Madhya Pradesh High Court restores ‘retired’ Central Bank branch manager’s pension

Regulation 33(2) of the Employees’ Pension Regulations, 1995 mandates that the board of directors must be consulted before the competent authority passes an order awarding a reduced pension.

The order noted that the petitioner has completed more than 36 years of service before his compulsory retirement and claims entitlement to pension on the basis of his qualifying service. “The petitioner’s case, therefore, is not that compulsory retirement ipso facto confers an indefeasible right to full pension, but that any reduction from the full pension otherwise admissible must be made strictly in accordance with Regulation 33,” it added.

The court observed that the Pension Regulations mandated prior consultation with the bank’s board of directors whenever an employee’s pension is reduced. (AI-generated image)

Compulsory retirement challenged

The petitioner served as a branch manager with the Central Bank of India for 36 years. Following a chargesheet dated October 22, 2009, and a departmental enquiry into alleged irregularities, he was penalised with compulsory retirement on May 26, 2011, approximately two and a half years before superannuation. His departmental appeal was rejected on August 19, 2011.

Post-retirement, the general manager of the bank sanctioned pension at two-thirds of the rate admissible to the petitioner. The petitioner challenged this reduction, citing Regulation 33 of the Central Bank of India Employees’ Pension Regulations, 1995, which requires mandatory consultation with the board of directors when awarding less than full pension. The bank maintained that powers had been delegated to the general manager and that the petition suffered from delay.

The petitioner had previously filed for full pension and leave encashment. It was withdrawn on January 14, 2019, after the leave encashment benefit was extended (sanctioned on February 26, 2019), reserving liberty to file a fresh petition for the remaining pension claim. The petitioner made a representation on April 9, 2019, for full pension, which was rejected by the bank on May 13, 2019, leading to the present petition.

Prior board consultation must: Order

The court observed that Regulation 33(2) of the Pension Regulations mandates prior consultation with the board of directors whenever an employee’s pension is reduced below the full admissible amount.

The ruling held that an internal delegation or resolution in favour of the general manager cannot override or substitute the legal requirement of prior board consultation framed under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970. The court noted that the order sanctioning two-thirds pension failed to assign any administrative reasons for the reduction, rendering it legally unsustainable.

While the right to receive correct pension is continuous, the court observed that the petitioner’s long delay in seeking judicial remedy bars full recovery of past monetary arrears. Applying Article 7 of the Limitation Act, 1963, arrears are restricted strictly to three years before the filing of the petition.