INDIAN BANK vs. MAHAVEER KHARIWAL

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 2760 OF 2010 Indian Bank and another …Appellants Versus Mahaveer Khariwal …Respondent J U D G M E N T M.R. SHAH, J. 1. Feeling   aggrieved   and   dissatisfied   with   the   impugned judgment and order dated 02.02.2009 passed by the Division Bench of the High Court of Delhi at New Delhi in Letters Patent Appeal No. 246 of 2007, by which the Division Bench has allowed Signature Not Verified the   said   appeal   preferred   by   the   respondent   herein   and   has Digitally signed by ARJUN BISHT Date: 2021.01.22 16:09:02 IST Reason: quashed and set aside the judgment and order passed by the 1 learned   Single   Judge   and   has   quashed   and   set   aside communication   dated   20.04.2004   of   the   bank   rejecting   the application   for   voluntary   retirement   and   has   directed   the appellant­bank   to   release   retiral   dues   of   the   respondent   in accordance   with   the   Pension   Regulations,   1995   with   simple interest at the rate of 9% per annum from the date of filing of writ petition, the employer­bank has preferred the present appeal. 2. The facts leading to the present appeal in nutshell are as under: That   the   respondent   herein   –   original   writ   petitioner   – employee (hereinafter referred to as the ‘employee’) was working with the appellant bank – employer (hereinafter referred to as the ‘employer’), who was promoted as Chief Manager SMG­IV.   In March, 1998, he was transferred and posted as Chief Manager, Colombo   Branch,   Colombo.     Thereafter,   by   order   dated 13.05.2013, he was transferred from Colombo overseas branch to the Defence Colony Branch, New Delhi 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 2 as well as the application for extension of leave were refused by the employer and the employee was directed to report on duty at Defence Colony Branch, New Delhi.   That on 21.01.2004, the employee submitted an application seeking voluntary retirement from the services of the employer in accordance with Circular No. th 32/97­98  dated  15   July,  1997  and  the  format given  by  the employer for submitting the notice of voluntary retirement.   In the application for voluntary retirement, the employee requested for waiver of three months’ notice, as required under Regulation 29   of   the   Indian   Bank   Employees   Pension   Regulations,   1995 (hereinafter   referred   to   as   ‘Pension   Regulations,   1995’)   and requested/authorised the employer to deduct the salary of the notice period from out of the amount payable by the employer on retirement.   The employer vide letter dated 20.04.2004, which was served on the employee on 23.04.2004, rejected the request of the employee for voluntary retirement on the ground that the employee was not eligible under Pension Regulations, 1995. 3. Being   aggrieved   by   the   rejection   of   the   application   for voluntary retirement, the employee preferred Writ Petition (C) No. 16972 of 2005.   One another prayer was for a direction to the 3 employer to reimburse the educational expenses for the son of the employee, who had been sent to Singapore for his education while he was posted at Colombo.   One another prayer was for grant of traveling allowance bills for the journey from Colombo to New Delhi, which was declined by the employer on account of delay   in   submitting   the   bills.     The   learned   Single   Judge   by judgment and order dated 11.10.2006 dismissed the writ petition so far as challenge to the rejection of his voluntary retirement application   vide   communication   dated   20.04.2004.     However, granted the prayers for traveling allowance bills and educational expenses. 4. Feeling aggrieved and dissatisfied with the judgment and order passed by the learned Single Judge in dismissing the writ petition   with   respect   to   his   prayer   to   quash   the   letter   dated 20.04.2004   rejecting   his   request  for   voluntary   retirement,   the employee   preferred   Letters   Patent   Appeal   before   the   Division Bench of the High Court.  The Division Bench, by the impugned judgment and order, has allowed the said Letters Patent Appeal and has quashed and set aside the letter dated 20.04.2004 and 4 has directed the employer to release retiral dues of the employee in accordance with Pension Regulations, 1995. 5. Feeling   aggrieved   and   dissatisfied   with   the   impugned judgment and order passed by the Division Bench of the High Court, the employer has preferred the present appeal. 6. Shri Ravi Sikri, learned Senior Advocate has appeared on behalf of the employer and Shri Sanjeev Kumar, learned Advocate has appeared on behalf of the employee. 6.1      Shri Ravi Sikri, learned Senior Advocate appearing on behalf   of   the   employer   has   made   the   following   submissions, assailing   the   impugned   judgment   and   order   passed   by   the Division Bench: i) that the High Court has not properly appreciated Regulation 29 of the Pension Regulations, 1995 in its true perception; ii) that the High Court has not properly appreciated the fact that as per Regulation 29, a request for voluntary retirement by an   employee   requires   permission/acceptance   of   the   employer concerned; 5 iii) that vide communication dated 20.04.2004, the application of the employee for voluntary retirement was rejected within three months   from   the   date   of   submitting   the   voluntary   retirement application and therefore there could not be a deemed acceptance of voluntary retirement; that what is relevant is taking the decision within three months and not the service of the decision on the application for voluntary retirement.   