ASSISTANT GENERAL MANAGER, STATE BANK OF INDIA & ORS. versus RADHEY SHYAM PANDEY

Citation: [2020] 4 S.C.R. 814 · Decided: 02-03-2020 · Supreme Court of India · Bench: ARUN MISHRA · Disposal: Disposed off

Cited by 2 judgment(s) · cites 7 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2020] 4 S.C.R.
ASSISTANT GENERAL MANAGER,
STATE BANK OF INDIA & ORS.
v.
RADHEY SHYAM PANDEY
(Civil Appeal No. 2463 of 2015)
MARCH 02, 2020
[ARUN MISHRA, M. R. SHAH AND B. R. GAVAI, JJ.]
Service Law – Voluntary Retirement Scheme – Whether the
respondent employees are entitled to pension on completion of 15
years of service as per the State Bank of India Voluntary Retirement
Scheme (VRS framed in 2000) – Held: The Central Board of
Directors of the SBI accepted the memorandum for making payment
of pension, in case it was not accepting the proposal, in the
memorandum it ought to have said clearly that it was not ready to
accept the proposals of the Government and the Indian Bank
Association (IBA) and rejects the same – However, once it approved
the proposals referred to in the memorandum which were on the
basis of IBA’s letter and Government of India’s decision it was bound
to implement it in true letter and spirit – By accepting the same,
binding obligation was created upon the SBI to make payment of
pension on completion of 15 years of service – It cannot invalidate
its own decision by relying on fact it failed to amend the rule, whereas
other Banks did it later on with the retrospective effect – They cannot
invalidate otherwise valid decision by virtue of exclusive superior
power to amend or not to amend the rule and act unfairly and make
the entire contract unreasonable based on misrepresentation – The
scheme of contractual nature has to be read in the context and in
the backdrop of facts and what has been resolved by the Board of
Directors – There is no ambiguity with respect to the admissibility of
pension when the memorandum and the scheme are read together –
In case of ambiguity and even if two interpretations are possible in
the backdrop of facts of the case, one in favour of the employee
has to be adopted and any clarification, if it denies the benefit of
pension, has to be held to be unenforceable, illegal and contrary to
law – In the instant case, the eligibility clause, when read with clauses
providing the benefit, i.e., clauses 5 and 6 of the scheme, leaves no
[2020] 4 S.C.R. 814
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room for any doubt and makes it clear the employee with 15 years
of service were treated as eligible to claim the benefit of the scheme
floated by SBI – Therefore, the employees who completed 15 years
of service or more as on cut-off date were entitled to proportionate
pension under SBI-VRS to be computed as per SBI Pension Fund
Rules.
Disposing of the appeals, the Court
HELD: 1. It is apparent that once the Central Board of
Directors accepted the memorandum for making payment of
pension, in case it was not accepting the proposal in the
memorandum, it ought to have said clearly that it was not ready
to accept the proposals of the Government and the IBA and rejects
the same. Once it approved the proposals referred to in the
memorandum, which were on the basis of IBA’s letter and
Government of India’s decision it was bound to implement it in
true letter and spirit. By accepting the same, binding obligation
was created upon the SBI to make payment of pension on
completion of 15 years of service. It cannot invalidate its own
decision by relying on fact it failed to amend the rule, whereas
other Banks did it later on with retrospective effect. They cannot
invalidate otherwise valid decision by virtue of exclusive superior
power to amend or not to amend the rule and act unfairly and
make 
the 
entire 
contract 
unreasonable 
based 
on
misrepresentation. It was open to the Board of Directors to reject
the proposal. Once it accepted the proposal to make payment of
pension on completion of 15 years of service as proposed in the
memorandum, though the scheme is tried to be interpreted by
the SBI that pension was to be admissible as provided in the rule
that refers to proportionate pension as noted by this Court in
O.P. Swarnakar & Ors., and what was decided by Government of
India/IBA, was not taken away rather adopted by the Central
Board of Directors. The scheme of contractual nature has to be
read in the context and in the backdrop of facts and what has
been resolved by the Board of Directors. There is no ambiguity
with respect to the admissibility of pension when the memorandum
and the scheme are read together. In case of ambiguity and even
if two interpretations are possible in the backdrop of facts of the
case, one in favour of the employees has to be adopted and so-
ASS

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