Holding

Withdrawal and utilisation of a VRS benefit amount to acceptance of a part of the benefit, precluding the employee from rescinding the acceptance, and the direction allowing State Bank of India appeals also applies to State Bank of Patiala.

Summary

The Supreme Court examined several applications concerning the interpretation of its earlier directions (dated 17‑12‑2002) on Voluntary Retirement Schemes (VRS) in banks. It clarified that "accepting a part of the benefit" includes the employee’s withdrawal and utilisation of the benefit, not merely a unilateral credit to the bank account. Accordingly, an employee who withdrew and used the benefit cannot rescind his acceptance or approbate/reprobate the scheme. The Court also held that the direction allowing appeals filed by the State Bank of India extends to the State Bank of Patiala, a wholly‑owned subsidiary. As a result, the review petition filed by Punjab National Bank was allowed, certain interim applications were allowed granting reinstatement with conditions, while others were dismissed. The petitions were disposed of with costs awarded against the respondent.

Issues considered

Whether withdrawal and utilisation of a VRS benefit constitutes "accepting a part of the benefit" under direction No. I of the 17‑12‑2002 judgment.
Whether an employee who has accepted a part of the benefit can rescind his acceptance (approbate/reprobate).
Whether a unilateral credit of benefit to a bank account without withdrawal amounts to acceptance.
Whether the direction allowing appeals filed by the State Bank of India also covers appeals filed by the State Bank of Patiala.
The appropriate relief (reinstatement, back wages, refund of benefit) for employees who have accepted the benefit.

Subjects

Voluntary Retirement SchemeService LawEmployee RightsContractual BenefitAppealReinstatementBanking LawSupreme CourtInterpretation of Directions

Judgment

A PUNJAB NATIONAL BANK •
.\.._ •.
v.
VIRENDER KUMAR GOEL AND ORS.

JANUARY 21, 2004

B [V.N. KHARE, CJ., H.K. SEMA AND S.B. SINHA, JJJ

Service law:

Banks-Voluntary Retirement Scheme-Clarification with regard to
c directions by Supreme Court in judgment dated 17.12.2002-Clarified that
the phrase "accepted a part of the benefit under the scheme" appearing in
direction no. I in the judgment would include withdra1val of benefit and
utilisation thereof-Unilateral deposit of a part of benefit under the Scheme,
when the spme was neither withdrawn nor utilised by employee, that too after
withdrawal of application would not be construed as acceptance of the
D
Scheme-Jn the cases where employees had accepted the scheme by
withdrawing and utilisation of amount, they are not permilled to approbate .,
and reprobate.

The Supreme Court by its judgment dated 17 .12.2002, while
E disposing of the appeals arising out of disputes between employer Banks
and their employees with regard to Voluntary Retirement Scheme (VRS),
upheld the right of an employee to withdraw his option for voluntary
retirement before the same was accepted. In the judgment, the Court
issued further directions, inter alia, "(i) appeals preferred by the
nationalised banks arising from the judgment of the High Courts are
F dismissed except the cases where the employees concerned have accepted J,.
a part of the benefit under the Scheme; (ii) appeals filed by the State Bank
of India are allowed; and (iii) appeals arising from the judgment of the
Uttaranchal High Court are allowed."

G Review Petition No. 53 of 2003 was filed by the Punjab National
Bank bringing it to the notice of the Court that the employee concerned
therein had accepted the benefits under the VRS and the appeal filed by '('
him against the judgment of Uttaranchal High Court ought to have been
dismissed instead of being allowed. I.A. Nos 14-15 seeking clarifications
were filed by employees who had withdrawn and utilised the benefit of .
H 920
i

P.N.B. v. V.K. GOEL 921
the· Scheme credited in their accounts. A
I.A. Nos. I, 2 and 3 were filed by the employees stating that the
benefits under the Scheme were credited to their accounts, but they did
not operate the accounts after such deposits and therefor it could not be
said that they had accepted part of the benefit in terms of direction no. 1.
I.A. Nos. 1-22 were filed by the State Bank of Patiala stating that the said B
Bank was not a nationalised bank but a hundred percent subsidiary of
State Bank of India; that the VRS floated by the bank was in pari materia
with that of the State Bank of India; and that the appeals of State Bank
of India were allowed but nothing was said about the appeals filed by the
applicant-Bank. C

