Pension is a vested property right and deferred compensation for past service, not a bounty. Accordingly, statutory pension regulations cannot be overridden by non-statutory executive agreements, and accrued pensionary rights cannot be taken away through retrospective amendments.

ORDER :

1. Heard learned counsel for the parties.

2. I.A. Nos. 3, 4 & 5 of 2012 for intervention are permitted to be withdrawn, with liberty to avail appropriate remedy. Applications stand dismissed as withdrawn.

3. Leave granted in all the special leave petitions.

4. In these civil appeals, question arises with respect to the calculation of the pension on the basis of the definition of average emoluments given in Regulation 2(d) read with definition of the pay, as defined in Regulation 2(s) of the Bank (Employees) Pension Regulations, 1995 (hereinafter referred to as “the Regulations of 1995), of the concerned Banks.

5. The dispute is with respect to the employees who retired or died while in service on or after 1.4.1998 and before 31.10.2002. The Banks are governed by the Banking Companies (Acquisition and Transfer of Undertakings Act, 1970 (hereinafter referred to as “the Act of 1970”). The regulations have been framed in exercise of powers conferred under Section 19 of the Act of 1970.

6. We are concerned in the instant cases with the officer’s class of the Banks. The provisions of the Industrial Disputes Act, 1947 are admittedly not applicable to them.

7. On 29.9.1995, the Board of Directors of the respective nationalized banks, in exercise of their powers under Section 19 of the Act of 1970, in consultation with Reserve Bank of India (RBI) and with prior sanction of Central Government, had notified in Gazette the aforesaid Regulations of 1995.

8. It appears that Indian Banks’ Association was negotiating with the Officers’ Association and a Joint Note had been entered into and was signed on 14.12.1999, with regard to periodical pay revision of the officers of the member Banks. Joint Note indicated the date of effect of scale of pay, dearness allowance and pension, as was agreed to be with effect from 1.4.1998. Thereafter, on 18.1.2003 amendment had been made in the definition of ‘pay’ as defined in Regulation 2(s) of the Regulations of 1995 and explanation thereof was added.

9. The dispute arose after the amendment had been made with respect to pension which would be payable to the Officers who have died or retired after 1.4.1998. Though, the definition of ‘average emoluments’ as defined in Regulation 2(d) of the Regulations of 1995, specified that the average of the pay drawn by the employee during the last ten months of his service in the Bank shall be taken as “Average Emoluments” so as to work out the pension under Regulation 35(2). Regulation 35(2) provided that the basis of the calculation to be 50% of average emoluments, as defined in Regulation 2(d). Regulation 38 of the Regulations 1995 provided the method of determination of the period of ten months for average emoluments. In the case of voluntary retirement/premature retirement, the Bank shall reckon the period of ‘preceding’ ten months for the purpose of average emoluments, from the date on which the employee voluntarily retires or prematurely retires. By virtue of the explanation (c) that was added in Regulation 2(s) of the Regulations of 1995, it was provided that the pay shall be taken to mean the pay and emoluments that had been drawn before 1.4.1998 for the category of the officers, who have retired or died on or after 1.4.1998. The provisions contained in Regulations 2(d), 2(s)(c), 35, 37 and 38,are extracted hereunder:

“Regulation 2(d):

2. (d) “Average Emoluments” means the average of the pay drawn by an employee during the last ten months of his service in the Bank.”

“Regulation 2(s)(c):

“2(s) “Pay” includes:

(a)........

(b)........

(c) in relation to an employee who retired or died while in service on or after the 1st day of April, 1998:

(i) the basic pay including stagnation increments, if any.

(ii) all other components of pay counted for the purpose of making contribution to the Provident Fund and for the payment of dearness allowance.

(iii) increment component of Fixed Personal Allowance.

(iv) dearness allowance thereon on the above calculated up to Index Number