Government Employees Cannot Dispute Retirement Benefits In Consumer Forums: NCDRC

Brief Facts of the Case

The complainant was a clerk at the Punjab National Bank and applied for a pension there but did not refund the bank's contribution to the provident fund he had already received. As a result, his pension application was incomplete and unsuccessful. The complainant passed away, and subsequently, his widow applied for a family pension as the complainant's surviving spouse but again did not refund the bank's provident fund contribution that the complainant had received earlier. Her application was also deemed incomplete. The bank sent a letter giving her another option to pay back the provident fund amount plus interest in order to have her late husband's pension case approved. The bank eventually paid the widow arrears for her late husband's basic pension for a certain period and arrears for her own family pension for another period. However, the widow passed away shortly after, leading the bank to stop the family pension payments. Subsequently, the son of the late complainant filed a complaint against the bank. He argued that the bank demanded and received a refund of the provident fund contribution it had previously paid to his late father, along with interest on that refund amount. This was a prerequisite for paying the basic and family pensions to the complainant's wife. He filed a complaint in the District Forum. The District Forum allowed the complaint, following which the bank appealed to the State Commission, but the State Commission dismissed the appeal and directed the bank to deposit the employee contribution with interest @8.5%. Consequently, the bank approached the National Commission with a revision petition.

Contentions of the Bank

The bank argued that the complainant had no locus standi (no legal standing) to raise any issue regarding the pension paid by the bank before any forum under the Consumer Protection Act, 1986. The bank contended that the State Commission committed illegality by allowing the complainant to withdraw Rs. 25,000 and accrued interest, as neither the State Commission nor the District Forum had jurisdiction to entertain the complainant's complaint. The bank asserted that pensionary benefits in the bank are regulated by special laws and cannot be bequeathed by the beneficiary of such pension benefits. The bank argued that the State Commission's reasoning was contrary to the regulations and circulars the bank relied upon.

Observations by the National Commission

The National Commission emphasized that a government servant cannot raise any dispute regarding his service conditions or for payment of gratuity, GPF, or any of his retiral benefits before any forum under the Consumer Protection Act. The commission highlighted the Supreme Court judgment in Sain Bhagat vs. Director Health Services Haryana, wherein it was held that a government servant does not fall under the definition of a “consumer” and is entitled to claim his retiral benefits strictly in accordance with his service conditions and regulations or statutory rules framed for that purpose. The commission observed that the National Commission has also taken a similar view that the provisions of the Consumer Protection Act, 1986 cannot be invoked to deal with service conditions/service matters/retiral benefits, as held in cases like Savita Tiwari v. Bharat Heavy Electricals Limited and Sheo Muni Prasad v. General Manager, Northern Railway, The commission noted that the bank contended that the pension is payable to employees in terms of the Punjab National Bank Employees Pension Regulation 1995, framed by the Board of Directors in consultation with RBI and with the previous sanction of the Central Government, and there is no provision for payment of interest in the said statutory Pension Regulations. The commission emphasized that the matter is not per se a service matter but rather an issue of unfair trade practice/principles of natural justice, under which the bank charged interest on getting the refund of the employee contribution but was hesitant to pay interest at the same rate on paying the pension, which was due from an earlier date. Furthermore, the commission observed that the State Commission had relied upon the judgment of the National Commission in State Bank of Mysore Vs. S.K. Vidya, the Supreme Court judgment in Regional Provident Fund Commissioner Vs. Shiv Kumar Joshi, wherein it was observed that the EPF scheme amounts to service and their members are consumers, and the Supreme Court judgment in M/s. Spring Meadown Hospital & Anr. Harjol Ahluwalia, wherein it was held that the beneficiary of such a scheme is also a consumer.

The National Commission upheld the State Commission's order of allowing interest on arrears of the pension and dismissed the petition.

Case Title: Punjab National Bank Vs. Rohit Malhotra

Case Number: R.P. No. 3588/2017