Holding

Regulation 18 must be given a liberal construction as a rule of measurement, enabling the employee to satisfy the 15‑year service requirement, and no case exists for interference under Article 136.

Summary

N. Venkataramani, an employee of Indian Bank, voluntarily retired after 14 years, 9 months and 17 days of service. The bank denied his claim for pension on the ground that he had not completed the statutory minimum of 15 years. The Madras High Court set aside the bank’s order and directed the grant of pension, interpreting Regulation 18 of the Indian Bank Employees' Pension Regulations, 1995, which treats a broken service period of more than six months as a full year. On appeal, the Supreme Court held that Regulation 18 is a rule of measurement independent of other qualifying‑service provisions and must be given a liberal construction, thereby allowing the employee to meet the 15‑year requirement. The Court also ruled that there was no ground for exercising its discretionary jurisdiction under Article 136 of the Constitution. Consequently, the appeal was dismissed and the High Court’s order granting pension was affirmed.

Issues considered

Whether Regulation 18 of the Indian Bank Employees' Pension Regulations, 1995, which provides for the treatment of broken periods of service, is applicable to compute qualifying service for pension under a voluntary retirement scheme.
Whether the employee satisfied the minimum 15‑year service requirement for pension when the broken period rule is applied.
Whether the Supreme Court can exercise its discretionary jurisdiction under Article 136 of the Constitution to interfere with the High Court's decision.

Legislation cited

Constitution of Indias. Article 136
Indian Bank Employees Pension Regulations, 1995s. Regulation 18, s. Regulation 28, s. Regulation 29
Payment of Gratuity Act, 1972

Subjects

pensionvoluntary retirementbroken periodservice calculationliberal constructionRegulation 18Article 136employee benefits

Judgment

A INDIAN BANK AND ANR.
v. ·,
N. VENKATRAMANI

AUGUST 30, 2007

B (S.B: SINHA AND HARJIT SINGH BEDI,JJ.)

Service Law-Jridian Bank Employee's Pension Regulation 1995-
Regulations 18 and 28-Pensionary benefits under voluntary retirement
C Scheme-Qualifying service for obtaining pension was I 5 years-Regulation
18 provided that if period of service included "broken period" of service less
than one year, but more than six months, such "broken period" to be treated
as one year-Employee had completec/ 14 years and 9 months of service at
the time of voluntary retirement-His claim for pension rejected on the
ground that he had not completed 15 years of service-High Court however
D allowed claim of employee-Interference with-Held: No case made out for
interference under Art. 136-Regulation 18 which provided for rule of
measurement of "broken period", not controlled by any of the Regulations ~~
providing for qualifying service-It does not brook any restrictive
interpretation-Provisions beneficial in nature to be construed liberally-
E Interpretation of Statutes-Liberal Construction-,-Constitution of India,
1950-Article 136.

Respondent-employee took voluntary retirement in terms of the voluntary
retirement scheme floated by Appellant-Bank. At that time, Respondent had
completed 14 years, 9 months and 17 days of service. He filed an application
F for grant of pensionary benefits under the Voluntary retirement Scheme. The _.,.
application was rejected on the ground that Respondent had not completed 15
years of service. Respondent filed writ petition, on which High Court directed
the Appellant to grant pensionary benefits to him.

In appeal to this Court, it was contended that the High Court failed to
G consider that qualifying service for obtaining pension was minimum 15 years
of service and Regulation 18 of the Indian Bank Employee's Pension
Regulations, 1995 providing for measurement of"broken period" of service
did not come within the purview thereof.

