HC admonishes Punjab Cooperative Bank for defying settled law, slaps Rs 1 lakh costs

Coming down heavily on the Punjab State Cooperative Agricultural Development Bank for dishonouring judicial pronouncements and forcing retired employees to litigate for benefits already settled in their favour, the Punjab and Haryana High Court has imposed Rs 1 lakh cost.

“Much to the chagrin of this court, the petitioners-retired employees have been forced to initiate litigation even to claim benefits of the judicial decisions that have been consistently in their favour. The act and conduct of the respondent-bank shows no regard for the majesty of the justice dispensation mechanism,” Justice Harpreet Singh Brar asserted

Stressing the constitutional need for finality in litigation, Justice Brar invoked the legal maxim reipublicae ut sit finis litium – it is in the interest of the public that there is an end to litigation).

Dispute

The controversy stemmed from the contributory pension scheme introduced by the bank in 1989 after amending its service rules with statutory force. Employees, including the petitioners, specifically opted for the scheme and contributed to the pension corpus for over two decades. However, the bank in 2014 withdrew the scheme and reverted to the contributory provident fund system. Retired employees who had been contributing since 1989 were thereafter denied pensionary benefits, forcing them to move the high court. The petitioners were represented by senior advocate D.S. Patwalia and counsel Gauravjit Singh Patwalia, Lagan K. Sidhu and Shreenath Khemka

 Pension Scheme carried statutory force

Allowing a bunch of petitions, Justice Brar made it clear that the pension scheme had a statutory character. “The pension scheme was introduced by amending the `Rules of 1978’ with the due approval of the Registrar, Cooperative Societies. As such, the pension scheme clearly bears a statutory nature and therefore, the petitioners are entitled to agitate the rights originating from the same under Article 226 of the Constitution of India,” the Bench held.

The court added that the petitioners had duly opted for the scheme and were contributing towards it since inception. As such, they had a legitimate expectation to be granted the benefits. “In fact, owing to its statutory nature, a right was vested in the petitioners, which cannot be taken away by subsequently introducing an amendment to withdraw the pension scheme itself.”

Rebuttal of bank’s financial plea

Rejecting the bank’s plea of financial unviability, Justice Brar observed that a statutory right could not be nullified by citing constraints. “The respondent-bank formulated the pension scheme of its own accord and also carried out the necessary amendments… The contention of financial unviability cannot be used as a shield to defeat the vested rights of employees.”

Directions issued

Answering the central question in the affirmative, Justice Brar ruled that the 2014 amendment withdrawing the pension scheme could not be applied retrospectively to defeat the rights of employees who had been contributing under it.

“The amendment cannot be given a retrospective effect to deny statutory rights of the petitioners. Accordingly, all the captioned petitions are allowed,” Justice Brar ordered.

The Bank has now been directed to release all admissible benefits to the petitioners, who had retired after contributing to the Pension Scheme for more than two decades.