Jai Singh Chauhan vs Punjab National Bank And Ors.
2001 Latest Caselaw 369 Bom

JUDGMENT

A.P. Shah, J.

1. Rule. Respondents waive service. By consent. Rule is made returnable forthwith.

2. Whether an employee who has applied for voluntary retirement under the Voluntary Retirement Scheme (VRS) introduced by the respondent No. 1 Punjab National Bank, is competent to withdraw the same before its acceptance by the Bank in accordance with Clause 10 of the scheme is the short question that falls for consideration in this petition under Article 226 of the Constitution of India.

3. The petitioner was appointed in clerical grade in the erstwhile New Bank of India with effect from February 10, 1979. He was later on promoted as "Officer in Junior Management Grade" (JMG-1). In 1991, the petitioner was chargesheeted for threatening and abusing a peon of the bank and domestic enquiry was initiated against him. In the mean time, New Bank of India merged with the respondent No. 1 Bank. By order dated July 4, 1995, a major penalty of "reversion to a lower post from JMG Scale to clerical scale" was imposed on the petitioner. Being aggrieved the petitioner has filed Writ Petition being Writ Petition No. 2066 of 1996 in this Court which is admitted and is pending. In view of order of reversion, petitioner was posted in clerical grade at Seepz Branch, Mumbai.

4. By Circular dated January 29, 2000, respondent No. 1 Bank introduced "PNB Employees Voluntary Retirement Scheme 2000" whereunder the eligible employees could apply for voluntary retirement on the terms and conditions mentioned therein. This scheme was to remain in operation from November 1, 2000 to November 30, 2000. Annexure-1 to the Circular contains the terms and conditions of the scheme and as per Clause 5.1 all permanent full time employees of the Bank were eligible to seek voluntary retirement provided they have completed 15 years of service or 40 years of age. Clause 10.4, however, states that mere request of an employee seeking voluntary retirement under the scheme will not take effect until and unless it is accepted in writing by the Competent Authority. Clause 10.5 provides as follows:

"It will not be open for an employee to withdraw the request made for voluntary retirement under the scheme after having exercised such option".

Clause 10.6 then provides that the Competent Authority shall have absolute discretion either to accept or reject the request of an employee seeking voluntary retirement under the scheme depending upon the requirement of the Bank. It is also provided that the reasons for rejection of request by the employee seeking voluntary retirement shall be recorded in writing by the Competent Authority and acceptance or otherwise of the request of the employee seeking voluntary retirement will be communicated to him in writing.

5. The petitioner being eligible to apply under the said Scheme, applied for voluntary retirement on November 23, 2000, by submitting form duly filled in by him to the Chief Manager of respondent No. 1 Bank. Acting on the basis of the application for voluntary retirement, by order dated December 30, 2000, the petitioner was allowed to retire voluntarily from service prospectively with effect from afternoon of December 30, 2000. The said order dated December 30, 2000 reads as follows:

"1. You have offered to seek voluntary retirement from the services of the Bank vide your application dated November 23, 2000 on the terms and conditions stipulated in PNBEVRS 2000, circulated vide Personnel Division Circular No. 1755 dated September 29, 2000 which you have also accepted unconditionally and irrevocably.

2. Your above offer has been considered and accepted by the competent authority in terms of the Scheme.

3. Accordingly, you stand relieved from the services of the bank today afternoon.

4. ............"

6. In the mean time, however, the petitioner states that on account of his domestic problems and realising that it was not in his interest to retire as per the said scheme, the petitioner had changed his mind and consequently by his letter dated December 7, 2000 withdrew his application of voluntary retirement. He stated in his letter that he had dropped the idea of seeking voluntary retirement and he, therefore, requested the authorities that his request for voluntary retirement may be treated as cancelled. The petitioner, however, was not allowed to do so. The petitioner was relieved by order dated December 30, 2000.

7. The petitioner has contended before the Authorities and before this Court that in view of his letter dated December 7, 2000 seeking withdrawal of his application for voluntary retirement, the impugned order dated December 30, 2000 retiring the petitioner was illegal and invalid. The petitioner has contended that unless and until the request for voluntary retirement was accepted in writing by the Competent Authority, the same could not take effect and this being the position before the request of the petitioner for voluntary retirement was accepted in writing, it was open for the petitioner to withdraw the said request. It seems that the petitioner submitted a representation on January 5, 2001 and sought, permission to report for work. By the reply of the even date petitioner was informed that he stood relieved from the service of the Bank with effect from December 30, 2000 as his application for VRS dated November 23, 2000 has been accepted by the Authority and the same has already been conveyed to him vide letter dated December 30, 2000.

