Retrospective Amendment taking away the benefits of vested pension, promotion already available to an employee under existing rules violative of Article 14 & 16, rules SC

The Supreme Court in the case of The Punjab State Cooperative Agricultural Development Bank Ltd v/s The Registrar, Cooperative Societies and Others ruled that the Retrospective Amendment taking away the benefits of vested pension, promotion already available to an employee under existing rules is violative of Article 14 & 16.

It reveals from the record that the employees of the appellant Bank who had opted for pension became members of the pension scheme and continued to derive the benefit of pension after they had opted for it till the year 2010.  Later, when the appellant Bank found   the   scheme   to   be   unviable   on   account   of   financial constraints, the Board of Directors of the appellant Bank in its meeting  reconsidered   the   matter   about   giving   pension   to   the   bank employees. Although the proposal was turned down by the Registrar, Cooperative Societies, Punjab, Chandigarh still the Board of Directors of the appellant Bank vide its Resolution dated 17th August, 2012 decided to discontinue the pension scheme and revert to the scheme of Contributory Provident Fund with a proposal of One Time Settlement.

The appellant Bank contended that it had not been considered by the High Court that the appellant Bank had framed a pension scheme subject to approval of the competent authority.   Even though the appellant Bank had not applied for seeking approval/exemption from the   authority, still the fact remains that in the absence of the approval being granted by the competent authority, the retirees were entitled to receive pension until the scheme remained in operation.

Mr. P.S. Patwalia, senior counsel for the respondents contended that indisputedly the respondents who were writ petitioners before the High Court are the retired employees and after amendment was made under the scheme of Rules 1978, they became its member and started getting pension in terms of the scheme under the Rules with effect from 1st April, 1989 and without any   justification, the appellant Bank unilaterally stopped full pension to the respondent pensioners in the year 2010. 

The division bench of Justice Ajay Rastogi and Justice Abhay S. Oka noted that so far as the arrears towards element of pension to which the retired employees are entitled for, the appellant Bank is at liberty to pay arrears towards pension upto 31st December, 2021 in 12 monthly installments in the next one year by the end of December, 2022 and those employees who have accepted payment under one time settlement at a given point of time, what is being paid to them is always open for adjustment against arrears of their due pension. Still if arrears remain outstanding, the same shall be paid in 12 monthly installments.

The court while dismissing the appeal held that the complaint of the appellant Bank regarding orders passed under Section 7A, Section 14B and Section 7Q of the Act 1952 are not the subject matter of challenge in the instant proceedings, it will be open for the appellant to take legal   recourse, if being aggrieved in the appropriate proceedings available under the law.

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