Delhi High Court
Indian Tourism Development ... vs Sri Kant Sharma on 4 July, 2011
Author: Dipak Misra
Bench: Chief Justice, Sanjiv Khanna
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment Reserved on: 5th May, 2011
% Judgment Pronounced on: July 04, 2011
+1. WP (C) No. 555/2011
INDIAN TOURISM DEVELOPMENT
CORPORATION LTD. ..... Petitioner
Through: Mr.Ujjawal K. Jha and Mr. Kanwaljit
Singh, Advocates.
Versus
SRI KANT SHARMA ..... Respondent
Through: Mr.Som Dutt Sharma and Mr.Gaurav
Bhardwaj, Advocate.
2. WP (C) No.2522/2011
SRI KANT SHARMA ..... Respondent
Through: Mr.Som Dutt Sharma and Mr.Gaurav
Bhardwaj, Advocate.
Versus
INDIAN TOURISM DEVELOPMENT
CORPORATION LTD. ..... Petitioner
Through: Mr.Ujjawal K. Jha and Mr. Kanwaljit
Singh, Advocates.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
1 Whether reporters of the local papers be allowed to see the judgment? Yes
2 To be referred to the Reporter or not? Yes
3 Whether the judgment should be reported in the Digest? Yes
WP (C) 555/2011 & 2522/2011 page 1 of 32
DIPAK MISRA, CJ
In these two writ petitions the assail is to the order dated 8.10.2010
passed by the Central Administrative Tribunal, Principal Bench (for short
the tribunal) in OA No.3616/2009 whereby the tribunal has allowed the
original application on the bedrock that the plea of acceptance of
resignation by the employer, Indian Tourism Development Corporation
Ltd. (for short the Corporation) cannot be countenanced in law and, hence,
the employee is entitled to reinstatement in service but without backwages
along with all consequential benefits including considering of his claim for
promotion to the post of Manager from the due date within a period of
two months from the date of the receipt of the order passed by it.
2. Be it noted, the Corporation has preferred W.P.(C) No. 555/2011 by
which challenge is made to the order of the tribunal, inter alia, directing
reinstatement of employee and the employee has preferred W.P.(C)
No.2522/2011 as there has been denial of backwages to him while
directing reinstatement. Regard being had to the singular order passed by
the tribunal and the inextricable link between the two writ petitions, they
were heard analogously and are being disposed of by this common order.
WP (C) 555/2011 & 2522/2011 page 2 of 32
3. The factual score, which is required to be exposited after filtering the
unnecessary details, is that the applicant in the original application before
the tribunal (hereinafter referred to as „the applicant - employee‟) had
joined the Corporation as an Accountant and was promoted as Senior
Accountant in 1994. On 16.6.1998, he was again promoted as Assistant
Manager (F&A) and was confirmed on the said post in June 1999. He was
posted as Assistant Manager (Accounts) at Hotel Ashok. On 27.11.2003, a
voluntary retirement scheme was introduced and the applicant - employee
applied for the same, but his claim was turned down. He was
recommended for officiating promotion as Manager (Accounts) by the
reviewing officer on 8.6.2007. Prior to that, on 15.9.2006, eligible
candidates for 16 posts of Manager which is a selection post were notified
and the Departmental Promotion Committee met on 14th and 19th
December, 2006. As set forth, the applicant-employee was placed at serial
no. 4 amongst the successful candidates, securing 137 marks out of 165 but
the management Corporation instead of filling 100% vacancies withheld
20% of the posts for direct recruitment. Because of the aforesaid situation,
the applicant-employee could not be promoted but the persons junior to
him, though had secured lower marks than him, were selected. This led
the applicant-employee to send a letter of request on 30.3.2007 to the
WP (C) 555/2011 & 2522/2011 page 3 of 32
Chairman-cum-Managing Director of the Corporation tendering his
resignation.
4. It was averred in the original application that when the resignation
was tendered he was called by the General Manager and was assured of
redressal of his grievances and due to that he had written a note on his
resignation letter that he did not want to pursue the matter. Despite
assurance given by the General Manager, when nothing positive ensued,
the applicant-employee feeling depressed, withdrew his note/letter giving
assurance that he would not pursue the matter and sought resignation by
writing a letter on 11.6.1997. On 18.6.2007, he was issued „No Objection
Certificate‟ to pursue part time MBA course from a University and
thereafter he performed his duties and marked his attendance. At this
stage, he received an order on 28.9.2007, whereby his resignation was
accepted despite expiry of the notice period as per the resignation
tendered on 11.6.2007 and he was advised to handover the complete
charge and to get settled his accounts. An order was passed on the same
day, postponing his relieving till a suitable candidate was posted. On
27.10.2007, he was asked to look after the charge of day-to-day functioning
of the finance and accounts, in addition to his own duties.
