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Service & Administrative LawSupreme Court of India

The Reserve Bank of India v. M.T. Mani and Another

Civil Appeal · 2025 INSC 769Decided 23 May 2025
Civil Appeal No. 13962 of 2024
Justice Abhay S. Oka · Justice Augustine George Masih

Background

M.T. Mani joined the RBI in 1981 and retired in 2014, having repeatedly chosen to remain on the Contributory Provident Fund (CPF) scheme instead of switching to RBI's Pension Regulations across four earlier opportunities offered in 1990, 1992, 1995 and 2000. In 2020, RBI opened one final, last-chance option for CPF employees to switch to the Pension Scheme, but made pension payments prospective only from 1 July 2020, with no arrears for the years before. Mani opted into the new scheme but then challenged its prospective-only condition before the Kerala High Court, seeking pension arrears back to his 2014 retirement date. The High Court's Division Bench ruled in his favour, and RBI appealed to the Supreme Court.

Decision Breakdown

The Supreme Court reversed the High Court, holding that a policy's cut-off date can validly rest on legitimate financial and administrative considerations: here, an estimated retrospective liability exceeding Rs. 900 crore for the RBI, and is not arbitrary or discriminatory merely because it disadvantages some employees. Having voluntarily accepted the benefits of the 2020 Scheme, Mani could not selectively reject its unfavourable prospective-effect condition; the Scheme had to be accepted or rejected as a complete package, not picked apart ("approbation and reprobation"). The Kerala High Court's judgment was set aside and the Single Judge's original dismissal of the writ petition was restored.

Lesson Learnt

An employee who accepts the benefits of a scheme cannot later challenge only the terms that are unfavourable to them: such schemes must be taken or left as a whole, and courts will generally defer to an employer's reasoned, finance-driven cut-off date for extending benefits like pension.

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