Another Set back - Restoration of commuted pension – Again rejected by Allhabad High Court in the Writ Petition No. 17819 of 2024 on 15.1.2025

 Another Set back - Restoration of commuted pension – Again rejected by Allhabad High Court in the Writ Petition No. 17819 of 2024 on 15.1.2025

Restoration of commuted pension – Again rejected by Allhabad High Court in the Writ Petition No. 17819 of 2024 on 15.1.2025

 

Background

• Petitioners: Ashok Kumar Agarwal and 48 others, retired employees of Punjab National Bank.
• Respondent: Union of India and another.

• The petitioners availed the benefit of commutation of part of their pension at the time of superannuation, which stipulated that the original pension would be restored only after 15 years.
• The petitioners sought to challenge this provision, arguing for a reduction of the restoration period from 15 years to 10 years.

 

Court Findings

1. The court emphasized that the petitioners had accepted the commutation policy with full awareness of its terms, thereby creating a binding contract between the employees and the employer.
2. The court found no evidence that the terms of the commutation policy were unconstitutional or unconscionable. The petitioners did not contest the legality of the policy but sought a modification of its terms.
3. Once the petitioners acquiesced to the policy, they could not later seek to alter the agreed-upon terms regarding the restoration period of the pension.
4. The court's decision was supported by previous judgments from the Supreme Court and other High Courts, reinforcing the principle that once a policy is accepted, it cannot be contested later.

 

The order cites several previous court judgments to support its findings:

1. Common Cause, A Registered Society and Others Vs. Union of India - (1987) 1 Supreme Court Cases, 142.
2. R. Gandhi Vs. Union of India and Others - (1999) 8 SCC 106.
3. Forum Retired IPS Officers (FORIPSO) Vs. Union of India & Another - 2019 SCC Online Del 6610.
4. Shila Devi Vs. State of Punjab - CWP No. 9426 of 2023, Punjab & Haryana High Court.

These citations reinforce the court's stance on the binding nature of accepted policies and the inability to alter agreed-upon terms post-acceptance.

 

Conclusion

The court dismissed the writ petition, affirming that the petitioners must adhere to the original terms of the commutation policy, which clearly stipulates a 15-year restoration period for the pension. The ruling underscores the importance of clarity and acceptance in contractual agreements between employees and employers.

Neutral Citation No. - 2025:AHC:6439-DB

Court No. - 29

Case :- WRIT - A No. - 17819 of 2024

Petitioner :- Ashok Kumar Agarwal And 48 Others

Respondent :- Union Of India And Another

Counsel for Petitioner :- Chandra Dutt,Pradeep Verma

Counsel for Respondent :- Ashok Shankar

Bhatnagar,Anupama Parashar,C.S.C.,Dharmendra Vaish

Hon'ble Ashwani Kumar Mishra,J.

Hon'ble Donadi Ramesh,J.

Petitioners are retired employees of Punjab National Bank. At

the time of their superannuation, they availed of the benefit of

commutation of part of their pension in terms of the applicable

Service Regulations i.e. Punjab National Bank (Employee)

Pension Regulation, 1995 (hereinafter referred to as the

Regulations of 1995). The Pension Regulations clearly

contemplated that in the event an employee avails benefit of

commutation of pension, he would be entitled to lumpsum

amount on the commutation of his giving up pension, upto

1/3rd of the pension. The Regulations of 1995 clearly

contemplate that pension would be restored after a period of 15

years.

The petitioners contend that actual amount of deduction on

account of 1/3rd reduction in the pension, due to commutation

for a period of 10-11 years, would almost equalise the lumpsum

amount paid on commutation, and therefore, the period of 15

years fixed for restoration of pension be reduced to 10 years.

For such purposes, the petitioners lay challenge to Regulation

41(4) and 41(5) of the Regulations of 1995, which are

reproduced hereinafter:

"(4) In the case of a pensioner eligible for superannuation pension or

pension on voluntary retirement or premature retirement pension, no

medical examination shall be necessary, if the application for

commutation is made within one year from the date of retirement.

However, if such a pensioner applies for commutation of pension after one

year from the date of his retirement, the same will be permitted subject to

medical examination;

Provided that in the case of an applicant who is in receipt of a provisional

pension as in Regulation 46 and for whom pension in whole or in part on

the finalisation of the departmental or judicial proceedings has been

authorised, the period of one year referred to in this sub-regulation shall

reckon from the date of issue of the orders consequent upon the

finalisation of the departmental or judicial proceedings.

(5) An applicant who -

(i) retires on invalid pension under regulation 30 of these regulations; or

(ii) is in receipt of compassionate allowance under regulation 31 of these

regulations; or

(iii) is compulsory retired by the Bank and is eligible for compulsory

retirement pension under regulation 33 shall be eligible to commute a

fraction of his pension subject to the limit specified in sub-regulation (1)

after he has been declared fit by a medical officer approved by the bank."

