M/S. NEW VICTORIA MILLS & ORS. versus SHRIKANT ARYA

[2021] 11 S.C.R.

AM/s. NEW VICTORIA MILLS & ORS.

SHRIKANT ARYA

(Civil Appeal No. 5685 of 2021 )

BSEPTEMBER 27, 2021

[SANJAY KISHAN KAUL AND M. M. SUNDRESH, JJ.]

Service Law – Resignation – When not conditional – ModifiedVoluntary Retirement Scheme – Respondent submitted resignationunder the Scheme vide letter dtd. 12.07.02 – On 03.03.2003, theCrespondent requested that his application under the Scheme be keptsuspended – Vide letter dtd. 01.07.03, the respondent requestedthat his letter dtd.12.07.02 be treated as having been cancelledbecause he had changed his mind about submitting resignationunder the Scheme – However, the resignation was accepted and theDrespondent was to be relieved accordingly – Challenged byrespondent – Single Judge ruled in favour of the respondent – Orderupheld by Division Bench – On appeal, held: Resignation of therespondent had already been accepted on 28.05.03 before heendeavoured to withdraw the same – Right of person whoseresignation has been accepted was to receive inter alia the benefit ofEthe provident fund amount as one of the terminal benefits under theScheme – The fact that there was some discrepancy on account ofthe description of the name in the account for which there was someprior communication also, will not imply that any delay indisbursement of the provident fund amount would entitle theFrespondent to withdraw his resignation – Resignation was not aconditional resignation – Letter dtd.03.03.2003 cannot be construedas letter of withdrawal of resignation – All that it stated was thatthe resignation be “kept suspended” till the amount is deposited inhis provident fund account – Further, acceptance of resignationand the abolition of the post were simultaneous exercises – OnceGthe letter of resignation was accepted on 28.05.03, the post stoodabolished – Respondent cannot take advantage of the postponementof the cut-off date by few days – Also, mere delay in relieving therespondent from duties would not impact the acceptance of hisresignation – Impugned order set aside.

Allowing the appeal, the Court

HELD: 1.1 The respondent filed the application under theScheme. If the letter dated 12.07.2002 is looked at closely, theintent of the respondent was clear, i.e., to submit his resignation.It is not resignation operative from future date but one whichwould operate as per the Scheme. It is also not conditionalresignation as was sought to be canvassed by the respondent.The mere assertion that all benefits arising out of the serviceperiod of the applicant would be paid to him is natural corollaryof their resignation. Such resignation can hardly be calledconditional. If this resignation letter under the Scheme is lookedat, no doubt in terms of Clause 1.6 of the MVRS, the option laywith the management to decline an application without assigningany reasons. That again will not make the resignation conditional.In contractual context, it would be an offer made by an employeeunder the Scheme which may or may not be accepted by theappellant-management. Once the acceptance takes place, thecontract stands concluded. Such acceptance has to be in terms ofthe Scheme. Thus, the crucial question is whether the subsequentcommunications of the respondent could give the resignationletter colour of conditional resignation and whether thewithdrawal was prior to its acceptance. [Paras 30, 31][765-F-H;766-A-B]1.2 The MVRS, more specifically Clause 4.0, provides forterminal benefits payable under the Scheme. Clause 4.1 requiresthe balance in the provident fund account to be paid as per theEmployees Provident Fund Act. Thus, the right of person whoseresignation has been accepted is to receive inter alia the benefitof the provident fund amount as one of the terminal benefits underthe Scheme. The fact that there was some discrepancy on accountof the description of the name in the account for which there wassome prior communication itself, will not imply that any delay indisbursement of the provident fund amount would entitle therespondent to withdraw his resignation. If there is anyunreasonable delay, the amount may carry interest. In the givenfacts of the case, it appears that the account was credited to anaccount number where it ought to have been credited, but therewas some problem in the name/description of the beneficiary which

Ahad caused some confusion/delay. The appellant-managementought to have taken better care of this but then the appellant hadpointed out that the problem arose on account of the managementby the concerned authority of the provident fund account, andnot the appellant. [Para 32][766-B-F]

B1.3 Another significant aspect is the terms of the Schemeas per Clause 5.0. Clause 5.1 required the post to be abolishedsimultaneously with the request of voluntary retirement beingaccepted. This had to be done before disbursing retirementbenefits to the employee under the Scheme. There was specificstipulation that no person would be engaged in his/her place. TheCobjective was clear, that it should not be that on the one hand,manpower is reduced by giving the benefit of MVRS to anemployee and on the other, some other person is deployed in thepost. That would be, in sense, destructive of the very objectiveof why the Scheme was propounded, i.e., on account of the pre-Dcarious financial condition of appellant No.1. [Para 33][766-F-G]

1.4 The next communication addressed by the respondentis the letter dated 03.03.2003. The respondent did not withdrawhis resignation, which he could have done at that stage. He seeksto refer to the aspect of the non-correction of the provident fundEaccount and inaction with respect to his earlier communications,which were almost three years old. Actually, the amount wasdeposited in the relevant account but, there was some confusionabout the beneficiary of the account, which was clearly to be therespondent. All that the respondent’s letter states is that hisresignation be “kept suspended” till the amount is deposited inFhis provident fund account. The rationale for the same is set outin the very next sentence, i.e., if the resignation is accepted thereceipt of the amount will not only be difficult but rather it will beimpossible. [Para 34][766-H; 767-A, B-D]