It is submitted that in the present case, the decision was taken within a period of three months. iv) that   the   High   Court   has   failed   to   appreciate   that   an employee who seeks voluntary retirement is to give three months’ mandatory   notice   in   writing   to   enable   the   employer   to   make necessary arrangements for an alternate hand in place of the employee seeking voluntary retirement.   It is submitted that in the present case, three months’ mandatory notice was not given and   therefore   his   application   for   voluntary   retirement   was defective   to   that   extent.     It   is   submitted   that   therefore   the employer rightly rejected his application for voluntary retirement which   was   not   in   consonance   with   the   Pension   Regulations, 1995; 6 v) that   the   High   Court   has   failed   to   appreciate   that   the employee’s offer of surrendering three months salary in lieu of mandatory notice period could not be considered to be a valid application for waiver of the three months’ notice requirement; vi) that the High Court has erred in holding that the employee was, in fact, transferred to the foreign branch and was not sent on deputation.  It is submitted that as such the respondent was on deputation at the overseas branch at Colombo at the relevant point of time and therefore as per Regulation 29(1) of the Pension Regulations,  1995, the  employee was  not eligible to apply for voluntary   retirement   unless   after   having   been   transferred   or having returned to India, he has resumed charge of the post in India and has served for a period of not less than one year.  It is submitted that therefore the employee did not fulfil the statutory requirement of serving for a period of one year after returning to India, as contemplated under Regulation 29(1); vii) It is submitted that as such after rejection of the application for   voluntary   retirement,   the   employer   initiated   departmental proceedings against the employee for his unauthorised absence from 26.11.2003 to 19.01.2004 and from 22.01.2004 and the 7 disciplinary   authority   imposed   the   penalty   of   compulsory retirement on the employee.   It is submitted that therefore the Division Bench of the High Court ought not to have allowed the appeal. Making the above submissions, it is prayed to allow the present appeal and quash and set aside the impugned judgment and   order   passed   by   the   Division   Bench   and   restore   the judgment   and   order   passed   by   the   learned   Single   Judge   and restore the decision of the bank dated 20.04.2004 rejecting the application of the employee for voluntary retirement. 7. Shri Sanjeev Kumar, learned Advocate appearing on behalf of the employee has supported the impugned judgment and order passed by the Division Bench of the High Court.  It is submitted that the Division Bench has rightly set aside the communication dated 20.04.2004 by which the application of the employee for voluntary   retirement   was   rejected.     It   is   submitted   that   the Division   Bench   of   the   High   Court   has   rightly   interpreted Regulation  29  and   has   rightly  considered  that the   bar  under Regulation 29(1) shall not be applicable insofar as Regulation 29(1) is concerned, as the employee was not on deputation at 8 Colombo Branch but was on transfer.   It is submitted that the question is not when the decision was served upon the employee, but   the   question   is   whether   the   rejection   of   the   voluntary retirement application vide communication dated 20.04.2004 was legal, just and proper and was in consonance with Regulation 29 or not.  It is submitted that on true interpretation of Regulation 29, the High Court has rightly allowed the appeal and has rightly quashed and set aside the communication dated 20.04.2004.     8. We have heard the learned counsel for the respective parties at length. It is not in dispute that in the present case the employee submitted the voluntary retirement application on 21.01.2004. In the application itself, the employee requested for waiver of three months’ notice and requested to deduct the salary amount of the notice period from out of the amounts payable to him by the employer on retirement.  It is not in dispute and it cannot be disputed   that   the   notice   of   voluntary   retirement   requires acceptance by the appointing authority.  However, as per proviso to Sub­Regulation  2 of  Regulation  29,  in case  the  appointing authority does not refuse to grant the permission for retirement 9 before   the   expiry   of   the   period   specified   in   the   notice,   the retirement shall become effective from the date of expiry of the th said notice period.   In the present case, on the 90   day vide communication dated 20.04.2004 the application of the employee for   voluntary   retirement   was   rejected   without   assigning   any specific reasons and by observing that the employee is not eligible for voluntary retirement under Pension Regulations, 1995.  