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Madras High Court
Indian Bank Voluntary Retirees ... vs Indian Banks' Association

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED; 14-10-2011

CORAM:

THE HONOURABLE MR.JUSTICE T.RAJA

W.P.Nos.10836, 10837 of 2002, 13044 of 2006 and 3769 of 2007

W.P.No.10836 of 2002

Indian Bank Voluntary Retirees Welfare

Association (Registered)

Rep. by its President N.S.Rajan

Old.No.10, New No.19, Second Street

Postal Colony,

West Mambalam, Chennai 600 033 ..Petitioner

Vs.

1.Indian Banks' Association

Rep.by its Secretary

Stadium House

6th Floor, Block 3

Veer Nariman Road

Mumbai 400 020

2.The Management of Indian Bank

Rep.by its Chairman and Managing Director

Central Office

Rajaji Salai

Chennai 600 001

3.All India Bank Employees Association

Represented by its General Secretary

Sri.Tarakeswar Chakraborthy

I Floor

3-B, Lal Bazaar Street

Calcutta 700 001

4.National Confederation of Bank Employees

Represented by its General Secretary

Sri Y.Taraknath

State Bank Buildings

Bank Street, Hyderabad 500 095

5.Indian National Bank Employees Federation

Represented by its General Secretary

Sri R.P.K.Murugesan

No.37, Alwar Thirunagar Annexe

Valasaravakkam, Chennai 600 087  Respondents

W.P.No.10837 of 2002

Indian Bank Voluntary Retirees Welfare

Association (Registered)22/2001

Rep. by its President N.S.Rajan

Old.No.10, New No.19, Second Street

Postal Colony,

West Mambalam, Chennai 600 033 ..Petitioner

Vs.

1.Indian Banks' Association

Rep.by its Secretary

Stadium House

6th Floor, Block 3

Veer Nariman Road

Mumbai 400 020

2.The Management of Indian Bank

Rep.by its Chairman and Managing Director

Central Office

Rajaji Salai

Chennai 600 001

3.All India Bank Employees Association

Represented by its General Secretary

Sri.S.R.Sen Gupta

5,B.T.M.Sarani

Calcutta 700 001

4.All India Bank Officers' Association

represented by its General Secretary

Sri.R.J.Sridharan

A.K.Nayak Bhavan

Second Line Beach road

Chennai 600 001

5.Indian National Bank Officers' Congress

represented by its General Secretary

Sri.K.K.Nair

C/o Bank of Baroda

No.3, Walchand Hirchand Marq

Ballart Pier, Mumbai 400 038

6.National Organization of Bank Officers

represented by its General Secretary

Sri Raviraman

Flat No.331, BPCL Staff Colony

Mumbai 400 074  Respondents

W.P.No.13044 of 2006

1.M.R.Rajan

2.V.Sundararaman

3.N.Ramanathan

4.M.Swaminathan

5.A.M.Inayathullah

6.N.Gnanaprakasam

7.N.Maruthanayagam

8.C.Naganathan

9.M.Veerapandian

10.N.Ramachandran

11.A.R.Kannan

12.K.James Paulraj

13.A.Thavamani

14.N.Veera Gandhi

15.A.Vatsala

16.M.Murugappan

17.R.Selvaraj

18.Ebenesar D.Rajkumar

19.N.S.Rajan

20.G.Ramani

21.V.Swaminathan

22.M.Sai Prasad

23.R.Meenakshi

24.S.Jagannathan

25.P.Nithyanandam

26.M.K.Selvaraj

27.V.Veeramani

28.V.Anantha Narayanan

29.M.Sivasubramanian

30.Namachivaya Vallatharasu

31.R.Chenniappan

32.V.Suthanthira Kumar

33.K.J.Urmila Devi

34.P.S.Uma

35.Rajalakshmi Viswanathan

36.R.Swarnalatha

37.B.Poongodi

38.K.Lakshmi ..Petitioners

vs.

