The power of the Bank to refuse pensionary benefits under Rule 11 of the Pension Rules is not arbitrary or unguided, and the Bank must conduct an enquiry before refusing such benefits.

JUDGMENT :

Jeevan Reddy, J.—The Imperial Bank of India constituted under the Imperial Bank of India Act, 1920, was taken over and succeeded by the State Bank of India, established under the State Bank of India Act, 1955. The conditions of service under the Bank are governed by the various rules and regulations made both prior to 1955 and continued thereafter, as well as those made after 1955. According to Rule 20 of the State Bank of India (Supervising Staff) Service Rules, " an employee shall retire from the service of the Bank on attaining the age of 58 years or upon the completion of thirty years' pensionable service, whichever occurs first". The first proviso to the said Rule reserves a power in the Bank to extend the period of service of an employee beyond 58 years of age, while the second proviso entitles the employee to retire voluntarily from the Bank's service on completion of 25 years' pensionable service. So far as pension is concerned, it is governed by the Imperial Bank of India Employees' Pension and Guarantee Fund Rules and Regulations. According to these Rules, the pension has to be contributed both by the employee and by the Bank, and it is payable to an employee completing the pensionable service.

2. The petitioner was appointed in the Imperial Bank of India on 29-1-1940 and continued under the service of the State Bank of India after the coming into existence of the latter. In 1957 he was promoted as an Agent. In August, 1970 he was working at the Bapatla Branch. By an order dated 12-8-1970 the petitioner was suspended pending enquiry into certain charges against him. A memo of charges was served upon him on 3-5-1972. After completion of the preliminary enquiry, an enquiry officer was appointed on 9-54973, who was replaced by another enquiry officer on 2-4-1974. The enquiry proceeded to some extent ; but, before it could be completed, the petitioner was informed by the Bank through its letter dated 5-5-1976 that " it has become impossible for the Bank to complete the enquiry well in time before you (petitioner) complete 60 years of age. Accordingly, you will not cease to be in the Bank service on the date of superannuation and you will not be paid any subsistence allowance with effect from 10-5-1976". The petitioner's service under the Bank was, accordingly, treated as having ceased with effect from 10-5-1976. Thereafter, the petitioner claimed the provident fund and pension payable to him ; but on the Bank refusing to pay the same, he has filed the present writ petition.

3. In so far as the Provident Fund is concerned, it is sated by Mr. K. Srinivasamurthy, the learned Counsel appearing for the Bank, that the Bank has since decided to pay the Provident Fund in full to the petitioner and that, he can drew it at any time. Even with respect to pension, the learned Counsel submitted that so far as the objection to pay the same to the petitioner but that, in so far as the payment of Bank's share in the pension fund is concerned, the petitioner is not entitled thereto unless and until the Bank grants the same in accordance with the aforementioned Pension Rules.

4. While according to the learned Counsel for the petitioner, Sri V. Jagannadha Rao, the petitioner is entitled to the full pension according to the said Pension Rules, it is contended by Mr. K. Srinivasamurthy that the petitioner does not have an automatic right to get full pension on retirement from the Bank service and that, unless and until the Bank sanctions the same, he is not entitled to the pension benefit as a matter of right. It is necessary to examine the relevant Pension Rules for resolving the said question.

5. The Imperial Bank of India Employees' Pension and Guarantee Fund Rules & Regulations, have been framed with the object of providing pension to the Bank employees and security to the Bank against losses arising from dishonesty on the part of the employees. It is not necessary to notice the Rules relating to Guarantee Section of the Fund. It w