Holding

The termination of service under Clause 5, 1976 is to be treated as voluntary retirement under Clause 30 of the 1995 Pension Scheme, making the appellant eligible for pension.

Summary

Sheelkumar Jain, an employee of New India Assurance (formerly Liberty Insurance), served for over 20 years and in September 1991 gave a three‑month notice to leave service, which was accepted in December 1991. After the General Insurance (Employees') Pension Scheme, 1995 was introduced, he applied to opt for pension, but the company denied his claim, stating that his 1991 departure was a "resignation" and thus barred under Clause 22 of the 1995 scheme. The High Court upheld the denial, holding that resignation forfeits pension rights. On appeal, the Supreme Court examined whether the termination under Clause 5 of the 1976 scheme amounted to resignation or voluntary retirement. It held that Clause 5 does not define either term, and that having completed 20 years of qualifying service and given 90‑day notice, the appellant effectively retired voluntarily under Clause 30 of the 1995 scheme, making him eligible for pension. The Court set aside the High Court’s orders and directed the respondents to consider his pension claim.

Issues considered

Whether the termination of service in 1991 under Clause 5 of the General Insurance (Termination, Superannuation and Retirement) Scheme, 1976 amounts to "resignation" as defined in Clause 22 of the General Insurance (Employees') Pension Scheme, 1995.
Whether the appellant is entitled to pension benefits under Clause 30 of the Pension Scheme, 1995 despite using the word "resign" in his notice.

Legislation cited

General Insurance Business (Nationalised) Act, 1972s. 10, s. 17-A

Subjects

pensionresignationvoluntary retirementGeneral Insurance (Employees') Pension Scheme 1995service terminationstatutory interpretationemployee benefits

Judgment

[2011) 9 S.C.R. 574
~ ...
A SHEELKUMAR JAIN
v.
THE NEW INDIA ASSURANCE CO. LTD. AND ORS.
(Civil Appeal No. 6013 of 2011)
.,
JULY 28, 2011
B •
[R.V. RAVEENDRAN AND A.K. PATNAIK, JJ.]

General Insurance (Termination, Superannuation and
Retirement of Officers and Development Staff) Scheme, 1976
c - Clause 5 - General Insurance (Employees') Pension
Scheme, 1995 - Clause 22 and 30 - Resignation tendered
by appellant in 1991 - Competent authority accepted the
same and relieved him from service - In 1995, Pension ... ...
Scheme introduced which was made applicable to employees
D who were in the service of respondent no.1-Company on or i
after first January, 1986 but had retired before the first day of
November, 1993 and had exercised an option for same, -
Appellant opting for the Pension Scheme, 1995 on
20. 10.1995 - Entitlement of appellant to opt for the said
E Scheme - Held: Sub-clause (1) of Clause 5 does not state
that the termination of service pursuant to the notice given by
an employee to leave or discontinue his service amounts to
"resignation" nor does it state that such termination of service
amounts to "voluntary retirement" - The said sub-clause does
F not also make a distinction between "resignation" and
"voluntary retirement" - Clauses 22 and 30 of the Pension
Scheme, 1995 were not in existence when the appellant
served his notice - Both the appellant and respondent no. 1
acted in accordance with the provisions of sub-clause (1) of
G
Clause 5 of the Scheme, 1976 at the time of determination
of service of the appellant in the year 1991 - Clause 22 of
..,., .
the Pension Scheme, 1995 states that resignation of an
employee from the service of the Company shall entail
forfeiture of his entire past service and consequently shall not

H 574
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 575

-. - LTD. AND ORS.

qualify for pensionary benefits, but does not define the term A
"resignation" - Under sub-clause (1) of Clause 30 of the
Pension Scheme, 1995, an employee, who has completed 20
years of qualifying service, may by giving notice of not less
than 90 days in writing to the appointing authority retire from
~~
service - Since 'voluntary retirement' unlike 'resignation' does B
" not entail forfeiture of past services and instead qualifies for
pension, an employee to whom Clause 30 of the Pension
Scheme, 1995 applies cannot be said to have 'resigned' from
service - In the facts of the instant case, the appellant had
completed 20 years qualifying service and had given notice c
of not less than 90 days in writing to the appointing authority
of his intention to leave service and the appointing authority
had accepted notice of the appellant and relieved him from
.:. ~
service - Therefore, Clause 30 of the Pension Scheme, 1995
applied to the appellant even though in his notice he had
D
+ used the word 'resign' - Respondents directed to consider the
claim of the appellant for pension in accordance with the
Pension Scheme, 1995 and intimate the decision to the
appellant within three months..

