INDIAN BANK AND ANOTHER versus MAHAVEER KHARIWAL

[2021] 1 S.C.R.

AINDIAN BANK AND ANOTHER

MAHAVEER KHARIWAL

(Civil Appeal No. 2760 of 2010)

JANUARY 22, 2021

[ASHOK BHUSHAN, R. SUBHASH REDDY ANDM. R. SHAH, JJ.]

Service Law:

CVoluntary retirement – Rejection of – Propriety – Applicationseeking voluntary retirement with request for waiver of requirementof three months notice – Rejection of, on the ground that theemployee was not eligible under Pension Regulations, 1995 –Thereafter disciplinary proceedings were initiated against theemployee – Writ petition – Dismissed by Single Judge of High CourtD– Division Bench of High Court quashed the order whereby requestfor voluntary retirement was rejected – Appeal to Supreme Court –Held: The application for voluntary retirement was absolutely inconsonance with Regulation 29 and rejection thereof was bad inlaw and contrary to Regulation 29 – Employee shall be entitled toEall retiral benefits – The consequent proceedings of departmentalenquiry will be null and void and shall be non est – Indian BankEmployees Pension Regulations, 1995 – Regulation 29.

Dismissing the appeal, the Court

HELD : 1. On considering the communication datedF20.04.2004 rejecting the application of the employee for voluntaryretirement, it does not reflect any compliance of Sub-Regulation3(b) of Regulation 29. As such, no reasons whatsoever havebeen assigned/given except stating that the request is not inaccordance with Pension Regulations, 1995. Even otherwise, itGis required to be noted that the communication dated 20.04.2004was on the last day of the third month, i.e., 90[th] day from the dateof submitting the voluntary retirement application. Therefore,there was no reason to reject the prayer of curtailment of the

period of notice considering the grounds mentioned in Sub-Regulation 3(b) of Regulation 29. Be that as it may, the rejectionof the application for voluntary retirement was not on the groundthat notice of three months is not given. The request made bythe employee for curtailment of notice of three months was alsonot considered on merits. Therefore, the application for voluntaryretirement was absolutely in consonance with Regulation 29 andthat the rejection was bad in law and contrary to Regulation 29.The Division Bench of the High Court is absolutely justified inquashing and setting aside the communication dated 20.04.2004.[Para 10] [153-E-H; 154-A]

2. As regards eligibility for voluntary retirement in view ofproviso to Sub-Regulation (1) of Regulation 29, there is specificfinding given by the Division Bench that the said proviso shallnot be applicable to the facts of the present case, as in the presentcase the employee was on transfer to Overseas Branch and wasnot on deputation. The order dated 19.03.1998, says that theemployee is posted as Chief Manager, Overseas Branch. Evenwhen he was relieved from the Overseas Branch to join at DelhiBranch in the communication dated 25.08.2003 (Annexure P5),it speaks about the transfer order dated 13.05.2003. It is not theorder of repatriation. Therefore, proviso to Sub-Regulation (1)to Regulation 29 shall not be applicable. [Para 11][154-B-D]

3. It is true that in the present case the decision was takenbefore the expiry of the period specified in the notice, i.e., on orbefore three months (last day of the third month), however, therejection of the application for voluntary retirement itself is foundto be illegal and bad in law. Therefore, the aforesaid shall notaffect the ultimate conclusion reached by the Division Bench ofthe High Court. The communication dated 20.04.2004 rejectingthe voluntary retirement application was bad in law and contraryto Regulation 29. Therefore, the employee shall be entitled toall retiral benefits on the basis of his voluntary retirement. Once,it is held that he is voluntary retired as per his application dated21.01.2004 and the rejection of the application of voluntaryretirement is held to be bad in law, all other subsequent

Aproceedings of departmental enquiry will be null and void andshall be non est, as after the voluntary retirement, there shall notbe an employer-employee relationship. [Para 12][154-E-H;155-A]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2760Bof 2010.

From the Judgment and Order dated 02.02.2009 of the High Courtof Delhi at New Delhi in LPA No. 246 of 2007.

