Arrears of pension and commutation as per sc order
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Biman Ghosh
Sep 10, 2018, 11:40:04 PM9/10/18
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I want to know from any retirees organisation whether arrears of
commutation of revised pension
as per SC order dt. 13.02.18 is
payable or not and whether any
retirees organisation has taken up this issue with IBA.
commutation of revised pension
as per SC order dt. 13.02.18 is
payable or not and whether any
retirees organisation has taken up this issue with IBA.
Metlapalli Sharma
Sep 11, 2018, 6:21:15 AM9/11/18
to bankpensioner
it is payable and is paid by Canara bank
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Atul Mangla
Sep 12, 2018, 12:04:37 AM9/12/18
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Canara Bank had paid the communication arrears but later on arbitrarily recovered an amount. Till date no detail of amount paid and recovered is provided by the bank.
Venkatesh Rao
Sep 12, 2018, 12:04:37 AM9/12/18
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This has already been recovered by Canara Bank and clarified time and again.
Karaya Venkatesh Rao
CB SVRS 2000
Kishalaya Mukherjee
Sep 14, 2018, 12:16:45 AM9/14/18
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The difference of amount of communication has already been paid along with previous revision (on the basis of 1684 points ), although the communication amount was a little less than one-third ( in my case it is 28.88% in place of 33.33% of the basic for pension) of the latest revised basic. The reason for this was may be due to wrong calculation. And as the deductible period of fifteen years (180 months) from the date of retirement has already passed, it will be difficult for the bank to recover legally the commuted amount in monthly installments, if they pay the commuted value of difference now. In fact, communication of pension is nothing but a loan against pension and the the loan is recoverable in 180 equal monthly installments (15 years) with interest , starting from the date of first pension payment.
Kishalay Mukherjee.
Hyderabad.
Anantharaman Tg
Sep 14, 2018, 6:13:57 AM9/14/18
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Kindly note that the arrears that you are discussing
about is COMMUTATION and not COMMUNICATION.
On 13 September 2018 at 11:17, Kishalaya Mukherjee <kishalaya...@gmail.com> wrote:
The difference of amount of communication has already been paid along with previous revision (on the basis of 1684 points ), although the communication amount was a little less than one-third ( in my case it is 28.88% in place of 33.33% of the basic for pension) of the latest revised basic. The reason for this was may be due to wrong calculation. And as the deductible period of fifteen years (180 months) from the date of retirement has already passed, it will be difficult for the bank to recover legally the commuted amount in monthly installments, if they pay the commuted value of difference now. In fact, communication of pension is nothing but a loan against pension and the the loan is recoverable in 180 equal monthly installments (15 years) with interest , starting from the date of first pension payment.Kishalay Mukherjee.Hyderabad.
On Wed 12 Sep, 2018, 9:34 AM 'Venkatesh Rao' via bankpensioner, <bankpensioner@googlegroups.com> wrote:
This has already been recovered by Canara Bank and clarified time and again.Karaya Venkatesh RaoCB SVRS 2000
On Sep 11, 2018 10:09 AM, Metlapalli Sharma <metlapa...@gmail.com> wrote:
it is payable and is paid by Canara bank
On Tue, Sep 11, 2018 at 9:10 AM Biman Ghosh <bimang...@gmail.com> wrote:
I want to know from any retirees organisation whether arrears of
commutation of revised pension
as per SC order dt. 13.02.18 is
payable or not and whether any
retirees organisation has taken up this issue with IBA.
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Pradip Chakraborty
Sep 14, 2018, 6:13:57 AM9/14/18
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There is no development, only time consuming. Endless game by the system.
No remedies for the victims. No one cares.
Arvind Mangla
Sep 14, 2018, 6:14:00 AM9/14/18
to bankpensioner
Dearest Ghosh ji,
Let’s look the operative part of the the various judgements.
Operative part of Karnataka High Court Judgement
…..bank shall pay the differential amount of pension and commutation value of pension to the petitioners on that basis,within a period of eight weeks, if not earlier and in the event of failure to make the payment as above, the banks shall be liable to pay interest at the rate of 10% on the said amounts till the date of payment.
Operative part of SC Judgement
“34. Thus, we set aside the judgment rendered by the High Court of Delhi and affirm that of High Courts of Karnataka at Bangalore and the High Court of Madras. The appeals filed by the Banks are dismissed and the appeal filed by the Association is allowed. Resultantly, let the amount which was due and payable be paid with 9% interest, be calculated and paid within four months from today.