General Insurance (Employees) Pension Scheme, 1995: E
Clauses 22 and 30 - Object of - Held: The general purpose
of the Pension Scheme, 1995, read as a whole, is to grant
pensionary benefits to employees, who had rendered service
i.. in the Insurance Companies and had retired after putting in
the qualifying service in the Insurance Companies - Clauses F
22 and 30 of the Scheme cannot be so construed as to
deprive of an employee of an Insurance Company who had
put in the qualifying service for pension and who had
voluntarily given up his service after serving 90 days notice
in accordance with sub-clause (1) of Clause 5 of the Scheme, G
r-'
-< 1976 and after his notice was accepted by the appointing
authority.
The appellant was the employee of respondent no.1-
company. On 16.9.1991, he sent a letter to respondent
H
576 SUPREME COURT REPORTS [2011J 9 S.C.R.

A no.1-company saying that he would like to resign from
his post and requesting to treat the letter as three months
notice and to relieve him from service. His resignation
was accepted with effect from 16.12.1991 i.e. after
completion of three months. Accordingly appellant was
B relieved from his services on 16.12.1991. Thereafter, the ·•
General Insurance (Employees') Pension Scheme, 1995
was made by the Central Government in exercise of its
powers under Section 17-A of the Act. The Pension
Scheme, 1995 applied also to employees who were in the
c service of respondent no.1-Company on or after first
January, 1986 but had retired before the first day of
November, 1993 and exercised an option in writing within
120 days from the notified date provided he refunded
within the specified period the entire amount of the
D company's contribution to the provident fund including
.. ...
interest thereon as well as the entire amount of non-
refundable withdrawal, if any, made from the company's
contribution to the provident fund amount and interest
thereon. On 20.10.1995, the appellant submitted an
E application to the respondent no.1-Company opting for
the Pension Scheme, 1995 and gave an undertaking to
refund the entire amount of company's contribution to
his provident fund account together with interest.
Respondent no.1-Company, however, intimated the
appellant that the Pension Scheme, 1995 was not
F applicable to those who have resigned from respondent
no.1-Company and since the appellant had resigned, he
would not be entitled for the Pensions Scheme, 1995.
The appellant filed a writ petition before the High
G Court. The Single Judge of the High Court dismissed the
writ petition holding that under Clause 22 of the Pension
Scheme, 1995, resignation entails forfeiture of the past
services and as the appellant resigned from service, even
if he had worked for 20 years in respondent no.1-
H Company, he could not be equated with an employee
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 577
LTD. AND ORS.
who had taken voluntary retirement from service under A
Clause 30 of the Pension Scheme, 1995 and, therefore,·
the Pension Scheme, 1995 did not apply to the appellant.
The Division Bench of the High Court upheld the order
of the Single Judge. The instant appeal was filed
challenging the order of the Division Bench of .the High B
~·
Court.

Allowing the appeal, the Court

HELD: 1. The Clause 5 of the General Insurance
(Termination, Superannuation and Retirement of Officers C
and Development Staff) Scheme, 1976 was made under
Section 10 of the General Insurance Business
(Nationalized) Act, 1972. It is clear from the language of
sub-clause (1) of Clause 5 of the Scheme, 1976 that an
officer or a person of the Development Staff could leave D
or discontinue his services after giving in writing to the
appointing authority of his intention to leave or
discontinue the services and the period of such notice
required to be given was three months. It was in
accordance with this statutory provision that the E
appellant submitted his letter dated 16.09.1991 to the
General Manager of respondent no.1-Company saying
that he would like to resign from his post and requesting
him to treat the letter as three months' notice and to
relieve him from his services and the competent authority F
accepted his resignation with effect from 16.12.1991, i.e.
after completion of three months' notice. Sub-clause (1)
of Clause 5 does not state that the termination of service
pursuant to the notice given by an officer or a person of
the Development Staff to leave or discontinue his service G
amounts to "resignation" nor does it state that such
termination of service of an officer or a person of the
Development Staff on his serving notice in writing to
leave or discontinue in service amounts to "voluntary
retirement". Sub-clause (1) of Clause 5 does not also
H
578 SUPREME COURT REPORTS [2011] 9 S:C.R.

A make a distinction between "resignation" and "voluntary
retirement" and it only provides that an employee who
wants to leave or discontinue his service has to serve a
notice of three months to the appointing authority. Sub-
clause (1) of Clause 5 also does not require that the
B appointing authority must accept the request of an officer
or a person of the Development Staff to leave or
discontinue his service but in the facts of the present
case, the request of the appellant to relieve him from his
service after three months' notice was accepted by the
c competent authority and such acceptance was conveyed.
[Para 8] [586-F; 587 -F-H; 588-A-C]

2. The Pension Scheme, 1995 was framed and
notified only in 1995 and yet the Pension Scheme, 1995
was made applicable also to employees who had left the
D services of respondent no.1-Company before 1995.
Clauses 22 and 30 of the Pension Scheme, 1995 were not
in existence when the appellant submitted his letter
dated 16.09.1991 to respondent no.1-Company. Hence,
when the appellant served his letter dated 16.09.1991 to
E the General Manager of respondent no.1- Company, he
had no knowledge of the difference between 'resignation'
under Clause 22 and 'voluntary retirement' under Clause
30 of the Pension Scheme, 1995. Similarly, respondent
no.1-Company employer had no knowledge of the
F difference between 'resignation' and 'voluntary # ...

