SUPREME COURT RULES ON PENSION ELIGIBILITY OF DISMISSED EMPLOYEE UNDER UCO BANK REGULATIONS

The Judgment in the Case of UCO Bank & Anr. v. Vijay Kumar Handa, Civil Appeal No. 5922 of 2024, was delivered by a Division Bench of the Supreme Court of India, comprising Hon’ble Justice Abhay S Oka and Justice Ujjal Bhuyanon 3^rd April 2025. This Judgment examines the interplay between Regulation 22 and Clause 6(b) of the Bipartite Settlement in determining eligibility for superannuation benefits.

Facts of the Case

The Respondent, Vijay Kumar Handa, was employed as a Clerk at UCO Bank, Gurmandi Branch, Jalandhar. He was served with a charge memo dated 12.10.1998 for alleged assault and gross misconduct within the bank premises. Following disciplinary proceedings, he was dismissed from service on 14.12.1999 under Clause 19.5(c) of the Bipartite Settlement. On Appeal, the penalty was modified on 16.02.2000 to remove him from service with terminal benefits, explicitly stating that such removal would not disqualify him from future employment. This Appellate order attained finality as it was not further contested by the bank. Subsequently, the Respondent raised an industrial disputeand the Labour Petition by Award dated 13.02.2004, substituted the penalty with the stoppage of four increments for one year and directed his reinstatement with 75% back wages. However, the High Court (Single Judge and Division Bench) set aside this Award. Thereafter, the Respondent filed a Writ Petition seeking retiral and pensionary benefits, which was allowed by the High Court in 2016 and affirmed by the Division Bench in 2017. The Bank’s challenged these judgments before the Supreme Court through this Appeal.

Issues Involved

• Whether an employee who has been removed from service for misconduct is entitled to pensionary benefits under the UCO Bank (Employees) Pension Regulations, 1995.
• Whether Regulation 22 of the Pension Regulations can be harmoniously construed with Clause 6(b) of the Bipartite Settlement of 2002 to allow superannuation benefits to a removed employee who has completed the qualifying service.

Contentions by both Parties

Contentions by Appellant (UCO Bank)

The Bank contended that the Respondent was ineligible for pension as Regulation 22 of the Pension Regulations clearly states that removal from service results in forfeiture of past service, thus disqualifying the employee from pension. They argued that the Supreme Court’s decision in Bank of Baroda vs. S.K. Kool[1] was not applicable because, in that Case, the employee had opted for pension before the imposition of penalty, unlike the present Case. The Bank also referred to the Ninth Bipartite Settlement (2010), the said settlement did not include employees who had suffered the penalty of removal from service as being eligible for pension.

Contentions by Respondent (Vijay Kumar Handa)

The Respondent submitted that he had completed the minimum qualifying service and had exercised the option for pension, making him eligible under the Pension Regulations. He relied on S.K. Kool (supra) to argue that Regulation 22 should be harmoniously construed with Clause 6(b) of the Bipartite Settlement, which allows for removal from service with superannuation benefits. He emphasized that the Appellate order modifying the penalty to removal with terminal benefits had attained finality and recognized his entitlement to benefits.

Supreme Court

The Supreme Court held that Regulation 22 of the UCO Bank Pension Regulations must be read in conjunction with Clause 6(b) of the Bipartite Settlement. The Petition interpreted the phrase “as would be due otherwise” in Clause 6(b) to mean that if an employee satisfies the eligibility conditions under the Pension Regulations, such as completing the minimum qualifying service, they would be entitled to pensionary benefits even if removed from service for misconduct. The Petition observed that since the Respondent was removed with terminal benefits and had fulfilled the requisite service conditions, he could not be denied pension. Accordingly, the Supreme Court upheld the findings of the High Court and dismissed the Appeal filed by UCO Bank, stating that there was no compelling reason to interfere with the concurrent decisions of the Lower Court. Consequently, the Appeal was dismissed.

Parichaya Reddy

Associate

The Indian Lawyer & Allied Services

 

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[1] 1(2014) 2 SCC 715