{"id":247382,"date":"2002-12-17T00:00:00","date_gmt":"2002-12-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002"},"modified":"2016-05-20T04:55:06","modified_gmt":"2016-05-19T23:25:06","slug":"bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002","title":{"rendered":"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002<\/div>\n
Author: Sb Sinha<\/div>\n
Bench: Cji, H.K. Sema, S.B. Sinha.<\/div>\n
           CASE NO.:\nAppeal (civil)  854 of 2002\nAppeal (civil)  855 of 2002\nAppeal (civil)  870 of 2002\nAppeal (civil)  874 of 2002\nAppeal (civil)  877 of 2002\nAppeal (civil)  878 of 2002\nAppeal (civil)  879 of 2002\nAppeal (civil)  883 of 2002\nAppeal (civil)  7353 of 2002\nAppeal (civil)  7354 of 2002\nAppeal (civil)  7355 of 2002\nAppeal (civil)  7356 of 2002\nAppeal (civil)  873 of 2002\nAppeal (civil)  876 of 2002\nAppeal (civil)  880 of 2002\nAppeal (civil)  3552-60 of 2002\nAppeal (civil)  4067 of 2002\nAppeal (civil)  5380-81 of 2002\nAppeal (civil)  875 of 2002\nAppeal (civil)  881 of 2002\nAppeal (civil)  8467-8499 of 2002\nSpecial Leave Petition (civil)  19373-405 of 2002\nAppeal (civil)  8511 of 2002\nSpecial Leave Petition (civil)  12322 of 2002\nAppeal (civil)  7314-35 of 2002\nAppeal (civil)  3561-65 of 2002\nAppeal (civil)  896 of 2002\nAppeal (civil)  955 of 2002\nAppeal (civil)  8500 of 2002\nSpecial Leave Petition (civil)  7966 of 2002\n\nPETITIONER:\nBank of India & Ors.\n\nRESPONDENT:\nO.P. Swarnakar etc.\n\nDATE OF JUDGMENT: 17\/12\/2002\n\nBENCH:\nCJI, H.K. Sema & S.B. Sinha.\n\nJUDGMENT:\n<\/pre>\n
Punjab National Bank & Ors.\n<\/p>\n
Allahabad Bank etc. etc.
\nDena Bank
\nPunjab & Sind Bank & Ors.\n<\/p>\n
Union Bank of India & Ors.\n<\/p>\n
State Bank of Patiala
\nState Bank of India & Anr. etc.
\nVirender Kumar Goel
\nShri Harprit Singh Chhabra
\nBhupinder Singh Sachdeva & Ors.\n<\/p>\n
Vs.\n<\/p>\n
Jai Singh Chauhan etc. etc.
\nRaminder Singh Arora etc. etc.
\nMr. Netaji D. Karande & Ors. etc.
\nMohinder Pal Singh & Ors.\n<\/p>\n
A.Q. Beg
\nVirender Kumar Sharma & Ors.\n<\/p>\n
Sanjeev Kalra  etc.
\nPunjab National Bank & Ors. etc.
\nBank of India & Ors.\n<\/p>\n
Chairman, Punjab & Sind Bank & Ors.\n<\/p>\n
J U D G M E N T<\/p>\n
SB SINHA, J :\n<\/p>\n
\t Leave granted in the special leave petitions.\n<\/p>\n
\t A common question, as to whether an employee who opts for the voluntary
\nretirement pursuant to or in furtherance of  a scheme floated by the Nationalised
\nBanks and the State Bank of India would be precluded from withdrawing the said
\noffer, is involved in this batch of appeals which  arise out of the judgments of various
\nHigh Courts.\n<\/p>\n
\tThe State Bank of India has been constituted under the State Bank of India
\nAct<\/a>, 1955 whereas the other banks (hereinafter referred to as ‘the Nationalized
\nBanks, for the sake of brevity) were taken over in terms of the provisions of the
\nBanking Companies (Acquisition and Transfer of Undertakings), Act, 1970
\n(hereinafter referred to as  ‘1970 Act’).\n<\/p>\n
\tThe banks were said to be over-staffed.\t For the purpose of effective
\nmanagement , man power planning was contemplated by the Ministry of Finance,
\nGovernment of India, pursuant whereto and in furtherance whereof, the Government
\nconsidered the desirability of introducing voluntary retirement scheme to help the
\nbanks to right-size their force.  In a letter dated 22.5.200, the Director (IR & BOII),
\nMinistry of Finance, intimated to the concerned banks that  different committees and
\nexperts opined that most  of the banks have 25% surplus manpower.   It was
\nobserved :\n<\/p>\n
“While there is a need for inducting new
\nworkforce, which had adequate knowledge of new
\nskills such as modern technology, foreign exchange,
\nventure capital, e-commerce, money management,
\netc. it is also essential to rationalize the existing
\nmanpower.  In doing so, it has to be ensured that
\nthere should be adequate opportunities for
\npromotions for all and proper balance between
\npromoted and direct recruit officers at entry level.
