IMPORTANT POINT
Regulation 22 of UCO Bank (Employees ) Pension Regulations, 1995 is not in the nature of penalty. It only disentitles an employee who has resigned from service from becoming a member of the Pension Scheme in lieu of employees contribution to the provident fund.

Headnote:Industrial Disputes Act, 1947-Sections 2(P) and 18(1)-Industrial Disputes (Central) Rules, 1957-Rule 58-UCO Bank (Employees) Pension Regulations, 1995-Reg. 22-Pension Scheme-Indian Banks Association on 29.10.1993 agreed to introduce pension scheme in banks in lieu of employees contribution to provident fund-Respondent was appointed as a Class-IV employee in UCO Bank on 29.12.1959 and was promoted to class III post in 1980-On 25.2.1988, he resigned after giving one month s notice-He accepted his provident fund without protest-Subsequently, respondent opted for pension scheme-He having resigned in 1988, appellant bank declined to accept his option for admitting him as a member/beneficiary of the fund-Civil suit for declaration and injunction-Regulation 22 provides for disqualification of employees who have resigned from service and for those who have been dismissed or removed from service-Whether respondent was entitled to the benefit of pension scheme-(No).
Held : The words "resignation" and "retirement" carry different meanings in common parlance. An employee can resign at any point of time, even on the second day of his appointment but in the case of retirement he retires only after attaining the age of superannuation or in the case of voluntary retirement on completion of qualifying service. The effect of resignation and retirement to the extent that there is severance of employment but in service jurisprudence both the expressions are understood differently. Under the Regulations, the expressions "resignation" and "retirement" have been employed for different purpose and carry different meanings. The pension scheme herein is based on actuarial calculation; it is a self-financing scheme, which does not depend upon budgetary support and consequently it constitutes a complete code by itself. The scheme essentially covers retirees as the credit balance to their provident fund account is larger as compared to employees who resigned from service. Moreover, resignation brings about complete cessation of master and servant relationship whereas voluntary retirement maintains the relationship for the purposes of grant of retiral benefits, in view of the past service. Similarly, acceptance of resignation is dependent upon discretion of the employer whereas retirement is completion of service in terms of regulations/rules framed by the bank. Resignation can be tendered irrespective of the length of service whereas in the case of voluntary retirement, the employee has to complete qualifying service for retiral benefits. Further, there are different yardsticks and criteria for submitting resignation vis-a-vis voluntary retirement and acceptance thereof. Since the pension regulations disqualify an employee, who has resigned, from claiming pension the respondent cannot claim membership of the fund. In our view, regulation 22 provides for disqualification of employees who have resigned from service and for those who have been dismissed or removed from service. Hence, we do not find any merit in the arguments advanced on behalf of the respondent that regulation 22 makes an arbitrary and unreasonable classification repugnant to Article 14 of the Constitution by keeping out such class of employees. (Para 9)

JUDGMENT

V.N. Khare, CJI-Since common question of law is involved in these appeals, one at the instance of UCO Bank; second, Oriental Bank of Commerce; and the third, Bank of India, we propose to decide them by a common Judgment.

2. For the sake of convenience, we are noticing the facts asserted in Civil Appeal No. 3192 of 1999. The respondent - Sanwar Mal was appointed as a Class-IV employee in UCO Bank on 29.12.1959 and was promoted to class-III post in 1980. On 25.2.1988, he resigned after giving one month s notice. He accepted his provident fund without protest. On 29.10.1993, a settlement was arrived at under section 2(P) and section 18(1) of the Industrial Disputes Act, 1947 read with Rule 58 of the Industrial Disputes (Central) Rules, 1957 between Indian Banks Association (hereinafter referred to as "IBA") representing the managements of banks on one hand and All India Bank Employees Association representing the workmen. Pursuant to the said settlement, the IBA agreed to introduce pension scheme in banks in lieu of employees contribution to the provident fund. As a consequence of the said settlement, UCO Bank (Employees ) Pension Regulations, 1995 (hereinafter referred to as "the said regulations") were framed by the bank under section 19(2)(f) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 after consultation with the Reserve Bank of India. The said regulations were published with the prior sanction of the Central Government. The respondent herein opted for the pension scheme. However, since he had resigned in 1988, the appellant - bank declined to accept his option for admitting him as a member/beneficiary of the fund. Under such circumstances, he filed a suit in civil court for a declaration that he was entitled to pension as provided for under the regulations. He also prayed for mandatory injunction directing the appellant to make payment of arrears along with interest. The suit was decreed and the first appeal filed against the trial court judgment as also the second appeal filed by the appellant were dismissed. It is in this way that the appellant is in appeal before us by way of special leave.

3. Before coming to the arguments advanced before us, we would like to examine briefly the memorandum of settlement dated 29.10.1993 as well as the regulations. The recital to the said settlement shows that during negotiations of service conditions of workmen, the IBA agreed to introduce the pension scheme in banks for the workmen in lieu of employers contribution to the provident fund. This was pursuant to the demand made by All India Bank Employees Association representing the workmen, to introduce pension as a second retiral benefit in lieu of employers contribution to contributory provident fund. As per the terms of the said settlement, the banks agreed to introduce pension as second retiral benefit in lieu of contributory provident fund w.e.f. 1.11.1993. Under the settlement, the pension scheme was inter alia made applicable to all retired employees who were in service of the bank on or after 31.12.1985 and who retired on or after 1.1.1986 but before 1.11.1993. Provided that such employees opt for the pension scheme and refund within six months from 1.11.1993 the banks contribution to the provident fund. As a consequence of the said settlement, the appellant - Bank framed UCO Bank (Employees) Pension Regulations, 1995 (hereinafter referred to as "the said Regulations") in exercise of power conferred by section 19(2)(f) of the Banking Companies (Acquisition and transfer of Undertakings) Act, 1970. The said regulations were framed after consultation with the Reserve Bank of India and were published with the previous sanction of the Central Government.

4. Now coming to the said regulations, it may be stated that regulations 2(j) defines "contribution" to mean any sum credited by the bank on behalf of the employee to the Pension Fund. Under clause (k) of regulation (2), the "date of retireme

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2004 Supreme(SC) 295

IMPORTANT POINTRegulation 22 of UCO Bank (Employees ) Pension Regulations, 1995 is not in the nature of penalty. It only disentitles an employee who has resigned from service from becoming a member of the Pension Scheme in lieu of employees contribution to the provident fund.

Cases Referred (1)

IMPORTANT POINT
Regulation 22 of UCO Bank (Employees ) Pension Regulations, 1995 is not in the nature of penalty. It only disentitles an employee who has resigned from service from becoming a member of the Pension Scheme in lieu of employees contribution to the provident fund.