Indian Bank vs Mahaveer Khariwal on 22 January, 2021


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Supreme Court of India

Indian Bank vs Mahaveer Khariwal on 22 January, 2021

Author: Ashok Bhushan

Bench: Ashok Bhushan, R. Subhash Reddy, M.R. Shah

                                                        REPORTABLE
                                  IN THE SUPREME COURT OF INDIA
                                  CIVIL APPELLATE JURISDICTION
                                  CIVIL APPEAL NO. 2760 OF 2010


          Indian Bank and another                            …Appellants


                                           Versus
          Mahaveer Khariwal                                  …Respondent




                                           JUDGMENT

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned

judgment and order dated 02.02.2009 passed by the Division

Bench of the High Court of Delhi at New Delhi in Letters Patent

Appeal No. 246 of 2007, by which the Division Bench has allowed
Signature Not Verified

the said appeal preferred by the respondent herein and has
Digitally signed by
ARJUN BISHT
Date: 2021.01.22
16:09:02 IST
Reason:

quashed and set aside the judgment and order passed by the

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learned Single Judge and has quashed and set aside

communication dated 20.04.2004 of the bank rejecting the

application for voluntary retirement and has directed the

appellant­bank to release retiral dues of the respondent in

accordance with the Pension Regulations, 1995 with simple

interest at the rate of 9% per annum from the date of filing of writ

petition, the employer­bank has preferred the present appeal.

2. The facts leading to the present appeal in nutshell are as

under:

That the respondent herein – original writ petitioner –

employee (hereinafter referred to as the ‘employee’) was working

with the appellant bank – employer (hereinafter referred to as the

‘employer’), who was promoted as Chief Manager SMG­IV. In

March, 1998, he was transferred and posted as Chief Manager,

Colombo Branch, Colombo. Thereafter, by order dated

13.05.2013, he was transferred from Colombo overseas branch to

the Defence Colony Branch, New Delhi as Chief Manager (BM).

The employee applied for 30 days’ leave to visit London as his son

was admitted in the hospital. Thereafter, the employee wrote to

the employer seeking extension of leave. The application for leave

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as well as the application for extension of leave were refused by

the employer and the employee was directed to report on duty at

Defence Colony Branch, New Delhi. That on 21.01.2004, the

employee submitted an application seeking voluntary retirement

from the services of the employer in accordance with Circular No.

32/97­98 dated 15th July, 1997 and the format given by the

employer for submitting the notice of voluntary retirement. In

the application for voluntary retirement, the employee requested

for waiver of three months’ notice, as required under Regulation

29 of the Indian Bank Employees Pension Regulations, 1995

(hereinafter referred to as ‘Pension Regulations, 1995’) and

requested/authorised the employer to deduct the salary of the

notice period from out of the amount payable by the employer on

retirement. The employer vide letter dated 20.04.2004, which

was served on the employee on 23.04.2004, rejected the request

of the employee for voluntary retirement on the ground that the

employee was not eligible under Pension Regulations, 1995.

3. Being aggrieved by the rejection of the application for

voluntary retirement, the employee preferred Writ Petition (C) No.

16972 of 2005. One another prayer was for a direction to the

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employer to reimburse the educational expenses for the son of

the employee, who had been sent to Singapore for his education

while he was posted at Colombo. One another prayer was for

grant of traveling allowance bills for the journey from Colombo to

New Delhi, which was declined by the employer on account of

delay in submitting the bills. The learned Single Judge by

judgment and order dated 11.10.2006 dismissed the writ petition

so far as challenge to the rejection of his voluntary retirement

application vide communication dated 20.04.2004. However,

granted the prayers for traveling allowance bills and educational

expenses.

4. Feeling aggrieved and dissatisfied with the judgment and

order passed by the learned Single Judge in dismissing the writ

petition with respect to his prayer to quash the letter dated

20.04.2004 rejecting his request for voluntary retirement, the

employee preferred Letters Patent Appeal before the Division

Bench of the High Court. The Division Bench, by the impugned

judgment and order, has allowed the said Letters Patent Appeal

and has quashed and set aside the letter dated 20.04.2004 and

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has directed the employer to release retiral dues of the employee

in accordance with Pension Regulations, 1995.

5. Feeling aggrieved and dissatisfied with the impugned

judgment and order passed by the Division Bench of the High

Court, the employer has preferred the present appeal.

