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2002 DIGILAW 587 (KAR)

K. C. SHIVASUBRAMANIAN v. UNION OF INDIA

2002-09-21

K.G.KRISHNA MURTHY, V.GOPALA GOWDA

body2002
V. GOPALA GOWDA J. ( 1 ) THE petitioner was working in the second respondent-Canara Bank and retired on september 30, 1987. At that time there was no pension scheme in the bank. The pension scheme known as the Canara Bank (Employees) Pension Regulations, 1995 (hereinafter referred to as "the Regulations" or "the Pension Scheme"), was introduced in the year 1995 and it came into force with effect from September 29, 1995 (notified date), the date on which it was published in the Official gazette. The relevant portions of clause III of the regulations relating to their application and eligibility, which are necessary for the disposal of this writ petition, are extracted hereunder:"iii The following categories of retirees and families of the deceased retired employees are also covered under the pension scheme. They have to exercise an option in writing within 120 days from the notified date, september 29, 1995, to become member of the pension fund and refund within 60 days after the expiry of the said period of 120 days specified above, the entire amount of the contribution to the provident fund including interest accrued thereon together with a further simple interest at the rate of 6 per cent, per annum on the said amount from the date of settlement of the provident fund account till the date of refund of the aforesaid amount to the bank. (a) Employees who were in the service of the bank on or after January 1, 1986, but had retired before November 1, 1993. "as per clause (a), extracted above, the petitioner was also eligible for pension as he was in the service of the bank as on January 1, 1986, and retired on September 30, 1987, before the cut-off date November 1, 1993. ( 2 ) THE last date for exercising the option under sub-clause (2) of clause IV was January 26, 1996, and since it was a national holiday, , option letters have been accepted till January 25, 1996. But, the petitioner did not submit the option letter within the stipulated period referred to above. The reason furnished by him is that he was not aware of the introduction of the pension scheme. It is further asserted that the petitioner made a representation on december 1, 1998 to consider his case for grant of pension under the above Regulations. But, the petitioner did not submit the option letter within the stipulated period referred to above. The reason furnished by him is that he was not aware of the introduction of the pension scheme. It is further asserted that the petitioner made a representation on december 1, 1998 to consider his case for grant of pension under the above Regulations. The bank declined to accept the option letter of the petitioner, vide its letter at Annexure D, dated december 15, 1998, on the ground that he had not exercised the option within the stipulated period under the Regulations. Thereafter, several representations have been made in that regard to the respondents, the copies of which are produced along with the writ petition for perusal of this Court. ( 3 ) THE Government of India issued a circular dated April 28, 1999, authorising the banks to consider the cases of belated option letters at their end and on being satisfied, to refer such cases to the Government. However, the second respondent-bank refused the case of the petitioner by its letter at annexure MMM, dated December 1, 2000. Aggrieved by the same, the petitioner has approached this Court seeking to quash annexure MMM and to strike down Regulation III (b) of the Regulations and to direct the respondents to grant the pensionary benefits. ( 4 ) THE statement of objections is filed on behalf of first respondent stating that since petitioner has not exercised his option within the stipulated time under the Regulations, he is not entitled to the pensionary benefits and, hence, it has sought for dismissal of the writ petition. The statement of objections is also filed on behalf of the second respondent reiterating the stand of the first respondent. Annexure R1 is produced to show that notice had been published in the newspapers regarding the introduction of pensionary scheme. Annexure R3 is the letter written by the bank to the Government of India recommending the case of the petitioner for extending the pensionary benefits to him. Despite such recommendation, the bank has prayed for dismissal of the writ petition in its counter-statement. ( 5 ) HEARD learned counsel for the parties at length, perused the pleadings, voluminous documents and the decisions of the Supreme court, this Court and other High Courts relied upon by them in support of their respective legal submissions. Despite such recommendation, the bank has prayed for dismissal of the writ petition in its counter-statement. ( 5 ) HEARD learned counsel for the parties at length, perused the pleadings, voluminous documents and the decisions of the Supreme court, this Court and other High Courts relied upon by them in support of their respective legal submissions. ( 6 ) THE points for consideration in this case are: (A) Whether the pensionary benefits be denied to the petitioner by the respondents merely because he has not exercised his option within the time stipulated in clause iv (2) of the Regulations; (b) Whether non-exercise of option within the stipulated period under the Regulations by the petitioner amounts to waiver? ( 7 ) LEARNED counsel for the petitioner has rightly placed reliance upon the decision of the apex Court in Deokinandan Prasad v. State of bihar, AIR 1971 SC 1409 : 1971 (2) SCC 330 : 1971-1- LLJ-557, wherein the Supreme Court has