Supreme Court Rejects UCO Bank’s Plea That Employee Dismissed For Misconduct Wasn’t Entitled To Pension Despite 10 Yrs Service

2025 INSC 442 REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 5922 OF 2024
UCO BANK & ANR. APPELLANT(S)
VERSUS
VIJAY KUMAR HANDA RESPONDENT(S)
J U D G M E N T
UJJAL BHUYAN, J.
Heard learned counsel for the parties.
2. This appeal by special leave is directed against
the judgment and order dated 11.01.2017 passed by the
High Court of Punjab and Haryana at Chandigarh (briefly
‘the High Court’ hereinafter) dismissing Letters Patent
Appeal No. 1525 of 2016 preferred by the appellant.
2.1. Appellant herein is the United Commercial Bank
(briefly ‘the Bank’ hereinafter).
3. By the judgment and order dated 11.01.2017, the
letters patent appeal filed by the appellant Bank against the
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judgment and order of the learned Single Judge was
dismissed by the Division Bench of the High Court. Learned
Single Judge vide the judgment and order dated 14.03.2016
had allowed the writ petition filed by the respondent being
Civil Writ Petition No. 2490 of 2014 by directing the
appellant to process the case of the respondent for pension
and to release the pensionary dues to him expeditiously.
4. Relevant facts may be briefly noted.
5. At the relevant point of time, respondent was
serving as a Clerk in the appellant Bank. A charge memo
dated 12.10.1998 issued by the disciplinary authority was
served upon him, charging him with having indulged in acts
of gross misconduct within the premises of the Gurmandi
Branch, Jalandhar of the appellant Bank. As per the
allegations, on 21.09.1998, at around 05:15 PM, respondent
alongwith another employee of the same branch Shri R.N.
Chopra had assaulted Shri J.B. Bansal, an officer of the
appellant Bank posted at the Raipur-Rasulpur Branch, in
the cabin of the senior manager of the Gurmandi Branch.
Officials of the branch had to intervene to separate Shri
Bansal from the respondent and Shri Chopra.
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5.1. Before the respondent could file his response to
the charge memo, the disciplinary authority decided to
institute an enquiry. In this connection, Shri H.S. Saini, an
officer in Scale III, was appointed as the Enquiry Officer and
Shri R.K. Kakkar, an officer in Scale II, was appointed as the
Presiding Officer vide the notification dated 18.12.1998.
5.2. The Enquiry Officer conducted the enquiry and
on conclusion of the same submitted his enquiry report to
the disciplinary authority alongwith his covering letter dated
09.10.1999. In the enquiry proceedings, stand of the
respondent was that no such incident of assault had taken
place; instead, it was a conspiracy hatched at the instance
of the rival union to falsely implicate the respondent and
Shri Chopra. Enquiry Officer concluded that the charges
against the respondent stood proved.
5.3. On going through the enquiry report, disciplinary
authority passed an order dated 18.10.1999 holding that
the charge against the respondent of indulging in riotous,
disorderly and indecent behaviour within the premises of
the Bank was proved. Therefore, as the disciplinary
authority, he proposed to impose the penalty of dismissal
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from service. A copy of the enquiry report was forwarded to
the respondent with the intimation that a personal hearing
would be held on 29.10.1999 on the question of penalty.
5.4. It appears that respondent had appeared before
the disciplinary authority for personal hearing and also filed
a written submission. He reiterated that he was innocent
and was falsely implicated. He submitted he had two small
school going children besides his unemployed wife.
Therefore, he pleaded that the penalty as proposed should
not be imposed.
5.5. Disciplinary authority vide his order dated
14.12.1999 agreed with the findings of the Enquiry Officer
and held that the charge levelled against the respondent for
having indulged in riotous, disorderly and indecent
behaviour within the premises of the appellant Bank was
proved. Respondent thus committed an act of gross
misconduct within the meaning of Clause 19.5(c) of the
Bipartite Settlement dated 19.10.1966, as amended. He,
therefore, imposed the penalty of dismissal from service on
the respondent with immediate effect.
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6. Respondent preferred an appeal against the
aforesaid order of dismissal from service before the appellate
authority. By order dated 16.02.2000, the appellate
authority while concurring with the finding of the
disciplinary authority qua the misconduct, however
modified the penalty to one of removal from service. It was
ordered that respondent be removed from the services of the
Bank with immediate effect; however, he would be entitled
to receive the terminal benefits for the period of service he
had rendered. It was clarified that removal from service
would not be a disqualification for the future employment of
the respondent.
