LPA/769/2011 of CENTRAL BANK OF INDIA Vs S. CHANDRASHEKHAR

*IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of Decision: 20.02.2019

%LPA 769/2011

CORAM:HON'BLE MR. JUSTICE VIPIN SANGHIHON'BLE MR. JUSTICE A.K.CHAWLA

A.K.CHAWLA, J. (ORAL)

1.The appellant - Central Bank of India in short 'the Bank', is aggrievedof the order dated 10.08.2011 passed by the learned Single Judge, whereby,in WP(C) 3833/2006 filed by the respondent, the Bank, inter alia, wasdirected to grant pension to the respondent under its Pension Regulations,1995.

2.Concisely, the facts relevant to the appeal are that the respondent hadjoined the Bank as Clerk on 03.08.1972 and earned promotions over spanof 22 years of his service to the Bank. It is matter of record that in the year1990, the Reserve Bank of India arrived at settlement with its employeesto extend them the pensionary benefits. On the similar demands made by the

employees of the Public Sector Banks, the Indian Banks Association, inshort, 'IBA', which represents the Public Sector Banks, arrived at asettlement with the Employees' Association and Trade Unions and aMemorandum of Settlement dated 29.10.1993 in short 'MoS', came to bearrived at amongst them. In terms of this MoS, the employees of such IBAmembers, who were in service as on 01.11.1993, became eligible forpension. It also emerges from the record that IBA vide its communicationdated 17.03.1994 asked the Public Sector Banks, which included the Bank,to, inter alia, inform its employees to exercise their option for pension by30.09.1994. The Bank, so, informed its employees to exercise their option.Undisputedly,therespondentexercisedhisoptionforpensionon09.09.1994. Having exercised such option, the respondent, vide hiscommunication dated 28.02.1995, requested the Bank for being relievedimmediately and requested that the resignation so tendered, be accepted. TheBank conveyed its acceptance of such resignation tendered by therespondentvideitscommunicationdated29.03.1995.Videitscommunication dated 04.06.1996, though, the Bank acknowledged thereceipt of the option for pension, the sanction of pension to the respondentwas not ever given effect to. On 29.09.1999, Central Bank of India(Employees') Pension Regulations, 1995 in short 'the Bank's PensionRegulations' came to be notified, after consultation with RBI. On this, therespondentmaderepeatedrepresentationsandinresponsetohisrepresentation/letter dated 23.06.1998, vide its letter dated 22.09.1998, theBank, informed the respondent that as per the existing provisions of thePension Regulations i.e. Regulation 22, the respondent was not eligible for

pension inasmuch as he had resigned from service. The respondent sought toreason his case making further representations, the last of which, as emergesfrom the record, was made on 02.11.2005. Getting no positive results, therespondent approached this Court by way of writ petition in the year 2006,in which the impugned order has come to be passed. The Bank assails theimpugned order, pertinently, on two counts. One, Regulation 22 of theBank's Pension Regulations disqualifies its employees from pensionarybenefits in the case of resignation and that, the case of the respondent wasnot of voluntary retirement and that, the resignation and voluntary retirementcannot be treated at par. Secondly, the respondent had approached the courtafter 11 years of his resignation from the service and therefore, the writpetition was hit by the principles of delays and laches. In support of suchpleas, reliance is placed upon UCO Bank & Ors. vs. Sanwar Mal, (2004)SC 4112 and Reserve Bank of India vs. Cecil Dennis Solomon & Anr.,(2004) 9 SCC 461.

3.In the submissions of learned counsel for the Bank, the impugnedorder was not sustainable in law inasmuch as the respondent has resignedprior to coming into force of the Bank's Pension Regulations and that,Regulation 22, specifically, disentitles the pensionary benefits to anemployee, who chooses to resign from service.

