The Supreme Court held that under Regulation 33 of the Central Bank of India (Employees’) Pension Regulations, 1995, prior consultation with the Board of Directors is mandatory before reducing the pension of a compulsorily retired employee below the full admissible amount. The Court emphasized that pension is a constitutional right under Article 300A and cannot be curtailed without strict adherence to procedural safeguards. The word “may” in Regulation 33(1) does not grant discretion to reduce pension below two-thirds of the full amount but clarifies eligibility. The judgment clarified that clauses (1) and (2) of Regulation 33 must be read harmoniously, and any reduction in pension requires prior Board consultation, rendering post-facto approval insufficient. The High Court’s interpretation was set aside
Facts Of The Case:
The appellant, Vijay Kumar, was a Chief Manager (Scale IV officer) at Central Bank of India. During his tenure as Branch Manager in Dhanbad, he was accused of sanctioning loans without proper appraisal, KYC verification, and post-sanction inspection, exposing the bank to potential financial losses. A disciplinary inquiry was initiated, and after his superannuation on 30.11.2014, the proceedings continued under Regulation 20(3)(iii) of the Central Bank of India (Officers’) Service Regulations, 1979. The Inquiry Authority found him guilty of misconduct, leading to his compulsory retirement as a penalty under the Discipline and Appeal Regulations, 1976. The bank reduced his pension to two-thirds of the admissible amount based on recommendations by the Regional Manager and approval by the Field General Manager. The appellant challenged this reduction before the Patna High Court, which upheld the bank’s decision. Aggrieved, he approached the Supreme Court, arguing that the reduction violated Regulation 33 of the Pension Regulations, which mandates prior consultation with the Board of Directors before any such reduction. The bank contended that since the Field General Manager, a higher authority, had approved the reduction, prior consultation was unnecessary. The Supreme Court examined the interplay between clauses (1) and (2) of Regulation 33 and ruled in favor of the appellant, holding that prior Board consultation was mandatory.
Procedural History:
The procedural history of the case begins with the disciplinary action initiated against Vijay Kumar, the appellant, during his service as Chief Manager at Central Bank of India. After his superannuation on 30.11.2014, the inquiry continued under Regulation 20(3)(iii) of the Central Bank of India (Officers’) Service Regulations, 1979. The Inquiry Authority found him guilty, leading to his compulsory retirement as a penalty under the Discipline and Appeal Regulations, 1976. The bank subsequently reduced his pension to two-thirds of the admissible amount based on recommendations by the Regional Manager and approval by the Field General Manager. The appellant initially challenged the validity of Regulation 20(3)(iii) before the Patna High Court but later restricted his plea to the reduction of his pension. The High Court upheld the bank’s decision, prompting the appellant to appeal to the Supreme Court. The Supreme Court examined the interpretation of Regulation 33 of the Pension Regulations and set aside the High Court’s order, ruling that prior consultation with the Board of Directors was mandatory before reducing pension benefits. The Court directed the bank to reconsider the matter with proper consultation and an opportunity for the appellant to be heard.
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Court Observation:
The Supreme Court made several key observations in its judgment. It emphasized that pension is not a bounty but a constitutional right protected under Article 300A, which cannot be arbitrarily curtailed without proper legal authority. The Court analyzed Regulation 33 of the Central Bank of India (Employees’) Pension Regulations, 1995, and held that clauses (1) and (2) must be read harmoniously. It observed that the word “may” in clause (1) does not grant discretionary power to reduce pension below two-thirds of the full amount, but rather clarifies eligibility conditions. The Court noted that when a higher authority (like the Field General Manager) reduces pension under clause (1), and that same authority also functions as an appellate/reviewing authority under clause (2), prior consultation with the Board of Directors becomes mandatory to prevent circumvention of safeguards. It rejected the bank’s argument that post-facto approval could substitute prior consultation, stressing that such consultation with the Board is a vital procedural protection for employees. The Court also observed that the High Court erred in interpreting Regulation 33(1) as making pension entirely discretionary, clarifying that a compulsorily retired employee is entitled to at least two-thirds of full pension or ₹375 per mensem, whichever is higher. Finally, it declined to exercise its extraordinary powers under Article 142 of the Constitution, noting the bank’s failure to provide evidence of actual financial loss or grant the appellant a proper hearing before reducing his pension.
Final Decision & Judgement:
The Supreme Court allowed the appeal and set aside the judgment of the Patna High Court along with the Field General Manager’s order dated 07.08.2015, which had reduced the appellant’s pension without prior consultation with the Board of Directors. The Court held that the reduction of pension was procedurally flawed, as Regulation 33 of the Pension Regulations mandates prior consultation with the Board before any such curtailment of pension benefits. It directed the bank to reconsider the matter afresh, ensuring the appellant is granted an opportunity of hearing and the Board’s consultation is obtained within two months. Failing compliance, the appellant would be entitled to full pension from his superannuation date. The judgment reinforced that pension is a statutory right, not a discretionary benefit, and any reduction must strictly adhere to procedural safeguards under the law. The Court declined to exercise its extraordinary powers under Article 142 of the Constitution, finding no exceptional circumstances to validate the bank’s unilateral action. Justices Pamidighantam Sri Narasimha and Joymalya Bagchi delivered the unanimous verdict, restoring the appellant’s rights while leaving room for the bank to pursue a lawful review process.
Case Details:
Case Title: Vijay Kumar v. Central Bank of India & Ors. Citation: 2025 INSC 848 Appeal No.: D No. 39502/2024 Date of Judgment: July 15, 2025 Bench:Justice Pamidighantam Sri Narasimha & Justice Joymalya Bagchi
Download The Judgement Here