Superannuation Benefits

11th Bipartite

The improvements made in the Pension scheme in the areas like updation and

upgradation of the Pension, the rationalization of Dearness Allowance, Family

Pension etc., needs to be implemented in the banking industry as our pension

scheme amply speaks of being in the lines of central govt. pension scheme.

The seventh Pay commission has analysed the issue as given below.

Constitutional Provisions and Judicial Position Article 366(17) of the

Constitution defines pension as: “Pension means a pension, whether

contributory or not, of any kind whatsoever payable to or in respect of any

person, and includes retired pay so payable, a gratuity so payable and any

sum or sums so payable by way of the return, with or without interest thereon

or any other addition thereto, of subscriptions to a Provident Fund.”

Pension has been the subject matter of a number of landmark judgements by

the Supreme Court of India in which its nature, obligations of the government

thereon and the recognition of distinctiveness in categories of pensions and

pensioners has been settled. In its judgment in D.S. Nakara and others Vs

Union of India [AIR 1983 SC 130] the Supreme Court held that a pension

scheme consistent with available resources must provide that a pensioner

would be able to live free from want, with decency, independence and self

respect and standard equivalent at pre-retirement level. It held that pension is

not an ex-gratia payment but payment for past services rendered. At the same

time in Indian Ex-Services League & Others Vs Union of India & Others [(1991)

2 SSC 104] the Supreme Court held that the decision in the Nakara case has to

be read as one of a limited application and its ambit cannot be enlarged to

cover all claims made by the pension retirees or a demand for an identical

amount of pension to every retiree from the same rank irrespective of the date

of retirement, even though the reckonable emoluments for computation of their

pension be different. In the judgement in Vasant Gangaramsachandan Vs

State of Maharashtra & Others [(1996) 10 SSC 148] Supreme Court reiterated

that pension is not a bounty of the State. It is earned by the employee for service

rendered to fall back upon after retirement. It is attached to the office and it

cannot be arbitrarily denied. In the case of petitioners who were retired Railway

employees, covered by or who opted for the Railway Contribution Fund Pension

Scheme, the Supreme Court in Krishna Kumar Vs Union of India and Others

[(1990) 4 SSC 207] averred that it was never held that both the pension retirees

and PF retirees formed a homogenous class and that any further classification

Report of the Seventh CPC 382 Index among them (viz., pension retirees and PF

retirees) would be violative of Article 14. Under the Pension Scheme, the

government’s obligation does not begin until the employee retires but it begins on

his/her retirement and then continues till the death of the employee. Thus, on the

retirement of an employee, government’s legal obligation under the PF account

ends while under the Pension Scheme it begins. The rules governing the PF and its


contribution are entirely different from the rules governing pension. An imaginary

definition of obligation to include all the government retirees in a class was not

decided and could not form the basis for any classification for this case.

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