retirement' under Clauses 22 and 30 of the Pension
Scheme, 1995 respectively. Both the appellant and
respondent no.1 acted in accordance with the provisions
of sub-clause (1) of Clause 5 of the Scheme, 1976 at the
G time of determination of service of the appellant in the
year 1991. Clause 22 of the Pension Scheme, 1995 states ._
that resignation of an employee from the service of the •
Corporation or a Company shall entail forfeiture of his
entire past service and consequently shall not qualify for
H pensionary benefits, but does not def'ine the term
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 579
LTD. AND ORS.
'.;.;· _..,.
"resignation". Under sub-clause (1) of Clause 30 of the A
Pension Scheme, 1995, an employee, who has completed
20 years of qualifying service, may by giving notice of not
less than 90 days in writing to the appointing authority
... • retire from service and under sub-clause (2) of Clause 30
of the Pension Scheme, 1995, the notice of voluntary B
" retirement shall require acceptance by the appointing
authority. Since 'voluntary retirement' unlike 'resignation'
does not entail forfeiture of past services and instead
qualifies for pension, an employee to whom Clause 30 of
the Pension Scheme, 1995 applies cannot be said to c
have 'resigned' from service. In the facts of the instant
case, the appellant had completed 20 years qualifying
service and had given notice of not less than 90 days in
~
writing to the appointing authority of his intention to
leave service and the appointing authority had accepted
.. notice of the appellant and relieved him from service .
D
Therefore, Clause 30 of the Pension Scheme, 1995
applied to the appellant even though in his letter dated
16.09.1991 to respondent no.1-Company he had used the
word 'resign'. [Para 10) [590-F-H; 591-A-H]
E
Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd.· &

- Ors. AIR 1984 SC 1064: 1984 (3) SCR 325; Union of India
& Ors. v. Lt. Col. P.S. Bhargava (1997) 2 SCC 28: 1997 (1)
-".-.. SCR 130; Reserve Bank of India & Anr. v. Cecil Dennis
Solomon & Anr. (2004) 9 SCC 461: 2003 (6) Suppl. SCR F
465- relied on.

J.K. Cotton Spinning and Weaving Mills Company Ltd.
v. State of U. P. & Ors. (1990) 4 SCC 27: 1990 (3) SCR 523;
Sansar Chand Atri v. State of Punjab & Anr. (2002) 4 SCC
• ·- 154: 2002 (2) SCR 881; D.S. Nakara & Ors. v. Union of India
(1983)° 1 SCC 305: 1983 (2) SCR 165; Chairman, Railway
G

Board & Ors. v. C. R. Rangadhamaiah & Ors. AIR 1997 SC
3828: 1997 (3) Suppl. SCR 63; S. Appukuttan v. Thundiyil
Janaki Amma & Anr. (1988) 2 SCC 372: 1988 (2) SCR 661;
-,
H
580 SUPREME COURT REPORTS [2011) 9 S.C.R.

A Vatan Mal v. Kai/ash Nath (1989) 3 SCC 79: 1989 (2) SCR ..Jr \.:_
192; Employees' State Insurance Corporation v. R.K. Swamy
& Ors. (1994) 1 SCC 445: 1993 (3) Suppl. SCR 461; Union
of India & Anr. v. Pradeep Kumari & Ors. (1995) 2 SCC 736:
1995 (2) SCR 703; UCO Bank & Ors., etc. v. Sanwar Mal, etc.
B (2004) 4 SCC 412: 2004 (2 ) SCR 1125 - referred to.
3. The general purpose of the Pension Scheme, 1995,
!
-
read as a whole, is to grant pensionary benefits to
employees, who had rendered service in the Insurance
Companies and had retired after putting in the qualifying
c service in the Insurance Companies. Clauses 22 and 30
of the Pension Scheme, 1995 cannot be so construed as
to deprive of an employee of an Insurance Company,
such as the appellant, who had put in the qualifying
service for pension and who had voluntarily given up his
D service after serving 90 days notice in accordance with
~
-
sub-clause (1) of Clause 5 of the Scheme, 1976 and after •
his notice was accepted by the appointing authority. The
respondents are directed to consider the claim of the
appellant for pension in accordance with the Pension
E Scheme, 1995 and intimate the decision to the appellant
within three months. [Para 13, 14] [593-B-F]

Case Law Reference: ,--

1984 (3) SCR 325 relied on Para 5, 11
,,..
F
1990 (3) SCR 523 referred to Para 5
1997 (1) SCR 130 relied on Para 5, 12
2002 (2) SCR 881 referred to Para 5
G 1983 (2) SCR 165 relied on
1997 (3) Suppl. SCR 63 relied on
Para 5
Para 5
...
1988 (2) SCR 661 relied on Para 5

H
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 581
LTD. AND ORS.