8. The facts, therefore, are that the petitioner offered to voluntarily retire from his service by application dated November 23, 2000 and according to the petitioner, his voluntary retirement could have been effective, if accepted, only from the date of acceptance thereof i.e. December 30, 2000. Before retirement could have become effective the petitioner withdrew his application by letter dated December 7, 2000, long before, according to the petitioner, the date when the retirement could have become effective. Despite the application for withdrawal dated December 7, 2000 respondent No. 1 has purported to retire the petitioner with effect from December 30, 2000. According to the petitioner, under Clause 10.4 read with Clause 10.6 retirement was to be effective from the date of acceptance of the request by the Bank. Therefore, normal rule that person can withdraw his resignation just before it is effective would apply in full force to the present case.

9. Mr. Pradhan, the learned counsel appearing for the petitioner, submitted that it is settled law that request for premature retirement, which requires the acceptance of the Competent Authority, will not be complete unless and until it is accepted by the Competent Authority and request could definitely be withdrawn before it becomes so complete. It is all the more so, in the present case, where absolute discretion is vested in the Bank to accept or not to accept the voluntary retirement. He referred to the decision of the Supreme Court in Union of India v. Gopal Chandra Mishra , Punjab National Bank v. P. K. Mittal and Shri Balaram Gupta v. Union of India and Anr. 1987 (Supp) SCC 228.

10. Per contra Mr. Dada, the learned counsel appearing for the respondents, submitted that having regard to the conditions in the VRS of which the petitioner was said to be aware and having accepted the conditions stipulated in the scheme unconditionally and irrevocably, it is not open for the petitioner to withdraw from the scheme, once the application for voluntary retirement was submitted by the petitioner. Mr. Dada submitted that Clause 10.5 of the scheme specifically provides that option once exercised would be final and the petitioner having exercised the option would have no right to withdraw the same. Mr. Dada placed heavy reliance upon the decision of the Division Bench of Himachal Pradesh High Court in J. Ram v. H.P.S.T.H.&H. Corporation Ltd. 1998-III-LLJ (Suppl)-772. He submitted that the scheme framed by the respondent Bank has statutory force and as per the scheme the option given to the employee once exercised attains finality and it is not open for the employee to withdraw from the scheme after the application for voluntary retirement is submitted. Mr. Dada also submitted that the effect of VRS was to create an irrevocable option and having exercised the option it was not open for the offerer to revoke it. In this connection, Mr. Dada referred to the decision in Mountford and Anr. v. Scott 1974 1 All ER page 248.

11. We have carefully considered the submissions of the learned counsel appearing on either side. It is well settled principle that in absence of legal, contractual or constitutional bar a "prospective" request for retirement can be withdrawn at any time before it becomes effective and it becomes effective when it operates to terminate the employment of office tenure of the resignor. This question arose in the case of Shri Satish Chandra, the then Judge in the High Court of Allahabad in Union of India v. Gopal Chandra Mishra (Supra). There the second respondent Shri Satish Chandra wrote to the President of India, on May 7, 1977, intimating his resignation from the office of Judge of Allahabad High Court, with effect from August 1, 1977. On July 15, 1977 he again wrote to the President revoking his earlier communication and commenced deciding matters in Court from February 16, 1977. A writ petition was filed by Shri Mishra, an Advocate of the said High Court, contending that once the resignation of Shri Satish Chandra has been duly communicated to the President of India in accordance with Article 217(1) Proviso (a) of the Constitution, it was final and irrevocable and that continuance of Shri Satish Chandra as a Judge of the High Court thereafter was an usurpation of public office. High Court allowed the petition holding that Shri Satish Chandra was not competent to revoke his resignation letter. On appeal, the Supreme Court held that resigning office necessarily involves relinquishment of office which implies cessation or termination of, or cutting asunder from the office A complete and effective act of resigning the office is one which severs the link of the resignor with his office and terminates his tenure. In the context of Article 217(1), this assumes the character of decisive test because the expression "resigning his office" occurs in a proviso which excepts or qualifies the substantive clause fixing the office tenure of a Judge up to the age of 62 years. It was further reiterated that in absence of legal, contractual or constitutional bar and communication in writing sent to appropriate authority by the incumbent of his intention or proposal to resign his office/post from future specified date can be withdrawn by him at any time before it becomes effective i.e. before it effectively terminates the tenure of the office/post or employment. It was held that this general rule equally applies to a Government servant and constitutional functionaries. The other peculiar aspects of Article 217 which were discussed need not detain us in the facts of the present case.

