Supreme Court of India
M/S. NEW VICTORIA MILLS & ORS.versusSHRIKANT ARYA
- Citation
- 2021 INSC 552
- Decided
- 27 September 2021
- Disposal
- Appeal(s) allowed
- Bench
- SANJAY KISHAN KAUL
Holding
The resignation submitted under the MVRS was unconditionally accepted on 28 May 2003, and the employee could not withdraw it thereafter; he is only entitled to the scheme’s terminal benefits.
Summary
The respondent, a supervisor at New Victoria Mills, applied for the Modified Voluntary Retirement Scheme (MVRS) by submitting a resignation on 12 July 2002. He later requested that his resignation be kept suspended until his provident fund dues were cleared, but the employer accepted his resignation on 28 May 2003, simultaneously abolishing his post as required by Clause 5.1 of the MVRS. The respondent attempted to withdraw his resignation on 1 July 2003, arguing that the acceptance was not final due to the postponed cut‑off date and unresolved PF issues. The High Court had upheld the respondent’s claim, but the Supreme Court held that the resignation was an unconditional offer that was validly accepted on 28 May 2003, and that subsequent delays or the respondent’s request could not revive the resignation. Consequently, the respondent was entitled only to the terminal benefits under the scheme, which had already been paid, and the impugned order was set aside.
Issues considered
- The nature of the resignation under the MVRS – whether it was conditional or unconditional.
- Whether an employee can withdraw a resignation after it has been accepted but before the actual relieving date.
- The effect of a delay in the credit of provident fund dues on the validity of the resignation.
- The interpretation of Clause 1.6, 4.0 and 5.1 of the MVRS regarding acceptance, post abolition and payment of benefits.
- The relevance of prior case law on withdrawal of resignation in the context of a voluntary retirement scheme.
Legislation cited
Subjects
service lawresignationvoluntary retirement schemeconditional resignationacceptance of resignationprovident fundpost abolitioncontract lawemployee benefits
Judgment
750 [2021]REPORTS
SUPREME COURT 11 S.C.R. 750 [2021] 11 S.C.R.
A M/s. NEW VICTORIA MILLS & ORS.
v.
SHRIKANT ARYA
(Civil Appeal No. 5685 of 2021 )
B SEPTEMBER 27, 2021
[SANJAY KISHAN KAUL AND M. M. SUNDRESH, JJ.]
Service Law – Resignation – When not conditional – Modified
Voluntary Retirement Scheme – Respondent submitted resignation
under the Scheme vide letter dtd. 12.07.02 – On 03.03.2003, the
C
respondent requested that his application under the Scheme be kept
suspended – Vide letter dtd. 01.07.03, the respondent requested
that his letter dtd.12.07.02 be treated as having been cancelled
because he had changed his mind about submitting resignation
under the Scheme – However, the resignation was accepted and the
D respondent was to be relieved accordingly – Challenged by
respondent – Single Judge ruled in favour of the respondent – Order
upheld by Division Bench – On appeal, held: Resignation of the
respondent had already been accepted on 28.05.03 before he
endeavoured to withdraw the same – Right of a person whose
resignation has been accepted was to receive inter alia the benefit of
E
the provident fund amount as one of the terminal benefits under the
Scheme – The fact that there was some discrepancy on account of
the description of the name in the account for which there was some
prior communication also, will not imply that any delay in
disbursement of the provident fund amount would entitle the
F respondent to withdraw his resignation – Resignation was not a
conditional resignation – Letter dtd.03.03.2003 cannot be construed
as a letter of withdrawal of resignation – All that it stated was that
the resignation be “kept suspended” till the amount is deposited in
his provident fund account – Further, acceptance of resignation
and the abolition of the post were simultaneous exercises – Once
G
the letter of resignation was accepted on 28.05.03, the post stood
abolished – Respondent cannot take advantage of the postponement
of the cut-off date by a few days – Also, mere delay in relieving the
respondent from duties would not impact the acceptance of his
resignation – Impugned order set aside.
H
750
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 751
Allowing the appeal, the Court A
HELD: 1.1 The respondent filed the application under the
Scheme. If the letter dated 12.07.2002 is looked at closely, the
intent of the respondent was clear, i.e., to submit his resignation.
It is not a resignation operative from a future date but one which
would operate as per the Scheme. It is also not a conditional B
resignation as was sought to be canvassed by the respondent.
The mere assertion that all benefits arising out of the service
period of the applicant would be paid to him is a natural corollary
of their resignation. Such a resignation can hardly be called
conditional. If this resignation letter under the Scheme is looked
at, no doubt in terms of Clause 1.6 of the MVRS, the option lay C
with the management to decline an application without assigning
any reasons. That again will not make the resignation conditional.
In a contractual context, it would be an offer made by an employee
under the Scheme which may or may not be accepted by the
appellant-management. Once the acceptance takes place, the D
contract stands concluded. Such acceptance has to be in terms of
the Scheme. Thus, the crucial question is whether the subsequent
communications of the respondent could give the resignation
letter a colour of a conditional resignation and whether the
withdrawal was prior to its acceptance. [Paras 30, 31][765-F-H;
