KG Seshadriv.The Trustees of State Bank of India & Anr

Legal Analysis: K.G. Seshadri vs. The Trustees of State Bank of India & Anr

Citation: 2026 INSC 333

Court: Supreme Court of India

Coram: Justice Prashant Kumar Mishra and Justice N.V. Anjaria

Judgment Author: Justice Prashant Kumar Mishra

Date of Decision: April 8, 2026

Nature of Judgment: This is a judgment by a Two‑Judge Bench of the Supreme Court in its civil appellate jurisdiction, arising from a Special Leave Petition against a judgment of the Madras High Court. The Court dismissed the appeal challenging the denial of pensionary benefits to a former employee who had voluntarily abandoned service.

1. Synopsis of the Judgment

This judgment arises from a claim for pensionary benefits by an appellant who was appointed as a Clerk in the State Bank of India in 1978, confirmed in 1979, and ceased to be in service in 1998. The appellant had left for abroad in 1989, returned in 2004, and sought reinstatement. The Bank declared that he had voluntarily abandoned his services from 12.12.1998. The appellant filed a claim petition under Section 33C(2) of the Industrial Disputes Act, 1947 before the Labour Court, which was dismissed for lack of jurisdiction as the claim did not relate to a pre‑existing right. The High Court affirmed the dismissal. The Supreme Court, while noting the technical dismissal, proceeded to examine the case on merits. The Court held that the appellant was not entitled to pension under Rule 22(i)(a) of the State Bank of India Employees’ Pension Fund Rules, 1955 because he had not completed 20 years of qualifying service (having only 19 years, 9 months and 25 days of pensionable service) and had not attained the age of 50 years. The Court further held that his case did not fall under Rule 22(i)(c) because he had not taken voluntary retirement; rather, his services were declared as voluntarily abandoned due to prolonged unauthorized absence. The appeal was dismissed.

2. Basic Information of the Judgment

Case Title: K.G. Seshadri vs. The Trustees of State Bank of India and Another

Civil Appeal No.: 4279 of 2026 (arising out of SLP (Civil) No. 12462 of 2022)

Bench: Justice Prashant Kumar Mishra and Justice N.V. Anjaria

Date of Decision: April 8, 2026

Citation: 2026 INSC 333

Appeal From: Judgment and order dated 27.04.2022 of the High Court of Judicature at Madras in W.A. No. 1065 of 2022

3. Legal Framework

This judgment involves the interpretation of pension rules under the State Bank of India Employees’ Pension Fund Rules, 1955, the scope of jurisdiction under Section 33C(2) of the Industrial Disputes Act, 1947, and the distinction between voluntary retirement and voluntary abandonment of service.

A. Key Provisions of Law:

State Bank of India Employees’ Pension Fund Rules, 1955:

• Rule 7: Membership of the Fund – every permanent employee becomes a member from the date of confirmation or from the date required under terms of service.

• Rule 20: Reckoning of service for pension – service from the date of admission to the Fund up to the date of retirement shall be reckoned.

• Rule 22(i)(a): Entitlement to pension – after having completed twenty years’ pensionable service provided that the employee has attained the age of fifty years (or as amended for later periods).

• Rule 22(i)(b): Pension on medical incapacitation – after twenty years’ service, irrespective of age, on medical certificate.

• Rule 22(i)(c): Pension on voluntary retirement – after having completed twenty years’ pensionable service, irrespective of age, at the employee’s request in writing.

Industrial Disputes Act, 1947:

• Section 33C(2): Computation of benefits – where any workman is entitled to receive from the employer any benefit which is capable of being computed in terms of money, the workman may apply to the appropriate Labour Court for computation.

B. Related Precedents (Discussed in the Judgment):

• Assistant General Manager, State Bank of India & Ors. vs. Radhey Shyam Pandey (Citation not fully provided): Held that pension is a pre‑existing right; voluntary cessation under a recognized VRS should be treated favourably. Distinguished by the Court on the ground that in that case, entitlement to pension was not disputed and the employees had retired under a recognized VRS.