\nSufficient promotional opportunities should be
\ncreated for the entrants in non-executive grades by
\ncreating graded scales within the cadre and giving
\nage relaxation and special coaching to enable them
\nto compete for direct recruitment also.\t Thus for
\nentry in officers cadre, 50% quota for promotion
\nshould suffice.\t That will enable banks to recruit
\n50% officers from open market in accordance with
\nthe needs of the banks to ensure continuous intake
\nof persons with desired qualifications in accordance
\nwith the changing skill needs.”\n<\/p>\n
\tIt was, therefore, requested that the concerned banks should undertake the
\nexercise of man-power planning on priority basis and send the same to the Banking
\nDivision for approval of the Board.  A Committee was constituted by the Central
\nGovernment for consideration of various issues as specified in the report  of the
\nCommittee on Human Resource Management in Public Sector Banks.\tThe said
\nCommittee in its report, inter alia, observed :-\n<\/p>\n
“3.15.1 The Committee feels that the high
\nestablishment cost and\tlow business per employee
\nare important contributory factors for the low
\nprofitability of several public sector banks.  The
\nCommittee feels that without right-sizing  the staff,
\nit would  be difficult for public sector banks to
\ncompete with other banks operating in the country
\nand their profitability will remain under severe
\nstrain.\t Optimising the existing work force is also
\nnecessary to facilitate recruitment of personnel with
\nspecialised skills required for appropriate use of
\ninformation technology in banking transaction,
\ncompliance with prudential norms and consequent
\nemphasis on improved risk management and assert
\nliability management, as also Banks’ foray into new
\nbusiness areas such as insurance, capital markets,
\netc.\n<\/p>\n
3.15.2\t Different committees and experts have in
\nthe recent past perceived excess staff in banks
\nespecially in the public sector banks.\tThe extent of
\nsurplus may however differ from bank to bank.\n<\/p>\n
Banks are at various stages of making a proper
\nassessment of human resource including man-power
\nplanning exercise.\n<\/p>\n
3.15.4\t  The Committee further reiterates that the
\nGovernment may consider rolling back the age of
\nretirement for officers from 60 years to 58 years.
\nThis will not only reduce the man-power in the age
\ngroup of 58 to 60 but will also result in considerable
\nsavings.”\n<\/p>\n
\tPursuant to or in furtherance of the said purported policy decision, the State
\nBank of India as well as the Nationalised Banks adopted separately but almost
\nidentical scheme known as “Employees Voluntary Retirement Scheme”.  We may,
\nhowever, observe that  the scheme adopted by the State Bank of India (hereinafter
\nreferred to ‘SBIVRS’) in certain respects differ from the scheme of the Nationalised
\nBanks (hereinafter referred to the ‘said scheme’).  For our purpose, we would
\nconsider them separately.\n<\/p>\n
The said scheme was applicable in relation to employees who on the date of
\napplication had completed 15 years of service or 40 years of age.  The employees
\nspecified therein including specialised officers were not eligible to seek voluntary
\nretirement.  However, in certain scheme they were ordinarily ineligible for being
\nconsidered.  The period during which the said scheme was to remain operative varies
\nfrom bank to bank.  However, as far as Punjab National Bank was concerned, the
\nsaid scheme was to remain in operation from 1.11.2000 to 30.11.2000.  In terms of
\nthe said scheme those who sought for voluntary retirement were entitled to ex-gratia
\npayments as specified therein as also other benefits which are as follows :-\n<\/p>\n
“AMOUNT OF EX-GRATIA<\/p>\n
An employee seeking voluntary retirement under the
\nscheme will be entitled\t to the\t ex-gratia amount  mentioned
\nbelow in para  (a) or (b), whichever is less :-\n<\/p>\n
a) 60 days salary (pay plus stagnation increments plus
\nspecial pay plus dearness relief) for each completed
\nyear of service;\n<\/p>\n
OR<\/p>\n
b)  salary for the number of months service left;\n<\/p>\n
OTHER BENEFITS<\/p>\n
An employee seeking voluntary retirement under the
\nscheme will be eligible for the following benefits in
\naddition to the ex-gratia amount mentioned in para 6 above
\nof this scheme :-\n<\/p>\n
i)\tGratuity as per Payment of Gratuity Act<\/a>, 1972 or
\nGratuity payable under the Service Rules as the case
\nmay be, as per existing rules;\n<\/p>\n
ii)  a) Pension (including commuted value of pension) as per
\nPNB (Employees’) Pension Regulations, 1995.\n<\/p>\n
OR<\/p>\n
  b)\tBank’s contribution towards PF as per existing rules.\n<\/p>\n
\t iii)  Leave encashment as per existing rules.”\n<\/p>\n
The Scheme contained an eligibility criteria, namely, that employees against
\nwhom disciplinary proceedings were contemplated or pending would not be eligible
\nfor seeking voluntary retirement.  It states that the employees seeking voluntary
\nretirement were eligible for all other retirement benefits.  Under the existing said
\nscheme the bank has reserved with itself the right to withdraw the scheme at any
\ntime it thinks fit and its decision in this behalf was to be final.\n<\/p>\n
Para 9 of the said scheme specifies different competent authorities for
\naccepting voluntary retirement of different categories of officers and workmen.\n<\/p>\n
The following general conditions now need be noticed :-\n<\/p>\n
\t“10.4\tA mere request of an employee seeking
\nvoluntary retirement under the Scheme will not take
\neffect until and unless it is accepted in writing by
\nthe Competent Authority.\n<\/p>\n
10.5\tIt will not be open for an employee to
\nwithdraw the request made for voluntary retirement
\nunder the scheme after having exercised such
\noption.\n<\/p>\n
10.6. The Competent Authority shall have absolute
\ndiscretion either to accept or reject the request of an
\nemployee seeking Voluntary Retirement under the
\nscheme depending upon the requirement of the
\nbank.  The reasons for rejection of request of an
\nemployee seeking voluntary retirement shall be
\nrecorded in writing by the competent authority.