4.Learned counsel for the respondent on his part, however, contendedthat the case of the respondent was not case of resignation simplicitorand that, the respondent having continuously worked for over 20 years andhaving exercised the option of pensionary benefits within the time stipulatedby the Bank, which was even acceded to by the Bank vide its

LPA No. 769/2011

communication dated 04.06.1996, it could not resile thereform. It was alsocontended that the expression 'resignation' in his communication dated28.02.1995 was not to be seen in its literal context inasmuch as, theconstructive reading of the said communication would show that thiscommunication was in the nature of an application to seek voluntaryretirement and thereby, in any case, governed by Regulation 29. In supportof such submissions, reliance was placed on Shashikala Devi vs. CentralBank of India & Ors., 2014(14) scale 288 and, Asger Ibrahim Amin vs.Life Insurance Corporation of India, (2016) 13 SCC 797.

5.Since the subject relates to pensionary benefits to an employee, whohas rendered 22 years of continuous service to the bank, we may, at thethreshold, only note that the Pension Scheme is beneficial provision andhas to be interpreted liberally to promote its underlying object. Be that as itmay, when one adverts to the case in hand, it becomes imperative to see thenature of the communication, which, the respondent addressed to the Bank,terming hisseveranceasaresignation.Thiscommunicationdated28.02.1995 reads, as under :

"Due to certain personal reasons I am not in position tocontinue my service with the Bank any longer.I thereforetender my resignation and request you to kindly relieve me fromthe bank service immediately.Considering my accumulatedordinary leave of more than 6 months, I request you to pleasewaive the notice period.

I once again request you to please accept my resignation andrelieve me immediately.

perusal of this communication does show that, though, therespondent used the expression 'resignation' simplicitor, he, infact, did notleave or abandon his services with the Bank, immediately on submitting thisletter. Not only that, this communication made by the respondent, by itself,also did not specify any date, on which the purported resignation sotendered, was to take effect. By such communication, the respondent onlyrequested for being relieved from the Bank's service immediately, and, thattoo, seeking that the notice period to be waived, which, the Bank, acceptedvide its communication dated 29.03.1995, which is, as under:

"This has reference to your resignation letter dated 28.02.1995.We also refer to your letter dated 29.03.1995 wherein you haveinformed that you have deposited two months' salary in lieu oftwo months notice.

Your resignation has been accepted as of today. We wish youall the best in your future assignment.

As regards your terminal dues, you may contact our office onany working day during office hours.

The afore-going communication of the Bank thus leaves no doubt thatboth the respondent and the Bank acted voluntarily. It so happened, when,the respondent had rendered the qualifying service for being entitled to thepensionary benefits. It is not in dispute that at the relevant time, the Bankhad invited the respondent amongst others, to give option and such optionwas duly exercised by the respondent within the stipulated time. Here, itmay only be noted that at the time when the respondent exercised his option,the MoS was arrived at under Section 2(p) and Section 18(1) of the

Industrial Disputes Act, 1947 read with Rule 58 of the Industrial Disputes(Central) Rules, 1957 and it, inter alia, stipulated as under :

"5.Completed service of thirty three years will qualify forfull pension.

Employees voluntarily retiring after 20 years of completedservice as per provisions to be incorporated in the scheme willget proportionate Pension.

The qualifying service of an employee voluntarily retiring oncompletion of 20 years of actual service shall be increased by aperiod not exceeding five years, so however, that the totalqualifying service of such employee shall not in any case exceedthirty three years and also shall not take him beyond the date ofsuperannuation.

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11.Actual payment of pension in all cases shall commencefrom 1st November, 1993.

12.Provisions will be made by scheme, to be negotiatedand settled between the parties to this Settlement by 31stDecember, 1993 for applicability, qualifying service, amountsof pension, payment of pension, commutation of pension, familypension, updating the other general conditions, etc. on the lineas are in force in Reserve Bank of India.

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14.The terms and conditions hereof shall continue to governand bind the parties until the settlement is terminated by eitherparty giving to the other - statutory notice as prescribed inlaw at the material time."

In pursuance of this MoS, while the respondent exercised his option toavail the pensionary benefits, in respect whereof, the provisions were to be

negotiated and settled, ultimately took the form of the Bank's PensionRegulations, 1995. Further advertence on such factual conspectus, weconsider, is not called for. Suffice to say, the Bank declined the pensionarybenefits to the respondent for the reasons given in its communication/letterdated 11.02.1999, as under:

".....................................................................................................