1.Indian Banks' Association'

Rep.by its Secretary

Stadium House

6th Floor, Block 3,

Veer Nariman Road

Mumbai 400 020

2.The Management of Indian Bank

Rep.by its Chairman and Managing Director

Central Office

Rajaji Salai

Chennai 600 001 ..Respondents

W.P.No.3769 of 2007

R.Natesan ..Petitioner

vs.

1.Indian Banks' Association

rep.by its Secretary

Stadium House

6th Floor, Block 3

Veer Nariman Road

Mumbai 400 020

2.The Management of Indian Bank

rep.by its Chairman and Managing Director

Central Office

Rajaji Salai,Chennai 600 001 ..Respondents

Writ Petition No.10836/2002 filed under Article 226 of the Constitution of India praying for issuance of a writ of Declaration declaring that the second part of the clause (F) of the short recital of the case and Clause 16 of the Terms of Settlement of the Memorandum of Settlement dated 27.03.2000 entered into between the respondents insofar it restricted the Dearness Allowance of CPI 1616 points for the purpose of pension as void and unconstitutional.

Writ Petition No.10837/2002 filed under Article 226 of the Constitution of India praying for issuance of a writ of Declaration declaring that the 6th Clause of the Annexure I to the Joint Note dated 14.12.1999 the entered into between the respondents insofar it has restricted the Dearness Allowance to CPI 1616 points for the purpose of pension as void and unconstitutional.

Writ Petition No.13044/2006 filed under Article 226 of the Constitution of India praying for issuance of a writ of Declaration declaring that the petitioners are entitled for the arrears of pension for the period between their date of retirement till 30.04.2005 by taking into account the last drawn salary at the time of their retirement as the basis and direct the second respondent to pay the same to the petitioners within a time frame fixed by this Honourable Court.

Writ Petition No.3769/2007 filed under Article 226 of the Constitution of India praying for issuance of a writ of Declaration declaring that the petitioner is entitled for the arrears of pension with interest for the period between his date of retirement i.e., from February, 2001 till 30.04.2005 by taking into account the last drawn salary at the time of his retirement as the basis and direct the second respondent to pay the same to the petitioner within a time frame fixed by this Honourable Court.

For petitioners in

W.P.Nos.10836, 10837 of 2002

and 13044/2004 : Mr.M.Ramamoorthi

For petitioner in W.P.No.3769

Of 2007 : Mr.N.S.Rajan

For Respondent No.1

in all W.Ps. : Mr.V.Karthick

for M/s T.S.Gopalan & Co.

For Respondent No.2 : Mr.M.Vijayan

for M/s King and Patridge

...........

O R D E R

The writ petitioner in W.P.Nos.10836 and 10837 of 2002-Indian Bank Voluntary Retirees Welfare Association (registered), represented by its President has filed these writ petitions with the prayer to issue a writ of Declaration declaring the second part of the clause (F) of the short recital of the case and Clause 16 of the terms of the Memorandum of Settlement dated 27.03.2000 entered into between the respondents insofar as it restricted the Dearness Allowance to CPI 1616 points for the purpose of pension, as void and unconstitutional.

Writ Petition No.13044/2006 is filed for issuance of a writ of Declaration declaring that the petitioners are entitled for the arrears of pension for the period between their date of retirement till 30.04.2005 by taking into account the last drawn salary at the time of their retirement as the basis and direct the second respondent to pay the same to the petitioners within a time frame fixed by this Honourable Court.

Writ Petition No.3769/2007 is filed for issuance of a writ of Declaration declaring that the petitioner is entitled for the arrears of pension with interest for the period between his date of retirement i.e., from February, 2001 till 30.04.2005 by taking into account the last drawn salary at the time of his retirement as the basis and direct the second respondent to pay the same to the petitioner within a time frame fixed by this Honourable Court.

