PARSURAM MOHANTY Vs. CHAIRMAN, MANAGING DIRECTOR AND ANR.

JUDGEMENT

(1.) The petitioner joined the opposite party-Bank as an Officer on 6-11-1977 and retired as a Manager, Sahidnagar Branch on 31-10-2009. Case of the petitioner is that the Government of India has formed an agency named Indian Banks Association (IBA) and all the public sector Banks are the member constituents of IBA. It is headed by an ex-officio Chairman who can be the Chairman of any of the public sector Banks. It is authorised by the Government to perform certain jobs as an agency of the Government. One of such functions is to negotiate with Bank employees through their Unions/Associations for revision of salary and other financial benefits and reach at an agreement within due time which is to be approved by the Government and implemented by different Public Sector Member Banks. It is further case of the petitioner that for clerical and subordinate employees, a settlement is signed under Industrial Disputes Act between IBA and different Bank employees trade unions whereas for officers, a joint note is prepared and signed by IBA and other different officer associations and thereafter the same is sent to the Government for approval. After approval is accorded, revised salaries are paid to the officers pending amendment to the Officers Service Regulation. The petitioner being an Officer, second procedure of preparation of joint note is applicable to his case. The settlements were being made once in every four years up to the year 1997. Thereafter, the said settlements are being made once in every five years and, accordingly after 1997, the subsequent settlements were due in the year 2002, 2007 and 2012. The 9th Settlement, which was due on Nov., 2007, was settled on 27-4-2010 but was given effect to from Novmeber, 2007.

(2.) Earlier there was no provision for pension for the employees of Nationalised Banks up to the year 1995. The employees were under C.P.F. (Contributory Provident Fund) scheme under which the employees used to contribute 10% of their salary and the employer also used to contribute a similar amount. Both the amounts were being deposited in the Provident Fund Account of the respective employees. Since there was demand from different associations for introduction of pension scheme, the Government of India came out with a pension scheme for the bank employees in the year 1993, which could not be implemented. A revised Pension Regulation came into effect in the year 1995 in the lines of Central Civil Service Rules, 1972 as applicable to the Central Government Employees. The Regulation was approved by the Government of India and the Reserve Bank of India and published in the Government of India Gazette on 20-9-1995. The said Regulations was adopted by all the Public Sector Banks. As per the provision of the said Regulation, employees, who opted for pension, have to fore go the employer's part of P.F. contribution with interest accrued thereon which will be credited in pension fund account. The pension fund will constitute the employer's contribution of 10% of employee's salary and other incomes earned out of investment of this fund. Any shortfall has to be met by the employer by making provision at regular intervals. The employees were asked to give their option for availing the pension scheme. The regulation prepared for the above purpose contained penal clauses like forfeiture of past service in case of participation in strike etc. and because of such penal clauses, large number of employees did not opt for the conditional pension scheme. The petitioner was one of them. After repeated demands, the said penal clauses were deleted from the regulations but the due date of opting for pension scheme had already expired. Accordingly, again demand was made by the associations to introduce a scheme for second option. However, the said demand was not conceded. Only in Annexure-1 dated 16th Aug., 2010 another option was permitted. As per the second option scheme formulated under Annexure-1, the employees, who retired from service on superannuation or on voluntary retirement on or after 29th Sept., 1995 rendering at least 15 years of service and opted for pension have to pay 156% of what they have received on retirement on account of Bank's contribution to SPF and interest accrued thereon being the employees share of 30% initial funding gap. The other option was in respect of the employees who joined the bank prior to 1st April, 2010 and were in service of the Bank on 27th April, 2010. Therefore so far as the petitioner is concerned, in order to opt for the pension scheme under Annexure-1, he was required to pay 156% of what he had received on retirement and interest accrued thereon. This clause contained in Annexure-1 for exercising the second option is challenged on the ground that retiring officers exercising the second option under Annexure-1 have to pay back the banks contribution to the provident fund and in addition thereto 56% of provident fund with interest accrued thereon. Such a condition according to the petitioner is discriminatory. The second ground taken at the time of argument was that Annexure-1 read with joint note dated 27-4-2010 have been issued on the authority of the Pension Regulations whereas the Pension Regulation, 1995 do not contain any provision requiring the Officers concerned to pay additional 56% of the Provident Fund (bank's contribution) already received by the officers.

(3.) Learned counsel appearing for the petitioner in course of his submission drew attention of the Court to the provisions contained in United Bank of India (Employees Pension Regulations, 1995), the judgment of Kerala High Court in the case of M.C. Ratnakaran Vs. Canara Bank vide OP No. 37198 of 2001 (C) disposed of on 31st Aug., 2010 . The opposite party-Bank has filed a counter affidavit. The stand taken in the counter affidavit is that IBA is only a voluntary association of Banks consisting of Public Sector, Private Sector, foreign and Co-operative Banks. IBA negotiates wage revision based on mandate given by each of the member banks. The settlements signed between Workmen Unions are under the provisions of Industrial Disputes Act and in respect of officer employees, the Officers' Service Regulation are required to be amended for implementation of the understandings by following the procedures thereof in terms of Section-19 read with sub-section (2) of Sec. 12 of Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 by the Board of Directors of each Bank in consultation with the Reserve Bank of India, with previous sanction of the Central Government. Since the consultation process takes time, an approval from the Government of India is only sought for implementing the terms of understanding reached, pending amendments to the Regulations. It is further stated in the counter affidavit that when the pension scheme, 1995 was implemented, a vast majority of employees had opted for pension under the scheme. The employees who did not opt for the pension scheme took such a decision on the basis of advantages/disadvantages of the scheme specially with reference to higher rates of interest prevailing at that point of time. It is also stated in the counter affidavit that pension in the banking industry was introduced in the year 1995 with effect from 1-11-1993 for those employees who were in service of the Banks as on 29-9-1995 and those who have retired from service with effect from 1-1-1986. The said pension Regulations was framed and implemented on the basis of a memorandum of settlement dated 29-10-1993 between IBA and union of workman employees as well as the officers association who had signed the joint notes. In terms of the memorandum of understanding and joint note, the pension scheme was introduced in the Banks in lieu of Contributory Provident Fund and employees were given option to choose either the pension scheme or Contributory Provident Fund. Now under the second option, if one chose to opt the pension scheme he is required to surrender the Bank's contribution to the provident fund with accrued interest thereon. Since pension is to be paid from the income generated from the pension fund, affordability of the same was a major concern for the banks for payment of pension to the bank employees. Therefore, negotiations were held with the Unions/Association and the proposal given by UFBU to share the funding cost for admitting the P.P. optees as members of the pension fund was viewed as an alternative proposal as agreed in the 8th Bipartite Settlement and Joint Note dated 2-6-2005. After negotiation, UFBU agreed to share 30% of the funding gap which was arrived at for extending another option to non-optees. The amounts so agreed to share works out to Rs. 1800 crores. When the said amount was translated to individual shares it came to 156% of the banks contribution to provident fund and interest accrued thereon till the date of retirement in the case of retired employees and 2.8 times of the revised pay payable in the month of Nov., 2007 in respect of serving employees. Therefore, after long negotiation with the Unions and the Officers' association, a decision was arrived at to introduce the second option scheme on the basis of the understanding arrived in course of negotiation and the contents of Annexure-1 are the decisions taken during negotiation between IBA and the Unions as well as the Officers' association.