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Retired bank staff lose pension fight as Punjab and Haryana HC backs scrapping of scheme

The petitioners had claimed that discontinuation of the Cooperative Bank Employees Pension Scheme was illegal, but the court ruled it was voluntary, non-statutory, and unsustainable.

3 min readChandigarhSep 2, 2025 03:24 PM IST

The bench noted that the scheme had become financially unviable, with inflows failing to match outflows as beneficiaries increased. (Source: File)

The Punjab and Haryana High Court has upheld the discontinuation of the Cooperative Bank Employees Pension Scheme, 2005, dismissing multiple writ petitions filed by retired employees of the Punjab State Cooperative Bank (PSCB) and various district central cooperative banks.

The petitions, led by cases filed by Vijay Kumar Kapil and others, challenged a 2015 order by the Registrar of Cooperative Societies that deemed the decision to scrap the scheme fair, reasonable, and legal. Beneficiaries of the old pension scheme, all former employees of these cooperative banks, argued that the repeal was illegal as it slashed their pensions to nearly one-third of the original amount. They contended it violated principles of natural justice since they were not heard before the change.

The petitioners further claimed the discontinuation resulted from mismanagement by the banks and the pension trust, which failed to recover profits or manage funds effectively, and asserted they had a legitimate expectation of lifelong benefits after contributing to the scheme.

The scheme, introduced in 2005 with retrospective effect from January 1, 1996, was voluntary and aimed at providing tax benefits, with a trust managing contributions. However, in August 2012, PSCB’s board of directors resolved to discontinue it due to a lack of funds, replacing it with a defined contributory pension scheme managed by the Life Insurance Corporation of India (LIC). Petitioners argued the board lacked authority to scrap it entirely, as its powers were limited to amendments under the scheme’s clauses.

In his judgment, Justice Harpreet Singh Brar held that the pension scheme was not statutory, did not mandate participation, and did not form part of employees’ service conditions under the Punjab Cooperative Societies Act, 1961, or its rules. The court emphasised that it was a voluntary, benevolent initiative, not one created under statutory powers exercised by the state government or the registrar. Mere approval by the registrar, it observed, did not confer statutory status.

The bench noted that the scheme had become financially unviable, with inflows failing to match outflows as beneficiaries increased. LIC advised in 2012 that sustaining it would require an initial infusion of Rs 351-361 crore plus annual contributions, which the trust could not manage. The court observed that 90 per cent of beneficiaries had opted for the new scheme, and 2,462 in-service employees supported it compared to 1,425 retirees.

Justice Brar highlighted that shareholders of cooperative banks are often small agriculturists with limited resources, and burdening them further could risk the banks’ closure. “These banks cannot be considered instrumentalities of the state under Article 12 of the Constitution,” the judgment stated, adding that no statutory provisions were violated, making the writ petitions non-maintainable. The court also ruled that retirees continue to receive other statutory benefits such as provident fund, gratuity, and leave encashment, ensuring they are not left helpless.

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Citing Supreme Court precedents, including Chairman & MD, Kerala SRTC vs. K O Varghese (2007), the bench affirmed that autonomous entities like cooperative banks can revise policies based on financial health without being arbitrary or violating Article 14.

The ruling disposes of 13 connected petitions, including contempt cases.

Manraj Grewal Sharma

Manraj Grewal Sharma is a senior journalist and the Resident Editor of The Indian Express in Chandigarh, where she leads the newspaper’s coverage of north India’s most politically and institutionally significant regions. From Punjab and Haryana to Himachal Pradesh and the Union Territory of Chandigarh, she oversees reporting at the intersection of governance, law, politics and society. She also reports on the diaspora, especially in Canada and the US. With a career spanning journalism across several countries, academia and international development, Manraj brings a rare depth of perspective to regional reporting. She is widely regarded as a leading chronicler of Punjab’s contemporary history and socio-political evolution, particularly its long shadow of militancy, federal tensions and identity politics. Her book, Dreams after Darkness, remains a definitive account of the militancy years and their enduring aftermath. Professional Background & Expertise A gold medalist in mass communication and a post-graduate in English literature, Manraj has a multifaceted career spanning journalism, academia, and international development. She was also awarded a fellowship by National Foundation of India and did several in-depth pieces on Manipur. Internationally, she has reported from Israel, US, UK, Myanmar, and Mauritius Her key focus areas include: Regional Politics, History, Agriculture, Diaspora, and Security. Of late, she has started focusing on Legal & Judicial Affairs: Much of her recent work involves reporting on high-stakes cases in the Punjab and Haryana High Court, ranging from environmental policy to civil rights. International Consulting: She previously served as a consulting editor for the Asia Pacific Adaptation Network and a publishing consultant for the Asian Development Bank (ADB) in Manila. Academia: For five years, she was the managing editor of Gender, Technology and Development, a peer-reviewed international journal at the Asian Institute of Technology, Bangkok. Recent Notable Articles (Late 2025) Her recent reportage focuses heavily on judicial interventions and regional governance: 1. Environment & Governance "‘NGT can’t test legality of policy’: HC hears challenge to Punjab’s ‘Green Habitat’ plan" (Dec 22, 2025): Covering a critical legal battle over whether the National Green Tribunal has the authority to strike down a state policy regularizing farmhouses on delisted forest land. "High court pulls up Punjab poll panel over audio clip probe" (Dec 10, 2025): Reporting on judicial concerns regarding the transparency and fairness of local body elections. 2. Legal Rights & Social Welfare "HC issues notice to Punjab, Haryana over delay in building old age homes" (Dec 22, 2025): Reporting on a contempt petition against top officials for failing to establish government-run homes for the elderly as promised in 2019. "Victims can appeal acquittals in sessions court without seeking special leave" (Dec 19, 2025): Highlighting a significant procedural shift in criminal law following a Supreme Court ruling. "HC upholds benefits for Punjab FCI officer acquitted in 20-year-old bribery case" (Dec 19, 2025): A report on the concept of "honourable acquittal" and its impact on employee benefits. 3. Human Rights & Identity "As Punjab denies parole to MP Amritpal Singh, HC asks it to submit ‘foundational material’" (Dec 1, 2025): Covering the legal proceedings regarding the radical preacher and sitting MP's request to attend Parliament. "Protecting life paramount: HC backs Muslim woman in live-in after verbal divorce" (Nov 6, 2025): Analyzing judicial protections for personal liberty in the context of traditional practices. Signature Beats Manraj is recognized for her ability to decode complex judicial rulings and relate them to the everyday lives of citizens. Whether it is a 30-year-old land battle in Fazilka or the political implications of Kangana Ranaut’s candidacy in Mandi, her writing provides deep historical and regional context. Contact @grewal_sharma on X manrajgrewalsharma on Instagram ... Read More

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Punjab and Haryana High Court

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