V. Kannappan and others v. Additional Secretary and others
Background
Former Bank of Madura employees became ICICI Bank employees after a merger and voluntarily retired under its 2003 early retirement option. They received the scheme's benefits, including provident fund payments, and then claimed pension under the former bank's 1995 pension regulations. None had opted for that pension scheme during the opportunities previously provided.
Decision Breakdown
The Court dismissed the appeals and the related intervention applications. Although the 2003 retirement scheme came within the pension regulations, that did not make every participant eligible for pension. Both the amended regulations and the retirement scheme required an employee to have opted for pension under the 1995 regulations. The option mattered because choosing pension displaced the alternative provident fund arrangement, whereas these employees had continued under that arrangement. Their later retirement did not reopen the expired opportunity to choose the pension scheme.
Lesson Learnt
Voluntary retirement under a covered scheme does not create pension eligibility if the pension rules separately require a timely prior option. Employees' retirement benefits depend on the election and conditions in the applicable scheme, as well as service length.