Bharat Bhushan vs Union Of India & Ors.
2013 Latest Caselaw 1137 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                           W.P.(C) No. 7159/2001
%                                                          7th March, 2013

BHARAT BHUSHAN                                                  ...... Petitioner
                            Through:     Mr. Sanjay Ghose, Mohd. Farruqh and Mr.
                                         Nitin Bhardwaj, Advocates.


                            VERSUS

UNION OF INDIA & ORS.                                           ...... Respondents

                   Through:              Mr. Rajiv Kapur and Ms. Vatsala Rai,
                                         Advocates.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    To be referred to the Reporter or not? Yes


VALMIKI J. MEHTA, J (ORAL)

1. The present writ petition is filed by Sh. Bharat Bhushan, an ex-

employee of the respondent no.2-State Bank of India, who took voluntary

retirement under a circular dated 29.07.1999. The claim of the petitioner is that the

petitioner has got lesser VRS benefits inasmuch as the petitioner has been given

VRS benefits taking him on a lower post than the actual post, which he was

working in the grade being Officer Middle Management Grade Scale II w.e.f

1.01.1991.

2. The basis dispute in the present case centers around the aspect of

entitlement to further promotion of an employee of the respondent no.2-bank,

petitioner being one such employee, being dependant upon completion of an

assignment in a rural or a semi urban area. In terms of the policy of the respondent

no.2-bank since certain circumstances existed, adhoc promotions were granted

without employees‟ completing the period of posting of 2 years in the rural or semi

urban area, subject however to the employee given an undertaking that he will

complete the posting in the rural or semi urban area. The petitioner did take the

promotion, and which was admittedly an adhoc promotion, by giving the following

undertaking:-

"The Chief General Manager, State Bank of India, New Delhi Dear Sir STAFF: SUPERVISING PROMOTION TO MMG SCALE II RURAL/SEMI-URBAN SERVICE: SEPARATE DESPENSATION

I hereby undertake to complete the required period of service as per the norms laid down by the Bank in a rural and/or semi-urban branch immediately after my posting.

2. I also undertake to forgo the promotion in the event of my failing to complete the required period of service at a rural/semi-urban branch for reasons attributable to me.

              Yours faithfully,
                          (Signature)
              Name of Officer: Bharat Bhushan

               Grade:        MM II
              Place of Posting:   Service Branch"

3. Though this undertaking is undated obviously it must have been given

prior to the petitioner taking the adhoc promotion to Officer Middle Management

Grade Scale II.

4. Petitioner, pursuant to the VRS scheme dated 29.7.1999 applied for

VRS, however, admittedly, till that date, he had not completed the period of two

years posting in rural/semi urban area, and six months were still remaining.

Petitioner was given voluntary retirement and the petitioner was paid his terminal

dues, however, he was paid the terminal dues not as the petitioner being an Officer

Middle Management Grade Scale II, but one scale lower being Officer Junior

Management Grade Scale-I, and from which post, the petitioner had taken adhoc

promotion subject to giving of an undertaking to complete the rural/semi urban

assignment of two years.

5. It is undisputed before me that the amount which was received by the

petitioner towards the terminal benefits on account of his VRS application being

accepted, was not taken by the petitioner by disputing the quantum of payment and

by reserving his rights that the amount received by the petitioner was not as per his

legal entitlement requiring the monetary benefits to be as per the petitioner being

an Officer of Middle Management Grade Scale-II.

6. On behalf of the petitioner, two principal points have been argued.

The first one is that VRS scheme is a contract between an employee and the

employer organization, and since the petitioner applied for VRS on the basis of his

being an Officer Middle Management Grade Scale II, the contract of VRS had

necessarily to be accepted by the respondent no.2-bank on this basis and not on

taking the petitioner on the lower grade i.e the respondent-bank could not have

given VRS benefits by taking the petitioner in a lower scale of Junior Management

Grade Scale-I. The second argument is based upon para 3(vii) of the circular dated

29.7.1999 of the respondent no.2-bank, and this para as per the petitioner means

that the respondent-bank should not have permitted resignation unless the

employee mandatorily completes the rural/semi urban assignment, and if, in spite

of the same VRS is given, it will have to be in terms of the grade scale pay of the

higher grade where adhoc promotion is given.

7. So far as the first aspect is concerned, I cannot agree with the

contention raised on behalf of the petitioner that the application given by an

employee such as the petitioner can only form the basis of the contract of VRS and

not the response thereto given by the respondent no.2/employer. This is for the

reason that no doubt the application for VRS is an offer under the Contract Act,

1872 which has to be accepted by the respondent no.2-bank/employer, however,

the respondent no.2-bank/employer can always give a counter offer by paying a

different amount instead of the amount as is claimed by an employee in his VRS

application. This counter offer would be different from the terms of the VRS

application and it would be perfectly open for an employee not to accept this

counter offer and refuse the lesser payment, and in which circumstances, there

would be no conclusion of the contract of VRS. However, if an employee, and

which the petitioner has done in the present case, accepts lesser VRS benefits/

amounts being credited to his account, especially without raising any objection in

the acceptance of VRS benefits, the contract is completed at this stage of receiving

the VRS benefits and the contract is not as per the application made for voluntary

retirement.