You representation dated 23.8.1999 and dated 18.11.1998 sentto G.M. (PRS) were replied by us vide our letter No.CO/PRS/PEN/98-99/SH/2653dated22.9.1998andCO/PRS/RP/AVK/98-99/3395 dated 25.11.1998 copy ofwhich is enclosed once again. Therefore, your allegation thatBank has not replied your letter is far from the truth.

With regards to your request for treating your resignationunder Voluntary Retirement Scheme, we wish to inform you thatin terms of Central Bank of India Employees' PensionRegulation 29, which deals on Voluntary Retirement reads asunder :

"Regulation 29 'Pension on Voluntary Retirement'.

On or after the 1[st]day of Nov. 1993 at any time after anemployee has completed 20 years of qualifying service he maybe giving notice of not less than 3 months in writing to theappointing authority retire from service, is entitled for pensionon voluntary retirement."

However, the Pension Scheme in Public Sector Bank came intooperation w.e.f. 29.9.1995 on being notified in the Gazette ofIndia. Some of the Officer employees who had in the year 1994opted to be governed by the pension scheme had during theperiod 1.1.1993 to 29.9.1995 applied for Voluntary retirementunder Pension Regulations but were not allowed to do so by theBanks due to the fact that Pension Regulations were not inforce. As consequence, there offer employees had eitherretired from the service or had to resign from the Bank'sservice.

The matter was examined by the Indian Banks Association inconsultation ofGovernment of India, accordingly banksincluding ours were advised to consider such cases at itsdiscretion to treat under voluntary retirement subject to thecondition that,

i)The employee concerned had opted for Pension prior tohis cessation of service and

ii)He had applied for permission to voluntarily retire fromthe services in terms of the corresponding provisions in thePension Scheme already circulated at that time and

iii)The Bank had turned down his request due to reasonsthat Pension Regulations were yet to be adopted as aconsequence of which the employee had either resigned orvoluntarily retired in terms of the rules framed by the Bank forthe purpose and

iv)Theemployeehad atthetime of submittinghisapplicationforvoluntaryretirementconformedtotheprovisions of Regulations 29 of Pension Regulation 1995, fromthe letter of resignation dated 28.2.1995 submitted by you to theZonal Manager, Zonal Office, New Delhi it is observed that youhave tender resignation from the Bank's service for thepersonal reasons further stating that you are not in positionto continue your service with the Bank any longer accordinglyyou were relieved from Bank's service on 29.3.1995, acceptingyour resignation. From the above it is very clear that you haveneither submitted for voluntary retirement from the bankservice nor bank had turned down your request. You have onlyresigned from the banks service. Thus the conditions laid downas enumerated above are not fulfilled.

We trust that we have clarified the position.

6.Resignation per se is not defined in the Bank's Pension Regulationsand the respondent, in effect, has been pressing that his communication

dated 28.02.1995, which he termed to be resignation, should be treated asvoluntary retirement and therefore, he should be extended the pensionarybenefits under Regulation 29, more so, when he had given notice beforeseeking leave of the Bank to discontinue his service and was so granted. Insomewhat similar case, as is the case of the respondent, the Supreme Courtin Asger Ibrahim Amin's case (supra) has observed as under :

"16. What is unmistakably evident in the case at hand is that theappellant had worked continuously for over 20 years, that hesought to discontinue his services and requested waiver of threemonths' notice in writing, and that the said notice was acceptedby the respondent Corporation and the appellant was therebyallowed to discontinue his services. If one would examine Rule31 of the Pension Rules juxtaposed with the aforementionedfacts, it would at once be obvious and perceptible that theessential components of that Rule stand substantially fulfilled inthe present case. In Sheelkumar [Sheelkumar Jain v. New IndiaAssurance Co. Ltd., (2011) 12 SCC 197] , this Court was aliveto the factum that each case calls for scrutiny on its own merits,but that such scrutiny should not be detached from the purposeand objective of the statute concerned. It thus observed: (SCCpp. 206-07, paras 30-31)

“30. The aforesaid authorities would show thatthe court will have to construe the statutoryprovisions in each case to find out whether thetermination of service of an employee was aterminationbywayofresignationoratermination by way of voluntary retirement andwhile construing the statutory provisions, thecourt will have to keep in mind the purposes ofthe statutory provisions.