• Rugmini Ganesh vs. State Bank of India (Citation not fully provided): Held that pre‑confirmation service may be counted for computing qualifying service. Distinguished on the ground that the employee’s entitlement to pension was already recognized, and the issue was only computation, not entitlement itself.

• Municipal Corporation of Delhi vs. Ganesh Razak & Anr. (Citation not fully provided): Proceedings under Section 33C(2) are in the nature of execution proceedings and cannot be used to adjudicate disputed rights.

• Arikaravula Sanyasi Raju vs. Branch Manager, State Bank of India, Visakhapatnam (A.P) and Ors. (Citation not fully provided): (Referred to by the respondent – content not detailed in extract, but cited to support the proposition that voluntary abandonment does not entitle an employee to pension.)

4. Relevant Facts of the Case

• Appointment (17.08.1978): The appellant was appointed as a Clerk in the State Bank of India.

• Confirmation (17.02.1979): His probation was confirmed after six months.

• Cessation of service (1989-1998): The appellant left for abroad in 1989. From 24.01.1998 to 11.12.1998, he remained unauthorisedly absent without informing or availing leave. The Bank issued notices on 01.06.1998 and 12.11.1998 calling upon him to report for duty and explain his absence. He failed to comply.

• Declaration of voluntary abandonment (12.12.1998): The Bank declared that the appellant had voluntarily abandoned his services from 12.12.1998.

• Request for reinstatement (2004): After returning to India, the appellant gave a letter seeking to rejoin service. The Bank refused.

• Letter dated 21.07.2008: The Bank declared that the appellant had been voluntarily retired.

• Writ Petition No. 19002/2008: The appellant challenged the letter before the Madras High Court. On 21.04.2009, the High Court orally directed him to withdraw the case and approach the Labour Court.

• Claim Petition CP No. 5/2010 under Section 33C(2) ID Act: The appellant approached the Central Government Industrial Tribunal-cum-Labour Court, Chennai, seeking computation of pension benefits of Rs. 8,11,770/- with interest.

• Labour Court order (24.09.2010): Dismissed the claim petition, holding that it had no jurisdiction because the case did not relate to a pre‑existing right under pension rules; the matter involved disputed facts.

• Writ Petition No. 25597/2010: The appellant again approached the High Court. The learned Single Judge (05.11.2019) confirmed the Labour Court’s finding, holding that the appellant could not establish any pre‑existing right and that the eligibility conditions for pension were disputed.

• Writ Appeal No. 1065/2022: The Division Bench of the High Court (27.04.2022) dismissed the appeal, upholding the Single Judge’s order.

• Appeal to Supreme Court: The appellant filed SLP, which was granted.

5. Issues Identified by the Supreme Court

• Whether the appellant is entitled to pensionary benefits under the State Bank of India Employees’ Pension Fund Rules, 1955.

• Whether the appellant’s case falls under Rule 22(i)(c) (pension on voluntary retirement) or under Rule 22(i)(a) (pension on completion of 20 years’ service and attainment of 50 years of age).

• Whether the appellant had completed 20 years of pensionable service, reckoning service from the date of appointment or from the date of confirmation.

• Whether the cessation of the appellant’s service constituted “voluntary retirement” or “voluntary abandonment of service”.

6. Ratio Decidendi (The Reasoning and Decision of the Court)

A. The Court Proceeded on Merits Despite Technical Dismissal

The Court noted that both the Labour Court and the High Court had dismissed the claim on the technical ground that proceedings under Section 33C(2) of the ID Act are in the nature of execution proceedings and cannot be used to adjudicate disputed rights. However, the Supreme Court decided to proceed with the case on its merits to provide a final determination. (Para 17)

B. Calculation of Pensionable Service – Confirmation Date is the Starting Point

Under Rule 20 read with Rule 7 of the Pension Fund Rules, service for the purpose of pension is to be reckoned from the date the employee became a member of the Fund, which is the date of confirmation in service. The appellant was confirmed on 17.02.1979. He was declared to have voluntarily abandoned service from 12.12.1998. Calculating from 17.02.1979 to 12.12.1998, the total period was 19 years, 9 months and 25 days – less than the required 20 years. Even if the probation period (from 17.08.1978 to 17.02.1979) were to be included (as argued by the appellant relying on Rugmini Ganesh), the appellant would still not have attained the age of 50 years, making him ineligible under Rule 22(i)(a). (Paras 23-24, 31)