\nAcceptance or otherwise of the request of an
\nemployee seeking voluntary retirement will be
\ncommunicated to him in writing.\n<\/p>\n
10.11. An employee who would seek voluntary
\nretirement under this scheme will not be eligible for
\nre-employment in the bank or any of its
\nsubsidiaries.\n<\/p>\n
10.13.\tThe benefits payable under this scheme shall
\nbe in full and final settlement of all claims of
\nwhatsoever nature, whether arising under the
\nscheme or otherwise to the employee (or to his
\nnominee in case of death).  An employee who
\nvoluntarily retired under this scheme will not have
\nany claim against the bank of whatsoever nature and
\nno demand or dispute or difference will be raised by
\nhim or on his behalf, whether for re-employment or
\ncompensation or back wages including employment
\nof any of his relative on compassionate grounds in
\nthe service of the bank or for any other benefit
\nwhatsoever.\n<\/p>\n
10.14. The vacancy caused by voluntary retirement
\nshall not be filled up by new recruitment.\n<\/p>\n
10.15. The ex-gratia payable to an employee on
\nopting for Voluntary Retirement under this scheme
\nwould be paid to him within 45 days from the date
\nof his relieving.\n<\/p>\n
PROCEDURE<\/p>\n
 An employee eligible to seek voluntary retirement
\nunder this scheme should make a request on the
\nprescribed application enclosed with this scheme as
\nAnnexure-A or Annexure A-1 as the case may be
\nthrough proper channel addressed to the Competent
\nAuthority before the last date prescribed under this
\nScheme.\t Further one copy of the application be
\ndirectly sent to the Dy. General Manager (P) at
\nHead Office New Delhi.”\n<\/p>\n
Annexure-A appended to the said Scheme is the format of an application for offer to
\nseek voluntary retirement which reads thus :-\n<\/p>\n
“Application for Offer to seek voluntary retirement from
\nthe service of the Bank.\n<\/p>\n
\t(For workmen employees & officers upto scale-III)<\/p>\n
The Dy. General Manager
\nPersonnel Division
\nHead Office
\nNew Delhi.\n<\/p>\n
\t\t(Through proper channel)
\nSir,<\/p>\n
SUB:   VOLUNTARY RETIREMENT.\n<\/p>\n
\tI  hereby offer to seek voluntary retirement from
\nthe services of the Bank in accordance with the terms and
\nconditions stipulated in the PNB Employees Voluntary
\nRetirement Scheme  2000 circulated vide Personnel
\nDivision Circular No.1755 dated 29.9.2000, which I have
\ncarefully read and understood the contents of the same.\n<\/p>\n
2.\tI accept the terms and conditions stipulated in PNB
\nEmployees Voluntary Retirement Scheme  2000
\nunconditionally and irrevocably.\n<\/p>\n
3.\tI furnished the required particulars in the
\nAPPENDIX enclosed for consideration of my offer to
\nseek voluntary retirement from the service of the Bank
\nunder the above scheme.<\/p>\n
\n\nYours faithfully,\n\t\t\t\tSignature of the Employee\n\nPlace:\t\t\t\tName _______________\n Date :\t\t\t\tDesignation___________\n\t\t\t\tBO\/Division __________\"\n\n\n\n<\/pre>\n
\tA large number of employees (1,01,000 employees approx.) submitted their
\napplications out of whom a small number of employees (200 employees approx.)
\nwithdrew their offer.  Despite withdrawal of their offer the same was accepted.\t In
\nsome cases offers despite withdrawal thereof were accepted within the period during
\nwhich the scheme was operative and in some beyond the same.\n<\/p>\n
\tThe scheme was introduced by the banks with the approval of the Board of
\nDirectors.\n<\/p>\n
\tQuestioning the action on the part of the banks, in accepting the applications
\nof the concerned employees despite their withdrawal, writ petitions were filed in the
\nPunjab & Haryana High Court, Bombay High Court, Uttaranchal High Court etc.<\/p>\n
\tBefore the Punjab & Haryana High Court, the legality or validity of the said
\nscheme\talso came to be questioned.  Writ applications were also filed by some
\nemployees seeking for issuance of writ of mandamus directing the respective banks
\nto pay unto them their lawful dues strictly in terms of the scheme.\n<\/p>\n
\tThe Punjab & Haryana High Court by reason of its judgment impugned
\nherein dated 3.4.2002, inter alia,  held :-\n<\/p>\n
“That the V.R. Scheme as framed is not a
\nvalid piece of subordinate legislation inasmuch as
\nthe provision of Section 19<\/a> sub clause (1) and sub
\nclause (4) of the Act have not been complied with
\nand has, therefore, to be set aside.\n<\/p>\n
Even if it is assumed for the sake of
\narguments that the scheme is validly framed, it
\nwould be open to an employee to withdraw his
\noption before the same has been accepted and
\neffectively enforced.\n<\/p>\n
\tFor the reasons recorded above, we allow 71
\nwrit petitions i.e C.W.P. Nos.1458, 1472 of  2001
\nand C.W.P Nos. 303 and 1765 of 2002 etc. etc.  in
\nwhich the petitioners have made a prayer for the
\nwithdrawal of their options and the impugned
\norders accepting the options of voluntary retirement
\nstand quashed.\tAll these petitioners shall be
\nreinstated in service with all consequential benefits.