1.5 On 28.05.2003, letter was issued by appellant No.1Gaccepting the resignation of four persons including the respondent.Once the resignation letter had been accepted, the chapter wasover. The respondent was to retire from the services with effectfrom 01.06.2003 in terms of the said letter. The respondent,however, seeks to take advantage of the letter dated 02.06.2003

of appellant No.1, which extended the cut-off date already fixedfor 01.06.2003. The respondent, thus, seeks to plead that oncethe date from which he was to be relieved was extended, it wouldamount to non-acceptance of his resignation. The respondent,taking advantage of the aforesaid, ad- dressed letter on01.07.2003 claiming that his resignation had not been acceptedtill that date, and his letter of resignation under the MVRS dated12.07.2002 may be treated as cancelled. Appellant No.1 refusedto act on the same as in their view the resignation letter alreadystood accepted on 28.05.2003. The respondent was relieved w.e.f.16.07.2003. The acceptance of resignation and the abolition ofthe post were simultaneous exercises as that is part of Clause5.1 of the Scheme. Clause 5.1 also prevents appellant No.1 fromappointing anyone else to that post. Thus, once the letter ofresignation was accepted on 28.05.2003, the post stood abolished.The letter dated 03.03.2003 cannot be construed as letter ofwithdrawal of resignation. The postponement of the cut-off dateand the consequent payment which would have to be made to therespondent for those few days is really matter of financialexercise for appellant No.1, with which the respondent cannotconcern himself as long as his resignation is accepted. Incontractual terms, appellant No. 1’s acceptance of therespondent’s offer of resignation as available under the MVRSwas completed on 28.05.2003. The respondent cannot bepermitted to take advantage of the postponement of the cut-offdate by few days, during which time the respondent was askedto attend to office, albeit against no sanctioned post. [Paras 36-39][767-F-H; 768-A-F]

1.6 Appellant No.1 had, in fact, closed down. The MVRSwas undisputedly beneficial to the employees who availed of thesame. An analysis of the MVRS including Clause 5.1 belies therespondent’s contention that there was any requirement of makingthe payments in advance. The wordings of the Scheme are clearthat acceptance of resignation has to simultaneously happen withthe abolition of the post and thereafter, the payments have to bedisbursed. The construction given to the MVRS is as per itsclauses and the action of the parties under the Scheme, whichresult in the conclusion that the resignation had already been

DEF

Aaccepted on 28.05.2003 before the respondent endeavoured towithdraw the same on 01.06.2003. The mere delay in relievingthe respondent from duties would not impact the acceptance ofhis resignation. In pursuance of the offer and acceptance on28.05.2003, the transaction was completed. The resignation letterof the respondent stood accepted on 28.05.2003 and theBrespondent is entitled to the benefits under the Scheme whichhave already been paid to the respondent albeit without prejudiceto the rights and contentions of the respondent in theproceedings. The impugned order is set aside. [Paras 40-43, 45,46 and 47][769-C-D, E-F, G-H; 770-A, E, G; 771-A]CJ.N. Srivastava v. Union of India & Anr. (1998) 9 SCC559; Shambhu Murari Sinha v. Project & DevelopmentIndia & Anr. (2000) 5 SCC 621 : [2000] 3 SCR 9 –distinguished.

Air India Express Limited & Ors. v. Captain GurdarshanDKaur Sandhu (2019) 17 SCC 129 : [2019] 12 SCR980 – relied on.

Raj Kumar v. Union of India (1968) 3 SCR 857; Unionof India v. Gopal Chandra Misra (1978) 2 SCC 301 :[1978] 3 SCR 12; Power Finance Corporation LimitedEv. Pramod Kumar Bhatia (1997) 4 SCC 280 : [1997] 2SCR 1170; Bank of India v. O.P. Swarnakar (2003) 2SCC 721 : [2002] 5 Suppl. SCR 438; HEC VoluntaryRetd. Emps. Welfare Soc. & Anr. v. Heavy EngineeringCorporation Ltd. & Ors. (2006) 3 SCC 708 : [2006] 2FSCR 678; Food Corporation of India & Anr. v. RamKesh Yadav & Anr. (2007) 9 SCC 531 : [2007] 3 SCR336 – referred to.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5685of 2021.

From the Judgment and Order dated 12.03.2019 of the High Courtof Judicature at Allahabad in Special Appeal No.1188 of 2005.

Ms. Madhvi Divan, Sr. Adv., Ms. Mayuri Raghuvanshi, VyomRaghuvanshi, Ms. Purvat Wali, Ayush Puri, Advs. for the Appellants.

Shadan Farasat, Bharat Gupta, Shourya Dasgupta, Aman Naqvi,Advs. for the Respondent.

The Judgment of the Court was delivered by

SANJAY KISHAN KAUL, J.

