Case Note & Summary
The petitioner, S M Adiga, a retired Assistant General Manager of Syndicate Bank, filed two writ petitions under Article 226 of the Constitution of India. In W.P.No.18992/2003, he sought quashing of orders dated 03.10.2001, 26.12.2002, and 28.03.2003 by which the bank withheld the balance 50% of ex-gratia payment, and sought payment of Rs.7,57,355/- with interest at 18% per annum from 01.10.2001. In W.P.No.40590/2003, he sought quashing of order dated 16.07.2003 reducing his pension by 50% for five years as a disciplinary penalty, and sought arrears of pension with interest at 18% per annum. The court noted that the parties were the same and the issues related to the same disciplinary proceedings. The court held that ex-gratia is a contractual benefit and cannot be withheld arbitrarily; the bank's orders were quashed. Regarding pension, the court found the penalty of reduction of pension by 50% for five years disproportionate and set aside the order. The bank was directed to pay the balance 50% ex-gratia with interest at 18% per annum from 01.10.2001, and to recompute pension and pay arrears with interest at 18% per annum from the dates the amounts were due. The writ petitions were allowed with costs.
Headnote
A) Service Law - Ex-Gratia Payment - Entitlement to Balance 50% - Syndicate Bank Employees' Pension Regulations - The petitioner, a retired officer, was denied the balance 50% of ex-gratia on the ground of disciplinary proceedings. The court held that ex-gratia is a contractual benefit and cannot be withheld arbitrarily. The bank's order dated 03.10.2001, 26.12.2002, and 28.03.2003 were quashed, and the bank was directed to pay the balance 50% with interest at 18% per annum from 01.10.2001. (Paras 1-10) B) Service Law - Pension - Arrears and Interest - Syndicate Bank Employees' Pension Regulations - The petitioner's pension was reduced due to a penalty of reduction in pension by 50% for five years. The court held that the penalty was disproportionate and set aside the order dated 16.07.2003. The bank was directed to recompute pension and pay arrears with interest at 18% per annum from the dates the amounts were due. (Paras 11-20)
Issue of Consideration
Whether the petitioner is entitled to the balance 50% of ex-gratia payment and arrears of pension with interest, and whether the bank's orders withholding the same are valid.
Final Decision
Writ petitions allowed. Orders dated 03.10.2001, 26.12.2002, 28.03.2003, and 16.07.2003 quashed. Respondent bank directed to pay the balance 50% ex-gratia of Rs.7,57,355/- with interest at 18% per annum from 01.10.2001 until payment. Bank also directed to recompute pension and pay arrears with interest at 18% per annum from the dates the amounts were due. Costs awarded.
Law Points
- Ex-gratia payment is a contractual benefit
- not a bounty
- pension is a right
- interest on delayed payment of pension and ex-gratia
- interpretation of Syndicate Bank Employees' Pension Regulations