\nIt is however, made clear that those petitioners who
\nhave received the benefits under the scheme
\nincluding the ex-gratia payment whether with or
\nwithout protest, shall return the entire amount
\nreceived by them with interest at the rate of 9% per
\nannum from the date of the receipt of the said
\namount till the date of return.\t On return of the
\naforesaid amount the consequential benefits
\nregarding the payment of arrears of salary and
\nallowances from the date of their release to the date
\nof reinstatement shall be given to them by the
\nrespondents.  These petitioners shall also have the
\nbenefit of continuity of service and the interregnum
\nperiod shall be regularised in accordance with law
\nand regulations.\n<\/p>\n
Since we have already declared this scheme
\nas bad, therefore, we are not in a position to give
\nany relief to the writ petitioners of 10 writ petitions
\ni.e. C.W.P. Nos.6072, 7277, 7448, 9191, 14325,
\n15686, 15689, 19393, 19711 and 19803 of the year
\n2001, and in our opinion, these writ petitions are
\nliable to be dismissed.\t When all rights flow from a
\nvalid scheme and the moment the scheme is
\ndeclared bad on account of statutory restrictions
\nthen the petitioners of these 10 writ petitions cannot
\nask for any advantage or benefit.\n<\/p>\n
\tNow we want to make some observations
\nwith regard to those employees who had taken the
\nbenefit under the VRS Scheme but they have not
\napproached this court as they appear to be satisfied\/
\nwith the amount\/benefits already received by them.
\nWith regard to them we want to make it clear that
\nthe Banks are not obliged to recall these employees
\nfor employment”\n<\/p>\n
The Bombay High Court and the other High Courts, on the other hand, held
\nthat clause 10.5 of the scheme or the scheme framed framed by the other banks is not
\noperative as the employees have indefeasible rights to withdraw their offer before the
\nsame is accepted.  In arriving at its aforementioned finding, the High Courts, inter
\nalia, relied on the following decisions of this Court in Union of India & Ors. v. Gopal
\nChandra Misra & Ors<\/a>. [(1978) 2 SCC 301], Balram Gupta v. Union of India & Anr<\/a>.
\n[(1987) Supp.SCC 228], Punjab National Bank  v. P.K. Mittal<\/a> [(1989) Supp. 2 SCC
\n175], Union of India & Anr. v. Wing Commander T. Parthasarathy<\/a> [(2001) 1 SCC
\n158] and Shambhu Murari Sinha v. Project &  Development India Ltd. & Anr<\/a>.
\n[(2002) 3 SCC 437].\n<\/p>\n
\tAssailing the judgment of the High Courts, Mr. Soli J. Sorabjee, learned
\nAttorney General for India, inter alia, submitted  that having regard to the purport
\nand object sought to be achieved by the scheme, clause 10.5 of the General
\nConditions cannot be said to be illegal as by submitting themselves thereto, the
\nconcerned employees must be held to have resigned  in prasenti and in that view of
\nthe matter the contractual bar contained therein cannot be held to be bad in law.  The
\nlearned Attorney General would urge that the High Court proceeded on a wrong
\npremise insofar as it failed to take into consideration that the scheme would amount
\nto a regulation which would attract the provision of Section 19<\/a> of 1970 Act.  It was
\nsubmitted that power to fix the terms and conditions of service of their employees by
\nthe Banks is provided for under Section 7<\/a> of the said Act.  The learned counsel
\nwould contend that it is not the case of the writ petitioner-respondents that the
\naforementioned clause 10.5 is arbitrary or otherwise opposed to public policy or
\nsuffers from lack of mutuality and, thus, the High Court must be held to have arrived
\nat a wrong conclusion.\tSuch a clause being an offer, the learned Attorney General
\nwould contend, is not violative of any provisions of the Indian Contract Act<\/a>, 1872 or
\nthe Constitution of India.  Taking us through the decisions of this Court in Gopal
\nChandra Misra (supra), T. Parthasarthy (supra), Balram Gupta (supra) as also
\nShambhu Murari Sinha  (supra), the learned Attorney General would urge that
\ntherein this Court has laid  down that such a provision leads to laudable object and
\nonly in absence of such a provision prospective resignation can be withdrawn before
\nits acceptance.\t It was further submitted that as each of the employees had made
\nirrevocable and unconditional offer of terms and conditions laid down in the scheme,
\nthey could not have withdrawn therefrom and particularly as some of them accepted
\nthe ex-gratia payment and, thus, they having elected for the scheme and thus, were
\nestopped and precluded from questioning the same.  Those employees, Mr.Sorabjee
\nwould submit, who accepted the ex-gratia payment could not have been permitted by
\nthe High Court to approbate or reprobate.  In support of the said contention, reliance
\nhas been placed in Brijendra Nath Bhargava & Anr. v. Harsh Wardhan & Ors<\/a>.
\n[(1988) 1 SCC 454],  Shri Lachoo Mal v. Shri Radhey Shyam<\/a> [(1971) 1 SCC 619],
\nHalsbury’s Laws of England, Fourth Edition, Volume 16, para 957 and American
\nJurisprudence, 2d, Volume 28, pages 677 to 680.\n<\/p>\n
As regards the finding of the Punjab & Haryana High Court  that the scheme
\nis ultra vires having regard to the fact that the same was not laid before the
\nParliament as required under Section 19(4)<\/a> of  1970 Act, it was contended that such
\na provision being directory one, failure on the part of the Central Government to lay
\nthe said scheme before the Parliament could not vitiate the scheme itself.  Strong
\nreliance, in this connection, has been placed  in Jan Mohammad Noor Mohammad
\nBegban v. State of Gujarat & Anr<\/a>. [(1966) 1 SCR\t 505] and M\/s Atlas Cycle
\nIndustries Ltd. & Ors. v. The State of Haryana<\/a> [(1979) 2 SCC 196].  It was urged
\nthat the entire scheme was offered to the employees as a package and the same had
\nto be treated as such and in that view of the matter, it being within the realm of
\ncontract, statutory regulations cannot be said to have any application whatsoever.\n<\/p>\n
\tMr. V.R. Reddy who appeared for the Punjab National Bank in the matters
\narising out the judgment and orders passed by the Bombay High Court, inter alia,
\nwould submit that the High Court erred in proceeding on the basis as if the
\nemployees are the Government servants and enjoy a status.  According to the learned
\ncounsel, having regard to the provisions of the 1970 Act, the terms and conditions of
\nservices of the employees of the Nationalised Banks are governed by contract.  Mr.