1. National Textile Corporation Limited (for short ‘NTC’), is apublic sector undertaking constituted and registered under the CompaniesAct, 1956. Appellant No.2 before us is the National Textile Corporation(Uttar Pradesh) Limited, Kanpur, subsidiary of appellant No. 3 thathas set up several industrial establishments in the State of Uttar Pradesh.M/s. New Victoria Mills, appellant No.1, is one such establishment setup by appellant No.2 in Kanpur. Respondent was working as Supervisor(Maintenance) in appellant No.1 since 1991, having been so appointedon transfer from M/s. Atherton Mills, another industrial unit set up byappellant No.2.

2. The textile industry went through difficult times at the turn ofthe century and accordingly, endeavours were made to examine thefeasibility of the continued existence of different textile mills. questionmark over the existence of these mills in turn had ramifications for thepersons who were employed with these mills. In order to safeguard theinterests of these employees, Modified Voluntary Retirement Scheme(for short ‘MVRS/Scheme’) was propounded by appellant No.3 tofacilitate the voluntary retirement of employees and workers of appellantNo.1 and certain other mills operated by appellant No.2. It is ofsignificance to note that this MVRS was proposed pursuant to therecommendations made by the Board for Industrial and FinancialReconstruction (for short ‘BIFR’), with the objective of rationalising

Asurplus manpower and reducing the losses of appellant No.2. BIFR hadcome into the picture as the production activities of appellant No.2 werebrought to standstill and it had been declared sick undertaking underthe Sick Industrial Companies (Special Provisions) Act, 1985. The financialcondition of appellant No.2 was so precarious that BIFR recommendedclosure of nine out of eleven mills of appellant No.2, including appellantBNo.1. While making this recommendation, in order to secure the interestsof the employees, BIFR imposed condition that the mills would only beclosed if all employees working therein were given the benefit of avoluntary retirement scheme. Thus, MVRS came to be promulgated insupersession of the earlier revised voluntary retirement scheme.C3. The Management reserved the right to refuse the MVRSapplication without assigning any reasons in terms of Clause 1.6 of theMVRS. Clauses 1.6 of the MVRS reads as under:

“1.6 The management reserves the right to refuse MVRSapplication without assigning any reasons further applications forDMVRS in respect of 1.6.1 & 1.6.2 may be put up before theBoard of Director for consideration.

1.6.1 Where disciplinary proceeding are either pending or arecontemplated against the employee concerned for impositionof major penalty.

E1.6.2 Where prosecution in Criminal Court is contemplatedor may have already been launched in any Court of Law and

1.6.3 Employees who resign from the services of the companyin normal manner are not entitled in MVRS.”

F4. Further clause 4.0 of the MVRS provided for the benefits underthe MVRS, which reads as under:

“4.0 OTHER TERMINAL BENEFITS UNDER THESCHEME

4.1 Balance in the Provident Funds Accounts payable as perGEmployees Provident Fund Act and rules made thereunder.

4.2 Cash equivalent of accumulated earned leave/privilege/leaveas per the rules of the mills/office, concerned.

4.3 Gratuity as per Payment of Gratuity Act or the GratuityHScheme, if any.”

5. The procedure for the MVRS was set out in Clause 5.0. Sufficeto produce some of its relevant sub-clauses, which have been referredto as under:

“5.0 PROCEDURE

5.1 An eligible employee may submit an application in the prescribedform for voluntary retirement under the scheme by tenderingresignation from the post held and service in NTC to theCompetent Authority. The post falling vacant as result of anemployee’s voluntary retirement under the scheme shall in all casesstand abolished simultaneously while accepting resignation andorder to that effect issued simultaneously before disbursingretirement benefits to employees under this scheme and no person(Permanent/badly/substitute/temporary etc.) shall be engaged inhis/her place.”

............

“5.10 Once an employee’s (sic) avails himself/herself of voluntaryretirement from PSU, he/she shall not be allowed to take upemployment in any other PSU. If he/she desires to do so, he/sheshall have to return the VRS compensation received by him/herto the PSU concerned where the compensation was paid out of aGovernment grant, the PSU concerned shall remit the refundedamount to the Government in case the PSU is already closed/merged, the VRS compensation shall be returned directly to theGovernment.”

significant aspect of Clause 5.1 was that the post itself was tostand abolished and fall vacant as result of the employee’s voluntaryretirement, simultaneously with the acceptance of their resignation andthis was to be prelude to the disbursement of retiral benefits to theemployee under the Scheme. The objective appears to be to ensure thatthe Scheme was not utilised to see the exit of an employee and replacehim with someone else, something which would be contrary to the verypurpose of the Scheme.

6. The respondent sought to avail of the opportunity under theScheme and addressed letter dated 12.07.2002. The relevant extractof the same is as under:

“That in the context of information dated: 13.06.2002 &04.07.2002 of the Mill under Amended Voluntary Retirement

Afrom Service Scheme operated by National RehabilitationScheme, applicant wants to submit his resignation.

It is, therefore, requested to accept resignation of theapplicant by making sure payment of all benefits of the serviceperiod of the applicant.”

BIt is relevant to note that the resignation was sought to be broughtinto force forthwith with the only request that payment of all benefits ofservice be disbursed promptly.