766-A-B] E
1.2 The MVRS, more specifically Clause 4.0, provides for
terminal benefits payable under the Scheme. Clause 4.1 requires
the balance in the provident fund account to be paid as per the
Employees Provident Fund Act. Thus, the right of a person whose
resignation has been accepted is to receive inter alia the benefit F
of the provident fund amount as one of the terminal benefits under
the Scheme. The fact that there was some discrepancy on account
of the description of the name in the account for which there was
some prior communication itself, will not imply that any delay in
disbursement of the provident fund amount would entitle the G
respondent to withdraw his resignation. If there is any
unreasonable delay, the amount may carry interest. In the given
facts of the case, it appears that the account was credited to an
account number where it ought to have been credited, but there
was some problem in the name/description of the beneficiary which
H
752 SUPREME COURT REPORTS [2021] 11 S.C.R.
A had caused some confusion/delay. The appellant-management
ought to have taken better care of this but then the appellant had
pointed out that the problem arose on account of the management
by the concerned authority of the provident fund account, and
not the appellant. [Para 32][766-B-F]
B 1.3 Another significant aspect is the terms of the Scheme
as per Clause 5.0. Clause 5.1 required the post to be abolished
simultaneously with the request of voluntary retirement being
accepted. This had to be done before disbursing retirement
benefits to the employee under the Scheme. There was a specific
stipulation that no person would be engaged in his/her place. The
C objective was clear, that it should not be that on the one hand,
manpower is reduced by giving the benefit of MVRS to an
employee and on the other, some other person is deployed in the
post. That would be, in a sense, destructive of the very objective
of why the Scheme was propounded, i.e., on account of the pre-
D carious financial condition of appellant No.1. [Para 33][766-F-G]
1.4 The next communication addressed by the respondent
is the letter dated 03.03.2003. The respondent did not withdraw
his resignation, which he could have done at that stage. He seeks
to refer to the aspect of the non-correction of the provident fund
E account and inaction with respect to his earlier communications,
which were almost three years old. Actually, the amount was
deposited in the relevant account but, there was some confusion
about the beneficiary of the account, which was clearly to be the
respondent. All that the respondent’s letter states is that his
resignation be “kept suspended” till the amount is deposited in
F his provident fund account. The rationale for the same is set out
in the very next sentence, i.e., if the resignation is accepted the
receipt of the amount will not only be difficult but rather it will be
impossible. [Para 34][766-H; 767-A, B-D]
1.5 On 28.05.2003, a letter was issued by appellant No.1
G accepting the resignation of four persons including the respondent.
Once the resignation letter had been accepted, the chapter was
over. The respondent was to retire from the services with effect
from 01.06.2003 in terms of the said letter. The respondent,
however, seeks to take advantage of the letter dated 02.06.2003
H
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 753
of appellant No.1, which extended the cut-off date already fixed A
for 01.06.2003. The respondent, thus, seeks to plead that once
the date from which he was to be relieved was extended, it would
amount to non-acceptance of his resignation. The respondent,
taking advantage of the aforesaid, ad- dressed a letter on
01.07.2003 claiming that his resignation had not been accepted
B
till that date, and his letter of resignation under the MVRS dated
12.07.2002 may be treated as cancelled. Appellant No.1 refused
to act on the same as in their view the resignation letter already
stood accepted on 28.05.2003. The respondent was relieved w.e.f.
16.07.2003. The acceptance of resignation and the abolition of
the post were simultaneous exercises as that is part of Clause C
5.1 of the Scheme. Clause 5.1 also prevents appellant No.1 from
appointing anyone else to that post. Thus, once the letter of
resignation was accepted on 28.05.2003, the post stood abolished.
The letter dated 03.03.2003 cannot be construed as a letter of
withdrawal of resignation. The postponement of the cut-off date
D
and the consequent payment which would have to be made to the
respondent for those few days is really a matter of financial
exercise for appellant No.1, with which the respondent cannot
concern himself as long as his resignation is accepted. In
contractual terms, appellant No. 1’s acceptance of the
respondent’s offer of resignation as available under the MVRS E
was completed on 28.05.2003. The respondent cannot be
permitted to take advantage of the postponement of the cut-off
date by a few days, during which time the respondent was asked
to attend to office, albeit against no sanctioned post. [Paras 36-
39][767-F-H; 768-A-F]
F
1.6 Appellant No.1 had, in fact, closed down. The MVRS
was undisputedly beneficial to the employees who availed of the
same. An analysis of the MVRS including Clause 5.1 belies the
respondent’s contention that there was any requirement of making
the payments in advance. The wordings of the Scheme are clear
that acceptance of resignation has to simultaneously happen with G
the abolition of the post and thereafter, the payments have to be
disbursed. The construction given to the MVRS is as per its
clauses and the action of the parties under the Scheme, which
result in the conclusion that the resignation had already been
H
754 SUPREME COURT REPORTS [2021] 11 S.C.R.
A accepted on 28.05.2003 before the respondent endeavoured to
withdraw the same on 01.06.2003. The mere delay in relieving
the respondent from duties would not impact the acceptance of
his resignation. In pursuance of the offer and acceptance on
28.05.2003, the transaction was completed. The resignation letter
of the respondent stood accepted on 28.05.2003 and the
B
respondent is entitled to the benefits under the Scheme which
have already been paid to the respondent albeit without prejudice
to the rights and contentions of the respondent in the
proceedings. The impugned order is set aside. [Paras 40-43, 45,
46 and 47][769-C-D, E-F, G-H; 770-A, E, G; 771-A]
C J.N. Srivastava v. Union of India & Anr. (1998) 9 SCC
559; Shambhu Murari Sinha v. Project & Development
India & Anr. (2000) 5 SCC 621 : [2000] 3 SCR 9 –
distinguished.
Air India Express Limited & Ors. v. Captain Gurdarshan
D Kaur Sandhu (2019) 17 SCC 129 : [2019] 12 SCR
980 – relied on.
Raj Kumar v. Union of India (1968) 3 SCR 857; Union
of India v. Gopal Chandra Misra (1978) 2 SCC 301 :
[1978] 3 SCR 12; Power Finance Corporation Limited
E v. Pramod Kumar Bhatia (1997) 4 SCC 280 : [1997] 2
SCR 1170; Bank of India v. O.P. Swarnakar (2003) 2
SCC 721 : [2002] 5 Suppl. SCR 438; HEC Voluntary
Retd. Emps. Welfare Soc. & Anr. v. Heavy Engineering
Corporation Ltd. & Ors. (2006) 3 SCC 708 : [2006] 2
F SCR 678; Food Corporation of India & Anr. v. Ram
Kesh Yadav & Anr. (2007) 9 SCC 531 : [2007] 3 SCR
336 – referred to.
