Posted On by &filed under Supreme Court of India.


Supreme Court of India
Manjushree Pathak vs The Assam Industrial Development … on 31 August, 2000
Author: S V Patil
Bench: S. Rajendra J., Shivaraj V. J.
           PETITIONER:
MANJUSHREE PATHAK

	Vs.

RESPONDENT:
THE ASSAM INDUSTRIAL DEVELOPMENT CORPORATION LTD.  & ORS.

DATE OF JUDGMENT:	31/08/2000

BENCH:
S. Rajendra Babu J. & Shivaraj V. Patil J.




JUDGMENT:

Shivaraj V. Patil J.

L…I…T…….T…….T…….T…….T…….T…….T..J

Leave granted.

In this appeal, the appellant has assailed the judgment
and order dated 5.12.1997 passed by the Division Bench of
the High Court of Assam, Nagaland, Meghalaya, Manipur,
Mizoram, Tripura and Arunachal Pradesh at Gauhati made in
Writ Appeal No. 124/96. In brief, the facts leading to the
filing of this appeal are the following.

The appellant joined the services of the respondent-
Corporation in 1973 as Receptionist-cum-Telephone Operator.
After passing LL.B degree examination, she was promoted to
the post of legal Assistant in 1981. Subsequently she was
promoted as Assistant Law Officer, Law Officer and finally
as Senior Law Officer in 1995 [re-designated as Deputy
Manager (Law)].

In 1992 the respondent-Corporation issued a special
scheme “AIDC Voluntary Retirement Scheme, 1992” (for short
the `Scheme’) as a special measure in the form of a golden
handshake providing an option to its employees for voluntary
retirement who had completed 10 years of service in the
Corporation or 40 years of age.

The appellant having served the respondent-Corporation
for nearly 23 years and attaining the age of 42 years with a
view to avail the benefit of the Scheme, made an application
on 7.12.1995 seeking voluntary retirement in the form
prescribed, requesting to accept her option for voluntary
retirement with immediate effect. The recommending
authority on the same day recommended for accepting her
voluntary retirement. Voluntary retirement ought to have
come into effect with immediate effect. Since the appellant
was not allowed to hand over the charge and there was none
to take over charge from her and certain other official
formalities were also left to be carried out, she was
compelled to continue to attend to her duties. When there
was no response from the respondent-Corporation till third
week of January, 1996, she wrote a letter dated 23.1.1996 to
the Managing Director of the respondent-Corporation stating
that she had come to know that her application for voluntary
retirement would be placed before the Board of Directors and
that there was no need for the same as under the Scheme
Managing Director himself was the competent authority to
accept application of her voluntary retirement. No reply
was given to the said letter. The appellant addressed a
letter dated 14.2.1996 to the Chairman of the respondent-
Corporation stating that the failure of the respondent-
Corporation to accept her voluntary retirement has caused
great inconvenience and that she was entitled to get her
voluntary retirement accepted forthwith. In the said letter
also she made it clear that in the absence of any specific
order she would consider herself to be free person without
any obligations to the respondent-Corporation and her
contract of service would stand determined with effect from
the date of submission of her application for voluntary
retirement. Further in the said letter she stated that in
case there was any delay, she would presume that her
voluntary retirement was deemed to have been accepted with
effect from 15.2.1996 and that she would not attend her
duties any more. The appellant wrote a third letter to the
Managing Director of the respondent-Corporation on 15.2.1996
requesting for payment of retirement benefits under the
Scheme. Strangely the Managing Director of the
respondent-Corporation issued a show cause notice dated
15/16.2.1996, which was received by the appellant on
17.2.1996. In the said show cause notice it was stated that
the appellant had been participating in the political
activities of the BJP and that she intended to contest the
election on a BJP ticket which amounted to misconduct and as
such a reply was sought for the same. Under the
circumstances, the appellant approached the High Court by
filing Writ Petition Civil Rule No. 816/96 seeking reliefs
that the appellant was no longer employee of the
respondent-Corporation having gone on voluntary retirement
with effect from 7.12.1995 and to direct the
respondent-Corporation to give all retirement benefits by
setting aside the show cause notice dated 15/16.2.1996. The
learned Single Judge accepted the case of the appellant and
granted relief. The respondent-Corporation aggrieved by the
order of the learned Single Judge took up the matter in
appeal and the Division Bench of the High Court allowed the
appeal and set aside the order of the learned Single Judge.

The learned counsel for the appellant urged that there
was no requirement of three months’ prior notice in the
Scheme; the option of voluntary retirement ought to have
been accepted with immediate effect; the
respondent-Corporation, having offered that the Scheme was a
golden and unique opportunity to eligible employees, was
bound to accept the application of the appellant seeking
voluntary retirement when all the conditions of the Scheme
were satisfied. It was further contended that Dinesh
Chander Sangma’s case referred to in the judgment under
appeal fully supports the case of the appellant.

