1. Employee dismissed from service; dismissal set aside by High Court; parties entered Joint Memo substituting penalty; dispute over subsequent request for pensionary benefits. (Para 3 , 4 )
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2023 Supreme(SC) 1250
SUPREME COURT OF INDIA
HIMA KOHLI, AHSANUDDIN AMANULLAH, JJ.
Syndicate Bank – Appellant
Versus
N.R. Bhat - Respondent
Petition For Special Leave To Appeal (Civil) No. 7277 of 2020
Decided on : 10-10-2023
Important Points
An employee who fails to exercise the option for pension during provided opportunities cannot claim such benefits at a belated stage. Additionally, an employer is liable to pay interest for the illegal withholding of settlement dues payable to the employee.
Subject
Employment - Employee Benefits and Rights
Act Referred
SYNDICATE BANK EMPLOYEES PENSION REGULATIONS: .
Headnote
Pension Option - Employee Rights - Circular dated 16th September, 2010 - The court discussed the employee's right to exercise the option of availing retiral benefits and the bank's obligation to consider and pass appropriate orders. The court also highlighted the employee's missed opportunity to opt for a pension scheme in 1995 and the bank's failure to implement the Joint Memo dated 17th June, 2019.
Fact of the Case:
The respondent-employee joined the bank in 1969, was dismissed in 1997, and the High Court set aside the dismissal orders in 2005. The bank disagreed with the liberty granted to the employee to apply for pensionary benefits in 2019.
Finding of the Court:
The court found that the employee's belated request for pension benefits was not permissible, but the bank was directed to pay interest for withholding the settlement dues.
Issues: The issues revolved around the employee's right to opt for pension benefits, the bank's obligation to consider the request, and the bank's failure to implement the settlement agreement.
Ratio Decidendi: The court held that the employee's belated request for pension benefits was not permissible due to missed opportunities and the settlement agreement, but the bank was directed to pay interest for withholding the settlement dues.
Final Decision: The petition for special leave to appeal was disposed of with the direction for the bank to pay interest for withholding the settlement dues.
Legal Category Hierarchy
Advocates:
Advocate Appeared:
For the Appellant : Mr. Puneet Taneja, Mr. Manmohan Singh Narua, Mr. Amit Yadav, Adv.
For the Respondents: Mr. Ayush Negi, Ms. Vishakha Upadhaya, Mr. Shikhar Chanda, Adv.
Advocate Appeared:
For the Appellant : Mr. Puneet Taneja, Mr. Manmohan Singh Narua, Mr. Amit Yadav, Adv.
For the Respondents: Mr. Ayush Negi, Ms. Vishakha Upadhaya, Mr. Shikhar Chanda, Adv.
Table of Contents
2. Bank contends pension request is barred by previous missed options and settlement finality; employee seeks interest for delayed payment of settlement dues. (Para 5 , 6 , 9 )
3. Restoration of employment relationship after setting aside dismissal provided opportunity to opt for pension; failure to exercise option within prescribed circulars precludes belated claims. (Para 7 , 8 )
4. An employee who fails to exercise a pension option within the timeframe provided by official circulars cannot claim such benefits at a belated stage. (Para 7 , 8 )
5. Pension request denied; Bank directed to pay simple interest on delayed settlement dues, with enhancement for non-payment. (Para 8 , 10 )
6. Can an employee claim pensionary benefits after failing to exercise the option within the time limits set by employer circulars?
No. If the employer-employee relationship is restored and the employee fails to exercise the option provided in official circulars, they cannot claim pensionary benefits at a belated stage, especially after entering into a settlement. (Para 7 , 8 )
7. Does the setting aside of a dismissal order restore the employer-employee relationship for the purpose of exercising benefit options?
Yes, once a dismissal order is set aside by the court, the relationship between the employer and employee is restored, enabling the employee to avail themselves of available options and circulars. (Para 7 )
8. Is an employer liable to pay interest for the illegal withholding of settlement dues?
Yes, if an employer fails to implement a settlement memo and illegally withholds dues, the court may direct the payment of interest as restitution to the employee. (Para 10 )
ORDER :
1. The Petitioner-Bank is aggrieved by an order dated 17th June, 2019 passed by the Division Bench of the High Court in an Intra Court Appeal1[Writ Appeal No.3255 of 2005] whereby, while taking on record the Joint Memo dated 17th June, 2019 filed by the parties, in view of the submission made by learned counsel for the respondent-employee that he would be submitting a request to the petitioner-Bank for opting for pension. The respondent-employee was permitted to exercise the option of availing retiral benefits and making a written request to the petitioner-Bank to pass appropriate orders within eight weeks thereafter.
2. Before adverting to the submissions made by learned counsel for the parties, a brief reference to the relevant facts is necessary:
3. The respondent-employee joined the services of the petitioner-Bank as an Officer Trainee on 31st March, 1969. On completion of probation, he was posted as a Probationary Junior Officer on 3rd October, 1969. On 6th August, 1982, the respondent employee was suspended in contemplation of disciplinary proceedings. After the disciplinary proceedings were concluded, the Disciplinary Authority passed an order on 3rd March, 1997 dismissing the respondent-employee from service. The said order has been upheld by the Appellate Authority vide order dated on 6th April, 1997. Aggrieved by the aforesaid orders, the respondent-employee preferred a writ petition No.20386/1997 before the High Court. Vide order dated 23rd June, 2005, the High Court set aside the two orders passed by the Disciplinary Authority and the Appellate Authority and the matter was remitted back to the Petitioner – Bank for reconsideration.
4. Aggrieved by the said order, the petitioner preferred an Intra Court Appeal1[Writ Appeal No.3255 of 2005] before the Division Bench of the High Court. During the pendency of the writ appeal, the parties arrived at an amicable settlement in terms of a Joint Memo dated 17th June, 2019 where under the petitioner-Bank agreed to substitute the penalty of dismissal from service imposed on the respondent-employee with the penalty of reduction of time scale of pay by four stages but without adversely affecting his retiral benefits. It was in the course of taking on record the aforesaid Joint Memo that the impugned order came to be passed granting liberty to the respondent-employee to exercise the option of availing retiral benefits and with a further direction to the petitioner-Bank to consider and pass appropriate orders on such a representation within eight weeks thereafter.
5. Aggrieved by the aforesaid liberty granted to the respondent-employee, the petitioner-Bank has filed the present petition stating inter alia that the High Court ought not to have permitted the respondent-employee to apply for pensionary benefits considering the fact that the entire matter was settled between the parties by virtue of the Joint Compromise Memo dated 17th June, 2019; that there was no further scope of a settlement with the petitioner-Bank and that the respondent-employee had an opportunity to opt for a pension scheme in the year 1995 when the Syndicate Bank Employees (Pension Regulations) were first notified and at that time, he was an employee of the Bank but having failed to do so then, he cannot demand that pension be released in his favour.
6. Learned counsel for the petitioner-Bank further draws the attention of this Court to the Circular dated 16th September, 2010 filed by the respondent-employee with counter affidavit (Annexure A) whereunder another opportunity was extended to those employees who had not opted for pension earlier, to enable them to do so in terms of the said circular. It is stated that despite the said option having been available to the respondent-employee in terms of the captioned circular, he had failed to exercise the same and therefore, is barred from raising the issue of exercising his option for pension as belatedly as in the year 2019.
7. We are inclined to accept the su
