VOLUNTARY RETIREMENT SCHEME

Retired people need security in the fall of life: SC upholds right to a pension of SBI employees who took a VOLUNTARY RETIREMENT SCHEME after 15 years or more year of service.
 "The simple outline of socialism is to deal with security in the fall of life to the operational people."

The SC has held that employees of SBI who have taken voluntary retirement as per 2000 scheme after 15 years or more of service as on the cutoff date are entitled to proportionate pension as per SBI pension fund rules. A 3 judge bench comprising of arun Mishra, MR shah, RR gavai held so while answering a reference following conflicting of views between judges regarding admissibility of pension under VOLUNTARY RETIREMENT SCHEME. 

The question was whether an employee who opted for this scheme after putting in pensionable service was entitled to pension as well under the SBI pension fund.

Background

On December 27, 2000, the central board of state bank of India approved the scheme proposed by the Indian bank association as per which an employee with 15 years of service was eligible. It is relevant to note that as per SBI pension fund rules, an employee eligible for pension only on completion of 20 year of service. One Radhey Shyam Pandey who opted for this scheme after 19 years, 9 months and 18 days of pensionable service were denied as per rules on the ground that he has not completed 20 years of service. Some of them who were in the same situation approached HC. The HC ruled in their favor, challenging the HC verdicts the SBI came in appeal.

Bank cannot wriggle out the obligation

The court held that VOLUNTARY RETIREMENT SCHEME once approved by the board of directors of SBI become a contract enforceable by law. The rights under contract cannot be taken away and they become enforceable by a court of law. The court added that even if two interpretations were possible. The interpretation benefiting the employee should be adopted.
 The principle of socialism is to secure working people in the fall of life.

The court observed that pension cannot be denied in an arbitrary and unfair manner, as it was a measure of security for a retired employee during the old days.

Conclusion

We are of the opinion that the employees who completed 15 years of service or more as on cutoff date were entitled to a proportionate pension under SBI this scheme to be computed as per SBI pension fund rules. The benefits must be extended to all similar employees retired under VOLUNTARY RETIREMENT SCHEME on completion of 15 years of service.

Remarks

The court’s order has to be complied with and arrears be paid within 3 months failing of which amount to carry interest at the rate of 6% per annum from the date of order.

Author:

eStartIndia Team