ORDER
1. By this writ petition the petitioner has challenged the letter dated September 7, 1999 being Annexure ‘N’ whereby acceptance of offer of voluntary retirement has been withdrawn.
2. Undisputed fact of this case is as follows:
The petitioner was employed by the respondent Bank on compassionate ground In the post of clerk owing to death of her husband. She served the bank for more than 20 years, and that is why under the service regulation she applied for voluntary retirement to the bank which in its turn however had accepted on certain conditions which amongst others is for liquidation of the outstanding dues. In course of her employment her son, viz., one Debashis Endow being the respondent No. 8 as then being unemployed obtained Transport Loan on certain terms and conditions. The petitioner became guarantor of the aforesaid loan granted in favour of her son. The term loan was duly disbursed and the respondent No. 8 purchased a vehicle being one of the securities of term loan. The aforesaid vehicle however was purchased after having received margin money to the extent of 20% from the Government of West Bengal under the Additional Employment Scheme and which was duly vetted by the respondent bank. The writ petitioner while becoming guarantor, duly deposited her Life Insurance Policies as collateral security for the aforesaid loan.
3. The writ petitioner’s son after having obtained employment duly applied to the bank for transfer of the aforesaid loan in favour of the respondent No. 6. After due negotiation the respondent bank agreed to accept the proposal for transfer of the aforesaid liability of loan in favour of the respondent No. 6. It appears ultimately the respondent bank from its regional office agreed to transfer the said transport loan in favour of the respondent No. 6 on the following terms and conditions:
(i) Respondent No. 6 has to accept the entire outstanding dues as on the date of transfer (then debit balance was Rs. 2,47,906.35 as on January 8, 1990).
(ii) The rate of interest will be as per norms.
(iii) Respondent No. 6 is to mortgage a house property at Darbhanga the valuation of which is not less than Rs. 5 lacs.
(iv) The loan is to be repaid by 60 monthly instalments.
(v) Before transferring the loan account in the name of the respondent No. 6 he is to produce non-encumbrance-cum-Marketability Certificate and Valuation Report from the Bank’s approved lawyer and valuer at Darbhanga.
It appears that the aforesaid proposal was accepted by the respondent No. 6. It also appears. from the documents that the respondent No. 6 in terms of the aforesaid agreement while taking liability of the aforesaid loan account duly executed Demand Promissory Note, Letter of Lien, Hypothecation of Transport Equipment and Hypothecation of debts and movable assets. It appears further that in addition to the above he signed a memorandum for deposit of title deeds. It further appears that the said loan account which was originally maintained by United Bank of India in its Dalhousie Square Branch was sought to be transferred to Darbhanga Branch. The vehicle was handed over by the respondent No. 8 to the respondent No. 6 and the respondent No. 8 also refunded the margin money along with interest to the Government of West Bengal.
4. Now the fact in dispute is whether the aforesaid loan account has been transferred finally in favour of the respondent No. 6 or not and for that matter whether the liabilities of the writ petitioner and the respondent No. 8 stand discharged or not because of the aforesaid arrangement and/or agreement. In other words, whether the acceptance of proposal for voluntary retirement can be withdrawn on the plea of non-discharge of liability or not.
5. It further appears that a suit has been filed in the learned City Civil Court at Calcutta for recovery of the aforesaid loan account against the writ petitioner as a guarantor, the respondent No. 6 as a principal debtor and the respondent No. 8. In terms of the Court’s order the original record containing the plaint of the aforesaid suit has been produced before me.
6. Mr. Roy, learned senior Advocate appearing with Mr. Amaresh Chakraborty, learned Advocate on behalf of the writ petitioner contends that withdrawal of sanction of proposal for voluntary retirement by the impugned letter is wholly invalid and illegal. The plea for withdrawal is unjustified under the law. The alleged liability of the petitioner qua guarantor cannot be termed as, and/or equated with, the dues of the writ petitioner in relation to her service. The agreement of guarantee stands on a different footing and it has got nothing to do with the dues and claims of the petitioner in relation to her service, viz., Provident Fund, Gratuity and other leave salaries. The alleged dues, if any, in relation to the transport loan can be recovered if at all sustainable under the law by the separate proceedings for which the suit has been filed. Moreover, Provident Fund and Gratuity cannot be withheld under the law. In any event assuming (and) not admitting the dues of the writ petitioner on account of her service payable by the respondent No. 1 can be withheld and/or recovered in relation to the dues arising out of the contract of the guarantee then the petitioner does not have any liability as a guarantor, as agreement for transfer of the loan account in favour of the respondent No. 6 has been effected and the same having been acted upon, so the contract of guarantee stands discharged.
