Supreme Court Denies Pension To SBI Employee, Rules Voluntary Abandonment Is Not Voluntary Retirement

Voluntary retirement, or VRS, allows employees to retire early without losing benefits. It requires the completion of at least 20 years of service. In a recent case, the Supreme Court rejected an appeal from an SBI employee. The employee had left his job after 20 years of service and sought a pension.

The bench comprising Justice Prashant Kumar Mishra and Justice N.V. Anjaria affirmed that the retirement benefit can be given only when the employee is eligible for it as per the rules. Based on the applicable rules, it held that “The two conditions that are required to be fulfilled are that the appellant must have completed twenty years of pensionable service, provided that he attained the age of fifty years during the relevant time.”

Case Background

The appellant joined SBI as a clerk on August 17, 1978, and was confirmed on February 17, 1979. In 1989, his career took an unconventional turn when he allegedly left for employment abroad.

According to the respondent (SBI), the appellant started remaining absent unauthorisedly, between January 21, 1998, and December 11, 1998. Regarding his unauthorised absence, the bank issued notices on June 6, 1998, and November 12, 1998, asking the appellant to report to work and explain his absence.  

In the absence of any response from the appellant, the bank declared him to have voluntarily abandoned his services from December 12, 1998. The counsel further contended that this is not a case of voluntary retirement but a case of voluntary abandonment because the appellant was employed and residing abroad.

After returning in 2004, the appellant requested to rejoin the bank; however, the bank denied. In July 2008, the bank turned down the request, declaring that the appellant had voluntarily retired.

The appellant approached the Labour Court and the Madras High Court, but his petition was dismissed on technical jurisdictional grounds. Then he approached the Supreme Court seeking retirement benefits.

Arguments

The counsel of the appellant argued that he (appellant) had completed more than 20 years of service (precisely 20 years, 3 months, and 25 days of service) and thus, is entitled to pension under Rule 22(i)(c) of the SBI Employees’ Pension Fund Rules.

On the other hand, the counsel (Additional Solicitor General - ASG) for SBI argued that the appellant's pensionable service is less than the eligibility criteria. Further, he didn’t attain the age of 50 at the time of leaving, which makes him ineligible for pensionary benefits under Rule 22(i)(a).

Court Observation

The court observed, “As the appellant failed to report for duty, he was declared to have voluntarily abandoned his services from 12.12.1998. During this time, it is argued on behalf of the respondent(s) that the appellant had been in employment abroad and was residing there. Thus, this was not a case of voluntary retirement, but of voluntary abandonment of services on the part of the appellant.”

It noted that under Rules 7 and 20, the pensionable service must be calculated from the date of admission to the pension fund, which in the petitioner’s case is his confirmation date in February 1979. Under this criterion, the court observed that his actual service was only 19 years, 9 months, and 25 days.

The court held that the appellant was ineligible under Rule 22(i)(a) because he had neither completed 20 years of qualifying service nor attained the age of 50 at the time of leaving.

Court Judgment

“In view of the non-satisfaction of both the essential conditions, namely, completion of 20 years of qualifying service and attainment of 50 years of age, the appellant is clearly not entitled to claim pension under Rule 22(i)(a) of the Pension Fund Rules,” the Court ruled.

It also rejected the application of Rule 22(i)(c), concluding that the appellant was never granted a VRS; instead, he was declared to have voluntarily abandoned the service. As he hasn’t fulfilled the VRS rules, he is not eligible for pensionary benefits. The Court dismissed the petition.