31. The general purpose of the 1995 PensionScheme, read as whole, is to grant pensionary

benefits to employees, who had rendered servicein the insurance companies and had retired afterputting in the qualifying service in the insurancecompanies. Paras 22 and 30 of the 1995 PensionScheme cannot be so construed so as to depriveof an employee of an insurance company, such asthe appellant, who had put in the qualifyingservice for pension and who had voluntarilygiven up his service after serving 90 days' noticein accordance with sub-para (1) of Para 5 of the1976 Scheme and after his notice was accepted bythe appointing authority.”

17. The appellant ought not to be deprived of pension benefitsmerely because he styled his termination of services as“resignation” or because there was no provision to retirevoluntarily at that time. The commendable objective of thePension Rules is to extend benefits to class of people to tideover the crisis and vicissitudes of old age, and if there aresome inconsistencies between the statutory provisions and theavowed objective of the statute so as to discriminate betweenthe beneficiaries within the class, the end of justice obligatesus to palliate the differences between the two and reconcilethem as far as possible. We would be failing in our duty, if wego by the letter and not by the laudatory spirit of statutoryprovisions and the fundamental rights guaranteed underArticle 14 of the Constitution of India.

18.RBI v. Cecil Dennis Solomon [RBI v. Cecil Dennis Solomon,(2004) 9 SCC 461 : 2004 SCC (L&S) 737] , relied upon by therespondent, although distinguishable on facts, has ventured todistinguish “voluntary retirement” from “resignation” in thefollowing terms: (SCC pp. 467-68, para 10)

“10. In service jurisprudence, the expressions‘superannuation’,‘voluntaryretirement’,‘compulsory retirement’ and ‘resignation’ conveydifferent connotations. Voluntary retirement andresignation involve voluntary acts on the part ofthe employee to leave service. Though both involve

voluntary acts, they operate differently. One of thebasic distinctions is that in case of resignation itcan be tendered at any time, but in the case ofvoluntary retirement, it can only be sought forafter rendering prescribed period of qualifyingservice. Other fundamental distinction is that incase of the former, normally retiral benefits aredenied but in case of the latter, the same is notdenied. In case of the former, permission or noticeis not mandated, while in case of the latter,permissionoftheemployerconcernedisarequisitecondition.Thoughresignationisabilateralconcept,andbecomeseffectiveonacceptance by the competent authority, yet thegeneralrulecanbedisplacedbyexpressprovisions to the contrary. In Punjab NationalBank v. P.K. Mittal [Punjab National Bank v. P.K.Mittal, 1989 Supp (2) SCC 175 : 1990 SCC (L&S)143 : (1990) 12 ATC 683] on interpretation ofRegulation 20(2) of the Punjab National BankRegulations, it was held that resignation wouldautomatically take effect from the date specified inthe notice as there was no provision for anyacceptance or rejection of the resignation by theemployer. In Union of India v. Gopal ChandraMisra [Union of India v. Gopal Chandra Misra,(1978) 2 SCC 301 : 1978 SCC (L&S) 303] it washeld in the case of Judge of the High Courthaving regard to Article 217 of the Constitutionthat he has unilateral right or privilege to resignhis office and his resignation becomes effectivefrom the date which he, of his own volition,chooses.Butwherethereisaprovisionempowering the employer not to accept theresignation,oncertaincircumstancese.g.pendencyofdisciplinaryproceedings,theemployer can exercise the power”

19. The legal position deducible from the above observationsfurther amplifies that the so-called resignation tendered bythe appellant was after satisfactorily serving the period of 20years ordinarily qualifying or enabling voluntary retirement.Furthermore, while there was no compulsion to do so, awaiver of the three months' notice period was granted by therespondent Corporation. The State being model employershould construe the provisions of beneficial legislation in away that extends the benefit to its employees, instead ofcurtailing it."(emphasis supplied)

