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1997(10) Supreme 358
SUPREME COURT OF INDIA
(From Delhi High Court)
Sujata V. Manohar & D.P. Wadhwa, JJ.
State Bank of India -Appellant
versus
Shri C.B. Dhall -Respondent
Civil Appeal No. 10078 of 1983
Decided on 11-12-1997
Counsel for the Parties :
For the Appellant : Sunil Dogra, Ms. Monica Sharma, Advocates for S.A. Shroff & Co., Advocates.
Held : Rules 20-A and 20-B have now made a material difference to the applicability of Rule 11 of the Pension Rules. However, the case of A.N. Gupta (supra) is distinguishable as these Rules 20-A and 20-B, came into existence only w.e.f. March 31, 1977. Under Rule 20-A retirement under the Pension Fund Rules has now to be sanctioned by the competent authority. Under this Rule, retirement would mean retirement on superannuation or any other type of retirement. (Para 15)
Under Rule 20-B disciplinary proceedings if initiated against an employee before he retires from service could be continued and concluded even after his retirement and for the purpose of conclusion of the disciplinary proceedings, the employee is deemed to have continued in service but for no other purpose. After the disciplinary proceedings were concluded, the State Bank directed that (1) sanction of Dhall to retire be withheld and (2) Bank s contribution to his provident fund accounts be forfeited. Under Rule 10 of the Pension Fund Rules, an employee dismissed from the Bank Service for wilful neglect or fraud shall forfeit all claims upon the fund for pension. Dhall has not been dismissed from service though he was charged with wilful neglect and fraud. The question that arises for consideration is what is the effect of the direction of the State Bank that sanction to retire of Dhall be withheld. Here cessation of service of Dhall on retirement has not been sanctioned and accordingly as per the last portion of Rule 11 of the Pension Fund he forfeits all claims upon the fund for pension. (Para 16)
It is only if an employee has been dismissed from service that he forfeits all claims upon the fund for pension and so would appear to be the effect of Rule 11. Under Rule 7, an employee has right of property in the pension fund to the extent of his contribution made thereof with interest thereon. It would, therefore, appear to us that when the Rules talk of forfeiture of all claims upon the fund for pension that would only mean the Bank s contribution and the interest accruing thereon. These Rules cannot be extended to forfeit even the employee s contribution to the pension fund and the interest accruing thereon. However, after the introduction of Rule 5-A in the Pension Fund Rules w.e.f. April 1, 1968, there is not to be any contribution by employee to the pension fund. (Para 17)
(ii) Imperial Bank of India Pension and Guarantee Fund Rules-Rules 7 & 11-Imperial Bank of India Employees Provident Fund Rules-State Bank of India (Supervising Staff) Service Rules, 1975-Rules 20A, 20B & 21-Resolution of Central Bank of withdrawal of sanction to retire and forfeiture of Bank s contribution to respondent s provident fund account-Challenged-Respondent was appointed as Cashier in Imperial Bank of India in 1939-His services taken over by State Bank-Promotion as Head Cashier-Disciplinary proceedings-Charges of wilful neglect and fraud-Respondent completed 58 years of his age in 1977-Due to pendency of enquiry, he was given two years extension-Show cause notice as to why Bank s contribution to provident fund should not be forfeited and why sanction to his retirement be not withheld-Writ petition-Whether State Bank was within its authority to impose the penalty as conveyed to respondent ?-(Yes)-Impugned judgment of High Court that respondent would be entitled to his contribution, if any, to the Pension Fund alongwith interest accrued thereon upheld-Judgment of High Court in all other respects set aside. (Paras 16 to 19)
JUDGMENT
D.P. Wadhwa, J.-This appeal by the State Bank of India (for short, the Bank or State Bank ) arises out of the judgment dated August 22, 1983 of the learned single Judge of the High Court of Delhi. The reasons for the judgment were given by order dated September 2, 1983. The impugned judgment was delivered on a writ petition filed by the respondent, C.B. Dhall. Dhall had challenged the order of the Central Board of the State Bank dated June 4, 1980 by which it was resolved that "the sanction to retire you be withheld and the Bank s contribution to your provident fund Account amounting to Rs. 24006-49 be forfeited" which decision was communicated to Dhall by letter dated July 16, 1980 of the Chief General Manager of the Bank. The High Court allowed the writ petition and quashed the Resolution of the Central Board as well as the communication by which it was conveyed to Dhall. The High Court further ordered that the Bank shall pay within six weeks to Dhall the following amounts :
"1. The entire arrears of pension in regard to the pension and gratuity fund rules with interest @ 6 per annum.
2. Pension will be paid in future in accordance with the rules. Pension will be computed on the basis of full pay during the period of suspension.
3. The Provident Fund (Bank s contribution which has been withheld) with interest according to the Rules after deducting the admitted sum of Rs. 10,000/- P.F. and the interest up-to-date on payment according to the Rules will be calculated first. Thereafter the admitted amount of Rs. 10,000/- will be deducted therefrom. The balance shall be paid to the petitioner.
4. The petitioner shall be also be entitled to such other retirement benefits as are admissible to him according to the service rules, have already not been given to him.
5. Petitioner will also be entitled to full pay for the period of suspension and the bank shall pay the sum after deducting such amount as has been paid to him during the period of suspension by way of subsistence allowance or otherwise.
6. The petitioner shall be entitled to his costs.
Counsel s fee for Rs. 500/-."
2. Dhall was appointed as Cashier in the Imperial Bank of India in July 1939 and was confirmed to this post after completion of his period of probation of one year. The Imperial Bank of India was constituted under the Imperial Bank of India Act, 1920 which was repealed by the State Bank of India Act, 1955 by which the State Bank was constituted. Services of Dhall were taken over by the State Bank and the existing Services Rules, Pension Fund Rules and Provident Fund Rules of the Imperial Bank of India were adopted by the State Bank in respect of these employees. This was under Section 7 of the State Bank of India Act which, in relevant part, is as under :
"7. Transfer of service of existing officers and employees of the Imperial Bank of the State Bank.-(1) Every officer or other employee of the Imperial Bank (excepting the managing director the deputy managing director and other directors) in the employment of the Imperial Bank immediately before the appointed day shall on and from the appointed day, become an officer or other employee, as the case may be, of the State Bank, and shall hold his office or service therein by the same tenure, at the same remuneration and upon the same terms and conditions and with the same rights and privileges as to pension, gratuity and other matters as he would have held the same on the appointed day if the undertaking of the Imperial Bank had not vested in the State Bank, and shall continue to do so unless and until his employment in the State Bank is terminated or until his remuneration, terms or conditions are duly altered by the State Bank.
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