Source: Supreme Court  

Why in News? 

Recently, Justices PS Narasimha and Joymalya Bagchi held that pension is a constitutional right to property and cannot be curtailed without authority of law. Any reduction in pension, especially under Regulation 33 of the Central Bank of India (Employees') Pension Regulations, 1995, requires prior consultation with the Board of Directors. The Bank's act of reducing the appellant's pension by one-third without such consultation was arbitrary, unjustified, and violative of procedural safeguards, rendering the action unsustainable in law. 

• The Supreme Court held this in the matter of Vijay Kumar v. Central Bank of India & Ors. (2025). 

What was the Background of Vijay Kumar v. Central Bank of India & Ors. (2025) Case ? 

• Vijay Kumar, Chief Manager (Scale IV officer) at Central Bank of India, was charged with sanctioning loans in 12 accounts without proper appraisal of income, non-verification of KYC compliance, and failure to conduct post-sanction inspections, exposing the bank to potential financial loss. 
• A.K. Roy, Assistant General Manager, was appointed as Inquiry Authority. The appellant attained superannuation on 30th November 2014 during inquiry proceedings. The disciplinary proceedings continued post-retirement under Regulation 20(3)(iii).  
• The Inquiry Authority found the appellant failed to discharge duties with integrity, and the disciplinary authority imposed compulsory retirement with effect from superannuation date. 
• During appeal pendency, Field General Manager awarded two-third pension on 07th A2015 without prior consultation with Board of Directors, and subsequently dismissed the appellant's appeal on 30th December 2015. 
• The appellant challenged the pension reduction. The High Court upheld the bank's decision to reduce one-third pension. The appellant then approached the Supreme Court challenging this reduction. 

What were the Court’s Observations? 

• The Court observed that pension is not employer discretion but a constitutional right to property under Article 300A of the Constitution of India, 1950 (COI), which cannot be taken away except by clear legal authority. 
• The Court noted that Regulation 33 of the Central Bank of India (Employees') Pension Regulations, 1995 mandates prior consultation with Board of Directors before awarding pension less than full compensation pension. 
• The Court emphasized that all procedural safeguards must be strictly followed when reducing pension. Prior consultation with Board of Directors is a mandatory safeguard before curtailing an employee's constitutional right to pension. 
• The Court observed that Clauses (1) and (2) of Regulation 33 must be read conjointly, not as mutually exclusive provisions. The bank's argument for independent operation of clauses was rejected. 
• The Court distinguished that prior consultation with Board of Directors is mandatory, not directory. Post facto approval cannot substitute prior consultation before the decision is made. 
• The Court found that no opportunity of hearing was given to the appellant before reducing pension, and no evidence of claimed financial loss was properly considered by authorities. 
• The Court cited established legal principles regarding mandatory consultation and interpretation of statutory provisions to avoid rendering them meaningless. 

Is Pension a Constitutional Right Protected Under Articles 21 and 300A? 

• Pension is a constitutional right to property protected under Article 300A of the Constitution of India and cannot be denied without proper authority of law. 
• The Supreme Court has established that "pension is a right and not a bounty" - it is neither discretionary nor depends on the sweet will of the employer but is governed by rules and constitutional mandate. 
• The right to family pension has been recognized as a component of the right to life under Article 21, as it is essential for the survival and well-being of the family of a deceased employee. 
• Pension constitutes a social welfare measure rendering socio-economic justice to employees, serving as assurance that they will not be left in lurch during old age, making it a constitutional obligation. 
• Any denial, reduction, or adverse action affecting pension rights must comply with due process and procedural safeguards, as the constitutional protection requires strict adherence to principles of natural justice. 
• The constitutional characterization of pension as a property right enables judicial review and writ jurisdiction to enforce pension rights against arbitrary governmental or employer action.