Dismissing the appeal. the Court
II 570
)
;

INDIAN BANK v. N. VENKATRAMANl[S.B.SINHA,J.] 571

HELD : l.1. It may be true that various provisions of the Indian Bank A
Employee's Pension Regulations, 1995 as for example Regulations 16, 17,
19, 23, etc. provided for qualifying service. Regulation 18 is not controlled by
any of the said provisions. It does not brook any restrictive interpretation. It
only provides for a rule of measurement An employee was entitled to pension
provided he has completed the specified period of service. How such a period B
of service would be computed is a matter which is governed by the statute. It
is one thing to say that a statute provides for completion of fifteen years of
minimum service, but if a provision provides for measurement of the period,
the same cannot be lost sight of Provision of the Regulations which are
beneficial in nature should be construed liberally. A person otherwise entitled
to the benefit of a beneficial provision of a statute should not ordinarily be C
deprived thereform. (Paras 13 and 14) (575-A-C; 575-GJ

1.2. In any event, it is not a case where this Court should exercise its
discretionary jurisdiction under Article 136 of the Constitution. [Para 171

State ofAndhra Pradesh v. Bathu Prakasa Rao and Ors., (197613 SCC D
301; Nathi Devi v. Radha Devi Gupta, (20051 2 SCC 271 and ONGC Ltd v.
Sendhabhai Vastram Patel and Ors., {200516SCC454, referred to.
-t
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3989 of2007.

From the Final Judgment and Order dated 4.7.2005 of the High Court of E
Judicature at Madras in Writ Petition No. 14744 of 2003.

Raju Ramchandran, Gaulam Awasthi and D. Mahesh Babu for the
Appellants.

S. Balakrishnan and Subramonium Prasad for the Respondent. F
The Judgment of the Court was delivered by

S.B. SINHA, J. 1. Leave granted.

2. Meaning of the term "broken period" for the purpose of grant of G
pension while implementing a voluntary retirement scheme is the question
involved herein.

3. Respondent was working with the appellant - Bank. The terms and
conditions of grant of pension to the employees of the Bank are governed
by the Indian Bank Employee's Pension Regulation 1995 (for short "the H
572 SUPREME COURT REPORTS [2007) 9 S.C.R

A Regulation"); Regulation 28 whereof, as amended with effect from 8.06.2002,
' reads as under: ~

"28. Superannuation Pension

Superannuation pension shall be granted to an employee who has
B retired on his attaining the age of superannuation specified in the
Service Regulations or Settlements. ., '
'. • G

Provided that, with effect from 1st day of September)OOO pension
shall also be granted to an employee who opts to retire before attaining
the age of superannuation, but after rendering service for a minimum
c period of 15,years in terms ~fany Scheme that may be framed for such
purpose by the Board with the approval of the Government."

4. A voluntary retirement scheme was floated by the bank on 9.11.2000.
Respondent requested for his voluntary retirement. It was accepted by an
order dated 10.02.200 I. By then, he had completed 14 years, 9 months and 17
D days of service. He filed an application for grant of pension on the premise
that" he was eligible therefor. It was rejected on the ground that he had not
completed 15 years of service. A writ petition filed by him was dismissed by -;....
a learned Single Judge of the Madras High Court. An intra-court appeal filed
thereagainst has been allowed by a Division Bench of the High Court by
E reason of the impugned judgment directing:

"Accordingly, while setting aside the order impugned in the Writ
Petition, we direct the respondent to grant pensionary benefits under
IBVRS 2000 as per the above referred to Regulations. The arrears of
pension payable to the petitioner are liable to be settled with interest.
As far as payment of interest is concerned, inasmuch as the petitioner
F
ought to have been paid pension on the date when he was relieved
from the services i.e. on 10.2.2001 and since for no fault of the
petitioner, he was deprived of the benefits of pension, we are of the
view that the petitioner is entitled for interest on the arrears from the
date of his superannuation till the date of its payments ..."

5. Mr. Raju Ramchandran, learned senior counsel appearing on behalf
of the appellant submitted that the High Court committed a manife~t error in
coming to the aforementioned conclusion as it failed to take into consideration
that qualifying service for obtaining a pension was minimum fifteen years of
service and Regulation 18 providing for 'broken period' would not come within
H the purview thereof.
INDIANBANK v. N.VENKATRAMANI[S.B.SINHA,J.] 573

6. Regulation 28 of the Regulations provides for grant of superannuation A·
pension. Regulation 29 provides for pension on voluntary retirement after an
employee has completed 20 years of qualifying service, clause (5) whereof
reads ·as under:

"The qualifying service of an employee retiring voluntarily under this
regulation shall be increased by a period not exceeding five years, B
subject to the condition that the total qualifying service rendered by
such employee shall not in any case exceed thirty-three year and it
does not take him beyond the date of superannuation."