..... ~ 1989 (2) SCR 192 relied on Para 5 A
1993 (3) Suppl. SCR 461 relied on Para 5
1995 (2) SCR 703 relied on Para 5
2004 (2) SCR 1125 referred to Para 6, 7
B
/

• 2003 (6) Suppl. SCR 465 relied on Para 6, 7
~

CIVIL APPELLATE JURISDICTION : Civil Appeal No.
6013 of 2011.

From the Judgment & Order dated 10.11.2006 of the High c
Court of Madhya Pradesh, Bench at Indore, in Writ Appeal No.
224 of 2006.

Sushil Kr. Jain, B. Jain, Ajay Jain, Pratibha Jain for the
..... .... Appellant. D

+ Balaji Subramanian (for Law Associates & Co.) for the
Respondents.

The Judgment of the Court was delivered by
E
A. K. PATNAIK, J. 1. Leave granted.
2. This is an appeal by way of special leave against the
order dated 10.11.2006 of the Division Bench of the Madhya
Pradesh High Court, Indore Bench, in W.A. No.224 of 2006.
.). ..._ F
3. The brief facts of this case are that on 01.07.1969 the
appellant was appointed as an Inspector in Liberty Insurance
Company Limited. Under the General Insurance Business
(Nationalised) Act, 1972 (for short 'the Act'), Liberty Insurance
Company was nationalized and merged in the respondent no.1- G
Company. The services of the appellant were absorbed in
.t ....
respondent No.1-Company and in September, 1984, he was
promoted as Assistant Administrative Officer and posted at the
Guna Branch as Assistant Branch Manager. In the year 1989,
he was transferred to Indore and posted as Assistant H
582 SUPREME COURT REPORTS [2011] 9 S.C.R.

A Administrative Officer and thereafter as Divisional Accountant
and in 1991 he was promoted to the post of Administrative
Officer. The appellant then served a letter dated 16.09.1991 to
the General Manager of respondent No.1- Company at the
Head Office of the company at Bombay saying that he would
s like to resign from his post and requesting him to treat the letter
as three months' notice and to relieve him from his services.
The Assistant Administrative Officer, Indore, by his letter dated
28.10.1991 informed the appellant that his resignation has been
accepted by the competent authority with effect from
c 16.12.1991, i.e. after completion of three months notice.
Accordingly, the appellant was relieved from his services on
16.12.1991. Thereafter, the General Insurance (Employees')
Pension Scheme, 1995 (for short 'the Pension Scheme, 1995')
was made by the Central Government in exercise of its powers
0
under Section 17-A of the Act. The Pension Scheme, 1995
applied also to employees who were in the service of
.
respondent No.1-Company on or after first January, 1986 but
had retired before the first day of November, 1993 and
exercised an option in writing within 120 days from the notified
E date provided he refunded within the specified period the entire
amount of the company's contribution to the provident fund
including interest thereon as well as the entire amount of non-
refundable withdrawal, if any, made from the company's
contribution to the provident fund amount and interest thereon.
On 20.10.1995, the appellant submitted an application to the
F respondent No.1-Company opting for the Pension Scheme,
1995 and gave an undertaking to refund to respondent No.1-
Company the entire amount of company's contribution to his
provident fund account together with interest as well as the
entire amount of non-refundable withdrawal, if any, made by him
G from company's contribution to his provident fund account and
interest thereon. The respondent No.1-Company, however,
intimated the appellant by letter dated 25.10.1995 that the
Pension Scheme, 1995 was not applicable to those who have
resigned from the respondent No.1-Company and since the
H
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE C0.583
LTD. AND ORS. [A.K. PATNAIK, J.]

appellant has resigned, he will not be entitled for the Pensions A
Scheme, 1995.

4. The appellant then filed Writ Petition No.692 of 1996
• before the Madhya Pradesh High Court, Indore Bench, which
~
was dismissed by the learned Single Judge by order dated B
15.02.2000. Aggrieved, the appellant initially filed Special
Leave Petition before this Court, but thereafter withdrew the
same and challenged the order of the learned Single Judge
before the Division Bench of the Madhya Pradesh High Court
in Writ Appeal No.224 of 2006. The Division Bench of the C
Madhya Pradesh High Court held in the impugned order that
under Clause 22 of the Pension Sche111e, 1995, resignation
... -. entails forfeiture of the past services and as the appellant has
resigned from service, even if he had worked for 20 years in
+ respondent No.1-Company, he cannot be equated with an
employee who had taken voluntary retirement from service D
under Clause 30 of the Pension Scheme, 1995 and the
Pension Scheme, 1995 did not apply to the appellant and
dismissed the Writ Appeal.