7. An aspect which caused some anguish to the respondent wasthat apparently there was pre-existing dispute between appellant No.1Cand the respondent, relating to deposits to be made in the provident fundaccount of the respondent. This is apparent from two letters addressedin this regard dated 29.03.2000 and 23/24.04.2000, making grievancethat the provident fund amount has not been deposited in his accountsince 1991. Even on submission of his letter dated 12.07.2002, it appearsthat this issue was not resolved, consequently triggering letter from theDrespondent dated 03.03.2003 about the same. In this letter, respondentmade request that since the issue was not resolved, his applicationunder the MVRS be kept suspended till the amount is deposited in hisprovident fund account and the account regularised. The reason for thisrequest was also set out in the same letter immediately thereafter, thatEis, “because after the acceptance of resignations, receipt of thisamount will not only be difficult, rather it will be impossible.”

8. general information was issued about acceptance of lettersof resignation under the MVRS on 28.05.2003 in which the name of therespondent figured at serial No.4. The four persons were to retire fromFthe services of the mill on 01.06.2003. However, letter was issued byappellant no. 1 on 02.06.2003, after the cut off date had already comeinto effect from 01.06.2003; informing the respondent that the said datebe treated as cancelled and new cut off date would be informed shortly.The respondent was advised to attend to his duties.

9. In the aforesaid scenario, the respondent addressed letterGdated 01.07.2003 requesting that his letter dated 12.07.2002 under theMVRS be treated as having been cancelled because he had changed hismind about submitting his resignation under the MVRS, noticing that hisresignation letter had still not been accepted. However, vide letter14.07.2003 the resignation submitted under the MVRS was acceptedHintimating that the respondent was to retire from 16.07.2003.

10. It is the aforesaid letter which triggered off the litigation, withthe respondent filing Civil Miscellaneous Writ Petition No.16587/2004before the High Court of Judicature at Allahabad under Article 226 ofthe Constitution of India seeking the following prayers:

a.Quashing of the impugned order dated 14.07.2003;

b.A direction to allow the respondent to join his duties on thepost of Supervisor (Maintenance) and pay him all hisemoluments as entitled;

c.To pay him his back-wages since 16.07.2003 and permithim to work on the post till the age of his superannuationwhen he would be entitled to all his retiral benefits.

11. The writ petition was resisted on the ground that the resignationalready stood accepted and the postponement of the cut off date wouldnot in any way take away the validity of the acceptance. It may beworthwhile to note that while responding to the petition, Appellantexplained their position qua the respondent’s grievance about the providentfund contributions not being credited to his account. It was stated thatthe entire provident fund contribution had been deposited with the Officeof the Regional Provident Fund Commissioner and it appears that thesame was credited to wrong person with similar name. This was amistake in the Office of the Regional Provident Fund Commissioner,which was recommended to be corrected and had also been corrected.In fact, the account number to which the amount was credited was thecorrect account number.12. The learned single Judge ruled in favour of the respondent interms of the judgment dated 22.08.2005. The judgment also noted thatthe question of reinstatement in service could not arise as appellant No.1had been closed down pursuant to notification of the CentralGovernment dated 09.03.2004 issued during the pendency of the writpetition. However, the learned single Judge found that it was “not clear”that at any point of time, the respondent had given an unconditional offerof resignation under the MVRS. Rather, his resignation was conditionalon the payment of all dues, which included the provident fund dues whichshould be first cleared and paid to him. We may note at this stage as amatter of record on perusal of the letter dated 12.07.2002 that we do notfind it so. All that was stated in the letter was request to accept theresignation of the respondent by making sure payment of all benefits of

Ahis service period. There was no prior condition put nor could have beenput under the MVRS as Clause 5.1 itself envisaged the simultaneousacceptance of the resignation and abolishment of the post; and paymentbeing made thereafter. Pertinently, the resignation letter had beensubmitted under the MVRS and hence was subject to Clause 5.1.

B13. The second aspect which weighed with the learned singleJudge was that the respondent continued to work till 14.07.2003, afterhis resignation was accepted by appellant No. 1; despite the fact that hehad already withdrawn his resignation prior to that date on 01.07.2003.In fact, the reasoning is predicated on what is stated to be “better footing”as the offer made by the respondent under the MVRS was onlyCconditional and that condition had admittedly not been fulfilled, which issomething that we are unable to agree on plain reading of the letterdated 12.07.2003. reference was also made to the letter dated03.03.2003 seeking to keep the letter dated 12.07.2002 in abeyance (notthat the resignation letter was recalled till that stage). Another significantDaspect which has weighed with the learned single Judge is the continuedworking of the respondent, due to which the jural relationship of employerand employee continued even though the circular notifying theacceptance of the respondent’s resignation letter was issued on28.05.2003,. The subsequent letter dated 02.07.2003 was taken intoaccount as having cancelled the earlier cut off date communicated onE28.05.2003, while informing that new cut off date would be provided.The new cut off date was then only intimated vide letter dated 14.07.2003,to be effective from 16.07.2003. Prior to that date, on 01.07.2003, therespondent had already asked for recall/cancellation of his resignation.