7. On an industrial dispute being raised at the
instance of the respondent, the central government referred
the same to the Central Government Industrial Tribunalcum-Labour Court, Jalandhar (for short ‘Labour Court’
hereinafter). The question referred was whether the action
of the Bank in dismissing the respondent from service was
legal and just. The supplementary question was as to what
relief the concerned workman (respondent) would be entitled
to and from which stage. Labour Court after hearing the
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matter passed an award dated 13.02.2004 opining that the
penalty imposed was disproportionate to the gravity of the
alleged misconduct by taking into consideration the
involvement of the respondent in the alleged incident.
Invoking the provisions of Section 11A of the Industrial
Disputes Act, 1947 (briefly, ‘the Industrial Disputes Act’
hereinafter), the Labour Court substituted the penalty of
dismissal/removal from service with the penalty of stoppage
of four increments for one year. Respondent was directed to
be reinstated in service with 75 percent back wages and
other benefits. The reference was answered accordingly. The
aforesaid award was notified by the central government on
07.03.2004.
8. Appellant assailed the aforesaid award dated
13.02.2004 before the High Court by filing CWP No. 11806
of 2004. A learned Single Judge of the High Court vide the
judgment and order dated 25.03.2009 was of the view that
the award passed by the Labour Court was totally
unjustified and could not be sustained. Power under Section
11A of the Industrial Disputes Act ought not to have been
invoked by the Labour Court. Punishment of removal from
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service with terminal benefits as imposed on the respondent
by the appellate authority could not be said to be
disproportionate. Therefore, the award dated 13.02.2004
was set aside.
9. Aggrieved by the aforesaid judgment and order of
the learned Single Judge dated 25.03.2009, respondent
preferred a letters patent appeal being LPA No. 928 of 2009
before the Division Bench of the High Court. Vide the
judgment and order dated 24.02.2010, the Division Bench
agreed with the view taken by the learned Single Judge that
power under Section 11A of the Industrial Disputes Act
ought not to have been invoked by the Labour Court.
Consequently, the appeal was dismissed.
10. Respondent filed a petition under Article 226 of
the Constitution of India before the High Court seeking a
direction to the appellant to release his retiral benefits. The
same was registered as Civil Writ Petition No. 2490 of 2014.
A learned Single Judge of the High Court vide the judgment
and order dated 14.03.2016 referred to the order of the
appellate authority wherein the latter had held that the
respondent would be entitled to receive the terminal benefits
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for the period of service he had rendered and thereafter
allowed the said writ petition by directing the appellant
Bank to process the case of the respondent for pension in
pursuance of the option exercised by him and to release the
pensionary benefits due to him expeditiously.
11. Appellant preferred LPA No. 1525 of 2016 before
the Division Bench challenging the aforesaid decision of the
learned Single Judge dated 14.03.2016. A Division Bench of
the High Court vide the judgment and order dated
11.01.2017 placed reliance on a decision of this Court in
Bank of Baroda Vs. S.K. Kool1 and another decision of the
High Court in Hardial Singh Vs. Bank of Baroda2 and
thereafter affirmed the view taken by the learned Single
Judge. Consequently, the letters patent appeal of the
appellant was dismissed.
12. Hence the present appeal.
13. This Court by order dated 03.07.2017 had issued
notice and stayed the operation and implementation of the
1
(2014) 2 SCC 715
2 2012 SCC Online P&H 8059
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impugned judgment and order dated 11.01.2017. When the
matter was heard on 23.04.2024, leave was granted.
14. Learned senior counsel for the appellant submits
that respondent was not punished under Clause 6(b) of the
Bipartite Settlement. Therefore, the High Court was not
justified in applying the case of S.K. Kool (supra). That apart,
the decision in S.K. Kool (supra) was rendered in a different
factual context. The employee in the said case had opted for
pension before the penalty of removal from service was
imposed on him. In the present case, respondent never
opted for pension. Therefore, S.K. Kool (supra) is clearly
distinguishable in so far facts and circumstances of the
present case is concerned.
14.1. Learned senior counsel further submits that
respondent was not entitled to pension in as much as he did
not fulfil the requirements of pension in terms of the ninth
Bipartite Settlement dated 27.04.2010. The said settlement
did not include employees who had suffered the penalty of
removal from service as being eligible for pension.
