In Brief
Vijay Kumar, a Chief Manager at Central Bank of India, was compulsorily retired as a penalty for allegedly sanctioning loans without proper appraisal and KYC compliance. The bank reduced his pension by one-third without consulting its Board of Directors, and the High Court upheld this. The Supreme Court set aside the reduction, holding that regulations 33(1) and 33(2) of the bank's Pension Regulations must be read together: prior Board consultation is mandatory whenever a compulsorily retired employee's full pension is reduced. Post-facto approval cannot substitute for prior consultation, as it is a safeguard for constitutional pension rights. The Court allowed the appeal, requiring the bank to grant the employee an opportunity to be heard and obtain Board approval within two months, or pay full pension from superannuation date.
The lawyer headnote and full judgment text are available to registered users.