WP (C) 555/2011 & 2522/2011 page 4 of 32
5. It was contended before the tribunal that the resignation tendered by
the applicant-employee was on account of non-promotion and
heartburning. The initial tender resignation was not accepted and an
assurance was given to reconsider the matter of his promotion. Therefore,
the application for resignation cannot be treated as a resignation. It was
urged that it was a conditional resignation and, therefore, the Corporation
would not have accepted it.
6. The stand and stance put forth was resisted by the Corporation
contending, inter alia, that the resignation tendered by the applicant -
employee was voluntary without any condition attached to it which would
be reflectible, if letters dated 30.3.2007 and 11.6.2007 are scrutinized in
proper perspective. It was also put forth that the letter of postponement of
relieving clearly stipulate that it was being done in administrative
exigency and would not be construed as an act of the respondent
Corporation to decide against the acceptance of the resignation of the
applicant.
7. The tribunal referred to the decisions in P.K. Ramachandra Iyer Etc.
Etc. v. Union of India Etc. Etc. 1984 I LLJ SC 314 and Dr. Prabha Atri v.
State of U.P. and others, 2003 SCC (L&S) 118 and came to hold that the
WP (C) 555/2011 & 2522/2011 page 5 of 32
applicant had given three months‟ notice in advance for resignation; that
the resignation was not acted upon on intervention of C&MD who had
assured that 100% vacancies would be filled through departmental
candidates; that despite writing on the earlier resignation by the applicant
that it would not be pursued by him but realizing the assurance and
promise made by the authorities to consider his claim in right perspective
for promotion and that they having failed to live up to that, a letter written
on 11.6.2007 causing heart-burning or depression to the applicant which
had affected his working, he had withdrawn his earlier assurance not to
pursue the resignation and sought acceptance of his resignation which was
accepted on 28.9.2007; that the applicant instead of relieving immediately
was not relieved immediately but his relieving date was postponed and
admittedly he had worked upto November 2007; that his tendering of
resignation on both occasions was on account of non-promotion, which he
was deprived of and by no standards could be treated as an unconditional
voluntary request for resignation and a clear intent to relinquish the
position; that after acceptance of resignation on 28.9.2007 as the
Corporation allowed the applicant to function by virtue of postponement
of relieving date due to non-availability of a suitable substitute the
relationship of master and servant had not been severed despite
WP (C) 555/2011 & 2522/2011 page 6 of 32
acceptance of resignation and, hence, the acceptance of resignation had
become otiose; that the applicant was consciously allowed to continue for
more than two months after acceptance of the resignation and was treated
as an employee of Corporation having been paid the salary and thus, the
acceptance of resignation was not acted upon for the said period. Being of
this view, the tribunal allowed the original application and issued
directions which we have mentioned hereinbefore.
8. We have heard Mr. Ujjawal K. Jha, learned counsel appearing for the
Corporation and Mr. Som Dutt Sharma, learned counsel appearing for the
applicant - employee.
9. The central issue that emerges for consideration is whether there has
been voluntary resignation by the employee and the acceptance in the real
sense of the term by the employer. We may note with profit that the
tribunal has commenced its order on the issue of promotion and how it has
to be considered on fair and equitable basis, and in that regard placed
reliance on Union of India & another v. Hemeraj Singh Chauhan & others,
2010 (3) SCALE 272 and A. Satyanarayana & others v. S. Purushotham &
others, (2008) 2 SCC (L&S) 279, but we are disposed to think that the same
has really no nexus with the adjudication of the lis that had arisen in the
WP (C) 555/2011 & 2522/2011 page 7 of 32
Original Application and also that has crept up in these two writ petitions,
for it is not a case of conditional resignation, to which aspect we shall
advert to while dwelling upon the issue whether the Corporation has
appositely dealt with letter/s of resignation and the relationship between
the employer and employee had ceased to exist. Thus, we proceed to deal
with the communications and resultant effect thereof.
10. The first letter of resignation is dated 30th March, 2007. The said
letter reads as follows:
"To,
C & MD
ITDC Ltd.
SCOPE Complex
Core 8, 6th Floor,
7 Lodi Road,
New Delhi - 110 003
Sir,
I, Shri Kant Sharma presently working as Asstt.
Manager (B&C) in „The Ashok‟ for the last six years
against the much higher post, being dissatisfied with
the promotional policy of the corporation which
demoralizes its good workers and favour the butlers
only specially in Finance & Accounts department. I am
deeply demoralized by not getting promotion even after
putting nine years of my service in the same scale
whereas in other departments officials of much junior
service have been promoted and are now senior to me.
WP (C) 555/2011 & 2522/2011 page 8 of 32
I put best of my efforts and gave results despite of all
the odds. Now unable to work to my full potential, I
hereby submit my resignation by giving three months
advance notice.
I hope you will accept the same under intimation to
me." [Emphasis added]
11. The second resignation letter dated 11th June, 2007 reads as follows:
To,
Director (F)
ITDC Ltd.
