Full Judgment Text
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6186 OF 2009
(Arising out of SLP(C) No. 3514 of 2008)
Padubidri Damodar Shenoy …Appellant
Versus
Indian Airlines Limited & Anr. …Respondents
JUDGEMENT
R.M. Lodha, J.
Leave granted.
2. In this appeal by special leave, interpretation and
construction of Regulation 12 of Service Regulations for
Employees (other than those in the Flying Crew and those in
the Aircraft Engineering Departments) – for short ‘Service
Regulations’ – framed by respondent no. 1, is involved.
3. Padubidri Damodar Shenoy – appellant – joined
the services of the Indian Airlines Limited – respondent no. 1 as
Traffic Assistant on January 13, 1977. The appellant was
promoted from time to time and, lastly, he was promoted to the
post of Manager in the commercial department. In or about
September, 2002, the appellant was posted to work at Muscat
as Airport Manager but was recalled from posting soon
thereafter and posted as Manager, Mumbai Airport. The
appellant challenged the pre-mature recall by filing writ petition
which was later on withdrawn. It is not necessary to refer to the
details of that writ petition as the subject matter of the present
appeal does not concern that. What is relevant to be noticed
here is that a charge-sheet dated January 16/21, 2003 was
served upon the appellant; enquiry was conducted and the
appellant was found guilty of misconduct alleged in the charge-
sheet and vide order dated March 31, 2006/April 10, 2006, the
appellant’s time scale by two incremental stages with
cumulative effect was reduced by way of punishment.
4. In the year 2003, the respondent no. 1 came out
with a scheme of Voluntary Retirement for its employees
entitled Voluntary Retirement Scheme, 2003 (for short, ‘VRS,
2003’). The appellant applied for voluntary retirement under
the said scheme on September 17, 2003.
2
5. On September 30, 2005 the appellant gave a notice
of his intention to voluntarily retire from service on completion
of three months from the date of the notice as the appellant had
completed 29 years of service. This was done under regulation
12 of the Service Regulations.
6. The appellant’s case is that he sent a reminder to
the authorities on December 16, 2005 and when he did not
receive any reply, he sent another letter dated June 8, 2006
informing the respondents that he would cease to be an
employee of the respondent no. 1 after close of the working
hours on June 30, 2006. Again on July 1, 2006, the appellant is
said to have informed the respondent no. 1 and the concerned
authority that in terms of notice dated September 30, 2005 he
has ceased to be an employee of the respondent no. 1 in terms
of Regulation 12(b) of the Service Regulations and requested
the respondents to release and pay all his legal dues including
the provident fund and gratuity within two weeks from July 1,
2006. Another letter is said to have been sent by the appellant
on July 20, 2006 asking the respondents to release his legal
3
dues failing which he informed them that he would be left with
no alternative but to approach the court.
7. It appears that by a letter dated July 31, 2006, the
appellant was informed that his application for voluntary
retirement has been forwarded to the Headquarters for decision
in the matter. The appellant was advised to report for duty
immediately, failing which he was informed that a disciplinary
action would be taken against him.
8. The appellant sent reply to the said letter on August
8, 2006 reiterating his stand and further informing the
respondents that he has ceased to be the employee of the
respondents from July 1, 2006 and, therefore, there was no
question of his reporting for duty.
9. The appellant then filed a writ petition (Writ Petition
No. 2522 of 2006) before the High court of Judicature at
Bombay. During the pendency of writ petition, the appellant
received a communication dated September 15, 2006 from the
respondents that his request for voluntary retirement from
service has not been acceded to by the competent authority.
4
10. Writ Petition No.2522 of 2006 was contested by the
respondents. The Division Bench of the High Court heard the
parties and by its order dated April 23, 2007, dismissed that writ
petition.
11. The appellant filed a fresh writ petition being Writ
Petition No.1463 of 2007 before the High Court of Judicature at
Bombay praying therein that the communication dated
September 15, 2006 rejecting the appellant’s application for
voluntary retirement be quashed and set aside and a direction
be issued to the respondents to approve the voluntary
retirement of the appellant under Regulation 12(b) of Service
Regulations pursuant to the notice dated September 30, 2005.
The appellant also prayed that the respondents be further
directed to release and pay all legal dues of the appellant along
with interest thereon at 18% per annum from July 1, 2006 till
payment and extend all post-retirement benefits.
12. The respondents contested that writ petition on
diverse grounds, inter alia , namely: (i) that the appellant had
raised the same issue in earlier writ petition (Writ Petition No.
