Whether the explanation [c] added in regulation 2[s] of regulations of 1995 ,in the month of January 2003 with retrospective effect is constitutionally valid?

Hon’ble Mr. Justice Arun Mishra

Indian Banks� Association was negotiating with the Officers� Association and a Joint Note had been entered into and was signed on 14.12.1999, with regard to periodical pay revision of the officers of the member Banks. Joint Note indicated the date of effect of scale of pay, dearness allowance and pension, as was magreed to be with effect from 1.4.1998. Thereafter, on 18.1.2003 amendment had been made in the definition of �pay�, as defined in Regulation 2(s) of the Regulations of 1995 and explanation thereof was added. By virtue of the explanation (c) that was added in Regulation 2(s) of the Regulations of 1995, it was provided that the pay shall be taken to mean the pay and emoluments that had been drawn before 1.4.1998 for the category of the officers, who have retired or died on or after 1.4.1998.

The High Court of Delhi had opined that once the benefit had been taken under the Joint Note of revision of the salary, estoppel is created against the officers to claim the pension as per the existing formulae, which prevailed before its amendment and amendment could have been made with retrospective effect. Thus, the Delhi High Court had dismissed the writ petition filed by the Officers� Association, against which an appeal had been preferred. The High Court of Madras and High Court of Karnataka have taken the contrary view. They have observed that Joint Note of 1999 could not have supplanted the existing rules/regulations. Pension was required to be determined under the existing Regulations. By amending the Regulation and adding the Explanation (c) in Regulation 2(s) in the month of January 2003 benefit that has accrued could not have taken away. Thus, we have two contrary views of the High Courts to adjudicate upon in the instant matters.

Apex court held that The only purpose of the addition of Explanation (c) to Regulation 2(s), was to take away the actual computation of the pension on the basis of the salary, which was drawn in the preceding ten months. Thus, we have no hesitation to strike it down being arbitrary and repugnant to other provisions/Regulations namely 2(d), 38(1)(2) and 35. The Explanation (c) to Regulation 2(s) is hereby struck down, as it could not have been enacted retrospectively to take away accrued rights. Even otherwise also it is held to be arbitrary and irrational. More so, in view of the fact that only by way of a temporary measure, that discrimination was created and the Explanation was deleted with effect from 1.5.2005. Thus, we set aside the judgment rendered by the High Court of Delhi and affirm that of High Courts of Karnataka at Bangalore and the High Court of Madras. The appeals filed by the Banks are dismissed and the appeal filed by the Association is allowed. Resultantly, let the amount which was due and payable be paid with 9% interest, be calculated and paid within four months from today.