STATE BANK OF INDIA versus L. KANNAIAH AND ORS.

Citation: [2003] SUPP. 2 S.C.R. 735 · Decided: 19-08-2003 · Supreme Court of India · Bench: S. RAJENDRA BABU · Disposal: Case Partly allowed

Judgment (excerpt)

STATE BANK OF INDIA 
v. 
L. KANNAIAH AND ORS. 
AUGUST 19, 2003 
[ S. RAJENDRA BABU AND P. VENKA T ARAMA REDDI, JJ.] 
State Bank of India Act, 1955-State Bank of India Employees Pension 
Fund Rules-Rules 7.and 8: 
A 
B 
Sepoy in Army joining SB! as Security Guard-Pensionary benefits to C 
pensioned ex-service personnel w.e.f 1.1.1965 .subject to restriction of age 
limit of 35 years, on that date which was later enhanced to 38 years-Denial 
of benefit as they exceeded the age limit on the cut-off date-Writ petition-
Dismissal by Single Judge of High Court-Division Bench setting aside the 
order~n appeal, held: When benefit extended, denial of benefit to some of D 
the serving employees should be based on rational and intelligible criterion-
When a new benefit is conferred cut-off date could be fvced but there could 
be no arbitrariness or irrationality in fvcing such date-On facts, there is no 
rationale or discernible basis for fvcing cut-off date notwithstanding employees' 
earlier confirmation in bank service-Thus order of Division Bench of High 
Court upheld 
E 
Sepoys in Army joining SB! as Security Guard-Pensionary benefits-
Denial of on the ground that total service rendered in Bank less than 20 
years-Plea that service rendered in Army to be clubbed with service in Bank 
for purpose of pension-On appeal, held: Circular does not obligate the F 
management of the Bank to add military service to service rendered in Bank 
for purpose of pension-Thus plea untenable. 
Sepoys in Army earlier joining Imperial Bank of India and then absorbed 
in SB I-Pensioned sepoys excluded from Imperial Bank of India Pension and 
Guarantee Fund Rules thus member of SB! pension fund-Plea for pensionary G 
benefits-Denial by High Court-On appeal, held: Merely because they were 
not original employees of SB/ as they· had joined service of Imperial Bank 
of India prior to absorption, they cannot be denied benefit of pension. 
Respondents 2, 4 and 5 served in Army as Sepoys and joined service of 
735 
II 
736 
SUPREME COURT REPORTS [2003) SUPP. 2 S.C.R. 
A State Bank of India as Security Guards. They retired from service after 
rendering 22 to 24 years of service anrl sought ben~fit of pension. It was denied 
to them since as on 1. 1 .965 they exceeded th·e age limit of 35 years which 
was later increased to 38 years. Respondents filed a writ petition. Single Judge 
of High Court dismissed the writ petition; Division Bench set aside the order 
B of the Single Judge and allowed the appeal granting relief to the said 
respondents and certain others: 
Out of the four appellants in C.A. No. 3432 of2000, two of them were 
denied relief on the ground that their total service in SBI was less than 20 
years. Other two writ petitioners joined the service of Imperial Bank of India. 
C On formation ofSBI, they were absorbed in the service ofSBI along with the 
other staff of the erstwhile Imperial Bani\ of India with effect from 1.7.1955. 
Reckoning from that date, they rendered service.of24 years by the time they 
retired at the age of 60. High Court held that they were not entitled to pension . 
as they were not the employees of SBI originally. Hence the present appeal 
and the cross appeal. 
D 
Dismissing the main appeal and partly allowing the cross appeal, the 
Court · 
HELD: 1.1. The pensioned ex-service personnel were admitted to 
pensionary benefits with effect from 1.1.1965 subject to restriction of age 
E limit of 35 years (which was later on enhanced to 38 years) on that date. As 
the date of confirmation of the respondents was much earlier to 1.1.1965, the 
crucial date for admission to the pension fund would be 1.1.1965. On that 
date, the confirmed employee of the Bank should not have exceeded 35 years 
of age which was the combined effect ofthe staff Circular dated 8.4.1974 read 
F . with the Pension Fund Rules. The reason for prescribing the maximum age 
limit of 35 or 38 for the purpose of induction into pension fund appears to be 
that the employee would be able to render minimum service of20 years as 
contemplated by Rut~ 22 of the Pension Fund Rules. However, there does not 
appear to be any rationale_ or discernible basis for fixing the cut-off date as 
1.1. 1965, notwithstanding their earlier confirmation in Bank service. True, . 
G a new benefit has been conferred on the ex-servicemen and therefore, a cut-
off date could be fixed for extending this new benefit but, there could be no 
arbitrariness or irrationality in fixing s

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