The learned counsel for the respondent-Corporation while
supporting the judgment and order impugned in this appeal
submitted that the filing of the writ petition was
pre-mature as three months’ period from the date of the
application seeking voluntary retirement was not yet over.
Under Clause 8.1 of the Scheme, the respondent-Corporation
had discretion either to accept or to reject the request of
any employee for voluntary retirement viewing the
organizational requirement and any other relevant factors in
this regard and that the appellant had no vested right to
claim for acceptance of the voluntary retirement.

We have carefully considered the submissions made on
behalf of the parties in the light of the material placed on
record. As per Clause 3 of the Scheme, an employee who
completed 10 years of service in the respondent-Corporation
or completed 40 years of age could seek voluntary retirement
by making an application in the prescribed form. The
General Managers/Heads of the Departments are the
recommending authorities in respect of the employees working
under their control and the Managing Director is the
accepting authority of voluntary retirement applications as
per Clause 4. Clause 5 speaks of the conditions which apply
to those requesting for voluntary retirement – (1) once an
employee has applied for voluntary retirement under the
Scheme, the option cannot be withdrawn; (2) There should
not be any vigilance case pending/contemplated against the
concerned employee or/and his/her evidence in some important
case would be of material value to the
respondent-Corporation; (3) (a) Employees under suspension
or against whom disciplinary proceedings are pending or/and
contemplated will not be eligible for voluntary retirement;

(b) The Scheme will not apply to those employees who have
already submitted their resignation as on date; (c)
Employees who are under bond/agreement will also not be
eligible for voluntary retirement unless they fulfill the
bond/agreement obligations.

As per Clause 7, the eligible employee may submit
application in the prescribed form for voluntary retirement
under the Scheme to the Managing Director through proper
channel.

Clause 8.1 reads thus:

“Notwithstanding any of the aforesaid provisions, the
Scheme does not confer any right on an employee to have the
request for voluntary retirement accepted by the management.
The management shall have full discretion to accept or
reject the request from any employee for voluntary
retirement viewing the organizational requirement and any
other relevant factors in this regard.”

Para 2 of the prescribed application form is to the
following effect:

“I, of my own accord and without any external pressure
and coercion, am opting to voluntary retirement under the
said Scheme. I shall be obliged if you kindly accept my
option for voluntary retirement with immediate effect.”

(Emphasis supplied)

There is no dispute that the appellant was eligible to
apply for voluntary retirement having completed nearly 23
years’ service and 42 years of age; there was no impediment
coming in the way of the appellant for seeking voluntary
retirement as per clause 5 of the Scheme. The application
made in the prescribed form as per the Scheme contemplates
acceptance of option for voluntary retirement with immediate
effect.

The appellant made the application in the prescribed
form on 7.12.1995 requesting for its acceptance with
immediate effect. The respondent-Corporation did not
respond or react to the said application till 17.2.1996, on
which date the appellant received notice asking her to show
cause why action should not be taken for alleged misconduct
of indulging in political activities. In spite of reminders
and letters by the appellant as stated above while narrating
the facts, it is only after the appellant handed over charge
on 15.2.1996 and requested for release of retirement
benefits on 15.2.1996, the show cause notice aforementioned
was issued to the appellant. In our view, the said show
cause notice was of no consequence. It appears to us that
it was issued only to defeat the claim of the appellant. On
the date when the appellant submitted her application for
voluntary retirement, neither vigilance enquiry nor any
disciplinary proceedings were pending or contemplated. In
other words, as per Clause 5 she was not prevented from
making an application to opt for voluntary retirement. The
recommending authority as per Clause 4 of the Scheme
recommended for acceptance of the application on 7.12.1995
itself. We are unable to understand why the Managing
Director of the respondent-Corporation did not accept the
same although it was required to be accepted with immediate
effect as per para 2 of the prescribed application form. No
doubt, as per Clause 8.1 of the Scheme extracted above, the
Management had discretion to accept or reject the request
from any employee for voluntary retirement viewing the
organizational requirement and any other relevant facts but
that does not mean that the respondent- Corporation being an
authority coming within the purview of Article 12 of the
Constitution can abdicate its duty to act reasonably and
fairly in exercise of discretion. It is strange as to why
the Managing Director of the respondent-Corporation, the
competent authority to accept the application made for the
voluntary retirement, did not act on it at all till
17.2.1996. He ought to have exercised his discretion as per
Clause 8.1 if not immediately at least within a reasonable
time. The last paragraph of the Memorandum No.
AIDC/Estt/1485/93/746-51 dated 20/21.5.1993 issued by the
respondent-Corporation reads thus:

“The Corporation has thus offered a unique opportunity.
It is now for all eligible and interested employees of the
Corporation to avail of this golden opportunity in a big
way.”