SCOPE Complex
Core 8, 6th Floor,
7 Lodhi Road,
New Delhi-110003
Sir,
Re: RESIGNATION
Kindly refer to my resignation as per copy dated 30th
March, 2007 enclosed, submitted through General
Manager (Ashok) and further discussions held with you
on the subject matter. You know about my
performance very well throughout my carrier in ITDC.
I have been result oriented. On receipt of my
resignation, you called me in your office, praised about
my effective and efficient discharge of duties and also
conveyed that nothing unjustified has been done in the
selection process of promotions. I was pursued and
made agreed to write on my resignation that I don‟t
want to pursue the matter further. I get nothing accept
consolation.
WP (C) 555/2011 & 2522/2011 page 9 of 32
Sir, I have learnt that on the concerned file, in which my
case for promotion was being considered, the
competent authority i.e., C&MD have given the
approval for filling up cent-per-cent posts through
departmental candidates at par with other departments.
This approval was ignored and the 80:20
selection/promotion (80% for departmental) and (20%
for direct recruits) has been implemented.
I am not able to find out any convincing reasons for
depriving the fit candidates in this manner even after
successfully working for 9 long years in the same scale
and 5 years against the much higher post even after
achieving good rank in the interview. Out of frustration
and dismay in my carrier development, seeing the bleak
future & prospects in ITDC I am going into further
depressing on adaptation of different yardsticks for
promotions by the corporation. Continuous depression
is affecting my workings.
Therefore, my assurance, not to pursue the resignation
stands withdrawn and I request you to please accept
my resignation dated 30th March, 07 and relieve me
after expiry of the notice period. Hope you will do the
needful and inform me accordingly.
[Emphasis supplied]
12. On 28th September, 2007, the following order was passed by the
Management-Corporation:
"Please refer to your letter dated 11.06.2007 tendering
resignation from the post of Asst. Mgr. (A/cs), Ashok
Hotel, New Delhi.
Your resignation has been considered and I am directed
to inform you that the Competent Authority has
WP (C) 555/2011 & 2522/2011 page 10 of 32
decided to accept your resignation w.e.f. 28.9.2007
(AN).
You are advised to hand over the complete charge of
your post to Sr. Manager (A/cs), Ashok Hotel, New
Delhi and collect your dues in full and final settlement
of your accounts with this Corporation after furnishing
"No Demand Certificates" from the concerned
Department.
This issues with the approval of the Competent
Authority."
[Underlining is by us]
13. Thereafter, on 28th September, 2007 itself, a further order came to be
passed by the management. The said order reads as under:
"This is with reference to our memo of even number
dated 28.09.2007 conveying the acceptance of the
resignation of Sh. Shri Kant Sharma, Asstt. Mgr. (A/cs),
Ashok Hotel, New Delhi.
As desired by the Director (Finance), the relieving of Sh.
Shri Kant Sharma, AM (A/cs), may be postponed till a
suitable substitute is posted at Ashok Hotel."
[Emphasis added]
14. On 30th November, 2007, the petitioner was relieved with effect from
that date and he was directed to submit No Demand Certificates for
settlement of his dues. It is urged by the learned counsel for the
Corporation that the resignation was accepted as per the communication
WP (C) 555/2011 & 2522/2011 page 11 of 32
dated 28th September, 2007 but relieving from the post was postponed
awaiting to get a suitable substitute and, hence the tribunal has fallen into
error by recording that the resignation tendered by the applicant was not
accepted by the Corporation. It is also contended by him that the tribunal
has faulted by treating the resignation as a conditional one inasmuch as
the petitioner had submitted the resignation because of the discontent with
regard to his non-promotion. We have already indicated earlier that the
issue of promotion is totally immaterial as the factual matrix would unfurl
that the correspondences relating to resignation do not postulate any
condition. Hence, what is required to be scrutinized is whether there has
been lawful resignation and lawful acceptance.
15. It is noteworthy that there has been no dispute with regard to the
facts. To have a complete picture, we have reproduced the contents of the
documents to understand the import and purport of the communications
made between the parties. On a perusal of the first resignation letter dated
30th March, 2007, we do not perceive the same to be a conditional
resignation. What has been stated by the employee is that he was unable
to work to his full potential and, therefore, he submitted his resignation by
giving three months advance notice. He repeated the same on 11th June,
WP (C) 555/2011 & 2522/2011 page 12 of 32
2007 again tendering his resignation with three months notice. That was
accepted on 28th September, 2007 but thereafter he was not relieved for
almost two months. As is revealed from the pleadings, the employee was
paid the retiral dues on 7th October, 2008 amounting to Rs.3,08,303/-. The
said cheque was accepted and encashed. The employee also filed an
application on 30th January, 2009 before the controlling authority under the
Payment of Gratuity Act, 1972 for payment of Rs.47,132.30 towards the
interest on the amount of gratuity paid. Under these circumstances, it is
required to be seen whether there has been acceptance of resignation and
how the applicant-employee had accepted it.