Ravi Sikri, Sr. Adv., Jasbir Bidhuri, Ms. Madhu Sikri, SanjeevKumar, Ajay Amritraj, Sanjay Kumar, Naik H.K., Venkateswara RaoCAnumolu, Advs. for the appearing parties.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgmentDand order dated 02.02.2009 passed by the Division Bench of the HighCourt of Delhi at New Delhi in Letters Patent Appeal No. 246 of 2007,by which the Division Bench has allowed the said appeal preferred bythe respondent herein and has quashed and set aside the judgment andorder passed by the learned Single Judge and has quashed and set asidecommunication dated 20.04.2004 of the bank rejecting the applicationEfor voluntary retirement and has directed the appellant-bank to releaseretiral dues of the respondent in accordance with the Pension Regulations,1995 with simple interest at the rate of 9% per annum from the date offiling of writ petition, the employer-bank has preferred the present appeal.

2. The facts leading to the present appeal in nutshell are as under:F

That the respondent herein – original writ petitioner – employee(hereinafter referred to as the ‘employee’) was working with theappellant bank – employer (hereinafter referred to as the ‘employer’),who was promoted as Chief Manager SMG-IV. In March, 1998, hewas transferred and posted as Chief Manager, Colombo Branch,GColombo. Thereafter, by order dated 13.05.2013, he was transferredfrom Colombo overseas branch to the Defence Colony Branch, NewDelhi as Chief Manager (BM). The employee applied for 30 days’leave to visit London as his son was admitted in the hospital. Thereafter,the employee wrote to the employer seeking extension of leave. The

application for leave as well as the application for extension of leavewere refused by the employer and the employee was directed to reporton duty at Defence Colony Branch, New Delhi. That on 21.01.2004,the employee submitted an application seeking voluntary retirement fromthe services of the employer in accordance with Circular No. 32/97-98dated 15[th] July, 1997 and the format given by the employer for submittingthe notice of voluntary retirement. In the application for voluntaryretirement, the employee requested for waiver of three months’ notice,as required under Regulation 29 of the Indian Bank Employees PensionRegulations, 1995 (hereinafter referred to as ‘Pension Regulations,1995’) and requested/authorised the employer to deduct the salary ofthe notice period from out of the amount payable by the employer onretirement. The employer vide letter dated 20.04.2004, which was servedon the employee on 23.04.2004, rejected the request of the employeefor voluntary retirement on the ground that the employee was not eligibleunder Pension Regulations, 1995.

3. Being aggrieved by the rejection of the application for voluntaryretirement, the employee preferred Writ Petition (C) No. 16972 of 2005.One another prayer was for direction to the employer to reimburse theeducational expenses for the son of the employee, who had been sent toSingapore for his education while he was posted at Colombo. Oneanother prayer was for grant of traveling allowance bills for the journeyfrom Colombo to New Delhi, which was declined by the employer onaccount of delay in submitting the bills. The learned Single Judge byjudgment and order dated 11.10.2006 dismissed the writ petition so faras challenge to the rejection of his voluntary retirement application videcommunication dated 20.04.2004. However, granted the prayers fortraveling allowance bills and educational expenses.4. Feeling aggrieved and dissatisfied with the judgment and orderpassed by the learned Single Judge in dismissing the writ petition withrespect to his prayer to quash the letter dated 20.04.2004 rejecting hisrequest for voluntary retirement, the employee preferred Letters PatentAppeal before the Division Bench of the High Court. The DivisionBench, by the impugned judgment and order, has allowed the said LettersPatent Appeal and has quashed and set aside the letter dated 20.04.2004and has directed the employer to release retiral dues of the employee inaccordance with Pension Regulations, 1995.

5. Feeling aggrieved and dissatisfied with the impugned judgmentand order passed by the Division Bench of the High Court, the employerhas preferred the present appeal.

6. Shri Ravi Sikri, learned Senior Advocate has appeared on behalfof the employer and Shri Sanjeev Kumar, learned Advocate has appearedBon behalf of the employee.

