Rules Taking Away Vested Rights Of Employees Retrospectively Violate Articles 14 & 21 Of Constitution
Case: The Punjab State Cooperative Agricultural Development Bank Ltd. Versus The Registrar, Cooperative Societies And Others
Corum: Justice Ajay Rastogi and Justice Abhay S. Oka
Case No.: Civil Appeal No(S). 297298 Of 2022
Court Observation: “…if the employee who had already been promoted or fixed in a particular pay scale, if that is being taken away by the impugned scheme of rules retrospectively, that certainly will take away the vested/accrued right of the incumbent which may not be permissible and may be violative of Article 14 and 16 of the Constitution”
“Non-availability of financial resources would not be a defence available to the appellant Bank in taking away the vested rights accrued to the employees and that too when it is for their socio-economic security. It is an assurance that in their old age, their periodical payment towards pension shall remain assured. The pension paid to them is not a bounty and it is for the appellant to divert the resources from where the funds can be made available to fulfil the rights of the employees in protecting the vested rights accrued in their favour.”
“A rule which seeks to reverse from an anterior date a benefit which has been granted or availed of, e.g., promotion or payscale, can be assailed as being violative of Articles 14 and 16 of the Constitution. Any amendment having retrospective operative having the effect of taking away a benefit already available to the employee under the existing rule is arbitrary, discriminatory and violative of the rights guaranteed under A.14 and A.16 of the Constitution.”
“there is a distinction between the legitimate expectation and a vested/accrued right in favour of the employees. The rule which classifies such employees for promotional, seniority, age of retirement purposes undoubtedly operates on those who entered service before framing of the rules but it operates in future. In a sense, it governs the future right of seniority, promotion or age of retirement of those who are already in service.”
“employer/employees contribution provided under the employees’ pension scheme(EPS) of the Act 1952, applicable to the serving employees makes them entitled to get a pension in terms of the provisions of the Act 1952. So far as their complaint regarding payment of contribution is concerned, it is in no manner going to be adjusted for payment of pension to retirees/respondents, who are entitled to get their pension in terms of the pension scheme of which they are members and it is for the appellant Bank to reserve the resources and make payment to the retired employees seeking pension to the scheme in vogue when they became members and took benefits pursuant thereto”
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Keywords
Articles 14 & 21 Of Constitution, Bank Pensioners Case
