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Facts of the Case

In 2004, a writ petition in the nature of Mandamus was filed against the Balmer Lawrie and Co Ltd Company by the Balmer Lawrie and Co. Ltd Ex-Officers Forum. The writ moved the Court to direct the Respondent party, i.e the Balmer Lawrie and Co. Ltd as well as the Trustees of the Company to refrain from making any revision in the pension scheme of 1989 availed by the petitioner, i.e the ex-officers of the Company and release of pension. The respondents have contested the petition with the filing of an affidavit in opposition.

The 1989 scheme in question was introduced by the Company as a Pension fund to provide its salaried officers pension due on retirement. In the years 2000 and 2002, the Company introduced a voluntary retirement scheme under which many of its officers took retirement after the guarantee that their pensions will be disbursed on the notional date of retirement of the respective officers on the rates mentioned in the pension scheme.

The contention of the case rests on the letter received by the petitioners on January 12th 2004. The letter was sent by the Trustees that because of grave financial condition, the Managing Director of the Company had decided to adopt a Deed of Variation. The deed stands to change the terms from a “Defined Benefit Scheme” to a “Defined Contribution Scheme” meaning the pension will depend on the individual’s contribution and not the period of service. The amendment also proposes to recalculate the amount which would drastically reduce the pension amount.

The case WP no. 394 of 2004 was being heard by the honourable Justice Sambuddha Chakrabarti and the final verdict was read on the 5th of November 2019.

Arguments for the Release of Pension

Respondents’ Counsel, Mr Jishnu Saha and Mr. Kushagra Saha make the following points:

  • The managing director is not directly involved in the management of the said Fund and therefore no writ petition can be maintained against the independent Board of Trustees. The four trustees appointed by the Company are also employees is merely incidental and does not prove that the Board was under the direct control of the Company.
  • All the petitioners signed necessary documents through which they acceded to any decisions made by the Trustees and therefore
  • Since the petition has been filed by an association and that association is not directly affected by the actions of the respondent, the writ petition is not maintainable.
  • The amendment cannot be challenged on the grounds that the rights of the petitioner were not crystallized during the execution of the Deed of Variation, which will be crystallized only after annuity was purchased which was not the case at the time of the amendment.
  • The petitioners have no right to question the amendment because a) their rights are valid at the time of superannuation which had not arrived by the time of the amendment, and b) the amendment is for the larger public interest.

Petitioners’ Counsel, Mr Puspal Chakraborty argues for the writ petition and stopping the deed of variation for the following reasons:

  • On the issue of the petition being filed by an association, the counsel argues that any individual affected by an action of the respondents has the right to maintain a writ petition even if all persons affected are not able to join the petition.
  • The counsel shows that the Company has the power to nominate 50% of the Trustees and such nomination of employees of the Company cannot be merely stated as incidental.
  • It is accepted that when it comes to rules of retirement and entitlement, any amendment to the scheme should not be applicable to the employees who had accepted the same under assurances by the Company. He argues that;

“When once a decision has been taken by an authority assuring an employee the terms and entitlement of….should not be allowed to be unilaterally altered or varied and modified.”

The judgment of the Court

The Writ Petition Succeeds

Honourable Justice Sambuddha Chakrabarti observed that the respondents’ counsel to claim that the Trustees are the sole authority of the Fund is an effort to “bypass any liabilities….stipulated in the concerned scheme, dated August 28 1989.”

As per the judgment in the case WP No. 783 of 2003, wherein the petitioners could not alter the agreement “made with their eyes open”, the Court stated if the petitioners are not allowed to alter the terms of the agreement then the respondents cannot alter the same without the petitioners’ consent. Therefore, introducing a new scheme after the employees had accepted voluntary retirement is “plainly impermissible”.

Further, the Court stated that the respondent company is required to “perform its promise and not avoid its obligation” vis-i-vis its ex-officers who had accepted the Voluntary Retirement scheme long before the Deed of Variation was introduced.

The Court directed that the respondents are not to give any effect to the Deed of Variation and release of pension amount of all the voluntarily retired employees as they have the right to get what has been assured to them in terms of the scheme. The court also rejected the plea by the respondents’ counsel to put a stay on the operation and rightly provides six weeks to release the amount.

[googlepdf url=”https://libertatem.in/wp-content/uploads/2019/11/WP-No.-394-of-2003.pdf” download=”Download Judgement PDF” width=”100%” height=”900″]


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