held that the right to pension is "property" under Article 19 (l) (f) and Article 31 (1) of the constitution. It is further held that denial of pensionary benefits affects the fundamental right. No doubt sub- clause (f) of clause (1) of article 19 of the Constitution is deleted by way of the 44th Constitutional amendment with effect from June 20, 1979, Despite the deletion of the said clause still the right to get pensionary benefits from the respondents has to be construed as fundamental rights guaranteed under Articles 14 and 21 of the Constitution read with Articles 39, 41 and 43 of the i Directive Principles of State Policy enumerated in Part IV of the Constitution as held in D. S. Nakara v. Union of India, AIR 1983 SC 130 : 1983 (1) SCC 305 : 1983-I-LLM04. In the light of the law laid down in this decision, the petitioner is entitled to get the pensionary benefits under the Regulations and the same cannot be denied to him by putting restriction on time- limit in the Regulation to avail of the same. It follows that the period of limitation of 120 days stipulated under the Regulations for exercising the option is bad in law. It follows that the period of limitation of 120 days stipulated under the Regulations for exercising the option is bad in law. ( 8 ) IN the case of D. S. Nakara v. Union of india (supra), the Supreme Court has held that arbitrary and discriminatory portions of liberalised pension scheme are liable to be struck down as unconstitutional and violative of Article 14 of the Constitution of India. In view of the said law, since eligible pensioners form one category, there cannot be any discrimination among them. In the instant case, the petitioner is sought to be discriminated merely because he has not exercised his option within the stipulated period. Had he exercised the option within the stipulated period, he would have received the pensionary benefits. Such benefit is denied to him merely because he failed to exercise the option within the stipulated time under the Regulations. Those who exercised the option have been granted the benefit. That means, although pensioners form one category, discrimination is made by time-limit to exercise, their fundamental right. Such prescription of time-limit for submitting option form under the Regulations is arbitrary and, hence, the beneficial part shall be retained as held in Nakaras case. The prescription of time-limit under the Regulations to exercise the right shall not prevail over the fundamental right guaranteed to the pensioners, as such regulation would deprive the fundamental rights guaranteed to the petitioner under articles 14, 19 and 21 of the Constitution and, therefore, the prescription of time limit for submission of option forms by the pensioners has to be held as bad in law. ( 9 ) THE time prescribed for exercising the option by the pensioners is under the regulations, which has statutory force. The statutory provision under the Regulations cannot take away the fundamental rights conferred upon the beneficiaries under the constitution. The prescription of time-limit to exercise option is, therefore, only directory and not mandatory. In the case of Bombay municipality v. BEST Workers Union, AIR 1973 SC 883 , while considering the scope of section 78 (l) (D) (i) of the Bombay Industrial relations Act, has held that prescription of time is directory and not mandatory. The prescription of time-limit to exercise option is, therefore, only directory and not mandatory. In the case of Bombay municipality v. BEST Workers Union, AIR 1973 SC 883 , while considering the scope of section 78 (l) (D) (i) of the Bombay Industrial relations Act, has held that prescription of time is directory and not mandatory. The relevant portions of the same are extracted hereunder:"the question whether an award of an industrial Tribunal ceases to be effective due to the non-publication of the same by the appropriate Government within a period of thirty days from the date of its receipt under Section 17 (1) of the Industrial disputes Act, 1947, has been considered by this Court in Remington Rand of India Ltd. v. Their Workmen AIR 1968 SC 224 : 1967-II-LLJ-866. Section 17 (1), omitting the unnecessary parts, reads as follows: every arbitration award and every award of a Labour Court, Tribunal or National tribunal shall, within a period of thirty days from the date of its receipt by the appropriate Government, be published in such manner as the appropriate Government thinks fit. It may be noted that the expression used is shall. The question that arose for consideration before this Court was whether the above provision was mandatory or directory. This Court held that the provision as to time in the above section is merely directory and not mandatory, and that the limit of time has been fixed only as showing that the publication of the award ought not be held up. It was further held that the publication of the award beyond the time mentioned in the Section does not render the award invalid. Having due regard to the various aspects discussed above we are of the opinion that the provisions contained in Section 78 (l) (D) (i) are not mandatory but only directory. " ( 10 ) THE prescription of time-limit under the regulation shall not nullify the very object and purpose of extending the pensionary benefits to the petitioner, which constitute fundamental rights to him under the constitution as held by the Apex Court in a catena of cases. " ( 10 ) THE prescription of time-limit under the regulation shall not nullify the very object and purpose of extending the pensionary benefits to the petitioner, which constitute fundamental rights to him under the constitution as held by the Apex Court in a