7. Mr. C.R. Dutta, learned Senior Advocate, opposing this writ petition submits that the proposal for voluntary retirement was accepted under the provisions of Regulation 29 of United Bank of India (Employees) Pension Regulations, 1995. The aforesaid acceptance was made on condition that all the liabilities of the petitioner have to be paid off and retiral benefit payable to her shall be as per rules of the bank and subject to adjustment of her all liabilities to the bank. It was contended by Mr. Dutta since the dues in connection with the transport loan account was not liquidated and/or discharged the writ petitioner had and still has liability as a guarantor. Since, it is argued by Mr. Dutta, transfer of the aforesaid loan in favour of the respondent No. 6 was not effected finally as the said respondent No. 6 did not fulfil all the terms and conditions for creation of equitable mortgage. So both the writ petitioner and her son do have their subsisting liability. The bank has authority to withhold the dues on account of service under Regulation 49 of the aforesaid Pension Regulations, 1995. He draws my attention to Regulation 49 which according to him authorises the bank to recover dues to the bank on account of housing loans, advances, licence fees, other recoveries and recoveries due to staff co-operative credit society from the commutation value of the pension or the pension or the family pension. It is also the contention of Mr. Dutta since the bank has power to accord sanction of proposal for voluntary retirement so it has also the power to withdraw the same. As the condition was not fulfilled the decision for voluntary retirement was also withdrawn.
8. Having heard the rival contention of the parties the first point according to me which has fallen for my consideration as to whether under the scheme of the aforesaid regulation the bank can impose any stipulation and/or condition for voluntary retirement or not.
9. I have carefully gone through the aforesaid Regulation 29 which provides for scheme of voluntary retirement and the same is reproduced hereunder.
“29. Pension on Voluntary Retirement-
(1) On or after the day of November 1, 1993 at any time after an employee has completed twenty years of qualifying service he may, by giving notice of not less than three months in writing to the appointing authority, retire from service;
Provided that this sub-regulation shall not apply to an employee who is on deputation or on study leave abroad unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year.
Provided further that this sub-regulation shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking or company or institution or body, whether incorporated or not to which he is on deputation at the time of seeking voluntary retirement;
Provided that this sub-regulation shall not apply to an employee who is deemed to have retired in accordance with Clause (1) of Regulation 2.
(2) The notice of voluntary retirement given under Sub-regulation (1) shall require acceptance by the appointing authority.
Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.
(3) (a) An employee referred to in Sub-regulation (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than three months giving reasons therefor;
(b) On receipt of a request under Clause (a), the appointing authority may, subject to the provisions of Sub-regulation (2) consider such request for the curtailment of the period of notice of three months on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of notice of three months on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of three months.
(4) An employee, who has elected to retire under this regulation and has given necessary notice to that effect to the appointing authority, shall be precluded from withdrawing his notice except with 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 regulation shall be increased by a period not exceeding five years subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty three years and it does not take him beyond the date of superannuation.
(6) The pension of an employee retiring under this regulation shall be based on the average emoluments as defined under Clause (d) of regulation 2 of these regulations and the increase not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating his pension.”
10. It appears to me that it does not authorise the bank authority to put any condition for acceptance of voluntary retirement. Either it has to be accepted or not at all. Once it is accepted no condition shall be stipulated therein. Sub-regulation (2) of Regulation 29 only requires acceptance and It does not say that the acceptance shall be done on any terms and conditions.
11. Now the question remains once the proposal for voluntary retirement is accepted then whether all the retiral benefits should be released or the same can be withheld by the bank or not.
12. It appears from careful reading of Regulation 49 that the bank is entitled to recover the dues to the bank on account of housing loans, advances, licence fees, other recoveries and recoveries due to the staff co-operative credit society from the commutation value of the pension or the pension or the family pension. Therefore, I am of the view that the aforesaid Regulation 49 does not authorise the bank to withhold and/or deduct the amount of Provident Fund and Gratuity of the writ petitioner on account of retirement. The bank is entitled to recover its dues from the employee from the commutation value of the pension or the pension or the family pension. In order to appreciate properly,
Regulation 49 of the said Pension Regulations, 1995 is reproduced hereunder.