6. Shri Ravi Sikri, learned Senior Advocate has appeared on

behalf of the employer and Shri Sanjeev Kumar, learned Advocate

has appeared on behalf of the employee.

6.1 Shri Ravi Sikri, learned Senior Advocate appearing on

behalf of the employer has made the following submissions,

assailing the impugned judgment and order passed by the

Division Bench:

i) that the High Court has not properly appreciated Regulation

29 of the Pension Regulations, 1995 in its true perception;

ii) that the High Court has not properly appreciated the fact

that as per Regulation 29, a request for voluntary retirement by

an employee requires permission/acceptance of the employer

concerned;

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iii) that vide communication dated 20.04.2004, the application

of the employee for voluntary retirement was rejected within three

months from the date of submitting the voluntary retirement

application and therefore there could not be a deemed acceptance

of voluntary retirement;

that what is relevant is taking the decision within three

months and not the service of the decision on the application for

voluntary retirement. It is submitted that in the present case,

the decision was taken within a period of three months.

iv) that the High Court has failed to appreciate that an

employee who seeks voluntary retirement is to give three months’

mandatory notice in writing to enable the employer to make

necessary arrangements for an alternate hand in place of the

employee seeking voluntary retirement. It is submitted that in

the present case, three months’ mandatory notice was not given

and therefore his application for voluntary retirement was

defective to that extent. It is submitted that therefore the

employer rightly rejected his application for voluntary retirement

which was not in consonance with the Pension Regulations,

1995;

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v) that the High Court has failed to appreciate that the

employee’s offer of surrendering three months salary in lieu of

mandatory notice period could not be considered to be a valid

application for waiver of the three months’ notice requirement;

vi) that the High Court has erred in holding that the employee

was, in fact, transferred to the foreign branch and was not sent

on deputation. It is submitted that as such the respondent was

on deputation at the overseas branch at Colombo at the relevant

point of time and therefore as per Regulation 29(1) of the Pension

Regulations, 1995, the employee was not eligible to apply for

voluntary retirement 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. It is

submitted that therefore the employee did not fulfil the statutory

requirement of serving for a period of one year after returning to

India, as contemplated under Regulation 29(1);

vii) It is submitted that as such after rejection of the application

for voluntary retirement, the employer initiated departmental

proceedings against the employee for his unauthorised absence

from 26.11.2003 to 19.01.2004 and from 22.01.2004 and the

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disciplinary authority imposed the penalty of compulsory

retirement on the employee. It is submitted that therefore the

Division Bench of the High Court ought not to have allowed the

appeal.

Making the above submissions, it is prayed to allow the

present appeal and quash and set aside the impugned judgment

and order passed by the Division Bench and restore the

judgment and order passed by the learned Single Judge and

restore the decision of the bank dated 20.04.2004 rejecting the

application of the employee for voluntary retirement.

7. Shri Sanjeev Kumar, learned Advocate appearing on behalf

of the employee has supported the impugned judgment and order

passed by the Division Bench of the High Court. It is submitted

that the Division Bench has rightly set aside the communication

dated 20.04.2004 by which the application of the employee for

voluntary retirement was rejected. It is submitted that the

Division Bench of the High Court has rightly interpreted

Regulation 29 and has rightly considered that the bar under

Regulation 29(1) shall not be applicable insofar as Regulation

29(1) is concerned, as the employee was not on deputation at

8
Colombo Branch but was on transfer. It is submitted that the

question is not when the decision was served upon the employee,

but the question is whether the rejection of the voluntary

retirement application vide communication dated 20.04.2004 was

legal, just and proper and was in consonance with Regulation 29

or not. It is submitted that on true interpretation of Regulation

29, the High Court has rightly allowed the appeal and has rightly

quashed and set aside the communication dated 20.04.2004.

8. We have heard the learned counsel for the respective parties

at length.

It is not in dispute that in the present case the employee

submitted the voluntary retirement application on 21.01.2004.