6.1 Shri Ravi Sikri, learned Senior Advocate appearing on behalfof the employer has made the following submissions, assailing theimpugned judgment and order passed by the Division Bench:

i) that the High Court has not properly appreciated Regulation 29Cof the Pension Regulations, 1995 in its true perception;

ii) that the High Court has not properly appreciated the fact thatas per Regulation 29, request for voluntary retirement by an employeerequires permission/acceptance of the employer concerned;

Diii) that vide communication dated 20.04.2004, the application ofthe employee for voluntary retirement was rejected within three monthsfrom the date of submitting the voluntary retirement application andtherefore there could not be deemed acceptance of voluntary retirement;

that what is relevant is taking the decision within three monthsand not the service of the decision on the application for voluntaryEretirement. It is submitted that in the present case, the decision wastaken within period of three months.

iv) that the High Court has failed to appreciate that an employeewho seeks voluntary retirement is to give three months’ mandatory noticein writing to enable the employer to make necessary arrangements forFan alternate hand in place of the employee seeking voluntary retirement.It is submitted that in the present case, three months’ mandatory noticewas not given and therefore his application for voluntary retirement wasdefective to that extent. It is submitted that therefore the employerrightly rejected his application for voluntary retirement which was not inGconsonance with the Pension Regulations, 1995;

v) that the High Court has failed to appreciate that the employee’soffer of surrendering three months salary in lieu of mandatory noticeperiod could not be considered to be valid application for waiver of thethree months’ notice requirement;

vi) that the High Court has erred in holding that the employeewas, in fact, transferred to the foreign branch and was not sent ondeputation. It is submitted that as such the respondent was on deputationat the overseas branch at Colombo at the relevant point of time andtherefore as per Regulation 29(1) of the Pension Regulations, 1995, theemployee was not eligible to apply for voluntary retirement unless afterhaving been transferred or having returned to India, he has resumedcharge of the post in India and has served for period of not less thanone year. It is submitted that therefore the employee did not fulfil thestatutory requirement of serving for period of one year after returningto India, as contemplated under Regulation 29(1);

vii) It is submitted that as such after rejection of the applicationfor voluntary retirement, the employer initiated departmental proceedingsagainst the employee for his unauthorised absence from 26.11.2003 to19.01.2004 and from 22.01.2004 and the disciplinary authority imposedthe penalty of compulsory retirement on the employee. It is submittedthat therefore the Division Bench of the High Court ought not to haveallowed the appeal.

Making the above submissions, it is prayed to allow the presentappeal and quash and set aside the impugned judgment and order passedby the Division Bench and restore the judgment and order passed by thelearned Single Judge and restore the decision of the bank dated20.04.2004 rejecting the application of the employee for voluntaryretirement.

7. Shri Sanjeev Kumar, learned Advocate appearing on behalf ofthe employee has supported the impugned judgment and order passedby the Division Bench of the High Court. It is submitted that the DivisionBench has rightly set aside the communication dated 20.04.2004 by whichthe application of the employee for voluntary retirement was rejected.It is submitted that the Division Bench of the High Court has rightlyinterpreted Regulation 29 and has rightly considered that the bar underRegulation 29(1) shall not be applicable insofar as Regulation 29(1) isconcerned, as the employee was not on deputation at Colombo Branchbut was on transfer. It is submitted that the question is not when thedecision was served upon the employee, but the question is whether therejection of the voluntary retirement application vide communication dated20.04.2004 was legal, just and proper and was in consonance withRegulation 29 or not. It is submitted that on true interpretation of

ARegulation 29, the High Court has rightly allowed the appeal and hasrightly quashed and set aside the communication dated 20.04.2004.

8. We have heard the learned counsel for the respective partiesat length.

It is not in dispute that in the present case the employee submittedBthe voluntary retirement application on 21.01.2004. In the applicationitself, the employee requested for waiver of three months’ notice andrequested to deduct the salary amount of the notice period from out ofthe amounts payable to him by the employer on retirement. It is not indispute and it cannot be disputed that the notice of voluntary retirementCrequires acceptance by the appointing authority. However, as per provisoto Sub-Regulation 2 of Regulation 29, in case the appointing authoritydoes not refuse to grant the permission for retirement before the expiryof the period specified in the notice, the retirement shall become effectivefrom the date of expiry of the said notice period. In the present case, onthe 90[th] day vide communication dated 20.04.2004 the application of theDemployee for voluntary retirement was rejected without assigning anyspecific reasons and by observing that the employee is not eligible forvoluntary retirement under Pension Regulations, 1995. The saidcommunication was sent to the employee on the very date, i.e.,20.04.2004, however the same was received by the employee onE23.04.2004. The learned Single Judge dismissed the writ petition so faras challenge to the communication dated 20.04.2004 is concerned.However, on appeal, by the impugned judgment and order, the DivisionBench has set aside the communication dated 20.04.2004 by which therequest of the employee for voluntary retirement from the service of theemployer came to be rejected.F

