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by Admin
03 April 2026 1:20 PM
“Courts Cannot Mandate Policy Amendments; Resigned Employees Have No Vested Right to Pension”: Supreme Court Declares That Resigned Bank Employees Cannot Claim Pension Under 1995 Regulations – But Grants Relief Under Article 142 Considering 35+ Years of Unblemished Service. Supreme Court of India in United Bank of India (Now Punjab National Bank) v. Swapan Kumar Mullick & Ors. delivered a significant judgment concerning the right to pension of bank employees who resigned as opposed to those who retired voluntarily. The Bench comprising Justice Dipankar Datta and Justice Ujjal Bhuyan held that resignation and voluntary retirement are legally distinct modes of severance of service, and under Regulation 22 of the United Bank of India (Employees') Pension Regulations, 1995, a resigned employee is not entitled to pension.
While denying pensionary relief as a matter of right, the Court exercised its extraordinary powers under Article 142 of the Constitution to extend limited equitable relief to the respondent considering his mental health condition and 35 years of meritorious service.
“Resignation Is Not Retirement, Even If Employee Served 35 Years” — No Parity Between Quitters and Retirees, Says Court
The respondent, Swapan Kumar Mullick, had served the Bank for over 35 years before tendering his resignation in 2006 citing mental depression. Four years later, when the Bank issued a circular dated 16 August 2010 offering a second option for pension under the 1995 Pension Regulations, Mullick submitted his application. The Bank rejected it, citing Regulation 22 which expressly disqualifies resigned employees from pension benefits.
The Calcutta High Court’s Single Judge had directed the Bank to allow Mullick’s claim, treating his resignation as a form of voluntary retirement. However, the Division Bench partly reversed that finding but directed the Bank to “consider” amending Regulation 22, and further examine whether Mullick’s resignation could be treated as voluntary retirement.
The Bank appealed against these directions.
The Supreme Court categorically held: “Resignation and voluntary retirement constitute two distinct classes with differing legal consequences… Substituting one for the other based solely on the duration of service would run counter to the intendment of statutory regulations.” [Para 47]
“Courts Cannot Direct Legislative Amendments in Policy Matters”: SC Calls Out Overreach by High Court
The Court was highly critical of the High Court's directive to the Bank’s Board to “consider amendment” of Regulation 22.
“Although the Division Bench required the Board… to ‘consider’ an amendment… the use of timelines and follow-up directions amounts to a mandate... No such mandate could have been issued.” [Para 68]
The Court reasserted the constitutional boundary between judicial review and legislative discretion:
“The power under Article 226 of the Constitution cannot be exercised by a high court to direct the legislature or executive to enact a law or frame a regulation… These are executive functions.” [Para 67]
Consequently, Directions (B) to (D) of the Division Bench were set aside.
“Article 142 Relief Granted to Prevent Injustice in Exceptional Circumstances”: SC Allows Fresh Pension Option or ₹5 Lakh Ex Gratia
Despite finding no legal infirmity in Regulation 22, the Court took note of Mullick’s mental health condition at the time of resignation, the absence of any disciplinary blemish, and the long tenure of over 35 years.
“We appreciate Mullick’s candour in not continuing in service despite his mentally depressed state of mind… He averted a crisis situation… and is now a septuagenarian.” [Para 71]
Invoking Article 142, the Court allowed Mullick a last opportunity to opt for pension under the 2024 Bipartite Settlement, provided he refunds the provident fund dues with applicable interest.
“Though Mullick may not have exercised option in terms thereof, we grant him a fortnight’s time more to opt for pension as a very special case.” [Para 72]
If Mullick is ineligible or unable to refund, the Court directed the Bank to pay ₹5,00,000 as ex gratia:
“The Bank shall, as a model employer, proceed to pay to Mullick relief in a sum of ₹5,00,000… This particular grant of financial relief is, however, not to be treated as a precedent.” [Para 73]
“Regulation 22 Is Not Arbitrary; No Violation of Article 14” – Court Clarifies Scope of Judicial Review Over Service Regulations
Rejecting the constitutional challenge, the Court reaffirmed the legitimacy of Regulation 22:
“Clubbing resignation with dismissal, removal and termination… does not offend Article 14… Such regulation is a signal to employees warning them of the consequences…” [Para 54]
The Court rejected arguments based on Anwar Ali Sarkar and D.S. Nakara, stating:
“Treating the two classes [resigned and voluntarily retired employees] differently may not offend Article 14; and there is no justification to hold so, on facts and in the circumstances.” [Para 53]
Resignation is not equivalent to voluntary retirement and cannot be treated as such solely due to length of service.
Pension is not an automatic right; it flows from qualifying under the Pension Regulations, and Regulation 22 validly excludes resigned employees.
Courts cannot direct the executive or legislature to amend existing laws or policies. At best, they can make recommendations, not mandates.
Article 142 can be used in exceptional cases to grant equitable relief even where legal entitlement is absent.
Pension Claim Dismissed, But Humanity Prevails in Relief Under Article 142
While the Supreme Court upheld the sanctity of statutory pension schemes and drew a firm line between resignation and retirement, it also humanised its ruling by ensuring that Mullick—who served without blemish for over three decades—does not go empty-handed.
This judgment reinforces the principle that beneficial legislation cannot be judicially expanded beyond its clear terms, but also illustrates the Court’s willingness to exercise equity in deserving cases under Article 142.
Date of Decision: 22 July 2025
