Telangana High Court Directs SBI To Grant VRS Benefits To Legal Heirs Of Employee Who Died After VRS Application Was Accepted

The Telangana High Court has directed the State Bank of India to extend Voluntary Retirement Scheme (VRS) benefits to the legal heirs of a deceased employee, observing that the employee's application had already been scrutinised and accepted before his death, and denial of benefits in such circumstances could not be justified.A Single Judge Bench of Justice Namavarapu Rajeshwar Rao observed:“When a VRS application filed by an applicant has not been scrutinized and is not yet accepted by the respondents, this Court can accept the contentions of the respondent authorities in the event of the applicant's death. However, in the present case, the applicant had applied for VRS, the withdrawal period had already expired, and the application had been scrutinized and accepted, and the same was informed to the concerned Branch. At that juncture, the applicant passed away. In these circumstances, this Court feels that the denial of VRS benefits to the petitioners cannot be justified.”The Court was dealing with a writ petition filed by the wife and children of late Sri K.S.R. Sastry, seeking a direction to the respondents to pay Rs.9,48,474/- under the VRS announced by SBI.The deceased employee had joined the services of the respondent-Bank on 09.11.1971. SBI thereafter announced its VRS vide Circular dated 30.12.2000 for employees who had put in 15 years of service or completed 40 years of age as on 31.12.2000.The deceased applied for VRS on 15.01.2001. His application was forwarded and the Branch Manager, after enquiry, found that he was eligible for making the VRS application. The application was accordingly accepted and the same was communicated to the Branch Manager on 03.03.2001. However, the employee had died on 27.02.2001 due to a heart attack.The first petitioner thereafter requested payment of the benefits accrued under VRS. The Bank rejected the request, stating that the effective date of retirement under the SBI VRS was 31.03.2001 and that since the employee had died before that date, his VRS application had become invalid and could not be considered.The petitioners contended that once the VRS application had been accepted, the benefits ought to have been extended to the legal heirs of the deceased employee. They also relied on the Voluntary Retirement Scheme of the State Bank of Hyderabad, which provided that in the event of death of an employee whose request for voluntary retirement had been accepted, the ex-gratia payable to the deceased employee would be paid to his legal heirs.On the other hand, the Bank argued that the SBI VRS was contractual in nature and that an employee's application was only an “offer”. It was submitted that no voluntary retirement could be deemed to have come into effect unless the competent authority's decision accepting the request had been communicated in writing and the employee had been relieved from duties to the satisfaction of the Bank.The respondents further contended that the competent authority had declared 31.03.2001 as the effective date of retirement under the scheme and that an employee opting for VRS must be in service and alive as on that date. Since the deceased employee died on 27.02.2001 and the acceptance was never communicated to him before his death, no right had accrued in his favour, it was argued.The Court framed the question as whether, when a deceased employee had applied for VRS and subsequently expired, his legal representatives were eligible to receive benefits of Rs.9,48,474/- under the VRS scheme.Taking note of the record, the Court observed that the deceased employee had applied on 15.01.2001, his application was forwarded to the competent authority, and the application was accepted and communicated to the Branch Manager on 03.03.2001. The Court noted that “the only remaining issue” was that the applicant had not yet availed the benefits of the VRS scheme.The Court also noted that under the State Bank of Hyderabad VRS, legal heirs were entitled to ex-gratia in the event of death of an employee whose request for voluntary retirement had been accepted. Terming this “a proper decision” by the then State Bank of Hyderabad, which had now merged with SBI, the Court observed that all nationalised banks were required to follow a “uniform methodology” for considering VRS applications.Referring to the Supreme Court's decision in Assistant General Manager and others v. Radhey Shyam Pandey, the Court observed that SBI, being an instrumentality of the State, was bound by the principles of fairness and could not act unfairly to the detriment of employees.The Court held that the petitioners' case could be considered for grant of VRS benefits as they were the legal heirs of the deceased employee. It further noted that while terminal benefits had already been settled and paid, the petitioners were claiming Rs.9,48,474/- under the VRS.Accordingly, the Court directed the respondents to pay the amount payable under the VRS scheme to the petitioners, after deducting...

Telangana High Court Directs SBI To Grant VRS Benefits To Legal Heirs Of Employee Who Died After VRS Application Was Accepted

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Telangana High Court Directs SBI To Grant VRS Benefits To Legal Heirs Of Employee Who Died After VRS Application Was Accepted

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