Case Law Reference
[2019] 12 SCR 980 relied on Para 19
G
[1978] 3 SCR 12 referred to Para 20
[2000] 3 SCR 9 distinguished Para 23
[1997] 2 SCR 1170 referred to Para 25
H
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 755
[2002] 5 Suppl. SCR 438 referred to Para 26 A
[2006] 2 SCR 678 referred to Para 26
[2007] 3 SCR 336 referred to Para 26
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5685
of 2021. B
From the Judgment and Order dated 12.03.2019 of the High Court
of Judicature at Allahabad in Special Appeal No.1188 of 2005.
Ms. Madhvi Divan, Sr. Adv., Ms. Mayuri Raghuvanshi, Vyom
Raghuvanshi, Ms. Purvat Wali, Ayush Puri, Advs. for the Appellants.
C
Shadan Farasat, Bharat Gupta, Shourya Dasgupta, Aman Naqvi,
Advs. for the Respondent.
The Judgment of the Court was delivered by
SANJAY KISHAN KAUL, J.
1. National Textile Corporation Limited (for short ‘NTC’), is a D
public sector undertaking constituted and registered under the Companies
Act, 1956. Appellant No.2 before us is the National Textile Corporation
(Uttar Pradesh) Limited, Kanpur, a subsidiary of appellant No. 3 that
has set up several industrial establishments in the State of Uttar Pradesh.
M/s. New Victoria Mills, appellant No.1, is one such establishment set E
up by appellant No.2 in Kanpur. Respondent was working as a Supervisor
(Maintenance) in appellant No.1 since 1991, having been so appointed
on transfer from M/s. Atherton Mills, another industrial unit set up by
appellant No.2.
2. The textile industry went through difficult times at the turn of F
the century and accordingly, endeavours were made to examine the
feasibility of the continued existence of different textile mills. A question
mark over the existence of these mills in turn had ramifications for the
persons who were employed with these mills. In order to safeguard the
interests of these employees, a Modified Voluntary Retirement Scheme
(for short ‘MVRS/Scheme’) was propounded by appellant No.3 to G
facilitate the voluntary retirement of employees and workers of appellant
No.1 and certain other mills operated by appellant No.2. It is of
significance to note that this MVRS was proposed pursuant to the
recommendations made by the Board for Industrial and Financial
Reconstruction (for short ‘BIFR’), with the objective of rationalising H
756 SUPREME COURT REPORTS [2021] 11 S.C.R.
A surplus manpower and reducing the losses of appellant No.2. BIFR had
come into the picture as the production activities of appellant No.2 were
brought to a standstill and it had been declared a sick undertaking under
the Sick Industrial Companies (Special Provisions) Act, 1985. The financial
condition of appellant No.2 was so precarious that BIFR recommended
closure of nine out of eleven mills of appellant No.2, including appellant
B
No.1. While making this recommendation, in order to secure the interests
of the employees, BIFR imposed a condition that the mills would only be
closed if all employees working therein were given the benefit of a
voluntary retirement scheme. Thus, MVRS came to be promulgated in
supersession of the earlier revised voluntary retirement scheme.
C 3. The Management reserved the right to refuse the MVRS
application without assigning any reasons in terms of Clause 1.6 of the
MVRS. Clauses 1.6 of the MVRS reads as under:
“1.6 The management reserves the right to refuse a MVRS
application without assigning any reasons further applications for
D MVRS in respect of 1.6.1 & 1.6.2 may be put up before the
Board of Director for consideration.
1.6.1 Where disciplinary proceeding are either pending or are
contemplated against the employee concerned for imposition
of major penalty.
E
1.6.2 Where prosecution in a Criminal Court is contemplated
or may have already been launched in any Court of Law and
1.6.3 Employees who resign from the services of the company
in a normal manner are not entitled in MVRS.”
F 4. Further clause 4.0 of the MVRS provided for the benefits under
the MVRS, which reads as under:
“4.0 OTHER TERMINAL BENEFITS UNDER THE
SCHEME
4.1 Balance in the Provident Funds Accounts payable as per
G Employees Provident Fund Act and rules made thereunder.
4.2 Cash equivalent of accumulated earned leave/privilege/leave
as per the rules of the mills/office, concerned.
4.3 Gratuity as per Payment of Gratuity Act or the Gratuity
H Scheme, if any.”
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 757
[SANJAY KISHAN KAUL, J.]
5. The procedure for the MVRS was set out in Clause 5.0. Suffice A
to produce some of its relevant sub-clauses, which have been referred
to as under:
“5.0 PROCEDURE
5.1 An eligible employee may submit an application in the prescribed
form for voluntary retirement under the scheme by tendering B
resignation from the post held and service in NTC to the
Competent Authority. The post falling vacant as a result of an
employee’s voluntary retirement under the scheme shall in all cases
stand abolished simultaneously while accepting resignation and
order to that effect issued simultaneously before disbursing C
retirement benefits to employees under this scheme and no person
(Permanent/badly/substitute/temporary etc.) shall be engaged in
his/her place.”
.... .... .... .... .... ....
“5.10 Once an employee’s (sic) avails himself/herself of voluntary D
retirement from a PSU, he/she shall not be allowed to take up
employment in any other PSU. If he/she desires to do so, he/she
shall have to return the VRS compensation received by him/her
to the PSU concerned where the compensation was paid out of a
Government grant, the PSU concerned shall remit the refunded
amount to the Government in case the PSU is already closed/ E
merged, the VRS compensation shall be returned directly to the
Government.”
