Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 6013 OF 2011
(Arising out S.L.P. (C) NO. 3777 OF 2007)
Sheelkumar Jain ...... Appellant
Versus
The New India Assurance Co. Ltd. & Ors. ...... Respondents
J U D G M E N T
A. K. PATNAIK, J.
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.244 of 2006.
3. The brief facts of this case are that on 01.07.1969 the
appellant was appointed as an Inspector in Liberty Insurance
2
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-Company. The services of the appellant were absorbed
in 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
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
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 16.12.1991, i.e. after completion of three months
notice. Accordingly, the appellant was relieved from his
3
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 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 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 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 from
4
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
appellant has resigned, he will not be entitled for the Pensions
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
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
Madhya Pradesh High Court held in the impugned order that
under Clause 22 of the Pension Scheme, 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
5
employee who had taken voluntary retirement from service
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. Sushil Kumar Jain, learned counsel for the
appellant, submitted that the High Court was not right in
coming to the conclusion that the appellant had resigned from
service. He 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 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 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
6
resignation from the service of 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,
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 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 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.
7
State of Punjab & Anr. [(2002) 4 SCC 154] to contend that the
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
Board & Ors. v. C. R. Rangadhamaiah & Ors. [AIR 1997 SC
3828] that pension is neither a bounty nor a matter of grace
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. Kailash Nath [(1989) 3 SCC 79], Employees'
State Insurance Corporation v. R.K. Swamy & Ors. [(1994) 1
SCC 445] and Union of India & Anr. v. Pradeep Kumari & Ors.
[(1995) 2 SCC 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.
6. Mr. Balaji Subramanian, learned counsel for the
respondents, on the other hand, submitted that the letter
dated 16.09.1991 of the appellant to the General Manager of
8
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 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 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
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
& Anr. v. Cecil Dennis Solomon & Anr. (supra) employees of the
Reserve Bank of India had tendered their resignations in 1988
9
and were getting superannuation benefits under the provident
fund contributory provisions and gratuity schemes.
Subsequently, the Reserve Bank of India Pension Regulations,
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 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,
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 III 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
(Employees') Pension Regulations, 1995 were framed and
Sanwar Mal opted for the pension scheme under these
10
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 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 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 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
which the services of the appellant were terminated after he
11
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.
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 service without first
giving in writing to the appointing 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 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.
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 entitled to set off any leave earned
against the period of such notice.
12
(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 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."
It will be 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 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
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
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-
13
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
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 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 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 authority and such acceptance was conveyed by
the letter dated 28.10.1991 of the Assistant Administrative
Officer, Indore.
14
9. We may now look at Clauses 22 and 30 of the Pension
Scheme, 1995 which are quoted hereinbelow:
"22. Forfeiture of Service: Resignation or
dismissal or 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.
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:
Provided that this sub-paragraph shall not apply
to an 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:
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.
(2) The notice of voluntary retirement given under
sub-paragraph (1) shall require acceptance by the
appointing authority:
15
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.
(3)(a) An employee referred to in sub-paragraph
(1) may 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 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
the curtailment of the period of notice will not
cause any administrative inconvenience, the
appointing authority may 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.
(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:
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 exceeding five years,
16
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.
(6) The pension of an employee retiring under this
paragraph shall be based on the 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;
Explanation: For the purpose of this paragraph,
the appointing authority shall be the appointing
authority specified in Appendix-I to this scheme."
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 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 Clause 30 of the Pension
17
Scheme, 1995. Similarly, the respondent No.1-Company
employer had no knowledge of the difference between
`resignation' and `voluntary retirement' under Clauses 22 and
33 of the Pension Scheme, 1995 respectively. Both the
appellant and the respondent No.1 have acted in accordance
with the provisions of sub-clause (1) of Clause 5 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
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 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
18
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 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 `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 relieved him from service.
Hence, Clause 30 of the Pension Scheme, 1995 applied to the
appellant even though in his letter dated 16.09.1991 to the
General Manager of respondent no.1-Company he had used
the word `resign'.
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
19
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 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
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."
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 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
20
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 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 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 qualifying service, he
earns a right to get pension and as the
Regulations stand that right to get pension
can be 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 termination by way of resignation or a termination by way of
voluntary retirement and while construing the statutory
21
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
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 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.
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
consider the claim of the appellant for pension in accordance
with the Pension Scheme, 1995 and intimate the decision to
22
the appellant within three months from today. There shall be
no order as to costs.
..........................J.
(R. V. Raveendran)
..........................J.
(A. K. Patnaik)
New Delhi,
July 28, 2011.
