Held:
1.
The term retirement must in the context of the two
schemes, and the admissibility of pension to those retiring under the SVRS of
2004, include retirement not only under Para 30 of the Pension Scheme 1995 but
also those retiring under the Special Scheme of 2004. That apart any provision
for payment of pension is beneficial in nature which ought to receive a liberal
interpretation so as to serve the object underlying not only of the Pension
Scheme 1995 but also any special scheme under which employees have been given
the option to seek voluntary retirement upon completion of the prescribed
number of years of service and age.
2.
Interpretation must depend on the text and the context.
They are the bases of interpretation. One may well say if the text is the
texture, context is what gives the colour. Neither can be ignored. Both are
important. That interpretation is best which makes the textual interpretation
match the contextual. A statute is best interpreted when we know why it was enacted.
With this knowledge, the statute must be read, first as a whole and then section
by section, clause by clause, phrase by phrase and word by word. If a statute
is looked at, in the context of its enactment, with the glasses of the statute maker
, provided by such context, its scheme, the sections, clauses, phrases and
words may take colour and appear
different than when the statute is looked at without the glasses provided by the
context. With these glasses we must look at the Act as a whole and discover
what each section, each clause, each phrase and each word is meant and designed
to say as to fit into the scheme of the entire Act. No part of a statute and no
word of a statute can be construed in isolation. Statutes have to be construed
so that every word has a place and everything is in its place.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 256 OF 2014
(Arising out of S.L.P. (C) No.9953 of 2008)
National Insurance Co. Ltd. & Anr. …Appellants
Versus
Kirpal Singh
…Respondent
With
CIVIL APPEAL NO. 257 OF 2014
(Arising out of S.L.P. (C) No.10548 of 2008)
United India Insurance Co. Ltd. & Ors. …Appellants
Versus
Shamsher Singh Puri … Respondent
And
CIVIL APPEAL NO. 258 OF 2014
(Arising out of S.L.P. (C) No.10756 of 2008)
The New India Assurance Co. Ltd. & Ors. …Appellants
Versus
Davinder Singh …Respondent
J
U D G M E N T : T.S. THAKUR, J.
1.
Leave granted.
2.
The short
question that falls for determination in these appeals is whether the
respondents who opted for voluntary retirement from the service of the
appellant-companies are entitled to claim pension under the General Insurance
(Employees) Pension Scheme 1995. The High Court having answered the question in
the affirmative, the appellant- Insurance Companies have appealed to assail
that view.
3.
The
controversy arises in the following backdrop:
4.
In
exercise of its powers under Section 17A of the General Insurance Business
(Nationalisation) Act, 1972, the Central Government made what is described as
General Insurance Employee’s Special Voluntary Retirement Scheme, 2004
(hereinafter referred to as “SVRS of 2004”). Para 3 of the scheme stipulating the eligibility conditions for
employees who could opt for voluntary retirement from the services of the
insurance company is as under:
“Eligibility
1)
All permanent full time
employees will be eligible to seek special voluntary retirement under this
Scheme provided they have attained the age of 40 years and completed 10 years
of qualifying services as on the date of notification.
2)
An employee who is under suspension or against
whom disciplinary proceedings are pending or contemplated shall not be eligible
to opt for the scheme; Provided that the case of an employee who is under
suspension or against whom disciplinary proceeding is pending or contemplated
made be considered by the Board of the Company concerned having regard to the
facts and circumstances of each case and the decision taken by the Board shall
be final.”
5.
In para 5
of the scheme those seeking voluntary retirement were held entitled to
ex-gratia amount to be determined according to the said provision. In Para 6 of
the scheme were stipulated other benefits to which the employees opting for
voluntary retirement under the scheme would be entitled. It reads as under:
“6.