In fact, the principle of estoppel will also apply against the petitioner and the

petitioner is estopped from claiming any higher amounts inasmuch as he accepted

the VRS amounts given by the respondent no.2/employer without any protest and

without reserving any legal rights to claim a higher amount. I may note that in this

regard, the respondent No.2-bank in its counter-affidavit has specifically stated that

the petitioner having withdrawn the VRS benefits settled in his favour from his

account shows his consent and completion the contract by accepting of the counter

offer of the bank of a lesser amount instead of the amount as claimed by the

petitioner/employee. This aspect of contract being completed on the petitioner

receiving a lesser VRS amount, as also the issue of estoppel becomes more than

clear when we read para 8(iii) of the VRS Scheme, which reads as under:-

"iii) The employees seeking retirement under VRS will not be entitled to dispute the payments received under the Scheme on any ground whatsoever. The retiring staff members and/or their nominee or legal heirs shall have no right/claim/demands against the Bank on any matter relating to the Scheme."

8. A reference to the aforesaid para 8(iii) makes it abundantly clear that

an employee who retires under a Voluntary Retirement Scheme will not be entitled

to dispute the payment received under the scheme on any ground whatsoever. This

scheme which contained this specific para is the scheme under which the

petitioner had applied and taken VRS, and therefore, the petitioner is clearly barred

from claiming any entitlement to dispute the payment received under the VRS.

9. In para 34 of A.K.Bindal & Anr. vs. Union of India & Ors., 2003 (5)

SCC 163, it is held that on accepting voluntary retirement, an employee cannot

turn back thereafter to claim other amounts except VRS benefits received. This

para 34 reads as under:-

34. This shows that a considerable amount is to be paid to an employee ex-gratia besides the terminal benefits in case he opts for voluntary retirement under the Scheme and his option is accepted. The amount is paid not for doing any work or rendering any service. It is paid in lieu of the employee himself leaving the services of the company or the industrial establishment and foregoing all his claims or rights in the same. It is a package deal of

give and take. That is why in business world it is known as 'Golden Handshake'. The main purpose of paying this amount is to bring about a compete cessation of the jural relationship between the employer and the employee. After the amount is paid and the employee ceases to be under the employment of the company or the undertaking, he leaves with all his rights and there is no question of his again agitating for any kind of his past rights, with his erstwhile employer including making any claim with regard to enhancement of pay scale for an earlier period. If the employee is still permitted to raise a grievance regarding enhancement of pay scale from a retrospective date, even after he has opted for Voluntary Retirement Scheme and has accepted the amount paid to him, the whole purpose of introducing the Scheme would be totally frustrated.

Thus the first argument raised on behalf of the petitioner is

accordingly rejected.

10. The second argument raised by the petitioner on the basis of para

3(vii) of the Circular dated 29.7.1999 can be understood if we refer not only to

such para but also the other related paras of this circular dated 29.7.1999. The

relevant portions of this circular read as under:-

       "      CIRCULAR MEMO NO.CDO:PER: 56 OF 1999-2000 C.O.
              LETTER NO.CDO/PMCIR/25 DATED 11TH JUNE 1999
       To:-                                             FROM:-
       ALL BRANCHES&                           PERSONNEL & HRD DEPTT.
       OFFICES IN DELHI                        STATE BANK OF INDIA.
       CIRCLE                                  LHO.NEW DELHI.

                                               DATED: 29 JUL 1999

- -----------------------------------------------------------------

       STAFF:       SUPERVISING
       NON-COMPLETION OF RURAL/SEMI URBAN ASSIGNMENTS
       WITHDRAWAL OF PROMOION

In terms of the Government of India guidelines, the officers promoted to MMGS II/III which effect from the 1st August, 1988 had to complete 2/3 years Rural/Semi-Urban (R/SU) assignments as a necessary condition for promotion. Some of the officers could not be posted for completion of the same due to various factors and were promoted to higher grades, based on the undertakings given by them that they would complete the R/SU assignment immediately after their posting or forego the promotion in the event of their failing to complete the required period of service at rural/semi- urban branch for reasons attributable to them.

2. Due to the change in circumstances over a period of time, some of these officers are not willing to go in for completion of these assignments now, some have even given in writing that their promotion may be withdrawn, some have submitted papers for voluntary retirement and some others have stated that they are not in a position to go for R/SU posting immediately.