14. The appellants aggrieved by the same preferred an appealFbefore the Division Bench of the Allahabad High Court, being SpecialAppeal No.1188/2005. An aspect which is greatly emphasised by thecounsel for the respondent was the manner in which this appeal wasprosecuted. Apparently, no endeavour was made by the appellants toget their appeal listed for almost six years, until the matter was finallylisted on 10.10.2011 - which is when the appeal was admitted and noticeGwas issued. Further, an interim order was passed staying the operationof the order of the learned single Judge. The respondent was givenliberty to collect the entire money which he was to get on acceptance ofhis resignation without prejudice to his rights and subject to the finaldecision in the appeal. It is the say of the respondent that during thisHperiod of six years, the respondent did not receive the money and encashedthe amount only after the aforesaid interim order was passed. Suffice tosay that the cheque for Rs.5,47,267/- was issued by appellant No.1 tothe respondent on 22.10.2011, which was duly encashed by the respondentin terms of the impugned order dated 10.10.2011. It does not really comeout of the record as to what steps may have been taken during thisperiod of time to enforce the judgment of the learned single Judge. TheContempt Petition No.2967/2006 was apparently filed by the respondentseeking enforcement, but that also appears not to have been pursuedwith much rigour. We also note that the appeal against the single judge’sorder was dismissed for non-prosecution thrice and restored!

15. The Division Bench finally bestowed its consideration on theappeal on 12.03.2019, and upheld the order of the learned single Judge.A reference was also made to Clause 1.6 of the MVRS extractedaforesaid, which gave authority to appellant No.1 to refuse resignationapplication without assigning any reasons. Thus, it was opined that theacceptance of the request for voluntary retirement was conditionprecedent to such retirement. On the issue of abolishing the post asper Clause 5.1 of the MVRS, it was opined that since appellant No.1had cancelled the original cut off date of 01.06.2003 and had asked therespondent to join his duties once again, the post must have continuedand, thus, Clause 5.1 had not come into operation.

16. The aforesaid order of the Division Bench has been assailedby filing Special Leave Petition before this Court. Vide order dated17.02.2020, notice was issued and the operation of the impugned orderwas stayed. Leave was granted on 07.09.2021 when the matter washeard finally and judgment reserved.

17. We have examined the principles governing the case ofvoluntary retirement under the Scheme in the given factual scenario andin the conspectus of the submissions of the counsel for the rival parties.

18. In nutshell the submission of the appellants before us wasthat the respondent had not even challenged the letters dated 28.05.2003or 02.06.2003, which effectively accepted the respondent’s resignationrequest under the MVRS. This would imply that the acceptance ofresignation by appellant No. 1 was complete. What the respondent hadsought to challenge was only the revised cut off date by assailing theletter dated 14.07.2003, which sought to relieve the respondent from16.07.2003. Once such resignation was accepted, and not even assailed,there could be no question of the respondent being permitted to resign

Apost acceptance of the resignation. It was only postponement of thecut off date for administrative reasons, which merely delayed the relievingof the respondent and did not defer the acceptance of the resignation.

19. Learned counsel for the appellants sought to rely upon thejudgment of this Court in Air India Express Limited & Ors. v. CaptainBGurdarshan Kaur Sandhu[1] to support the plea that mere delay inrelieving someone from their duties does not impact the acceptance oftheir resignation. In fact, prior judgment of this Court in Raj Kumar v.Union of India[2], which was referred to in Air India Express Limited&Ors.[3], involves scenario where the State Government hadrecommended that the resignation of an IAS officer be accepted andCthe Government of India had requested the Chief Secretary of the Stateto intimate the date on which he would be relieved of his duties so that aformal notification could be issued. However, before the date could beinformed and formal notification be issued, the officer withdrew hisresignation letter. On an order accepting his resignation being issuedDsubsequently, challenge was raised and it was opined by this Courtthat there was no indication in the correspondence between the partiesthat the resignation was not to become effective until the acceptancewas intimated. In fact, the officer had forwarded his resignation letterfor early acceptance and thus, on plain reading of the letter, theresignation became effective as soon as it was accepted by the appointingEauthority.

20. On contra position, the judgment of this Court in Union ofIndia v. Gopal Chandra Misra[4] was referred to, where the resignationletter by sitting Judge of the Allahabad High Court was found to havebeen validly withdrawn. The resignation letter began with the statementFthat the Judge was resigning from office but that was not standalonestatement. Had it been so, the resignation would have been in praesentiinvolving immediate relinquishment of the office and termination of histenure as Judge. There was really no requirement of acceptance of aresignation letter of Judge, but it was not so. The first sentence wasGfollowed by two more sentences which intimated subsequent date forthe resignation to be effective and since the letter of resignation waswithdrawn before that date, it was held to have been validly withdrawn.

1 (2019) 17 SCC 129.2 (1968) 3 SCR 8573 (supra)H4 (1978) 2 SCC 301

21. We may note that the significance of the aforesaid is thatultimately, the wordings of the letter would be material and in the presentcase since it is under scheme it would be MVRS.