From the judgements it is clear that commutation is the important part of the arrears to be paid to the concerned employees.
Thus the arrears to be paid will have the following three components.
Arrears = Difference of (BP+DA) with interest @9% plus (+) Commutation Value with interest @9% minus (-) monthly recovery of commutation amount (⅓ of difference of BP) for 15 years from the date of retirement.
Now the moot point in payment of arrears of commutation is the recovery of commutation amount (⅓ of difference of BP) for 15 years from the date of retirement.
Here I wish to draw attention towards relevant portions of Regulation 41, of Pension Regulations which reads as under:-
41(2) An employee shall indicate the fraction of pension, which he desires to commute, and may either indicate the maximum limit of one-third pension or such lower limit, as he may desire to commute.
41(4) Notes (2) An employee who had commuted the admissible portion of pension is entitled to have the commuted portion of the pension restored after the expiry of a period of fifteen years from the date of commutation.
41(4) Notes (6) The commutation of pension shall become absolute in the case of an employee, (a) retiring on superannuation or voluntary retirement who submits an application for commutation of pension before the date of retirement, on the date following the date of retirement:
41(6) An applicant who is authorized a superannuation pension, voluntary retirement pension, premature retirement pension, compulsory retirement pension, invalid pension or compassionate allowance shall be eligible to commute a fraction of his pension under these regulations.
Provided that on and from 1.7.2003, in case of an applicant in whose case the commuted value of pension becomes payable on the day following the date of his retirement or from the date from which the commutation becomes absolute, the reduction in the amount of pension on account of commutation shall become operative from its inception. Where, however, payment of commuted value of pension could not be made within the first month after the date of retirement or within the first month after the date when the commutation becomes absolute as the case may be, the difference between the normal monthly pension and the commuted pension shall be paid for the period between the date on which commutation becomes absolute and the date preceding the date on which commuted value of pension is deemed to have been paid.
(AMENDMENT NOTIFIED IN GAZETTE OF GOVERNMENT OF INDIA DATED 24.7.2004)
In the present case, as the commutation value is being paid after 01.07.2003 and a period of more than 15 years have already passed from the date commutation had become absolute, banks are not entitled to make any recovery on account of commutation (⅓ of difference of BP).
However, even if one takes a very narrow interpretation of the Regulation 41(6) which is operative w.e.f. 01.07.2003, banks at the maximum can recover commutation amount (⅓ of difference of BP), only from the date of retirement upto 30.06.2003.
I understand that most of the banks have not paid the arrears on account of commutation, which is high handedness ,disregard of Pension Regulations and importantly Contempt of the Court, on the part of bank managements.
I recall from memory, the similar high handedness attitude of the bank managements, while making payment of arrears of pension for 5 years notional service to retirees under Voluntary Retirement Scheme (EVRS-2000) allowed by SC in 2009. At that time also banks recovered commutation amount (⅓ of difference of BP), from the date of voluntary retirement upto the date of payment of arrears in 2009, blatantly disregarding the Pension Regulation 41.6, as above.
You have asked two questions,
1. whether arrears of commutation of revised pension as per SC order dt. 13.02.18 is payable.or not.
2,. whether any retirees organisation has taken up this issue with IBA.
As far as the first question is concerned, I have tried to clarify the issue in my blog , which is being reproduced below-
1616-1684 Arrears - Commutation
The matter concerns, refixation of pension and consequential arrears with respect to the bank employees who retired or died while in service on or after 1.4.1998 and before 31.10.2002.
The matter concerns, refixation of pension and consequential arrears with respect to the bank employees who retired or died while in service on or after 1.4.1998 and before 31.10.2002.
Let’s look the operative part of the the various judgements.
Operative part of Karnataka High Court Judgement
…..bank shall pay the differential amount of pension and commutation value of pension to the petitioners on that basis,within a period of eight weeks, if not earlier and in the event of failure to make the payment as above, the banks shall be liable to pay interest at the rate of 10% on the said amounts till the date of payment.
Operative part of SC Judgement
“34. Thus, we set aside the judgment rendered by the High Court of Delhi and affirm that of High Courts of Karnataka at Bangalore and the High Court of Madras. The appeals filed by the Banks are dismissed and the appeal filed by the Association is allowed. Resultantly, let the amount which was due and payable be paid with 9% interest, be calculated and paid within four months from today.