14.2. In any view of the matter, learned senior counsel
submits that a delinquent employee who has been imposed
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the major penalty of removal from service is not entitled to
pension or other retiral benefits. The charge against the
respondent is very serious and that was proved in the duly
constituted enquiry. Regulation 22 of the UCO Bank
(Employees’) Pension Regulations, 1995 (for short
‘Regulations, 1995’ hereinafter) also does not permit grant
of pension to such delinquent employees.
14.3. In such circumstances, learned senior counsel
submits that the High Court fell in error in directing the
appellant to grant pension to the respondent. Therefore, the
impugned order should be set aside.
15. Per contra, learned counsel for the respondent
submits that both the learned Single Judge and the Division
Bench of the High Court had correctly appreciated the facts
and the law and thereafter upheld the claim of the
respondent.
15.1. Learned counsel for the respondent heavily relied
upon the decision of this Court in S.K. Kool (supra) and
submits that respondent having completed the minimum
pensionable years of service, he is entitled to the pensionary
benefits.
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15.2. It is further submitted that the appellate
authority while maintaining the finding of the disciplinary
authority in so far the finding of misconduct of the
respondent is concerned, however held that the respondent
would be entitled to receive the terminal benefits for the
period of service he had rendered. Appellant did not
challenge this decision. On the contrary, appellant had
challenged the subsequent Labour Court award substituting
the same with a lesser penalty and directing re-instatement
in service. This challenge was sustained by the Single Judge
as well as by the Division Bench of the High Court, thus
restoring the appellate order. Therefore, the appellate order
had attained finality. On the strength of the appellate order,
respondent is entitled to pension and this is what the High
Court in the subsequent round has held. Learned counsel,
therefore, submits that there is no merit in the appeal and,
as such, the appeal should be dismissed.
16. Submissions made by learned counsel for the
parties have received the due consideration of the Court.
17. A Bipartite Settlement was arrived at between the
Indian Banks’ Association and the Banks’ Workmen Union
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on 19.10.1966. This settlement was arrived at under Section
2(p) and Section 18(1) of the Industrial Disputes Act read
with Rule 58 of the Industrial Disputes (Central) Rules,
1957. This settlement therefore has a statutory backing and
is binding on the parties. Respondent was charged with
committing an act of gross misconduct as defined in Clause
19.5(c) of the aforesaid Bipartite Settlement which was
proved by the Enquiry Officer and accepted by the
disciplinary authority. On 10.04.2002, a further settlement
was arrived at between the Indian Banks’ Association,
representing the management on the one hand, and the
workmen represented by the All India Bank Employees’
Association, National Confederation of Bank employees and
Indian National Bank Employees’ Federation on the other
hand. Pursuant thereto, Clause 6(b) was inserted in the said
Bipartite Settlement providing for one of the penalties which
may be imposed on a delinquent employee found guilty of
gross misconduct. Clause 6(b) reads as follows:
6. An employee found guilty of gross misconduct may:
(a) * * * * *
(b) be removed from service with superannuation
benefits i.e. pension and/or provident fund and
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gratuity as would be due otherwise under the rules or
regulations prevailing at the relevant time and
without disqualification from future employment; or
17.1. Thus, as per the aforesaid clause, an employee
who is found guilty of gross misconduct may be removed
from service but would be provided with superannuation
benefits which would otherwise be due to him. Further, the
penalty of removal from service would be without
disqualification from future employment.
18. In the instant case, the initial penalty imposed on
the respondent by the appellant was dismissal from service
with immediate effect after having been found guilty of gross
misconduct as per Clause 19.5(c) of the Bipartite
Settlement. Appellate authority vide the order dated
16.02.2000 modified the penalty order dated 14.12.1999
passed by the disciplinary authority by substituting the
penalty of dismissal from service by removal from service
with terminal benefits. The substituted penalty in terms of
the appellate order dated 16.02.2000 reads as under:
Shri V.K. Handa (PFM No. 22488) is hereby removed
from the bank’s service with immediate effect.
However, he will be entitled to receive the terminal
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benefits for the period of service he has rendered.
Removal from service will not be a disqualification for
his future employment.
19. We have already seen that respondent had raised
an industrial dispute which culminated in an award dated
13.02.2004. As per this award, Labour Court had invoked
the provisions of Section 11A of the Industrial Disputes Act
and substituted the penalty of removal from service with
terminal benefits by the penalty of stoppage of four
increments for one year with further direction for
reinstatement in service with 75 percent back wages. This
award of the Labour Court failed to stand judicial scrutiny
as learned Single Judge of the High Court set aside the same
which decision was affirmed by the Division Bench in letters
patent appeal. This sequence of events demonstrates that
the modified penalty as imposed by the appellate authority
attained finality as this appellate order was not questioned
by the appellant.