2. (i) The learned counsel appearing for the petitioner association in W.P.Nos.10836 and 10837 of 2002 submitted that all the members of the petitioner association were in the service of the Indian Bank, the second respondent herein. They opted for voluntary retirement under the Indian Bank Voluntary Retirement Scheme 2000. The Board of second respondent has adopted the Indian Bank (Employees) Pension Regulations 1995 on 26.9.1995 in terms of Section 19(1) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 and the same was also notified on 29.9.1995. Regulation 29 of the Pension Regulations of the second respondent permits an employee to opt for voluntary retirement on completion of twenty years of qualifying service by giving notice not less than 3 months in writing. (ii) When the matter stood as above, as the Indian Bank Employees Voluntary Retirement Scheme 2000 has given promise to the members of the petitioner association for pension (including commuted value of pension) as per the Indian Bank Voluntary Employees Pension Regulations, 1995 and as the said scheme was open between 27.11.2000 and 26.12.2000, all the members of the petitioner association accepted the Voluntary Retirement Scheme (hereinafter referred to as "the V.R.S."). But, one peculiar problem was also faced by the members of the petitioner association. Once an employee opted for voluntary scheme under the scheme, he cannot withdraw the same on his own volition. But, at the same time, it was open to the second respondent either to accept it or reject it depending upon the requirement of the bank. According to the learned counsel for the petitioners, this itself is arbitrary, capricious and violative of Article 14 of the Constitution of India. The members of the petitioner association after sending their applications accepting the V.R.S., they were relieved by the second respondent on 31.12.2000 without giving three months' notice as stipulated under the contract of employment. However, in the relieving order nothing has been stated as to when the employees would be paid their retiral benefits, such as Provident Fund, Gratuity, Pension etc, The reliving order further stated that the pension eligibility shall be in terms of Indian Bank Employees Pension Regulations 1995 under Regulation 28 subject to the proposed amendment. The second respondent bank after accepting the request of the members of the petitioner association to go for V.R.S., issued reliving order stating that the pension eligibility in terms of Indian Bank Employees' Pension Regulations is subject to the proposed amendment. The stand of the second respondent accepting the offer of V.R.S. without deciding the pension eligibility is violative of Article 21 of the Constitution of India. Even on the last date of receipt of applications for V.R.S.2000, i.e., on 26.12.2000, the second respondent did not even inform the employees about the proposed amendment. Even many employees have given voluntary retirement on 31.12.2000. The relieving order informed the petitioner and its members that the pension eligibility shall be in terms of the Indian Bank Employees Pension Regulations subject to the proposed amendment. The members have learnt that under the proposed amendment the employees would not be given the benefit of Regulation 29(5), i.e., notional extension of 5 years of qualifying service. The said decision of the second respondent is not only unilateral and arbitrary, but also capricious and unfair for the reason that the Indian Overseas Bank, another Nationalised Bank, while floating a similar V.R.S.2000 under its circular Memo No.7(f) of 2000-2001 dated 3.1.2001 permitted its employees to withdraw the applications for V.R.S., 2000 following the proposed amendment in the pension regulations. Whileso, the second respondent, Indian Bank alone did not give any such option to its employees and without giving any objections their applications were processed subject to the proposed amendment. After accepting their request for voluntary retirement, they were relieved from service on 31.12.2000. Therefore, their case is after accepting the request for voluntary retirement from the members of the petitioner association, they cannot include or bring any amendment to their detriments. If so, the subsequent amendment to Regulation 28 of the Pension Regulations cannot bind the employees. According to the learned counsel, the acceptance of V.R.S.applications of the employees by the Bank is tantamount to conclusion of the contract. Once the contract is concluded, the second respondent is estopped from altering the contract subsequently. (iii) The learned counsel further contended that as per Regulation 38 of the Indian Bank Employees Pension Regulations 1995, the period of preceding 10 months for the purpose of average emoluments has to be calculated from the date of retirement for fixing the basic pension, namely, the last basic pay drawn and other superannuation benefits. Whileso, the respondent entered into a bipartite settlement on 14.12.1999 fixing different basic pay for the employees opting for voluntary retirement for the purpose of pension alone. As per the Bipartite Settlement, the pay for pension is the aggregate of pre-revised pay and D.A.,thereon at CPI 1616 points. This part of the settlement is violative of Article 14 of the Constitution of India and also Regulation 36 of the Pension Regulations of the second respondent Bank.