7. Although the respondent has not superannuated in terms of the said
scheme, he has taken. his voluntary retirement under the voluntary retirement C
scheme in terms whereof an ex gratia payment equivalent to sixty days' salary
was to be paid apart from the other benefits, viz., gratuity payment or leave
· encashment, which are as under:

"I. Gratuity as per Gratuity Act/Service Gratuity as the case may be.
D
2. Pension (including commuted value of pension) as per Indian
Bank (Employees') Pension Regulations 1995/Bank's contributi'?n
towards PF as per rules.
3. Leave encashment as per rules."

8. The matter relating to pension is governed by the pension regulations. E
9. We may notice that although various provisions have been made
providing for qualifying service to which our attention has been drawn by Mr.
Raju Ramchandran, the manner in which the period of service is to be measured
is contained in Regulation 18 of the Regulations w~~ch reads as under: F
...........
"Broken period of service of less than one year:- If the period of
service of an employee includes broken period of service less than
one year, then if such broken period is more than six months, it shall
be treated as one year and if such broken period is six months or less
it shall be ignored." G
10. The term "broken lot" has been defined in Black's Law Dictionary,
Sixth Edition, page 193, in the following terms:

"Broken lot. Odd lot; less than the usual unit of measurement or unit
of sale; e.g. less than 100 shares of stock."
H
574 SUPREME COURT REPORTS [2007] 9 S.C.R

A 11. A person apart from being entitled to receive a superannuation
pension, was also entitled to pro-rata pension if he completes a period of ten
years of service.

12. A circular letter was issued by the appellant itself on 11.12.2000
which is in the following tenns:
B
"VOLUNTARY RETIREMENT SCHEME IN PUBLIC SECTOR BANKS-
AMENDMENTS TO BANK (EMPLOYEES') PENSION REGuLATIONS,
1995

Please refer to our circular letter No. PD/CIR/76/G2/933 dated 31st
C August, 2000 conveying the No Objection of the Government to
banks adopting and implementing a voluntary retirement scheme for
employees on the lines of what was contained in the Annexure to the
circular.

As per the Scheme, an employee who is eligible and applies for
D. voluntary retirement is entitled for the benefit of CPF, Pension, Gratuity
and encashment of accumulated privilege leave, as per rules.

Bank (Employers') Pension Regulations, 1995 do not, have
provisions enabling payment of pension to an employee who retires
before attaining the age of superannuation except under circumstances
E as in Regulations 29, 30, 32 and 33. We had, therefore, taken up
Regulations by way of amendments to Regulation 28 so that employees
who retire. as above under special adhoc schemes fonnulated by the
banks after serving for a prescribed minimum period would be eligible
for prorata pension.

F Government of India has after examining the proposal conveyed
its approval and desires that IBA advise banks to make necessary
amendment to their pension regulations as in the Annexures. We
request banks to take note accordingly.

Please note that ·with the above amendments employees who
G apply for voluntary retirement after having rendered a minimum of 15
years of service under a special/adhoc scheme formulated with the
specific approval of the Government and the Board of Directors, will
be eligible for pro-rata pension for the period of service rendered as
if they are to retire on attaining the age of superannuation on that
date."
H
INDIAN BANK v. N. VENKATRAMANI [S.B. SINHA,J.] 575

13. It may be true that various provisions of the Regulations as for A
example Regulations 16, 17, 19, 23, etc. provided for qualifying service.
Regulation 18 is not controlled by any of the said provisions. It does not
brook any restrictive interpretation. It only provides for a rule of measurement.
An employee, as noticed hereinbefore, was entitled to pension provided he
has completed the specified period of service. How such a period of service :S
would be computed is a matter which is governed by the statute. It is one
thing to say that a statute provides for completion of fifteen years of minimum
service, but if a provision provides for measurement of the period, the same
cannot be lost sight of. Provision of the Regulations which are beneficial in
nature, in our opinion, should be construed liberally.