22. Learned counsel for the appellants sought to refer to the aspectsof (a) the respondent’s acceptance of the cheque (but that was underinterim directions of the Court); (b) abolishment of the post as NewVictoria Mills was shut by notification dated 09.03.2004 (but in thateventuality if the respondent succeeds, he would still be in employmentwith all consequences); (c) superannuation of the respondent in 2018(which would only mean that his benefits would be only till that time).The only other aspect of significance is that had the respondent notopted for voluntary retirement under the MVRS, he could have beenretrenched under the Industrial Disputes Act, 1947.Learned counsel forthe appellants clarified during arguments that the amount paid to suchpersons was lower than the amount paid to employees opting forresignation under the MVRS. If one may say, that was the very incentivefor an employee to accept the MVRS.23. On the other hand, learned counsel for the respondent soughtto rely on judgments of this Court in J.N. Srivastava v. Union of India& Anr.[5] and Shambhu Murari Sinha v. Project & Development India& Anr.[6] to canvas proposition that an employee has right to withdrawhis application for voluntary retirement even after its acceptance, if suchwithdrawal is done prior to the date of the employee’s actual retirement.Learned counsel for the respondent submitted that the jural relationshipof employer and employee between appellant No.1 and respondentcontinued till 16.07.2003 and thus, the respondent had locus poenitentiaeto withdraw his resignation on 01.07.2003.

24. On closer reading of the aforesaid judgments, it would beappropriate to notice the factual matrix in the context of the observationstherein. In J.N. Srivastava[7], the voluntary retirement notice was tooperate three months hence. The proposal was accepted before theexpiry of three months; but the employee withdrew the voluntaryretirement notice before the date on which the retirement was to beoperative. In Shambhu Murari Sinha[8], resignation letter submitted

5 (1998) 9 SCC 559

6 (2000) 5 SCC 621

7 (supra)

8 (supra)

Aby the employee under voluntary retirement scheme was accepted bythe management but the employee was not relieved from service andwas permitted to continue working, by postponing the cut off date. Theemployee withdrew the offer of voluntary retirement in the meantime. Anumber of judicial pronouncements were referred to by this Court forthe proposition that resignation in spite of its acceptance could beBwithdrawn before the effective date.

25. In Power Finance Corporation Limited v. Pramod KumarBhatia[9]; the Corporation withdrew voluntary retirement scheme afteran application made thereunder had been accepted. This Court held thatthe acceptance of his offer to voluntarily retire was subject to adjustmentCof the amount payable to him, and hence did not attain finality. Learnedcounsel for the respondent did point out that though that was somethingwhich was beneficial to the management, on the same principle, it shouldequally apply to an employee.

26. Learned counsel for the respondent sought to emphasise thatDa voluntary retirement scheme like the MVRS was in the nature of an“invitation to offer” and would, thus, be governed by the principles ofcontract law (Bank of India v. O.P. Swarnakar[10]; HEC VoluntaryRetd. Emps. Welfare Soc. & Anr. v. Heavy Engineering CorporationLtd. &Ors.[11]). Thus, the application submitted by the respondent underEthe Scheme on 12.07.2002 was in the nature of an offer. The respondentsuspended his resignation vide letter dated 03.03.2003 till such time asappellant No.1 deposited respondent’s provident fund dues and, thus,the offer of the respondent stood revoked. On the same principle it wasurged that the application of the respondent under the MVRS was pre-conditioned on appellant No.1 clearing respondent’s dues, particularlyFhis provident fund dues. Appellant No.1 did not comply with the attachedcondition relating to the provident fund dues. Learned counsel for therespondent also relied upon the judgment in Food Corporation of India& Anr. v. Ram Kesh Yadav &Anr.[12] opining that in case of conditionaloffer, the offeree cannot accept part of the offer which results inGperformance by the offeror and then reject the condition subject to whichthe offer is made.

9 (1997) 4 SCC 28010 (2003) 2 SCC 72111 (2006) 3 SCC 708H12 (2007) 9 SCC 531

27. On the terms and conditions of the MVRS, learned counselfor the respondent drew our attention to Clause 5.1 which required thaton acceptance of the respondent’s resignation, he would not only retirebut simultaneously the post would also be abolished. This would onlyhappen on 16.07.2003. How could the respondent have been asked tocarry on if the post stood abolished?

28. The last aspect, which was brought to our attention was anRTI reply received on 07.12.2010, which clarified that three employeeshad taken back their resignations. This was not the only scenario, asthere were five other employees/officers, who had been transferred tomills in other States. These facts were only to show that the closure ofappellant No. 1 could not deprive the respondent of the benefit ofemployment in some other mill, though now the question of employmentno more remains alive as he would have retired in 2018 but would still beentitled to financial benefits. We may, at this stage, also note that aresponse to an RTI query of the respondent clarified that there was noscheme for absorption of the employees of the mills in other States.

29. We have examined the factual contours of the currentcontroversy in the conspectus of the legal position set forth aforesaid. Infact, if one looks to the different judgments cited from both sides, thereare actually factual nuances which have led to one result or the other.The factual nuances have to be most importantly examined in the contextof the scheme which applies, as the present case is not one of resignationper se but that of exercising an option available under the MVRS.

30. The respondent before us filed the application under theScheme. If we look closely at the letter dated 12.07.2002, the intent ofthe respondent was clear, i.e., to submit his resignation. It is not aresignation operative from future date but one which would operate asper the Scheme. It is also not conditional resignation as was sought tobe canvassed by the respondent. The mere assertion that all benefitsarising out of the service period of the applicant would be paid to him isa natural corollary of their resignation. We do believe that such aresignation can hardly be called conditional.