20. Learned senior counsel for the appellant in the
course of her submissions placed reliance on Regulation 22
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of the Regulations, 1995. Regulation 22(1) of the aforesaid
regulations reads thus:
22. Forfeiture of service.-(1) Resignation or dismissal
or removal or termination of an employee from the
service of the Bank shall entail forfeiture of his entire
past service and consequently shall not qualify for
pensionary benefits.
20.1. According to her, in view of Regulation 22, the
respondent would not be entitled to pension.
21. Interplay of Clause 6(b) of the Bipartite
Settlement and Regulation 22 of the Regulations, 1995 was
examined by this Court in S.K. Kool (supra) and after due
consideration answered the same in the following manner:
13. …….From a plain reading of the aforesaid
Regulation, it is evident that removal of an employee
shall entail forfeiture of his entire past service and
consequently such an employee shall not qualify for
pensionary benefits. If we accept this submission, no
employee removed from service in any event would be
entitled for pensionary benefits. But the fact of the
matter is that the Bipartite Settlement provides for
removal from service with pensionary benefits “as
would be due otherwise under the rules or regulations
prevailing at the relevant time”. The consequence of
this construction would be that the words quoted
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above shall become a dead letter. Such a construction
has to be avoided.
14. The Regulations do not entitle every employee to
pensionary benefits. Its application and eligibility is
provided under Chapter II of the Regulations whereas
Chapter IV deals with qualifying service. An employee
who has rendered a minimum of ten years of service
and fulfils other conditions only can qualify for
pension in terms of Regulation 14 of the Regulations.
Therefore, the expression “as would be due otherwise”
would mean only such employees who are eligible and
have put in minimum number of years of service to
qualify for pension. However, such of the employees
who are not eligible and have not put in required
number of years of qualifying service shall not be
entitled to the superannuation benefits though
removed from service in terms of Clause 6(b) of the
Bipartite Settlement. Clause 6(b) came to be inserted
as one of the punishments on account of the Bipartite
Settlement. It provides for payment of
superannuation benefits as would be due otherwise.
15. The Bipartite Settlement tends to provide a
punishment which gives superannuation benefits
otherwise due. The construction canvassed by the
employer shall give nothing to the employees in any
event. Will it not be a fraud Bipartite Settlement?
Obviously it would be. From the conspectus of what
we have observed we have no doubt that such of the
employees who are otherwise eligible for
superannuation benefit are removed from service in
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terms of Clause 6(b) of the Bipartite Settlement shall
be entitled to superannuation benefits. This is the
only construction which would harmonise the two
provisions. It is well-settled rule of construction that
in case of apparent conflict between the two
provisions, they should be so interpreted that the
effect is given to both. Hence, we are of the opinion
that such of the employees who are otherwise entitled
to superannuation benefits under the Regulations if
visited with the penalty of removal from service with
superannuation benefits shall be entitled for those
benefits and such of the employees though visited
with the same penalty but are not eligible for
superannuation benefits under the Regulations shall
not be entitled to that.
22. Both the learned Single Judge and the Division
Bench had followed the aforesaid decision of this Court.
Learned Single Judge noted that respondent had submitted
his option for pension on 05.10.2010. Learned Single Judge
also held that objection of the appellant to the claim of
pension by the respondent was without any basis in as
much as the appellate authority had specifically held that
respondent would be entitled to receive terminal benefits for
the period of service he had rendered. This order of the
appellate authority has attained finality. Therefore, it was
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held that respondent was entitled to receive pension in view
of the order passed by the appellate authority. This view of
the learned Single Judge has been endorsed by the Division
Bench in the impugned judgment. The decision in S.K. Kool
(supra) is binding on us. Therefore, we do not find any
compelling reason to interfere with the concurrent findings
of the learned Single Judge and the Division Bench while
exercising our jurisdiction under Article 136 of the
Constitution of India.
23. Accordingly, the civil appeal is dismissed.
However, there shall be no order as to cost.
………………………………J.
[ABHAY S. OKA]
.……………………………J.
[UJJAL BHUYAN]
NEW DELHI;
APRIL 03, 2025.