C. Appellant’s Case Does Not Fall Under Rule 22(i)(c) – No Voluntary Retirement

Rule 22(i)(c) applies when an employee retires at his own request in writing after completing 20 years of pensionable service. The Court found that the appellant had not taken voluntary retirement. Instead, from 24.01.1998 to 11.12.1998, he remained unauthorisedly absent without leave. The Bank issued notices calling upon him to report for duty. He gave an unsatisfactory reply. Consequently, his services were declared to have been voluntarily abandoned. This is not voluntary retirement. The reliance on Radhey Shyam Pandey was misplaced because in that case the employees had retired under a recognized Voluntary Retirement Scheme (VRS) and their entitlement to pension was not in dispute. Here, the very foundation of the claim is disputed. (Paras 25-28)

D. Appellant’s Case Does Not Fall Under Rule 22(i)(a) – Non‑fulfilment of Both Conditions

Rule 22(i)(a) requires two conditions: (i) completion of 20 years of pensionable service; and (ii) attainment of 50 years of age (at the relevant time). The appellant satisfied neither condition. His pensionable service was less than 20 years, and it was admitted that he had not attained the age of 50 years as on the date of cessation of service. Therefore, he is not entitled to pension under Rule 22(i)(a). (Paras 29-30)

E. Distinction from Relied‑Upon Precedents

• Radhey Shyam Pandey: In that case, the employees had undisputedly retired under a recognized VRS. The only issue was interpretation of pension rules and qualifying service. Here, the appellant did not retire under any VRS; he abandoned service. Hence, not applicable.

• Rugmini Ganesh: That case dealt with computation of qualifying service (whether pre‑confirmation service could be counted) in a situation where the employee’s entitlement to pension was already recognized. Here, entitlement itself is in dispute. Moreover, even after including probation, the age condition remains unfulfilled. Hence, not applicable. (Paras 27, 31)

F. Conclusion

The appellant failed to satisfy the eligibility conditions under either clause (a) or clause (c) of Rule 22(i). The appeal was dismissed. (Para 32)

7. New Legal Principles Established / Reiterated

• Pensionable service under SBI Pension Fund Rules is reckoned from the date of confirmation, not from the date of appointment: Rule 7 read with Rule 20 clearly provides that membership of the Fund (and hence reckoning of service for pension) begins from the date of confirmation. Probation period before confirmation does not count unless the rules specifically provide otherwise.

• Voluntary abandonment of service is not equivalent to voluntary retirement: An employee who remains unauthorisedly absent for a prolonged period, fails to respond to notices to report for duty, and is declared to have voluntarily abandoned service cannot claim the benefit of Rule 22(i)(c) which requires a written request for retirement. Abandonment is a unilateral act of the employee; retirement requires a formal request and acceptance.

• Section 33C(2) ID Act cannot be used to adjudicate disputed entitlements: The Court reiterated the well‑settled principle that a claim under Section 33C(2) is maintainable only when the right to the benefit is pre‑existing and undisputed. If the employer disputes the very entitlement (e.g., whether the employee qualifies for pension under the rules), the proper remedy is not a computation petition but a substantive proceeding (e.g., reference under Section 10 ID Act or civil suit).

• Pension rules must be strictly interpreted: Eligibility conditions for pension (qualifying service, age, mode of cessation) are to be strictly construed. Courts cannot relax statutory conditions or create new categories of eligibility.

8. The Court’s Analysis and Examination of Concepts

A. Distinction Between “Pre‑existing Right” and “Disputed Right” under Section 33C(2)

The Court implicitly endorsed the Labour Court’s view that Section 33C(2) is an execution machinery, not an adjudicatory forum for establishing a right. The appellant’s claim for pension was disputed by the Bank on multiple grounds – length of service, age, and the nature of cessation (abandonment vs. retirement). Since there was no pre‑existing right that could be merely “computed”, the Labour Court lacked jurisdiction. However, the Supreme Court chose to decide the merits to avoid further litigation.

