Summary of the Judgment: Vijay Kumar vs. Central Bank of India & Ors

1. Heading of the Judgment

Case Title: Vijay Kumar vs. Central Bank of India & Ors.
Court: Supreme Court of India
Citation: 2025 INSC 848
Judges: Pamidighantam Sri Narasimha and Joymalya Bagchi, JJ.
Date: July 15, 2025

2. Related Laws and Sections

The judgment interprets the following legal provisions:

• Central Bank of India (Employees’) Pension Regulations, 1995:
  Regulation 33: Governs compulsory retirement pension, specifying minimum pension (not less than two-thirds of full pension) and mandatory Board consultation for reductions.

• Central Bank of India Officer Employees’ (Discipline and Appeal) Regulations, 1976:
  Rule 4(h): Penalty of compulsory retirement.
  Regulation 20(3)(iii): Allows continuation of disciplinary proceedings post-superannuation.

• Constitutional Provisions:
  Article 300A: Right to property, including pension as a deferred wage.

3. Basic Judgment Details

• Background:
  The appellant, a Chief Manager, was compulsorily retired in 2014 after a disciplinary inquiry found him guilty of sanctioning loans improperly, causing potential losses.
  The Bank reduced his pension to two-thirds (minimum under Regulation 33) without consulting the Board of Directors.

• High Court’s Decision: Upheld the pension reduction, misinterpreting Regulation 33 as discretionary.

• Supreme Court’s Ruling:
  Set aside the High Court’s order.
  Held that prior Board consultation is mandatory for pension reduction.
  Directed the Bank to reconsider the decision within 2 months, failing which the appellant would receive full pension.

4. Explanation of the Judgment

Key Issues and Analysis

A. Interpretation of Regulation 33

1. Clause (1) vs. Clause (2):
   Clause (1): Allows a higher authority (e.g., Field General Manager) to grant pension between two-thirds and full pension.
   Clause (2): Requires Board consultation if the competent authority (disciplinary/appellate) reduces pension below full amount.
   SC’s View: Both clauses must be read conjointly. If the higher authority (under Clause 1) is also the appellate authority (under Clause 2), Board consultation is mandatory.

2. Discretionary "May" Misinterpreted:
   The High Court erroneously treated "may" in Clause (1) as granting discretion to deny pension.
   SC Clarified: "May" only clarifies eligibility (e.g., if the employee lacks qualifying service), but pension cannot be less than two-thirds.

B. Procedural Safeguards

• Prior Consultation with Board:
  The Bank’s failure to consult the Board violated procedural fairness.
  Post-facto approval is insufficient (Indian Administrative Service (S.C.S.) Association, U.P. vs. Union of India).

• Opportunity of Hearing:
  The appellant was not heard before the pension reduction, violating natural justice.

C. Constitutional Right to Pension

• Pension as Property:
  SC reiterated that pension is a fundamental right under Article 300A, not a "bounty" (citing D.S. Nakara vs. Union of India).

• Strict Compliance Required:
  Any curtailment must follow statutory safeguards (e.g., Board consultation).

Final Decision

1. Pension Reduction Quashed:
   The Field General Manager’s order (07.08.2015) was set aside for lack of Board consultation.

2. Remedy for Bank:
   Bank may reconsider reduction after hearing the appellant and consulting the Board within 2 months.

3. Default Relief:
   If the Bank fails to comply, the appellant is entitled to full pension from his superannuation date (30.11.2014).

Significance

• Employee Protections: Reinforces that pension rights cannot be arbitrarily reduced without due process.

• Regulatory Clarity: Harmonizes Regulation 33(1) and (2), ensuring higher authorities follow Board consultation.

• Precedent: Affirms that procedural lapses (e.g., lack of consultation) invalidate punitive actions.