2009 Supreme(SC) 582

2009(4) Supreme 538
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court, Calcutta High Court and Kerala High Court)
D.K. Jain and R.M. Lodha, JJ.
Bank of India & Anr. — Appellants
versus
K. Mohandas & Ors. — Respondents
Civil Appeal No. 1942 of 2009
(Arising out of S.L.P. ) No. 22704/2005)
with
Civil Appeal No. 1943 to 1957/2009
Decided on : 27-03-2009

IMPORTANT POINT
Regulation 28 (as amended)of the Pension Regulations 1995 of the Banks is not applicable to optees of VRS 2000.

Headnote:(a) Indian Contract Act, 1872 – Section 10 – The true construction of a contract must depend upon the import of the words used and not upon what the parties choose to say afterwards – Subsequent conduct of the parties is irrelevant – Intention of the parties must be ascertained from the language they have used, considered in the light of the surrounding circumstances and the object of the contract – The contract should be read as a whole. (Para 28)

        AIR 1938 PC 26; AIR 1952 SC 9; 1900 AC 260 – Relied upon.

        (b) Pension Regulations, 1995 – Regulation 29(5) r/w section 10, Indian Contract Act, 1872 – If the terms applied by one party are unclear, an interpretation against that party is preferred – Therefore, if the intention was not to give pension as provided in Regulation 29 and particularly sub-regulation (5) thereof, the Banks could have said so in the scheme itself. (Paras 32 and 33)

        (c) Pension Regulations, 1995 – Regulation 28 – It would be unreasonable if amended Regulation 28 which was non-existent when the VRS was operative and not intended by the Banks to is made applicable. (Para 33)

        (d) Banking Law – VRS – The scheme intending to rationalizing the number of staff was oriented to lure the employees to go in for voluntary retirement – In this background the consideration that was to pass between the parties assumes significance – A harmonious construction to the Scheme and Pension Regulations, therefore, has to be given. (Para 34)

        (e) Pension Regulations, 1995 – Regulations 28 and 29 r/w VRS – Under VRS employees having rendered 15 years of service or completing 40 years of age but not having completed 20 years of service were not eligible for pensionary benefits under Regulation 29 – Proviso to Regulation 28 was put in place to cover such VRS optees – It was not intended to cover the optees who had already completed 20 years service as the provisions contained in Regulation 29 met that contingency – On a harmonious reading of Regulations 28 and 29 the proviso to regulation 28 cannot be said to unfair. (Paras 36 and 37)

        (f) Pension Regulations, 1995 – Regulation 29 r/w VRS – If the VRS optees who have not completed 20 years get excluded from the weightage of five years which has been given to optees who have completed 20 years of service or more u/r 29(5), it is no discrimination – Merely because the employees who have completed 15 years of service but not completed 20 years of service are not entitled to weightage of five years for qualifying service under Regulation 29(5), the employees who have completed 20 years of service or more cannot be denied such benefit. (Para 38)

        (g) Indian Contract Act, 1872 – Section 23 – The precise effect of Pension Regulations, for the purposes of pension, having been made part of scheme, is that Pension Regulations, to the extent, these are applicable, must be read into the VR Scheme – Section 34 has no application. (Para 39)

        (h) Banking Law – VRS – It cannot be accepted that VRS 2000 did not envisage grant of pension benefits under Regulation 29(5) of the Pension Regulations, 1995, to the optees of 20 years service along with payment of ex-gratia. (Para 41)

        2009 (1) Scale 168 – Distinguished.

        (i) Precedent – Every judgment must be read as applicable to the particular facts proved, or assumed to be proved – A case is only an authority for what it actually decides – Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision – Judgments are not to be construed as statutes and the observations must be read in the context in which they appear to have been stated. (Paras 43 and 48)

        1901 AC 495; AIR 1968 SC 647; (1987) 1 SCC 213; (2003) 2 SCC 111; (2004) 8 SCC 579 – Relied upon.

        (j) Estoppel – Employees seeking enforcement of the clause in the Scheme that provides that the optees will be eligible for pension under the Pension Regulations, 1995 – Employees not resiling from their acceptance or option to the VRS – Question of estoppel does not arise. (Para 52)

        (2003) 2 SCC 721 – Referred.

       Facts of the case :

        Interpretation of Banks’ Pension Regulations 29 and 28 (as amended in 2002 with retrospective effect) is in question in this batch of appeals.

       Finding of the Court :

        The employees who had completed 20 years of service and were pension optees and offered voluntary retirement under VRS 2000 and whose offers were accepted by the banks are entitled to addition of five years of notional service in calculating the length of service for the purposes of that Scheme as per Regulation 29(5) of the Pension Regulations, 1995. Employees are not entitled to interest on unpaid pension.

       Result : Appeals by the Banks dismissed and those by he employees allowed.