Disposing of the petitions, the Court

HELD: I.I. The respondent employee in Review Petition No. 53 of
2003 had withdrawn a part of the benefit under the Voluntary Retirement
Scheme. His contention that the bank accepted his request after the period D
cif the Scheme had expired would be of no assistance to him. The fact that
the employee had withdrawn a part of the benefit under the Scheme was
not brought to the notice of the Court at the time of hearing. However,
the fact remains that the incumbent had accepted the benefits under the
Scheme and utilisation thereof would squarely be covered by direction no. E
I. Therefore, the judgment dated 17.12.2002 is reviewed to the extent that
the appeal arising out of the judgment and order of the Uttaranchal High
Court is dismissed and the judgment of the High Court is upheld.
1924-F; 925-A-CI

l.2. Applicants in I.As. 14 -15 having accepted the benefit under the F
Scheme by withdrawing and utilisation thereof are not permitted to
approbate and reprobate. (927-H)

2. It is clarified that the phrase "accepted a part of the benefit under
the Scheme" appearing the direction no. I in the judgment dated 17.12.2002
would include the withdrawal of the benefit and utilisation thereof. By no G
stretch of imagination, unilateral deposit of a part of benefit under .the
Scheme into, the Bank account, that too after withdrawal of the
application, would construe as to have accepted the part of the benefit
under the Scheme when the same was neither withdrawn nor utilised by
the employee concerned. Accordingly, applicants in I.A. Nos. l, 2 and 3 H
922 SUPREME COURT REPORTS [2004] I S.C.R.

A would be reinstated into tlieir posts with continuity in service, back wages J.. •
and all consequential benefits subject to the condition that they refund
the entire amount deposited into their bank accounts with interest.
[926-E-F[

3. As regards I.As. 1-22 filed by State Bank of Patiala, it is clarified
B that the direction no.2 allowing the appeals filed by State Bank of India
would also include the appeals filed by the State Bank of Patiala.
[927-D-Ef

State Bank of Patia/a v. Jagga Singh, SLP (C) No. 23530 of 2002
C decided by Supreme Court on 13.3.2003, referred to.
CIVIL APPELLATE JURISDICTION : Review Petition (C) No. 53
of 2003.

In
D Civil Appeal No. 896 of 2002.

From the Judgment and Order dated 16.5.2001 of the Uttaranchal High
Court at Nainital in C.W.P.No. 311 (S/B) of2001.

WITH
E
I.A. Nos. 1-2, 3/2003 in C.A. Nos. 8488, 8490 and 8467/2002 in C.A.
Nos. 8467-8499/2002, I.A.Nos. 1-22/2003 in C.A. Nos. 7314-7335/2002
I.A.No. 15/2003 in C.A. No. 3553/2002 and I.A. No. 14/2003 in C.A. No.
3556/2002 in C.A. Nos. 3552-3560/2002.
F Soli J. Sorabjee, Attorney General, Dhruv Mehta, Mohit Choudhary,
Ms. Shalini Gupta for M/s. K.L. Mehta & Co. for the Petitioner/Appellant.

Rakesh Dwivedi, Ms. Meenakshi Arora and Anshul Singh for the
Respondents.
G The Judgment of the Court was delivered by

SEMA, J. Parties are heard.
In all these applications, the applicants sought to review/clarify/modify
the judgment and order of this Court rendered on 17 .12.2002 in batches of
H Civil Appeals.
P.N.B. v. V.K. GOEL [SEMA • .I.] 923
At the outset, we make it clear, that this Benc11 is not sitting on appeal A
over the judgment rendered by this Court on 17.12.2002. Factual Matrix
leading to the filing of the present petitions is, therefore, obviated.

Before we advert further, we may at this stage, notice the _operative
directions rendered in the judgment sought to be reviewed/clarified, strictly
relevant for the purpose of disposal of the present applications. This Court B
inter alia held that the request of an employee seeking voluntarily retirement
would not take effect until and unless it was accepted in writing by the
competent authority and. therefore, this Court upheld the right of the employee
to withdraw his option from voluntary retirement before the same was accepted.

This Court further held in paragraphs 114 and 115 of the judgment as C
under:-

"114. However. it is accepted that a group of employees accepted the
ex-gratia payment. Those who accepted the ex- gratia payment or any
other benefit under the Scheme, in our considered opinion, could not
have resiled therefrom. D
..... 115. The Scheme is contractual in nature. The contractual right derived
by the employees concerned, therefore, could be waived. The·
employees concerned having accepted a part of the benefit could not
be permitted to approbate and reprobate nor can they be permitted E
to resile from their earlier stand.

(Emphasis supplied)

Finally, in paragraph 130 of the judgment this Court issued the following
directions:-
F
I. The appeals preferred by the nationalised banks arising from the
High Courts are dismissed except the cases where the employees
concerned have accepted a part of the benefit under the Scheme;
However, in respect of such of the employees who despite
acceptance of a part of the retirement benefit under the Scheme
had continued under the orders of the High Court and has retired G
on attaining the age of superannuation, this order shall not apply.

(Emphasis supplied)
2. The appeals filed by the State Bank of India are allowed.
3. The appeals arising from the judgments of the Uttaranchal High H
924 SUPREME COURT REPORTS [2004) I S.C.R.