B. Reckoning of Service – Why Confirmation Date Matters

The Court analysed Rule 7 and Rule 20 together. Rule 7 states that a permanent employee becomes a member of the Fund from the date of confirmation. Rule 20 states that service from the date of admission to the Fund (i.e., confirmation) up to retirement shall be reckoned. The appellant’s argument that service should be counted from the date of appointment (including probation) was rejected because the rules expressly link pensionable service to Fund membership, and Fund membership starts only upon confirmation. The Court distinguished Rugmini Ganesh on facts – in that case, the rules may have permitted counting of pre‑confirmation service, or the entitlement was already admitted.

C. Voluntary Abandonment vs. Voluntary Retirement – Conceptual Difference

The Court drew a clear conceptual distinction:

• Voluntary retirement: A consensual arrangement where the employee, after fulfilling eligibility conditions, submits a written request to retire, and the employer accepts it. The employee is entitled to pension under Rule 22(i)(c).

• Voluntary abandonment: A unilateral act of the employee who fails to report for duty without authorization, leading the employer to declare that the employee has abandoned service. This is treated as a breach of service conditions, not a retirement. The employee is not entitled to pension under Rule 22(i)(c) because there is no “request in writing” for retirement, nor is there a formal retirement.

The Court noted that the appellant’s own conduct – leaving for abroad, remaining absent for months without leave, failing to respond to notices – amounted to abandonment. The Bank’s letter dated 21.07.2008 using the phrase “voluntarily retired” was not binding; the factual position was abandonment.

D. Age Requirement – An Absolute Condition

Rule 22(i)(a) requires both 20 years’ service and attainment of 50 years of age. The appellant could not satisfy the age condition. The Court noted that this was an “admitted position” – the appellant had not turned 50 by December 1998. Thus, even if the service condition were met, the age bar would still defeat his claim. This made it unnecessary to conclusively determine the service calculation, though the Court did so anyway.

E. Reliance on Precedents – Correct Distinguishing

The Court correctly distinguished the two precedents cited by the appellant:

• In Radhey Shyam Pandey, the employees had retired under a VRS – a scheme recognized by the Bank. There was no dispute that they had retired; the dispute was only about the quantum of pension. Here, the dispute was whether the appellant had retired at all.

• In Rugmini Ganesh, the employee’s right to pension was admitted; the only question was whether pre‑confirmation service should be counted for computing the length of service. Here, the right to pension itself was denied.

9. Critical Analysis of the Judgment

Strengths

• Clarity on reckoning of pensionable service: The judgment provides a clear interpretation of Rules 7 and 20 of the SBI Pension Fund Rules, which will be useful for other employees and the Bank in determining eligibility.

• Correct distinction between abandonment and retirement: The judgment prevents abuse by employees who walk away from service and later claim pension as if they had retired voluntarily. This protects the employer’s legitimate expectation that employees will comply with service conditions.

• Practical approach – deciding on merits despite technical bar: Although the Labour Court had correctly dismissed the claim under Section 33C(2), the Supreme Court chose to decide the merits to give a quietus to the long‑standing dispute. This saved the parties from further rounds of litigation.

• Reiteration of strict interpretation of pension rules: Pension rules are a contract between the employee and the employer (or the trust). Courts should not rewrite them. The judgment respects that principle.

Potential Concerns / Critiques

• Harshness towards the appellant: The appellant had served from 1978 to 1998 (over 20 years from appointment date). The Court’s refusal to count the probation period (about 6 months) resulted in a shortfall of 2 months and 5 days from 20 years. Some may argue that a more liberal interpretation – counting service from the date of appointment – would have been just, especially given that the appellant had worked for over 20 years if probation is included. However, the Court was bound by the express language of the rules.

• No discussion of the Bank’s letter dated 21.07.2008: The Bank itself had stated that the appellant was “voluntarily retired”. The Court dismissed this as not binding, but did not explain why the Bank’s own characterization should be ignored. The appellant could have argued estoppel. The judgment would have been stronger if it had addressed this point.