(iv) The learned counsel for the petitioner also submitted that as per Regulation 2(s)(b) of the Indian Bank Employees Pension Regulations, 1995, "Pay" means the basic pay including stagnation increment, if any and all allowances counted for the purpose of making contribution to the Provident Fund and for the payment of dearness allowance and increment component of Fixed Personal Allowance and dearness allowance calculated upto Index Number 1148 points in the All India Average Consumer Price Index for Industrial Workers in the series 1960=100. The said Index number 1148 has been substituted by further points through wage settlements and the present Index Number is 1684. When all the employees of the second respondent were paid Dearness Allowance at the Index Number 1684, by subsequent amendment they cannot calculate the Dearness Allowance, Increment by reducing the index to 1616 points as against the Regulation 2(s)(b) of the Indian Bank Employees' Pension Regulations, particularly, when Index Number 1148 was substituted by further points through Index Number 1684. Therefore, the present writ petitions are filed to issue a writ of declaration to declare the second part of clause (f) of the short recital of the case 7th bipartite settlement dated 27.3.2000 insofar as it has restricted the D.A. 1616 for the purpose of pension as void and unconstitutional.

(v) The learned counsel further submitted that in the V.R.S. circular dated 3.11.2000 the impugned clause of 7th bipartite settlement has not been mentioned. Moreover, the respondents again failed to mention the same in the reliving order. After sending the applications for V.R.S., when the employees carry on any amendment changing the terms of VRS that will otherwise amount to arbitrary, unjust and unlawful.

(vi) Another crucial argument advanced by the learned counsel for the petitioner association is, the term "basic pay" means "basic pay" as per Regulation 2(s)(b) of the Indian Bank Employees Pension Rules, 1985. While so, there cannot be too many basic pays, namely, there cannot be more than one basic pay for the same employee. In the present case, it is contended that under the impugned clause of the settlement the pension optees are assigned two basic pays, one for the purpose of pension and another for the purpose of Gratuity, Provident Fund and all other retirement benefits. As a result of the impugned clause of 7th Bipartite settlement dated 27.3.2000, while fixing the ex-gratia payment, gratuity and other retirement benefits as per the "basic pay" arrived in terms of clause (F) of the 7th Bipartite settlement dated 27.3.2000, namely, CPI at 1684 points and the pension alone has been wrongly fixed as per clause 16 of the 7th Bipartite Settlement, which has resulted in an anomalous situation. Since pension is not an ex-gratia payment and it is only a social welfare measure earned by the employee, the employees' pension cannot be reduced arbitrarily as it is violative of Art.21 of the Constitution of India.