7.The ratio of the judgment (supra) does come to the aid of therespondent. The facts and circumstances of the said case are quite akin to thecase of the respondent. Not only that, in our considered view, the case of therespondent is further fortified by the fact that the option expressed by himwas accepted to by the Bank even prior to his resignation and thenotification of the Bank's Pension Regulations on 29.09.1999, without anyconditions. This acceptance letter dated 04.06.1996, would show that it doesnot even indicate that such acceptance was subject to any regulations whichmay be notified later. Interestingly, it was issued much after the respondenthas left the services of the Bank. Pertinently, though the pension Regulationswere notified on 29.09.1999, they were given retrospective effect, asRegulation 29, in terms, states "on or after 1st day of Nov. 1993 at any timeafter an employee has completed 20 years of qualifying service.......". Thus,the respondent was covered by the pension scheme. Even the appellant wasconscious of this position. That is why options were called for – even beforenotification of the scheme and options were accepted and acknowledged onthe day the respondent tendered his resignation. Since the pension schemehad not been notified, he had no option, but to nomenclature his act of

quitting the appellant bank as "resignation". But it was in the background ofthe Pension Scheme which was in the process of being notified – with theclear understanding amongst all concerned, that it would apply to allemployees who may resign after 01.11.1993 after exercising their option tobe covered by the pension scheme and who have the qualifying service.

8.Not only that, we consider, acceptance of the option exercised by therespondent without any conditions, also binds the Bank on the wellestablished principle of promissory estoppel.It does not require anyelaboration that the Bank is Public Sector Bank and thereby, aninstrumentality of the state and the respondent exercised his option for thepensionary benefits on the offer to exercise option as was extended to him.Resiling therefrom and that too, on superficial reading of the regulation todeprive the benefit, in our considered view, is not tenable even on theprinciple of promissory estoppel.

9.In Manuelsons Hotels Private Limited vs. State of Kerala & Ors.,(2016) 6 SCC 766, as regards the doctrine of promissory estoppel, theSupreme Court has observed, as under:

"19. In fact, we must never forget that the doctrine ofpromissory estoppel is doctrine whose foundation is that anunconscionable departure by one party from the subject-matterof an assumption which may be of fact or law, present or future,and which has been adopted by the other party as the basis ofsome course of conduct, act or omission, should not be allowedto pass muster. And the relief to be given in cases involving thedoctrine of promissory estoppels contains degree of flexibilitywhich would ultimately render justice to the aggrieved party.The entire basis of this doctrine has been well put in judgment

oftheAustralianHighCourtin CommonwealthofAustralia v. Verwayen [CommonwealthofAustraliav.Verwayen, (1990) 170 CLR 394 (Aust)], by Deane, J. in thefollowing words:

“1. While the ordinary operation of estoppel byconduct is between parties to litigation, it is adoctrine of substantive law, the factual ingredientsof which fall to be pleaded and resolved like otherfactual issues in case. The persons who may bebound by or who may take the benefit of such anestoppel extend beyond the immediate parties to it,to their privies, whether by blood, by estate or bycontract. That being so, an estoppel by conductcan be the origin of primary rights of property andof contract.

2. The central principle of the doctrine is that thelaw will not permit an unconscionable—or, moreaccurately,unconscientious—departurebyoneparty from the subject-matter of an assumptionwhich has been adopted by the other party as thebasis of some relationship, course of conduct, actor omission which would operate to that otherparty's detriment if the assumption be not adheredto for the purposes of the litigation.

3. Since an estoppel will not arise unless the partyclaimingthebenefitofithasadoptedtheassumption as the basis of action or inaction andthereby placed himself in position of significantdisadvantage if departure from the assumption bepermitted, the resolution of an issue of estoppel byconduct will involve an examination of the relevantbelief, actions and position of that party.

4. The question whether such departure would beunconscionable relates to the conduct of theallegedly estopped party in all the circumstances.

That party must have played such part in theadoption of, or persistence in, the assumption thathe would be guilty of unjust and oppressiveconduct if he were now to depart from it. The casesindicate four main, but not exhaustive, categoriesin which an affirmative answer to that questionmay be justified, namely, where that party:

(a) has induced the assumption byexpress or implied representation;express or implied representation;

(b) has entered into contractual orother material relations with the otherparty on the conventional basis of theassumption;

(c) has exercised against the otherparty rights which would exist only ifthe assumption were correct;

(d) knew that the other party labouredunder the assumption and refrainedfrom correcting him when it was hisduty in conscience to do so.

