The Central Bank of India spent Rs 5.33 lakh in a 10-year legal battle to avoid paying Rs 9.5 lakh as retirement benefit to an employee on the grounds that she died two days before they cleared her name for the voluntary retirement scheme (VRS). But both the Bombay High Court and the Supreme Court have ruled that Homai Darayas Postwala - an officer in the investment department - was entitled to the benefits.
Postwala, who served the Central Bank for 30 years, died on June 23, 2001. The bank argued that as it accepted her in the VRS retirement scheme on June 25 - two days after her death - her heirs were not entitled to the benefits of the scheme.
Eight years later, the HC ruled that as the bank had failed to provide the family any record or notification of her acceptance (or rejection) under the scheme, "it would have to be held that the application was accepted when she (Postwala) was alive".
When her husband and son filed an RTI application in June 2011, they learnt that the bank had spent nearly half the amount due to Postwala fighting the case. They have now moved the Bombay High Court to enhance her pension from Rs 4,700 to Rs 6,700 per month after the Supreme Court accepted her rights under VRS.
Postwala had applied for the bank's VRS scheme on February 22, 2001- the day it was announced. The bank did not include her in the first list, but her name appeared on the second list on June 30, 2001. The bank claimed that they had approved her name for the second list on June 25, two days after her death.
While arguing their side of the case in court, Postwala's heirs said the bank had failed to communicate their decision, be it an acceptance or rejection, as is the norm. In fact, the family learned of her acceptance under the scheme only when they enquired with the bank after her death. They were told that she was not eligible for VRS.
The HC in July 2009 directed the bank to pay retirement and other dues under VRS to Postwala's legal heirs in three months. The bank then appealed to the Supreme Court, which upheld the HC order in April 2011.
Postwala's family has now filed a contempt petition in the HC since the pension amount has not been increased retrospective from July 2001. The family has also filed an appeal against the RTI order because the bank refused to provide receipts showing money paid to the lawyers.
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