Other benefits.-
1)
An employee opting for the
scheme shall also be eligible for the following benefits in addition to the
ex-gratia amount mentioned in para 5namely:-
(a) Provident Fund,
(b)
Gratuity as per Payment of Gratuity Act, 1972 (39 of 1972) or gratuity payable under
the Rationalisation Scheme, as the case may be;
(c)
Pension (including commuted value of pension) as per General Insurance (Employee’s)
Pension Scheme 1995, if eligible. However, the additional notional benefit of
the five years of added service as stipulated in para 30 of the said pension
Scheme shall not be admissible for the purpose of determining the quantum of
pension and commutation of pension.
(d)
Leave encashment.
2)
An employee who is opting
for the scheme shall not be entitled to
avail Leave Travel Subsidy and also encashment of leave while in service during
the period of sixty days from the date of notification of this scheme.”
(emphasis supplied)
6.
The
respondents who opted for voluntary retirement in terms of the SVRS of 2004
afore-mentioned appear to have claimed pension as one of the benefits
admissible to them under para 6 above. The claim was rejected by the appellants
forcing the respondents to agitate the matter before the High Court in separate
writ petitions filed by them. The High Court has by a common order dated 25th
January, 2008, allowed the said petitions holding the respondents to be
entitled to claim pension. The High Court has taken the view that para 6 of the
SVRS of 2004 read with para 14 of the General Insurance (Employees) Pension Scheme
1995 entitled the employees to claim pension so long as they had rendered a
minimum of ten years of service in the Corporation/Company from whose service
they were seeking retirement. Para 14 of the Pension Scheme 1995 reads as
under:
“Qualifying Service:
Subject to the other condition contained in this scheme, an employee who has rendered
a minimum ten years of service in the Corporation or a Company, on the date of
retirement shall qualify for pension.”
7.
A conjoint
reading of para 6 of SVRS of 2004 and para 14 of the Pension Scheme 1995, would
leave no manner of doubt that any employee retiring from the service of the company/corporation
would qualify for payment of pension if he/she has rendered a minimum of ten
years of service on the date of retirement. The expression ‘retirement’
has been defined in para 2 (t) of the Pension
Scheme 1995 as under:
“2
Definition:- In this Scheme, unless the context otherwise requires:-
xxx xxx xxx
¨ (t)
"retirement" means –
I.
the retirement in
accordance with the provisions contained in paragraph 12 of General Insurance
(Rationalisation and Revision of Pay Scales and Other Conditions of Service of
Supervisory, Clerical and Subordinate Staff) Scheme,1974 notified under the
notification of Government of India, in the Ministry of Finance(Department of
Revenue and Insurance) number S.O.326(E) dated the 27th May, 1974;
II.
the retirement in accordance with the provisions
contained in paragraph 4 of the General Insurance (Termination, Superannuation
and Retirement of Officers and Development Staff) Scheme, 1976notified under
notification of Government of India, in the Ministry of Finance (Department of Economic
Affairs) number S.O.627(E) dated 21st September,1976;
III.
voluntary retirement in accordance with the provisions
contained in paragraph 30 of this scheme;
8.
It was
contended on behalf of the appellant-companies that in terms of para 6 of SVRS
of 2004 (supra) pension will be admissible to those seeking voluntary
retirement only if they were eligible for the same under the Pension Scheme 1995.
Para 30 of the Pension Scheme 1995 in turn made only such employees eligible
for pension who had completed twenty years of qualifying service. Inasmuch as
the respondents had not admittedly completed twenty years of qualifying service
on the date of their voluntary retirement, they were not eligible for pension
under the Pension Scheme 1995.
9.
On behalf
of the respondents, it was argued that the respondents had not sought voluntary
retirement in terms of para 30 of the Pension Scheme 1995 which is a general provision
and which stipulates twenty years of qualifying service for being eligible to
claim pension nor was it a case where the SVRS of 2004 either specifically or
by necessary implication adopted para 30 of the Pension Scheme 1995 for determining
the eligibility of those seeking retirement under the said scheme. The
respondents had, it was contended, voluntarily retired pursuant to the SVRS of
2004 which was different from what was envisaged under para 30 of the Pension
Scheme 1995. The condition of eligibility for pension stipulated under para 30 viz.
twenty years of qualifying service had,
therefore, no application to the respondents implying thereby that the claim
for pension ought to be seen in the light of Para 14 of the Pension Scheme 1995
treating retirement under the Special Scheme of 2004 also as a retirement for
the purposes of that para.