A significant aspect of Clause 5.1 was that the post itself was to
stand abolished and fall vacant as a result of the employee’s voluntary
retirement, simultaneously with the acceptance of their resignation and F
this was to be a prelude to the disbursement of retiral benefits to the
employee under the Scheme. The objective appears to be to ensure that
the Scheme was not utilised to see the exit of an employee and replace
him with someone else, something which would be contrary to the very
purpose of the Scheme. G
6. The respondent sought to avail of the opportunity under the
Scheme and addressed a letter dated 12.07.2002. The relevant extract
of the same is as under:
“That in the context of information dated: 13.06.2002 &
04.07.2002 of the Mill under Amended Voluntary Retirement H
758 SUPREME COURT REPORTS [2021] 11 S.C.R.
A from Service Scheme operated by National Rehabilitation
Scheme, applicant wants to submit his resignation.
It is, therefore, requested to accept resignation of the
applicant by making sure payment of all benefits of the service
period of the applicant.”
B It is relevant to note that the resignation was sought to be brought
into force forthwith with the only request that payment of all benefits of
service be disbursed promptly.
7. An aspect which caused some anguish to the respondent was
that apparently there was a pre-existing dispute between appellant No.1
C and the respondent, relating to deposits to be made in the provident fund
account of the respondent. This is apparent from two letters addressed
in this regard dated 29.03.2000 and 23/24.04.2000, making a grievance
that the provident fund amount has not been deposited in his account
since 1991. Even on submission of his letter dated 12.07.2002, it appears
that this issue was not resolved, consequently triggering a letter from the
D
respondent dated 03.03.2003 about the same. In this letter, respondent
made a request that since the issue was not resolved, his application
under the MVRS be kept suspended till the amount is deposited in his
provident fund account and the account regularised. The reason for this
request was also set out in the same letter immediately thereafter, that
E is, “because after the acceptance of resignations, receipt of this
amount will not only be difficult, rather it will be impossible.”
8. A general information was issued about acceptance of letters
of resignation under the MVRS on 28.05.2003 in which the name of the
respondent figured at serial No.4. The four persons were to retire from
F the services of the mill on 01.06.2003. However, a letter was issued by
appellant no. 1 on 02.06.2003, after the cut off date had already come
into effect from 01.06.2003; informing the respondent that the said date
be treated as cancelled and a new cut off date would be informed shortly.
The respondent was advised to attend to his duties.
9. In the aforesaid scenario, the respondent addressed a letter
G
dated 01.07.2003 requesting that his letter dated 12.07.2002 under the
MVRS be treated as having been cancelled because he had changed his
mind about submitting his resignation under the MVRS, noticing that his
resignation letter had still not been accepted. However, vide letter
14.07.2003 the resignation submitted under the MVRS was accepted
H intimating that the respondent was to retire from 16.07.2003.
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 759
[SANJAY KISHAN KAUL, J.]
10. It is the aforesaid letter which triggered off the litigation, with A
the respondent filing Civil Miscellaneous Writ Petition No.16587/2004
before the High Court of Judicature at Allahabad under Article 226 of
the Constitution of India seeking the following prayers:
a. Quashing of the impugned order dated 14.07.2003;
b. A direction to allow the respondent to join his duties on the B
post of Supervisor (Maintenance) and pay him all his
emoluments as entitled;
c. To pay him his back-wages since 16.07.2003 and permit
him to work on the post till the age of his superannuation
when he would be entitled to all his retiral benefits. C
11. The writ petition was resisted on the ground that the resignation
already stood accepted and the postponement of the cut off date would
not in any way take away the validity of the acceptance. It may be
worthwhile to note that while responding to the petition, Appellant
explained their position qua the respondent’s grievance about the provident D
fund contributions not being credited to his account. It was stated that
the entire provident fund contribution had been deposited with the Office
of the Regional Provident Fund Commissioner and it appears that the
same was credited to a wrong person with a similar name. This was a
mistake in the Office of the Regional Provident Fund Commissioner, E
which was recommended to be corrected and had also been corrected.
In fact, the account number to which the amount was credited was the
correct account number.
12. The learned single Judge ruled in favour of the respondent in
terms of the judgment dated 22.08.2005. The judgment also noted that F
the question of reinstatement in service could not arise as appellant No.1
had been closed down pursuant to a notification of the Central
Government dated 09.03.2004 issued during the pendency of the writ
petition. However, the learned single Judge found that it was “not clear”
that at any point of time, the respondent had given an unconditional offer
of resignation under the MVRS. Rather, his resignation was conditional G
on the payment of all dues, which included the provident fund dues which
should be first cleared and paid to him. We may note at this stage as a
matter of record on perusal of the letter dated 12.07.2002 that we do not
find it so. All that was stated in the letter was a request to accept the
resignation of the respondent by making sure payment of all benefits of
H
760 SUPREME COURT REPORTS [2021] 11 S.C.R.
A his service period. There was no prior condition put nor could have been
put under the MVRS as Clause 5.1 itself envisaged the simultaneous
acceptance of the resignation and abolishment of the post; and payment
being made thereafter. Pertinently, the resignation letter had been
submitted under the MVRS and hence was subject to Clause 5.1.
B 13. The second aspect which weighed with the learned single
Judge was that the respondent continued to work till 14.07.2003, after
his resignation was accepted by appellant No. 1; despite the fact that he
had already withdrawn his resignation prior to that date on 01.07.2003.
