SIDBI Pension Cut-Off Date and Denial of Arrears Upheld as Valid Policy | HC

Case Details: Sandeep Lahiri Choudhury vs. Small Industries Development Bank of India [2026] 183 taxmann.com 519 (HC-Bombay)

Judiciary and Counsel Details

• R.I. Chagla & Advait M. Sethna, JJ.
• Ramesh Ramamurthy, Saikumar Ramamurthy & Aalim N. Pinjari for the Petitioner.
• Anand Pai, Rahul Sanghavi & Ajinkya Kadam for the Respondent.

Facts of the Case

In the instant case, the petitioners were retired employees of SIDBI who sought pensionary benefits from their respective dates of superannuation/retirement with arrears. SIDBI had introduced Pension Regulations in 1993, which the petitioners asserted were not brought into force due to non-compliance with Section 52 of the SIDBI Act.

On 29 June 2022, SIDBI issued the impugned Circular. Clause 3(VIII) of the Circular provided that retired employees who exercised option and refunded SIDBI’s PF contribution with accrued interest plus simple interest at 3% p.a. would be eligible for full pension from 1 July 2022 up to the date for commutation. Clause 3(IX) stated eligible retired employees would become eligible for pension with effect from 1 July 2022 and no arrears would be paid for the period before 1 July 2022.

The petitioners, through advocates, filed a representation on 29 June 2022, objecting to these clauses, and thereafter filed the present writ petition seeking the quashing of Clauses 3(VIII) and 4(IX) and directions to pay pension from the dates of superannuation/retirement, with arrears.

It was noted that where serving/retired employees of SIDBI as well as eligible family members of employees who had passed away were given ample opportunities to opt for pension and petitioners having exercised their option to opt for pension scheme by switching over from CPF, challenge by petitioners to clauses of impugned circular issued by SIDBI on 29-6-2022 fixing a cut-off date for eligible retired employees to become eligible for pension w.e.f. 1-7-2022.

Further, it was noted that no arrears of pension would be paid for the period before 1-7-2022, which could not be held to be arbitrary, illegal, or discriminatory.

High Court Held

The High Court observed that a similar issue had been considered by the Supreme Court in Reserve Bank of India v. M.T. Mani [2025] 174 taxmann.com 1148(SC), where it was held that refusing a grant of pension retrospectively i.e. before the cut-off date from the date of superannuation/retirement could not be held to be arbitrary or illegal or discriminatory in nature.

The High Court held that the present pension option had resulted in a financial burden of around Rs. 96 crores, and that an additional burden of Rs. 19.67 crores would be incurred for 28 petitioners alone. There were 150 such pension optees, and a mere 18.67 per cent of pension optees were before the Court. Thus, allowing eligible retired employees of SIDBI to opt for pension from their date of superannuation/retirement, along with payment of arrears arising therefrom, would create a financially unsustainable situation.

Therefore, the impugned clauses were not arbitrary, illegal, or discriminatory, and were a valid policy decision. Thus, there was no merit in the instant petition, and the same was to be dismissed.

List of Cases Reviewed

• Reserve Bank of India v. M.T. Mani [2025] 174 taxmann.com 1148 (SC)/2025 SCC Online SC 1217 (para 16) followed

List of Cases Referred to

• Sandeep Lahiri Choudhury v. Small Industries Development Bank [W. P. No. 2698 of 2017, dated 24-8-2018] (para 3)
• Praveen Kumar Agarwal v. Small Industries Development Bank of India [W. P. No. 104 of 2020, dated 24-6-2022] (para 3)
• Reserve Bank of India v. M.T. Mani [2025] 174 taxmann.com 1148 (SC) (para 4)
• M.T. Mani v. Reserve Bank of India [W. A. No. 1037 of 2023, dated 18-12-2023] (para 4)
• Union of India v. M.K. Sarkar [2010] 2009 taxmann.com 1974 (SC) (para 11)
• Union of India v. L.V. Vishwanathan (1998) 1 SCC 479 (para 14).