Supreme Court Rejects UCO Bank's Plea That Employee Dismissed For Misconduct Wasn't Entitled To Pension Despite 10 Yrs Service

The Supreme Court rejected UCO Bank's plea that a bank employee who has completed over ten years of service was not entitled to superannuation benefits when he was dismissed on grounds of misconduct.

The bench comprising Justices Abhay S. Oka and Ujjal Bhuyan upheld the Punjab & Haryana High Court's decision directing the Appellant-UCO Bank to grant pensionary benefits to the Respondent-employee removed from service for misconduct after completing 10 plus years in the service.

The Case

In 1998, the Respondent was charged with assaulting a bank officer and was dismissed following an inquiry in 1999. In 2000, the appellate authority modified the penalty to removal with terminal benefits, a decision that went unchallenged by the Appellant-Bank and attained finality.

In 2004, the Labour Court reduced the penalty to stoppage of increments and ordered reinstatement with 75% back wages. However, in 2009, the High Court set aside the Labour Court's award, reinstating the removal with terminal benefits.

Subsequently, in 2010, the Respondent opted for a pension under the Bipartite Settlement. The High Court later directed the bank to grant pension benefits, relying on the Supreme Court's ruling in Bank of Baroda v. S.K. Kool, (2014) 2 SCC 715.

In SK Kool's judgment, the Court held that if the bank employee has completed the minimum pensionable years of service (10+ years), he would be entitled to the pensionary benefits even if dismissed on account of misconduct.

Arguments

The Appellant opposed the grant of pensionary benefits to the Respondent citing Regulation 22 of UCO Bank Pension Regulations which denies pension for removed employees.

However, the Respondent-Employee referred to the Bipartite Agreement arrived between the Indian Banks' Association and the Banks' Workmen Union on 19.10.1966. This settlement was arrived under Section 2(p) and Section 18(1) of the Industrial Disputes Act read with Rule 58 of the Industrial Disputes (Central) Rules, 1957. It has a statutory backing and is binding on the parties.

Clause 6(b) of the Bipartite Agreement states that “an employee who is found guilty of gross misconduct may be removed from service but would be provided with superannuation benefits which would otherwise be due to him.”

Issue

Because of contradictory stand of both the parties, the question appeared before the Court was whether the Regulation 22 override the Bipartite Settlement, which has statutory force under the Industrial Disputes Act.

Decision

Answering in negative, the judgment authored by Justice Bhuyan relying on the case of S.K. Kool, harmonized both the provisions and observed that Regulation 22 cannot override the Bipartite Settlement, which has statutory force under the Industrial Disputes Act.

The Court rejected the Appellant's argument regarding the non-application of the SK Kool's judgment in the present case. The Appellant argued that in SK Kool's judgment applies only where the employee opted for pension before removal.

“the decision in S.K. Kool (supra) was rendered in a different factual context. The employee in the said case had opted for pension before the penalty of removal from service was imposed on him. In the present case, respondent never opted for pension. Therefore, S.K. Kool (supra) is clearly distinguishable in so far facts and circumstances of the present case is concerned.”, the court observed

“Both the learned Single Judge and the Division Bench had followed the aforesaid decision of this Court. Learned Single Judge noted that respondent had submitted his option for pension on 05.10.2010. Learned Single Judge also held that objection of the appellant to the claim of pension by the respondent was without any basis in as much as the appellate authority had specifically held that respondent would be entitled to receive terminal benefits for the period of service he had rendered. This order of the appellate authority has attained finality. Therefore, it was held that respondent was entitled to receive pension in view of the order passed by the appellate authority. This view of the learned Single Judge has been endorsed by the Division Bench in the impugned judgment. The decision in S.K. Kool (supra) is binding on us. Therefore, we do not find any compelling reason to interfere with the concurrent findings of the learned Single Judge and the Division Bench while exercising our jurisdiction under Article 136 of the Constitution of India.”, the court observed.

In terms of the aforesaid, the Court dismissed the appeal.

Case Title: UCO BANK & ANR. VERSUS VIJAY KUMAR HANDA

Citation : 2025 LiveLaw (SC) 390

Click here to read/download the judgment

Appearances:

For Petitioner(s) Ms. Vibha Dutta Makhija, Sr. Adv. Mr. Sarfaraz Khan, Adv. Mr. Kausar Raza Faridi, AOR Mr. Naved Ahmed, Adv. Mr. Mirza Amir Beg, Adv. Mr. Shahbaaz Jameel, Adv. Mr. Abdul Wahid, Adv.

For Respondent(s) Mr. Tripurari Ray, Adv. Mr. Balwant Singh Billowria, Adv. Mr. Anirudh Ray, Adv. Mr. Vivekanand Singh,