In fact, the reasoning is predicated on what is stated to be “better footing”
as the offer made by the respondent under the MVRS was only
C conditional and that condition had admittedly not been fulfilled, which is
something that we are unable to agree on a plain reading of the letter
dated 12.07.2003. A reference was also made to the letter dated
03.03.2003 seeking to keep the letter dated 12.07.2002 in abeyance (not
that the resignation letter was recalled till that stage). Another significant
D aspect which has weighed with the learned single Judge is the continued
working of the respondent, due to which the jural relationship of employer
and employee continued even though the circular notifying the
acceptance of the respondent’s resignation letter was issued on
28.05.2003,. The subsequent letter dated 02.07.2003 was taken into
account as having cancelled the earlier cut off date communicated on
E 28.05.2003, while informing that a new cut off date would be provided.
The new cut off date was then only intimated vide letter dated 14.07.2003,
to be effective from 16.07.2003. Prior to that date, on 01.07.2003, the
respondent had already asked for recall/cancellation of his resignation.
14. The appellants aggrieved by the same preferred an appeal
F before the Division Bench of the Allahabad High Court, being Special
Appeal No.1188/2005. An aspect which is greatly emphasised by the
counsel for the respondent was the manner in which this appeal was
prosecuted. Apparently, no endeavour was made by the appellants to
get their appeal listed for almost six years, until the matter was finally
G listed on 10.10.2011 - which is when the appeal was admitted and notice
was issued. Further, an interim order was passed staying the operation
of the order of the learned single Judge. The respondent was given
liberty to collect the entire money which he was to get on acceptance of
his resignation without prejudice to his rights and subject to the final
decision in the appeal. It is the say of the respondent that during this
H period of six years, the respondent did not receive the money and encashed
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 761
[SANJAY KISHAN KAUL, J.]
the amount only after the aforesaid interim order was passed. Suffice to A
say that the cheque for Rs.5,47,267/- was issued by appellant No.1 to
the respondent on 22.10.2011, which was duly encashed by the respondent
in terms of the impugned order dated 10.10.2011. It does not really come
out of the record as to what steps may have been taken during this
period of time to enforce the judgment of the learned single Judge. The
B
Contempt Petition No.2967/2006 was apparently filed by the respondent
seeking enforcement, but that also appears not to have been pursued
with much rigour. We also note that the appeal against the single judge’s
order was dismissed for non-prosecution thrice and restored!
15. The Division Bench finally bestowed its consideration on the
appeal on 12.03.2019, and upheld the order of the learned single Judge. C
A reference was also made to Clause 1.6 of the MVRS extracted
aforesaid, which gave authority to appellant No.1 to refuse a resignation
application without assigning any reasons. Thus, it was opined that the
acceptance of the request for voluntary retirement was a condition
precedent to such a retirement. On the issue of abolishing the post as D
per Clause 5.1 of the MVRS, it was opined that since appellant No.1
had cancelled the original cut off date of 01.06.2003 and had asked the
respondent to join his duties once again, the post must have continued
and, thus, Clause 5.1 had not come into operation.
16. The aforesaid order of the Division Bench has been assailed E
by filing a Special Leave Petition before this Court. Vide order dated
17.02.2020, notice was issued and the operation of the impugned order
was stayed. Leave was granted on 07.09.2021 when the matter was
heard finally and judgment reserved.
17. We have examined the principles governing the case of F
voluntary retirement under the Scheme in the given factual scenario and
in the conspectus of the submissions of the counsel for the rival parties.
18. In a nutshell the submission of the appellants before us was
that the respondent had not even challenged the letters dated 28.05.2003
or 02.06.2003, which effectively accepted the respondent’s resignation
G
request under the MVRS. This would imply that the acceptance of
resignation by appellant No. 1 was complete. What the respondent had
sought to challenge was only the revised cut off date by assailing the
letter dated 14.07.2003, which sought to relieve the respondent from
16.07.2003. Once such a resignation was accepted, and not even assailed,
there could be no question of the respondent being permitted to resign H
762 SUPREME COURT REPORTS [2021] 11 S.C.R.
A post acceptance of the resignation. It was only a postponement of the
cut off date for administrative reasons, which merely delayed the relieving
of the respondent and did not defer the acceptance of the resignation.
19. Learned counsel for the appellants sought to rely upon the
judgment of this Court in Air India Express Limited & Ors. v. Captain
B Gurdarshan Kaur Sandhu 1 to support the plea that mere delay in
relieving someone from their duties does not impact the acceptance of
their resignation. In fact, a prior judgment of this Court in Raj Kumar v.
Union of India2, which was referred to in Air India Express Limited
&Ors. 3, involves a scenario where the State Government had
recommended that the resignation of an IAS officer be accepted and
C the Government of India had requested the Chief Secretary of the State
to intimate the date on which he would be relieved of his duties so that a
formal notification could be issued. However, before the date could be
informed and a formal notification be issued, the officer withdrew his
resignation letter. On an order accepting his resignation being issued
D subsequently, a challenge was raised and it was opined by this Court
that there was no indication in the correspondence between the parties
that the resignation was not to become effective until the acceptance
was intimated. In fact, the officer had forwarded his resignation letter
for early acceptance and thus, on a plain reading of the letter, the
resignation became effective as soon as it was accepted by the appointing
E authority.
20. On a contra position, the judgment of this Court in Union of
India v. Gopal Chandra Misra4 was referred to, where the resignation
letter by a sitting Judge of the Allahabad High Court was found to have
been validly withdrawn. The resignation letter began with the statement
F that the Judge was resigning from office but that was not a standalone
statement. Had it been so, the resignation would have been in praesenti
involving immediate relinquishment of the office and termination of his
tenure as a Judge. There was really no requirement of acceptance of a
resignation letter of a Judge, but it was not so. The first sentence was
G followed by two more sentences which intimated a subsequent date for
the resignation to be effective and since the letter of resignation was
withdrawn before that date, it was held to have been validly withdrawn.
1
(2019) 17 SCC 129.
2
(1968) 3 SCR 857
3
(supra)
H 4
(1978) 2 SCC 301
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 763
[SANJAY KISHAN KAUL, J.]