2522 of 2006) and by a detailed order, his writ petition was
5
dismissed and, therefore, it was not open to the appellant to
re-agitate the same issue; (ii) that the application for voluntary
retirement is an offer made by an employee and unless it is
accepted by the employer, it does not become effective. The
employee is not relieved from service till the offer is accepted
because the relationship of the employer and employee does
not come to an end. The offer of the appellant was not
accepted by the first respondent and (iii) that the delayed
communication does not create any right in the appellant and
that the Service Regulations do not contemplate reasons to be
communicated for rejection of the application for voluntary
retirement.
13. The Division Bench of the High Court, after hearing
the parties, dismissed the writ petition on October 17, 2007.
Hence, the present appeal by special leave.
14. Before we turn to Regulation 12 of the Service
Regulations, we may observe that the appellant had raised the
same controversy by filing Writ Petition No. 2522 of 2006. It is
true that the communication dated September 15, 2006 was
received by him during the pendency of writ petition but the
6
Division Bench was conscious of this fact while passing the
order dated April 23, 2007. The Division Bench held that right to
accept or reject the offer for voluntary retirement is that of the
employer and although this has to be exercised within a
reasonable time but that, however, does not give any right to
the employee, if not accepted within reasonable time, to hold
that the employment has come to an end. This is what the
Division Bench said in its order dated April 23, 2007 while
dismissing earlier writ petition :
“The case of the petitioner is that once application is moved
for retirement, under the provisions of Regulation 16(b), it
would be the bounden duty of the Respondents to have
decided the same recently. As the Respondents for a long
period of time did not accept the letter to offer retirement, the
petitioner stopped attending the work as in his opinion, he
ceases to be in the employment and demanded the
compensation/retiremental benefits from Respondent No. 1.
After having heard the learned counsel for the petitioner and
the learned counsel for Respondent No. 1 and the relevant
Regulation, we are clearly of the opinion that right to accept
or reject is that of the employer. It is true that this has to be
exercised within a reasonable time, that however does not
give right in employee if not accepted within reasonable time
to hold that the employment has to come to an end. The
requirement of the regulation is approval of the competent
authority. The Competent Authority has by a communication
on 15.9.2006 refused the request for voluntary retirement.
Considering the above, we are of the opinion that no case is
made out for interference by this court.
It is made clear that we are not going to the merits as to
whether Respondent No. 1 was within its jurisdiction to
7
accept or refuse. If the petitioner is aggrieved, it is for the
petitioner to take whatever action which he desires.”
15. While dismissing the subsequent writ petition, in
the impugned order, the Division Bench has observed that it
was improper for the appellant to have another round of
litigation on the same point. The Division Bench expressed its
unhappiness about the conduct of the appellant thus :
“In its order dated 23/4/07, the Division Bench quoted
Regulation 12(b). The Division Bench heard arguments on
this point. It is reflected in the order that this point was
canvassed. The Division Bench then observed that because
the employer does not exercise the right to accept or reject
the application within a reasonable time that does not give
right in employee to contend that employment has come to
an end. It is distressing to note that though this contention is
rejected it is again raised in the present petition. It is
improper for the petitioner to have a round of litigation in this
manner on the same point. We are unhappy about this
conduct of the petitioner.”
16. Now, we come to the core issue. Regulation 12 of
the Service Regulations, which is the area of controversy, reads
thus :
“12. An employee shall retire from the service of the
Company on attaining the age of 58 years provided that the
competent authority may ask an employee to retire after he
attains the age of 55 years on giving three months’ notice
without assigning any reason. An employee :-
(a) On attaining the age of 55 years;
OR
8
(b) On the completion of 20 years of
continuous service may by giving three
months notice voluntarily retire from the
service;
Provided that the voluntary retirement under Clause (b) shall
be subject to approval of the competent authority.
Provided further, notwithstanding anything contained in
regulation – 12 the services of an employee may at the
option of the Managing Director and the employee being
found medically fit, be extended by one year at a time
beyond the age of retirement of 58 years for an aggregate
period not exceeding two years.”
17. Mr. S.J. Deshmukh, learned counsel for the
appellant contended that Regulation 12 vests the employees
covered thereby with a right to voluntarily retire after giving
three months notice, namely, those who have attained age of
55 years and also those who have completed 20 years of
continuous service and both these categories form one class.