(vii) In support of his arguments, the learned counsel for the petitioner association has placed reliance on two judgments. The first one is the judgment of the Supreme Court rendered in BANK OF INDIA AND ANOTHER V. K.MOHANDAS & ORS., reported in 2009 (4) SUPREME 538 for a proposition that any interpretation of the terms of V.R.S.2000 although contractual in nature must meet the test of fairness. It has to be considered in a manner that avoids arbitrariness and unreasonableness on the part of the public sector banks who brought a VRS 2000 with an objective of rightsizing its manpower. If the intention was not to give pension as ordered in the regulations, they could have said so in the scheme itself. Without mentioning clearly whether the retirees are going to get less or more pension, it will be unreasonable if they carry out any subsequent amendment which was not existing when the VRS was operative and not intended by the banks. Another decision relied on by the learned counsel for the petitioner is the judgment of the Division Bench of this Court rendered in W.P.No.1209/2007 dated 28.6.2011 in G.PALANI AND 16 OTHERS V. BANK OF BARODA, REP. BY THE CHAIRMAN AND MANAGING DIRECTOR, CENTRAL OFFICE, BARODA CORPORATE CENTRE, 'G'BLOCK, C-26, BANDRA -KURLA COMPLEX, BANDRA EAST, MUMBAI 400 051 AND TWO OTHERS wherein a similar question, whether a settlement entered into by the unions, contrary to the Regulations, would be legal, has been decided. While answering the question in the affirmative, the Honble Division Bench has held that curtailing any pensionary benefits to the retirees by introducing any amendment is illegal. On these basis, the learned counsel for the petitioners prayed for allowing the writ petitions.

3. (i) The learned counsel appearing for the first respondent submitted that for the first time a settlement was made between the management of 58 banks and their workmen represented by All India Banks' Association setting out the terms and conditions of the pension and draft of the pension regulations. Para 20(i) of the draft regulations clearly mentioned the rate of pension to mean "basic pension will be 50% of the average emoluments, namely, the average of the pay drawn by an employee during the last 10 months of his service as per the Regulation 24(iv)". On that basis the 6th bipartite settlement was concluded on 14.2.1995. Pursuant to the said settlement, pension regulations were framed for all the nationalized banks as approved by the Government of India. Since then the right to receive the pension as stemmed up from the settlement and the pension regulations are meant only to administer the Pension Scheme as dealt with in the settlement. The terms of the settlement on pension are deemed to be incorporated in the Pension Regulations and therefore, certainly, the Pension Regulations cannot override the terms of the settlement. However, before the 7th Bipartite Settlement, during negotiations on 11.3.1999, it was agreed in principle that the cost of the settlement shall be 12.25% of the wage bill of the workmen employees for the period till 31.3.1997. On that basis, the cost of pension was restricted to 18.25% of the incremental pay arrived at by merger of DA in the Consumer Price Index at 1616 points with pay as per the 6th Bipartite Settlement. Since the parties consciously agreed that irrespective of the pay which is to be fixed in terms of the 7th Bipartite Settlement for the purpose of pension, it has to be restricted to the pay as increased with the merger of DA upto 1616 points. Giving effect to this understanding, Clause 16 of the 7th Bipartite Settlement dated 27.3.2000 provided that in relation to an employee who retires or dies while in service on or after the 1st of April, 1998, Pay for the purpose of pension shall be the aggregate of the pay drawn by the member of the award staff in terms of the 6th Bipartite Settlement dated 14.2.1995 and the DA thereon calculated upto index number 1616 points in the All India Average Consumer Price Index for Industrial Workers in the series 1960=100. This shall be subject to the necessary amendments to be made to the relevant provisions of the Bank (Employees') Pension Regulations 1995. He added, the parties have clearly understood to mean that the benefits of the settlement was subject to the limitation placed on the pension payable to the employees who retire on or after 1.4.1998. Thereafter, the next 8th Bipartite Settlement was signed on 2.6.2005. On the eve of signing of the settlement, a representation was made on behalf of the workmen that the workmen who retired after 1.4.1998 did not get pension on the average of 10 months basic immediately preceding their cessation of employment. Only after deliberations, an understanding was reached that a revision shall be made, but the same shall be limited only to the period from 1.5.2005. Subsequently, a joint note was signed on 2.6.2005 placing on record the understanding reached between the parties. Accordingly, the definition of "pay" as was obtained prior to 7th Bipartite Settlement was restored. Therefore, the contingency for amending the Pension Regulations did not arise. Hence, the grievance of the petitioners that they retired during the period between 1.11.1997 and 31.10.2002 and the benefit of merger of DA between 1684 points and 1616 was not extended to them in the matter of payment of pension from the date of cessation of their employment to 30.4.2005 cannot be accepted.

