Court Directs State Bank of India to Disburse VRS Benefits to the Legal Heirs of Late Sri K.S.R.Sastry
In a landmark judgment, the Telangana High Court, presided over by Justice Namavarapu Rajeshwar Rao, ruled in favor of the petitioners in the case of Smt. K. Kalyani and others versus the Managing Director & CDO HRD Department, State Bank of India (SBI). The court directed SBI to pay an amount of Rs. 9,48,474 to the legal heirs of the late Sri K.S.R.Sastry, who had applied for the Voluntary Retirement Scheme (VRS) but unfortunately passed away before the effective retirement date.
The case revolved around the application of Mr. K.S.R.Sastry for VRS, submitted on January 15, 2001, which was accepted by the bank. However, Mr. Sastry succumbed to a heart attack on February 27, 2001, before the retirement date of March 31, 2001. The bank had denied the VRS benefits to his heirs, citing the effective date of retirement as the reason for invalidating the application.
The court found this denial unjustified, emphasizing that the application process had been completed and accepted, despite the applicant's demise prior to the effective date. The judgment underscored the principle of fairness and the need for uniformity across nationalized banks, referencing similar cases where other banks had extended benefits to the heirs of deceased employees under analogous circumstances.
The court cited a three-judge bench decision of the Supreme Court in Assistant General Manager And Others v. Radhey Shyam Pandey, which highlighted the duty of banks to act fairly and in accordance with the approved schemes. The court found that SBI's actions were contrary to the spirit of the resolution approved by the Central Board of Directors and the Government of India, thereby reinforcing the petitioners' entitlement to the benefits.
Justice Rao ordered the respondent bank to disburse the VRS benefits to the petitioners, deducting any amount already paid, within four months from the date of the order. The court concluded that denying the benefits due to the applicant's death before the effective date was not justifiable and ordered SBI to act in line with the principles of fairness and uniformity.
Bottom line:-
Legal heirs of a deceased employee who applied for Voluntary Retirement Scheme (VRS) and whose application was accepted but passed away before the effective date of retirement are entitled to receive VRS benefits.
Statutory provision(s):
- Voluntary Retirement Scheme (VRS) guidelines
- Circular No.Per/39/200-2001 dated 30.12.2000
Smt.K.Kalyani v. Managing Director & CDO HRD Department, (Telangana ) : Law Finder Doc id # 2917902
