserve Bank of India to its
employees. Therefore a joint note cannot take away the right of
employees to that dearness relief."
Holding the distinction between pre-November 2002 retirees and
post-November 2002 retirees to be unreasonable, arbitrary and
discriminatory the Division Bench directed the appellant to pay the
dearness relief to all pensioners at the same rate. The direction was
issued in following terms:
"Therefore, we direct the Bank to comply with Regulation 6 of
the Pension Regulations and to pay pension to the pre-2002 retirees
at the same rate as enjoyed by the post-2002 retirees, as has been
paid to the retired employees of the Reserve Bank of India. The
judgment of the learned Single Judge is modified to that extent."
14. The appellant preferred Review Applications being RVWO
Nos.57 and 58 of 2016 submitting that the decision dated 26.09.2016
required certain typographical changes. The Division Bench of the High
Court vide its order dated 05.12.2016 effected changes as stated therein
and disposed of the Review Applications.
15. The appellant bank being aggrieved, challenged the decisions
dated 26.09.2016 and 05.12.2016 rendered by the Division Bench by
filing these appeals by special leave on or about 07.02.2017. By that
time, a decision rendered by Division Bench of Madras High Court in
Writ Appeal Nos.355 of 2013 and allied matters on 17.06.2013 was
affirmed by this Court by dismissing appeals arising therefrom on
01.02.2017.
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16. At this stage it may be noted that Writ Petition Nos.5000050002 of 2006 and allied writ petitions titled as A.B. Kasturirangan v.
Canara Bank etc. were allowed by Single Judge of Madras High Court
by judgment and order dated 14.12.2012. The challenge was to the nongrant of benefit of 100% neutralization of dearness relief to retirees
prior to 01.11.2002 on lines similar to the challenge raised in the present
matters. It was observed by the Single Judge that the Bipartite Settlement
dated 02.06.2005 introduced dearness relief at the slab rate of 0.18% of
the basic pension; that the change from tapering rate of slab rate was
not an introduction of a new scheme but was a modification of the existing
one. He further observed that the classification introduced by the bank
was artificial and arbitrary and was not based on any rational principle
and that the bank had virtually created class within a class. The matter
was carried in appeal. While allowing the appeals and setting aside the
decision of the Single Judge, the Division Bench observed as under:
"... the settlement has to be taken as a package deal and when
labour has gained in the matter of wages and if there is some
reduction in the matter of dearness allowance so far as the award
is concerned, it cannot be said that the settlement as a whole is
unfair and unjust and it is not possible to scan the settlement in
bits and pieces and hold some parts good and acceptable and
others bad. It has been further held that unless it can be
demonstrated that the objectionable portion is such that it
completely outweighs all the other advantages gained, the Court
will be slow to hold a settlement as unfair and unjust and the
settlement has to be accepted or rejected as a whole.
........
... in the case on hand, the respondents are not covered by the
8th Bipartite Settlement/Joint Note and they were covered by
earlier Bipartite Settlement/Joint Note and they are not eligible to
get the benefits payable to the persons who are covered by the
8th Bipartite Settlement/Joint Note as they were made applicable
only to those employees who were in service on 01.11.2002. The
payment of pension and other related benefits are covered by the
earlier Settlement/Joint Note and hence, it is not open to the
respondents to contend that the benefits in the form of Dearness
Allowance at 0.18% is to be given to them. In the considered
UNITED BANK OF INDIA v.