\nReddy would urge that the purpose of the scheme being down sizing of the
\nemployees, the same was required to be considered having regard to the age profile,
\nskill profile, the extent of the response received from the employees and several
\nother relevant factors.\t In the aforementioned situation, the learned counsel would
\nsubmit that clause 10.5 was inserted so that in the event, those who had opted for the
\nscheme resile therefrom, the banks may not face practical difficulties.\t The
\nrequirement of the bank, the learned counsel would submit, must prevail over the
\nrequirement of the individual employees.\n<\/p>\n
As regards the validity of clause 10.5, the learned counsel would submit that
\nthe same was at the threshold stage leading to a major contract.  Strong reliance, in
\nthis connection, has been placed Anson’s Law of Contract, 28th Edition, paras 235
\nand Chitty on Contracts,  28th Edition (1999) pages 3 -160 and 3-161 and Halsbury’s
\nLaws of England, 4th Edition, Volume 9, para 235 at page 106.\n<\/p>\n
Mr. Mukul Rohtagi appearing on behalf of the Bank of India would contend
\nthat  as the writ petitions involved  enforcement of contract qua contract, they  were
\nnot  maintainable.  The learned counsel placed strong reliance in Har Shankar & Ors.
\nv. The Dy. Excise and Taxation Commr & Ors<\/a>. [(1975) 1 SCC 737].\n<\/p>\n
\tDr. Rajeev Dhawan and Mr. Harish Salve, appearing on behalf of the State
\nBank of India, submitted that the High Court completely misdirected itself insofar as
\nit failed to take into consideration that the provi sions of the State Bank of India Act<\/a>,
\n1955 materially differ from  1970 Act.\tAccording to the learned counsel, the terms
\nand conditions of employment are governed under Sections 17<\/a> and 43<\/a> of  1955 Act.
\nIt has been pointed out that having regard to the difficulties which may be faced by
\nsome of the employees, although the scheme dated 27.12.2000 was to remain in
\nforce for a short time,\t implementation thereof was contemplated in a time-bound
\nmanner i.e. :-\n<\/p>\n
a)\tOpportunity to the employees to apply for voluntary retirement during
\nthe period 15.1.2001 to 31.1.2001;\n<\/p>\n
b)\tOpportunity to the employees to withdraw, if so desired by 15.2.2001;\n<\/p>\n
c)\tEmployees whose request for voluntary retirement is accepted, were
\nto stand retired on 31.3.2001 and paid accordingly.\n<\/p>\n
Having regard to the difficulties which may be faced by some of the
\nemployees, by a circular a cut-off date of 15.2.2001 was fixed; thereby granting
\nopportunities to the employee to withdraw the option exercised by him.\tThe logic
\nand necessity therefor, inter alia,  was :-\n<\/p>\n
i)\t the purpose of the SBIVRS was inter alia to have overall reduction in
\nthe existing strength of the employees.\t However, the  bank were also
\nrequired to control the outflow according to its requirements, for
\nwhich the bank retained the discretion to limit the number of
\nemployees allowed to retire.\n<\/p>\n
ii)\tA decision was taken by the bank that around 10% employees may
\nbe allowed to retire under the VRS; the petitioner bank had to process
\nthe applications of all the employees who had opted for VRS.  This
\nratio of 10% could be achieved only after the bank receives a definite
\nfigure about the number of persons opting for VRS and withdrawing
\nlater.\n<\/p>\n
iii)\tFurther the final decision of the category of persons eligible under
\nVRS could be taken only after the petitioner bank had the final tally
\nregarding the last and final figure of number of persons who had
\nopted under the VRS.\n<\/p>\n
iv)\tThe scheme was purely voluntary and the conscious decision of the
\nemployee, hence there could be no reason for his withdrawal of
\napplication at a later date.  However, keeping in view the interest of
\nthe employee, it was decided that the employee might be permitted to
\nwithdraw the application on or before 15.2.2001.\n<\/p>\n
v)\tIt was a time bound scheme whereunder the employee was to be
\nrelieved and paid entire monetary benefits by 31.3.2001, for which
\narrangements were to be made.\n<\/p>\n
It has been pointed out that around 35,380 employees had applied under the
\nsaid scheme and around 1,996 employees had withdrawn before the cut off date.
