Supreme court of India: Punjab State Cooperative Agricultural Development Bank Ltd. v. Registrar, Cooperative Societies January 11, 2022 Service Law – Pension – Non-­availability of financial resources would not be a defence available to the employer in taking away the vested rights accrued to the employees that too when it is for their socio­economic security.

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Punjab State Cooperative Agricultural Development Bank Ltd. v. Registrar, Cooperative SocietiesJanuary 11, 2022
Supreme Court of India


Service Law – Pension – Non-­availability of financial resources would not be a defence available to the employer in taking away the vested rights accrued to the employees that too when it is for their socio­economic security.

It is an assurance that in their old age, their periodical payment towards pension shall remain assured. The pension which is being paid to them is not a bounty and it is for the appellant to divert the resources from where the funds can be made available to fulfil the rights of the employees in protecting the vested rights accrued in their favour. [Para 55]

Service Law – The concept of vested/accrued right in the service jurisprudence – What is the concept of vested or accrued rights of an employee and at the given time whether such vested or accrued rights can be divested with retrospective effect by the rule making authority ?

An amendment having retrospective operation which has the effect of taking away the benefit already available to the employee under the existing rule indeed would divest the employee from his vested or accrued rights and that being so, it would be held to be violative of the rights guaranteed under Articles 14 and 16 of the Constitution.

Service Law – Pension – Employees Provident Fund and Miscellaneous Provisions Act, 1952 – Punjab State Cooperative Agricultural Land Mortgage Banks Service (Common Cadre) Rules, 1978.

In the instant case, the Bank pension scheme was introduced from 1st April 1989 and options were called from the employees and those who had given their option became member of the pension scheme and accordingly pension was continuously paid to them without fail and only in the year 2010, when the Bank failed in discharging its obligations, respondent employees approached the High Court by filing the writ petitions. The Bank later on withdrawn the scheme of pension by deleting clause 15(ii) by an amendment dated 11th March, 2014 which was introduced with effect from 1st April, 1989 and the employees who availed the benefit of pension under the scheme, indeed their rights stood vested and accrued to them and any amendment to the contrary, which has been made with retrospective operation to take away the right accrued to the retired employee under the existing rule certainly is not only violative of Article 14 but also of Article 21 of the Constitution.

There is a distinction between the legitimate expectation and a vested/accrued right in favour of the employees.

The rule which classifies such employee for promotional, seniority, age of retirement purposes undoubtedly operates on those who entered service before framing of the rules but it operates in futuro. In a sense, it governs the future right of seniority, promotion or age of retirement of those who are already in service. 50. For the sake of illustration, if a person while entering into service, has a legitimate expectation that as per the then existing scheme of rules, he may be considered for promotion after certain years of qualifying service or with the age of retirement which is being prescribed under the scheme of rules but at a later stage, if there is any amendment made either in the scheme of promotion or the age of superannuation, it may alter other conditions of service such scheme of rules operates in futuro. But at the same time, if the employee who had already been promoted or fixed in a particular pay scale, if that is being taken away by the impugned scheme of rules retrospectively, that certainly will take away the 37 vested/accrued right of the incumbent which may not be permissible and may be violative of Article 14 and 16 of the Constitution. [Para 50]

Case Law ReferenceMarathwada Gramin Bank Karamchari Sanghatana v. Management, (2011) 9 SCC 620
State of Rajasthan v. A.N. Mathur, (2014) 13 SCC 531
State of Himachal Pradesh v. Rajesh Chander Sood, (2016) 10 SCC 77
Chairman, Railway Board v. C.R. Rangadhamaiah, (1997) 6 SCC 623
U.P. Raghavendra Acharya v. State of Karnataka, (2006) 9 SCC 630
Bank of Baroda v. G. Palani, 2018 SCC Online SC 3691


Case Link : https://pdf.caselaw.in/sc/2022/01/1183/

Hon’ble Mr. Justice Ajay Rastogi pronounced the judgment of the Bench comprising His Lordship and Hon’ble Mr. Justice Abay S. Oka.

For Petitioner(s) Mr. Gurminder Singh Sr. Adv. Mr.Pushpinder Singh, Adv. Mr. R.P.S. Bara, Adv. Mr. Gajender Singh Adv. Ms. Shalini Kaul, AOR Mr. K.V.Viswanathan, Sr.Adv. Mr. Sudhir Walia, Adv. Ms. Niharika Ahluwalia, AOR Mr. R.Venkataraman, Adv. Ms. Sneha Kohli, Adv. For Respondent(s) Mr. P.S.Patwalia, Sr.Adv. Mr. G.S.Patwalia, Adv. Ms. Harshika Verma, Adv. Mr. Tushar Bakshi, AOR Ms. Uttara Babbar, AOR Ms. Ranjeeta Rohatgi, AOR Mr. Sanjay Kapur, AOR Ms. Megha Karnwal, Adv. Mr. V.M. Kannan, Adv. Mr. Arjun Bhatia, Adv. Mrs. Shubhra Kapur, Adv. Mr. Lalit Rajput, Adv. Mr. Siddharth, AOR

Case Number : CIVIL APPEAL NO(S). 297­-298 OF 2022 (Arising out of SLP(Civil) No(s). 1940­1941 of 2020) WITH CIVIL APPEAL NO(S). 303 OF 2022 (Arising out of SLP(Civil) No(s). 1934 of 2020) CIVIL APPEAL NO(S). 311 OF 2022 (Arising out of SLP(Civil) No(s). 12822 of 2020) CIVIL APPEAL NO(S). 312 OF 2022 (Arising out of SLP(Civil) No(s). 1935 of 2020) CIVIL APPEAL NO(S). 310 OF 2022 (Arising out of SLP(Civil) No(s). 1936 of 2020) CIVIL APPEAL NO(S). 300 OF 2022 (Arising out of SLP(Civil) No(s). 1949 of 2020) CIVIL APPEAL NO(S). 306 OF 2022 (Arising out of SLP(Civil) No(s). 1943 of 2020) CIVIL APPEAL NO(S). 299 OF 2022 (Arising out of SLP(Civil) No(s). 1944 of 2020) CIVIL APPEAL NO(S). 308 OF 2022 (Arising out of SLP(Civil) No(s). 1859 of 2020) CIVIL APPEAL NO(S). 309 OF 2022 (Arising out of SLP(Civil) No(s). 1942 of 2020) CIVIL APPEAL NO(S). 301 OF 2022 (Arising out of SLP(Civil) No(s). 1932 of 2020) CIVIL APPEAL NO(S). 302 OF 2022 (Arising out of SLP(Civil) No(s). 1931 of 2020) CIVIL APPEAL NO(S). 304 OF 2022 (Arising out of SLP(Civil) No(s). 1939 of 2020) CIVIL APPEAL NO(S). 305 OF 2022 (Arising out of SLP(Civil) No(s). 1937 of 2020) CIVIL APPEAL NO(S). 307 OF 2022 (Arising out of SLP(Civil) No(s). 1945 of 2020) CIVIL APPEAL NO(S). 313 OF 2022 (Arising out of SLP(Civil) No(s).12864 of 2020); JANUARY 11, 2022