Court are allowed and the judgments of the said High Court are
l •'
A
set aside.
4. The appeals arising from the judgments of the Punjab and Haryana
High Court in relation to ten writ petitions which were filed by
the employees for a direction upon the Bank that the benefits
B under the Scheme be paid to them are set aside and the matters
are remitted to the High Court for consideration thereof afresh
on merits and in accordance with law.

In these applications, we are concerned with direction Nos. I, 2 and 3.

C In the backdrop of the directions aforesaid, we now proceed to examine
the present applications.

Review Petition No. 53 of 2003 arising out of Civil Appeal No. 896 of
2002 has been filed by the Punjab National Bank. The ground taken therein
is that respondent No.I, Yirender Kumar Goel, has accepted the benefits
D under the YRS and, therefore, the appeal filed by him against the judgment
and order of Uttaranchal High Court ought to have been dismissed, instead
.,.
of allowed, as contained in direction No.3.

The respondent herein had filed counter to the application. It is argued
that the Review Petition is not maintainable as the applicant had failed to
E show that there was an error apparent on record or that there was discovery
of some new or important matter which, after the exercise of due diligence,
was not within the knowledge or could not be produced by him at the time
of the hearing of the special leave petition. It is further argued that the
respondent had applied for YRS on 17.11.2000, which was operative w.e.f.
F 1.11.2000 to 30.11.2000. Thereafter, on 27.11.2000 the respondent had
submitted an application for withdrawal of his application dated 17.11.2000
during the warranty of the Scheme. However, the bank accepted the request
of the respondent on 6.1.2001 after the period of the Scheme was expired and
on the same date the respondent had been relieved of his post.

G In our view this contention would be of no assistance to the respondent.
He knew very well that the money deposited in his account was part of the
benefits under the Scheme. He also knew it very well that his request for '(
YRS was accepted after the Scheme had expired, yet he had withdrawn the
amount deposited and utilised the same.

H The fact that the respondent had withdrawn a part of the benefit under
P.N.B. v. V.K. GOEL [SEMA, J.) 925
I
~ j
' the scheme is not disputed and it could not be._To substantiate the contention, A
the applicant has submitted a photocopy of respondent's bank account
No.27980 (Annexure R-1 ). It clearly appears from Annexure R-1 that a part
of the retirement benefit was deposited in the respondent's bank account on
12.1.2001 and on 15.1.2001 he had withdrawn Rs. three lakhs. Again on
28.2.2001 he had withdrawn Rs. fifty thousand. This fact, however, was not
brought to the notice of this Court at the time of the hearing. However, the
B
fact remains that the incumbent had accepted the benefits under the scheme
).
and utilisation thereof would squarely be covered by direction No.I as noticed
above. Therefore, the judgment dated 17 .12.2002 is reviewed to the extent
that the appeal arising out of the judgment and order of the Uttaranchal High
Court is dismissed and the judgment of the High Court is upheld. c
l.A.NOS.1-2 AND 3

The question involved in I.A.Nos. 1-2 and 3 is as to whether the
applicants have accepted a part of the benefit under the YRS in terms of
direction No. I or not. D
.... I.A.No. I

This I.A is filed by respondent Balbir Singh Chadha for clarification
and modification of the judgment dated 17.12.2002. The ground taken in the
application is that the benefits under the scheme had been deposited in the E
applicant's defunct Bank account No.30 which has never been accepted nor
withdrawn by the applicant cannot be construed as acceptance of part of the
benefits in terms of direction No. I. In this case, the applicant applied for
YRS on 28.11.2000. The applicant withdrew his application on 20.12.2000,
before the same was accepted by the bank. Annexure-R5 is the photocopy of F
).
~
Bank account no.30 in the name of the applicant. It appears that on 13.3.2001
leave encashment of Rs.134650.82 was deposited in his account. Thereafter,
the applicant had not operated the bank account. He had not withdrawn the
amount.

l.A.No.2 G

- 'r
The employee Narinder Singh is the applicant. The applicant applied
for benefit under the scheme on 1.12.2000. He submitted an application on
25.1.200 I for withdrawal of his offer for YRS. The ground taken in the
application inter a/ia is that on 26.3.2001 the respondent-bank herein deposited
leave encashment of Rs. 119048 in account No.5654 of the applicant. It is H
926 SUPREME COURT REPORTS [2004) I S.C.R.
1.. • '
A further contended that the applicant did not operate the account thereafter. He
has neither withdrawn the amount nor utilised the amount, unilaterally
deposited in his account. To substantiate his contention the applicant has
annexe:! photocopy of the account No.5654 (Annexure R-3). A perusal of the
account would reveal that after 26.3.~00I the applicant has not operated his
bank account. This fact is not denied by the bank.
B
J.A.No.3