16. Keeping in view the aforesaid scenario, we think it appropriate to
refer to certain authorities in the field which relate to the concept of
voluntary resignation and when it takes effect. In Moti Ram v. Param
Devi and Anr., (1993) 2 SCC 725, the Apex Court while dealing with the
concept of resignation has held thus:
"As pointed out by this Court 'resignation' means the
spontaneous relinquishment of one's own right and in
relation to an office, it connotes the act of giving up or
relinquishing the office. It has been held that in the
general juristic sense, in order to constitute a complete
and operative resignation there must be the intention to
give up or relinquish the office and the concomitant act
WP (C) 555/2011 & 2522/2011 page 13 of 32
of relinquishment may take different forms or assume a
unilateral or bilateral character, depending on the
nature of the offence and the conditions governing it.
(See : Union of India v. Gopal Chandra Misra, AIR 1978
SC 694 : 1978 Lab IC 660 : [1978 (1) SLR 521 (SC)]. If the
act of relinquishment is of unilateral character, it comes
into effect when such act indicating the intention to
relinquish the office is communicated to the competent
authority. The authority to whom the act of
relinquishment is communicated is not required to take
any action and the relinquishment takes effect from the
date of such communication where the resignation is
intended to operate in prasenti. A resignation may also
be prospective to be operative from a future date that in
that event it would take effect from the date indicated
therein and not from the date of communication. In
cases where the act of relinquishment is of a bilateral
character, the communication of the intention to
relinquish, by itself, would not be sufficient to result in
relinquishment of the office and some action is required
to be taken on such communication of the intention to
relinquish, e.g. acceptance of the said request to
relinquish the office, and in such a case the
relinquishment does not become effective or operative
till such action is taken. As to whether the act of
relinquishment of any office is unilateral or bilateral in
character would depend upon the nature of the office
and conditions governing it."
17. In Prabha Atri (Dr.) v. State of U.P., 2003 SCC (L&S) 118, the
appellant who was working as an Anaesthetist was asked for an
explanation for certain lapses committed by her and she was put under
suspension. On receipt of the said memo, the appellant replied to the
Secretary of the Hospital that she had already clarified her position
WP (C) 555/2011 & 2522/2011 page 14 of 32
verbally. After so stating, she further added that the letter issued by the
authority was uncalled for and should be withdrawn since she has worked
in the best interest of the patients and instead of taking a lenient view, he
had opted to punish her. Towards the end, she commented, "if the
foregoing is not acceptable to you then I have no option left but to tender my
resignation with immediate effect". Thereafter, the appellant was informed
that the suspension order could not be withdrawn since her explanation
was not found to be satisfactory and on that day, a separate order was
passed accepting the resignation and dropping the domestic enquiry. In
that context, their Lordships referred to the concept whether the letter
written by the appellant could be said to meant or amounted to a letter of
resignation or merely an expression of her intention to resign. In factual
backdrop, their Lordships referred to the Words and Phrases (Permanent
Edn.) Vol.37, at p.476, wherein it has been stated thus:
"To constitute a „resignation‟, it must be unconditional
and with an intent to operate as such. There must be an
intention to relinquish a portion of the term of office
accompanied by an act of relinquishment. It is to give
back, to give up in a formal manner, an office."
Thereafter, their Lordships proceeded to state as follows:
WP (C) 555/2011 & 2522/2011 page 15 of 32
At p.474 of the very same book, it is found stated:
"Statements by club's President and corresponding
Secretary that they would resign, if constant bickering
among members did not cease, constituted merely
threatened offers, not tenders, of their resignation." It is
also stated therein that "A 'resignation' of a public office
to be effective must be made with an intention of
relinquishing the office accompanied by an act of
relinquishment". In the ordinary dictionary sense, the
word "resignation" was considered to mean the
spontaneous relinquishment of one's own right, as
conveyed by the maxim: Resignatio est juris proprii
spontanea refutatio (Black's Law Dictionary, 6th Edn.). In
Corpus Juris Secundum, Vol. 77, p.311, it is found
stated:
"It has been said that 'resignation' is a term of
legal art, having legal connotations which
describe certain legal results. It is
characteristically, the voluntary surrender of a
position by the one resigning, made freely and
not under duress and the word is defined
generally as meaning the act of resigning or
giving up, as a claim, possession or position."
8. In P.K. Ramachandra Iyer v. Union of India, (1984) 2
SCC 141 : 1984 SCC (L&S) 214, this Court had an
occasion to consider the nature and character of a letter
written by one of the petitioners in that case who after
stating in the letter that he has been all along patiently
waiting for the redressal of his grievance, yet justice has
not been done to him and
"as such, after showing so much patience in the
matter, I am sorry to decide that I should resign
from the membership of the Faculty in protest
against such a treatment and against the
discrimination and victimization shown to me by
the Head of the Division in the allotment of
WP (C) 555/2011 & 2522/2011 page 16 of 32
students of 1968 and 1969 batches and
departmental candidates". (SCC p.172, para 34)
In that context, this Court observed that the callous and
heartless attitude of the Academic Council in seizing an
opportunity to get rid of him by treating the said letter
to be a letter of resignation when really he was all along
making representations seeking justice to him and out
of exasperation the said person wrote that letter stating
that the only honourable course left open to him was to
resign rather than suffer (SCC p.172, para 34).
