CASE NO.: Appeal (civil) 9547 of 2003 Appeal (civil) 9549 of 2003 PETITIONER: Reserve Bank of India & Anr. RESPONDENT: Cecil Dennis Solomon & Anr. DATE OF JUDGMENT: 04/12/2003 BENCH: DORAISWAMY RAJU & ARIJIT PASAYAT JUDGMENT:
J U D G M E N T
(Arising out of SLP(C) No. 12159 of 2002)
(Arising out of SLP (C) No. 12160/2002)]
ARIJIT PASAYAT, J.
Leave granted in both the special leave petitions.
Division Bench of the High Court of Bombay at Nagpur Bench has
held by the impugned judgment that the respondents (hereinafter referred
to as ‘the employees’) were entitled to pension in terms of the Reserve
Bank of India Pension Regulations, 1990 (in short the ‘Pension
Regulations’). The Reserve Bank of India (hereinafter referred to as
the ’employer’) has questioned the correctness of the judgment.
Factual position is almost undisputed, and brief reference
thereto would suffice.
Respondents were working in various capacities in the employer
organization. The employees tendered resignation sometimes in 1988.
Subsequent to their resignation, the Pension Regulations came to be
operative. The said Regulation was made in exercise of powers conferred
by clause (j) of sub-section (2) of Section 58 of the Reserve Bank of
India Act, 1934 (for short the ‘Act’). The Central Board of the
employer-bank with the previous sanction of the Central Government made
the Regulations. The Reserve Bank of India Staff Regulations, 1948 (in
short ‘Staff Regulations’) which were subsequently amended w.e.f.
7.2.1992 were in operation at the relevant time governing the service
conditions. Regulation 26 of the 1948 Regulations dealt with the age of
retirement. Sub-rule (3) thereof which has some relevance to the
present disputes provides that an employee who has attained the age of
50 years may voluntarily retire after giving to the Competent Authority
three months’ notice in writing. Though several other provisions were
incorporated in the Regulation w.e.f. 7.2.1992, this provision in sub-
rule (3) continued unamended. By Pension Regulations prescriptions were
made for granting pension to certain categories of employees.
Regulations 2(12) and 18 thereof read as follows:
“2(12): ‘Retirement’ means retirement in terms of
Staff Regulation 26 and other instructions issued by
the Bank under Settlements/Awards;
18. Forfeiture of service on resignation or dismissal
or termination: Resignation or dismissal or
termination of an employee from the service shall
entail forfeiture of his entire past service and
consequently shall not qualify for pension payment.”
Some of the provisions of Staff Regulations need to be noted. They read
as follows:
“Regulation 26. (Unamended- prior to 7.2.1992)-
(1) an employee, other than an employee in Class IV
shall retire at 58 years of age and an employee in
Class IV at 60 years of age;
Provided that in the case of an employee in
Class IV who has reached the age of 55 years the Bank
may, in its discretion, retire him after giving two
months’ notice in writing if in the opinion of the
competent authority his efficiency is found to have
been impaired.
Provided further that the Bank may, in its
discretion, retire an employee, other than an
employee in Class IV, at any time after completion of
50 years of age;
Provided further in the case of an employee,
other than an employee in Class IV, who has attained
the age of 55 years,, his continuance in service up
to the age of 58 years shall be subject to his being
found suitable to be retained in service.
(2) The power conferred by the provisos to
sub-regulation (1) shall be exercised by the
Governor, with the prior approval of the Central
Board in the case of officers and by the Manager,
subject to such general or special instructions as
may be issued by the Governor, in the case of other
employees.
(3) An employee who has attained the age of
50 years may voluntarily retire after giving to the
competent authority three months’ notice in writing.
Regulation 26 (Amended with effect from
7.2.1992): (1) An employee shall retire at 60
years of age but no extension shall be given to any
employee beyond 60 years of age;
Provided that an employee who attains the age
of superannuation on any day other than the first
during a calendar month, shall retire on the last day
of that month;
Provided further that in the case of an
employee in Class IV who has reached the age of 55
years the Bank may, in its discretion, retire him
after giving two months’ notice in writing if in the
opinion of the competent authority his efficiency is
found to have been impaired;
Provided further that the Bank may, in its
discretion, retire in public interest an employee,
other than an employee in Class IV, at any time after
completion of 50 years of age;
Provided further in the case of an employee in
Class III and Class I, who has attained the age of 55
years, his continuance in service upto the age of 60
years shall be subject to his being found suitable to
be retained in service.
