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Central Bank of India and Ors. v. Tara Chand

Civil Appeal · 2019 INSC 846Decided 31 Jul 2019
Civil Appeal No. 5898 of 2019
Justice Ashok Bhushan · Justice Navin Sinha

Background

A Central Bank of India employee who had opted into the bank's pension scheme later took voluntary retirement in 2001 under the bank's Voluntary Retirement Scheme, 2001. The bank rejected his claim for pro-rata pension, but the Rajasthan High Court's Single Judge and then its Division Bench both ruled in his favour, holding that a specific clause of the retirement scheme entitled him to pension under the 1995 Pension Regulations. The bank appealed to the Supreme Court, arguing the High Court had misread the scheme and regulations.

Decision Breakdown

The Supreme Court held itself bound by its own two-judge-bench precedent in Bank of Baroda vs. Ganpat Singh Deora, which interpreted a materially identical voluntary retirement scheme and pension regulation framework, and found that judgment directly applicable rather than a differently-worded scheme considered in a separate precedent relied on by the employee. The Court declined to refer the matter to a larger bench since both precedents concerned different regulations. It held that the High Court had incorrectly interpreted the Scheme and Regulations, and, despite sympathy for the fact that the employee had been waiting 18 years for a pension decision, ruled that statutory schemes must be applied uniformly and no exception could be carved out for one individual's circumstances. The appeal was allowed, the High Court's judgments were set aside, and the employee's writ petition was dismissed, with each side bearing its own costs.

Lesson Learnt

Entitlement to retirement benefits under a voluntary retirement scheme depends strictly on the precise wording of that scheme and its governing regulations, and courts will apply settled precedent on materially identical scheme language uniformly, even where doing so causes hardship to an individual employee who has waited many years for a resolution.

Official source (sci.gov.in)View Judgment (PDF)

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