In the application itself, the employee requested for waiver of

three months’ notice and requested to deduct the salary amount

of the notice period from out of the amounts payable to him by

the employer on retirement. It is not in dispute and it cannot be

disputed that the notice of voluntary retirement requires

acceptance by the appointing authority. However, as per proviso

to Sub­Regulation 2 of Regulation 29, in case the appointing

authority does not refuse to grant the permission for retirement

9
before the expiry of the period specified in the notice, the

retirement shall become effective from the date of expiry of the

said notice period. In the present case, on the 90 th day vide

communication dated 20.04.2004 the application of the employee

for voluntary retirement was rejected without assigning any

specific reasons and by observing that the employee is not eligible

for voluntary retirement under Pension Regulations, 1995. The

said communication was sent to the employee on the very date,

i.e., 20.04.2004, however the same was received by the employee

on 23.04.2004. The learned Single Judge dismissed the writ

petition so far as challenge to the communication dated

20.04.2004 is concerned. However, on appeal, by the impugned

judgment and order, the Division Bench has set aside the

communication dated 20.04.2004 by which the request of the

employee for voluntary retirement from the service of the

employer came to be rejected.

Therefore, the short question which is posed for the

consideration before this Court is, whether the rejection of the

request of the employee for voluntary retirement vide

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communication dated 20.04.2004 was legal and in consonance

with Regulation 29 of the Pension Regulations, 1995 or not.

9. While considering the aforesaid question, Regulation 29 is

required to be referred to, which reads as under:

“29. Pension on Voluntary Retirement:­

1) On or after the first day of November, 1993, at any time
after an employee has completed twenty years of
qualifying service he may, by giving notice of not less
than three months in writing to the appointing authority
retire from service:

Provided that this sub­regulation shall not apply to an
employee who is on deputation or on study leave on
abroad 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:

Provided further that this sub­regulation shall not apply
to an employee who seeks retirement from service for
being absorbed permanently in an autonomous body or
a public sector undertaking or company or institution or
body, whether incorporated or not to which he is on
deputation at the time of seeking voluntary retirement:
Provided that this sub­regulation shall not apply to an
employee who is deemed to have retired in accordance
with clause (l) of regulation 2.

(2) The notice of Voluntary retirement given under sub­
regulation (1) shall require acceptance by the appointing
authority:

Provided that where the appointing authority does not
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.

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(3)(a) An employee referred to in sub­regulation (1) may
make a request in writing to the appointing authority to
accept notice of Voluntary Retirement of less than three
months giving reasons thereof;

(b) On receipt of a request under clause (a), the
appointing authority may, subject to the provisions of
sub­regulation (2), consider such request for the
curtailment of the period of the notice of three months
on merits and if it is satisfied that the curtailment of the
period of notice will not cause any administrative
inconvenience, the appointing authority may relax the
requirement of notice of three months on the condition
that the employee shall not apply for Commutation of a
part of the pension before the expiry of the notice of
three months.

(4) An employee, who has elected to retire under this
regulation and has given necessary notice to that effect
to the appointing authority. shall be precluded from
withdrawing his notice except with specific approval of
such authority;

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 regulation shall be increased by a
period not exceeding five years, subject to the condition
that the total qualifying service rendered by such
employee shall not in any case exceed thirty­three years
and it does not take him beyond the date of
superannuation,
(6) The pension of an employee retiring under this
regulation shall be based on the average emoluments as
defined under clause (d) of regulation 2 of these
regulations and the increase. not exceeding five years in
his qualifying service. shall not entitle him to any
notional fixation of pay for the purpose of calculating his
pension.”

10. On a fair reading of Regulation 29, it emerges that an

employee is entitled to apply for voluntary retirement after he has

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completed 20 years of qualifying service. He can apply for

voluntary retirement by giving notice of not less than three

months in writing to the appointing authority (Regulation 29(1)).

However, as per proviso to Sub­Regulation (1) of Regulation 29,

Sub­Regulation (1) of Regulation 29 shall not apply to an

employee who is on deputation or on study leave on abroad

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. The said proviso shall be dealt

with and considered hereinbelow. It also appears that as per

Sub­Regulation (2) of Regulation 29, the notice of voluntary

retirement given under Sub­Regulation (1) shall require

acceptance by the appointing authority. However, as per the

proviso to Sub­regulation (2), the appointing authority has to

take a decision before the expiry of the period specified in the

notice. It provides that where the appointing authority does not

refuse to grant the permission for retirement before the expiry of

the period specified in the notice, there shall be deemed

acceptance of the voluntary retirement application and the

retirement shall become effective from the date of expiry of the

period mentioned in the notice. However, at the same time, as

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per Sub­Regulation 3(a), an employee may make a request in

writing to the appointing authority for waiver of the three months’

notice and may make a request to accept the notice of voluntary

retirement of less than three months giving reasons thereof.

