Facts: Retired employees of the Small Industries Development Bank of India (SIDBI) filed a writ petition challenging Clauses 3(VIII) and 4(IX) of a circular issued by SIDBI. These clauses stipulated that pension benefits would be applicable only from 1st July, 2022, effectively denying arrears for the period prior to this date. The petitioners argued that they were not given adequate prior opportunity to opt for the pension scheme. SIDBI contended that it had extended a final opportunity to opt for pension and that the cut-off date was justified to avoid a financially unsustainable burden.
Procedural Posture: The case came before the High Court of Judicature at Bombay in its Ordinary Original Civil Jurisdiction as a Writ Petition. The Petitioners sought quashing of specific clauses of the impugned circular.
Issue: Whether the clauses in the SIDBI circular fixing a cut-off date for pension eligibility are arbitrary, illegal, or discriminatory, and whether the petitioners were given adequate opportunity to opt for the pension scheme.
Holding: The High Court dismissed the writ petition, upholding the validity of the clauses in the SIDBI circular that fixed a cut-off date for pension eligibility.
Reasoning: The Court relied on the Supreme Court's judgment in M.T. Mani (Supra), which addressed a similar issue regarding a cut-off date for pension benefits under the RBI Pension Regulations. The Court found that the Supreme Court had considered the financial burden and policy decisions involved in granting pension benefits and had upheld the validity of such cut-off dates. The High Court also noted that the petitioners had been given ample opportunities to opt for the pension scheme and had exercised their option to switch over from the Contributory Provident Fund (CPF) scheme. The court emphasized that allowing retrospective pension benefits would create a financially unsustainable scenario for SIDBI, given the significant financial burden involved. The court stated, "The Supreme Court upon considering a similar clause fixing cut off date for eligible retired employees to become eligible for pension held that the refusing of grant of Pension retrospectively i.e. prior to cut off date from date of superannuation / retirement cannot be held to be arbitrary or illegal or discriminatory in nature."