(2) The power conferred by the provisions to
sub-regulation (1) shall be exercised by the
Governor, with the prior approval of the Central
Board in the case of officers and by the Manager,
subject to such general or special instructions as
may be issued by the Governor, in the case of other
employees.
(3) An employee who has attained the age of
50 years may voluntarily retire after giving to the
competent authority three months’ notice in writing.
(3A) Without prejudice to sub-Regulation (3),
an employee may voluntarily retire after giving to
the competent authority three months notice in
writing provided he has completed 20 years of service
if he is not governed by the Reserve Bank of India
Pension Regulations, 1990 and 20 years of qualifying
service as defined in the Reserve Bank of India
Pension Regulations, 1990, if he is governed by the
Reserve Bank of India Pension Regulations, 1990.
Provided that this sub-Regulation shall not
apply to an employee who is on deputation or study
leave abroad, unless, after having been transferred
or having returned to India he has resumed the charge
of the post in India and served for a period of not
less than one year. The requirement of this proviso
may, however, be waived at the discretion of the
Governor.
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 to
which he is on deputation at the time of seeking
voluntary retirement.
(3B) The notice of voluntary retirement given
under sub-Regulation (3A) shall not be valid unless
it is accepted by the Competent Authority;
Provided that where the Competent Authority
does not communicate its decision not to accept such
notice before the expiry of period specified in the
notice, the retirement shall become effective from
the date of expiry of such period.
(3C) The Competent Authority may, if so
requested by the employee retiring pursuant to sub-
Regulation (3) or (3A), waive the notice of voluntary
retirement with respect to its full period or part
thereof if the Competent Authority is satisfied that
such waiver will not cause any administrative
inconvenience.
(3D) An employee who has elected to
voluntarily retire pursuant to sub-Regulation (3A)
and has given notice shall not be entitled to
withdraw the notice except with the permission of the
Competent Authority, provided that the request for
such withdrawal shall be made before the intended
date of his retirement”.
Since the respondents-employees had tendered resignation, making
them ineligible writ applications were filed before the High Court
questioning legality of Regulation 18. The High Court by the impugned
judgment held that Regulation did not have any retrospective operation
and, therefore, the employer was legally bound to grant pension.
Mr. R.N. Trivedi, learned Additional Solicitor General submitted
that the entire approach of the High Court was erroneous. On one hand it
came to hold that Regulations were not retrospective in operation, yet
ultimate direction was to work out the pension by taking recourse to
1990 Pension Regulations. It also recorded a finding that there cannot
be any doubt that resignation from service being not equivalent to
dismissal or termination which are the acts of the management, is more
akin to voluntary retirement. It held that as Regulation 18 of the
Pension Regulations was not attracted, the claim for pension was to be
allowed. The Pension Regulations clearly ruled out payment of pension
for those employees who go out by tendering resignation. There was no
question of the respondents-employees taking voluntary retirement as
they had not attained the age of 50 years in terms of sub-Regulation (3)
of Regulation 26 of the Staff Regulation of 1948. The respondents-
employees have not stated as to under which statute or Regulation they
were claiming pension. From the tenure of the pleadings in the writ
petition and the arguments it appears that they wanted only to get
advantage of Pension Regulations. But at the same time they contended
that it did not have retrospective operation.
Per contra, learned counsel for the respondents-employees
submitted, only 37 employees were to be benefited and only 3 had
approached the Court. That being the position, this is not a fit case
where the jurisdiction under Article 136 of the Constitution of India,
1950 (for short the ‘Constitution’) has to be exercised. Further, by
administrative decisions, the Central Board had decided to extend the
benefit to the employees like the respondents. That being so, on the
fortuitous ground that the Central Government had declined to accept the
recommendations, the benefits could not have been denied. Staff
Regulations were in the nature of administrative decisions and the
government decision was inconsequential. Once the Board had decided to
grant the benefit and even had suggested amendments to Staff
Regulations, there was no question of any government approval thereof.