5. Mr. Sushi! Kumar Jain, learned counsel for the appellant, E
submitted t;1at the High Court was not right in coming to the
conclusion that the appellant had resigned from service. He
1, submitted that though in the letter dated 16.09.1991 to the

General Manager of the respondent no.1-Company the
appellant used the word 'resigned', the letter was actually a three F
months' notice for voluntary retirement. He submitted that the
appellant had rendered 20 years service and 20 years service
was the qualifying service for voluntary retirement under Clause
30 of the Pension Scheme, 1995. He submitted that since the
~ .... appellant had rendered more than 20 years of service under G
the respondent no.1-Company, he was entitled to the pension
and such pension should not be denied to him by saying that
he had resigned from service and had not taken voluntary
retirement. He further submitted that Clause 22 of the Pension
Scheme, 1995 providing that resignation from the service of H
584 SUPREME COURT REPORTS [2011] 9 S.C.R.

A the respondent no.1-Company shall entail forfeiture of his entire
past service and consequently shall not qualify for pensionary
benefits, was not in existence when the appellant submitted his
letter dated 16.09.1991 and the only provision that was in force
was Clause 5 of the General Insurance (Termination,
B Superannuation and Retirement of Officers and Development
Staff) Scheme, 1976, (for short 'the Scheme 1976') which
provided that an officer or a person of the Development Staff
shall not leave or discontinue his service without first giving a
three months notice in writing to the appointing authority of his
c intention to leave or discontinue the service. He submitted that
had there been a provision similar to Clause 22 of the Pension
Scheme, 1995 in the Scheme, 1976, he would not have used
the word 'resigned' in his letter dated 19.06.1991. He cited the
..
decisions of this Court in Sudhir Chandra Sarkar v. Tata Iron
D and Steel Co. Ltd. & Ors. [AIR 1984 SC 1064], J.K. Cotton
Spinning and Weaving Mills Company Ltd. v. State of U. P.
& Ors. [(1990) 4 SCC 27], Union of India & Ors. v. Lt. Col.
P.S. Bhargava [(1997) 2 SCC 28] and Sansar Chand Atri v.
State of Punjab & Anr. [(2002) 4 SCC 154] to contend that the
E resignation of the appellant actually amounted to voluntary
retirement in the facts and circumstances of the case. He
vehemently argued that it has been held in D.S. Nakara & Ors.
v. Union of India [(1983) 1 SCC 305] and Chairman, Railway I
Board & Ors. v. C. R. Rangadhamaiah & Ors. [AIR 1997 SC
3828] that pension is neither a bounty nor a matter of grace
F but is a payment for the past services rendered by an employee.
He relied on the decisions of this Court in S. Appukuttan v.
Thundiyil Janaki Amma & Anr. [(1988) 2 SCC 372], Vatan Mal
v. Kai/ash Nath [(1989) 3 SCC 79], Employees' State
Insurance Corporation v. R.K. Swamy & Ors. [(1994) 1 SCC
G 445] and Union of India & Anr. v. Pradeep Kumari & Ors.
((1995) 2 sec 736] for the proposition that while interpreting
a statute the Court must have regard to the legislative intent and
should not take a narrow or restricted view which will defeat the
beneficial purpose of the statute.
H
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 585
..... ~
LTD. AND ORS. (A.K. PATNAIK, J.]

6. Mr. Balaji Subramanian, learned counsel for the A
respondents, on the other hand, submitted that the letter dated
16.09.1991 of the appellant to the General Manager of the
' .. respondent no.1-Company used the word 'resigned' and,
~
therefore, the appellant actually resigned from service and did
not take voluntary retirement. He cited a decision of this Court B
in UCO Bank & Ors., etc. v. Sanwar Mal, etc. ((2004) 4 SCC
412] in which this Court, while construing the UCO Bank
(Employees') Pension Regulations, 1995 which had similar
provisions, held that the words 'resignation' and 'voluntary
retirement' carry different meanings and an employee, who has
resigned from the service, was not entitled to pension. He also
c
... .. relied on the decision of this Court in Reserve Bank of India
& Anr. v. Cecil Dennis Solomon & Anr. ((2004) 9 SCC 461]
in which this Court, while construing the provisions of the
-+
Reserve Bank of India Pension Regulations, 1990, has held
D
that in service jurisprudence, the expressions "resignation" and
"voluntary retirement" convey different connotations and a
person who has resigned is not entitled to pension.

