Vijay Kumar v. Central Bank of India and Others
Background
The appellant, a Chief Manager at Central Bank of India, was served a disciplinary charge for irregularities in sanctioning loans at his branch. He retired during the pending inquiry, but the disciplinary proceedings continued and ultimately resulted in a finding against him; the bank imposed compulsory retirement and later reduced his pension to two-thirds of the full amount, done by a Field General Manager while his appeal was pending. The Patna High Court upheld this reduction (while separately ordering release of his gratuity), leading to his appeal to the Supreme Court.
Decision Breakdown
The Supreme Court interpreted Regulation 33 of the Bank's Pension Regulations and held that where the very authority exercising disciplinary, appellate or reviewing power decides to reduce pension below the full amount, it must first consult the Bank's Board of Directors: a mandatory safeguard that was never followed here, and the appellant was also never given a hearing on the alleged Rs. 3.26 crore loss used to justify the cut. Finding no evidence of the claimed loss was ever placed before the disciplinary or appellate authorities, the Court declined the bank's request to use Article 142 to endorse the reduction anyway. It set aside the pension cut and the High Court's judgment, giving the bank two months to redo the process properly, with a hearing and Board consultation, failing which the appellant would be entitled to full pension from the date of his retirement.
Lesson Learnt
Pension is a constitutionally protected property right (Article 300A), not a discretionary bounty, and an employer cannot cut it without strictly following the mandatory procedural safeguards, such as a hearing for the employee and consultation with the appropriate governing body.