• No examination of whether the Bank had a VRS in 1986: The appellant alleged that a VRS was introduced on 20.09.1986. The Bank denied this, claiming there was no VRS in operation during the relevant time. The Court did not resolve this factual dispute, instead holding that the appellant had not applied for VRS anyway. This leaves a factual ambiguity.

• The “age” requirement under Rule 22(i)(a) – anachronistic? The rule as quoted in the judgment (from the 1955 Rules) refers to “attained the age of fifty years” for employees retiring before certain dates. The appellant’s cessation was in 1998. The judgment does not clarify whether the age requirement was 50 or 58 or 60 depending on amendments. This lack of clarity may cause confusion.

Impact

• Guidance for SBI and other public sector banks: The judgment clarifies that for pension eligibility under the SBI Pension Fund Rules, service is counted from confirmation, not appointment. Employees who are on probation for a long period should be aware that probation service may not count towards pensionable service unless the rules specifically provide.

• Discourages abandonment of service: Employees who intend to leave service without formal resignation or retirement cannot later claim pension by calling their abandonment “voluntary retirement”. They must follow the proper procedure.

• Section 33C(2) jurisdiction reaffirmed: The judgment reinforces that disputed entitlements cannot be adjudicated under Section 33C(2); a substantive proceeding is required.

10. Final Outcome

The Supreme Court dismissed the appeal. The impugned judgment and order dated 27.04.2022 passed by the Division Bench of the Madras High Court in W.A. No. 1065 of 2022 was upheld. The Court held that the appellant was not entitled to pension under the State Bank of India Employees’ Pension Fund Rules, 1955, as he had not completed 20 years of pensionable service (reckoned from the date of confirmation) and had not attained the age of 50 years. His case did not fall under Rule 22(i)(c) because his services were declared to have been voluntarily abandoned, not voluntarily retired. No order as to costs.

11. Practical Application, Court Lines, and Legal Strategy

Use in Court (Practical Application)

• For an employer (Bank/PSU): If an employee remains unauthorisedly absent for a long period, issue notices calling for explanation. If the employee fails to respond or gives an unsatisfactory reply, declare that the employee has voluntarily abandoned service. Such abandonment does not entitle the employee to pension under voluntary retirement rules. Cite this judgment to oppose any claim for pension by an employee who abandoned service.

• For an employee seeking pension: Ensure that you have formally applied for voluntary retirement in writing and obtained acceptance. Do not simply stop reporting to work. If you have been on probation, check the pension rules to see whether probation service counts. If the rules (like Rule 7 of SBI Pension Fund Rules) say that membership starts from confirmation, you cannot count probation period. If you believe the employer has wrongly calculated your service, file a substantive proceeding (civil suit or a reference under Section 10 ID Act), not a Section 33C(2) petition.

• For a lawyer advising on Section 33C(2): If the employer disputes the very entitlement to a benefit (e.g., whether the employee is covered by a pension scheme, whether the employee has retired or abandoned service, whether the employee has completed qualifying service), do not file a Section 33C(2) petition. The Labour Court will dismiss it for lack of jurisdiction. Instead, seek a reference under Section 10 of the ID Act or file a civil suit.

• For a court: When interpreting pension rules, give effect to the plain language. If the rules specify a starting point for reckoning service (e.g., “from the date of confirmation”), that cannot be ignored. The court cannot rewrite the rules to include probation period unless the rules themselves so provide or there is a settled interpretation to that effect.

