INDIRA BANERJEE, J. - (1.) THE short question involved in this writ application is, whether the petitioners are entitled to exemption of tax for compensation to the extent of Rs. 5 lakhs under the optional early retirement scheme introduced by the RBI for voluntary retirement of its employees.
(2.) AN Optional Early Retirement Scheme, hereinafter referred to as the OERS, under which employees who had completed to take voluntary retirement.
(3.) THE terms and conditions on which the petitioners were offered voluntary retirement under the OERS are extracted hereinbelow for convenience : "(b) The scheme is applicable to employees who have completed 25 years of full -time regular service in the bank and have also completed 50 years of age. Only an employee who has completed 25 years of service and 50 years of age as (c) The scheme will be available to an employee entirely at his/her option/discretion. The employees in the bank's service would be fully entitled to continue in service, with all benefits for which they are eligible, if they decide not to opt for this facility. The eligible employees should apply in the prescribed application form. (e) On acceptance of an employee's application by the bank, his/her date of relieving from service, will be decided by the bank in keeping with administrative exigencies/convenience and advised in writing. Once an employee's application under OERS has been accepted, the option will be irrevocable. (g) Income -tax shall be deducted at source on the entire amount payable as ex gratia. (j) As retirement under OERS is optional, it shall not be negotiable and shall not be deemed or construed as a subject - matter of right or contract of service. It will not be a subject -matter of any industrial disputes under the provisions of the Industrial Disputes Act, 1947, and shall not be cited as precedent, custom, convention, usage or practice, anytime in future. (k) As retirement under OERS is optional, the employee seeking retirement under the OERS will not be eligible for any retrenchment compensation payable under the provisions of the Industrial Disputes Act. (q) The benefit of counting of service in excess of six months as a completed year of service under the scheme of OERS towards computing the 'ex gratia', will not be applicable for the purpose of determining the required minimum period of service of 25 years. (r) In the case of an employee whose application for retirement under OERS is accepted, he/she will be permitted to retain the bank's/leased flat beyond the date of retirement for a maximum period of 3 months, if he/she is in occupation of residential accommodation provided by the bank, recovery of rent being made at normal rate for the first 2 months and leased flat rental ceiling in the case of an officer and twice the amount of normal rent in the case of an employee in Class III or Class IV, for the 3rd month. As provided in the scheme, in such cases, the ex gratia amount and other dues will be payable only after the employee's hands over vacant possession of the bank's/leased flat." Some of the terms and conditions of the OERS as finalised are as follows : "2. Eligibility : Full -time regular employees who have completed minimum service of 25 years and have also completed 50 years of age, will be eligible to apply for retirement under the Optional Early Retirement Scheme. 4. Period of operation : The scheme is being introduced on an experimental basis without a closing date but it can be withdrawn by the bank after watching the response for some time and after giving a minimum of one month's notice. 5. Ex gratia payable : Upon acceptance of the application for early retirement under the scheme, the employee will be eligible for ex gratia amount equal to pay plus dearness allowance for the number of years of actual service rendered at 60 days for each completed year of service or part thereof in excess of six months or pay plus dearness allowance for remaining months of service reckoned up to the date on which the employee would retire on superannuation, whichever is less. 6. Income -tax liability : Income -tax, if any, on the amount of ex gratia, will have to be borne entirely by the employees concerned. The ex gratia amount will be payable in one lump sum subject to recovery of income -tax, which is to be borne entirely by the employee. 7. Retirement benefits : In addition to the ex gratia amount payable, employees who are granted early retirement under the scheme will be eligible for retirement benefits, viz., PF, pension, gratuity, encashment of ordinary leave and bonus under guarantee fund as per normal rules applicable in that respect. 8. Weightage of service for pension : Addition of service up to five years in the qualifying service for pension, if admissible under the provisions of the RBI Pension Regulation, 1990, will not be available for calculation of amount of ex gratia payable. 10. Vacation of bank's residential accommodation : An employee who is in occupation of residential accommodation provided by the bank, will be permitted to retain the bank's/leased flat beyond the date of retirement under the scheme for a maximum period of 3 months, recovery of rent being made at normal rate for the first 2 months and leased flat rental ceiling in the case of an officer and twice the amount of normal rent in the case of an employee in Class III or Class IV, for the 3rd month. The actual payment of ex gratia amount and other dues will be made to the employee only after the employee hands over to the bank vacant possession of the bank's residential accommodation, if any, occupied by him. 11. Effect of the provisions of the scheme : Except to the extent provided specifically in this Scheme, the provisions of the RBI (Staff) Regulations, 1948 and other instructions issued by the bank from time to time will continue to apply in this respect." ;