According to him, proviso appended to Regulation 12 only
empowers the competent authority to withhold approval
before the notice period is over. In other words, he would
submit, that the employer can stop the voluntary retirement by
not granting the approval within the period of notice and
communicating the same to the concerned employee that the
employer was not giving his approval. Learned counsel
9
submitted that a ‘proviso’ to particular provision of a statute
only embraces the field which is covered by main provision to
which it has been enacted and to no other. He relied upon a
decision of this Court in A.N. Sehgal & Others vs. Raje Ram
1
Sheoran & Others and submitted that where the language of
the main enactment is explicit and unambiguous, the proviso
can have no repercussion on the interpretation of the main
enactment, so as to exclude from it, by implication what clearly
falls within its express terms.
18. Insofar as norms relating to voluntary retirement are
concerned, Mr. S.J. Deshmukh, learned counsel for the
appellant submitted that the law in this regard is laid down by
2
this Court in State of Haryana & Others vs. S.K. Singhal . He,
particularly, referred to paragraphs 13 and 14 of the report and
submitted that any decision to withhold approval has to be
taken and communicated during the period of notice.
19. On the other hand, Mr. P.S. Narasimha, learned
senior counsel for the respondents submitted that cases of
1
1992 Supp. (1) SCC 304
2
(1999) 4 SCC 293
10
voluntary retirement fall in three categories namely: (i) where
voluntary retirement is automatic and comes into force on the
expiry of notice period; (ii) where voluntary retirement comes
into force on the expiry of notice period unless an order is
passed within the notice period withholding permission to retire;
and (iii) where voluntary retirement does not come into force
unless permission to this effect is specifically granted by the
controlling authority. The learned senior counsel would submit
that proviso appended to Regulation 12 relates to category
(iii). He also relied upon decision of this Court in S.K. Singhal
and another decision of this Court in the case of T ek Chand vs.
3
Dile Ram .
20. Learned senior counsel for the respondents
submitted that notice dated September 30, 2005 given by the
appellant to the employer under Regulation 12(b) expiring on
December 31, 2005 did not become effective and rather
remained inoperative since the appellant continued to attend
his duties not only until the expiry of notice period but thereafter
as well upto June 30, 2006. In this regard, he referred to a
decision of this Court in the case of K.L.E. Society vs. Dr.R.R.
3
(2001) 3 SCC 290
11
4
Patil & Anr. . He also submitted that the word “approval”
occurring in proviso to Regulation 12 in its context would mean
“to accept”. In this regard, he referred to a decision of this
Court in the case of Ashok Kumar Sahu vs. Union of India &
5
Ors. . Relying upon a decision of this Court in the case of
H.P.Horticultural Produce Marketing & Processing Corpn. Ltd.
6
vs. V. Suman Behari Sharma , Mr. P.S.Narasimha submitted
that ‘proviso’ to Regulation 12 expressly mandates the approval
of the competent authority or, in other words, approval of the
competent authority is a condition precedent to the event of
voluntary retirement.
21. Regulation 12 of the Service Regulations, inter alia,
enables an employee to seek voluntary retirement on attaining
the age of 55 years or on completion of 20 years of continuous
service by giving three months notice. An employee who has
attained the age of 55 years and has applied for voluntary
retirement under Regulation 12, his voluntary retirement is
automatic on expiry of notice period i.e. three months. Is it
equally applicable to an employee who has not attained the
4
(2002) 5 SCC 278
5
(2006) 6 SCC 704
6
(1996) 4 SCC 584
12
age of 55 years but completed 20 years of continuous service
and applied for voluntary retirement. In our judgment, it is not
so because for a category covered by clause (b), namely, an
employee having completed 20 years of continuous service
who has given three months notice for voluntary retirement
from the service, a proviso appended thereto provides that
voluntary retirement under clause (b) shall be subject to
approval of the competent authority.
22. It is appropriate at this stage to consider the
decision of this Court in S.K. Singhal. In S.K. Singhal , the
relevant rule 5.32(B) of the Punjab Civil Services Rules under
consideration was as follows:
“5.32(B)(1) At any time a government employee
has completed twenty years’ qualifying service, he
may, by giving notice of not less than three months in
writing to the appointing authority retire from service.
However, a government employee may make a
request in writing to the appointing authority to accept
notice of less than three months giving reason
therefor. On receipt of a request, the appointing
authority may 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 government employee shall not apply for
commutation of a part of his pension before the expiry
of the period of notice of three months.
