Isabella Mariam

The Supreme Court Division Bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan held that a bank employee removed from service with superannuation benefits under Clause 6(b) of the Bipartite Settlement is entitled to pension, provided the eligibility criteria under the applicable Pension Regulations are met. The Court observed that the expression “as would be due otherwise” under Clause 6(b) must be construed harmoniously with the Pension Regulations. Dismissing the appeal filed by the bank, the Court upheld the High Court's direction to process and release the respondent’s pensionary benefits, noting that the appellate authority’s order granting terminal benefits had attained finality.

The respondent was working as a clerk at UCO Bank and was served with a charge memo dated 12 October 1998, alleging gross misconduct. The charges stemmed from an incident on 21 September 1998, where the respondent, along with another employee, was alleged to have assaulted a fellow officer within the bank premises. An inquiry was initiated, and the Enquiry Officer, in his report dated 9 October 1999, found the charges proved. The disciplinary authority imposed the penalty of dismissal from service through an order dated 14 December 1999.

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An appeal was filed by the respondent before the appellate authority. By order dated 16 February 2000, the appellate authority modified the penalty from dismissal to removal from service. It was further ordered that the respondent would be entitled to terminal benefits for the period of service rendered and clarified that the removal would not be a disqualification from future employment.

Subsequently, an industrial dispute was raised, and the Central Government referred the matter to the Central Government Industrial Tribunal-cum-Labour Court, Jalandhar. The Labour Court, in its award dated 13 February 2004, invoked Section 11A of the Industrial Disputes Act, 1947, and substituted the penalty of removal from service with the penalty of stoppage of four increments for one year, along with a direction for reinstatement and 75 percent back wages.

The award was challenged by the bank through a writ petition before the High Court. A Single Judge set aside the award on 25 March 2009, holding that the Labour Court’s invocation of Section 11A was unjustified. The Division Bench affirmed the judgment on 24 February 2010 in Letters Patent Appeal No. 928 of 2009.

Thereafter, the respondent filed another writ petition under Article 226 seeking a direction for processing and releasing his pensionary dues. By judgment dated 14 March 2016, the High Court directed the bank to process the respondent’s case for pension and release the dues expeditiously. The Division Bench, in Letters Patent Appeal No. 1525 of 2016, upheld this decision by relying on the Supreme Court’s judgment in Bank of Baroda v. S.K. Kool, (2014) 2 SCC 715.

Challenging the decision of the Division Bench, the bank approached the Supreme Court by filing a civil appeal. The appeal was admitted, and a stay on the High Court’s direction was granted on 3 July 2017.

The Supreme Court examined the interplay between Clause 6(b) of the Bipartite Settlement and Regulation 22 of the UCO Bank (Employees’) Pension Regulations, 1995. It recorded that as per the Bipartite Settlement dated 10 April 2002, Clause 6(b) permits the penalty of removal from service “with superannuation benefits i.e., pension and/or provident fund and gratuity as would be due otherwise under the rules or regulations prevailing at the relevant time.”

The Court observed that the respondent was initially dismissed from service under Clause 19.5(c) of the Bipartite Settlement dated 19 October 1966, but the appellate authority had substituted this penalty by removal from service with terminal benefits. The relevant portion of the appellate authority’s order was quoted as follows:

“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 benefits for the period of service he has rendered. Removal from service will not be a disqualification for his future employment.”

The Court observed that this order was never challenged by the bank and had therefore attained finality.

Addressing the appellant’s argument based on Regulation 22(1), which provides that “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,” the Court turned to its earlier decision in S.K. Kool to resolve the apparent conflict.

Quoting the relevant portion of S.K. Kool, the Court recorded:

“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’… 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 terms of Clause 6(b) of the Bipartite Settlement shall be entitled to superannuation benefits.”

It further stated:

“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.”

Applying the above reasoning, the Court recorded:

“Learned Single Judge also held that objection of the appellant to the claim of pension by the respondent was without any basis inasmuch 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.”

The Court found no error in the conclusions drawn by the High Court. It affirmed that the respondent had completed the requisite years of service to qualify for pension and had submitted his option for pension on 5 October 2010.

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It recorded:

“Both the learned Single Judge and the Division Bench had followed the aforesaid decision of this Court. The decision in S.K. Kool 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.”

The Court dismissed the appeal filed by the bank. It stated:

“Accordingly, the civil appeal is dismissed. However, there shall be no order as to cost.”

Advocates Representing the Parties

For the Petitioners: Kausar Raza Faridi, Advocate

For the Respondents: Shilpa Singh, Advocate

Case Title: UCO Bank and Another v. Vijay Kumar Handa

Neutral Citation: 2025 INSC 442

Case Number: Civil Appeal No. 5922 of 2024

Bench: Justice Abhay S. Oka and Justice Ujjal Bhuyan

[Read/Download order]