ISLAMABAD - The Supreme Court Monday held that a notification regarding 70 per cent pension for retired employees of the National Bank of Pakistan (NBP) was statutory in nature and they were entitled to it.

A three-member bench headed by Justice Ejaz Afzal after hearing arguments of the NBP and its officers reserved the judgment in June 2017. The court held that the 30-11-1977 notification issued by the federal government in terms of Section 20 of the Bank Nationalisation Act was statutory in nature.

The apex court noted that the Board of Directors of the NBP after the dissolution of the Pakistan Banking Council became more autonomous and independent in managing the banking and determining the terms and conditions of services of the officers and executives of the bank. It reduced pension from 70 per cent to 33 per cent.

The board in exercise of such powers introduced under circular No 3799 dated 16-06-1999 revising the pay structure bringing substantial increase in the salaries of the officers and the executives of the bank. It, however, had not been given power under Section 11 of the Act to rescind, replace or repeal a statutory dispensation already in force.

The counsel of the retired employees had argued that the reduction in pension from 70 per cent to 33 per cent could not be justified under any principle of law and jurisprudence when the recommendation of the Pay Commission, orders of the Banking Council, notification issued by the Finance Division, the government of Pakistan and the circular issued by the bank nowhere limited their efficacy in terms of time.

They stated that if the terms and conditions regulating pension have their origin in a contract, the Board of Directors could not unilaterally amend them without the consent of the stakeholders. He also said that where pension is not only a vested but a recurring right, laches or any other inaction for a short span of time cannot extinguish it.

Failure to publish the notification in the official gazette cannot shear it of its efficacy or make it non-statutory, they further said.