A) ABSTRACT / HEADNOTE

UCO Bank & Anr. v. Vijay Kumar Handa, [2025] 5 S.C.R. 389 : 2025 INSC 442. The dispute centres on entitlement to retiral/terminal benefits where an employee was subjected to disciplinary proceedings for riotous, disorderly and indecent behaviour within bank premises. The disciplinary authority found the respondent guilty and imposed dismissal, while the appellate authority modified the penalty to removal from service with terminal benefits (specifically permitting pension/provident/gratuity “as would be due otherwise”) and clarified no disqualification for future employment. An industrial dispute produced a Labour Court award substituting reinstatement with 75% back wages; the High Court struck down that award and restored the appellate order. Subsequently the respondent sought release of pensionary benefits; the High Court directed the bank to process pension benefits, a decision affirmed by the Division Bench.

The Supreme Court, applying the Bipartite Settlement (1966) as amended (notably Clause 6(b)) and following precedent in Bank of Baroda v. S.K. Kool (2014) held that where an employee removed under Clause 6(b) is otherwise eligible for superannuation benefits under applicable regulations, he is entitled to receive those benefits. The appellate order substituting dismissal by removal with terminal benefits had not been challenged and attained finality; therefore the respondent’s claim for pension stood on that order and binding Bipartite/Regulatory interplay. Appeal dismissed.

Keywords: *Bipartite Settlement; Clause 6(b); removal from service with superannuation benefits; pension entitlement; dismissal; appellate modification; Industrial Disputes Act; Regulation 22; finality of appellate order.

B) CASE DETAILS

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The case arises from departmental disciplinary proceedings initiated by UCO Bank against its clerk, V. K. Handa, for alleged assault and gross misconduct on 21.09.1998 within a branch premise. An enquiry found the charges proved, and the disciplinary authority imposed dismissal under the applicable Bipartite Settlement (Clause 19.5(c)). On appeal, the bank’s appellate authority accepted misconduct but mitigated punishment to removal from service with terminal benefits, expressly allowing pension/provident/gratuity as due otherwise and no bar to future employment. The employee raised an industrial dispute; the Labour Court exercised Section 11A powers and substituted a lighter penalty, directing reinstatement with 75% back wages. The High Court set aside that award and restored the appellate order.

Thereafter, the employee invoked writ jurisdiction seeking release of pensionary benefits; both Single Judge and Division Bench held the employee entitled to pension, relying on earlier Supreme Court precedent (S.K. Kool) which reconciled Bipartite Settlement obligations with regulatory forfeiture clauses. The bank challenged that direction before the Supreme Court. The essential background question: whether a delinked disciplinary order of removal with superannuation benefits as modified by an appellate order which attained finality entitles an eligible employee to pension despite Regulation 22(1) that ordinarily treats removal/dismissal as forfeiture. The Court analysed statutory settlement force, constructional harmony between Bipartite clauses and bank regulations, and effect of appellate order finality.

D) FACTS OF THE CASE

The respondent was a Clerk at Gurmandi Branch. A charge memo dated 12.10.1998 accused him of assaulting an officer on 21.09.1998; enquiry was instituted and concluded with the Enquiry Officer finding the charge proved. The disciplinary authority on 14.12.1999 dismissed the respondent for gross misconduct under Clause 19.5(c) of the Bipartite Settlement. An appeal resulted in order dated 16.02.2000 substituting removal from service with terminal benefits and clarifying no disqualification for future employment. An industrial dispute referred to the Labour Court produced an award on 13.02.2004 invoking Section 11A to substitute dismissal/removal by stoppage of increments and reinstatement with 75% back wages.

The High Court set that award aside (Single Judge 25.03.2009; Division Bench dismissed LPA 24.02.2010). Later, respondent opted for pension (option recorded 05.10.2010) and filed writ petition for release of retiral dues; Single Judge directed the bank to process pension (14.03.2016), Division Bench affirmed (11.01.2017). The appellate order (16.02.2000) granting terminal benefits remained unchallenged by the bank and thus final. The bank relied on Regulation 22(1) of UCO Pension Regulations, 1995 which states resignation/dismissal/removal/termination entails forfeiture of past service and disqualifies for pension; the respondent relied on the Bipartite Settlement’s Clause 6(b) inserted in 2002 providing removal with superannuation benefits as would be due otherwise, and on precedent in Bank of Baroda v. S.K. Kool reconciling the two instruments.

E) LEGAL ISSUES RAISED

i. Whether an employee removed from service under Clause 6(b) of the Bipartite Settlement is entitled to pensionary benefits if otherwise eligible under the governing pension regulations?
ii. Whether a disciplinary order of removal with terminal benefits passed by an appellate authority attains finality where the employer does not challenge it, thereby estopping the employer from denying pensionary benefits?
iii. Whether Regulation 22(1) of the UCO Pension Regulations, 1995 operates to automatically disentitle an employee removed/dismissed to pension, despite a binding Bipartite Settlement clause to the contrary?

F) PETITIONER / APPELLANT’S ARGUMENTS

i. The bank contended the respondent never exercised pension option before imposition of penalty and was not eligible under the ninth Bipartite Settlement (27.04.2010) for pension if removed; hence S.K. Kool is distinguishable.
ii. Reliance on Regulation 22(1): resignation or dismissal or removal or termination…shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits. Therefore, a delinquent employee subjected to major penalty cannot claim pension.
iii. The bank urged that passage of events and applicable regulations denied any automatic right to superannuation benefits where statutory/regulatory disqualification exists.

