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Wednesday, 8 May 2019

Court Case - New Pension Scheme in State Bank of India has no legal effect

NEW PENSION SCHEME (NPS) IN STATE BANK OF INDIA
JUDGEMENT PRONOUNCED BY THE HON. HIGH COURT OF KERALA

The Hon. High Court of Kerala has delivered the judgment on 12th April 2019 in respect of the Writ Petition 5105 of 2013 filed by State Banks’ Staff Union (Kerala Circle) in the High Court of Kerala questioning   implementation of New Pension Scheme (NPS) in State Bank of India. The judgment has been pronounced by the Hon. Judge C. T. Ravikumar.

HISTORY OF THE CASE

In the 9th Bipartite Settlement the New Pension Scheme (NPS) was made applicable at industry level w.e.f. 01.04.2010 (excluding State Bank of India) . Despite the provisions to exclude State Bank of India in the 9th BPS signed under Industrial Disputes Act, 1947 are regards New Pension Scheme, State Bank of India unilaterally implemented the NPS in the bank from 1st August 2010.  

The past, present and future employees in the Award category (Clerical & Subordinate) are governed by Sastry & Desai Awards and various other bipartite settlements subsequently entered into both at industry level and at bank level as regards their service conditions. They are having protection of ID Act, 1947 under section 18 (3). Any alterations/modifications in the service conditions requires a Notice of Change under Section 9A of ID Act 1947. 

State Banks’ Staff Union (Kerala Circle) therefore filed a Writ Petition before the Hon. High Court of Kerala in 2013. The Court admitted the writ petition filed by the Union on 25.02.2013 as WP© 5105 of 2013. The Union prayed 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 in the bank. Counsels S. Vaidyanathan, H. Ganapathy and Jimmy George appeared for the Union.

Union contended that subsequent to the formation of State Bank of India in 1955, the provisions of Imperial Bank of India Pension Fund Regulations were adopted to State Bank of India also. Though NPS was made applicable to employees as per industry level settlement under 9th Bipartite, State Bank of India was excluded from the purview of the clause as regards to New Pension Scheme in the said settlement.

In the petition Union 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 1st August 2010. Union has 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. 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 it should be notified in the Gazette.

The main hearings of the case were completed by July 2013 and it has been reserved for judgement. Now the Hon. Judge C. T. Ravikumar has pronounced  the judgment on 12th April 2019.

NEW PENSION HAS NO LEGAL STANDING

Justice has given the judgment in the case in reference to a similar   writ petition which was disposed of as per judgment dated 26th October 2017. It was held in the judgment that “thus I have to hold that the New Pension Scheme will have to be introduced as a Regulation, as contemplated under section 50 and will have to follow the procedure under section 50(4) to have a legal effect”.
In the present writ petition, it is held by the justice that “so long as the New Pension Scheme was not introduced as a Regulation as contemplated under section 50 of the Act and in order to have legal effect the procedures contemplated under section 50 are to be followed, going by the said judgment, as on today, it got no legal effect. In such circumstances, I am of the view that the New Pension Scheme is not now, available for consideration. Needless to say that if it is validated in accordance with the provisions of section 50 of Act, as has been observed by this Court, it will be open to the petitioner and the employees affected by such   validation of the New Pension Scheme to challenge it appropriately, in case they are desirous to do so. So also, it is evident that as per the said judgment this Court granted liberty to the Central Board of the Bank to consider whether the petitioners therein could be admitted to pension fund covered by the pension rules. If a decision is taken in that matter and if it is ultimately against the interest of the members of the petitioner union, the petitioner union as also its members would certainly be free to challenge it appropriately in accordance with law”.
The stand of the Union is vindicated through the Judgment of the Hon’ble High Court holding that the New Pension Scheme in State Bank of India has no legal effect. The pronouncement of the judiciary gives everyone of us a great relief as the Union has spearheaded the case and followed it up in the best interest of protecting and preserving the hard earned rights of the workmen. 

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