Introduction:

In a landmark judgment, the Bombay High Court invalidated Clause 7(b) of the MOIL Group Superannuation Cash Accumulation Scheme, which denied pensionary benefits to employees who resigned. A Division Bench comprising Justices Avinash G. Gharote and Abhay J. Mantri held the clause discriminatory and violative of Article 14 of the Constitution. This decision came in response to a petition filed by Chandrabhan Atulkar, a former Executive Director (Technical) at MOIL Ltd., who was denied pension after resigning due to health concerns shortly before his superannuation. The court ruled that resignation alone could not be a ground for denying pensionary benefits when all other eligibility conditions were met.

Arguments:

The petitioner, Chandrabhan Atulkar, contended that Clause 7(b) arbitrarily differentiated between employees who resigned and those who superannuated, despite both fulfilling similar eligibility conditions. He argued that the clause was discriminatory and lacked any rational nexus to the objectives of the MOIL Scheme. Atulkar relied on the principles of equality under Article 14 and the precedent set in Shayara Bano v. Union of India [(2017) 9 SCC 1]. He pointed out that his resignation, prompted by health concerns, occurred mere months before his scheduled superannuation. Moreover, he emphasized that the MOIL Service Regulations did not impose any such restriction on pension eligibility.

In defense, MOIL argued that resignation and superannuation were fundamentally distinct and justified the exclusion of pension for employees who resigned. They relied on the Supreme Court’s decision in Senior Divisional Manager, LIC v. Shree Lal Meena [(2019) 4 SCC 479], where resignation resulted in forfeiture of pension benefits. MOIL maintained that the distinction served the policy objectives of the scheme and did not violate the equality principle. Furthermore, they contended that resignation was a voluntary act that could not be equated with retirement.

Court’s Judgment:

The Bombay High Court scrutinized the MOIL Scheme’s provisions and found Clause 7(b) to be discriminatory and unconstitutional. The court began by analyzing the amendments to the MOIL Scheme introduced in 2018. It noted that these amendments removed superannuation and length of service as mandatory conditions for pension eligibility, thereby implying that the mode of service termination (resignation or superannuation) should not affect pensionary benefits.

The court highlighted that Clause 7(b) created an irrational distinction between “simple resignation” and “technical resignation” (resignation for joining another Central Public Sector Enterprise with a similar scheme). It observed that this distinction had no rational nexus to the scheme’s objectives, which were to provide financial security to long-serving employees. Atulkar, having served over 15 years and met all other eligibility requirements, could not be arbitrarily excluded from pension benefits simply because he resigned.

Further, the court rejected MOIL’s reliance on Shree Lal Meena, explaining that the case involved materially different facts and regulations. In that case, specific pension rules explicitly mandated forfeiture of benefits upon resignation. By contrast, MOIL’s Service Regulations contained no such provision, and the pension scheme’s amendments in 2018 supported an inclusive approach.

The court emphasized that the object of the MOIL Scheme was to ensure pension benefits for employees who served over 15 years, irrespective of the manner of their service termination. It observed that denying Atulkar’s pension based on his resignation, especially when it occurred shortly before his scheduled superannuation, defeated the scheme’s purpose and violated the equality principle enshrined in Article 14.

The court also considered the petitioner’s health concerns and the proximity of his resignation to his superannuation date. It ruled that these factors reinforced the arbitrariness of denying him pensionary benefits. Consequently, the court declared Clause 7(b) unconstitutional and discriminatory, allowing the writ petition. It directed MOIL to release Atulkar’s pensionary benefits without delay.