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The Supreme Court has dismissed the appeal of Allahabad Bank and ruled that an officer, who opted for voluntary retirement from service and paid gratuity and provident fund, was also entitled to pension. In this case, Allahabad Bank vs A C Aggarwal, the officer retired and was paid gratuity. Then, he asked for pension. The bank rejected it, saying benefits under the pension scheme was subject to the condition of refund of the amount of gratuity already paid to him and submission of an irrevocable undertaking that he will be getting pension in lieu of gratuity. He challenged the bank’s stand in the Allahabad High Court, arguing that it was against the bank rules and constitutional provisions. He further argued that State Bank of India was paying gratuity to its employees in addition to other retiral benefits and, therefore, there was no justification to discriminate the employees of another public sector bank. The high court accepted the argument and asked the bank to pay pension. It moved the Supreme Court. The apex court rejected the appeal and said the law regarding payment of gratuity has overriding power over other rules and regulations. Moreover, the judgment noted the bank had earlier unsuccessfully tried to get exemption from the gratuity law, but the government had rejected its request.
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