Kerala High Court admits petition filed by staff union; hearing next month

The High Court of Kerala has admitted a writ petition filed by State Banks’ Staff Union (Kerala) to quash implementation of the New Pension Scheme (NPS) in State Bank of India.

The writ also prayed for directions to revert those recruited on or after August 1, 2010, back to existing pension scheme.


Justice P. N. Ravindran has posted the case for further hearing after a month.

The interim order directed that amounts contributed by employees towards the pension fund be kept in a separate account and maintained with the trustee bank.

The case was filed by A. Jayakumar, General Secretary of State Banks’ Staff Union, Kerala Circle.

The petitioner recalled that NPS was implemented as part of the industry-level 9{+t}{+h} bipartite wage settlement.

As per this, Defined Contribution Pension Scheme (DCPS)/NPS would apply to those joining services on or after April 1, 2010.

But this settlement between Indian Banks’ Association and unions of other banks would not apply to SBI, the petitioner contended. This is because the bank was not party to this settlement insofar as pension-related matters were concerned.

But central board of SBI on November 8, 2010, decided that all employees joining in permanent scale on or after August 1, 2010, shall be offered only the benefit of DCPS.

The SBI Act did not empower the central board to amend pension fund rules, and that too with retrospective effect, it was contended.


The SBI Act also makes it clear that any regulation framed in this manner will have to be laid before Parliament.

It will take effect in the existing or modified form as decided by both the Houses of Parliament only.

In the present case, the central board has taken a unilateral decision to modify the pension scheme.

Legal recourse was also being sought on grounds that the pension scheme once framed cannot be modified without issuing notice.

(This article was published on February 27, 2013)
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