Employees remain entitled to salary for duties performed until voluntary retirement is accepted.

The petitioners applied for voluntary retirement under the State Financial Corporation’s VRS in 2016.

The Corporation accepted their requests on 1 February 2017 and treated them as relieved on 3 February 2017.

The petitioners claimed that they had continued working until acceptance of their requests but had not been paid salary for 1 July 2016 to 31 January 2017.

The respondents disputed entitlement, relied on the VRS cut-off date and raised delay and laches

The petitioners sought a writ directing payment of the withheld salary

Whether the petitioners were entitled to salary for the period between requesting voluntary retirement and acceptance of their requests, given their asserted continued service during that period

Whether delay and laches barred the petitioners’ claim for the withheld salary

The Court relied on the principle stated in Man Singh v. State of Uttar Pradesh, Civil Appeal No. 7841 of 2011, decided 31 March 2022: an employer cannot take work from an employee without paying salary for the duties performed

It further applied the principles that a request for voluntary retirement does not itself end the employer–employee relationship where competent-authority acceptance is required; salary is payable for service actually rendered; and a later acceptance of retirement does not retrospectively extinguish salary already earned.

Salary may be withheld only under lawful authority or an applicable provision

The Court also treated delay as a relevant consideration, but not one that automatically defeats an otherwise established monetary entitlement

The Court found that the petitioners remained in service until their VRS requests were accepted and that the respondents had not produced an order showing they were relieved, placed on leave without pay, suspended, or otherwise prevented from working during the claimed period

Applying Man Singh, it held that if the petitioners had actually discharged their duties, the Corporation could not accept the benefit of their services while withholding the corresponding salary.

Neither the VRS cut-off date nor acceptance of VRS benefits, without a specific lawful provision, established that salary already earned was forfeited

The Court concluded that delay alone did not justify dismissal of the claim

The respondents were directed to release salary for the seven-month period identified in the operative order, subject to verification that the petitioners remained in service and discharged their duties, and provided there was no legal impediment.

The exercise was to be completed within four weeks after service of the order

Note: The operative order describes the period as between the request dated 1 July 2016 and acceptance dated 31 January 2017, whereas the judgment elsewhere records acceptance on 1 February 2017