\nAround 21,000 employees had been granted voluntary retirement under the scheme,
\nexcluding the ineligible.\n<\/p>\n
It was contended that the scheme if  read in its entirety would clearly show
\nthat the same was an offer and not an invitation to offer and in terms thereof\tan
\nenforceable rights and duties had been conferred upon both employer and employee
\nwhich would, subject to certain exception, be enforceable.  It was contended that as
\nthe concerned employee did not exercise his option of withdrawal within the
\nspecified date, namely, 15.2.2001, his case had been considered on the premise that
\nhe has not withdrawn his offer.\t The learned counsel would contend that\t a contract
\nof employment can be terminated unilaterally; even a tenure of contract of
\nemployment can be curtailed by an agreement and in that view of the matter
\nvoluntary retirement scheme cannot be said to be illegal.  Reliance, in this
\nconnection, has been placed on ‘Chitty on Contract’ paras 37-114 and 37-115.\n<\/p>\n
Mr. Nageshwar Rao, learned senior counsel appearing on behalf of the
\nrespondents in civil appeal arising out of SLP (C)  CC No.7966, inter alia, would
\nsubmit that the decisions of this Court in Balram Gupta (supra) and Parathasary
\n(supra) in no unmistakable terms  laid down the law that an offer of resignation can
\nbe withdrawn before the same is accepted.  According to the learned counsel, the
\nmatter relating to the scheme is merely an invitation to offer and option pursuant
\nthereto on the part of an employee would constitute an offer.  Such an offer, the
\nlearned counsel would contend, had been made by the concerned employee on dotted
\nlines.\tIn any event, the learned counsel would submit, that having regard to the
\nprovision contained in Section 5<\/a> of the Contract Act, the concerned employee had an
\nabsolute right to withdraw the same before a concluded contract is arrived at.\tClause
\n10.5 of the Punjab National Bank VRS is, thus, ultra vires Section 5<\/a> of the Contract
\nAct.\n<\/p>\n
Strong reliance, in this connection, has been placed on Rajendra Kumar
\nVerma v. State of Madhya Pradesh & Ors<\/a>. [AIR 1972 MP 131], Abdus Salam
\nChoudhury v. The State of Assam & Ors<\/a>.\t[AIR 1991 Gauhati 9] and Devi Krishan
\nGoyal v. District Inspector of Schools, Ghaziabad & Ors. [ J.T. 1988 (4) SC 201].\n<\/p>\n
Mr. Gopal Subramanium, learned senior counsel appearing on behalf of the
\nrespondent in Civil Appeal arising out of SLP (C) Nos.19373-404 of 2002, would
\nsubmit that the scheme formulated by other public sector banks including Punjab &
\nSind Bank is identical to that of  Punjab National Bank.  According to the learned
\ncounsel, the entire scheme has be read as a whole.  It was pointed out that the scheme
\nhad a limited duration from 1.12.2000 to 31.12.2000, and a cumulative consideration
\nof the relevant clauses would clearly show that the relationship between the master
\nand servant comes to an end only upon acceptance of the offer.\tIt was pointed out
\nthat the offer is required to be considered at the level of the Branch Manager and
\nZonal Manager and upon their recommendation the same was  ultimately to be taken
\nup by the Personnel Department will clearly go to show that irrevocable nature of
\noption would be relevant only if the same culminates into an acceptance.  The
\nlearned counsel would submit that mere declaration given by an offerer that he
\nwould not withdraw or cancel the offer would not destroy his locus.  Strongly relying
\nupon the decisions of  this Court in J.N. Srivastava v. Union of India & Anr<\/a>. [(1998)
\n9 SCC 559], Gopal Chandra Misra (supra), Parthasarathy (supra), Shambhu Murari
\nSinha (supra), Balram Gupta (supra), the learned counsel would submit that even
\nafter acceptance, the offer could be withdrawn, such an action on the part of the
\noptioner is permissible even after the acceptance of the offer and in that view of the
\nmatter the application of contractual bar must be held to be applicable\t only in a case
\nwhere offerer has been relieved from his part  not prior thereto.\n<\/p>\n
 The decisions of this Court, Mr. Suramanium would submit, lay down the
\nfollowing principles : (1) Juridical relationship of employer and employee continues
\ntill the employee is relieved from his duties (2) It is a bilateral action, (3) Offer being
\nnot in prasenti\t its acceptance is necessary, (4) only exception to the said rule would
\nbe where prejudice may be caused.\n<\/p>\n
 Mr. Subramanium  would urge that in the instant case, it cannot be said that
\nthe statutory regulation has nothing to do with the Scheme as pension was to be
\ncalculated in terms thereof.  The learned counsel pointed out that after the offer had
\nbeen made, the concerned banks had issued a circular, pursuant whereto or in
\nfurtherance whereof a proviso to Regulation 28 was sought to be added; in terms
\nwhereof the concerned employees were deprived of the benefit of additional five
\nyears of service towards qualifying service so as to get pension in terms of clause (4)
\nof Regulation 19 as thereby instead and in place of full pension the principle of pro-
\nrata pension was introduced.  Such amendment in the scheme as a result whereof the
\nemployees were gravely prejudiced, the concerned employees derived a legal right to
\nwithdraw from the said scheme.\n<\/p>\n
Mr. Rakesh Dwivedi, learned senior counsel appearing on behalf of the
\nrespondents in Civil Appeals arising out of SLP (C) Nos.19373-405 of 2002, would
\ncontend that the offending clause having been unilaterally prescribed would not
\namount to a contractual bar.  Such a contractual bar, the learned counsel would
\nsubmit, must be based on consideration.\t A contractual scheme must not offend the
\nright of the employee under Section 5<\/a> of the Indian Contract Act, in terms whereof
\nthe offeror is entitled to revoke his proposal\/offer at any time before the
\ncommunication of the acceptance.  Relying upon or on the basis of a large number of
\ndecisions by different High Courts, namely,  Zoravarmal v. Gopal Das [AIR 1922
\nMad. 486, 491], Secretary of State v. Bhaskar Krishnaji<\/a> [AIR 1925 Bom. 485,487,
\n488], Somu Sundram Pillai v. Provincial Government [AIR 1947 Mad. 366, 368],
\nRaghunandan v. State of Hyderabad<\/a> [AIR 1963 AP 110, 113], T. Linga Godar v.
\nState of Madras [AIR 1971 Mad. 28], Rajendra K. Verma v. State of M.P<\/a>. [AIR 1972
\nM.P. 131], Sri Durga Saw Mills v. State of Orissa<\/a> [AIR 1978 Orissa 41,43],
\nManaging Committee v. State of Bihar<\/a> [AIR 1981 Patna 271, 272], Janardhan Misra
\nv. State of U.P<\/a>. [AIR 1981 Allahabad 213, 216-217], M\/s Suraj Besan & Rice Mills
\nv. FCI [AIR 1988 Delhi 224], A.S. Khongphai v. Special Judicial Officer<\/a> [AIR 1981
\nGau, 9],  it was argued that in absence of any statute or statutory rules governing the
\nfield, Section 5<\/a> of the Indian Contract Act would be attracted and in that view of the
\nmatter\tclause 10.5 is neudum pactum and thus being  a nullity is not enforceable.
