The Madras High Court has set aside a circular issued by Union Bank of India (UBI) on August 27, 2010 denying monthly pension to employees who had been imposed with a punishment of compulsory retirement from service.
Allowing a writ petition filed by one such employee, Justice K.K. Sasidharan held that the circular was in contravention to Union Bank of India (Employees) Pension Regulations, 1995 which provide for payment of pension even to those who had been retired from service compulsorily.
The judge pointed out that the Bank had framed the regulations at the time of introduction of a pension scheme for its employees in 1995. But then, some of the employees failed to submit applications expressing their desire to be a part of the scheme.
Hence, acting on the basis of a general advisory issued by Indian Banks Association to all financial institutions in the country, UBI issued a circular in August 2010 providing one more chance to its employees to avail the benefits of the pension scheme.
However, the circular stated that only those who take voluntary retirement would be eligible to monthly pension and not those who had been retired compulsorily as a mode of punishment following disciplinary proceedings initiated against them.
Holding that such a restriction on grant of pension was not in consonance with the provisions of the pension regulations framed by the bank in 1995, the judge said that a circular could not override the regulations which were statutory in nature.