7. We have perused the decisions of this Court cited by
learned counsel for the respondents. In Reserve Bank of India E
& Anr. v. Cecil Dennis Solomon & Anr. (supra) employees
of the Reserve Bank of India had tendered their resignations

* in 1988 and were getting superannuation benefits under the
provident fund contributory provisions and gratuity schemes.
Subsequently, the Reserve Bank of India Pension Regulations, F
1990 were framed. The employees who had tendered
resignations in 1988 claimed that they were entitled to pension
under these new Pension Regulations and moved the Bombay
~
... High Court for relief and the High Court held that the Reserve
Bank of India was legally bound to grant pension to such G
employees. The Reserve Bank of India challenged the
decision of the Bombay High Court before this Court and this
Court held that as the employees had tendered resignation
which was different from voluntary retirement, they were not
entitled to pension under the Pension Regulations. Similarly,
H
586 SUPREME COURT REPORTS [2011] 9 S.C.R.
.:;.- ....
A. in UCO Bank & Ors., etc. v. Sanwar Mal, etc. (supra) Sanwar
Mal, who was initially appointed in the UCO Bank on
29.12.1959 and was thereafter promoted to Class Ill post in
1980, resigned from the service of the UCO Bank after giving
one month's notice on 25.02.1988. Thereafter, the UCO Bank ,.
B (Employees') Pension Regulations, 1995 were framed and I
Sanwar Mal opted for the pension scheme under these
regulations. The UCO Bank declined to accept his option to
admit him into the pension scheme. Sanwar Mal filed a suit for
a declaration that he was entitled to pension under the Pension
c Regulations and for a mandatory injunction directing the UCO
Bank to make payment of arrears of pensions along with
interest. The suit was decreed and the decree was affirmed in
first appeal and thereafter by the High Court in second appeal.
The UCO Bank carried an appeal to this Court and this Court .. ...
D differentiated "resignation" from "voluntary retirement" and _,
allowed the appeal and set aside the judgment of the High
Court. In these two decisions, the Courts were not called upon
to decide whether the termination of services of the employee
was by way of resignation or voluntary retirement. In this case,
on the other hand, we are called upon to decide the issue
E
whether the termination of the services of the appellant in 1991
amounted to resignation or voluntary retirement.

8. For deciding this issue, we have to look at the Clause
5 of the Scheme, 1976 made under Section 10 of the Act under
F which the services of the appellant were terminated after he
submitted his letter dated 16.09.1991 to the General Manager
of respondent No.1- Company saying that he would like to
resign from his post and requesting him to treat the letter as
three months' notice and to relieve him from his services.
G Clause 5 of the Scheme, 1976 is quoted hereinbelow: .. •
"5. Determination of Service:

(1) An officer or a person of the Development Staff, other
than one on probation shall not leave or discontinue his
4
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 587
LTD. AND ORS. [A.K. PATNAIK, J.]
"" ,.t..

service without first giving in writing to the appointing A
authority of his intention to leave or discontinue the service
and the period of notice required to be given shall be three
months;
•.. Provided that such notice may be waived in part or in full
\ B
by appointing authority at its discretion.

Explanation I - In this Scheme, month shall be reckoned
according to the English Calendar and shall commence
from the day following that on which the notice is received
by the Corporation or the Company, as the case may be. c
Explanation II - A notice given by an officer or a person of
the Development Staff under this paragraph shall be
deemed to be proper only if he remains on duty during the
period of notice and such officer or person shall not be
D
entitled to set off any leave earned against the period of
such notice.

(2) In case of breach by an officer or a person of the
Development Staff of the provisions of sub-paragraph (1 ),
he shall be liable to pay to the Corporation or the Company E
concerned, as the case may be, as compensation a sum
equal to his salary for the period of notice required of him
which sum may be deducted from any monies due to him."
-1-.
It will be clear from the language of sub-clause (1) of Clause 5 F
of the Scheme, 1976 that an officer or a person of the
Development Staff could leave or discontinue his services after
giving in writing to the appointing authority of his intention to
leave or discontinue of the services and the period of such
notice required to be given was three months. It is in
"'I' G
accordance with this statutory provision that the appellant
submitted his letter dated 16.09.1991 to the General Manager
of respondent No.1-Company saying that he would like to
resign from his post and requesting him to treat the letter as
three months' notice and to relieve him from his services and
H
588 SUPREME COURT REPORTS [2011] 9 S.C.R.
~- ....

A it is in accordance with this statutory provision that the
competent authority accepted his resignation with effect from
16.12.1991, i.e. after completion of three months' notice. Sub-
clause (1) of Clause 5 does not state that the termination of
service pursuant to the notice given by an officer or a person
B of the Development Staff to leave or discontinue his service
amounts to "resignation" nor does it state that such termination
of service of an officer or a person of the Development Staff
on his serving notice in writing to leave or discontinue in service
amounts to "voluntary retirement". Sub-clause (1) of Clause 5
c does not also make a distinction between "resignation" and
"voluntary retirement" and it only provides that an employee who
wants to leave or discontinue his service has to serve a notice
of three months to the appointing authority. We also notice that
sub-clause (1) of Clause 5 does not require that the appointing
authority must accept the request of an officer or a person of
D
the Development Staff to leave or discontinue his service but
in the facts of the present case, the request of the appellant to
relieve him from his service after three months' notice was
accepted by the competent authori.ty and such acceptance was
conveyed by the letter dated 28.10.1991 of the Assistant
E Administrative Officer, Indore.

