Supreme Court Rejects HPCL’s Plea Against Bombay HC Order Cancelling Pension Deductions to 269 Retired Employees

The Supreme Court on Tuesday (November 19) dismissed an SLP filed by Hindustan Petroleum Corporation Limited (HPCL) challenging the Bombay High Court’s order quashing two notifications regarding reduction/cutting of pension benefits to 269 retired employees.

A bench comprising Justice Abhay S Oka and Justice Augustine George Masih said the notices were issued without following the principles of natural justice.

“As previously mentioned, the decision was made belatedly on September 14.^This March 2016. As for the second article, we see that some employees retired in 1994 and 1995. Many have received VRS. Undoubtedly, some of the pensions were withdrawn without complying with the principles of natural justice and without giving them an opportunity to be heard. The situation is the same for the 40 employees who were the subject of the first article dated 14.^This March 2016. It is too late to direct petitioners to give them an opportunity to express themselves. Moreover, the issue concerns only 269 retired employees. Therefore, we are not inclined to exercise jurisdiction under Article 136 of the Constitution on the limited grounds we have stated before..”

The court explained that this decision was limited to 269 retired employees and did not address other legal questions raised by HPCL.

The dispute arose out of HPCL’s actions that retroactively changed the pension rights of its retired employees. The notices affected 40 retirees who joined HPCL or its predecessor after July 15, 1974, and 229 employees who retired after June 28, 1994.

During the hearing, Justice Abhay Oka criticized HPCL’s actions saying: “To do this after all these years, and without complying with the basic principles of natural justice… The reason for this action turns the entire life equation of a person upside down.”

The affected retirees were part of a group whose benefits were granted under the pension plans historically in force for HPCL and its predecessors Esso and Lube India Limited. The Supreme Court had quashed two notifications issued by HPCL on March 14, 2016.

The Bombay High Court, in its judgment dated May 3, 2019, held that HPCL’s notifications amounted to arbitrary cuts in pension benefits. The court observed that retirement benefits are a material property right of the employee and not a bonus or gratuity payment made at the will of the employer.

In two notifications dated 14 March 2016, the following was mentioned:

1. Withdrawal of Pensions of 40 Employees: These employees joined HPCL between 15 July 1974 and 1 May 1975. HPCL stopped pension payments completely, claiming that such benefits were given to them by mistake.

2. Reduction of Retirement Benefits to 229 Employees: In the second notification, retrospectively Rs. 12,000 per annum and removal of certain allowances, including dearness allowance linked to the All India Consumer Price Index.

Case no. – SLP(C) no. 5228-5229/2020

Case Title – Hindustan Petroleum Corporation Ltd. – Pensioners Social and Welfare Association