Kerala HC to take up SBI appeal on July 1 NPS rollout

The Kerala High Court is expected to take up on July 1 a writ appeal filed by the State Bank of India against a judgment in an original petition by the State Banks’ Staff Union (SBSU, Kerala Circle) contesting the unilateral implementation of the New Pension Scheme (NPS) in the bank.

The petition, filed by the union, was in protest at what it described as the unilateral implementation of NPS with effect from August 1, 2010. The main hearings of the case were completed by July 2013 and Justice CT Ravikumar proclaimed the judgment on April 12, 2019.

No legal effect, says court

The judge held that “so long as the NPS was not introduced as a Regulation as contemplated under Section 50 of the State Bank of India Act, in order to have legal effect, the procedures contemplated are to be followed.” Viewed in this light, implementation of the NPS had no legal effect, he had observed.

“I am of the view that the NPS is not available now for consideration. If it is not validated in accordance with the provisions of Section 50 of the Act, it will be open to the petitioner as well as employees affected to challenge it appropriately, in case they are desirous to do so,” the judge had said.

The union had contended that subsequent to the formation of SBI in 1955, it had adopted provisions of erstwhile Imperial Bank of India Pension Fund Regulations. Though the NPS was made applicable to employees as per the industry-level settlement under the ninth bipartite, SBI had been excluded.

The union has questioned the authority of the Central Board to unilaterally implement NPS to all categories of employees who joined SBI in the permanent scale on or after August 1, 2010. It took legal recourse under Article 226 of the Constitution on the grounds that the existing pension scheme, once framed, cannot be modified without issuing a notice under the Industrial Disputes (ID) Act, 1947.

Due process not followed

On its part, the SBI Act, Section 50 (4) states that every regulation shall, as soon as it is made by the Central Board, be forwarded to the Central government and the government shall cause a copy of the same to be laid before each House of Parliament while it is in session for a period of 30 days and both Houses agree in making any modification in the regulation before implementation.

Thereafter, it should be notified in the Gazette. The union contended that due procedure has not been followed by the bank and as such, introduction of the NPS has no legal standing, said A Raghavan, General Secretary, SBSU (Kerala Circle). Past, present and future employees in the Award category are governed by the Sastry and Desai Awards and subsequent bipartite settlements.

Any alteration/modification in service conditions requires a Notice of Change under Section 9A of the ID Act. The Court had admitted the writ petition filed by the union on February 25, 2013. It asked for directions to quash implementation of NPS and to restore those recruited by SBI on or after August 1, 2010 back to the existing pension scheme. Counsels S Vaidyanathan, H Ganapathy and Jimmy George appeared for the union.