The applicant is Mohinder Pal Singh, an employee of the bank. He
applied for the benefit of the scheme on 1.12.2000. On 27.12.2000 he made
an application for withdrawal of his offer for YRS. The withdrawal application
c was filed before the acceptance of the offer for YRS by the bank authority.
The ground taken in this application is that the applicant did not operate bank
account No.17611 after 21.4.200 I. To buttress his contention the applicant
has filed photocopy of bank account no.17611 (Annexure R-6). It appears
from there that the benefit under the scheme was deposited in the bank
D account of the applicant on and from 30.4.2001 and the applicant had not
operated his bank account thereafter. In view thereof, it cannot be construed
that the applicant had accepted a part of benefit under the scheme in terms
of direction No. I.

We make it clear that the sentence, "accepted a part of benefit under
E the scheme", appeared in our direction as noticed above, would include the
withdrawal of the benefit and utilisation thereof. By no stretch of imagination,
unilateral deposit of a part of benefit under the scheme into the bank account,
that too after withdrawal of the application, would construe as to have accepted
the part of the benefit under the scheme, when the same was neither withdrawn
F nor utilised by the employee concerned.
,I.,

In view of the discussion aforesaid, IA Nos. I, 2 and 3 are allowed. The
applicants shall be reinstated into their posts with continuity in service, back
wages and all consequential benefits as are entitled to them under the Law.
They shall, however, refund the entire amount deposited into their bank
G accounts with interest accrued, if any, to the bank. Full refund of the amount
by the applicants would be the condition precedent for reinstatement. Mr.
Mukul Rohtagi learned ASG submits that applying the principle of 'No Work
No Pay', back wages should not be allowed to them on their reinstatement.
We are unable to accept this contention. The applicants were out of their jobs
y -
H for no fault of theirs. Even otherwise, party in breach of contract can hardly
P.N.B. v. V.K. GOEL [SEMI\ . .I.] 927
seek for any e'quitable relief. A
I.A.NOS. 1-22

These applications hav~ been filed by the State Bank of Patiala for
clarification/directions. The ground taken in these applications is that the
State Bank of Patiala is not a nationalised bank. It is hundred per cent a B
subsidiary of the State Bank of India. The YRS scheme floated by the State
Bank of Patiala is in para-materia with the scheme floated by the State Bank
of India. This Court in the judgment dated 17.12.2002 allowed the appeals
filed by the State Bank of India but nothing has been said about the appeals
filed by the State Bank of Patiala. In the interregnum, a two-Judge Bench of C
this Court, in which one of us (Serna, J) was a member, considered the same
question in Civil Appeal No. 2341 of 2003 arising out of Special Leave
Petition No. 23530 of 2002 entitled State Bank of Patia/a v. Jagga Singh,
disposed of on 13.3.2003, where this Court after considering Clause 8 of the
scheme floated by the State Bank of Patiala and Clause 7 of the scheme
floated by the State Bank of India, had held that the scheme floated by the D
State Bank of Patiala is almost identical of the scheme floated by the State
Bank of India. Accordingly, the appeal filed by the State Bank of Patiala was
allowed. Review Petition was also dismissed on 3.12.2003. In view thereof,
we clarify that our direction No.2, allowing the appeals filed by the State
Bank of India, would also include the appeals filed by the State Bank of
Patiala. In other words, the appeals filed by the State Bank of Patiala are E
allowed in terms of our judgment dated 17 .12.2002.

I.A.NOS. 14-15

I.A. No. 14 has been filed by an employee of the bank sought to
clarify/modify our order dated 17.12.2002. In this case, admittedly, the benefit F
of the scheme had been withdrawn by the applicant on 27.2.200 I. The applicant
had clearly admitted, in ground E of the application, withdrawal of the amount
so credited in his account, albeit compelling financial constraints.

I.A. No.15 has been filed by an employee of the bank for clarification/ G
modification of our order dated 17.12.2002. In para 6 of the application, the
applicant admitted that he had withdrawn and utilised the benefit of the
scheme credited in his account.

As noticed in our judgment, having accepted the benefit under the
scheme by withdrawing and utilisation thereof they are not permitted to H
928 SUPREME. COURT REPORTS (2004] I S.C.R.

A approbate and reprobate.

The net result is:

(a) Review Petition No. 53 of 2003 is allowed but the costs of the
respondent shall be borne by the applicant.
B lb) I.A.Nos. I, 2 and 3 of 2003 are allowed.

(c) I.A.Nos. 1-22 of2003 are allowed.

(d) l.A.Nos.14 and 15 of 2003 are dismissed.

Petitions are disposed of in the above terms.

B.S. Petitions disposed of.