31. The aforesaid being the position; if we look at this resignationletter under the Scheme, no doubt in terms of Clause 1.6 of the MVRS,the option lay with the management to decline an application withoutassigning any reasons. That again, to our mind, will not make theresignation conditional. In contractual context, it would be an offer

Amade by an employee under the Scheme which may or may not beaccepted by the appellant-management. Once the acceptance takesplace, the contract stands concluded. No doubt such acceptance has tobe in terms of the Scheme. Thus, the crucial question is whether thesubsequent communications of the respondent could give the resignationletter colour of conditional resignation and whether the withdrawalBwas prior to its acceptance.

32. The MVRS, more specifically Clause 4.0, provides for terminalbenefits payable under the Scheme. Clause 4.1 requires the balance inthe provident fund account to be paid as per the Employees ProvidentFund Act. Thus, the right of person whose resignation has been acceptedCis to receive inter alia the benefit of the provident fund amount as oneof the terminal benefits under the Scheme. The fact that there wassome discrepancy on account of the description of the name in the accountfor which there was some prior communication itself, will not imply thatany delay in disbursement of the provident fund amount would entitleDthe respondent to withdraw his resignation. If there is any unreasonabledelay, the amount may carry interest. In the given facts of the case, itappears that the account was credited to an account number where itought to have been credited, but there was some problem in the name/description of the beneficiary which had caused some confusion/delay.No doubt the appellant-management ought to have taken better care ofEthis but then the appellant had pointed out that the problem arose onaccount of the management by the concerned authority of the providentfund account, and not the appellant.

33. Another significant aspect which we must take note of is theterms of the Scheme as per Clause 5.0. Clause 5.1 required the post toFbe abolished simultaneously with the request of voluntary retirementbeing accepted. This had to be done before disbursing retirement benefitsto the employee under the Scheme. There was specific stipulation thatno person would be engaged in his/her place. The objective was clear,that it should not be that on the one hand, manpower is reduced by givingGthe benefit of MVRS to an employee and on the other, some other personis deployed in the post. That would be, in sense, destructive of the veryobjective of why the Scheme was propounded, i.e., on account of theprecarious financial condition of appellant No.1.

34. The next communication addressed by the respondent is theHletter dated 03.03.2003. The respondent did not withdraw his resignation,

which he could have done at that stage. He seeks to refer to the aspectof the non-correction of the provident fund account and inaction withrespect to his earlier communications, which were almost three yearsold. The respondent seeks to attribute negligence and error to theconcerned departments under appellant No. 1, an aspect which has beenspecifically denied by appellant No.1. The respondent stated that non-deposit of the amount in the provident fund account despite regulardeduction from salary is on account of some grievous conspiracy. Actually,the amount was deposited in the relevant account but, as observedaforesaid, there was some confusion about the beneficiary of the account,which was clearly to be the respondent. All that the respondent’s letterstates is that his resignation be “kept suspended” till the amount isdeposited in his provident fund account. The rationale for the same is setout in the very next sentence, i.e., if the resignation is accepted thereceipt of the amount will not only be difficult but rather it will beimpossible.35. The aforesaid allegation is apparently arising out of someelement of frustration which the respondent may have felt due to non-correction of the provident fund account as the acceptance of resignationand disbursement of the amount are not interlinked aspects, except tothe extent that the amount under the provident fund account had to bepaid to the respondent under the Scheme. In that, there was noimpediment, except the factual correction which was required in thedescription of the account as explained by the appellants, which wasalso not attributable to any fault on their part.

36. It is in the aforesaid situation that on 28.05.2003, letter wasissued by appellant No.1 accepting the resignation of four persons includingthe respondent. Once the resignation letter had been accepted, the chapterwas over. The respondent was to retire from the services with effectfrom 01.06.2003 in terms of the said letter.

37. The respondent, however, seeks to take advantage of the letterdated 02.06.2003 of appellant No.1, which extended the cut off datealready fixed for 01.06.2003. The respondent, thus, seeks to plead thatonce the date from which he was to be relieved was extended, it wouldamount to non-acceptance of his resignation. This plea is supported bythe fact that since the acceptance of resignation and the abolition of thepost were simultaneous exercises, how could the respondent be asked

Ato continue to work, as there would be no post against which therespondent could so work. The respondent, taking advantage of theaforesaid, addressed letter on 01.07.2003 claiming that his resignationhad not been accepted till that date, and his letter of resignation underthe MVRS dated 12.07.2002 may be treated as cancelled.

B38. Appellant No.1 refused to act on the same as in their view theresignation letter already stood accepted on 28.05.2003. The respondentwas relieved w.e.f. 16.07.2003.

39. We have no doubt that the acceptance of resignation and theabolition of the post were simultaneous exercises as that is part of ClauseC5.1 of the Scheme, the objective of which we have already set forthabove. Clause 5.1 also prevents appellant No.1 from appointing anyoneelse to that post. Thus, in our view, once the letter of resignation wasaccepted on 28.05.2003, the post stood abolished. We have alreadymentioned that the letter dated 03.03.2003 cannot be construed as aDletter of withdrawal of resignation. The postponement of the cut offdate and the consequent payment which would have to be made to therespondent for those few days is really matter of financial exercise forappellant No.1, with which the respondent cannot concern himself aslong as his resignation is accepted. In order to test the proposition, onecan state that were the appellant to cancel the acceptance of theEresignation after 28.05.2003, it would not have been permissible for themto do so because they had already accepted the respondent’s resignationon this date. In contractual terms, appellant No. 1’s acceptance of therespondent’s offer of resignation as available under the MVRS wascompleted on 28.05.2003. The respondent cannot be permitted to takeFadvantage of the postponement of the cut off date by few days, duringwhich time the respondent was asked to attend to office, albeit againstno sanctioned post.

