Bank cannot withhold superannuation benefits expressly granted in relocation order despite ongoing service dispute: High Court of MP

Madhya Pradesh High Court: Division bench consisting of Justice Sunita Yadav and Justice Milind Ramesh Phadke partly allowed a written appeal challenging the order of the Single Judge which ordered the appellant to bring an industrial action relating to his pension benefits. The Court held that where a removal order expressly awards pension benefits, they cannot be withheld by ordering the employee to approach the Employment Tribunal because the tribunal’s application was intended only to challenge the removal itself.

Background

The appellant was removed from the service of State Bank of Indore (later merged with State Bank of India) where he was working from February 1985; initially as a clerk/cashier, and later as a computer operator. Following allegations of illegal lending, he was suspended and subsequently removed from service on April 1, 2008. The removal order specifically granted him retirement benefits, including pension, provident fund and severance pay, without disqualification from future employment. The appellant’s initial call for his expulsion in Writ Petition No. 1096 of 2009(S) resulted in the High Court quashing the expulsion order. However, the Divisional Court overturned this decision and ordered him to file a collective dispute. When the appellant approached the bank regarding pension benefits, he was asked to sign blank forms which he refused to do, giving rise to the present dispute.

Arguments

The appellant, through senior counsel KN Gupta, submitted that since the expulsion order itself provided for the payment of pension benefits and that aspect had become final, the single judge had wrongly directed him to file an industrial dispute in respect of those benefits. He emphasized that only a dispute involving the termination of an employment relationship would be brought before the Labor Court, and not the issue of pension benefits. The respondent bank, represented by senior counsel V. K. Bhardwaj, submitted a compliance report which showed that although Rs. An amount of 18,13,560.48 was due as pension arrears till January 2023, the appellant owed Rs. February 34, 654.93 to the bank. The bank argued that the single judge had correctly interpreted the earlier Division Bench order directing all disputes to be raised before the Industrial Court.

The Court’s reasoning

First, the Court emphasized that the original removal order of 1 April 2008 expressly provided for pension benefits. This provision of the expulsion order itself clearly defined the appellant’s entitlement to these benefits, making them independent of any dispute over expulsion. Secondly, examining the earlier order of the Division Bench, the Court clarified that the direction to be taken to the Industrial Court was specifically limited to challenging removal from service and not pension benefits. The Court found no dispute as to the applicant’s entitlement to pension benefits, noting that even the respondent bank did not dispute this aspect.

Thirdly, with regard to the recovery of unpaid loans from the appellant’s benefits, the Court upheld the Supreme Court’s observation regarding compliance with the principles set out in Article High Court of Punjab and Haryana v. Jagdev Singh (2016) i State of Punjab v. Rafiq Masih (2015). In practice, this meant that while the bank could continue with the recovery, it had to do so within the established legal framework for the recovery of pension claims. Ultimately, the Court ordered the bank to waive the final fees if it had not already done so, subject to the principles set out in the above-mentioned. decisions. Therefore, the cassation appeal was partially allowed.

Date: 25/10/2024

Quote: WA No. 1889 of 2019

The Complainant’s Representative: Shri KN Gupta, Senior Advocate Shri RBS Tomar

The defendant’s attorney: Shri V. K. Bhardwaj, Senior Advocate Shri Raju Sharma

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