(2) The notice of voluntary retirement given under
sub-rule (1) shall require acceptance by the
13
appointing authority subject to Rule 2.2 of the Punjab
Civil Services Rules Vol.II:
Provided that where the appointing authority
does not refuse to grant the permission for retirement
before the expiry of the period specified in sub-rule (1)
supra , the retirement shall become effective from the
date of expiry of the said period:
Provided further that before a government
employee gives notice of voluntary retirement with
reference to sub-rule (1) he should satisfy himself by
means of a reference to the appropriate authority that
he has, in fact, completed twenty years’ service
qualifying for pension.”
23. In paragraph 9 of the report, this Court considered
the general scheme of voluntary retirement in service rules and
also noted earlier decisions of this Court in the case of Dinesh
7
Chandra Sangma vs. State of Assam & Ors. , B.J. Shelat vs.
8
State of Gujarat & Others , Union of India vs. Sayed Muzaffar
9
Mir and H.P.Horticultural Produce Marketing & Processing
Corpn. Ltd. This Court observed:
“9. The employment of government servants is
governed by rules. These rules provide a particular
age as the age of superannuation. Nonetheless, the
rules confer a right on the Government to
compulsorily retire an employee before the age of
superannuation provided the employee has reached a
particular age or has completed a particular number
of years of qualifying service in case it is found that
his service has not been found to be satisfactory. The
rules also provide that an employee who has
completed the said number of years in his age or
who has completed the prescribed number of years
7
(1977) 4 SCC 441
8
(1978) 2 SCC 202
9
1995 Supp ( 1) SCC 76
14
of qualifying service could give notice of, say, three
months that he would voluntarily retire on the expiry
of the said period of three months. Some rules are
couched in language which results in an automatic
retirement of the employee upon the expiry of the
period specified in the employee’s notice. On the
other hand, certain rules in some other departments
are couched in language which makes it clear that
even upon expiry of the period specified in the notice,
the retirement is not automatic and an express order
granting permission is required and has to be
communicated. The relationship of master and
servant in the latter type of rules continues after the
period specified in the notice till such acceptance is
communicated; refusal of permission could also be
communicated after 3 months and the employee
continues to be in service. Cases like Dinesh
Chandra Sangma v State of Assam (1977) 4 SCC
441; B.J. Shelat v. State of Gujarat (1978) 2 SCC
202 and Union of India v. Sayed Muzaffar Mir (1995
Supp.(1) SCC 76 belong to the former category
where it is held that upon the expiry of the period, the
voluntary retirement takes effect automatically as no
order of refusal is passed within the notice period.
On the other hand H.P. Horticultural Produce
Marketing & Processing Corpn. Ltd. vs. Suman Behari
Sharma (1996) 4 SCC 584 belongs to the second
category where the bye-laws were interpreted as not
giving an option “to retire” but only provided a limited
right to “seek” retirement thereby implying the need
for a consent of the employer even if the period of the
notice has elapsed. We shall refer to these two
categories in some detail.”
24. In S.K. Singhal, this Court considered previous
decisions at quite some length and held:
“13. Thus, from the aforesaid three decisions it is
clear that if the right to voluntarily retire is conferred
in absolute terms as in Dinesh Chandra Sangma case
by the relevant rules and there is no provision in the
rules to withhold permission in certain contingencies
15
the voluntary retirement comes into effect
automatically on the expiry of the period specified in
the notice. If, however, as in B.J. Shelat case and as
in Sayed Muzaffar Mir case the authority concerned is
empowered to withhold permission to retire if certain
conditions exist, viz., in case the employee is under
suspension or in case a departmental enquiry is
pending or is contemplated, the mere pendency of the
suspension or departmental enquiry or its
contemplation does not result in the notice for
voluntary retirement not coming into effect on the
expiry of the period specified. What is further needed
is that the authority concerned must pass a positive
order withholding permission to retire and must also
communicate the same to the employee as stated in
B.J. Shelat case and in Sayed Muzaffar Mir case
before the expiry of the notice period. Consequently,
there is no requirement of an order of acceptance of
the notice to be communicated to the employee nor
can it be said that non-communication of acceptance
should be treated as amounting to withholding of
permission.
