SC: Pension Denied For Voluntary Abandonment, Allowed For Voluntary Retirement

A bench of Justice Prashant Kumar Mishra and Justice N.V. Anjaria heard an appeal challenging the Madras High Court's dismissal of a writ and upholding orders that denied pensionary benefits to a former clerk of the State Bank of India who ceased attendance in 1998 and sought reinstatement and pension on return.

The Court dismissed the appeal and held that the appellant was not entitled to pensionary benefits under the State Bank of India Employees’ Pension Fund Rules, 1955 because he had not completed twenty years of pensionable service reckoned from confirmation and his cessation of service amounted to voluntary abandonment, not voluntary retirement. The Court noted that although the Labour Court and High Court dismissed the claim on technical non-maintainability grounds under Section 33C(2) of the Industrial Disputes Act, it "decided to proceed with the case on its merits." 

The Court, in its reasoning, observed: "Additionally, a reading of Rule 20 along with Rule 7 of the Pension Fund Rules would make it clear that service for the purpose of pension is to be reckoned from the date of the employee’s admission to the fund wherein the employee shall become the member of the fund from the date on which he was confirmed in the service of the Bank. Thus, if we calculate the total period of the service rendered by the appellant, after completion of probation, it would come down to less than 20 years i.e., 19 years, 09 months, and 25 days. Thus, the first condition of the appellant having completed 20 years in service is not fulfilled." The Court further observed that "the present case is not of voluntary retirement, rather of voluntary abandonment of the services."

Background

The appellant was appointed as a clerk and was confirmed in service on 17.02.1979. He ceased attending work from 24.01.1998 and, after repeated notices, the Bank declared his services to have been voluntarily abandoned with effect from 12.12.1998. The appellant left for abroad in 1989 and returned in 2004; on seeking to rejoin and claiming pension the Bank treated his cessation as voluntary abandonment and declined pension. The appellant challenged the Bank’s letter of 21.07.2008 by filing a writ petition in the Madras High Court, which directed him to approach the Labour Court. He then filed a claim under Section 33C(2) of the Industrial Disputes Act seeking computation of pensionary benefits, but the Labour Court dismissed it for want of jurisdiction on the ground that there was no pre-existing right to enforce through Section 33C(2). The Single Judge and later a Division Bench of the High Court dismissed subsequent challenges and appeals.

Before the Supreme Court, the appellant contended that he had completed "20 years, 3 months and 25 days" and relied on Rule 22(i)(c) of the Pension Fund Rules to claim pension "after having completed twenty years pensionable service, irrespective of the age ... at his request in writing." The Bank argued that pension entitlement required either completion of twenty years with attainment of fifty years of age under Rule 22(i)(a), or valid voluntary retirement under a VRS; it maintained there was no VRS in operation in the appellant’s case and that his absence constituted unauthorized abandonment. The Court examined Rule 22 read with Rules 20 and 7, held that pensionable service was to be reckoned from confirmation, and found the appellant’s post-confirmation service to be under twenty years and that he had not attained fifty years of age; accordingly, he failed to satisfy Rule 22(i)(a) and did not qualify under Rule 22(i)(c) as he had not been granted voluntary retirement. The appeal was dismissed.

Case Details:
Case No.: CIVIL APPEAL NO. 4279 OF 2026 (ARISING OUT OF S.L.P. (CIVIL) NO.12462 OF 2022)
NeutralCitation: 2026 INSC 333
Case Title: K.G. Seshadri v. The Trustees of State Bank of India and Another

Source: 2026 CaseBase(SC) 294