\nAccording to the learned counsel, the terms and conditions of service of employees
\nbeing governed by a statute or statutory regulations, they enjoy a status.  It was urged
\nthat as such voluntary retirement scheme affects the status of an employee, a
\ncontractual bar cannot be imposed.  Reliance, in this connection, has been placed on
\nDelhi Transport Corporation v. D.T.C. Mazdoor Congress & Ors<\/a>. [(1991) Supp.(1)
\nSCC 600].  In a case, Mr. Dwivedi would urge when the employee has voluntarily
\nwithdrawn the offer, the doctrine of election will have no application as by reason
\nthereof the employee  has not received the benefit in one part of the contract and then
\nquestioned the rest  thereof.\n<\/p>\n
Mr. Jagdeep Dhankar would, inter alia, submit that in some cases the letters
\nof withdrawal reached before the option.  In any event, as the orders had been passed
\nin many cases on 8.1.2001 i.e. well after the expiry of the period of the scheme,
\nnamely, 31.1.2.2000, the competent authority had no jurisdiction to accept the same.\n<\/p>\n
Mr. Panda appearing for the Appellant in Civil Appeal No.955  of 2002
\nwould draw the attention of this Court to the fact of the matter and submitted that the
\nconcerned respondent had withdrawn  his offer on the very next day of filling his
\napplication but despite the same, he had been relieved from his duties on 30.12.2000.
\nThe learned counsel would contend that the offending clause seeks to obliterate the
\nright of the employee to which he would have been otherwise entitled to in terms of
\nRegulation 19(4) and thus the same must be held to be illegal.\tReliance, in this
\nconnection, has been placed in V.T. Khanzode & Ors. v. Reserve Bank of India &
\nAnr<\/a>.[(1982) 2 SCC 7].  Mr. Panda contended that by reason of the impugned
\njudgment, the Uttaranchal High Court dismissed a writ petition filed by an employee,
\ninter alia, on the ground that as he is bound himself by the terms not\tto withdraw the
\napplication for voluntary retirement, the writ petition was not maintainable.
\nAccording to the learned counsel, for the reasons stated by the Punjab & Haryana
\nHigh Court and Bombay High Court and the other High Courts, the said decision
\ncannot be sustained.\n<\/p>\n
Mr. D. Goburdhan, appearing on behalf of the respondent-employee of the
\nState Bank of India would submit that his client, who had completed 19 years, 10
\nmonths of service, had made the offer as he wanted  pensionary benefits having
\nregard to the circular issued by the Indian Banks’ Association of which the State
\nBank of India is manager, namely, that who had completed 15 years of service may
\nopt therefor, but withdrew the same as he was informed that he would not get his
\npensionary benefits.\n<\/p>\n
Mr. Pradeep Gupta appearing in Civil Appeal Nos.5380-81 of  2002 on
\nbehalf of the concerned employees of Allahabad Bank, would submit that as the
\nrespondent therein was working in a foreign exchange branch, and having been
\ndoing a specialised job, would not have ordinarily come within the purview of the
\nscheme.\t It was pointed out that his letter of withdrawal was strongly recommended
\nby the Branch Manager but despite the same, by reason of the writ petition, the
\ncompetent authority accepted the same without assigning any reason.  The said
\norder, contends the learned counsel, suffers from vice of non-application of kind
\ninasmuch as in a case of this nature, the concerned authority should have passed a
\nspeaking order.\n<\/p>\n
The learned counsel appearing in SLP (C) CC No.7966 would submit that the
\nPunjab & Haryana High Court had rejected  ten writ petitions filed by the petitioners,
\ninter alia, on the ground that as the scheme is ultra vires, no relief can be granted in
\ntheir favour. The learned counsel contended, that as the scheme is contractual in
\nnature, the benefits which were otherwise available to them in terms of the scheme
\ncould not have been curtailed.\n<\/p>\n
Before we advert to the rival contentions, we may take note of the relevant
\nprovisions of 1970 Act.\n<\/p>\n
Sections 7(2)<\/a>, 19(1)<\/a>, 19(2)(f)<\/a> and  19(4)<\/a> of 1970 Act read as follows :-
\n“7(2) The general superintendence, direction and
\nmanagement of the affairs and business of a
\ncorresponding new bank shall vest in a Board of
\nDirectors which shall be entitled to exercise all such
\npowers and do all such acts and things as the
\ncorresponding new bank is authorised to exercise
\nand do.”\n<\/p>\n
“19. Power to make regulations. – (1) The Board of
\nDirectors of a corresponding new bank may, after
\nconsultation with the Reserve Bank and with the
\nprevious sanction of the Central Government, by
\nnotification in the Official Gazette, make
\nregulations, not  inconsistent with the provisions of
\nthis Act or any scheme made thereunder, to provide
\nfor all matters for which provision is expedient for
\nthe purpose of giving effect to the provisions of this
\nAct.”\n<\/p>\n
“19(2)\tIn particular, and without prejudice to the
\ngenerality of the foregoing power, the regulations
\nmay provide for all or any of the following matters,
\nnamely, :-\n<\/p>\n
(a)\n<\/p>\n
(b)\n<\/p>\n
(c)\n<\/p>\n
(d)\n<\/p>\n
(e)<\/p>\n
(f) the establishment and maintenance of
\nsuperannuation, pension, provident or other funds
\nfor the benefit of officers or other employees of the
\ncorresponding new bank or of the dependants of