The said communication was sent to the employee on the very date, i.e., 20.04.2004, however the same was received by the employee on 23.04.2004.   The learned Single Judge dismissed the writ petition   so   far   as   challenge   to   the   communication   dated 20.04.2004 is concerned.  However, on appeal, by the impugned judgment   and   order,   the   Division   Bench   has   set   aside   the communication dated 20.04.2004 by which the request of the employee   for   voluntary   retirement   from   the   service   of   the employer came to be rejected. Therefore,   the   short   question   which   is   posed   for   the consideration before this Court is, whether the rejection of the request   of   the   employee   for   voluntary   retirement   vide 10 communication dated 20.04.2004 was legal and in consonance with Regulation 29 of the Pension Regulations, 1995 or not. 9. While considering the aforesaid question, Regulation 29 is required 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 time after   an   employee   has   completed   twenty   years   of qualifying service he may, by giving notice of not less than three months in writing to the appointing authority retire from service:  Provided that this sub­regulation shall not apply to an employee who is on deputation or on study leave on abroad unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year: Provided further that this sub­regulation shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking or company or institution or body, whether incorporated or not to which he is on deputation at the time of seeking voluntary retirement:  Provided that this sub­regulation shall not apply to an employee who is deemed to have retired in accordance with 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 refuse to grant the permission for retirement before the expiry   of   the   period   specified   in   the   said   notice,   the retirement shall become effective from the date of expiry of the said period. 11 (3)(a) An employee referred to in sub­regulation (1) may make a request in writing to the appointing authority to accept notice of Voluntary Retirement of less than three months giving reasons thereof;  (b)   On   receipt   of   a   request   under   clause   (a),   the appointing authority may, subject to the provisions of sub­regulation   (2),   consider   such   request   for   the curtailment of the period of the notice of three months on merits and if it is satisfied that the curtailment of the period   of   notice   will   not   cause   any   administrative inconvenience, the appointing authority may relax the requirement of notice of three months on the condition that the employee shall not apply for Commutation of a part of the pension before the expiry of the notice of three months.  (4)   An   employee,   who   has   elected   to   retire   under   this regulation and has given necessary notice to that effect to   the   appointing   authority.   shall   be   precluded   from withdrawing his notice except with specific approval of such authority;  Provided that the request for such withdrawal shall be made before the intended date of his retirement.  (5)   The   qualifying   service   of   an   employee   retiring voluntarily under this regulation shall be increased by a period not exceeding five years, subject to the condition that   the   total   qualifying   service   rendered   by   such employee shall not in any case exceed thirty­three years and   it   does   not   take   him   beyond   the   date   of superannuation,  (6)   The   pension   of   an   employee   retiring   under   this regulation shall be based on the average emoluments as defined   under   clause   (d)   of   regulation   2   of   these regulations and the increase. not exceeding five years in his   qualifying   service.   shall   not   entitle   him   to   any notional fixation of pay for the purpose of calculating his pension.” 10. On   a   fair   reading   of   Regulation   29,   it   emerges   that   an employee is entitled to apply for voluntary retirement after he has 12 completed   20   years   of   qualifying   service.     He   can   apply   for voluntary   retirement   by   giving   notice   of   not   less   than   three months in writing to the appointing authority (Regulation 29(1)). However, as per proviso to Sub­Regulation (1) of Regulation 29, Sub­Regulation   (1)   of   Regulation   29   shall   not   apply   to   an employee   who   is   on   deputation   or   on   study   leave   on   abroad unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year. The said proviso shall be dealt with and considered hereinbelow.   It also appears that as per Sub­Regulation   (2)   of   Regulation   29,   the   notice   of   voluntary retirement   given   under   Sub­Regulation   (1)   shall   require acceptance by the appointing authority.   However, as per the proviso to Sub­regulation (2),  the  appointing authority  has  to take a decision before the expiry of the period specified in the notice. It provides that where the appointing authority does not refuse to grant the permission for 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 the period mentioned in the notice.  