14 . Before referring to the second category of
cases where the rules require a positive acceptance
of the notice of voluntary retirement and
communication thereof, it is necessary to refer to the
decision of this Court in Baljit Singh (Dr) v. State of
Haryana [1997 (1) SCC 754] strongly relied upon by
the learned counsel for the appellants and to Power
Finance Corpn. Ltd. v. Pramod Kumar Bhatia [ (1997)
4 SCC 280] . The former case arose under Rule
5.32(B) of the Punjab Civil Services Rules. That rule
extracted earlier contains an express provision in the
proviso to sub-rule (2) that the retirement takes effect
automatically if refusal is not communicated within 3
months. In that case, when the employee gave notice
for voluntary retirement on 20-9-1993, criminal cases
were pending against him. After expiry of 3 months,
on 25-2-1994, the competent authority declined to
accept the notice. A two-Judge Bench of this Court,
however, held that the voluntary retirement did not
come about automatically on the expiry of the notice
period but that it could take effect only upon
acceptance of the notice by the Government and that
the acceptance must also be communicated and till
then the jural relationship of master and servant
continues. This Court referred only to the decision of
the two-Judge Bench in Sayed Muzaffar Mir case and
stated that that case was to be confined to its own
16
facts. The two-Judge Bench of this Court in Baljit
Singh case did not notice that there were two three-
Judge Bench cases in Dinesh Chandra Sangma and
Shelat taking the view under similar rules that a
positive order was to be passed within the notice
period withholding permission to retire and that the
said order was also to be communicated to the
employee during the said period. By stating that an
order of acceptance of the notice was necessary and
that the said acceptance must be communicated to
the employee and till that was done the jural
relationship continued and there was no automatic
snapping thereof on the expiry of 3 months’ period,
the two-Judge Bench, in our view, has gone contrary
to the two three-Judge Bench cases which were not
brought to its notice. In the above circumstances, we
follow the two three-Judge Bench cases for deciding
the case before us.
15 . Learned counsel for the appellant also relied
on a two-Judge Bench decision in Power Finance
Corpn. Ltd. v. Pramod Kumar Bhatia . That was a case
where the letter of voluntary retirement was
conditionally accepted subject to payment of dues
and the employee wrote a further letter seeking
adjustment thereof but before that was done, the
scheme itself was withdrawn. There are again some
observations made to the effect that there must be
acceptance of request to retire and that it must be
communicated. Neither Dinesh Chandra Sangma nor
Shelat was referred to. In our opinion, the express
provision in the proviso to sub-rule (2) of Rule 5.32(B)
in the case before us does not permit such a view to
be taken. The said observations again run contrary to
the decision in the two three-Judge Bench cases
referred to above. Our comments on Baljit Singh
apply equally to this case, so far as the observations
are concerned.
16 . We then come to the second category of
cases where the rules require that an order of
acceptance of notice be passed to make the voluntary
retirement effective. In HPMC v. Suman Behari
Sharma it will be noticed, the principle in Dinesh
Chandra Sangma case was accepted but the case
was distinguished on the ground that Bye-law 3.8(2)
in HPMC case provided differently and that under that
bye-law an employee could be permitted at his
request to retire on completion of 25 years’ service or
50 years of age. Para (5) of Bye-law 3.8 stated as
follows: (SCC p.588, para 7)
“( 5 ) Notwithstanding the provision under para (2)
above, the corporation employees who have a
17
satisfactory service record of 20 years may also
seek retirement from the service of the
Corporation after giving three months’ notice in
writing to the appropriate authority. Persons under
suspension would not be retired under this clause
unless proceedings of the case against them are
finalised....”(emphasis supplied)
While clause (2) speaks of 25 years’ service, clause
(5) speaks of 20 years’ service.
17 . The employee applied on 26-11-1990 for
voluntary retirement effective from 30-11-1990 and
also requested for waiver of notice of 3 months. He
did not report to duty right from 1-12-1990. Earlier on
12-12-1989, a charge-sheet was issued against him
for certain acts of misconduct. On 26-12-1990 he filed
a reply to the charge-sheet. On 22-8-1992 another
charge-sheet was served for unauthorised absence
and one more on 18-9-1992. On 30-9-1992 he
approached the Tribunal contending that he stood
retired on expiry of 3 months from notice, w.e.f. 26-2-
1990. The Tribunal accepted the said plea. Reversing
the order of the Tribunal, this Court held while
1
distinguishing Dinesh Chandra Sangma case and
other similar High Court judgments, that clause (2) of
the bye-law merely gave a right to make a request
and the request would become effective only if
permitted. Under clause (2) of the bye-law, it was a
“right to a request” and not “a right to retire”. If the
request was not accepted and permission was not
granted, the employee could not claim that there was
an automatic retirement on the expiry of the period.