9. We may now look at Clauses 22 and 30 of the Pension
Scheme, 1995 which are quoted hereinbelow: I
~

"22. Forfeiture of Service: Resignation or dismissal or
F
removal or termination or compulsory retirement or an
employee from the service of the Corporation or a
Company shall entail forfeiture of his entire past service
and consequently shall not qualify for pensionary benefits.
~
;
G 30. Pension on Voluntary Retirement: (1) At any time after
an employee has completed twenty years of qualifying
service, he may, by giving notice of not less than ninety
days, in writing to the appointing authority, retire from
service:
H
- -- SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 589
LTD. AND ORS. [A.K. PATNAIK, J.]

Provided that this sub-paragraph shall not apply to an A
employee who is on deputation unless after having been
transferred or having returned to India he has resumed
• • charge of the post in India and has served for a period of
not less than one year:
B
Provided further that this sub-paragraph shall not apply to
an employee who seeks retirement from service for being
absorbed permanently in an autonomous body or a public
sector undertaking to which he is on deputation at the time
of seeking voluntary retirement.
c
(2) The notice of voluntary retirement given under sub-
... ... paragraph (1) shall require acceptance by the appointing
authority:
' Provided that where the appointing authority does not D
refuse to grant the permission for retirement before the
expiry of the period specified in the said notice, the
retirement shall become effective from the date of expiry
of the said period.
(3)(a) An employee referred to in sub-paragraph (1) may E

,, make a request in writing to the appointing authority to
accept notice of voluntary retirement of less than ninety
days giving reasons. therefor;

(b) on receipt of request under clause (a), the appointing F
authority may, subject to the provisions of sub-paragraph
(2), consider such request for the.curtailment of the period
of notice of ninety days on merits and if it is satisfied that
-t the curtailment of the period of notice will not cause any
'
administrative inconvenience, the appointing authority may
G
relax the requirement of notice of ninety days on the
condition that the employee shall not apply for commutation
of a part of his pension before the expiry of the notice of
ninety days.
H
590 SUPREME COURT REPORTS [2011] 9 S.C.R.

A (4) An employee who has elected to retire under this
paragraph and has given necessary notice to that effect
to the appointing authority shall be precluded from
withdrawing his notice except with the specific approval of
such authority:
8
Provided that the request for such withdrawal shall be
made before the intended date of his retirement.

(5) The qualifying service of an employee retiring voluntarily
under this paragraph shall be increased by a period not
c exceeding five years, subject to the condition that the total
qualifying service rendered by such employee shall not in
any case exceed thirty three years and it does not take him
beyond the date of retirement. .,. >I=

D (6) The pension of an employee retiring under this
paragraph shall be based on th8 average emoluments as
defined under clause (d) of paragraph 2 of this scheme
and the increase, not exceeding five years in his qualifying
service, shall not entitled him to any notional fixation of pay
for the purpose of calculating his pension;
E
Explanation: For the purpose of this paragraph, the
appointing authority shall be the appointing authority
specified in Appendix-I to this scheme." /'

F 10. The Pension Scheme, 1995 was framed and notified
only in 1995 and yet the Pension Scheme, 1995 was made
applicable also to employees who had left the services of the
respondent No.1-Company before 1995. Clauses 22 and 30
of the Pension Scheme, 1995 quoted above were not in
G existence when the appellant submitted his letter dated
. ~

16.09.1991 to the General Manager of respondent No.1-
Company. Hence, when the appellant served his letter dated
16.09.1991 to the General Manager of respondent No.1-
Company, he had no knowledge of the difference between
'resignation' under Clause 22 and 'voluntary retirement' under
H
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 591
LTD. AND ORS. [A.K. PATNAIK, J.]
- -- ' Clause 30 of the Pension Scheme, 1995. Similarly, the A
respondent No.1-Company employer had no knowledge of the
difference between 'resignation' and 'voluntary retirement' under
Clauses 22 and 30 of the Pension Scheme, 1995 respectively.
Both the appellant and the respondent No.1 have acted in
f
accordance with the provisions of sub-clause (1) of Clause 5 B
of the Scheme, 1976 at the time of determination of service of
the appellant in the year 1991. It is in this background that we
have now to decide whether the determination of service of the
appellant under sub-clause (1) of Clause 5 of the Scheme,
1976 amounts to resignation in terms of Clause 22 of the
Pension Scheme, 1995 or amounts to voluntary retirement in
c
terms of Clause 30 of the Pension Scheme, 1995. Clause 22
of the Pension Scheme, 1995 states that resignation of an