After so stating, their Lordships referred to the decision in Moti
Ram (supra) and came to hold as follows:
"....To constitute a "resignation", it must be
unconditional and with an intention to operate as such.
At best, as observed by this Court in the decision in P.K.
Ramachandra Iyer (supra) it may amount to a threatened
offer more on account of exasperation, to resign on
account of a feeling of frustration born out of an idea
that she was being harassed unnecessarily but not, at
any rate, amounting to a resignation, actual and simple.
The appellant had put in about two decades of service
in the Hospital, that she was placed under suspension
and exposed to disciplinary proceedings and proposed
domestic enquiry and she had certain benefits flowing
to her benefit, if she resigns but yet the letter dated 9-1-
99 does not seek for any of those things to be settled or
the disciplinary proceedings being scrapped as a sequel
to her so-called resignation. The words "with
immediate effect" in the said letter could not be given
undue importance dehors the context, tenor of language
used and the purport as well as the remaining portion
of the letter indicating the circumstances in which it was
written. That the management of the hospital took up
WP (C) 555/2011 & 2522/2011 page 17 of 32
such action forthwith, as a result of acceptance of the
resignation is not of much significance in ascertaining
the true or real intention of the letter written by the
appellant on 9-1-1999. Consequently, it appeals to be
reasonable to view that as it in the case reported in P.K.
Ramachandra Iyer (supra) the respondents have seized
an opportunity to get rid of the appellant the moment
they got the letter dated 9-1-1999, without due or proper
consideration of the matter in a right perspective or
understanding of the contents thereof. The High Court
also seems to have completely lost sight of these vital
aspects in rejecting the writ petition."
[Emphasis supplied]
18. The aforesaid authorities lay down what exactly constitutes
resignation and under what circumstances it gets hedged by any condition
or earns the status of a conditional one or constitutes a threat to resign but
not the intention to resign. As has been held in the case of Prabha Atri
(supra), the appellant therein had really not expressed her intention to
severe the relationship with the employer by resigning but had entered
into communication with the authorities which had the character of stating
the grievance. Their Lordships have observed that the tenor and purport
of the language are to be seen whether there has been real resignation or
not. The communication has to be considered from the right perspective
and apposite understanding of the contents thereof. The Apex Court has
WP (C) 555/2011 & 2522/2011 page 18 of 32
further held that undue significance should not have been given to the
terms "with immediate effect".
19. In the case at hand, as has been perceived, the first letter of
resignation was submitted with clear-cut statement that the respondent-
employee was unable to work to his full potential and, therefore, he was
submitting his resignation by giving three months advance notice. True it
is, he had made a grievance that his case for promotion was not considered
and the juniors had become senior to him but he had expressed his view in
categorical terms to resign. In the second communication dated 11th June,
2007, he has referred to his earlier letter of resignation dated 30 th March,
2007 and the discussions held with the General Manager and stated that
his assurance not to pursue the resignation stands withdrawn and his
resignation dated 30th March, 2007 should be accepted and he should be
relieved after expiry of the notice period. Thus, the intention expressed
and the language employed are absolutely clear and categorical. In view
of the aforesaid, we have no hesitation in holding that the resignation was
absolutely unconditional and the decisions rendered in Prabha Atri
(supra), Moti Ram (supra) and P.K. Ramachandra Iyer (supra) would not
apply to the case at hand, being distinguishable on facts.
WP (C) 555/2011 & 2522/2011 page 19 of 32
20. Presently, we shall proceed to refer to certain rulings about the
factum of resignation, belated acceptance of resignation, concretization of
resignation and the effect of continuance in service after acceptance of
resignation. That apart, also we shall fruitfully refer to the authorities to
highlight when exactly the jural relationship between the employer and
the employee comes to an end.
21. In North Zone Cultural Centre & Anr. v. Vedpathi Dinesh Kumar,
(2003) 5 SCC 455, the Apex Court scanned the language employed in the
letter of resignation and referred to the decision in Raj Kumar v. Union of
India, AIR 1969 SC 180, wherein it has been held thus:
"When a public servant has invited by his letter of
resignation the determination of his employment, his
service normally stands terminated from the date on
which the letter of resignation is accepted by the
appropriate authority and, in the absence of any law or
rule governing the conditions of his service, to the
contrary, it will not be open to the public servant to
withdraw his resignation after it is accepted by the
appropriate authority. Undue delay, in intimating to
the public servant concerned the action taken on the
letter of resignation, may justify an inference that
resignation has not been accepted."