Even under clause (5) while it was true that there was
a non obstante clause, it was only an exception to
clause (2) to a limited extent, i.e., completion of 20
years’ satisfactory service [rather than 25 under
clause (2)] but the grant of “permission” to the request
seeking retirement was necessary even under clause
(5) and was not dispensed with. If under clause (2) a
person who had put in 25 years had to “seek to retire”
and had to be “permitted to retire”, a person with only
20 years’ service under clause (5) could not have
been placed on a better footing, it was held. The
Court emphasised: (SCC pp.588-89, para 8)
“The words ‘seek retirement’ in para 5 indicate
that the right which is conferred by it is not the
right to retire but a right to ask for retirement.
The word ‘seek’ implies a request by the
employee and corresponding acceptance or
permission by HPMC. Therefore, there cannot
be automatic retirement or snapping of service
relationship on expiry of three months’ period.”
18
On that basis, it was held that though the rejection of
the request was not communicated within the notice
period, there was no automatic retirement. There are
no such provisions in the case before us.
18 . In the case before us sub-rule (1) of Rule
5.32(B) contemplates a “notice to retire” and not a
request seeking permission to retire. The further
“request” contemplated by the sub-rule is only for
seeking exemption from the 3 months’ period. The
proviso to sub-rule (2) makes a positive provision that
“where the appointing authority does not refuse to
grant the permission for retirement before the expiry
of the period specified in sub-rule (1), the retirement
shall become effective from the date of expiry of the
said period. The case before us stands on a stronger
footing than Dinesh Chandra Sangma case so far as
the employee is concerned. As already stated Rule
2.2 of the Punjab Civil Services Rules Vol. II only
deals with a situation of withholding or withdrawing
pension to a person who has already retired.”
3
25. In Tek Chand vs. Dile Ram , a three Judge Bench
of this Court considered S.K. Singhal in paragraph 34 of the
report and then went on to hold as follows:
35. In our view, this judgment fully supports the
contention urged on behalf of the appellant in this
regard. In this judgment, it is observed that there are
three categories of rules relating to seeking of
voluntary retirement after notice. In the first category,
voluntary retirement automatically comes into force on
expiry of notice period. In the second category also,
retirement comes into force unless an order is passed
during notice period withholding permission to retire
and in the third category voluntary retirement does not
come into force unless permission to this effect is
granted by the competent authority. In such a case,
refusal of permission can be communicated even
after the expiry of the notice period. It all depends
upon the relevant rules. In the case decided, the
relevant Rule required acceptance of notice by
19
appointing authority and the proviso to the Rule
further laid down that retirement shall come into force
automatically if the appointing authority did not refuse
permission during the notice period. Refusal was not
communicated to the respondent during the notice
period and the Court held that voluntary retirement
came into force on expiry of the notice period and
subsequent order conveyed to him that he could not
be deemed to have voluntary retired had no effect.
The present case is almost identical to the one
decided by this Court in the aforesaid decision.
36. This Court in B.J. Shelat v. State of Gujarat
while dealing with a case of voluntary retirement,
referring to the Bombay Civil Service Rules, Rule
161(2)( ii ) proviso and Rule 56( k ) of the Fundamental
Rules, in a similar situation, held that a positive action
by the appointing authority was required and it was
open to the appointing authority to withhold
permission indicating the same and communicating its
intention to the government servant withholding
permission for voluntary retirement and that no action
can be taken once the government servant has
effectively retired. Paras 9 and 10 of the said
judgment read thus: (SCC pp. 207-08)
“ 9 . Mr Patel next referred us to the meaning of the
word ‘withhold’ in Webster’s Third New
International Dictionary which is given as ‘hold
back’ and submitted that the permission should be
deemed to have been withheld if it is not
communicated. We are not able to read the
meaning of the word ‘withhold’ as indicating that in
the absence of a communication it must be
understood as the permission having been
withheld.