10.
We find
considerable force in the contention urged on behalf of the respondents. The
Pension Scheme 1995 provides for “superannuation pension” and “pension on voluntary
retirement”. Superannuation pension is regulated by para 29 of the Pension
Scheme 1995 while voluntary retirement pension is governed by para 30 which
read as under:
“29. Superannuation Pension: Subject
to the other condition contained in this scheme, an employee who has rendered a
minimum ten years of service in the Corporation or a Company, on the date of
retirement shall qualify for pension.
30. Pension on voluntary retirement:
(1) At any time after an employee has completed twenty years of qualifying
service, he may, by giving notice of not less than ninety days, writing to the
appointing authority, retire from service.
xxx
xxx
xxx
(5)
The qualifying service of an employee retiring voluntarily under this paragraph
shall be increased by a period not exceeding five years, subject to the condition
that the total qualifying service rendered by the employee shall not in any
case exceed thirty years and it does not take him beyond the date of retirement.”
(6)
The pension of an employee retiring under this paragraph shall be based on the
average emoluments as defined under clause (d) of paragraph 2 of this scheme
and the increase, not exceeding five years in his qualifying service, shall not
entitle him to any notional fixation of pay for the purpose of calculating his
pension”
11.
The SVRS
of 2004 does not obviously rest the claim for payment of pension on any one of
the above two provisions. That is because what is claimed by the employees respondents
before us is not superannuation pension nor is it pension on voluntary
retirement within the meaning of para 30 (supra). As a matter of fact, para 6
(1)(c) of the SVRS of 2004 specifically provides that the notional benefit of additional
five years to be added to the service of the retiring employee as stipulated in
para 30 of the pension scheme shall not be admissible for purposes of
determining the quantum of pension and commutation of pension. It follows that
the SVRS of 2004 did not for the purposes of grant of pension adopt the scheme
underlying para 30 of the Pension Scheme 1995. Such being the case, the
question is whether the provisions of para 6 of the SVRS of 2004 read with para
14 of the Pension Scheme 1995 which stipulates only ten years qualifying
service for an employee who retires from service to entitle him to claim
pension would entitle those retiring pursuant to the SVRS of 2004 also to claim
pension. Our answer is in the affirmative. If paras 29 and 30 do not govern the
entitlement for those seeking the benefit of SVRS of 2004, the only other
provision which can possibly be invoked for such pension is para 14 (supra)
that prescribes a qualifying service of ten years only as a condition of eligibility.
The only impediment in adopting that interpretation lies in the use of the word
‘retirement’ in Para 14 of the Pension Scheme 1995. A restricted meaning to
that expression may mean that Para 14 provides only for retirements in terms of
Para (2)(t) (i) to (iii) which includes voluntary retirement in accordance with
the provisions contained in Para 30 of the Pension Scheme. There is, however,
no reason why the expression ‘retirement’ should receive such a restricted
meaning especially when the context in which that expression is being examined
by us would justify a more liberal interpretation; not only because the
provision for payment of pension is a beneficial provision which ought to be
interpreted more liberally to favour grant rather than refusal of the benefit
but also because the Voluntary Retirement Scheme itself was intended to reduce surplus
manpower by encouraging, if not alluring employees to opt for retirement by
offering them benefits like ex-gratia payment and pension not otherwise
admissible to the employees in the ordinary course. We are, therefore, inclined
to hold that the expression “Retirement” appearing in Para 14 of the Pension
scheme 1995 should not only apply to cases which fall under Para 30 of the said
scheme but also to a case falling under a Special Voluntary Retirement Scheme of
2004. So interpreted, those opting for voluntary retirement under the said SVRS
of 2004 would also qualify for payment of pension as they had put in the
qualifying service of ten years stipulated under Para 14 of the Pension Scheme
1995.
