Court Case New Pension Scheme in SBI Vs SBI Staff Union Kerala Circle

NEW PENSION SCHEME CASE IN SBI

STATE BANKS STAFF UNION, KERALA CIRCLE INITIATED THE CASE

The court admitted the writ petition filed by SBSU (KC) on 25th February 2013 praying for directions to quash the implementation of NPS in state Bank of India and to revert those recruited on or after 1st August 2010 back to the existing pension scheme.

The case has been filed as per the directions of the Central Committee meeting held on 17th & 18th September 2012. Counsels S Vaidyanathan, H Ganapathy and Jimmy George appeared for us. Justice P N Ravindran also gave an interim order to keep the amounts contributed by the employees in a separate account to be maintained with the trustee bank.

Subsequently the bank submitted a counter. The bank was, on their submission, given permission to collect, retain & remit the amount from the monthly emoluments as per the modification made in the interim order.
We contended in our petition that subsequent to the formation of SBI in 1955, the provisions of Imperial Bank of India Pension Fund Regulations were adopted to SBI also. Though New Pension Scheme was made applicable to new entrants in the Banking sector as per the 9th Bipartite settlement, SBI was not a party to the industry level settlement as far as the pension related matters are concerned.

In our petition we have questioned the authority of the Central Board of the Bank which unilaterally decided to implement NPS to all categories of employees who join the bank in the permanent scale on or after 01 08 2010.
We have taken the legal recourse under Article 226 of the Constitution of India on the ground that the existing pension scheme once framed cannot be modified without issuing notice under ID Act 1947. And again as per section 50 (4) of the State Bank of India Act, any regulation framed will have to be laid before the Parliament and it will take effect in the existing or modified form as decided by both the Houses of Parliament and after a notification in the Gazette to that effect.

The Central Board of the Bank has taken a unilateral decision to modify the pension scheme and also it has not been placed before the Parliament, we contended. The Union also contended that SBI Act does not empower the Central Board to amend the Pension Fund Rules and that too with retrospective effect. Hence it is argued that the introduction of the New Pension Scheme in State Bank of India is illegal and invalid. There is no comparative statement by respondents showing the particulars under the New Pension Scheme and the Existing Pension Scheme and no option facility was available.

It is further argued that the employees will be put to great hardship on implementation of the New Pension Scheme. The Pension is a property within the meaning of Article 300A of the Constitution of India and it cannot be withdrawn except in accordance with law. It is a means of livelihood for an employee or his/her family after rendering several years of service under the Bank. Hence it is also hit by Article 21 of the Constitution of India.

When the case came for further hearing on 17th, 18th & 19th of June, 2013 we have questioned the contention of the Bank that they have acted as per law and obtained prior permission of Reserve Bank of India and the Central Government to introduce the NPS. The counsels also argued that unless and until the provisions of the existing pension rules are amended following due procedure, the action of the Bank could only be construed as illegal. And it is also argued that as the service conditions of the employees are governed by Sastri & Desai Awards and further settlements, the Bank would have to issue notice under section 9A of the ID Act 1947 before contemplating any change and unilateral action contrary to the statutory provisions would not sustain in the eye of law.

In State Bank of India, the existing Pension Rules provide all the permanent employees the benefit of pension on the date of their confirmation in service. It is argued that on the face of the rule, without amending SBI Act and complying with the provisions of Section 50 (2) (o) and 50 (4), the bank could not impose new conditions of service detrimental to the employees as the provisions of the Act are mandatory.
State Bank of India Act Section 50 gives out the power of the Central Board to make regulations and Section 50 (4) clearly states that every regulation shall, as soon as it is made by the Central Board, be forwarded to the Central Government and Government shall cause a copy of the same to be laid before each House of the Parliament while it is in session, for a period of 30 days and both Houses agree in making any modification in the regulation before implementation.Thereafter there should be a notification in the Gazette.
On the contention of the Bank that the new recruits have no right to question the implementation,we argued that after the entry into the Bank, if the actions of the Bank is found contrary to the law of land, the employee could question it individually or through Union to which it belonged. The counsel replied to the bank’s contention that section 43 of SBI Act has not given unfettered power to the Board and it is subject to the provisions of ID Act 1947. Otherwise there was no need for Desai Award in 1962 and the Nine settlements thereafter. Section 43 cannot be read in isolation. The bank has to come up with an amendment to Section 43 A in respect of Customary Bonus.

The counsel further argued that in the agreement dated 27 April 2010 signed as part of the industry level bipartite settlement, it was categorically mentioned that the terms of settlement should not be applicable to State Bank of India as far as the pension matters are concerned. It is also argued that the members of a pension scheme should be kept aware of the benefit they would get on their retirement. But in the present case, even the Bank which is deducting contribution from the employees’ monthly salary could not confirm of the pensionary benefits going to be extended.

During the hearing on 1st July 2013 the Counsel appearing for the bank said that the pension scheme was framed in consultation with Reserve Bank of India and with prior approval of Government of India. He said a proposal in this regard was sent to the Central Government for approval and necessary action. Counsel appearing for the Government of India said details had been sought from authorities with regard to the implementation of the scheme in the bank. Details would be presented before the court within a week’s time.
Recording the submission made by counsel for the Central Government, the court directed them to furnish details in writing as regards the date of tabling of the scheme before both houses of Parliament and its passage with modifications, if any. Date of notification in the Gazette of India in compliance with section 50 (4) of SBI Act should also be clarified. The counsel was further directed to hand over copies of such details to the petitioner and the bank on or before July 8. The case was then posted for July 15.

But on 15th july 2013 also the counsels appearing for the Bank & Government could not present any further documents before the Court and the judge announced the case as reserved for Judgement.
Comrades, we have presented the case in a most effective manner before the Court and we are now awaiting the Judgement on 18th December 2014.

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Our View : If this case is taken into consideration further and hearing comes in the favour of Staff Union then it will be the greatest achievement for Bank Union especially SBI. As since 1 April 2010 any employee joining the state govt , psu , central govt or banks are covered under NPS - New Pension Scheme, and old pension scheme where monthly pension was given has been discarded.

So now it is to be seen whether favourable decision comes in Union or not, but we think it will be difficult for the court to give the decision in favour of union. 

All the best to union and SBI Staff