As per sub-clause (i) of Clause 5 of the Scheme, once an
employee applied for voluntarily retirement it could not be
withdrawn. The appellant wanted to avail this golden
opportunity. With this background it is not known as to why
her application was not accepted. From the letter of the
appellant dated 23.1.1996, it is clear that she informed the
Managing Director of the respondent-Corporation that there
was no need to place her application before the Board and he
himself was competent to accept it. The non-response of the
respondent- Corporation to the letters of the appellant
dated 23.1.1996, 14.2.96 and 15.2.1996 and issuing of
show-cause notice by the respondent-Corporation
subsequently, clearly indicate that all was not well with
the respondent-Corporation in dealing with her application
seeking voluntary retirement. A subsequent complaint
alleging indulgence of the appellant in political activities
was not germane to consideration of the application of the
appellant having regard to the relevant factors mentioned in
Clause 8.1 of the Scheme particularly when there was no
infirmity or impediment in terms of the Scheme in
considering and accepting the application of the appellant
for voluntary retirement having regard to the fact that the
appellant on her part did what all was required to be done.

Clause 6 of the Scheme deals with the benefits available
under the Scheme. Sub-clause (v) of the said Clause
contemplates one month’s/three months’ notice pay (as per
conditions of service applicable to him/her). Rule 18 of
AIDC Limited (Employees) Service Rules, 1992 and AIDC
Limited Recruitment and Promotion Rules, 1992 to the extent
it is relevant reads: –

“18. An employee shall not leave or discontinue his
service in the Corporation without first giving notice to
the Managing Director in writing of his intention to leave
or discontinue the service. The period of notice required
shall be –

a)	      .......

b)	      after completion of probationary period -

(i)	     Three months in case of Class I and
	     Class II officers.

(ii)	    One month in case of employees in
	    Class III & IV service.

In lieu of notice, an employee shall be liable to pay to
the Corporation a sum equal to his substantive pay for the
period of notice required of him.

Provided that any shortfall of the notice period may be
adjusted towards the earned leave due to the employee
concerned.”

There is some controversy as to applicability of this
Rule in respect of employees offering for voluntary
retirement under the Scheme.

Assuming that three months’ prior notice was required to
be given by the appellant in the case on hand in terms of
Rule 18 itself any shortfall in the notice period could be
adjusted towards the earned leave due to the appellant. It
is on record that the appellant in her letter dated
14.2.1996 (Annexure-2) has clearly requested to allow her to
go on voluntary retirement latest by 5.2.1996 and that the
Managing Director to adjust balance notice period by
deducting earned leave calculated up to 5.2.1996. In spite
of the same the Managing Director of the Corporation kept
mum.

The Division Bench of the High Court has failed to see
that the Scheme conferred discretion on the Corporation
under Clause 8.1 coupled with the duty to act judiciously
when application for voluntary retirement was made by an
employee. The said clause did not confer any unfettered
discretion upon the Corporation to refuse the benefit of the
Scheme to any employee being an authority coming within the
meaning of Article 12 of the Constitution. It was not open
to the Managing Director of the respondent-Corporation to
act on extraneous consideration by issuing a show-cause
notice dated 15/16.2.1996 so as to deprive the appellant of
the benefit flowing from acceptance of her voluntary
retirement. It is true that under Clause 8.1 of the Scheme
discretion was available to the respondent-Corporation but
that discretion was not absolute. It was circumscribed by
the terms mentioned in the said Clause and it was to be
exercised judiciously. In the case on hand the Managing
Director of the Corporation has failed to act reasonably and
fairly. He abdicated his duty by not exercising discretion
at all in the light of facts and circumstances of the case
stated above in sufficient details.

We are of the view that the Division Bench of the High
Court was also not right in saying that the appellant filed
the writ petition even before any action was taken by the
Managing Director of the respondent-Corporation either to
accept or reject the application. It is clear from the
undisputed facts that the appellant submitted the
application in the prescribed form to accept her voluntary
retirement from service with immediate effect; waited for
sufficiently long time and wrote letters in January and
February, 1996 pursuing the authority to accept the
application seeking voluntary retirement. Further after
receiving show-cause notice on 17.2.1996 from the
respondent- Corporation, the appellant had no good reason to
wait any longer. In this view it could not be said that the
writ petition filed was pre-mature.

In the result, for the reasons stated above, this appeal
is entitled to succeed. Hence the judgment and order of the
Division Bench of the High Court are set aside and the order
passed by the learned Single Judge of the High Court is
restored. The appeal is allowed accordingly. Parties to
bear their own costs.


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