'Abandonment Of Service Not Voluntary Retirement', Supreme Court Denies Pensionary Benefits To SBI Clerk

The Supreme Court has held that an employee who abandons service shortly before retirement cannot seek pensionary benefits by claiming it to be a voluntary retirement.

“…we have noticed that the present case is not of voluntary retirement, rather of voluntary abandonment of the services, wherein from 24.01.1998 to 11.12.1998, the appellant, without informing and availing leave, started remaining absent for a long time…”, observed a bench of Justice Prashant Kumar Mishra and Justice NV Anjaria, while dismissing the appeal filed by former State Bank of India clerk, who had remained absent for nearly 11 months before his services were treated as abandoned.

The Court clarified that, under the State Bank of India Employees' Pension Fund Rules, 1955, pensionable service is to be calculated from the date of confirmation in service and not from the initial appointment, meaning the probation period is excluded, and that the mandatory requirements of completing at least 20 years of service and opting for voluntary retirement must be strictly satisfied.

The appellant joined SBI as a clerk on August 17, 1978, and was confirmed on February 17, 1979. The dispute traces back to his prolonged unauthorised absence from January 24, 1998 to December 11, 1998, during which he remained absent without leave. The Bank issued notices on June 1 and November 12, 1998. Upon failure to respond satisfactorily, his services were declared “voluntarily abandoned” from December 12, 1998.

The appellant later claimed that he had effectively completed over 20 years of service and was entitled to a pension.

Aggrieved by the Labour Court and High Court's decision refusing to allow the pensionary benefits, the ex-employee appealed before the Supreme Court.

Refusing to interfere with the impugned rulings, the judgment authored by Justice Mishra observed that abandonment of service cannot be equated with Voluntary Retirement, to allow the pensionary benefits to an employee.

According to the Court, to claim pensionary benefits, an employee needs to complete “twenty years of pensionable service, irrespective of the age, he shall have attained at his request in writing.”

It was the case of the Appellant that he had completed 20 years, 3 months and 25 days, as on 12.12.1998, i.e. from the date of appointment being 17.08.1978, to the date of deemed voluntary retirement being 12.12.1998. However, the record of the case clearly shows that the appointment of the appellant was confirmed on 17.02.1979 and he was declared to have voluntarily abandoned his services from 12.12.1998.

Rejecting the Appellant's stand, the Court observed that the service for the purpose of calculating the pensionary benefits needs to be reckoned from the date of confirmation into service, and not from the date of joining the service on probation, thus when calculated the total length of service, the Court found the Appellant's service to fall short of 20 years, when calculated from 17.02.1979 to 12.12.1998, to become eligible for pension.

“…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 observed.

“…we are of the opinion that the appellant cannot be said to be eligible for pension under the Pension Fund Rules considering that he has not completed 20 years of service nor had attained the age of 50 years, hence, making him ineligible under Rule 22(i)(a). Also, the appellant's case cannot be said to fall under Rule 22(i)(c) since the appellant was never granted VRS, instead his services were declared to have been voluntary abandoned. Keeping in view that the case of the appellant does not fall in either of the above-stated Rules, this Appeal deserves to be dismissed.”, the court held.

Accordingly, the appeal was dismissed.

Cause Title: K.G. SESHADRI VERSUS THE TRUSTEES OF STATE BANK OF INDIA AND ANOTHER

Citation : 2026 LiveLaw (SC) 350

Click here to download judgment

Appearance:

For Petitioner(s) : Ms. N S Nappinai, Sr. Adv. Mr. V. Balaji, Adv. Mr. B. Dhananjay, Adv. Mr. Atul Sharma, Adv. Mr. Vinod K. Nair, Adv. Mr. R. Mohan, Adv. Mr. C. Kannan, Adv. Mr. Nizamuddin, Adv. Mr. Rakesh K. Sharma, AOR

For Respondent(s) : Mr. K.M. Natraj, A.S.G. Mr. Sanjay Kapur, AOR Mr. Surya Prakash, Adv. Ms. Santha Smruthi, Adv. Mr. Anuraj Mishra, Adv. Ms. Mansi Kapur, Adv.