(ii) The learned counsel for the first respondent further submitted that the plea of the petitioner in WP Nos.10836 and 10837 of 2002 that the second part of clause (f) of the short recital of the case and the clause 18 of the Memorandum of the Settlement dated 27.3.2000 are repugnant to the Pension Regulations and consequently, giving a declaration as such cannot be countenanced on the ground that the members of the petitioner association during the period of their employment, were parties to the said settlement dated 27.3.2000. Further, they have derived the benefits of the other terms of the settlement, therefore, it is not possible for them to say that the settlement was void and unconstitutional. Further, when the terms of the settlement dated 27.3.2000 has recorded the reason for the purpose of determination of the pay for pension, merger of DA was restricted to 1616 points instead of 1684, cannot be assailed.

4. The learned counsel appearing for the second respondent also reiterated his stand in line with the learned counsel appearing for the first respondent repeating almost similar argument that all of them retired during the period from 1.11.1997 to 31.10.2002 and the benefit of merger of D.A., between 1684 points and 1616 points was not extended to them in the matter of payment of pension from the date of the cessation of their employment to 30.4.2005. This was not an unilateral action of the first respondent or the banks and it was the conscious decision taken by the parties, hence they are bound by the same. Accordingly, the learned counsel for the second respondent has prayed that the plea of the petitioners cannot be accepted.

5. Heard the learned counsel for the respective parties.

6. The submissions of the learned counsel for the respondents 1 and 2 though appears to be meritorious but the law laid down by the Apex Court says otherwise. Before going to the answer, it is appropriate to know what is "Pay". As per Regulation 2(s)(b) of Indian Bank (Employees) Pension regulations, 1995, "Pay" includes

(b) in relation to an employee who retires or dies while in service on or after the 1st day of November, 1993-

(i) the basic pay including stagnation increment, if any and

(ii)all allowances counted for the purpose of making contribution to the Provident Fund and for the payment of dearness allowance; and (iii)increment component of Fixed Personal Allowances; and

(iv)dearness allowance calculated upto Index Number 1148 points in the All India Average Consumer Price Index for Industrial workers in the series 1960=100.

A close reading of Regulation 2(s)(b) of the Indian Bank (Employees) Pension Regulations, 1995 clearly shows the Pay for pension is the aggregate of pre-revised pay and D.A. thereon calculated upto Index Number 1148 points in the All India Average Consumer Price Index for Industrial Workers in the series 1960=100. Whileso, the members of the petitioner association at the time of submitting their applications accepting the Voluntary Retirement Scheme were under the impression that they were entitled to get pension as per 2(s)(b) of the Indian Bank Employees Pension Regulations, 1995. After the submission of their applications as per the scheme, they were not able to withdraw the same. However, the scheme permits only the employer-the second respondent either to accept the same or reject it depending upon the requirement of the bank. Even if this condition is accepted as reasonable after accepting the petitioners' applications to go for voluntary retirement, after relieving the petitioners, the respondents cannot say that their pension eligibility shall be in terms of Indian Bank employees Pension Regulations, under Regulation 28 subject to the proposed amendment. Such an approach that the eligibility of pension subject to proposed amendment is clear violation of Article 21 of the Constitution of India, simply for the reason that even as on the date of receipt of their applications on 26.12.2000 the respondents failed to inform the employees about the future conditions that they were intending to put against the retirees.

7. The second infirmity was, when the respondent bank was given liberty either to accept it or reject it depending upon the requirements of the bank, the same liberty should have been given equally to the retirees also to withdraw their applications when the respondent bank itself was not in a position to decide what was the proposed amendment.