21. We may note that the significance of the aforesaid is that A
ultimately, the wordings of the letter would be material and in the present
case since it is under scheme it would be MVRS.
22. Learned counsel for the appellants sought to refer to the aspects
of (a) the respondent’s acceptance of the cheque (but that was under
interim directions of the Court); (b) abolishment of the post as New B
Victoria Mills was shut by a notification dated 09.03.2004 (but in that
eventuality if the respondent succeeds, he would still be in employment
with all consequences); (c) superannuation of the respondent in 2018
(which would only mean that his benefits would be only till that time).
The only other aspect of significance is that had the respondent not
opted for voluntary retirement under the MVRS, he could have been C
retrenched under the Industrial Disputes Act, 1947.Learned counsel for
the appellants clarified during arguments that the amount paid to such
persons was lower than the amount paid to employees opting for
resignation under the MVRS. If one may say, that was the very incentive
for an employee to accept the MVRS. D
23. On the other hand, learned counsel for the respondent sought
to rely on judgments of this Court in J.N. Srivastava v. Union of India
& Anr.5 and Shambhu Murari Sinha v. Project & Development India
& Anr.6 to canvas a proposition that an employee has a right to withdraw
his application for voluntary retirement even after its acceptance, if such E
withdrawal is done prior to the date of the employee’s actual retirement.
Learned counsel for the respondent submitted that the jural relationship
of employer and employee between appellant No.1 and respondent
continued till 16.07.2003 and thus, the respondent had locus poenitentiae
to withdraw his resignation on 01.07.2003.
F
24. On a closer reading of the aforesaid judgments, it would be
appropriate to notice the factual matrix in the context of the observations
therein. In J.N. Srivastava7, the voluntary retirement notice was to
operate three months hence. The proposal was accepted before the
expiry of three months; but the employee withdrew the voluntary
retirement notice before the date on which the retirement was to be G
operative. In Shambhu Murari Sinha8, a resignation letter submitted
5
(1998) 9 SCC 559
6
(2000) 5 SCC 621
7
(supra)
8
(supra) H
764 SUPREME COURT REPORTS [2021] 11 S.C.R.
A by the employee under a voluntary retirement scheme was accepted by
the management but the employee was not relieved from service and
was permitted to continue working, by postponing the cut off date. The
employee withdrew the offer of voluntary retirement in the meantime. A
number of judicial pronouncements were referred to by this Court for
the proposition that a resignation in spite of its acceptance could be
B
withdrawn before the effective date.
25. In Power Finance Corporation Limited v. Pramod Kumar
Bhatia9; the Corporation withdrew a voluntary retirement scheme after
an application made thereunder had been accepted. This Court held that
the acceptance of his offer to voluntarily retire was subject to adjustment
C
of the amount payable to him, and hence did not attain finality. Learned
counsel for the respondent did point out that though that was something
which was beneficial to the management, on the same principle, it should
equally apply to an employee.
26. Learned counsel for the respondent sought to emphasise that
D
a voluntary retirement scheme like the MVRS was in the nature of an
“invitation to offer” and would, thus, be governed by the principles of
contract law (Bank of India v. O.P. Swarnakar10; HEC Voluntary
Retd. Emps. Welfare Soc. & Anr. v. Heavy Engineering Corporation
Ltd. &Ors.11). Thus, the application submitted by the respondent under
E the Scheme on 12.07.2002 was in the nature of an offer. The respondent
suspended his resignation vide letter dated 03.03.2003 till such time as
appellant No.1 deposited respondent’s provident fund dues and, thus,
the offer of the respondent stood revoked. On the same principle it was
urged that the application of the respondent under the MVRS was pre-
conditioned on appellant No.1 clearing respondent’s dues, particularly
F
his provident fund dues. Appellant No.1 did not comply with the attached
condition relating to the provident fund dues. Learned counsel for the
respondent also relied upon the judgment in Food Corporation of India
& Anr. v. Ram Kesh Yadav &Anr.12 opining that in case of a conditional
offer, the offeree cannot accept a part of the offer which results in
G performance by the offeror and then reject the condition subject to which
the offer is made.
9
(1997) 4 SCC 280
10
(2003) 2 SCC 721
11
(2006) 3 SCC 708
12
H (2007) 9 SCC 531
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 765
[SANJAY KISHAN KAUL, J.]
27. On the terms and conditions of the MVRS, learned counsel A
for the respondent drew our attention to Clause 5.1 which required that
on acceptance of the respondent’s resignation, he would not only retire
but simultaneously the post would also be abolished. This would only
happen on 16.07.2003. How could the respondent have been asked to
carry on if the post stood abolished?
B
28. The last aspect, which was brought to our attention was an
RTI reply received on 07.12.2010, which clarified that three employees
had taken back their resignations. This was not the only scenario, as
there were five other employees/officers, who had been transferred to
mills in other States. These facts were only to show that the closure of
appellant No. 1 could not deprive the respondent of the benefit of C
employment in some other mill, though now the question of employment
no more remains alive as he would have retired in 2018 but would still be
entitled to financial benefits. We may, at this stage, also note that a
response to an RTI query of the respondent clarified that there was no
scheme for absorption of the employees of the mills in other States. D
29. We have examined the factual contours of the current
controversy in the conspectus of the legal position set forth aforesaid. In
fact, if one looks to the different judgments cited from both sides, there
are actually factual nuances which have led to one result or the other.
The factual nuances have to be most importantly examined in the context E
of the scheme which applies, as the present case is not one of resignation
per se but that of exercising an option available under the MVRS.
