IMPORTANT POINT
Pension is a valuable right of the employee attached to the office and cannot be arbitrarily denied, but the entitlement must be shown.

Headnote:(a) Interpretation of statutes – Regulations – Regulations made under the statute laying down the terms and conditions of service of employees including the grant of retirement benefits have the force of law and are binding – Any action or order in breach of the Regulations shall be illegal and invalid – Even in the case of non-statutory Regulations, specifically providing for the grant of pensionary benefits to the employee qua his employer shall be governed by the terms and conditions encapsulated in such non-statutory Regulations. (Para 16, 17, 19)
        (1975) 1 SCC 421; (1988) 4 SCC 734; 1995 Supp (2) SCC 29; (2009) 4 SCC 299 – Relied upon
        (b) Service Law – Pension and CPF – Are conceptually separate and distinct – In case of CPF after retirement and receipt of the CPF amount the relationship between employee and employer ceases to exist without leaving any further legal right or obligation qua each other – Pension on the other hand is in a nature of right which employee has earned by rendering long service to the employer – It is a deferred payment of compensation for past service – It is a valuable right of the employee attached to the office and cannot be arbitrarily denied – However it must be shown that the employee is entitled to pension under the relevant rules or schemes. (Paras 21, 22, 26, 31, 36)
        (1990) 2 SCC 472; (1990) 4 SCC 207; 1992 Supp (1) SCC 664; (1971) 2 SCC 330; (1983) 1 SCC 305; (1985) 3 SCC 345; (2004) 13 SCC 662; (2006) 9 SCC 630; (1995) 6 SCC 227; (1996) 10 SCC 148; (2001) 8 SCC 71; (2002) 1 SCC 405; (2003) 10 SCC 297 – Relied upon
        (c) Service Law – Pension – Respondents availing retiral benefits arising out of the C.P.F and gratuity without any protest – Respondents making claim for pensionary benefits under the Pension Scheme for the first time only after their retirement with unreasonable delay – In some appeals, respondents never opting for the Pension Scheme for their alleged want of knowledge and still in some other appeals never fulfilling the quintessential conditions envisaged by the Regulations – Not entitled to any relief. (Para 38)
        (d) Constitution of India – Article 226 – Knowledge – Respondents claiming lack of knowledge of the scheme for want of individual notice – In view of the scheme the Corporation was not obliged to give individual notice for exercising option for the scheme – Moreover when notice or knowledge can be reasonably inferred or gathered from the conduct of the respondents in their ordinary course of business and from surrounding circumstances, then, it will constitute sufficient notice in the eyes of law. (Paras 38, 40)
        (2010) 2 SCC 59 – Relied upon
        (2009) 14 SCC 793 – Distinguished
       Facts of the case:
        1. The Pepsu RTC introduced pension scheme for its employees who were earlier governed by the CPF scheme.
        2. The question arising in these appeals is whether the employees entitled to the pension scheme even though they did not comply with the essential conditions thereof.
       Finding of the Court:
        Impugned judgment cannot be sustained.
       Result : Appeals allowed.

JUDGMENT

H.L. Dattu, J. —

1) Leave granted in SLP (C) No. 3349 of 2008 and SLP (C) 330 of 2008.

2) In Civil Appeal No. 4111 of 2008 - PEPSU Road Transport Corporation and Another v. Mangal Singh & Ors. (hereinafter referred to as “Mangal’s appeal”), respondent joined the services of the Pepsu Road Transport Corporation (hereinafter referred to as “Corporation”) as driver on 07.11.1974 and his services were governed by service rules of the Corporation which included the eligibility to receive Contributory Provident Fund (for short, “C.P.F.”) and gratuity. Subsequently, on 30.06.1982, the services of the respondent were terminated for his unauthorized absence from the duty. The respondent raised an industrial dispute against his termination order, which was dismissed by the Labour Court vide its order dated 11.02.1994. Aggrieved by the aforesaid order of the Labour Court, respondent filed a writ petition before the High Court of Punjab and Haryana, which was allowed vide order dated 10.04.1996, setting aside the order of termination. The High Court further directed the reinstatement of the respondent with effect from 18.06.1996. In the meantime, on 15.06.1992, the Corporation had introduced the Pension Scheme for its employees and also framed Regulations known as Pepsu Road Transport Corporation Employees Pension/Gratuity and General Provident Fund Regulations 1992 (`Regulations’ for short) in order to regulate the said scheme. The Pension Scheme in terms of Regulation 4 of the Regulations envisages the condition of exercise of the option within a period of six months from the date of issue of the Regulations by an employee in order to avail the pensionary benefits under the scheme. This time was further extended till 15.12.1992. The Regulation 4 of the said Regulations entitles the employee re-joining after leave or suspension to exercise his option for Pension Scheme within the period of 6 months from the date of his re-joining. The respondent had also submitted nomination form of the C.P.F. scheme. However, the respondent did not receive any retiral benefits on his retirement after attaining the age of superannuation due to pendency of litigation in the High Court regarding the payment of his back wages for the period of his absence from the service. It is not in dispute that respondent did not opt for the Pension Scheme till the date of his retirement. On 09.03.2005, the respondent filed a writ petition before the High Court for a direction to the Corporation to sanction pensionary benefits to the respondent under the pension scheme. The High Court has allowed the writ petition vide its order dated 19.01.2007 on the ground that the provisions of Regulation 4 do not cover the case of the persons reinstated into service pursuant to the orders of the Court. The High Court further directed the Corporation to allow the respondent to exercise his option for pension scheme within six months from the date of the order and the formalities for payment of pension be finalized within a particular time frame. Being aggrieved, the Corporation has filed this appeal.

3) In SLP (Civil) No. 3349 of 2008- PEPSU Road Transport Corporation and Another v. Sharanjit Kaur, widow of Bachittar Singh and Ors. (hereinafter referred to as Bachittar’s appeal): The respondent had joined the services of the Corporation as a Conductor on 07.07.1962. He was subscriber for C.P.F. and gratuity. In the year 1989, respondent took the loan from his C.P.F. account to the tune of ‘26,000/-. Subsequently, on 15.06.1992, the Corporation had introduced the Pension Scheme for its employees along with the Regulations to regulate the said scheme. The Pension Scheme in terms of Regulation 3 (h) of the Regulations envisaged the condition of refund of the loan taken from the C.P.F. account by an employee on or before 14.12.1992 in order to avail the pensionary benefits under the said Regulations. The respondent had applied for the pension scheme but failed to return the s

Click Here to Read the rest of this document

2011 Supreme(SC) 524

IMPORTANT POINT Pension is a valuable right of the employee attached to the office and cannot be arbitrarily denied, but the entitlement must be shown.

Cases Referred (17)

IMPORTANT POINT
Pension is a valuable right of the employee attached to the office and cannot be arbitrarily denied, but the entitlement must be shown.