The Supreme Court, on Tuesday, 11 Jan, 2022, in its judgement in the case of The Punjab State Cooperative Agricultural Development Bank v. the Registrar, Cooperative Societies and Ors., held that an amendment with retrospective effect taking away the benefits available to employees under existing rules would be violative of fundamental rights that are guaranteed under Article 14 and 16 of the Constitution of India. 

The two-judge bench consisting of Ajay Rastogi and Abhay S. Oka, while hearing the arguments of both the sides, came up with the observation that if an amendment is brought about by the government to having a retrospective effect if taking away the already available benefits of pension and promotion of the employee, then it would be a violation of the fundamental rights of that employee as guaranteed under Article 14 and 16 of the constitution. 

In this case, under the bank pension scheme that was introduced by Punjab State Cooperative Agricultural Development Bank in 1989, the employees were to be paid pension without fail. In the year 2010, the bank failed in discharging the said obligation, subsequent to which employees approached Punjab and Haryana High Court. The bank later retrospectively withdrew the scheme by deletion of Clause 15(ii) by way of amendment. The present case was to challenge it.

After giving due consideration to the facts of the case, the court was of the view that the employees availing the benefit of the pension scheme had such vested right and any form of retrospective amendment to deliberately take away such right of the retired employee which accrued on the then existent rule would violate is fundamental right under Article 14 and 16 of the constitution. 

The court distinguished between legitimate expectation and vested right of the employee as well as rejected the submission of the bank that they had been facing financial constraints and that being the reason of bringing such amendment and observed that the rule making authority was bound to have kept in mind the repercussions such provision could have. Thus it was held that non-availability of financial resource can’t be taken as a defense in violating the vested fundamental rights of the employees. 

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