3. In view of the foregoing and the affidavit filed in the Supreme Court by the Bank that the concerned officers (promoted to MMGS-III) shall be sent for R/SU assignments and till such officers complete the said R/SU assignments their promotion is to be treated as adhoc, it has been decided by the Executive Committee of the Central Board at its meeting held on the 3 rd June 1999, to proceed in the matter as under:-

i) If an officer is unable to complete the mandatory/R/SU assignment for any reason attributable to him/her, his/her promotion will have to be withdrawn and he/she will not be permitted to officiate in higher grade(s). This withdrawal can go back to two/three grades also i.e. to the grade in which the officer we when he/she gave the undertaking for completing the amount by assignment.

ii) An officer, not willing to go for R/SU assignment due to changed circumstances, will make a request in writing giving the reasons for withdrawal of promotion. In case no request is made in writing by the officer and he/she doesn‟t go for R/SU assignment, his/her promotion will be withdrawn as it was subject to the completion of the R/SU assignment, in terms of his/her undertaking.

iii) The officer can be considered for promotion subsequently with effect from a prospective date, if otherwise eligible, as per the promotion policy/placement norms in vogue at the material time, if he/she completes all the mandatory assignments beforehand. Minimum period for eligibility for considering him/her for next promotion will be two years as has been laid down in the debarment policy.

iv) Although the Bank has not a right to do so, as a special case, incremental salary, allowance and perquisites may not be recovered from the officers whose promotions have been withdrawn....... .

vi) Deferment in position at R/SU centre without withdrawal of promotion can be granted only on medical grounds pertaining to self, subject to examination by a competent medical board constituted by the Bank. This deferment would be for a period not exceeding 6 months. However, in such a case, if the transfer order was issued earlier and the officer had refused to complete the assignment at that particular point of time, his/her case would be treated just like other cases.

vii) If an officer opts for voluntary retirement/resignation, the Bank would not permit such retirement/resignation unless he/she either completes the mandatory R/SU assignment or makes a request in writing to withdraw his/her promotion(s) as he/she cannot complete R/SU assignment and be retired. In case the officer applies for retirement/resigns, without making a request in writing for withdrawal of promotion(s), the Bank may withdraw his/her promotion(s) based on the undertaking already given and thereafter permit the officer to retire/resign." (underlining added).

11. In my opinion para 3(vii) has to be read with the earlier paras of the

circular and not independently as if an employee gets the higher emoluments of a

higher grade unless there is a specific order/action of the bank of withdrawing of

the promotion. Even if para 3(vii) is read independently as urged on behalf of the

petitioner, yet this paragraph does not state that it is mandatory for the respondent

no.2/employer to seek a request in writing for withdrawal of the promotion by a

person and only thereafter VRS benefit for a lower post can be given failing which

automatically VRS benefits of a higher post has to be given. When we read the

first line of this para-3(vii), this line shows that a person will not be entitled to

VRS unless he completes the mandatory rural/semi urban assignment or makes a

request in writing to withdraw his promotion because he cannot complete the

rural/semi urban assignment. The later part of this first line cannot be read in

isolation to argue that if there is no request for withdrawal or promotion, VRS

benefits will automatically be given as if the employee has been confirmed as

promoted. To read so, would be to not only do violence to the language, but take

away the intention of this line and the earlier paras of the circular, which is

basically to ensure that VRS benefits cannot be given unless the mandatory

rural/semi urban assignment is complete failing which the benefit of the higher

promotion is withdrawn, and it cannot be that if the request for a higher promotion

is not withdrawn, merely on that basis automatically there will be a confirmed

higher promotion at the scale of pay of which post the employee will be granted

VRS benefits.

In fact, whatever doubt which exists is removed from the second line of para

3(vii) which specifically provides that in case the officer applies for retirement

without making a request in writing for withdrawal of a promotion, bank may

withdraw the promotion of an employee based on the undertaking already given

and thereafter permit the officer to retire/resign. The word „retirement‟ is more

than comprehensive to include a voluntary retirement and it is not possible to

confine the expression „retirement‟ as is urged on behalf of the petitioner only to a

normal retirement and not voluntary retirement. In fact the interpretation sought to

be given on behalf of the petitioner to the word „retirement‟ is without any basis

because the issue is if retirement includes retirement in the normal course or by

seeking voluntary retirement, and therefore, I refuse to give restricted

interpretation to the expression „retirement‟ as is urged on behalf of the petitioner

that it should be taken as normal retirement only and not a retirement under the

VRS.

12. In view of the above, I do not find any merit in the petition, which is

accordingly dismissed, leaving the parties to bear their own costs.

MARCH 07, 2013                                      VALMIKI J. MEHTA, J.
ib