12. The Apex Court had again an occasion to consider the question as to the principle of law to be applied to case of resignation made to become effective on the expiry of a particular period or from a future date as desired by the employee in Punjab National Bank v. P.K. Mittal (Supra). It was held therein that resignation being a voluntary act of employee, he may choose to resign with immediate effect or with a notice of less than 3 months if the employer agrees to the same or he may also resign at a future date on the expiry or beyond the period of 3 months as envisaged under the governing regulation in that case, even though there is no such consent from the employer, and that it was always open to the employee to withdraw the same before the date on which the resignation could have become effective.

13. In Balaram Gupta v. Union of India, (supra) the Supreme Court held that the retirement from the Government service was to take effect at a subsequent date prospectively, the Government servant had locus penitentiae and he is at liberty and entitled to withdraw his notice of voluntary retirement. In that case the Authority concerned disallowed the appellant's request under Rule 48-A(4) under the Central Civil Services (Pension) Rules which preclude the Government Servant from withdrawing his notice "except with the specific approval of such Authority". It was held that there was no valid reason for withholding the permission by the Authority. Therefore, the appellant was held to be entitled to reinstatement with all consequential benefits.

14. This legal position has been reiterated by the Supreme Court in some recent judgments. In the case of Union of India and Anr. v. Wing Commander T. Parthasarathi AIR 2001 SC 158 : 2001 (1) SCC 158 the respondent who was a Wing Commander in the Indian Air Force applied for premature retirement and along with his application he also submitted a certificate stating that he was aware that any request made by him later for cancellation of his application for premature retirement would not be accepted. He withdrew the application for premature retirement just one day before the acceptance thereof by the Competent Authority. The Supreme Court after considering the judgments in Gopalchandra Mishra and R. K. Mittal held that the respondent had a right to revoke his application which had not been accepted by the Authority. The Supreme Court expressly rejected the argument based on the so-called policy decision that there cannot be later cancellation of the application once made for premature retirement. RAJU J. speaking for the Bench observed thus:

"The reliance placed upon the so-called policy decision which obligated the respondent to furnish a certificate to the extent that he was fully aware of the fact that he cannot later seek for cancellation of the application once made for premature retirement cannot, in our view, be destructive of the right of the respondent, in law, to withdraw his request for premature retirement before it ever became operative and effective and effected termination of his status and relation with the department. When the legal position is that much clear, it would be futile for the appellant to base their rights on some policy decision of the department or a mere certificate of the respondent being aware of a particular position which has no sanctity or basis in law to destroy such rights which otherwise inhered in him and available in law. No such deprivation of a substantive right of a person can be denied except on the basis of any statutory provision or rule or regulation. There being none brought to our notice in this case, the claim of the appellants cannot be countenanced in our hands. Even that apart, the reasoning of the High Court that the case of the respondent will not be covered by the type or nature of the mischief sought to be curbed by the so-called policy decision also cannot be said to suffer any conformity in law, to warrant our interference."

15. In Shambhu Murari Sinha v. Project and Development India and Anr. in pursuance to the scheme of voluntary retirement the appellant therein had submitted an application seeking voluntary retirement, which offer was accepted by the respondent. In the mean time, however, the appellant submitted a letter to the respondent withdrawing his earlier letter of voluntary retirement. That letter was not given effect to by the respondent. The Supreme Court allowed the employee's petition relying upon the earlier decision in the case of Gopalchandra Mishra and Balaram Gupta. To the same effect is the decision in J.N. Srivastava v. Union of India .