40. We have to keep in mind the background in which the Schemecame to be propounded. Appellant No.1 amongst other mills faced suchGfinancial difficulties that their financial feasibility did not permit them tocarry on business. The competent authority to deal with the issue offinancial feasibility at that time was BIFR, which came to the conclusionthat nine out of eleven textile mills in the State of Uttar Pradesh werenot viable and could not be rehabilitated and, thus, recommended theirclosure. The Central Government exercising powers under Section 25(o)Hof the Industrial Disputes Act, 1947 granted permission for closure ofthe nine textile mills on 09.03.2004, including that of appellant No.1. Inorder to safeguard the interests of the employees, BIFR imposed thecondition while recommending closure, that all employees working inthe said mills would be given the benefit of voluntary retirement and onlythen would the mills be closed. The appellants being State and publicentities, it appears that BIFR took greater care to safeguard the interestsof the employees working therein. It is in this context that the appellantsalso placed before us, which can really not be disputed, the financialconsequence for persons who did not accept the MVRS. Such personswould be retrenched according to the Industrial Disputes Act, 1947 andthe financial benefits accruing to them would be far lesser than thatunder the MVRS. Thus, the MVRS was undisputedly beneficial to theemployees who availed of the same. That would be natural, since onlythen would an employee have any incentive to avail of the Scheme.

41. We can also not lose sight of the fact that appellant No.1 had,in fact, closed down and this was taken note of by the learned singleJudge. The mere fact that some staff continued to work after the closureof the Mill, or the fact that some people may have been deployed inother mills cannot help the respondent’s case for reinstatement.Importantly, the latter aspect has also been disputed by appellant No.1.

42. An analysis of the MVRS including Clause 5.1 belies therespondent’s contention that there was any requirement of making thepayments in advance. The wordings of the Scheme are clear thatacceptance of resignation has to simultaneously happen with the abolitionof the post and thereafter, the payments have to be disbursed.

43. We have endeavoured to appreciate the contention of theappellants about non-challenge of the letter dated 28.05.2003 and02.06.2003 with only the revised cut off date of 16.07.2003 being assailed.This does seem to have an element of infirmity in the manner in whichthe respondent sought to vent his grievance, but in view of largerconsideration we are not required to look into the aspect of whether thisis fatal to his claim. The construction we have given to the MVRS is asper its clauses and the action of the parties under the Scheme, whichresult in the conclusion that the resignation had already been acceptedon 28.05.2003 before the respondent endeavoured to withdraw the sameon 01.06.2003. It has, thus, rightly been contended by the appellants thatthe mere delay in relieving the respondent from duties would not impact

Athe acceptance of his resignation, as observed in Air India ExpressLimited & Ors.[13]. different scenario would have arisen, if theresignation letter was not in praesenti and had fixed future date forits operation, and before that date the resignation letter was withdrawn.

44. We have referred to the judicial pronouncements cited by theBrespondent aforesaid on the plea that the respondent has locuspoenitentiae to withdraw the resignation letter as the jural relationshipbetween the parties continued till the actual date of his resignation. (J.N.Srivastava[14] and Shambhu Murari Sinha[15]).

45. As noticed in para 3 aforesaid in J.N. Srivastava[16], theCresignation was to operate prospectively from specified date and waswithdrawn before that date, despite being accepted – which is differentfactual scenario. We are also not in disagreement with the legal principlepropounded by the respondent that scheme like the MVRS was an“invitation to offer.” The application submitted by the respondent underthe Scheme on 12.07.2002 was in the nature of an offer but we cannotDaccept the plea that vide letter dated 03.03.2003 there could be suspensionof his resignation conditional on the deposit of provident fund dues whichactually already were deposited (albeit confusion over the credit towhich it was named). The acceptance was also not conditional clearingof dues, including provident fund dues, as that was consequence whichEwould flow from the acceptance of the resignation. Thus, in pursuanceof the offer and acceptance on 28.05.2003, the transaction wascompleted. Unlike the case in Shambhu Murari Sinha,[17] this is not acase of conditional offer with part offer being accepted, but rather,acceptance of the offer in the terms of the Scheme, with the consequencesas envisaged under the Scheme of financial benefits flowing to theFrespondent on acceptance of the resignation.

46. The result of the aforesaid is that we are unable to persuadeourselves to agree with the conclusions arrived at by the learned singleJudge as affirmed by the learned Division Bench. We are of the viewthat the resignation letter of the respondent stood accepted on 28.05.2003Gand the respondent is entitled to the benefits under the Scheme which

13 (supra)

14 (supra)

15 (supra)

16 (supra)

H17 (supra)

have already been paid to the respondent albeit without prejudice to therights and contentions of the respondent in the proceedings.

47. The impugned order is set aside. The appeal is accordinglyallowed leaving the parties to bear their own costs.

Divya Pandey

Appeal allowed.