In the writ petition, the petitioners have furnished detail in

respect of lumpsum amount paid to the petitioners, consequent

upon commutation of pension, as also the actual deduction

made on account of 1/3rd reduction in their pension to submit

that in fact the benefit extended by the bank, on account of

commutation, gets equalised on the expiry of 10-11 years itself

and therefore, the Service Regulations providing for restoration

of pension upon expiry of 15 years, ought to be interfered with,

by this Court and reduced to 10 years.

This petition is opposed by learned counsel for the respondent-

Bank, who states that statutory Regulations clearly extend an

offer/option to the retiring bank employee to avail receipt of

lumpsum amount in lieu of giving up specified percent of

pension on account of its commutation. Argument is that once

the petitioners accept such offer/option and avail the benefit of

receipt of lumpsum amount, it would not be open for the

petitioners to question the term after which alone the pension

gets restored.

We have heard Sri Pradeep Verma, learned counsel for the

petitioners and Sri Ashok Bhatnagar, learned counsel for the

respondent-Bank, and have perused the materials on record.

Clause 41 (1) to (3) of the statutory Regulations of 1995 are

reproduced hereinafter:

"(1) An employee shall be entitled to commute for a lump sum payment of

a fraction not exceeding one-third of his pension:

Provided that in respect of an employee who is governed by subregulation

(5) of Regulation 3 of these regulations, the family of such

employee shall also be entitled to commute for a lump sum payment a

fraction not exceeding one- third of the pension admissible to the

employee.

(2) An employee shall indicate the fraction of pension, which he desires to

commute, and may either indicate the maximum limit of one-third pension

or such lower limit, as he may desire to commute.

(3) if fraction of pension to be commuted results in fraction of rupee, such

fraction of a rupee shall be ignored for the purpose of commutation."

Clause 41(4) contains reference to a table, which indicates the

commutation amount as also the manner of its calculation. The

table is followed with certain notes, which also highlight the

manner in which the computation is to be carried out for the

purposes of commutation. Clause 2 of the note is relevant and is

reproduced hereinafter:

"(2) An employee who had commuted the admissible portion of pension is

entitled to have the commuted portion of the pension restored after the

expiry of a period of fifteen years from the date of commutation."

The provisions contained in the Regulations would clearly

indicate that the retiring employee shall indicate a fraction of

pension, which he desires to commute, and may indicate its

maximum limit, which shall not be more than 1/3rd of the

pension. In case, the fraction amount is in part of the rupee,

such fraction of a rupee is to be ignored for the purposes of

commutation. Note (2) is categorical and provides in specific

terms that employees who have commuted the admissible

portion of pension, is entitled to have the commuted portion of

the pension restored after the expiry of 15 years from the date

of commutation. The statutory scheme is, therefore, abundantly

clear that an option is extended to the retiring employee concern

to avail of the benefit of computation and such computation is

on specific terms that on expiry of 15 years of such

commutation, the original pension is to be restored.

The petitioners' contention that period for resumption of full

pension be reduced from 15 years to 10 years only because the

bank actually recovers the lumpsum amount paid on expiry of

10 years, is a misconceived argument. The Policy contained in

the Regulations of 1995 extends an offer to the retiring

employee to avail the benefit of commutation on specific terms.

These terms clearly provide for restoration of pension only on

expiry of 15 years. The petitioners otherwise do not say that the

terms of the policy is unconstitutional or unconscionable.

Having accepted such offer, a binding contract comes into

existence between the employee and the employer as per which

the original pension is to be restored after 15 years. Having

acquiesced to the commutation policy with open eyes, it is not

open for the retiring employee to contend later that the period

of restoration of full pension be reduced from 15 years to 10

years. Whether or not the lumpsum amount gets equalised on

expiry of 10 years or 11 year is not decisive or material. What is

material is the nature of obligation which enures upon the

parties when the retiring employee accepts the provision of

commutation of pension. The employee with his open eyes

having availed the policy, cannot subsequently turn around or

seek modification in its terms. The argument that the table or

the figures were not adequately disclosed, is also not

acceptable, inasmuch as the chart specifies the manner in which

the commutation is to be fixed and the period after which the

original pension is to be restored. In case, the employees had

any misgivings about it, they could have sought appropriate

clarification before accepting the offer. Once, the petitioners

have acquiesced to the policy and accepted the offer, their

subsequent attempt to resile or seek change in its computation

would clearly be impermissible.

The writ petition lacks merit and is, accordingly, dismissed.

The view taken by us clearly finds support from the

adjudication made by the Supreme Court in "Common

Cause", A Registered Society And Others Vs. Union of

India, (1987) 1 Supreme Court Cases, 142, R. Gandhi Vs.

Union of India And Others, (1999) 8 SCC 106 as well the

judgment of Delhi High Court in Forum Retired IPS Officers

(FORIPSO) Vs. Union of India & Another, 2019 SCC

Online Del 6610 and Punjab & Haryana High Court in Shila

Devi Vs. State of Punjab in CWP No. 9426 of 2023.

Order Date :- 15.1.2025

Noman