16. Mr. Dada was unable to show any provision in the Act, Rules or Regulations prohibiting the employee from withdrawing from the Voluntary Retirement Scheme before its acceptance by the Competent Authority. The submission of Mr. Dada that the scheme has a statutory force is totally misconceived. Merely because the scheme has been framed by the bank pursuant to the policy decision taken by the Union of India it cannot partake the colour of a statutory scheme. It is an admitted position that the scheme is not framed in exercise of powers under Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1976. Undoubtedly, the Bank has ample power to frame such scheme in exercise of general powers under Section 7(2) of the said Act, but then the scheme cannot be said to have any statutory force. The decision of Himachal Pradesh High Court in the case of J. Ram (supra) is also of no assistance to the respondents. As can be seen from the said judgment, the petitioner therein applied for VRS and request of the petitioner was accepted by the respondent Corporation before the petitioner's wife sought withdrawal of the said application. The petitioner himself applied for withdrawal much later. In these circumstances, the Division Bench came to the conclusion that there was no question of withdrawing the application once it was accepted by the Corporation. Infact, the Division Bench in Jeet Ram's case noted that it is open to an employee to withdraw the request of premature retirement as long as he continues in service and not after it was terminated. This is clear from the following observations of the Bench in para 12 of the judgment which reads as under:

"It is pertinent that it is open to an employee who has expressed his desire to retire from service and applies to his superior officer to give him requisite permission, to change his mind subsequently and ask for cancellation of permission thus obtained; but he can be allowed to do so as long as he continues in service and not after it has been terminated. (See Jai Ram v. Union of India, )".

17. We may mention that this very issue was considered by the learned single Judge of Rajasthan High Court in the context of similar scheme framed by the Bank of India wherein the learned single Judge of the Rajasthan High Court held that the conditions incorporated in the Voluntary Retirement Scheme did not have any statutory character and an employee has got a right to withdraw the application for voluntary retirement before it was accepted by the Bank. Dhundram Yadav v. Bank of India and Ors. S.B. Writ Petition No. 5580 of 2000 decided on January 19, 2001. We may mention that the above decision of the learned single Judge has been confirmed by Division Bench in appeal.

18. Mr. Dada strenuously contended that the effect of VRS was to create an irrevocable option and having exercised that option it was not open for the offerer to revoke it. Mr. Dada tried to draw support from a decision of the Chancery Division in Mountford v. Scott (supra). In that case an action was brought against the defendant claiming specific performance of the contract for the sale of property constituted by option agreement and exercise in writing of the option thereby granted and alternately for damages for breach of the contract. The defendant in that case was the owner of a dwelling house and he signed an agreement with the plaintiffs, who were the property developers, whereby, in consideration of the sum of 1 pound he granted the plaintiffs an option for a period of six months to purchase his house at the price of 10,000 pounds. The option was to be exercised by notice in writing and, it exercised, the defendant undertook to complete the contract and give vacant possession on completion. Subsequently, the defendant disclaimed the liability under the agreement. The defendant claimed that, since an option was no more than an offer coupled with the promise not to withdraw the offer during the period of option, and since equity would not specifically enforce a promise at the instance of a volunteer, the plaintiffs, having made no more than a token payment for the grant of option, were in no better position than volunteers and should be left to their remedy for damages. It was held that since the option had been validly created and the option to purchase land constituted an equitable interest in land and it was immaterial that the option has been granted gratituously or for token payment. Thus, the plaintiffs had acquired equitable interest in the defendants land at the moment when the option agreement was signed and, therefore, subject to the payment of purchase price, were entitled to a decree for specific performance.

19. We are unable to see how the above decision has any application in the facts of the present case. The contract of option is one whereby granter of the option offers to enter into what may be called a major contract with the second person and makes a separate contract to make his offer open. Usually the person to whom the granter of the option binds himself to keep the offer open is with the second person who is referred to as the option holder. The equitable doctrine that applies to the contract of option has no application to a contract of employment in Government or Public Sector Undertaking. In our opinion, condition 10.5 of Voluntary Retirement Scheme to the effect that an employee having once applied for voluntary retirement, he cannot later seek for cancellation thereof, does not affect the right of the petitioner, in law, to withdraw his application for premature retirement before it became effective i.e. before it effectively terminated the tenure of the employment or post. Such a condition in the scheme, in our opinion, cannot destroy the right of an employee which is available to him except on the basis of any statutory provision or Rule or Regulations and in absence thereof it is not permissible for the Bank to deny the petitioner right to withdraw his request for voluntary retirement before it was accepted by the Bank.

20. In the aforesaid view of the matter, we are unable to sustain the impugned order dated December 30, 2000 and January 5, 2001 retiring the petitioner from service of the bank and the same are, therefore, set aside. Rule is made absolute in terms of prayers (a), (b) and (c).