G) RESPONDENT’S ARGUMENTS

i. Respondent relied on appellate order dated 16.02.2000 that explicitly granted entitlement to terminal benefits for the period of service rendered and permitted pension; that order was not challenged and attained finality, binding the bank.
ii. Reliance on Bank of Baroda v. S.K. Kool to reconcile Clause 6(b) with pension regulations: where an employee is otherwise eligible for pension under Regulations, a removal under Clause 6(b) will carry pensionary benefits.
iii. Emphasised he completed qualifying pensionable years and had exercised option for pension; hence regulatory disqualification under Regulation 22(1) did not apply where Bipartite Settlement expressly preserved superannuation benefits.

H) JUDGEMENT

The Supreme Court dismissed the appeal and upheld the High Court’s view. The Court analysed the statutory nature of the Bipartite Settlement (entered under Section 2(p) and Section 18(1) of the Industrial Disputes Act read with Rule 58 of the Industrial Disputes (Central) Rules, 1957), thereby treating Clause 6(b) as binding. Clause 6(b) was read to allow removal from service with superannuation benefits (pension/provident/gratuity) as would be due otherwise under rules prevailing at the relevant time and to ensure no disqualification for future employment. The Court stressed constructional harmony: to interpret Regulation 22(1) as obliterating Clause 6(b) would render the Bipartite Settlement a dead letter an impermissible construction.

The Court relied on its earlier decision in Bank of Baroda v. S.K. Kool which had addressed the very interplay; that decision held employees eligible under pension regulations and removed under Clause 6(b) remain entitled to pensionary benefits. Given respondent had put in qualifying service and had exercised option for pension (option on 05.10.2010), and since the appellate modification to removal with terminal benefits stood unchallenged, the respondent acquired a vested entitlement. The Labour Court award was set aside earlier by the High Court; thus the appellate order had legal finality. Consequently, the bank could not repudiate the appellate order and deny pension. The Court refused the bank’s contention that the respondent’s not opting for pension prior to modification mattered; the operative factor was eligibility and appellate order entitling terminal benefits. The Court therefore affirmed the concurrent High Court decisions directing release of pensionary dues. No costs were imposed.

a. RATIO DECIDENDI

The operative ratio: Where a Bipartite Settlement (statutorily backed) prescribes removal from service with superannuation benefits (Clause 6(b)) and the employee is otherwise eligible under pension/regulations (minimum qualifying service etc.), such employee is entitled to receive pensionary benefits despite Regulation 22(1) which speaks of forfeiture upon removal/dismissal; and where an appellate order modifies penalty to removal with terminal benefits and remains unchallenged, the order attains finality and creates a binding entitlement which the employer cannot defeat. The Court applied principle of harmonious construction to avoid rendering settlement clause ineffective.

b. OBITER DICTA

The Court observed that automatic application of Regulation 22(1) to trump a bipartite contractual/statutory settlement would lead to absurdity and would nullify negotiated industrial discipline mechanisms. The Court reiterated that eligibility under pension regulations remains a necessary condition; Clause 6(b) confers benefits only “as would be due otherwise”. Thus employees lacking qualifying service cannot claim pension even if removed under Clause 6(b). The opinion emphasized finality of appellate modifications where not challenged by employer, and the protective intent of Bipartite Settlements in balancing punitive measures with social security.

c. GUIDELINES

• Harmonious construction: reconcile Bipartite Settlement clauses and employer regulations so both operate; do not render either a dead letter.

• Eligibility precondition: entitlement under Clause 6(b) requires satisfying pension regulations (e.g., minimum qualifying service under Regulation 14).

• Finality of appellate order: where the employer does not challenge modification substituting removal with terminal benefits, the order is binding and cannot be re-opened to deny pension.

• Regulation 22(1) limited: does not automatically operate to deny pension where Bipartite Settlement expressly preserves superannuation benefits for eligible employees.

I) CONCLUSION & COMMENTS

The decision underscores the primacy of Bipartite Settlements (statutorily endorsed) in industrial relations and protects negotiated social security outcomes against unilateral regulatory nullification. Practically, the judgment clarifies that punitive disciplinary labels (removal/dismissal) must be read in context: where management or appellate authority applies the negotiated Bipartite mitigatory clause, eligible employees maintain pension rights. The ruling also reinforces finality doctrine an unchallenged appellate modification crystallises rights and estops the employer. For banks and other employers governed by bipartite settlements, the case is a caution: regulatory clauses in service rules (like Regulation 22(1)) cannot be applied mechanistically to defeat settlement promises; instead, a careful eligibility assessment per pension regulations is required. For workmen, the judgment preserves negotiated safety-nets against draconian career- and social-security consequences of disciplinary action, provided qualifying service exists. The reliance on S.K. Kool ensures doctrinal continuity. Administratively, employers should promptly challenge any appellate orders they consider contrary to policy; failing to do so may yield binding pension liabilities. The judgment also illustrates the Court’s preference for reconciliatory interpretation to maintain industrial peace and give effect to collective bargaining outcomes within legal parameters.

J) REFERENCES

a. Important Cases Referred
i. Bank of Baroda v. S.K. Kool, (2014) 2 SCC 715 (relied).

b. Important Statutes / Instruments Referred
i. Industrial Disputes Act, 1947 (Sections 2(p), 11A, 18(1)).
ii. Industrial Disputes (Central) Rules, 1957 (Rule 58).
iii. Bipartite Settlement dated 19.10.1966 and amendment inserting Clause 6(b) (2002 settlement).
iv. UCO Bank (Employees’) Pension Regulations, 1995 (Regulation 14; Regulation 22(1)).