12. We are mindful of the fact that
the word ‘means’ used in statutory definitions generally implies that the
definition is exhaustive. But that general rule of interpretation is not without
an exception. An equally well-settled principle of interpretation is that the
use of the word ‘means’ in a statutory definition notwithstanding the context
in which the expression is defined cannot be ignored in any forensic exercise
meant to discover the real purport of an expression.
Lord Denning’s observations in Hotel
and Catering Industry Training Board v. Automobile Proprietary Ltd. (1968) 1
W.L.R. 1526 are, in this regard, apposite when he said:
§ “It
is true that 'the industry' is defined; but a definition is not to be read in
isolation. It must be read in the context of the phrase which it defines,
realising that the function of a definition is to give precision and certainty
to a word or phrase which would otherwise be vague and uncertain-but not to
contradict it or supplant it altogether”
13.
In The Vanguard Fire & General Insurance Co. Ltd. Madras
v. Fraser & Ross & Anr. AIR 1960 SC 971 one of the questions that fell for determination before this Court was
whether the definition of the word “insurer” included a person intending to
carry on a business or a person who has ceased to carry on a business. It was
contended that the definition started with the words “insurer means” and, therefore,
is exhaustive. This Court repelling that contention held that statutory
definitions or abbreviations must be read subject to the qualification
variously expressed in the definition clauses which created them and it may be
that even where the definition is exhaustive inasmuch as the word defined is
said to mean a certain thing, it is possible for the word to have a somewhat
different meaning in different sections of the Act depending upon the subject
or the context. That is why all definitions in statutes generally begin with
the qualifying words “unless there is anything repugnant in the subject or
context”. This Court observed:
“The
main basis of this contention is the definition of the word "insurer"
in the s.2(9) of the Act. It is pointed out that that definition begins with
the words "insurer means" and is therefore exhaustive. It may be
accepted that generally the word "insurer" has been defined for the
purposes of the Act to mean a person or body corporate, etc., which is actually
carrying on the business of insurance, i.e., the business of effecting contracts
of insurance of whatever kind they might be. But s.2 begins with the words
"in this Act, unless there is anything repugnant in the subject or
context" and then come the various definition clauses of which (9) is one.
It is well settled that all statutory definitions or abbreviations must be read
subject to the qualification variously expressed in the definition clauses
which created them and it may be that even where the definition is exhaustive
inasmuch as the word defined is said to mean a certain thing, it is possible
for the word to have a somewhat different meaning in different sections of the
Act depending upon the subject or the context. That is why all definitions in
statues generally being with the qualifying words similar to the words used in the
present case, namely, unless there is anything repugnant in the subject or
context. therefore in finding out the meaning to the word "insurer"
in various sections of the Act, the meaning to be ordinarily given to it is
that given in the definition clause. But this is not inflexible and there may
be sections in the Act where the meaning may have to be departed from on
account of the subject or context in which the word has been used and that will
be giving effect to the opening sentence in the definition section, namely,
unless there is anything repugnant in the subject or context. In view of this qualification,
the court has not only to look at the words but also to look at the context,
the collocation and the object of such words relating to such matter and
interpret the meaning intended to be conveyed by the use of the words under the
circumstances. Therefore, though ordinarily the word "insurer" as used
in the Act would mean a person or body corporate actually carrying on the
business of insurance it may be that in certain sections the word may have a
somewhat different meaning.”
(emphasis supplied)
14.
To the
same effect is the decision of this Court in Paul Enterprises & Ors. v. Rajib Chatterjee and Co.
& Ors. (2009) 3 SCC 709 where this
Court once again reiterated that the interpretation clause should be given a
contextual meaning and that all statutory definitions must be read subject to
the qualification variously expressed in the interpretation clause, which
created them. In State of Maharashtra & Anr. v.
