ISLAMABAD: The Supreme Court has ordered that retired employees of the state-owned National Bank of Pakistan (NBP) will continue to get pension benefits calculated at 70pc, rather than the reduced rate of 33pc, because pension is a recurring right.

A three-judge bench, headed by Justice Ejaz Afzal Khan, decided in favour of the pensioners by upholding the Jan 16 verdict of the Lahore High Court (LHC), which had ordered the bank management to release pension benefits of retired bank employees in accordance with a Dec 26, 1977 Circular 228(C), within two months.

The Supreme Court held that Circular 228(C) had statutory backing and it was beyond the power and competence of NBP’s Board of Directors to change any of the terms and conditions governing the pay and pension of its officers and executives to their disadvantage.

Retired officials of NBP are governed by the NBP Employees Pension Provident and Guarantee Rules 1958 and the National Bank of Pakistan (Staff) Service Rules 1973, which were duly approved by the federal government.

Rejects argument petitions were filed over a decade after the change was notified

During the service of the concerned employees, the federal government launched a pension scheme, which was circulated by NBP vide Instruction Circular 228(C) on Dec 26, 1977, allowing the enhancement of the pension of retired employees at the rate of 70pc of average emoluments upon the completion of 30 years of service.

The employees had ultimately opted for this scheme.

In para-10 of the scheme, it was mentioned that any change or revision in rates/scales of pension or gratuity made by the federal government will also be applicable to the officers/executives of the bank.

But on June 16, 1999, the NBP management issued another Instruction Circular No. 37/1999, whereby the pension was reduced to almost 33pc, though the basic pay was increased. Subsequently the decision was assailed by employees before both the Peshawar and Lahore high courts.

Though the Peshawar High Court rejected the employees’ contentions, the LHC accepted them, directing the NBP management to release the pension benefits at the rate of 70pc. Consequently, NBP approached the Supreme Court in appeal, which upheld the LHC decision, but dismissed the Peshawar High Court judgement.

In its verdict, the apex court rejected the arguments of the NBP counsel, who claimed that the June 1999 circular, which substantially increased the salaries of officers and executives while reducing the pension factor to 33pc, was accepted and acted upon by officers and executives of the bank without any qualms for more than a decade and could not be questioned unless the increase in their salaries was refunded.

The apex court held that this argument does not hold up, because employees did not sit idle over their rights, as was evident from their correspondence at different levels. In addition, Justice Khan observed, there could be no estoppel (the principle which precludes a person from asserting something contrary to what is implied by a previous action or statement or by a previous pertinent judicial order) against a statute or rules that have statutory force.

The argument that such petitions are also subject to the principle of laches (unreasonable delay in asserting a claim, which may result in its dismissal) because petitions were instituted more than a decade after the issuance of the 1999 circular was also irrelevant, especially when the employees had been questioning the circular reducing their pension at different forums.

Published in Dawn, October 1st, 2017