10 . It will be useful to refer to the analogous
provision in the Fundamental Rules issued by the
Government of India applicable to the Central
Government servants. Fundamental Rule 56( a )
provides that except as otherwise provided in this
Rule, every government servant shall retire from
service on the afternoon of the last day of the
month in which he attains the age of fifty-eight
years. Fundamental Rule 56( j ) is similar to Rule
161( aa )(1) of the Bombay Civil Services Rules
conferring an absolute right on the appropriate
authority to retire a government servant by giving
20
not less than three months’ notice. Under
Fundamental Rule 56( k ) the government servant
is entitled to retire from service after he has
attained the age of fifty-five years by giving notice
of not less than three months in writing to the
appropriate authority on attaining the age
specified. But proviso ( b ) to sub-rule 56( k ) states
that it is open to the appropriate authority to
withhold permission to a government servant
under suspension who seeks to retire under this
clause. Thus under the Fundamental Rules issued
by the Government of India also the right of the
government servant to retire is not an absolute
right but is subject to the proviso whereunder the
appropriate authority may withhold permission to a
government servant under suspension. On a
consideration of Rule 161(2)( ii ) and the proviso,
we are satisfied that it is incumbent on the
Government to communicate to the government
servant its decision to withhold permission to retire
on one of the grounds specified in the proviso.”
In this decision effect of Rule 56( k ) of the
Fundamental Rules is also considered which answers
the argument of the learned counsel for the
respondent on this aspect. It may also be noticed that
under Rule 48-A in the Government of India’s
decision giving instructions to regulate voluntary
retirement it is stated:
“Even where the notice of voluntary retirement
given by a government servant requires acceptance
by the appointing authority, the government servant
giving notice may presume acceptance and the
retirement shall be effective in terms of the notice
unless the competent authority issues an order to the
contrary before the expiry of the period of notice.”
26. In the case of Jaipal Singh vs. Sumitra Mahajan &
10
Anr. , in an appeal from election petition, this Court had an
10
(2004) 4 SCC 522
21
occasion to consider the difference between “voluntary
retirement” and “resignation”. This Court held thus:
10…….In the case of Reserve Bank of India v. Cecil
Dennis Solomon (2004) 9 SCC 461, this Court has
laid down that in service jurisprudence there is a
difference between “voluntary retirement” and
“resignation” as they convey different connotations. It
has been held that voluntary retirement and
resignation involve voluntary acts on the part of the
employee to leave service and though both involve
voluntary acts, they operate differently. One of the
basic distinctions between the two is that in the case
of resignation, it can be tendered at any time but in
the case of voluntary retirement, it can only be sought
for after rendering prescribed period of qualifying
service. In the case of resignation, a prior permission
is not mandatory while in the case of voluntary
retirement, permission of the employer concerned is a
requisite condition. Under Rule 16 of the 1958 Rules,
an employee who seeks voluntary retirement has to
give three months’ notice to enable the employer to
complete the designated mode of acceptance. (See
Halsbury’s Laws of England , 4th Edn., Vol. 9, p. 133.)
Lastly, in a given case, the appointing authority may
refuse to waive the said notice period which shows
that resignation may be unilateral whereas voluntary
retirement is bilateral. A similar question came up
before this Court in the case of UCO Bank v. Sanwar
Mal [(2004) 4 SCC 412] in which this Court has inter
alia held that in the case of “resignation”, the
relationship of employer and employee terminates on
acceptance of resignation whereas in the case of
“retirement”, voluntary or on superannuation, the
relationship continues for the purposes of payment of
retiral benefits. In the case of retirement, there is a
nexus between such retirement and retiral benefits….
”
27. The aforesaid decisions of this Court do provide
some guidance but the controversy in hand has to be decided
in the light of the words used in proviso appended to
Regulation 12. The key words therein are that voluntary
22
retirement under clause (b) ‘shall be subject to approval’ of the
competent authority. In ‘Principles of Statutory Interpretation’
(Seventh Edition, 1999), Justice G.P. Singh has quoted words
of Lord Macmillan in Madras & Southern Maharatta Rly. Co.
11
Ltd. vs. Bezwada Municipality which read thus:
“The proper function of a proviso is to except
and to deal with a case which would otherwise fall
within the general language of the main enactment
and its effect is confined to that case.”
28. In the aforesaid book, author has also quoted the
opinion of Lord Macnaghten in Local Govt. Board vs. South
12
Stoneham Union as follows:
“The proviso may be a qualification of the preceding
enactment which is expressed in terms too general to
be quite accurate”.
29. In the case of Shah Bhoraj Kuverji Oil Mills and
13
Ginning Factory vs. Subhash Chandra Yograj Sinha , this
Court held, “…as a general rule, a proviso is added to an
enactment to qualify or create an exception to what is in the
enactment…”
11
AIR 1944 PC 71
12
(1909) AC 57, p.62
13
AIR 1961 SC 1596
23
30. In the case of CIT, Mysore etc. vs. Indo Mercantile
14
Bank Ltd. , this court observed:
“ The proper function of a proviso is that it qualifies
the generality of the main enactment by providing an
exception and taking out as it were, from the main
enactment, a portion which, but for the proviso
would fall within the main enactment. Ordinarily it is
foreign to the proper function of proviso to read it as
providing something by way of an addendum or
dealing with a subject which is foreign to the main
enactment”.