Thereafter, their Lordships opined that non-communication of the
acceptance does not make the resignation inoperative, provided there is in
WP (C) 555/2011 & 2522/2011 page 20 of 32
fact withdrawal before the acceptance. In the said case, there was belated
communication of 13 days and in that context, their Lordships stated thus:
"...The communication was on 1-12-1988 about 13 days
thereafter which delay, in our opinion, is not an undue
delay so as to make us draw an inference that there has
been no acceptance of the resignation. Even the fact that
in the meantime the respondent either attended duty or
signed the attendance register will be of no assistance to
claim his resignation had not taken effect. Even
otherwise the appellants have urged that because there
was no responsible officer in the headquarters from 18-
12-1988 after respondent's resignation was accepted till
1-12-1988 and the respondent took advantage of the
same and marked his attendance and such attendance
cannot be treated as lawful attendance in view of the
acceptance of his resignation on 18-11-1988. We agree
with this contention of the appellant."
22. In Power Finance Corporation Ltd. v. Pramod Kumar Bhatia, (1997)
4 SCC 280, the Apex Court has opined that unless the employee is relieved
of the duty after acceptance of the voluntary retirement or resignation,
jural relationship of the employee and the employer does not come to an
end. In the said case, as the order accepting the voluntary retirement was
a conditional one, and before the conditions could be complied with, the
appellant-employer had withdrawn the scheme. In that context, their
Lordships held thus:
WP (C) 555/2011 & 2522/2011 page 21 of 32
"7. It is now settled legal position that unless the
employee is relieved of the duly, after acceptance of the
offer of voluntary retirement or resignation, jural
relationship of the employee and the employer does not
come to an end. Since the order accepting the voluntary
retirement was a conditional one, the conditions ought
to have been complied with. Before the conditions could
be complied with, the appellant withdrew the scheme.
Consequently, the order accepting voluntary retirement
did not become effective. Thereby no vested right has
been created in favour of the respondent. The High
Court, therefore, was not right in holding that the
respondent has acquired a vested right and, therefore,
the appellant has no right to withdraw the scheme
subsequently."
23. In J.N. Srivastava v. Union of India and another, (1998) 9 SCC 559,
the question that emerged for consideration was whether the appellant
was entitled to withdraw the voluntary retirement notice of three months
submitted by him which was to come into effect from a particular date.
Their Lordships referred to the decision in Balram Gupta v. Union of
India, 1987 Supp SCC 228 and came to hold that the appellant had the locus
poenitentiae to withdraw the proposal for voluntary retirement before the
date mentioned.
24. In Bank of India & Ors. v. O.P. Swarankar etc., 2003(1) SLR 1, the
Apex Court while dealing with the validity of the scheme of the Bank of
India and other banks referred to the decision in Union of India v. Gopal
WP (C) 555/2011 & 2522/2011 page 22 of 32
Chandra Misra, 1978 (1) SLR 521 wherein the concept of resignation in
praesenti and the deferred date was dealt with. Be it noted, in the said
case their Lordships have referred to the decision in Jai Ram v. Union of
India, AIR 1954 SC 584 wherein it has been held thus -
"It may be conceded that it is open to a servant, who
has expressed a desire to retire from service and applied
to his superior officer to give him the requisite
permission, to change his mind subsequently and ask
for cancellation of the permission thus obtained; but, he
can be allowed to do also as long as he continues in
service and not after it has terminated."
Thereafter, the Apex Court referred to the decisions in Balram
Gupta (supra), Pramod Kumar Bhatia (supra) and J.N. Srivastava (supra)
and eventually came to hold as follows: -
"90. For the reasons aforementioned, we direct that:
1. The appeals preferred by the Nationalised
Banks arising from the High Courts are
dismissed except the cases where the
concerned employees have accepted a part
of the benefit under the scheme; However,
in respect of such of the employees who
despite acceptance of a part of the
retirement benefit under the scheme had
continued under the orders of the High
Court and has retired on attaining the age
of superannuation, this order shall not
apply;
WP (C) 555/2011 & 2522/2011 page 23 of 32
2. The appeals filed by the State Bank of India
are allowed;
3. The appeals arising from the judgments of
the Uttaranchal High Court are allowed
and the judgments of the said High Court
are set aside;
4. The appeals arising from the judgments of
the Punjab and Haryana High Court in
relation to ten writ petitions which were
filed by the employees for a direction upon
the bank that the benefits under the scheme
be paid to them are set aside and the
matters are remitted to the High Court for
consideration thereof afresh on merits and
in accordance with law."