14. In State of Andhra Pradesh v. Bathu Prakasa Rao and Ors., [1976]
c
3 SCC 301, this Court held:

"35. The District Judge had reached the conclusion that, quite apart
from these technically prescribed tests for the purposes of grading,
by the Directorate of Marketing and Inspection, the commonsense [)
test was that at least 50% must be broken in order to constitute what
could pass as a marketable consignment of"broken rice". He had also
made the necessary allowances for foreign matter. We do not think
that the test adopted by the District and Sessions Judge was either
incorrect or unreasonable. Indeed, we think that the High Court was
quite unjustified in interfering with this test on what seems to us like E
metaphysical reasoning to justify its view that, where the quantities
of the whole grains and broken grains in a consignment cannot be
accurately determined, the consignment should be deemed to be no
longer one of rice which requires a permit. The learned Attorney
General has rightly pointed out to us that at no earlier stage was it F
the case of the millers that mere mixture of some broken rice with some
whole rice is enough to constitute the whole consignment into one
of broken rice or of substance which was not "rice" at all. In our
opinion, the High Court has quite erroneously held that such mixtures
do not fall within the mischief provided for by the Reguiation Order
ofl964." G
A person, thus, otherwise entitled to the benefit of a beneficial provision
of a statute should not ordinarily be deprived therefrom.

15. Mr. Raju Ramchandran has relied upon a decision of this Court in
Nathi Devi V. Radha Devi Gupta, [2005] 2 sec 271 wherein while interpreting H.
576 SUPREME COURT REPORTS [2007) 9 S.C.R.

A the provisions of Delhi Rent Control Act, 1958, it was held:
"21. Sections 14A or 140 carve out an exception to Section 14(1 )(e)
of the Act. The said provisions envisage recovery of immediate
possession of the tenanted premises by (i) the members of Armed
Forces, (ii) the Central Government and Delhi Administration employees
B who have retired or who would be retiring and (iii) where the landlord
is a widow. All the aforementioned provisions refer to the immediate
necessity of the landlord.

22. The provisions contained in Section 14A or 14D being in the
nature of exception to the main provision, they must be construed
c strictly."

But, in our opinion, Regulation 28, as such, does not provide for an
exception. If it is to be a rule of measurement, there is no reason as to why
a literal interpretation would be impermissible.

D 16. In Nathi Devi (supra), this court held:

"14. It is equally well settled that in interpreting a statute, effort
should be made to give effect to each and every word used by the
Legislature. The Courts always presume that the Legislature inserted
every part thereof for a purpose and the legislative intention is that
E every part. of the statute should have effect. A construction which
attributes redundancy to the legislature will not be accepted except
for compelling reasons such as obvious drafting errors. ..

15. It is well settled that literal interpretation should be given to a
statute if the same does not lead to an absurdity."
F -f-:-
17. In any event, it is not a case where we should exercise our
discretionary jurisdiction under Article 136 of the Constitution of India.

In ONGC Ltd v. Sendhabhai Vastram Patel and Ors., [2005] 6 SCC 454,
this Court held:
G
"It is now well settled that the High Courts and the Supreme Court
while exercising their equity jurisdiction under Articles 226 and 32 of
the Constitution as also Article 136 thereof may not exercise the same
in appropriate cases. While exercising such jurisdiction, the superior
courts in India even may not strike down a wrong order only because
H
INDIANBANK v. N. VENKATRAMANI[S.B.SINHA,J.] 577

it would be lawful to do so. A discretionary relief may be refused to A
be extended to the appellant in a given case although the Court may
find the same to be justified in law. [See S.D.S. Shipping (P) Ltd. v.
Jay Container Services Co. (P) Ltd]"

18. For the reasons aforementioned, no case has been made out for
interference of the impugned judgment. The appeal is dismissed with costs. B
Counsel's fee assessed at Rs. 25,000/-.

B.B.B. Appeal dismissed.