Bank's Decision Reducing Retirement Age Illogical; Affected Employees Entitled To Salary For Out Of Service Period: Rajasthan High Court

Justice Rekha Borana, observed,

"Petitioners would be entitled to the salary for the period during which they remained out of service. The same shall be paid to them within a period of three months from the date of receipt of the copy of this order".

While allowing the petition, the court ruled that if the salary is not paid within the said period, it would then be payable along with an interest at the rate of 6% per annum.

Reliance was placed on the Supreme Court's decision in State of Uttar Pradesh v. Dayanand Chakrawarty & Ors., where it was held that if an employee is prevented by the employer from performing his duties, the employee cannot be blamed for having not worked, and the principle of 'no pay no work' shall not be applicable to such employee.

Background

In the instant case, the respondent Bank passed a resolution dated 25.05.2010, whereby, the superannuation age of the employees was reduced from 60 years to 58 years. However, following filing of a writ petition, the Bank was directed to reconsider its decision.

Subsequently, another resolution was passed on 18.07.2011, reiterating the earlier decision of fixing the age of superannuation at 58 years. The same was again challenged and a statement came to be made before the Court that the age of superannuation will be increase from 58 years to 60 years. Accordingly, the petitions were dismissed as having become infructuous.

Later, the petitioners were denied salary of the period during which they remained out of service because of the resolutions being passed by the Bank.

The counsel for the petitioners averred that it was only on the basis of the submission made by the Bank that the earlier writ petition was rendered as infructuous, as the Bank had promised the consequential benefits also in pursuance to the resolution. He further argued that two employees namely Kailash Chandra Shotriya and Harish Chandra Joshi have been paid the arrears of salary of the disputed period by the Bank and the present petitioners have been denied the same without any plausible reason.

The counsel for the respondent-Bank submitted that the petitioners had not worked during the period, as alleged, so they were not entitled to the salary on the principle of 'no pay no work'. However, he did not dispute the fact of the other two employees as named by the petitioners being paid the salary but submitted that the same was on medical grounds.

Findings

The court observed that respondent Bank had passed the resolutions dated 25.05.2010 & 18.07.2011 without any logic or reason, which were later interfered by the Court. The court added that the Bank had passed the resolution dated 16.12.2013 for self-interest and with the clear understanding that the benefits would be granted to even those employees who had retired by that time.

It held,

"In view of the ratio as laid down by the Hon'ble Apex Court in Dayanand Chakrawarty's case (supra), it is held that the present petitioners would be entitled for the salary for the period during which they remained out of service."

Case Title: Kailash Chandra Agarwal v. State of Rajasthan and Ors., with connected matters 

Citation: 2022 LiveLaw (Raj) 21

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