Sub­Regulation 3(b) provides that on receipt of a request for

waiver of three months’ notice as per Sub­Regulation 3(a), the

appointing authority may, subject to the provisions of Sub­

Regulation (2), consider such request for the curtailment of the

period of notice of three months on merits and if it is satisfied

that the curtailment of the period of notice will not cause any

administrative inconvenience, the appointing authority may relax

the requirement of notice of three months on the condition that

the employee shall not apply for commutation of a part of the

pension before the expiry of the notice of three months. In the

present case, the application of the employee submitting the

voluntary retirement application with a request for curtailment of

notice of three months was absolutely in consonance with

Regulation 29. The request made by the employee for

curtailment of the period of notice of three months was required

to be considered by the appointing authority on merits and only

in a case where it is found that the curtailment of the period of

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notice may cause any administrative inconvenience, the request

for curtailment of the period of three months’ notice can be

rejected. On considering the communication dated 20.04.2004

rejecting the application of the employee for voluntary retirement,

it does not reflect any compliance of Sub­Regulation 3(b) of

Regulation 29. As such, no reasons whatsoever have been

assigned/given except stating that the request is not in

accordance with Pension Regulations, 1995. Even otherwise, it is

required to be noted that even the communication dated

20.04.2004 was on the last day of the third month, i.e., 90 th day

from the date of submitting the voluntary retirement application.

Therefore, there was no reason to reject the prayer of curtailment

of the period of notice considering the grounds mention in Sub­

Regulation 3(b) of Regulation 29. Be that as it may, the rejection

of the application for voluntary retirement was not on the ground

that notice of three months is not given. The request made by

the employee for curtailment of notice of three months was also

not considered on merits. Therefore, as rightly held by the

Division Bench of the High Court, the application for voluntary

retirement was absolutely in consonance with Regulation 29 and

that the rejection was bad in law and contrary to Regulation 29.

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The Division Bench of the High Court is absolutely justified in

quashing and setting aside the communication dated

20.04.2004. We are in complete agreement with the view taken

by the Division Bench.

11. Now so far as the submission on behalf of the employer that

the employee was not eligible for voluntary retirement in view of

proviso to Sub­Regulation (1) of Regulation 29 as after he

returned to India from Colombo Branch he did not serve for a

period of not less than one year is concerned, there is a specific

finding given by the Division Bench that the said proviso shall

not be applicable to the facts of the case on hand as in the

present case the employee was on transfer to Colombo Branch

and was not on deputation. If we look at order dated 19.03.1998,

it cannot be said that the employee was sent on deputation as

Chief Manager, Colombo Branch. It says that he is posted as

Chief Manager, Colombo Branch. Even when he was relieved

from Colombo Branch to join at Defence Colony Branch, New

Delhi, in the communication dated 25.08.2003 (Annexure P5), it

speaks about the transfer order dated 13.05.2003. It is not the

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order of repatriation. Therefore, proviso to Sub­Regulation (1) to

Regulation 29 shall not be applicable.

12. Now so far as the submission on behalf of the employer

that the acceptance or non­acceptance of the voluntary

retirement application is required to be taken before the expiry of

the period specified in the notice, i.e., in the present case three

months and the same was taken on the last date of the three

months’ period and date of receipt of the

decision/communication is not material, it is true that in the

present case the decision was taken before the expiry of the

period specified in the notice, i.e., on or before three months (last

day of the third month), however, as observed hereinabove, the

rejection of the application for voluntary retirement itself is found

to be illegal and bad in law. Therefore, the aforesaid shall not

affect the ultimate conclusion reached by the Division Bench of

the High Court. As observed hereinabove, communication dated

20.04.2004 rejecting the voluntary retirement application was

bad in law and contrary to Regulation 29. Therefore, the

employee shall be entitled to all retiral benefits on the basis of his

voluntary retirement. Once, it is held that he is voluntary retired

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as per his application dated 21.01.2004 and the rejection of the

application of voluntary retirement is held to be bad in law, all

other subsequent proceedings of departmental enquiry will be

null and void and shall be non est, as after the voluntary

retirement, there shall not be an employer­employee relationship.

13. In view of the above and for the reasons stated above, the

appeal fails and the same deserves to be dismissed and is

accordingly dismissed. However, there shall be no order as to

costs.

……………………………………J.

[ASHOK BHUSHAN]

………………………………….J.

                               [R. SUBHASH REDDY]


NEW DELHI;                     ………………………………….J.
JANUARY 22, 2021.              [M.R. SHAH]




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