25. In Srikant S.M. v. Bharath Earth Movers Ltd., (2005) 8 SCC 314,
after the purported acceptance of the resignation of the appellant therein,
he had been granted casual leave from 5th January, 1993 to 13th January,
1993 and was informed that he would be relieved after office hours on 15th
January, 1993. In the fact situation obtaining therein, the Apex Court has
held thus -
"26. On the basis of the above decisions, in our
opinion, the learned counsel for the appellant is right in
contending that though the respondent Company had
accepted the resignation of the appellant on 4-1-1993
and was ordered to be relieved on that day, by a
subsequent letter, he was granted casual leave from 5-1-
1993 to 13-1-1993. Moreover, he was informed that he
WP (C) 555/2011 & 2522/2011 page 24 of 32
would be relieved after office hours on 15-1-1993. The
vinculum juris, therefore, in our considered opinion,
continued and the relationship of employer and
employee did not come to an end on 4-1-1993. The
relieving order and payment of salary also make it
abundantly clear that he was continued in service of the
Company upto 15-1-1993.
27. In the affidavit-in-reply filed by the Company, it
was stated that resignation of the appellant was
accepted immediately and he was to be relieved on 4-1-
1993. It was because of the request of the appellant that
he was continued upto 15-1-1993. In the affidavit-in-
rejoinder, the appellant had stated that he reported for
duty on 15-1-1993 and also worked on that day. At
about 12.00 noon, a letter was issued to him stating
therein that he would be relieved at the close of the day.
A cheque of Rs.13,511/- was paid to him at 1730 hrs.
The appellant had asserted that he had not received
terminal benefits such as gratuity, provident fund, etc.
It is thus proved that upto 15-1-1993, the appellant
remained in service. If it is so, in our opinion, as per
settled law, the appellant could have withdrawn his
resignation before that date. It is an admitted fact that a
letter of withdrawal of resignation was submitted by
the appellant on 8-1-1993. It was, therefore, on the
Company to give effect to the said letter. By not doing
so, the Company has acted contrary to the law and
against the decisions of this Court and hence, the action
of the Company deserves to be quashed and set aside.
The High Court in our opinion, was in error in not
granting relief to the appellant. Accordingly, the action
of the Company as upheld by the High Court is hereby
set aside."
26. In Modern School v. Shashi Pal Sharma & Ors., (2007) 8 SCC 540,
the aforesaid decision was distinguished as the terms and conditions of
WP (C) 555/2011 & 2522/2011 page 25 of 32
service are governed by the statute and the statutory rules and further as
in the said case acceptance of resignation of the first respondent was
communicated to him within a period of 30 days, it was held that the same
would take effect in terms thereof. Being of this view, their Lordships
opined that the resignation of the first respondent having been validly
accepted, but he was only to be relieved with effect from 17th June, 1997.
27. In the said case, the communication that was sent to the respondent
read as follows: -
"This is to inform you that we accept with regret your
resignation letter dated 17th March, 1997. You have our
sympathies for the domestic problems you face."
28. Thereafter, the first respondent by letter dated 15th May, 1997
withdrew the letter of resignation. There was cavil with regard to the
letter in question. Their Lordships posed two questions, namely, (i)
whether the first respondent has legally withdrawn his letter of
resignation; and (ii) whether the first respondent could withdraw his
resignation prior to 16-6-1997. While dealing with the second question, the
two-Judge Bench opined that an acceptance of resignation of the first
WP (C) 555/2011 & 2522/2011 page 26 of 32
respondent was communicated to him within a period of 30 days and the
same would take its effect in terms thereof.
29. In Nand Keshwar Prasad v. Indian Farmers Fertilizers Cooperative
Ltd.& Ors., (1998) 5 SCC 461, the Apex Court ruled that law is well settled
that unless controlled by condition of service or the statutory provisions,
the retirement mentioned in the letter of resignation must take effect from
the date mentioned therein and such date cannot be advanced by
accepting the resignation from an earlier date when the employee
concerned did not intend to retire from such earlier date. That apart, it is
open to the employee concerned to withdraw the letter of resignation
before the same becomes effective.
30. In Shambhu Murari Sinha v. Project & Development India Ltd. &
Anr., (2002) 3 SCC 437, the appellant therein applied for the voluntary
retirement on 18.10.1995 under the Voluntary Retirement Scheme and the
same was accepted by the management on 30.7.1997 with the condition
that the release memo along with detailed particulars will follow. The
appellant on 7.8.1997 sent a letter withdrawing his option from voluntary
retirement scheme by registered post but no response was received by him
from the respondents. On 25.9.1997, the respondent company issued a
WP (C) 555/2011 & 2522/2011 page 27 of 32
memorandum releasing the appellant from service of the company with
effect from 26.9.1997 (afternoon). The said order was challenged before the
learned Single Judge of the High Court who dismissed the writ petition
and the same was confirmed by the Division Bench. The Apex Court vide
order dated 13.4.2000 in Shambhu Murari Sinha v. Project & Development
India, (2000) 5 SCC 621 expressed the view that the appellant was not
relieved from service and was allowed to continue in service till 26.9.1997
which, for all practical purposes, would be the effective date as it was that
date on which he was relieved from service and as the appellant had
already withdrawn the offer from voluntary retirement scheme on
7.8.1997, the resignation in respect of its acceptance could be withdrawn
before the said effective date and, thus, the withdrawal was valid in law.