Therefore, the short question which is posed for the considerationbefore this Court is, whether the rejection of the request of the employeefor voluntary retirement vide communication dated 20.04.2004 was legaland in consonance with Regulation 29 of the Pension Regulations, 1995or not.G9. While considering the aforesaid question, Regulation 29 isrequired to be referred to, which reads as under:

“29. Pension on Voluntary Retirement:-1) On or after the first day of November, 1993, at any timeHafter an employee has completed twenty years of qualifying

service he may, by giving notice of not less than three monthsin writing to the appointing authority retire from service:

Provided that this sub-regulation shall not apply to anemployee who is on deputation or on study leave on abroadunless after having been transferred or having returned toIndia he has resumed charge of the post in India and hasserved for period of not less than one year:

Provided further that this sub-regulation shall not apply toan employee who seeks retirement from service for beingabsorbed permanently in an autonomous body or publicsector undertaking or company or institution or body,whether incorporated or not to which he is on deputation atthe time of seeking voluntary retirement:

Provided that this sub-regulation shall not apply to anemployee who is deemed to have retired in accordancewith clause (l) of regulation 2.

(2) The notice of Voluntary retirement given under sub-regulation(1) shall require acceptance by the appointing authority:

Provided that where the appointing authority does not refuseto grant the permission for retirement before the expiry ofthe period specified in the said notice, the retirement shallbecome effective from the date of expiry of the said period.

(3)(a) An employee referred to in sub-regulation (1) may makea request in writing to the appointing authority to acceptnotice of Voluntary Retirement of less than three monthsgiving reasons thereof;

(b) On receipt of request under clause (a), the appointingauthority may, subject to the provisions of sub-regulation(2), consider such request for the curtailment of the periodof the notice of three months on merits and if it is satisfiedthat the curtailment of the period of notice will not causeany administrative inconvenience, the appointing authoritymay relax the requirement of notice of three months on thecondition that the employee shall not apply for Commutationof part of the pension before the expiry of the notice ofthree months.

A(4) An employee, who has elected to retire under this regulationand has given necessary notice to that effect to the appointingauthority. shall be precluded from withdrawing his noticeexcept with specific approval of such authority;

Provided that the request for such withdrawal shall be madebefore the intended date of his retirement.

(5) The qualifying service of an employee retiring voluntarilyunder this regulation shall be increased by period notexceeding five years, subject to the condition that the totalqualifying service rendered by such employee shall not inany case exceed thirty-three years and it does not take himbeyond the date of superannuation,

(6) The pension of an employee retiring under this regulationshall be based on the average emoluments as defined underclause (d) of regulation 2 of these regulations and theincrease. not exceeding five years in his qualifying service.shall not entitle him to any notional fixation of pay for thepurpose of calculating his pension.”

10. On fair reading of Regulation 29, it emerges that an employeeis entitled to apply for voluntary retirement after he has completed 20Eyears of qualifying service. He can apply for voluntary retirement bygiving notice of not less than three months in writing to the appointingauthority (Regulation 29(1)). However, as per proviso to Sub-Regulation(1) of Regulation 29, Sub-Regulation (1) of Regulation 29 shall not applyto an employee who is on deputation or on study leave on abroad unlessafter having been transferred or having returned to India he has resumedFcharge of the post in India and has served for period of not less thanone year. The said proviso shall be dealt with and considered hereinbelow.It also appears that as per Sub-Regulation (2) of Regulation 29, thenotice of voluntary retirement given under Sub-Regulation (1) shallrequire acceptance by the appointing authority. However, as per theGproviso to Sub-regulation (2), the appointing authority has to take adecision before the expiry of the period specified in the notice. It providesthat where the appointing authority does not refuse to grant the permissionfor retirement before the expiry of the period specified in the notice,there shall be deemed acceptance of the voluntary retirement application

