Bank Can't Withhold Superannuation Benefits Explicitly Granted In Removal Order Despite Ongoing Service Dispute:MP High Court

Background

The appellant was removed from service at the State Bank of Indore (later merged with State Bank of India) where he had served since February 1985; initially as a Clerk/Cashier and later as a Computer Operator. Following allegations of illegally advancing loans, he was suspended and subsequently removed from service on April 1, 2008. The removal order specifically granted him superannuation benefits, including pension, provident fund, and gratuity, without disqualification from future employment. The appellant's initial challenge to his removal through Writ Petition No. 1096 of 2009(S) resulted in the High Court quashing the removal order. However, the Division Bench set aside this order and directed him to raise an industrial dispute. When the appellant approached the bank for his superannuation benefits, he was asked to sign blank forms, which he refused, leading to the present litigation.

Arguments

The appellant, through Senior Counsel K.N. Gupta, argued that since the removal order itself provided for payment of superannuation benefits, and this aspect had attained finality, the Single Judge erred in directing him to raise an industrial dispute regarding these benefits. He emphasized that only the termination dispute was to be referred to the Industrial Tribunal, not the matter of superannuation benefits. The respondent bank, represented by Senior Counsel V.K. Bhardwaj, presented a compliance report showing that while Rs. 18,13,560.48 was due as pension arrears until January 2023, the appellant owed Rs. 34,02,654.93 to the bank. The bank argued that the Single Judge correctly interpreted the earlier Division Bench order requiring all disputes to be raised before the Industrial Tribunal.

Court's Reasoning

Firstly, the Court emphasized that the original removal order dated April 1, 2008, explicitly provided for superannuation benefits. This provision in the removal order itself established the appellant's clear entitlement to these benefits, making them independent of any dispute regarding the removal. Secondly, examining the earlier Division Bench order, the Court clarified that the direction to approach the Industrial Tribunal was specifically limited to challenging the removal from service, not the superannuation benefits. The Court found no dispute regarding the appellant's entitlement to retirement benefits, noting that even the respondent bank hadn't challenged this aspect.

Thirdly, regarding the recovery of outstanding loans from the appellant's benefits, the Court upheld the Single Judge's observation about following the principles laid down in High Court of Punjab and Haryana v. Jagdev Singh (2016) and State of Punjab v. Rafiq Masih (2015). This effectively meant that while the bank could pursue recovery, it must do so within the established legal framework for recovering dues from retirement benefits. Finally, the Court directed the bank to release the terminal dues if not already done, subject to the principles established in the aforementioned decisions. Accordingly, the writ appeal was partially allowed.

Date: 25-10-2024

Citation: W.A. No.1889 OF 2019

Counsel for the Appellant: Shri K.N. Gupta, Senior Advocate with Shri R.B.S. Tomar

Counsel for the Respondent: Shri V.K. Bhardwaj, Senior Advocate with Shri Raju Sharma

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