8. Thirdly, when similar V.R.S. was floated by the Indian Overseas Bank, another nationalized bank under its circular Memo No.7(f) of 2000-2001 dated 3.1.2001, has permitted its employees to withdraw the VRS applications. But, in the present case, the respondent after accepting the applications, without giving option to withdraw, they can neither prejudicially nor willingly carry out any subsequent amendment reducing the CPI from 1148 to 1616 points. In this context, it is relevant to extract paragraphs 12, 13 and 14 from the judgment of Apex Court rendered in BANK OF INDIA AND ANOTHER V. K.MOHANDAS & ORS., reported in 2009 (4) SUPREME 538 hereunder:

"12.VRS 2000 came up for consideration before this Court in the case of Bank of India & Ors. vs. O.P.Swarnakar & Ors., (2003) 2 SCC 721. The question under consideration in that case was whether an employee who opts for voluntary retirement pursuant to or in furtherance of a scheme floated by the nationalized banks would be precluded from withdrawing the said offer. This Court culled out the following aspects:

(i)The banks treated the application from the employees as an offer which could be accepted or rejected.

(ii)Acceptance of such an offer is required to be communicated in writing.

(iii)The decision-making process involved application of mind on the part of several authorities.

(iv)Decision-making process was to be formed at various levels.

(v)The process of acceptance of an offer made by an employee was in the discretion of the competent authority.

(vi)The request for voluntary retirement would not take effect in present but in future.

(vii)The bank reserved its right to alter/rescind the conditions of scheme.

13.In O.P.Swarnakar, it has been held that scheme is contractual in nature. It amounted to an invitation to offer and not an offer or proposal itself; the application made by the employees was an offer.

14.The statement of law with regard to nature of voluntary retirement scheme expounded in O.P.Swarnakar has been reiterated in HEC Voluntary Retd. Employees Welfare Society v. Heavy Engineering Corporation Ltd. (2006)3 SCC 708; albeit is different voluntary retirement scheme." Paragraphs 33 and 34 of the judgment cited supra are extracted hereunder:

"33.What was, in respect of pension, the intention of the banks at the time of bringing out VRS 2000? Was it not made expressly clear therein that the employees seeking voluntary retirement will be eligible for pension as per Pension Regulations? If the intention was not to give pension as provided in Regulation 29 and particularly sub-regulation (5) thereof, they could have said so in the scheme itself. After all much thought had gone into the formulation of the VRS 2000 and it came to be framed after great deliberations. The only provision that could have been in mind while providing for pension as per Pension Regulations was Regulation 29. Obviously, the employees, too, had benefit of Regulation 29(5) in mind when they offered for voluntary retirement as admittedly Regulation 28 as was existing at that time was not applicable at all. None of the regulations 30 to 34 was attracted. It appears that VRS 2000 evoked huge response, much more than expected and then began the second thought. At the fag end of operation of VRS 2000, at the instance of NBA, the banks proposed amendment in the Pension Regulations and a circular came to be issued. But, by that time, ball had gone out of the hands of the employees; they had already made their offers which were irrevocable; it was not open to them to withdraw the offers as per specific condition incorporated in the scheme (albeit this court in O.P.Swarnakar held that offer could be withdrawn before acceptance) and their offers were accepted and they were relieved. We are afraid, it would be unreasonable if amended Regulation 28 is made applicable, which had not seen the light of the day and which was not the intention of the bank when scheme was framed. The banks in the present batch of appeals are public sector banks and are 'State' within the meaning of Article 12 of the Constitution and their action even in contractual matters has to be reasonable, lest, as observed in O.P.Swarnakar, it must attract the wrath of Article 14 of the Constitution.

34.Any interpretation of the terms of VRS 2000, although contractual in nature, must meet the test of fairness. It has to be construed in a manner that avoids arbitrariness and unreasonableness on the part of the public sector banks who brought out VRS 2000 with an objecting of rightsizing its manpower. The banks decided to shed surplus manpower. By formulation of the Special Scheme (VRS 2000), the banks intended to achieve its objective of rationalizing its force as they were overstaffed. The Special Scheme was, thus, oriented to lure the employees to go in for voluntary retirement. In this background, the consideration that was to pass between the parties assumes significance and a harmonious construction to the Scheme and Pension Regulations, therefore, has to be given."