Ultimately,however,thequestionwhetherdeparturefromtheassumptionwouldbeunconscionable must be resolved not by referenceto some preconceived formula framed to serve as auniversal yardstick but by reference to all thecircumstancesofthecase,includingthereasonableness of the conduct of the other party inacting upon the assumption and the nature andextent of the detriment which he would sustain byacting upon the assumption if departure from theassumed state of affairs were permitted. In casesfallingwithinCategory(a),acriticalconsideration will commonly be that the allegedlyestopped party knew or intended or clearly oughtto have known that the other party would beinduced by his conduct to adopt, and act on the

basis of, the assumption. Particularly in casesfalling within Category (b), actual belief in thecorrectness of the fact or state of affairs assumedmay not be necessary. Obviously, the facts of aparticular case may be such that it falls withinmore than one of the above categories.

5. The assumption may be of fact or law, presentor future. That is to say, it may be about thepresent or future existence of fact or state ofaffairs (including the state of the law or theexistence of legal right, interest or relationshipor the content of future conduct).

6. The doctrine should be seen as unified onewhich operates consistently in both law and equity.In that regard, “equitable estoppel” should not beseen as separate or distinct doctrine whichoperates only in equity or as restricted to certaindefinedcategories(e.g.acquiescence,encouragement,promissoryestoppelorproprietary estoppel).which operates consistently in both law and equity.In that regard, “equitable estoppel” should not beseen as separate or distinct doctrine whichoperates only in equity or as restricted to certaindefinedcategories(e.g.acquiescence,encouragement,promissoryestoppelorproprietary estoppel).

7. Estoppel by conduct does not of itself constitutean independent cause of action. The assumed factor state of affairs (which one party is estoppedfrom denying) may be relied upon defensively or itmay be used aggressively as the factual foundationof an action arising under ordinary principles withthe entitlement to ultimate relief being determinedon the basis of the existence of that fact or state ofaffairs. In some cases, the estoppel may operate tofashion an assumed state of affairs which willfound relief (under ordinary principles) whichgives effect to the assumption itself (e.g. where thedefendant in an action for declaration of trust isestopped from denying the existence of the trust).

8. The recognition of estoppel by conduct as adoctrine operating consistently in law and equity

and the prevalence of equity in Judicature Actsystem combine to give the whole doctrine adegree of flexibility which it might lack if it werean exclusively common law doctrine. In particular,the prima facie entitlement to relief based upon theassumed state of affairs will be qualified in casewhere such relief would exceed what could bejustified by the requirements of good conscienceand would be unjust to the estopped party. In sucha case, relief framed on the basis of the assumedstate of affairs represents the outer limits withinwhich the relief appropriate to do justice betweenthe parties should be framed.”

10.In our considered view therefore, the Bank is equally bound by thedoctrine of promissory estoppel. Here, it may only be noted that at the timethe Bank invited the option for pensionary benefits and the respondentexercised his option, the option exercised by the respondent was not subjectto any contingency to the contrary by way of any regulation or otherwise.

11.UCO Bank's and Cecil Dennis case (supra) relied upon by thelearned counsel for the appellant, were considered by the Supreme Court inAsger Ibrahim's case (supra) and in view of the ratio of the judgment inAsger Ibrahim's case, we do not find any merit in the appeal.

12.As regards the plea of the Bank that the writ petition, in which theimpugned order has come to be passed, suffered from delays and laches, weobserve that the MoS by itself provided that the provisions for pension wereto be made on the regulations being notified. Regulations came to benotified on 29.09.1999, and the respondent approached the court havingmade repeated representations adverting to the various case laws in the year

2006 in relation to claim for pensionary benefits, which are in the nature ofrecurring cause of action. We therefore, do not find any merit even in suchplea.

13.Dismissed. No order as to costs.

A.K.CHAWLA, J.

FEBRUARY 20, 2019rc

VIPIN SANGHI, J.