In a significant legal development, the Supreme Court has delivered a judgement on pension arrears concerning the State Co-operative Bank and a former employee. The verdict highlights the importance of upholding employee rights and ensuring fair treatment in pension matters.
Facts
- Appellant was an employee of a co-operative bank in Kerala, serving for 29 years before superannuation.
- The single judge previously denied pension citing pending disciplinary proceedings and non-remittance of employer’s contribution.
- Committee found no merit in allegations, recommended appellant’s entitlement to terminal dues, including pension.
- Division Bench upheld single judge’s decision, dismissing the writ petition on grounds of pension scheme clause 5(2).
- Upon Committee’s decision in 2013, the bank informed the appellant of retiral dues disbursement and pension recommendation.
- Despite raising objections in a letter dated 19 October 2007, FAC’s pension payment was held up due to disciplinary proceedings.
- FAC’s application for pension was informed to be decided only after the disposal of pending cases before the High Court of Kerala on 31 January 2011.
- A Sub Committee was constituted following the Kerala High Court’s order dated 27 August 2013 to look into allegations against FAC.
- FAC had a liability of Rs 6.76 lakhs fastened upon him on 5 October 2007, affecting his retiral dues.
- FAC objected to the 12% interest on the employer’s share on 30 March 2010, instead proposing to pay interest at the standard rate for provident fund.
- On 16 April 2010 FAC was enrolled in the Pension Scheme by the first respondent.
- A self-financing pension scheme called the State Co-operative Bank and District Co-operative Bank Employees Self Financing Pension Scheme 2005 was formulated for bank employees.
- Despite conveying willingness to join the Pension Scheme, FAC’s pension records were not forwarded to the Board, prompting him to address a letter on 15 January 2011.
- A writ petition by FAC before the High Court led to a direction to the Bank to consider his representation.
- FAC was required to deposit an amount of Rs 6,48,565 as per an order dated 18 March 2015 by the Joint Registrar of Co-operative Societies.
Also Read: Anticipatory Bail Application in Different Cases: Landmark Judgment by the Supreme Court of India
Arguments
- The appellant is entitled to pension with effect from 1 February 2007 as per paragraph 19 of the Pension Scheme.
- The entitlement to receive pension from 1 February 2007 was denied based on para 5(2) of the Pension Scheme by the learned Single Judge and in appeal.
- The eligibility of the appellant for pension under the Pension Scheme is not disputed.
- The appellant, an employee who retired after 31 March 2005, is eligible under para 5(1)(i) of the Pension Scheme.
- Para 19 of the Pension Scheme specifies that superannuation pension starts from the month following the retirement month after reaching the superannuation age.
Also Read: Supreme Court of India Dismisses Writ Petition on Arms Export to Israel
Analysis
- Banks governed by the Pension Scheme must transfer the employer’s contribution with accrued interest as per para 29 of the Pension Scheme.
- Any delays by a Bank cannot lead to negative consequences for retirees.
- Sub-paragraph (2) of paragraph 5 has been struck down by the Single Judge of the Kerala High Court.
- Employees of Banks in service as of 01.04.2005 are entitled to arrears of pension if the employer’s contribution was remitted with eligible interest.
- Additional interest of 25% applies if attracted under paragraph 29 of the Scheme.
- The appellant had objections to the demand of interest at the rate of 12% per annum.
- The Bank informed the appellant of the amount required to be deposited, which included interest at the rate of 12% for the period 2007-2008.
- This information was provided to the appellant in a letter dated 15 March 2010.
- The Bank informed the appellant that his pension application would be considered after the ongoing cases against the Bank were disposed of.
- The appellant was only informed of the remittance required for his pension after being exonerated on 28 September 2013.
- The appellant made the necessary remittance on the same day of being informed.
- There was no valid reason for the Bank to withhold the pensionary dues by not providing all relevant papers to the authorities responsible for disbursal.
Also Read: National Task Force for Healthcare Safety: Ensuring Dignity and Protection for Medical Professionals
Decision
- The High Court judgment is set aside.
- The appellant is entitled to receive arrears of pension from 1 February 2007 to 1 November 2013.
- The second respondent must pay the arrears to the appellant within four weeks.
- Interest, if applicable, due to delayed contribution by the Bank shall be calculated and communicated to the first respondent within four weeks.
- The first respondent should remit the interest amount to the second respondent within one week of receiving the communication.
- The arrears owed to the appellant must be paid within two months of receipt of the order.
Case Title: ISSAC T.M. Vs. THE IDUKKI DISTRICT COOPERATIVE BANK LTD.
Case Number: C.A. No.-005430-005430 / 2019