B.E. Billimoria & Ors. (2003) 7 SCC 336 also this Court restated the principle that meaning of an expression
must be determined in the context in which the same has been used. Reference
may also be made to K.V. Muthu v.
Angamuthu Ammal (1997) 2 SCC 53 where this
Court made the following apposite observations:
“Apparently,
it appears that the definition is conclusive as the word "means" has
been used to specify the members, namely, spouse, son, daughter, grand-child or
dependent parent, who would constitute the family. Section 2 of the Act in which
various terms have been defined, open with the words "in this Act, unless
the context otherwise requires" which indicates that the definitions, as
for example, that of "Family", which are indicated to be conclusive
may not be treated to be conclusive if it was otherwise required by the
context. This implies that a definition, like any other word in a statute, has
to be read in the light of the context and scheme of the Act as also the object
for which the Act was made by the Legislature. While interpreting a definition,
it has to be borne in mind that the interpretation placed on it should not only
be not repugnant to the context, it should also be such as would aid the
achievement of the purpose which is sought to be served by the Act. A construction
which would defeat or was likely to defeat the purpose of the Act has to be
ignored and not accepted.
Where
the definition or expression, as in the instant case, is preceded by the words
"unless the context otherwise requires", the said definition set out
in the Section is to be applied and given effect to but this rule, which is the
normal rule may be departed from if there be something in the context to show
that the definition could not be applied”.
(emphasis supplied)
15.
We may
also gainfully refer to the decision of this Court in Reserve Bank of India v. Peerless General Finance (1987) 1
SCC 424 where this Court declared that the best interpretation
is the one in which the Court relies upon not only the test but also the
context in which the provision has been made. We can do no better than to
extract the following passage from that decision:
“Interpretation
must depend on the text and the context. They are the bases of interpretation.
One may well say if the text is the texture, context is what gives the colour.
Neither can be ignored. Both are important. That interpretation is best which makes
the textual interpretation match the contextual. A statute is best interpreted
when we know why it was enacted. With this knowledge, the statute must be read,
first as a whole and then section by section, clause by clause, phrase by phrase
and word by word. If a statute is looked at, in the context of its enactment,
with the glasses of the statute maker , provided by such context, its scheme,
the sections, clauses, phrases and words may take colour and appear different than when the statute is
looked at without the glasses provided by the context. With these glasses we
must look at the Act as a whole and discover what each section, each clause,
each phrase and each word is meant and designed to say as to fit into the
scheme of the entire Act. No part of a statute and no word of a statute can be
construed in isolation. Statutes have to be construed so that every word has a
place and everything is in its place.”
(emphasis supplied)
16.
In the
case at hand Para 2 of the Pension Scheme 1995 (extracted earlier) defines the
expressions appearing in the scheme. But
what is important is that such definitions are good only if the context also
supports the meaning assigned to the expressions defined by the definition
clause. The context in which the question whether pension is admissible to an
employee who has opted for voluntary retirement under the 2004 scheme assumes
importance as Para 2 of the scheme starts with the words “In this scheme,
unless the context otherwise requires”. There is nothing in the context of 1995
Scheme which would exclude its beneficial provisions from application to
employees who have opted for voluntary retirement under the Special Scheme 2004
or vice versa.
The term retirement must in the context of the two schemes, and the
admissibility of pension to those retiring under the SVRS of 2004, include
retirement not only under Para 30 of the Pension Scheme 1995 but also those
retiring under the Special Scheme of 2004. That apart any provision for payment
of pension is beneficial in nature which ought to receive a liberal
interpretation so as to serve the object underlying not only of the Pension
Scheme 1995 but also any special scheme under which employees have been given
the option to seek voluntary retirement upon completion of the prescribed
number of years of service and age.
17.
In the
result these appeals fail and are hereby dismissed but in the circumstances
without any order as to costs.
……………………….……….…..…J.
(T.S.
THAKUR)
…………..…………………..…..…J.
(VIKRAMAJIT SEN)
New Delhi
January 10, 2014
