Today, I will talk about the case of Punjab State Cooperative Agricultural Development Bank Ltd. v. Registrar, Cooperative Societies and Others, 2022 SCC OnLine SC 28, wherein the Hon’ble Supreme Court discussed the concept of vested or accrued rights of an employee and “whether such vested or accrued rights can be divested with retrospective effect by the rule making authority.”
Today, I will talk about the case of Punjab State Cooperative Agricultural Development Bank Ltd. v. Registrar, Cooperative Societies and Others, 2022 SCC OnLine SC 28, wherein the Hon’ble Supreme Court discussed the concept of vested or accrued rights of an employee and “whether such vested or accrued rights can be divested with retrospective effect by the rule making authority.”
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Hi everyone.
I am Suyash and today, I will talk about the case of Punjab State Cooperative Agricultural Development Bank Ltd. v. Registrar, Cooperative Societies and Others, 2022 SCC OnLine SC 28, wherein the Hon’ble Supreme Court discussed the concept of vested or accrued rights of an employee and “whether such vested or accrued rights can be divested with retrospective effect by the rule making authority.”
Basically, in service jurisprudence, ‘vested right’ is “a right that so completely and definitely belongs to a person that it cannot be impaired or taken away without the person’s consent.” Thus, in matters involving promotion, seniority, retiral benefits, pension etc., the rights of an employee become vested or accrued once they have completed a minimum length of service or fall within the zone of consideration for the grant of benefit.
Suppose a person has retired from his services and the rules of service prescribe for grant of pension after retirement. Then in such a case, once the employee starts taking benefit of pension, his right to receive pension becomes vested and accrued, and any infringement of such vested or accrued right is not permissible.
In the present case, the Court discussed whether such vested or accrued rights can be removed with retrospective effect. According to the Court, if a rule that takes away the vested right is made applicable with future effect on the employees, then such taking away of vested right would not be illegal and violative of Article 14 of the Constitution of India; however, a rule “having retrospective operation which has the effect of taking away a benefit already available to the employee under the existing rule is arbitrary, discriminatory and violative of the rights guaranteed under Articles 14 and 16 of the Constitution.”
We see that once an employee has retired, the State cannot amend the statutory rules affecting their pension with retrospective effect. Similarly, once a person has been promoted, he cannot be demoted by framing new rules with retrospective effect. However, this does not mean that there is no power with the rule making authority to amend rules with respect to promotion, seniority retiral benefits etc. Even if the employee has entered into the service before amending of rules but as long as such amendment has future application and not retrospective application, such rules would be legal and applicable.
It is also to be noted that excuses such as non-availability of financial resources for disbursal of pension cannot be taken by the State to violate the vested or accrued rights of an employee. Matters such as pension or promotion are not bounties rather the same are hard earned rights of an employee that have accrued after completion of minimum length of service or after happening of similar events such as superannuation etc.
Thus, in conclusion, following important points emerge: -
a. Vested rights are those rights of a person that cannot be taken away without the person’s consent.
b. A vested right can be taken away by framing a rule or a law that is made applicable with a future effect.
c. A vested right cannot be taken away by framing a rule or a law that is made applicable with retrospective effect.
d. Matters such as pension or promotion are not bounties rather the same are hard earned rights of an employee that have accrued after efflux of time.
Thus, I hope that the concept of vested or accrued rights and the manner in which they can be taken away is clear by now.
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