Court Lines

“Employee’s pension rights are crystallized under Rule 22 of the Pension Fund Rules.” (Para 19)

“A reading of Rule 20 along with Rule 7 of the Pension Fund Rules would make it clear that service for the purpose of pension is to be reckoned from the date of the employee’s admission to the fund wherein the employee shall become the member of the fund from the date on which he was confirmed in the service of the Bank.” (Para 24)

“If we calculate the total period of the service rendered by the appellant, after completion of probation, it would come down to less than 20 years i.e., 19 years, 09 months and 25 days.” (Para 24)

“We have noticed that the present case is not of voluntary retirement, rather of voluntary abandonment of the services, wherein from 24.01.1998 to 11.12.1998, the appellant, without informing and availing leave, started remaining absent for a long time after which the respondent‑Bank issued notices calling upon the appellant to report for duty. … After receiving a non‑satisfactory reply, services of the appellant were declared to have been voluntarily abandoned. Hence, the reliance placed by the appellant on Rule 22(i)(c) of the Pension Fund Rules is completely misplaced.” (Paras 25-26)

“In Radhey Shyam Pandey (supra), this Court was concerned with employees who had undisputedly retired under a recognized Voluntary Retirement Scheme … In contrast, in the present case, the very foundation of the appellant’s claim, namely, his entitlement to pension, is seriously disputed by the respondent‑Bank, particularly with respect to the fact that his case is not of voluntary retirement, rather of voluntary abandonment of service on part of the appellant.” (Paras 27-28)

“It is an admitted position on record that the appellant had not attained the age of 50 years as on the date of cessation of service. Therefore, the mandatory condition relating to attainment of the prescribed age under Rule 22(i)(a) also remains unfulfilled.” (Para 30)

“In Rugmini Ganesh (supra) … the employee’s entitlement to pension was already recognized. … In the present case, even if we for argument’s sake agree to the submission of the appellant and include the probation period to calculate the pensionable service, he would still not be eligible as he had not attained the requisite 50 years of age at the relevant time.” (Para 31)

“The appellant cannot be said to be eligible for pension under the Pension Fund Rules considering that he has not completed 20 years of service nor had attained the age of 50 years, hence, making him ineligible under Rule 22(i)(a). Also, the appellant’s case cannot be said to fall under Rule 22(i)(c) since the appellant was never granted VRS, instead his services were declared to have been voluntary abandoned.” (Para 32)

Legal Strategy Insight

For the Employee (Claiming Pension):

• Step 1 – Review the pension rules carefully: Identify the exact eligibility conditions – length of qualifying service, age requirements, and the definition of “retirement”. Check whether service from the date of appointment or from confirmation is counted. If the rules are ambiguous, gather evidence of past practice or circulars.

• Step 2 – Ensure proper documentation: If you intend to retire, submit a formal written application for voluntary retirement and obtain an acceptance letter from the employer. Do not rely on verbal assurances or mere absence from work.

• Step 3 – If you have abandoned service (or the employer alleges abandonment), consider negotiating a settlement: The courts are unlikely to grant pension in cases of abandonment. A negotiated ex gratia payment may be the only practical remedy.

• Step 4 – Choose the correct forum: If the employer disputes your entitlement, do not file under Section 33C(2). File a civil suit for declaration of your right to pension, or seek a reference under Section 10 of the ID Act (if you are a “workman”).

For the Employer (Bank/PSU):

• Step 1 – Maintain clear records of attendance and leave: When an employee remains absent without authorization, issue notices promptly. Keep copies of notices and proof of dispatch.

• Step 2 – Pass a clear order of abandonment: The order should state that the employee has voluntarily abandoned service, with reference to the dates of absence and the notices issued. Avoid using the phrase “voluntarily retired” unless the employee has actually applied for and been granted voluntary retirement.

• Step 3 – Defend Section 33C(2) petitions vigorously: Argue that the claim is not maintainable because the right to pension is disputed. Cite Municipal Corporation of Delhi v. Ganesh Razak and this judgment.

• Step 4 – If the employee challenges the abandonment order, be prepared to prove: (a) the period of unauthorised absence; (b) that notices were sent to the employee’s last known address; (c) that the employee failed to respond or gave an unsatisfactory reply; and (d) that the service rules permit declaration of abandonment.

For the Court:

• When a claim for pension is made under Section 33C(2), first determine whether the right to the benefit is pre‑existing and undisputed. If the employer disputes the very entitlement (e.g., whether the employee qualifies under the rules), dismiss the petition as not maintainable. However, if the case has a long history of litigation and the merits are clear, consider following the approach of this judgment – decide the merits to give finality, but only after noting the technical bar.