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Sunday, March 18, 2018

Supreme Court upholds definition of Pay as per Bank Employees’ Pension Regulations, 1995 for calculation of Pension in the judgement pronounced on 13-02-2018

28 PAGE SUPREME COURT JUDGEMENT DATED 13TH FEB 2018 AFFECTING RETIRES OF 7TH BPS CYCLE, IS NOW AVAILABLE. HOWEVER IT'S MAIN FEATURES ARE SUMMARISED BELOW FOR INFORMATION OF MEMBERS.
Supreme Court upholds definition of Pay as per Bank Employees’ Pension Regulations, 1995 for calculation of Pension in the judgement pronounced on 13-02-2018 Vide Canara Bank Vs Savithri Venugopal & Ors – SLP (C) Nos. 20661--20668/2012 tagged to CA No: 5525/2012 BoB Vs G Palani & Ors. As we all know, Basic Pension is to be calculated @ 50% of last 10 months average “Pay” drawn by an employee at the time of retirement from Bank’s service in terms of Pension Regulations, 1995. In respect of post 01.04.1998 retirees, on the plea of financial load factor, definition of “Pay” was modified for the purpose of calculation of pension on the basis of adding to the pay paid earlier to 01.04.1998, dearness allowance thereon at lower price index level of 1616 points (instead of higher price index level of 1684 points as applied to serving employees) resulting in monthly reduction of pension payable and one time reduction of commutation amount receivable contrary to Pension Regulations, 1995. However, IBA restored the Statutory Definition of “Pay” effective from 01.05.2005 only and denied differential commutation benefit and arrears of pension from the date of retirement till 30-04-2005 to those pensioners retired on or after 01-04-1998. Against this injustice, affected pensioners in Canara Bank, moreparticularly, from the State of Karnataka, Tamilnadu, Andhra Pradesh & Kerala filed Writ Petitions in batches mostly in 2002. Against the judgement favouring pensioners, bank managements including Canara Bank preferred Writ Appeals in the Karnataka High Court. These appeals too were disposed favouring pensioners by way of common judgement and final order dated 08.03.2012 passed by the Karnataka High Court. Hence our Bank Management filed SLPs (C) Nos: 20661 – 20668/2012 against Orders of the Division Bench of Karnataka High Court and the same were admitted on 14-07-2012 by Supreme Court. These petitions along with other bank petitions were tagged to SLP(C) No.24889/2011 converted into CA No.5525/2012 Bank of Baroda & Anr Vs G Palani & Ors. After final hearing for about 3 hours on 13.02.2018, Hon’ble Mr.Justice Arun Mishra and Hon’ble Mr.Justice Amitava Roy pronounced judgement on the same day favouring the Pensioners by setting aside the judgement of Delhi High Court and affirming the judgements of Karnataka & Madras High Courts. As such, the appeals filed by bank managements have been dismissed and the appeals preferred by Pensioners/Association have been allowed. This in effect would mean that the bank managements have to re-calculate pension as per Pension Regulations, 1995 and pay arrears from the date of retirement to 30.04.2005 with 9% interest to those pensioners retired on or after 01-04-1998. In this regard, we wish to draw the attention of the pensioners that consequent to restoration of definition of “Pay” for calculation of Pension, IBA Vide its Circular No.557 dated 28-6-2005 instructed all the Banks to compute revised pension effective from 01-05-2005 and denied to those retired after 01.04.1998 differential commutation and also pension arrears from the date of retirement till 30-04-2005. While calculating arrears of pension in terms of the Supreme Court judgement, our retired colleagues need to note the following important points: 1. For those retired during the period from 01-04-1998 to 31-10-2002:Basic Pension was revised and re-fixed already, based on 7th BPS Pay (instead of 6thBPS and DA upto 1616 points) effective from 01-05-2005 with slab wise DA rates (tapering down) at 0.24%, 0.20%, 0.12%, and 0.06 % over 1684 points. Hence in terms of SC judgement dated 13.02.2018, arrears of pension from the date of retirement upto 30.04.2005 and differential commutation amount are to be paid now along with interest @ 9%. 2. For those retired during the period from 01-11-2002 to 30-04-2005:Basic Pension was revised and re-fixed already, based on 8th BPS Pay and was paid effective from 01-05-2005 with DR @ 100% Neutralisation Viz: 0.18% per slab over 2288 points on entire Basic Pension. In such cases also, equity demands that pension arrears from the date of retirement upto 30-04-2005 and differential commutation amount be paid to the pensioners of the above period. 3. Judgement is not applicable to those PF optee retirees between 01.04.1998 & 30.04.2005 and who joined the Pension Scheme in 2010 in terms of the Settlement

1 comment:

Unknown said...

This judgement should be applicable to all the retirees till date, because it is related with the definition of "pay" and hence special allowance component will be added to basic pay.

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