- ~·
employee from the service of the Corporation or a Company
shall entail forfeiture of his entire past service and consequently
shall not qualify for pensionary benefits, but does not define the
D
term "resignation". Under sub-clause (1) of Clause 30 of the
Pension Scheme, 1995, an employee, who has completed 20
years of qualifying service, may by giving notice of not less than
90 days in writing to the appointing authority retire from service
and under sub-clause (2) of Clause 30 of the Pension Scheme, E
1995, the notice of voluntary retirement shall require acceptance
by the appointing authority. Since 'voluntary retirement' unlike
'resignation' does not entail forfeiture of past services and
instead qualifies for pension, an employee to whom Clause 30
of the Pension Scheme, 1995 applies cannot be said to have F
'resigned' from service. In the facts of the present case, we find
that the appellant had completed 20 years qualifying service
and had given notice of not less than 90 days in writing to the
appointing authority of his intention to leave service and the
appointing authority had accepted notice of the appellant and G
~-'"
relieved him from service. Hence, Clause 30 of the Pension
Scheme, 1995 applied to the appellant even though in his letter
date.d 16.09.1991 to the General Manager of respondent no.1- ·
Company he had used the word 'resign'.
H
592 SUPREME COURT REPORTS [2011] 9 S.C.R.

A 11. We may now cite the authorities in support of our
aforesaid conclusion. In Sudhir Chandra Sarkar v. Tata Iron
and Steel Co. Ltd. & Ors. (supra), the plaintiff had rendered
continuous service under the respondent from 31.12.1929 till
31.08.1959, i.e. for 20 years and 8 months. He submitted a letter
B of resignation dated 27.07.1959 and his resignation was
accepted by the respondent by letter dated 26.08.1959 and he
was released from his service with effect from 01.09.1959. On
these facts, a three-Judge Bench of this Court held:

"The termination of service was thus on account of
c resignation of the plaintiff being accepted by the
respondent. The plaintiff has, within the meaning of the
expression, thus retired from service of the respondent and
he is qualified for payment of gratuity in terms of Rule 6."
..,....
D 12. In Union of India & Ors. v. Lt. Col. P.S. Bhargava "'
(supra), respondent joined the Army Dental Corps in 1960 and
thereafter he served in various capacities as a specialist and
on 02.01.1984 he wrote a letter requesting for permission to
resign from service with effect from 30.04.1984 or from an early
E date. His resignation was accepted by a communication dated
24.07.1984 and he was released from service and he was also
informed that he shall not be entitled to gratuity, pension, leave
pending resignation and travel concession. On receipt of this
letter, he wrote another letter dated 18.08.1984 stating that he
was not interested in leaving the service. This was followed by
F
another letter dated 22. 08.1984 praying to the authority to
cancel the permission to resign. These letters were written by
the respondent because he realized that he would be deprived
of his pension, gratuity, etc. as a consequence of his
resignation. These subsequent letters dated 18.08.1984 and
G
22.08.1984 were not accepted and the respondent was struck
off from the rolls of the Army on 24.08.1984. On these facts,
the Court held:
'•
"Once an officer has to his credit the minimum period of
H qualifying service, he earns a right to get pension and as
SHEELKUMAR JAIN v. NEW INDIA ASSURANCE CO. 593
LTD. AND ORS. [A.K. PATNAIK, J.]
....
- ;. the Regulations stand that right to get pension can be A
taken only if an order is passed under Regulations 3 or
16."

13. The aforesaid authorities would show that the Court will
.. • have to construe the statutory provisions in each case to find
out whether the termination of service of an employee was a
B
termination by way of resignation or a termination by way of
voluntary retirement and while construing the statutory
provisions, the Court will have to keep in mind the purposes of
the statutory provisions. The general purpose of the Pension
Scheme, 1995, read as a whole, is to grant pensionary benefits c
to employees, who had rendered service in the Insurance
Companies and had retired after putting in the qualifying
service in the Insurance Companies. Clauses 22 and 30 of the
Pension Scheme, 1995 cannot be so construed as to deprive
• of an employee of an Insurance Company, such as the D
~
appellant, who had put in the qualifying service for pension and
who had voluntarily given up his service after serving 90 days
notice in accordance with sub-clause (1) of Clause 5 of the
Scheme, 1976 and after his notice was accepted by the
appointing authority. E

14. In the result, we set aside the orders of the Division
Bench of the High Court in the Writ Appeal as well as the
learned Single Judge and allow this appeal as well as the Writ
Petition filed by the appellant and direct the respondents to
F
consider the claim of the appellant for pension in accordance
with the Pension Scheme, 1995 and intimate the decision to
the appellant within three months from today. There shall be no
order as to costs.

D.G. Appeal allowed. G
~
, .