1. Voluntary retirement — Claim for notional added service benefits — Conflict between general pension scheme and special voluntary retirement scheme. (Para 2 , 3 , 5 , 6 )
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2018 Supreme(SC) 1085
SUPREME COURT OF INDIA
Kurian Joseph, Sanjay Kishan Kaul, JJ.
NATIONAL INSURANCE SPECIAL VOLUNTARY RETIRED / RETIRED EMPLOYEES ASSOCIATION & ANR. – APPELLANTS
Versus
UNITED INDIA INSURANCE CO. LTD. & ANR. – RESPONDENTS
CIVIL APPEAL NO. 10775 of 2018 [Arising out of SLP(C) No.31906/2017] WITH CIVIL APPEAL NO. 10778 OF 2018 [@ SLP(C) No. 28823 OF 2018 @ DIARY NO. 34106/2017] CIVIL APPEAL NO. 10776 OF 2018 [@ SLP(C) No. 28821 OF 2018 @ DIARY NO. 34261/2017] CIVIL APPEAL NO. 10777 OF 2018 [@ SLP(C) No. 28822 OF 2018 @ DIARY NO. 34359/2017]
Decided On : 26-10-2018
Important Points
IMPORTANT POINTS
Financial impact of a decision on the employer is no ground for grant of refusal of relief.
Nothing can be added to or subtracted from the VRS 2004.
The VR Scheme has to be strictly adhered to.
Financial impact of a decision on the employer is no ground for grant of refusal of relief.
Nothing can be added to or subtracted from the VRS 2004.
The VR Scheme has to be strictly adhered to.
Subject
Employment Law - Voluntary Retirement Scheme
Act Referred
GENERAL INSURANCE BUSINESS NATIONALISATION ACT: S.17(a)
GENERAL INSURANCE EMPLOYEES SPECIAL VOLUNTARY RETIREMENT SCHEME: Cl.6(1)(c), Cl.5(1)
GENERAL INSURANCE EMPLOYEES SPECIAL VOLUNTARY RETIREMENT SCHEME: Cl.6(1)(c), Cl.5(1)
Headnote
(a) Administration of justice – Financial impact of a decision on the employer – No ground for grant of refusal of relief. (Para 14)
(b) General Insurance Employees’ Special Voluntary Retirement Scheme, 2004 – Para 6 – Scheme statutory in character being a scheme under Section 17-A of the General Insurance Business (Nationalisation) Act, 1972 – Nothing can be added to or subtracted from it – Any concession needs to be formally notified. (Para 15)
(2015) 4 SCC 482 – Relied upon
(c) General Insurance Employees’ Special Voluntary Retirement Scheme, 2004 – Para 5, 8(xiv) – Scheme having statutory flavor – Has to be strictly adhered to. (Para 20, 23)
(1998) 2 SCC 264; (2010) 5 SCC 335; (2003) 2 SCC 721; (2006) 3 SCC 708 – Relied upon
(1982) 2 SCC 463; (2015) 5 SCC 747 – Referred
Facts of the case:
The appellants are ex-employees of the respondent Insurance Companies, who initially joined as Assistants, between 1972 to 1980, and went out of service taking advantage of the General Insurance Employees’ Special Voluntary Retirement Scheme, 2004. The bone of contention is the plea of these appellants, that they are also entitled to certain benefits arising under the earlier scheme known as The General Insurance (Employees) Pension Scheme, 1995, which inter alia provided that the qualifying service of an employee, retiring under that 1995 Scheme, would be increased by a period not exceeding five (5) years, subject to certain conditions.
Finding of the Court:
The scheme has to be strictly adhered to.
Result: Appeals dismissed.
Legal Category Hierarchy
Table of Contents
2. Entitlement based on prior scheme and judicial observations — vs — Explicit exclusion of benefits under the terms of the special retirement scheme. (Para 6 , 10 , 11 )
3. Statutory nature of retirement scheme — Primacy of explicit exclusions over general benefits — Judicial observations in unrelated matters not constituting binding concessions. (Para 14 , 15 , 21 )
4. Statutory or contractual voluntary retirement schemes must be strictly adhered to — Benefits cannot be imported from other schemes contrary to explicit terms. (Para 15 , 20 )
5. Appeals dismissed — Division Bench judgment upheld except for observations on ex-gratia computation. (Para 24 )
6. Can employees claim benefits from a general pension scheme if a specific voluntary retirement scheme explicitly excludes them?
