M/S New Victoria Mills vs Shrikant Arya on 27 September, 2021

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Supreme Court of India

M/S New Victoria Mills vs Shrikant Arya on 27 September, 2021

Author: Sanjay Kishan Kaul

Bench: Sanjay Kishan Kaul, M.M. Sundresh


                                        IN THE SUPREME COURT OF INDIA
                                           CIVIL APPELLATE JURISDICTION

                                          CIVIL APPEAL NO._5685 OF 2021

                         M/s. NEW VICTORIA MILLS & ORS.                      … Appellants


                         SHRIKANT ARYA                                       …Respondent



1. National Textile Corporation Limited (for short ‘NTC’), is a 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 up

by appellant No.2 in Kanpur. Respondent was working as a Supervisor

Signature Not Verified (Maintenance) in appellant No.1 since 1991, having been so appointed on
Digitally signed by
Charanjeet kaur

transfer from M/s. Atherton Mills, another industrial unit set up by
Date: 2021.09.27
15:42:00 IST

appellant No.2.

2. The textile industry went through difficult times at the turn of 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

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

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 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.

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
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.

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.”

4. Further clause 4.0 of the MVRS provided for the benefits under

the MVRS, which reads as under:



         4.1     Balance in the Provident Funds Accounts payable as per

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
Scheme, if any.”

5. The procedure for the MVRS was set out in Clause 5.0. Suffice to

produce some of its relevant sub-clauses, which have been referred to as



5.1 An eligible employee may submit an application in the
prescribed form for voluntary retirement under the scheme by
tendering 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
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 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/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

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.

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 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

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 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

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 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

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 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

intimating that the respondent was to retire from 16.07.2003.

10. It is the aforesaid letter which triggered off the litigation, with 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 post

of Supervisor (Maintenance) and pay him all his emoluments as


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.

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 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, 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 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 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

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.

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 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 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

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 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 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

period of six years, the respondent did not receive the money and

encashed the amount only after the aforesaid interim order was passed.

Suffice to 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 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.

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 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 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 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

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 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


19. Learned counsel for the appellants sought to rely upon the

judgment of this Court in Air India Express Limited &Ors. v. Captain

Gurdarshan Kaur Sandhu1 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 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

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 authority.

1 (2019) 17 SCC 129.

2 (1968) 3 SCR 857
3 (supra)

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 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

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.

21. We may note that the significance of the aforesaid is that

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 Victoria

Mills was shut by a notification dated 09.03.2004 (but in that eventuality

4 (1978) 2 SCC 301
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 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.

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

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

5 (1998) 9 SCC 559
6 (2000) 5 SCC 621
continued till 16.07.2003 and thus, the respondent had locus poenitentiae

to withdraw his resignation on 01.07.2003.

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

operative. In Shambhu Murari Sinha8, a resignation letter submitted

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

withdrawn before the effective date.

25. In Power Finance Corporation Limited v. Pramod Kumar

Bhatia9; the Corporation withdrew a voluntary retirement scheme after

7 (supra)
8 (supra)
9 (1997) 4 SCC 280
an application made thereunder had been accepted. This Court held that

the acceptance of his offer to voluntarily retire was subject to adjustment

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 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 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 his

10 (2003) 2 SCC 721
11 (2006) 3 SCC 708
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

performance by the offeror and then reject the condition subject to which

the offer is made.

27. On the terms and conditions of the MVRS, learned counsel 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?

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 employment in

12(2007) 9 SCC 531
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.

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 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

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.

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

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

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 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 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 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 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 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 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 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-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 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 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 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 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

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 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.

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

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 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 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 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


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

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)

of the Industrial Disputes Act, 1947 granted permission for closure of 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

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 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 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

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

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

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

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

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. Srivastava16, the 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

13 (supra)
14 (supra)
15 (supra)
16 (supra)
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

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 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 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 and

17 (supra)
the 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.

47. The impugned order is set aside. The appeal is accordingly

allowed leaving the parties to bear their own costs.


[Sanjay Kishan Kaul]


[M.M. Sundresh]
New Delhi.

September 27, 2021.


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