However, at the same time, as 13 per Sub­Regulation 3(a), an employee may make a request in writing to the appointing authority for waiver of the three months’ notice and may make a request to accept the notice of voluntary retirement   of   less   than   three   months   giving   reasons   thereof. Sub­Regulation   3(b)   provides   that   on   receipt   of   a   request   for waiver of three months’ notice as per Sub­Regulation 3(a), the appointing   authority   may,   subject   to   the   provisions   of   Sub­ Regulation (2), consider such request for the curtailment of the period of notice of three months on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of three months on the condition that the employee shall not apply for commutation of a part of the pension before the expiry of the notice of three months.  In the present   case,   the   application   of   the   employee   submitting   the voluntary retirement application with a request for curtailment of notice   of   three   months   was   absolutely   in   consonance   with Regulation   29.     The   request   made   by   the   employee   for curtailment of the period of notice of three months was required to be considered by the appointing authority on merits and only in a case where it is found that the curtailment of the period of 14 notice may cause any administrative inconvenience, the request for   curtailment   of   the   period   of   three   months’   notice   can   be rejected.   On considering the communication dated 20.04.2004 rejecting the application of the employee for voluntary retirement, it   does   not   reflect   any   compliance   of   Sub­Regulation   3(b)   of Regulation   29.     As   such,   no   reasons   whatsoever   have   been assigned/given   except   stating   that   the   request   is   not   in accordance with Pension Regulations, 1995.  Even otherwise, it is required   to   be   noted   that   even   the   communication   dated th 20.04.2004 was on the last day of the third month, i.e., 90  day from the date of submitting the voluntary retirement application. Therefore, there was no reason to reject the prayer of curtailment of the period of notice considering the grounds mention in Sub­ Regulation 3(b) of Regulation 29.  Be that as it may, the rejection of the application for voluntary retirement was not on the ground that notice of three months is not given.   The request made by the employee for curtailment of notice of three months was also not   considered   on   merits.     Therefore,   as   rightly   held   by   the Division Bench of the High Court, the application for voluntary retirement was absolutely in consonance with Regulation 29 and that the rejection was bad in law and contrary to Regulation 29. 15 The Division Bench of the High Court is absolutely justified 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 that the employee was not eligible for voluntary retirement in view of proviso   to   Sub­Regulation   (1)   of   Regulation   29   as   after   he returned to India from Colombo Branch he did not serve for a period of not less than one year is concerned, there is a specific finding given by the Division Bench that the said proviso shall not be applicable to the facts of the case on hand as in the present case the employee was on transfer to Colombo Branch 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 Chief Manager, Colombo Branch.   It says that he is posted as Chief Manager, Colombo Branch.   Even when he was relieved from Colombo Branch to join at Defence Colony Branch, New Delhi, in the communication dated 25.08.2003 (Annexure P5), it speaks about the transfer order dated 13.05.2003.  It is not the 16 order of repatriation.  Therefore, proviso to Sub­Regulation (1) to Regulation 29 shall not be applicable. 12. Now so far as   the submission on behalf of the employer that   the   acceptance   or   non­acceptance   of   the   voluntary retirement application is required to be taken before the expiry of the period specified in the notice, i.e., in the present case three months and the same was taken on the 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   the   decision   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, as observed hereinabove, the rejection of the application for voluntary retirement itself is found to be illegal and bad in law.   Therefore, the aforesaid shall not affect the ultimate conclusion reached by the Division Bench of the High Court.  As observed hereinabove, communication dated 20.04.2004   rejecting   the   voluntary   retirement   application   was bad   in   law   and   contrary   to   Regulation   29.     Therefore,   the employee shall be entitled to all retiral benefits on the basis of his voluntary retirement.  Once, it is held that he is voluntary retired 17 as per his application dated 21.01.2004 and the rejection of the application of voluntary retirement is held 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   voluntary retirement, there shall not be an employer­employee relationship. 13. In view of the above and for the reasons stated above, the appeal   fails   and   the   same   deserves   to   be   dismissed   and   is accordingly dismissed.   However, there shall be no order as to costs. ……………………………………J. [ASHOK BHUSHAN] ………………………………….J. [R. SUBHASH REDDY] NEW DELHI; ………………………………….J. JANUARY 22, 2021. [M.R. SHAH] 18