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Syndicate Bank vs N.R. Bhat

Not available · 2023 INSC 1064Decided 10 Oct 2023
Not available
Hima Kohli · Ahsanuddin Amanullah

Background

N.R. Bhat, an employee of Syndicate Bank, was dismissed from service in 1997 following disciplinary proceedings, but the High Court later set aside the dismissal and remitted the matter back to the Bank. While an intra-court appeal by the Bank was pending, the parties reached a settlement in 2019 replacing the dismissal with a reduced pay scale, but the High Court's order also allowed Bhat to separately apply for pension benefits, even though he had earlier missed two opportunities (in 1995 and via a 2010 circular) to opt into the pension scheme. Syndicate Bank challenged this liberty granted to Bhat, and Bhat separately complained that the Bank had delayed paying him the settlement dues due under the 2019 Joint Memo.

Decision Breakdown

The Supreme Court agreed with the Bank that Bhat could not be allowed to belatedly opt for pension in 2019, since he had already had ample opportunity to do so earlier (in 1995 and again through the 2010 circular) once his employer-employee relationship was restored by the 2005 High Court order, and having entered into a settlement, he could not additionally claim pension benefits. However, the Court found merit in Bhat's separate grievance that the Bank had unjustifiably delayed paying his settlement dues (releasing them only in September 2023, years after they fell due), despite being told at the outset that the Joint Memo should be implemented. It therefore directed the Bank to pay Bhat simple interest at 12% per annum on the delayed amount from July 2019, escalating to 15% if not paid within four weeks.

Lesson Learnt

An employee who repeatedly fails to exercise a time-bound option (such as opting into a pension scheme) when it is available cannot invoke it belatedly after settling the dispute on other terms; conversely, an employer who delays paying agreed settlement dues can be made to pay a punitive rate of interest for that delay.

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

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