INTRODUCTION
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.”
MEANING
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.
RETROSPECTIVITY
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.
SUMMARY AND CONCLUSION
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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