From the judgements it is clear that commutation is the important part of the arrears to be paid to the concerned employees.
Thus the arrears to be paid will have the following three components.
Arrears = Difference of (BP+DA) with interest @9% plus (+) Commutation Value with interest @9% minus (-) monthly recovery of commutation amount (⅓ of difference of BP) for 15 years from the date of retirement.
Now the moot point in payment of arrears of commutation is the recovery of commutation amount (⅓ of difference of BP) for 15 years from the date of retirement.
Here I wish to draw attention towards relevant portions of Regulation 41, of Pension Regulations which reads as under:-
41(2) An employee shall indicate the fraction of pension, which he desires to commute, and may either indicate the maximum limit of one-third pension or such lower limit, as he may desire to commute.
41(4) Notes (2) An employee who had commuted the admissible portion of pension is entitled to have the commuted portion of the pension restored after the expiry of a period of fifteen years from the date of commutation.
41(4) Notes (6) The commutation of pension shall become absolute in the case of an employee, (a) retiring on superannuation or voluntary retirement who submits an application for commutation of pension before the date of retirement, on the date following the date of retirement:
41(6) An applicant who is authorized a superannuation pension, voluntary retirement pension, premature retirement pension, compulsory retirement pension, invalid pension or compassionate allowance shall be eligible to commute a fraction of his pension under these regulations.
Provided that on and from 1.7.2003, in case of an applicant in whose case the commuted value of pension becomes payable on the day following the date of his retirement or from the date from which the commutation becomes absolute, the reduction in the amount of pension on account of commutation shall become operative from its inception. Where, however, payment of commuted value of pension could not be made within the first month after the date of retirement or within the first month after the date when the commutation becomes absolute as the case may be, the difference between the normal monthly pension and the commuted pension shall be paid for the period between the date on which commutation becomes absolute and the date preceding the date on which commuted value of pension is deemed to have been paid.
(AMENDMENT NOTIFIED IN GAZETTE OF GOVERNMENT OF INDIA DATED 24.7.2004)
In the present case, as the commutation value is being paid after 01.07.2003 and a period of more than 15 years have already passed from the date commutation had become absolute, banks are not entitled to make any recovery on account of commutation (⅓ of difference of BP).
However, even if one takes a very narrow interpretation of the Regulation 41(6) which is operative w.e.f. 01.07.2003, banks at the maximum can recover commutation amount (⅓ of difference of BP), only from the date of retirement upto 30.06.2003.
I understand that most of the banks have not paid the arrears on account of commutation, which is high handedness ,disregard of Pension Regulations and importantly Contempt of the Court, on the part of bank managements.
I recall from memory, the similar high handedness attitude of the bank managements, while making payment of arrears of pension for 5 years notional service to retirees under Voluntary Retirement Scheme (EVRS-2000) allowed by SC in 2009. At that time also banks recovered commutation amount (⅓ of difference of BP), from the date of voluntary retirement upto the date of payment of arrears in 2009, blatantly disregarding the Pension Regulation 41.6, as above.
Now we come your second question. AIBRF vide letter no. Ref:2018/058 Date :16.06.2018 on the matter of commutation has taken up with IBA as under:-
" 3. However, we find that in the absence of specific guidelines to
member banks in your circular dated 03.04.2018 on the following
issues, banks are taking different stands while releasing arrears
which we feel are not in conformity of the tenor and spirit of the
judgement.
(a) COMMUTATION: While re-fixing basic pension of the eligible
pensioners from the date of retirement ,he/she is eligible to
receive all consequential benefits including payment of
difference in commutation amount as per the specific
direction of Karnataka High Court decision as confirmed by
Supreme Court judgement dated 13.02.2018. However we
find that most of the banks are ignoring this aspect and not
paying arrears on difference in commutated amount. We
therefore request IBA to issue specific guidelines to member
banks to give proper treatment to this aspect and pay the
arrears along with applicable interest to implement Supreme
Court decision as per its tenor and spirit. It will not be out of
place to draw your kind attention on the fact that as per the
extended provisions in the Central Civil Pension Rules and as
per earlier communication issued by IBA in the matter,
arrears paid on account of commutation are recoverable from
the pension in future after the date of payment."
The contention of AIBRF on recovery on account of commutation is in contravention of the Regulation 41, specifically 41(4) & 41(6) of Pension Regulations.
AS regards the outcome , one can draw one's own inferences.
I am not quite hopeful in the matter
Regards,
Arvind Mangla
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