A review petition was filed by which the order dated 13.4.2000 was
recalled. The Apex Court opined that once an option to voluntary
retirement is exercised by the employee and the same is accepted by the
employer, the employee is not entitled to withdraw from voluntary
retirement, but the question that arose for consideration was what was the
effective date in the case in hand before which the appellant could have
withdrawn his offer of voluntary retirement under the scheme. Their
lordships referred to the Constitution Bench decision in Gopal Chandra
WP (C) 555/2011 & 2522/2011 page 28 of 32
Misra (supra), Balram Gupta (supra), J.N. Srivastava (supra), Nand
Keshwar Prasad (supra), Raj Kumar (supra) and Pramod Kumar Bhatia
(supra) and opined thus:
18. Coming to the case in hand the letter of acceptance
was a conditional one inasmuch as, though option of
the appellant for the voluntary retirement under the
Scheme was accepted but it was stated that the "release
memo along with detailed particulars would follow".
Before the appellant was actually released from the
service, he withdrew his option for voluntary
retirement by sending two letters dated 7-8-1997 and 24-
9-1997, but there was no response from the respondent.
By office memorandum dated 25-9-1997 the appellant
was released from the service and that too from the next
day. It is not disputed that the appellant was paid his
salaries etc. till his date of actual release i.e. 26-9-1997,
and, therefore, the jural relationship of employee and
employer between the appellant and the respondents
did not come to an end on the date of acceptance of the
voluntary retirement and said relationship continued
till 26-9-1997. The appellant admittedly sent two letters
withdrawing his voluntary retirement before his actual
date of release from service. Therefore, in view of the
settled position of the law and the terms of the letter of
acceptance, the appellant had locus poenitentiae to
withdraw his proposal for voluntary retirement before
the relationship of employer and employee came to an
end.
19. We, therefore, hold that the respondent could not
have refused to accept the resignation of the appellant
as it was sent before the jural relationship of employee
and employer came to an end. Consequently, the
impugned judgment is liable to be set aside, which we
hereby do. The appellant shall be entitled to rejoin his
WP (C) 555/2011 & 2522/2011 page 29 of 32
duty and he shall be paid all his salaries and other
benefits during the period he was out from the service.
The learned counsel for the respondent has stated that
by this time the appellant might have retired from
service on attaining the age of superannuation, if that be
so, he shall be paid full salary and allowances for the
entire period he was out of service till the date of his
retirement and thereafter, he shall be entitled to get all
retiral benefits counting the above period as if he was in
service.
31. The present obtaining factual matrix is to be tested on the
touchstone of aforesaid decisions in the field. There can be no scintilla of
doubt that the employee concerned can withdraw the letter of resignation
before the same becomes effective and till such an event takes place, the
employee has the locus poenitentiae to withdraw the proposal for voluntary
retirement before the date mentioned. In the case at hand, the employer
by communication dated 28th September, 2007 had accepted the
resignation with effect from that date. However, he was not relieved and
the same was postponed till a substitute is posted. There is no dispute that
the employee continued till 30th November, 2007 and on that day, he was
relieved. He had accepted the retiral dues on 7th October, 2008. He had
also claimed interest over the amount of gratuity paid by filing an
application. In the case of Shambhu Murari Sinha (supra), their Lordships
have opined in the said case that before the appellant was actually relieved
WP (C) 555/2011 & 2522/2011 page 30 of 32
from his service as he had withdrawn his option for voluntary retirement
by sending letters, the jural relationship of employee and employer had
not come to an end and, hence, he had the locus poenitentiae to withdraw
the letter of resignation. By applying the same logic to the case at hand,
the petitioner could have withdrawn his resignation while he was not
relieved and his date of relieve was postponed till 30th November, 2007.
He chose not to do so. He allowed himself to be relieved. He also
accepted the reitral benefits. Thus, the jural relationship became extinct.
There was severance of status. The relationship between the employer and
the employee came to an end. Prior to that date, the resignation had
already been accepted. Had the employee submitted an application for
withdrawal of resignation during the postponed period, the matter would
have been totally different. That is not the factual scene. Ergo, we are
disposed to think that the tribunal is not correct in holding that the
acceptance of resignation was not acted upon.
32. In view of the aforesaid analysis, the writ petition No.555/2011
preferred by the corporation is allowed and the order passed by the
tribunal is quashed. Once the order passed by the tribunal is quashed, the
claim of back wages by the respondent-employee in WP(C) No.2522/2011
WP (C) 555/2011 & 2522/2011 page 31 of 32
is unsustainable and hence, it has to pave the path of dismissal which we
direct. The parties shall bear their respective costs.
CHIEF JUSTICE
JULY 04, 2011 SANJIV KHANNA, J.
dk/pk WP (C) 555/2011 & 2522/2011 page 32 of 32