30. The respondent before us filed the application under the
Scheme. If we look closely at the letter dated 12.07.2002, the intent of
the respondent was clear, i.e., to submit his resignation. It is not a F
resignation operative from a future date but one which would operate as
per the Scheme. It is also not a conditional resignation as was sought to
be canvassed by the respondent. The mere assertion that all benefits
arising out of the service period of the applicant would be paid to him is
a natural corollary of their resignation. We do believe that such a
resignation can hardly be called conditional. G
31. The aforesaid being the position; if we look at this resignation
letter under the Scheme, no doubt in terms of Clause 1.6 of the MVRS,
the option lay with the management to decline an application without
assigning any reasons. That again, to our mind, will not make the
resignation conditional. In a contractual context, it would be an offer H
766 SUPREME COURT REPORTS [2021] 11 S.C.R.
A made by an employee under the Scheme which may or may not be
accepted by the appellant-management. Once the acceptance takes
place, the contract stands concluded. No doubt such acceptance has to
be in terms of the Scheme. Thus, the crucial question is whether the
subsequent communications of the respondent could give the resignation
letter a colour of a conditional resignation and whether the withdrawal
B
was prior to its acceptance.
32. The MVRS, more specifically Clause 4.0, provides for terminal
benefits payable under the Scheme. Clause 4.1 requires the balance in
the provident fund account to be paid as per the Employees Provident
Fund Act. Thus, the right of a person whose resignation has been accepted
C is to receive inter alia the benefit of the provident fund amount as one
of the terminal benefits under the Scheme. The fact that there was
some discrepancy on account of the description of the name in the account
for which there was some prior communication itself, will not imply that
any delay in disbursement of the provident fund amount would entitle
D the respondent to withdraw his resignation. If there is any unreasonable
delay, the amount may carry interest. In the given facts of the case, it
appears that the account was credited to an account number where it
ought to have been credited, but there was some problem in the name/
description of the beneficiary which had caused some confusion/delay.
No doubt the appellant-management ought to have taken better care of
E this but then the appellant had pointed out that the problem arose on
account of the management by the concerned authority of the provident
fund account, and not the appellant.
33. Another significant aspect which we must take note of is the
terms of the Scheme as per Clause 5.0. Clause 5.1 required the post to
F be abolished simultaneously with the request of voluntary retirement
being accepted. This had to be done before disbursing retirement benefits
to the employee under the Scheme. There was a specific stipulation that
no person would be engaged in his/her place. The objective was clear,
that it should not be that on the one hand, manpower is reduced by giving
G the benefit of MVRS to an employee and on the other, some other person
is deployed in the post. That would be, in a sense, destructive of the very
objective of why the Scheme was propounded, i.e., on account of the
precarious financial condition of appellant No.1.
34. The next communication addressed by the respondent is the
H letter dated 03.03.2003. The respondent did not withdraw his resignation,
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 767
[SANJAY KISHAN KAUL, J.]
which he could have done at that stage. He seeks to refer to the aspect A
of the non-correction of the provident fund account and inaction with
respect to his earlier communications, which were almost three years
old. The respondent seeks to attribute negligence and error to the
concerned departments under appellant No. 1, an aspect which has been
specifically denied by appellant No.1. The respondent stated that non-
B
deposit of the amount in the provident fund account despite regular
deduction from salary is on account of some grievous conspiracy. Actually,
the amount was deposited in the relevant account but, as observed
aforesaid, there was some confusion about the beneficiary of the account,
which was clearly to be the respondent. All that the respondent’s letter
states is that his resignation be “kept suspended” till the amount is C
deposited in his provident fund account. The rationale for the same is set
out in the very next sentence, i.e., if the resignation is accepted the
receipt of the amount will not only be difficult but rather it will be
impossible.
35. The aforesaid allegation is apparently arising out of some D
element of frustration which the respondent may have felt due to non-
correction of the provident fund account as the acceptance of resignation
and disbursement of the amount are not interlinked aspects, except to
the extent that the amount under the provident fund account had to be
paid to the respondent under the Scheme. In that, there was no E
impediment, except the factual correction which was required in the
description of the account as explained by the appellants, which was
also not attributable to any fault on their part.
36. It is in the aforesaid situation that on 28.05.2003, a letter was
issued by appellant No.1 accepting the resignation of four persons including F
the respondent. Once the resignation letter had been accepted, the chapter
was over. The respondent was to retire from the services with effect
from 01.06.2003 in terms of the said letter.
37. The respondent, however, seeks to take advantage of the letter
dated 02.06.2003 of appellant No.1, which extended the cut off date G
already fixed for 01.06.2003. The respondent, thus, seeks to plead that
once the date from which he was to be relieved was extended, it would
amount to non-acceptance of his resignation. This plea is supported by
the fact that since the acceptance of resignation and the abolition of the
post were simultaneous exercises, how could the respondent be asked
H
768 SUPREME COURT REPORTS [2021] 11 S.C.R.
A to continue to work, as there would be no post against which the
respondent could so work. The respondent, taking advantage of the
aforesaid, addressed a letter on 01.07.2003 claiming that his resignation
had not been accepted till that date, and his letter of resignation under
the MVRS dated 12.07.2002 may be treated as cancelled.
B 38. Appellant No.1 refused to act on the same as in their view the
resignation letter already stood accepted on 28.05.2003. The respondent
was relieved w.e.f. 16.07.2003.