catena of cases. In the case of Madan Singh Shekhawat v. Union of India AIR 1999 SC 3378 : 1999 (6) scc 459 , relied upon by learned counsel for the petitioner, the Supreme Court considering the interpretation of statutes, has held that it is the duty of the Court to interpret a provision, especially a beneficial provision has to be liberally construed and interpreted as to give a wider meaning instead of giving a restrictive meaning which would negate the very object of the regulations and also the fundamental rights of the pensioners. In the instant case also, applying the same legal principle laid down by the Apex Court, I have to hold that the prescription of the time under clause IV (2) of the Regulations for submitting option letter to the respondents is bad in law as such time-limit will take away the right of the employee/officer for pensionary benefits. It is not a reasonable restriction imposed upon the pensioners by prescription of time-limit in the regulation under Article 19 (6) of the Constitution as there is no nexus to the intent and object sought to be achieved by the respondents by prescription of such time-limit for exercising the option by pensioners. An eligible employee/officer is entitled to exercise his right and option as long as it is available to him. No prudent person will keep quiet or sleep over in beneficial matters if he has knowledge of the circular alleged to have been circulated or published in the newspapers. In the instant case, the petitioner categorically asserted that he had no knowledge about the introduction of the pensionary scheme by framing the regulations in the bank after eight years of his retirement. As soon as he came to know of the same, he has been continuously pursuing the issue with the respondents as is evident from several representations made to them not only to the bank and the Central government but also to various other authorities and organisations to get the pensionary benefits. As soon as he came to know of the same, he has been continuously pursuing the issue with the respondents as is evident from several representations made to them not only to the bank and the Central government but also to various other authorities and organisations to get the pensionary benefits. ( 11 ) THE bank has rightly recommended the claim of the petitioner in annexure 3 as under: "we are of the opinion that he can be covered under the pension regulation. " ( 12 ) HAVING so recommended to the first respondent to extend the pensionary benefit to the petitioner, the bank has filed the objections statement taking altogether a different stand as mentioned earlier. The bank has taken such a plea without visualising the Constitutional mandate under Articles 14, 19, 21 of Part III and 38, 39 of Part IV of the Directive Principles of State Policy as enumerated under the constitution and the law on the subject. Pensionary benefit is a social security measure to the retired employees. The same cannot be denied to the petitioner on technical ground that option was not exercised by him within the stipulated time under the Regulations. Counsel for the petitioner, Sri K. C. Shiva- subramanian, has rightly pressed into service the decision of the Supreme Court in Union of india v. D. R. R. Sastri 1997 (1) SCC 514 : 1997-II-LLJ-678. In that case also liberalised pensionary benefits were denied (sic) on the ground that the employee not opt for the same within the time specified by the Railways. The supreme Court upheld the order of the Central administrative Tribunal, Madras, which held that the employee is entitled to the benefit like other employees. The said decision in all fours applies to this case. Accordingly, point (a) is answered in favour of the petitioner. ( 13 ) COMING to the point (b) as to non-exercise of option by the petitioner within the stipulated time amounts to waiver, it has to be straightaway held in the negative. In the light of the answer to point (a), this point does not arise for consideration at all. Moreover, there cannot be waiver of the fundamental rights of the petitioner as held by the Supreme Court in the decision in Basheshar Nath v. CIT AIR 1959 SC 149 , relied upon by the learned counsel for the petitioner. In the light of the answer to point (a), this point does not arise for consideration at all. Moreover, there cannot be waiver of the fundamental rights of the petitioner as held by the Supreme Court in the decision in Basheshar Nath v. CIT AIR 1959 SC 149 , relied upon by the learned counsel for the petitioner. In this regard learned counsel also rightly placed reliance upon the decision of the Gujarat High Court in bhagubhai F. Soni v. Union Bank of India 2002-II-LLJ-901. ( 14 ) IN view of the foregoing reasons and the decisions referred to above, the reliance placed by learned counsel for the bank on the unreported decision of the Kerala High Court in O. P. No. 30841 of 2001 disposed of on august 6, 2002, will not help the stand taken by the respondents. On the other hand, the decisions relied upon by learned counsel for the petitioner are well-founded and supports the claim of the petitioner. ( 15 ) THE bank states that the petitioner was aware of the pension scheme widely published in the newspapers and one such notice published in Indian Express, dated March 20, 1994, is produced at annexure R1. The categorical assertion of the petitioner is that he was not at all aware of introduction of the pension scheme as the same was introduced eight years after his retirement. Be that as it may, as already observed, the petitioner would not have kept quiet if he had the knowledge of the pension scheme as same is beneficial for him. In this regard, paragraph 2 of clause 10 of the