REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO._5685 OF 2021
M/s. NEW VICTORIA MILLS & ORS. … Appellants
Versus
SHRIKANT ARYA …Respondent
J U D G M E N T
SANJAY KISHAN KAUL, J.
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
(Maintenance) in appellant No.1 since 1991, having been so appointed on
transfer from M/s. Atherton Mills, another industrial unit set up by
1
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,
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:
“4.0 OTHER TERMINAL BENEFITS UNDER THE
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SCHEME
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
under:
“5.0PROCEDURE
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
4
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
applicant.”
It is relevant to note that the resignation was sought to be brought
5
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
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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
7
of Supervisor (Maintenance) and pay him all his emoluments as
entitled;
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
8
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
9
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
10
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
11
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
12
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
resignation.
19. Learned counsel for the appellants sought to rely upon the
13
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)
14
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
15
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
16
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
17
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 preconditioned on appellant No.1 clearing respondent’s dues, particularly his
10 (2003) 2 SCC 721
11 (2006) 3 SCC 708
18
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
19
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
20
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
21
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
22
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
23
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
24
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
25
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
post.
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
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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.
27
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
28
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)
29
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)
30
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.
...……………………………J.
[Sanjay Kishan Kaul]
...……………………………J.
[M.M. Sundresh]
New Delhi.
September 27, 2021.
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