No. Statutory or contractual voluntary retirement schemes must be strictly adhered to. Benefits from other schemes cannot be imported if the specific scheme's terms explicitly exclude them. (Para 15 , 20 )
7. Does a judicial observation in a previous case regarding a different issue constitute a binding concession to grant benefits contrary to a statutory scheme?
No. Observations made in a judgment on an unrelated issue, without specific directions, cannot be read as a grant of relief or a concession that overrides the explicit terms of a statutory scheme. (Para 21 )
8. What is the legal effect of a voluntary retirement scheme framed under the General Insurance Business (Nationalisation) Act, 1972?
Such schemes are statutory in character. Consequently, it is inappropriate to add or subtract terms from the scheme, and any modification for the benefit of retirees would require a formal notification. (Para 15 )
JUDGMENT
SANJAY KISHAN KAUL, J.
1. Leave granted.
2. The appellants are ex-employees of the respondent Insurance Companies, who initially joined as Assistants, between 1972 to 1980,and went out of service taking advantage of the General Insurance Employees’ Special Voluntary Retirement Scheme, 2004 (for short ‘SVRS-2004 Scheme’). The bone of contention is the plea of these appellants, that they are also entitled to certain benefits arising under the earlier scheme known as The General Insurance (Employees) Pension Scheme, 1995 (for short ‘1995 Scheme’), which inter alia provided that the qualifying service of an employee, retiring under that1995Scheme, would be increased by a period not exceeding five (5) years, subject to certain conditions.
3. The concept of providing pension to the employees of the respondent Insurance Companies was introduced for the first time by the 1995 Scheme, which was notified in the Gazette of India on 28.6.1995, but was brought into force from 1.11.1993. The relevant para 30 of the 1995Scheme, which is of concern to the present dispute, is as under:
“30. Pension on voluntary retirement -
(1) At any time after an employee has completed twenty years of qualifying service, he may, by giving notice of not less than ninety days, in writing to the appointing authority, retire from service: …………”
xxxx xxxx xxxx xxxx xxxx
“(5) The qualifying service of an employee retiring voluntarily under this paragraph shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty three years and it does not take him beyond the date of retirement.”
4. The aforesaid 1995 Scheme, thus, envisaged an additional notional benefit of five (5) years’ service for employees retiring voluntarily under it, with the limitation that the qualifying service rendered by such employees: (i) shall not, in any case, exceed 33 years; and (ii) does not take them beyond the date of retirement.
5. The insurance companies were faced with excess manpower, and, thus, to prune the manpower size, a special scheme, being the SVRS2004 Scheme, was introduced for a limited period of sixty (60) days from the date of its notification, that is 1.1.2004. The Scheme was made applicable to permanent, full-time employees eligible to seek special voluntary retirement, provided that they had attained the age of 40 years and had completed the minimum qualifying service of ten (10) years, as on the date of notification. The relevant clauses 5 & 6 read as under:
“5. Amount of ex-gratia:-
(1) An employee seeking Special Voluntary Retirement under this Scheme shall been (sic.) [To be read as ‘be’] entitled to lower of the ex-gratia amount as given below, namely: sixty days salary for each completed year of service, OR, salary for the number of months of remaining service.
(2) The ex-gratia shall be computed on the basis of his/her salary as on the date of relieving. In case, wage revision is effected from a date prior to the date of this notification in the Official Gazette, the benefit of revised pay for the purpose of payment of ex-gratia will be allowed.
6. Other Benefits
(1) An employee opting for the Scheme shall also be eligible for the following benefits in addition to the ex-gratia amount mentioned in para5, namely:
(a) Provident Fund;
(b) Gratuity as per Payment of Gratuity Act, 1972 (39 of 1972) or gratuity; payable under the Rationalisation scheme, as the case may be;
(c) Pension (including commuted value of pension) as per General Insurance (Employees’) Pension Scheme, 1995, if eligible. However, the additional notional benefit of five years of added service as stipulated in para 30 of the said pension scheme shall not be admissible for the purpose of determining the quantum of pension and commutation of pension;
(d) Leave encashment.
(2) An employee who is opting for the scheme shall not be entitled to avail Leave Travel Subsidy and also encas