and the retirement shall become effective from the date of expiry of theperiod mentioned in the notice. However, at the same time, as per Sub-Regulation 3(a), an employee may make request in writing to theappointing authority for waiver of the three months’ notice and maymake request to accept the notice of voluntary retirement of less thanthree months giving reasons thereof. Sub-Regulation 3(b) provides thaton receipt of request for waiver of three months’ notice as per Sub-Regulation 3(a), the appointing authority may, subject to the provisionsof Sub-Regulation (2), consider such request for the curtailment of theperiod of notice of three months on merits and if it is satisfied that thecurtailment of the period of notice will not cause any administrativeinconvenience, the appointing authority may relax the requirement ofnotice of three months on the condition that the employee shall not applyfor commutation of part of the pension before the expiry of the noticeof three months. In the present case, the application of the employeesubmitting the voluntary retirement application with request forcurtailment of notice of three months was absolutely in consonance withRegulation 29. The request made by the employee for curtailment ofthe period of notice of three months was required to be considered bythe appointing authority on merits and only in case where it is foundthat the curtailment of the period of notice may cause any administrativeinconvenience, the request for curtailment of the period of three months’notice can be rejected. On considering the communication dated20.04.2004 rejecting the application of the employee for voluntaryretirement, it does not reflect any compliance of Sub-Regulation 3(b) ofRegulation 29. As such, no reasons whatsoever have been assigned/given except stating that the request is not in accordance with PensionRegulations, 1995. Even otherwise, it is required to be noted that eventhe communication dated 20.04.2004 was on the last day of the thirdmonth, i.e., 90[th] day from the date of submitting the voluntary retirementapplication. Therefore, there was no reason to reject the prayer ofcurtailment of the period of notice considering the grounds mention inSub-Regulation 3(b) of Regulation 29. Be that as it may, the rejection ofthe application for voluntary retirement was not on the ground that noticeof three months is not given. The request made by the employee forcurtailment of notice of three months was also not considered on merits.Therefore, as rightly held by the Division Bench of the High Court, theapplication for voluntary retirement was absolutely in consonance with

DEF

ARegulation 29 and that the rejection was bad in law and contrary toRegulation 29. The Division Bench of the High Court is absolutelyjustified in quashing and setting aside the communication dated 20.04.2004.We are in complete agreement with the view taken by the Division Bench.

11. Now so far as the submission on behalf of the employer thatBthe employee was not eligible for voluntary retirement in view of provisoto Sub-Regulation (1) of Regulation 29 as after he returned to Indiafrom Colombo Branch he did not serve for period of not less than oneyear is concerned, there is specific finding given by the Division Benchthat the said proviso shall not be applicable to the facts of the case onhand as in the present case the employee was on transfer to ColomboCBranch and was not on deputation. If we look at order dated 19.03.1998,it cannot be said that the employee was sent on deputation as ChiefManager, Colombo Branch. It says that he is posted as Chief Manager,Colombo Branch. Even when he was relieved from Colombo Branch tojoin at Defence Colony Branch, New Delhi, in the communication datedD25.08.2003 (Annexure P5), it speaks about the transfer order dated13.05.2003. It is not the order of repatriation. Therefore, proviso toSub-Regulation (1) to Regulation 29 shall not be applicable.12. Now so far as the submission on behalf of the employer thatthe acceptance or non-acceptance of the voluntary retirement applicationEis required to be taken before the expiry of the period specified in thenotice, i.e., in the present case three months and the same was taken onthe last date of the three months’ period and date of receipt of the decision/communication is not material, it is true that in the present case thedecision was taken before the expiry of the period specified in the notice,i.e., on or before three months (last day of the third month), however, asFobserved hereinabove, the rejection of the application for voluntaryretirement itself is found to be illegal and bad in law. Therefore, theaforesaid shall not affect the ultimate conclusion reached by the DivisionBench of the High Court. As observed hereinabove, communicationdated 20.04.2004 rejecting the voluntary retirement application was badGin law and contrary to Regulation 29. Therefore, the employee shall beentitled to all retiral benefits on the basis of his voluntary retirement.Once, it is held that he is voluntary retired as per his application dated21.01.2004 and the rejection of the application of voluntary retirement isheld to be bad in law, all other subsequent proceedings of departmental

enquiry will be null and void and shall be non est, as after the voluntaryretirement, there shall not be an employer-employee relationship.

13. In view of the above and for the reasons stated above, theappeal fails and the same deserves to be dismissed and is accordinglydismissed. However, there shall be no order as to costs.

Kalpana K. Tripathy

Appeal dismissed.