Regulations has to be looked into and it reads thus:"in case any employee is on long leave/deputation/under suspension etc. , a blank option letter in duplicate may be sent to the last known address of the employee by registered A. D. , duly informing him to submit the option letters within the stipulated date through the branch/office. The registered acknowledgment duly acknowledged by the employee may be held in safe custody. They may also be informed to call on at the branch/office for going through the Pension Regulation booklet, if they so desire. " ( 16 ) THUS, the regulation contemplates sending of blank option letters to the employees on long leave, deputation or under suspension by registered post with acknowledgment due. They may also be informed to call on at the branch/office for going through the Pension Regulation booklet, if they so desire. " ( 16 ) THUS, the regulation contemplates sending of blank option letters to the employees on long leave, deputation or under suspension by registered post with acknowledgment due. But, such a provision was not made in respect of retired employees. Retired employees were in a worse position compared to the aforesaid class of employees as they were aware of the introduction of pension scheme through their colleagues or at least after they resume duty after availing of long leave or taken on duty on revocation of suspension. Sending of option forms should have been made compulsory to the eligible retired employees rather than to employees on long leave, deputation or under suspension, as the retired employees lost all relationship with the bank. If the stand of the bank that publicity given in the newspapers was sufficient notice regarding the pension scheme brought into force, the same logic or principle applies to the category of employees mentioned in the second paragraph of clause 10 of the regulations. In such an event, sending of option forms to them by registered post was wholly unnecessary. Since the petitioner was also eligible for the benefit of pension, it has to be held that he had been discriminated against by not notifying him duly about the introduction of the scheme. Consequently, it is held that the petitioner was not duly notified about the liberalised pensionary benefit, as a result of which he had not submitted his option. ( 17 ) IT is also pertinent to note that in the circular dated April 28, 1999, the Central government instructed all the banks to examine the belated options and refer such cases to it. In the circular it is also stated thus:"effort, if any, made by the bank to contact such a person during the relevant period to enable them to exercise their option may also be indicated. " ( 18 ) THE bank has not made any effort to contact the petitioner during the relevant period. Even clause 11 of the Regulations also prescribes branches/offices are requested to extend all possible assistance to the retired employees/families of the deceased retired employees to enable them to submit the option letters. " ( 18 ) THE bank has not made any effort to contact the petitioner during the relevant period. Even clause 11 of the Regulations also prescribes branches/offices are requested to extend all possible assistance to the retired employees/families of the deceased retired employees to enable them to submit the option letters. But, the bank has not extended any assistance to the petitioner for submitting the option letter. Publication made in the newspapers will not fulfil the requirement of the circular instruction given to the bank as stated above by the first respondent. In the circumstances, it is held that the petitioner was not duly notified about the Regulations by which pension scheme was introduced to its officers/employees. Further, this Court has to hold that there was no "deemed service" upon the petitioner merely because the circular was published in the newspaper as held by the Apex , Court in the case reported in Union of India v. Dinanath Shgxtaram Karekar, AIR 1998 SC 2722 : 1998 (7) SCC 569 : 1998-II-LLJ-748. At paragraph 10 of the said decision it is held that The theory of communication cannot be invoked and "actual service" must be "proved and established". ( 19 ) FOR the reasons stated above the relief sought for striking down the words "from the notified date" in Regulation 3 (b) of the regulations to submit the option letters claiming the pensionary benefits, has to be granted as the same is unconstitutional as it infringes the fundamental right of the pensioners guaranteed under Articles 14, 19 and 21 of the Constitution of India. For the foregoing reasons, the writ petition is allowed and the impugned endorsement is quashed. The words "from the notified date" in Regulation 3 (b) of the Regulations are struck down. ( 20 ) THE respondents are directed to reconsider the claim of the petitioner for pensionary benefits by accepting his option letter. On such reconsideration if it is found that the petitioner is eligible to get the pensionary benefits, the same shall be paid to him from the date of his entitlement with interest at the rate of 9 per cent, on the arrears. The claim shall be disposed of within six weeks from the date of receipt of a copy of this order. The claim shall be disposed of within six weeks from the date of receipt of a copy of this order. ( 21 ) HAVING regard to the hardship caused to the petitioner by the untenable stand taken by the respondents compelling him to approach this Court and subjecting him to suffer without the pensionary benefits under the Regulations, the petitioner is entitled to the costs of the proceedings. Accordingly, cost of Rs. 5,000 is imposed upon the respondents payable by them equally. --- *** --- .