SC Directs Govt. to Formulate Pension Scheme for Regional Rural Bank Employees

May 01, 2018

Case name: Union of India v. Gramin Bank Pensioners Samiti & Ors.

Date of Judgement: April 25, 2018

In a remarkable case the Two-Judge Bench of the Supreme Court has upheld the order passed by Division Bench of Rajasthan High Court in the case of Union of India v. Gramin Bank Pensioner Samiti & Ors.[1] in 2012.

In the case, taken up by the Apex Court on April 25, 2018, the Union of India had approached the Supreme Court against Rajasthan High Court’s order dated August 23, 2012 whereby the High Court of Rajasthan had allowed the petition of the Gramin Bank Pensioner’s Samiti (Respondent) to formulate and implement a pension scheme for the employees of Regional Rural Banks (‘RRBs’) on lines similar to verdict of High Court of Karnataka in the case of All India Regional Rural Bank Employees’ Association & Ors. Vs. Union of India & Ors.[2]

The Supreme Court has directed the Union of India to implement the impugned judgment in respect of all the regional rural banks expeditiously and at any rate within three months from the date of production of a copy of this judgment.

Brief History of the Case

The respondent in the case is a registered society of retired employees of the RRBs in the State of Rajasthan. In the writ petition one of the inherent contention advanced by the respondent was that as per the directions of the Supreme Court in the case of South Malabar Gramin Bank Vs. Co-ordination Committee of South Malabar Gramin Bank Employees’ Union & South Malabar Gramin Bank Officers’ Federation & Ors.[3] – as and when the pay structure of the Nationalized Commercial Banks would get revised on the basis of any bi-partite settlement, the Central Government was under obligation to take a decision so far the employees of the RRBs were concerned; and such employees of RRBs were required to be treated on equal footings and at par with the employees of National Commercial Banks as regards the pay, allowances and other benefits.

The Respondent in the case relied upon the bi-partite Settlement dated 29.10.1993 as entered into between the Management of 58 Nationalized Banks and the Association of their workmen. According to the said Memorandum of Settlement the member banks set out in the schedule I shall introduce pension as second retirement benefit scheme in lieu of contributory provident fund where it does not exist for the workmen employees of the member banks with effect from 1st November, 1993.

Hence, the respondents contended that when by the said settlement, pension as retirement benefit was made applicable to all the employees of Nationalized Commercial Banks, then in the light of Supreme Court’s judgment in the South Malabar Gramin Bank case, the Central Government was duty bound to implement such pension scheme in RRBs so as to maintain parity in respect of pay structure, other allowances and benefits for the employees and officers of RRBs vis- à-vis their counterparts in Nationalised Banks.

In view of the aforesaid, the High Court of Rajasthan in its order had noted that the Appellant should ensure working out of the modalities for a pension scheme in the line with that formulated for the employees of 58 Nationalized Banks in terms of the Settlement dated 29.10.1993.

The Supreme Court’s order dated April 25, 2018 can be accessed here.

The Supreme Court’s directions in the case comes as a huge relief for RRBs employees as they have been abstained from pension as retirement benefit. Moreover, the Apex Court’s order to treat RRBs employees in parity with the employees of National Commercial Banks as regards the pay, allowances and other benefits is a noteworthy one.