The above dictum of the Apex Court clearly covers the case of the petitioners in the case on hand. At the time of floating the Voluntary Retirement Scheme by the second respondent, it is the respondent bank who was responsible for formulation of the terms in the contractual scheme that the optees of voluntary retirement under that scheme were eligible to pension under Pension Regulations, 1995, and, therefore, they bear the risk of lack of clarity, if any. It is a well-known principle of construction of contract that if the terms applied by one party are unclear, an interpretation against that party is preferred.[Verba Chartarum Fortius Accipiuntur Contra Proferentum]. At the time of inviting the applications for Voluntary Retirement Scheme, Regulation 2(s)(b) of the Indian Bank (Employees) Pension Regulations, 1995 clearly conveys a message that all the retirees are entitled to get pension in terms of Regulation 2(s)(b) which indicated Index Number 1148 points. Whileso, without mentioning whether the retirees are going to get their pension in terms of D.A., calculated upto 1148 points or 1616 points, the respondents cannot reduce the Index Number from 1148 points to 1616 points by way of subsequent amendment, without giving opportunity to withdraw the same. Because at the end of the operation of V.R.S., as held by the Apex Court, the ball had gone out of the employees; they had already made their offers which were irrevocable. Therefore, it was not open to them to withdraw their applications, as per the specific condition involved in the scheme, that means their offers were accepted and they were relieved. Therefore, it is unreasonable to undertake any subsequent amendment, unilaterally by the respondent bank reducing the amount of pension. In a similar occasion, a Division Bench of this Court in the judgment rendered in W.P.No.1209/2007 dated 28.6.2011 (G.PALANI AND 16 OTHERS V. BANK OF BARODA, REP. BY THE CHAIRMAN AND MANAGING DIRECTOR, CENTRAL OFFICE, BARODA CORPORATE CENTRE, 'G'BLOCK, C-26, BANDRA -KURLA COMPLEX, BANDRA EAST, MUMBAI 400 051 AND TWO OTHERS) has held that in the absence of any amendment to the Pension Regulations, the attempt made on the part of the respondent bank curtailing the pension payable to the retirees by introducing subsequent amendment is illegal.

9. In this view of the matter, the impugned second part of the clause (F) of the short recital of the case and Clause 16 of the Terms of Settlement of the Memorandum of Settlement dated 27.3.2000 entered into between the respondents insofar it has restricted the Dearness Allowance to CPI 1616 points for the purpose of pension is declared as void and unconstitutional. Consequently, the respondents are directed to work out and calculate the pay out of the monetary benefits to the members of the petitioner association/petitioners within twelve weeks from the date of receipt of a copy of this order. However, the commutation of pension has to be done without any interest thereon.

10. All these writ petitions are allowed accordingly. No costs.

sal

To

1.Indian Banks' Association

Rep.by its Secretary

Stadium House

6th Floor, Block 3

Veer Nariman Road

Mumbai 400 020

2.The Management of Indian Bank

Rep.by its Chairman and Managing Director

Central Office

Rajaji Salai

Chennai 600 001

3.All India Bank Employees Association

Represented by its General Secretary

Sri.Tarakeswar Chakraborthy

I Floor

3-B, Lal Bazaar Street

Calcutta 700 001

4.National Confederation of Bank Employees

Represented by its General Secretary

Sri Y.Taraknath

State Bank Buildings

Bank Street, Hyderabad 500 095

5.Indian National Bank Employees Federation

Represented by its General Secretary

Sri R.P.K.Murugesan

No.37, Alwar Thirunagar Annexe

Valasaravakkam,

Chennai 600 087