In the case of UCO Bank and Others v. Vijay Kumar Handa, which was heard by the Supreme Court of India in April 2025, the court issued a landmark verdict. The purpose of this case was to resolve a long-standing legal disagreement on the question of whether or not a bank employee who had been terminated from their position as a result of disciplinary actions might still be eligible for pension services.
The ruling, which was written by Justice Ujjal Bhuyan and concurred by Justice Abhay S. Oka, interpreted service laws and settlements that were applicable to bank workers. It also found in favor of pension entitlement in situations where the termination of service was not followed by the forfeiture of benefits.
A Concise Review of the Situation
Vijay Kumar Handa was employed as a clerk at the Gurmandi Branch of the UCO Bank in Jalandhar on the day in question. He was accused of hitting another officer while they were both present on the premises of the branch, which was a behavior that was considered to be quite inappropriate.
For More Updates & Regular Notes Join Our Whats App Group (https://chat.whatsapp.com/DkucckgAEJbCtXwXr2yIt0) and Telegram Group ( https://t.me/legalmaestroeducators ) contact@legalmaestros.com.
After initiating disciplinary actions, the Bank engaged an inquiry officer to investigate the matter. The investigation came to the conclusion that the misbehavior was beyond reasonable doubt, which resulted in the disciplinary authority issuing an order to terminate the employee’s employment.
The order to dismiss Handa was appealed by Handa. A substantial compromise was made by the appeal authority, which permitted him to keep terminal benefits for the service that he had already performed. The penalty was changed from dismissal to removal from service. A further provision of the decision indicated that his dismissal from service would not render him ineligible for employment in the future.
After some time had passed, Handa filed a dispute with the employer, challenging the penalty. Using the authority granted to it by Section 11A of the Industrial Disputes Act, the Labour Court lowered the punishment to a cessation of increments and ordered reinstatement with a portion of the back earnings.
On the other hand, the High Court ultimately decided to overturn this award. It was therefore determined that the appellate order of removal with terminal benefits was reinstated and reached a state of finality.
In the subsequent steps, Handa submitted a writ petition to the High Court in order to request a pension. The Single Judge issued an order to the Bank, instructing them to continue processing and releasing his pension, and the Division Bench agreed with this determination. An appeal was filed by UCO Bank with the Supreme Court.
Fundamental Legal Concerns That Are Before the Supreme Court
Significant legal questions were brought up by the case:
Whether or not a bank employee who was terminated from his position due to misconduct is eligible for a pension if he meets the requirements outlined in the regulations governing pensions.
When it comes to service regulations, the question at hand is whether the decision of the appellate body that allows terminal benefits takes precedence over the general disqualification.
What is the relationship between Clause 6(b) of the Bipartite Settlement and Regulation 22 of the UCO Bank (Employees’) Pension Regulations, 1995?
Positions Taken by the Bank
The argument put up by UCO Bank is that once an employee is terminated from their position due to misconduct, they are unable to collect pension benefits and lose all of their previous service.
The Bank placed a significant amount of weight on the provision of Regulation 22(1) of the Pension Regulations, which provides that the loss of previous service is a consequence of being removed or dismissed. Handa’s case, according to the Bank, did not meet the requirements for eligibility under the pension regulations, and the High Court made a mistake when it applied the decision in Bank of Baroda v. S.K. Kool, which the Bank argued dealt with a distinct factual scenario.
In addition, the Bank maintained that Handa had not chosen to participate in the pension plan prior to being replaced, and as a result, she was not qualified to receive benefits under the Ninth Bipartite Settlement.
A Position Taken by the Respondent
Handa, through his legal representative, argued that the ruling of the appellate authority specifically gave him terminal benefits. Due to the fact that the order was never contested and had reached a state of finality, the Bank was now prevented from denying him disability benefits.
Furthermore, he stated that he had completed the necessary number of years to be eligible for the pension program and that he had chosen to participate in it.
In addition to this, he relied on the decision that the Supreme Court made in the case of S.K. Kool, which stated that employees who were terminated from their employment and were entitled to terminal benefits are eligible for pension services if they meet other eligibility requirements. It was his contention that the case was immediately relevant to his circumstances.
This is the interpretation and findings of the Supreme Court.
According to the Court, the origins of the applicable service conditions can be traced back to the Bipartite Settlement that was reached between banks and their workers on October 19, 1966. This settlement was supported by statutes.
In accordance with this settlement, it was mentioned that Handa was deemed to be guilty of gross misconduct. The most significant modification, on the other hand, was made in the form of Clause 6(b), which was included in a subsequent Bipartite Settlement in 1972.
This clause permits an employee who has been found guilty of misbehavior to be terminated from their employment but still maintaining their eligibility for retirement benefits such as pension and gratuity.
A comparison was made by the Court between this clause and Regulation 22 of the Pension Regulations, which stipulates that if an employee is removed from employment, they will lose all of their previous service. It recognized that there was a seemingly contradictory relationship between the two, but it handled the issue by reading both in a harmonic manner.
The Court reaffirmed its reasoning from the case of S.K. Kool, in which it had ruled that employees who were otherwise entitled for pension under the regulations would not lose that right just because they were removed from employment in accordance with Clause 6(b).
According to Clause 6(b), the phrase “as would be due otherwise” indicates that an employee would continue to be eligible for the benefits even if they were terminated from their position if they fulfilled all of the eligibility requirements outlined in the pension regulations.
Additionally, the court took note of the fact that the ruling issued by the appellate authority made it abundantly plain that Handa would be eligible for future work and would be eligible to receive terminal benefits. It was no longer possible for the Bank to rely on Regulation 22 in order to stop him from receiving benefits because this ruling had reached its finality and was not contested.
A Harmonization of the Regulations and the Settlement Terms
Legally speaking, when there is a disagreement between two service-related instruments, one of which is statutory and the other of which is contractual, the Court will attempt to harmonize both of them in order to ensure that neither of them is made meaningless.
In this particular case, the Supreme Court made it clear that Regulation 22 cannot be interpreted in a vacuum. Because it was a later development, Clause 6(b) of the Settlement had to be interpreted as an exception. This was especially true given that it permitted the provision of pensions subject to eligibility requirements.
Consequently, the normal rule that removal results in the forfeiture of service would not be applicable in situations that fall under Clause 6(b) of Regulation 22. This is given that the employee satisfied the qualifying requirements for pension, such as having completed a minimum number of years of service.
Decision that is finalized by the court
The decisions that were arrived at by the Single Judge and Division Bench of the High Court were upheld by the Supreme Court. As a result of being terminated in accordance with Clause 6(b) with terminal benefits and satisfying the eligibility requirements outlined in the regulations, it was established that Vijay Kumar Handa was eligible to receive disability payments.
In accordance with Article 136 of the Constitution, the Supreme Court decided not to intervene since it did not find any errors in the reasoning or conclusions reached by the lower courts. Additionally, the civil appeal that was submitted by UCO Bank was consequently rejected.
This ruling reaffirms that the application of service law must not only be carried out with legal clarity, but also with fairness and equality. The Court gave precedence to the intention of the service settlement, which was to give employees with a dignified exit even after they had been punished, provided that they met the eligibility standards.
The ruling provides clarity on the interplay between being removed from service and pension entitlements, and it also reaffirms the notion that benefits that have been given by a final order cannot be revoked through technical arguments at a later time.
This decision acts as a safety for employees who may have been penalized but not dishonorably discharged. It ensures their financial stability through pension and reinforces the impartiality of administrative justice. In a broader context, this case serves as a safeguard.
Author
About the Author