In Reserve Bank and Another v. S. Jayarajan (1995 supp(4) SCC 584)
the view expressed in V.T. Khanzode and Ors. v. Reserve Bank of India
and Anr. (1982 (2) SCC 7) was reiterated that the Staff Regulations are
administrative in nature. The Central Board is authorized to take such
administrative decisions and Central Government’s approval/decision is
not necessary. Therefore, if changes were to be introduced in the Staff
Regulations and the Central Board takes a decision, there would not be
any necessity for taking approval of the Central Government. But the
position is different so far as the Pension Regulations are concerned.
The said Regulations were framed with the sanction of the Central
Government and are framed in exercise of the powers conferred by clause
(j) of sub-section (2) of Section 58. If the Central Board recommended
for changes in the Pension Regulations, sanction of the Central
Government is mandatory. This aspect seems to have been lost sight by
the High Court and the respondents cannot derive any advantage from the
mere recommendations made by the Central Board suggesting changes to the
Regulations. The Central Government has specifically dealt with the
recommendations and has turned them down. Unless the recommendations for
the amendment are approved, they have no binding force or application to
make any claim thereon. Further, the respondents who claim that they
were not claiming the benefit under the Pension Regulations could not
point out any other source to which their claims could be linked. The
respondents-employees were getting superannuation benefits accruing to
them under the contributory provisions and gratuity schemes. The High
Court was also in error in equating the case of resignation to voluntary
retirement. The two are conceptually different in the service
jurisprudence and different consequences would flow depending upon one
or the other of the courses.
Under Regulation 26 of the Staff Regulations, four types of
retirements were contemplated as on Ist November, 1990 i.e. (a)
Retirement on Superannuation, (b) Compulsory Retirement on Invalidation,
(c) Compulsory Retirement and (d) Voluntary Retirement. Resignation does
not fit into any one of the said categories.
In service jurisprudence, the expressions superannuation,
voluntary retirement, compulsory retirement and resignation convey
different connotations. Voluntary retirement and resignation involve
voluntary acts on the part of the employee to leave service. Though both
involve voluntary acts, they operate differently. One of the basic
distinctions is that in case of resignation it can be tendered at any
time; but in the case of voluntary retirement, it can only be sought for
after rendering prescribed period of qualifying service. Other
fundamental distinction is that in case of the former, normally retiral
benefits are denied but in case of the latter, same is not denied. In
case of the former, permission or notice is not mandated, while in case
of the latter, permission of the concerned employer is a requisite
condition. Though resignation is a bilateral concept, and becomes
effective on acceptance by the competent authority, yet the general rule
can be displaced by express provisions to the contrary. In Punjab
National Bank v. P.K. Mittal (AIR 1989 SC 1083), on interpretation of
Regulation 20(2) of the Punjab National Bank Regulations, it was held
that resignation would automatically take effect from the date specified
in the notice as there was no provision for any acceptance or rejection
of the resignation by the employer. In Union of India v. Gopal Chandra
Misra (1978 (2) SCC 301), it was held in the case of a Judge of the High
Court having regard to Article 217 of the Constitution that he has an
unilateral right or privilege to resign his office and his resignation
becomes effective from the date which he, of his own volition, chooses.
But where there is a provision empowering the employer not to accept the
resignation, on certain circumstances e.g. pendency of disciplinary
proceedings, the employer can exercise the power.
On the contrary, as noted by this Court in Dinesh Chandra Sangma
v. State of Assam (AIR 1978 SC 17), while the Government reserves its
right to compulsorily retire a Government servant, even against his
wish, there is a corresponding right of the Government servant to
voluntarily retire from service. Voluntary retirement is a condition of
service created by statutory provision whereas resignation is an implied
term of any employer-employee relationship.
Looking from any angle the High Court judgment is indefensible and
is set aside and the writ petitions filed by the respondents-employees
stand dismissed. Appeals are allowed. There shall be no orders as to
costs.