1
31. In A.N. Sehgal & Ors ., upon which reliance
has been placed by the learned counsel for the
appellant, this Court stated as follows:
“14. It is a cardinal rule of interpretation that a
proviso to a particular provision of a statute only
embraces the field which is covered by the main
provision. It carves out an exception to the main
provision to which it has been enacted by the proviso
and to no other. The proper function of a proviso is to
except and deal with a case which would otherwise
fall within the general language of the main
enactment, and its effect is to confine to that case.
Where the language of the main enactment is explicit
and unambiguous, the proviso can have no
repercussion on the interpretation of the main
enactment, so as to exclude from it, by implication
what clearly falls within its express terms.
15. The scope of the proviso, therefore, is to carve
out an exception to the main enactment and it
excludes something which otherwise would have
been within the rule. It has to operate in the same
field and if the language of the main enactment is
clear, the proviso cannot be torn apart from the main
enactment nor can it be used to nullify by implication
14
AIR 1959 SC 713
24
what the enactment clearly says nor set at naught the
real object of the main enactment, unless the words of
the proviso are such that it is its necessary effect.”
32. The use of the word ‘shall’ in the proviso, prima
facie leads to an inference that provision is imperative. There
is nothing in the context to suggest that it is merely directory.
It is followed by the words, ‘subject to approval’. The effect of
the use of words ‘subject to’ is to introduce a condition. The
expression, “shall be subject to approval” is indicative of its
intendment that the voluntary retirement applied by the
employees covered by clause (b) is effective only upon
approval by the competent authority. The effect of these words
is to introduce a condition and thereby make voluntary
retirement applied by employees covered by category (b)
conditional upon its approval by the competent authority.
There is nothing to indicate in Regulation 12 that if employer
decides to withhold approval of voluntary retirement, such
refusal of approval must be communicated to the petitioner
during the period of notice. True it is that notice of three
months for voluntary retirement given by an employee covered
by clause (b) remains valid even if no communication is
25
received within notice period but it becomes effective only on
its approval by the competent authority. As a matter of fact,
this seems to have been understood by both the parties. The
appellant issued a notice of voluntary retirement under
Regulation 12 (b) on September 30, 2005. The notice period
was to expire on December 31, 2005. It is an admitted
position that the competent authority neither gave approval nor
indicated disapproval to the appellant within the notice period of
three months. The employee never treated that there has
been cessation of employment on expiry of three months
notice period inasmuch as he continued to attend his duties
after December 31, 2005 until June 30, 2006. It is only by
his letter dated June 8, 2006 that the appellant requested the
respondent to relieve him in terms of his notice dated
September 30, 2005 by June 30, 2006 and he stopped
attending work from July 1, 2006. The letter dated June 8,
2006 does not make any material difference as the fact of the
matter is that after expiry of notice period, the appellant
continued to attend his duties for many months thereafter. By
the letter dated September 15, 2006 the respondent
26
communicated to the appellant that his application for voluntary
retirement under Service Regulation 12(b) has not been
acceded to by the competent authority. Since the notice for
voluntary retirement by an employee who has not attained 55
years but has completed 20 years of continuous service,
under proviso appended to Regulation 12(b), is subject to
approval by the competent authority and that approval was not
granted, the voluntary retirement of the respondent never
came into effect.
33. It may be that voluntary retirement under a
particular scheme framed by an employer is different from
voluntary retirement provided in the Service Regulations and
some of the observations by the Division Bench with reference
to voluntary retirement under a special scheme may not be
relevant but the ultimate decision of the Division Bench does
not suffer from any legal infirmity.
34. By way of foot-note, we may record that before we
proceeded with the hearing of the matter, we granted an
opportunity to the parties to resolve the dispute amicably and
an offer was made by the respondents to the appellant in this
27
regard but the appellant showed his disinclination to accept
the offer made by the respondents.
35. Be that as it may, the appeal must fail and is
dismissed with no order as to costs.
……………………J
(Tarun Chatterjee)
…….
……………..J
(R. M. Lodha)
New Delhi
September 10, 2009.
28