Beneficial Legislation warrants liberal interpretation by the State as a Model Employer: Supreme Court

Beneficial Legislation warrants liberal interpretation by the State as a Model Employer: Supreme Court

This is a peculiar case in which both the appellant and respondent have acted in accordance with law; said the Supreme Court

The Apex Court while adjudicating a Civil Appeal observed that the State as a model employer should construe provisions of a beneficial legislation in a way that extends the benefits thereunder to its employees, instead of curtailing it.

The appeal was preferred by Asger Ibrahim Amin against the order of Life Insurance Corporation of India by virtue of which he was denied pension on account of his voluntarily resignation from the service of Corporation in 1991.

According to the appellant at the time of his termination a distinction between "resignation" and "voluntary retirement" had not been made out in the concerned service rules. He was also not covered by any beneficial pension scheme at that time .

Insurance Corporation of India (Employees) Pension Rules which came up in 1995 subsequent to his resignation provide that resignation from service would lead to forfeiture of the benefits of the entire service including eligibility for pension. Besides, the appellant's claim was raised after a lapse of 14 years from the date of his resignation. His claim of pension was objected by the Corporation on these grounds.

As far as the laches were concerned the court approved of earlier observations made in Union of India v. Tarsem Singh, (2008) 8 SCC 648 that in cases of continuing or successive wrongs, delay and laches or limitation will not thwart the claim so long as the claim, if allowed, does not have any adverse repercussions on the settled third-party rights.

The question whether the termination of service of the appellant remains unalterably in the nature of resignation, with the consequence   of   disentitling   him   from   availing   of   or migrating/mutating the pension scheme was answered by the court in negative. The court held that appellant's termination from service shall be viewed as a voluntary retirement so as to bestow the benefit of pension to him who had ‘resigned’ after reaching the age of fifty and having served the LIC for over twenty three years.

According to the scheme of 1995 Rules, an employee governed by it may be permitted to retire at any time after he has completed twenty years of qualifying service, by giving notice of not less than ninety days in writing to the appointing authority. Where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period. The Court noted the fact that the appellant, though unknowingly, had complied with all the requirements under the Rules so as to be eligible for pension. The Court observed that the Corporation being State is deemed as model employer who could and should have extended the advantage of these benevolent provisions to the appellant thereby safeguarding his pension entitlement.

The Court also noted that this is a peculiar case in which both the appellant and respondent have acted in accordance with law.

"The commendable objective of the Pension Rule is to extend benefits to a class of people to tide over the crisis and vicissitudes of old age, and if there are some inconsistencies between the statutory provisions and the avowed objective of the statute so as to discriminate between the beneficiaries within the class, the end of justice obligates us to palliate the differences between the two and reconcile them as far as possible. We would be failing in our duty, if we go by the letter and not by the laudatory spirit of statutory provisions and the fundamental rights guaranteed under Article 14 of the Constitution of India.",observed the Court while allowing the appeal.

Read the Judgment here.