“49. Recovery of Bank’s dues – The Bank shall be entitled to recover the dues to the Bank on account of housing loans, advances, licence fees, other recoveries and recoveries due to staff co-operative credit society from the commutation value of the pension or the pension or the family pension.”
13. It is argued by Mr. Dutta that the words “other recoveries” include the liability of the writ petitioner on account of guarantee. On the other hand Mr. Roy contends the words “other recoveries” should be read as ajusdem generis to the words housing loans, advances and licence fees. It is contended by Mr. Roy further that the petitioner did not obtain loan rather guaranteed loan and advances which was given to her son, assuming the petitioner did have subsisting liability in respect of the aforesaid guarantee. I am unable to accept the submission of Mr. Roy that aforesaid words “other recoveries” do not include the liability of guarantee The bank is authorized to recover the dues on account of advances taken by the employee as a principal debtor. The employee as a guarantor cannot be termed as no less than a principal debtor as under the law the liability of the guarantor is coextensive with the principal debtor. In the matter of repayment of loan both principal debtor and guarantor stand on the same footing.
14. Now the contention is whether on the strength of the aforesaid Regulation 49 the respondent bank can withhold all retiral benefits of the writ petitioner or not.
15. As I have already observed excepting the commutation value of the pension or the pension or the family pension, the Bank respondent cannot withhold any amount from other benefit. Even then in this case whether Bank is not entitled to deduct from pension at all for the reason as mentioned below.
16. This writ petition is heard upon notice to the respondent No. 6 who is also a party of the aforesaid title suit as a defendant. Several notices have been given upon the respondent No. 6 before this matter was heard finally. In spite of service of notices he has chosen not to appear. It appears from the materials placed before me that the agreement of transfer of loan from respondent No. 8 to respondent No. 6 has been concluded and the same has been substantially acted upon by the respondent bank and the principal debtor. It appears from the records that the respondent No. 6 has deposited a sum of Rs. 30,000/- and has agreed in writing to pay off the outstanding dues within three years. That respondent No. 6 has executed Demand Promissory Note and also signed a memorandum for deposit of title deeds. The vehicle was transferred in favour of the respondent No. 6 and from the date of transfer the respondent No. 8 has lost possession of the said vehicle.
17. In the plaint it is the case of the respondent bank as against the defendant No. 3 as follows:
“The defendant No. 3 made application in prescribed form to the plaintiff and accorded all terms and conditions for: repayment of loan. In the premises the plaintiff did not have any objection to transfer of vehicle by the defendant No. 1 to the defendant No. 3. To expedite the matter plaintiff allowed the defendant No. 3 to deposit Re. 20,000/- initially in the term loan account and Re. 20,000/- as security in cash certificate. The defendant No. 3 was also permitted to repay the loan in 36 equal monthly instalments.”
18. On the aforesaid admittedly factual aspect of the matter I am constrained to hold that there are substantial variations and7or changes of the terms and conditions of the original contract with the respondent No. 8 by the bank respondent. Therefore, the writ petitioner is discharged from the agreement of guarantee in view of the aforesaid act or omission of the bank respondent. It is the fault on part of the bank for not being able to procure further security by equitable mortgage rather it is an omission on part of the respondent bank without having equitable mortgage being created. It should not have allowed to part with the vehicle in favour of the respondent No. 6. The provision of Section 134 of the Indian Contract Act absolutely makes it clear as to when the discharge of, surety and/or guarantee can be concluded. The aforesaid text of Section 134 is reproduced hereunder.
“134. The surety is discharged by any contract between the creditor and the principal debtor, by which the principal debtor is released, or by any act or omission of the creditor, the legal consequence of which is the discharge of the principal debtor.”
19. The bank has acted in a manner by which the principal debtor viz., the respondent No. 3 has been discharged by entering into further transaction with the respondent No. 6. So, I hold that the writ petitioner does not have any liability as a guarantor.
20. Accordingly, I hold that order of withdrawal of sanction of voluntary retirement is illegal on the plea as above. So the said order withdrawing sanction being letter dated September 7, 1999 is set aside and quashed.
21. I direct the respondent bank to release all the retirement benefits treating the petitioner in terms of the order dated December 15, 1999 having retired on December 15, 1999.
22. Thus, the writ petition succeeds. There will be no order as to costs.