39. We have no doubt that the acceptance of resignation and the
abolition of the post were simultaneous exercises as that is part of Clause
C 5.1 of the Scheme, the objective of which we have already set forth
above. Clause 5.1 also prevents appellant No.1 from appointing anyone
else to that post. Thus, in our view, once the letter of resignation was
accepted on 28.05.2003, the post stood abolished. We have already
mentioned that the letter dated 03.03.2003 cannot be construed as a
D letter of withdrawal of resignation. The postponement of the cut off
date and the consequent payment which would have to be made to the
respondent for those few days is really a matter of financial exercise for
appellant No.1, with which the respondent cannot concern himself as
long as his resignation is accepted. In order to test the proposition, one
can state that were the appellant to cancel the acceptance of the
E resignation after 28.05.2003, it would not have been permissible for them
to do so because they had already accepted the respondent’s resignation
on this date. In contractual terms, appellant No. 1’s acceptance of the
respondent’s offer of resignation as available under the MVRS was
completed on 28.05.2003. The respondent cannot be permitted to take
F advantage of the postponement of the cut off date by a few days, during
which time the respondent was asked to attend to office, albeit against
no sanctioned post.
40. We have to keep in mind the background in which the Scheme
came to be propounded. Appellant No.1 amongst other mills faced such
G financial difficulties that their financial feasibility did not permit them to
carry on business. The competent authority to deal with the issue of
financial feasibility at that time was BIFR, which came to the conclusion
that nine out of eleven textile mills in the State of Uttar Pradesh were
not viable and could not be rehabilitated and, thus, recommended their
closure. The Central Government exercising powers under Section 25(o)
H
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 769
[SANJAY KISHAN KAUL, J.]
of the Industrial Disputes Act, 1947 granted permission for closure of A
the nine textile mills on 09.03.2004, including that of appellant No.1. In
order to safeguard the interests of the employees, BIFR imposed the
condition while recommending closure, that all employees working in
the said mills would be given the benefit of voluntary retirement and only
then would the mills be closed. The appellants being State and public
B
entities, it appears that BIFR took greater care to safeguard the interests
of the employees working therein. It is in this context that the appellants
also placed before us, which can really not be disputed, the financial
consequence for persons who did not accept the MVRS. Such persons
would be retrenched according to the Industrial Disputes Act, 1947 and
the financial benefits accruing to them would be far lesser than that C
under the MVRS. Thus, the MVRS was undisputedly beneficial to the
employees who availed of the same. That would be natural, since only
then would an employee have any incentive to avail of the Scheme.
41. We can also not lose sight of the fact that appellant No.1 had,
in fact, closed down and this was taken note of by the learned single D
Judge. The mere fact that some staff continued to work after the closure
of the Mill, or the fact that some people may have been deployed in
other mills cannot help the respondent’s case for reinstatement.
Importantly, the latter aspect has also been disputed by appellant No.1.
42. An analysis of the MVRS including Clause 5.1 belies the E
respondent’s contention that there was any requirement of making the
payments in advance. The wordings of the Scheme are clear that
acceptance of resignation has to simultaneously happen with the abolition
of the post and thereafter, the payments have to be disbursed.
43. We have endeavoured to appreciate the contention of the F
appellants about non-challenge of the letter dated 28.05.2003 and
02.06.2003 with only the revised cut off date of 16.07.2003 being assailed.
This does seem to have an element of infirmity in the manner in which
the respondent sought to vent his grievance, but in view of larger
consideration we are not required to look into the aspect of whether this
is fatal to his claim. The construction we have given to the MVRS is as G
per its clauses and the action of the parties under the Scheme, which
result in the conclusion that the resignation had already been accepted
on 28.05.2003 before the respondent endeavoured to withdraw the same
on 01.06.2003. It has, thus, rightly been contended by the appellants that
the mere delay in relieving the respondent from duties would not impact H
770 SUPREME COURT REPORTS [2021] 11 S.C.R.
A the acceptance of his resignation, as observed in Air India Express
Limited & Ors.13. A different scenario would have arisen, if the
resignation letter was not in praesenti and had fixed a future date for
its operation, and before that date the resignation letter was withdrawn.
44. We have referred to the judicial pronouncements cited by the
B respondent aforesaid on the plea that the respondent has locus
poenitentiae to withdraw the resignation letter as the jural relationship
between the parties continued till the actual date of his resignation. (J.N.
Srivastava14 and Shambhu Murari Sinha15).
45. As noticed in para 3 aforesaid in J.N. Srivastava 16, the
C resignation was to operate prospectively from a specified date and was
withdrawn before that date, despite being accepted – which is a different
factual scenario. We are also not in disagreement with the legal principle
propounded by the respondent that a scheme like the MVRS was an
“invitation to offer.” The application submitted by the respondent under
the Scheme on 12.07.2002 was in the nature of an offer but we cannot
D accept the plea that vide letter dated 03.03.2003 there could be suspension
of his resignation conditional on the deposit of provident fund dues which
actually already were deposited (albeit a confusion over the credit to
which it was named). The acceptance was also not conditional clearing
of dues, including provident fund dues, as that was a consequence which
E would flow from the acceptance of the resignation. Thus, in pursuance
of the offer and acceptance on 28.05.2003, the transaction was
completed. Unlike the case in Shambhu Murari Sinha,17 this is not a
case of a conditional offer with part offer being accepted, but rather,
acceptance of the offer in the terms of the Scheme, with the consequences
as envisaged under the Scheme of financial benefits flowing to the
F respondent on acceptance of the resignation.
46. The result of the aforesaid is that we are unable to persuade
ourselves to agree with the conclusions arrived at by the learned single
Judge as affirmed by the learned Division Bench. We are of the view
that the resignation letter of the respondent stood accepted on 28.05.2003
G and the respondent is entitled to the benefits under the Scheme which
13
(supra)
14
(supra)
15
(supra)
16
(supra)
17
H (supra)
M/s. NEW VICTORIA MILLS v. SHRIKANT ARYA 771
[SANJAY KISHAN KAUL, J.]
have already been paid to the respondent albeit without prejudice to the A
rights and contentions of the respondent in the proceedings.
47. The impugned order is set aside. The appeal is accordingly
allowed leaving the parties to bear their own costs.
B
Divya Pandey Appeal allowed.
C
D
E
F
G
H
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