\nsuch officers or other employees and the granting of
\nsuperannuation allowances, annuities and pensions
\npayable out of such funds;”\n<\/p>\n
19(4) Every regulation shall, as soon as may be after
\nit is made under this Act by the Board of Directors
\nof a corresponding new bank, be forwarded to the
\nCentral Government and that Government shall
\ncause a copy of the same to be laid before each
\nHouse of Parliament, while it is in session, for a total
\nperiod of thirty days which may be comprised in one
\nsession or in two or more successive sessions, and if,
\nbefore the expiry of the session immediately
\nfollowing the session or the successive sessions
\naforesaid, both Houses agree in making any
\nmodification in the regulation or both Houses agree
\nthat the regulation should not be made, the
\nregulation shall thereafter have effect only in such
\nmodified form or be of no effect, as the case may be,
\nso, however, that any such modification or
\nannulment shall be without prejudice to the validity
\nof anything previously done under that regulation.”\n<\/p>\n
Pursuant to or in furtherance of the power conferred upon the ‘Bank’ under
\nclause (f) of sub-section (2) of Section 19<\/a> of 1970 Act, the Punjab National Bank
\n(Employees’) Pension Regulation, 1995 was framed;  the relevant provisions being
\nRegulations 28 and 29 thereof read thus :-\n<\/p>\n
\t“28. Superannuation Pension<\/p>\n
 Superannuation pension shall be granted to an
\nemployee who has retired on his attaining the age of
\nsuperannuation specified in the Service Regulations
\nor Settlements.”\n<\/p>\n
\t29. Pension on voluntary Retirement<\/p>\n
1)\tOn or after the 1st day of November, 1993, at
\nany time after an employee has completed
\ntwenty years of qualifying service he may, by
\ngiving notice of not less than three months in
\nwriting to the appointing authority retire from
\nservice;\n<\/p>\n
2)    Provided that this sub-regulation shall not apply
\nto an employee who is on deputation or on study
\nleave abroad unless after having been
\ntransferred or having returned to India he has
\nresumed charge of the post in India and has
\nserved for a period of not less than one year;\n<\/p>\n
3)  Provided further that this sub-regulation shall
\nnot apply to an employee who seeks retirement
\nfrom service for being absorbed permanently in
\nan autonomous body or a public sector
\nundertaking or company or institution or body,
\nwhether incorporated or not to which he is on
\ndeputation at the time of seeking voluntary
\nretirement;\n<\/p>\n
Provided that this sub-regulation shall not apply
\nto an employee who is deemed to have retired in
\naccordance with clause (1) of regulation 2.\n<\/p>\n
4)   An employee, who has elected to retire under
\nthis regulation and has given necessary notice to
\nthat effect to the appointing authority, shall be
\nprecluded from withdrawing his notice except
\nwith the specific approval of such authority;”\n<\/p>\n
It is not in dispute that on or about 23.12.2000 a proviso to Regulation 28
\nwas sought to be introduced, which is as follows :-\n<\/p>\n
“Provided that, pension shall also be granted
\nto an employee who opts to retire before attaining
\nthe age of superannuation, but after having served
\nfor a minimum period of 15 years in terms of any
\nscheme that may be framed for the purpose by the
\nBank’s Board with the concurrence of the
\nGovernment”.\n<\/p>\n
The said amendment, however, has been carried into effect recently in 2002.
\n.\n<\/p>\n
The relevant portion of the SBI Voluntary Retirement Scheme is as follows :\n<\/p>\n
\t“SBI VOLUNTARY RETIREMENT SCHEME (SBIVRS)\n<\/p>\n
\t1.\txxx\n<\/p>\n
2. Objectives :\n<\/p>\n
I.\tTo have a balanced age profile providing for mobility,
\ntraining, development of skills and succession plans
\nfor higher-level positions.\n<\/p>\n
II.\tTo provide an exit for employees who have an honest
\nfeeling that they should now retire and take rest or that
\nthere are better opportunities elsewhere.\n<\/p>\n
III.\tTo have over all reduction in the existing strength of
\nthe employees and to increase productivity and
\nprofitability.\n<\/p>\n
3.\tEligibility :\n<\/p>\n
The scheme will be open to all permanent employees of the
\nBank, except those specifically mentioned as ‘ineligible’, who
\nhave put in 15 years of service or have completed 40 years of
\nage as on 31st December, 2000.\n<\/p>\n
Age will be reckoned on the basis of the date of birth as
\nentered in service record.\n<\/p>\n
Ineligible :\n<\/p>\n
\tThe following categories of employees are ineligible under the
\nscheme;\n<\/p>\n
i.\tStaff members who have executed bonds and have not
\ncompleted it; staff members serving abroad under the special
\narrangements\/bonds.  The Board of Directors may, however,
\nwaive this, subject to fulfillment of the bond\/other
\nrequirements.\n<\/p>\n
ii.\tEmployees against whom Disciplinary Proceedings are
\ncontemplated\/pending or who are under suspension.  This will
\nalso include employees against whom action has been initiated
\nby Government Agencies\/other law enforcing agencies.
\niii.\tEmployees appointed on contract basis.\n<\/p>\n
iv.\tWatch and ward staff.\n<\/p>\n
v.\tSpecialist Officers.\n<\/p>\n
vi.\tHighly skilled and qualified staff.\n<\/p>\n
4.\txxx\n<\/p>\n
5.\tAmount of Ex-gratia :\n<\/p>\n
The staff members whose request for retirement under
\nSBIVRS has been accepted by Competent Authority will be
\npaid an amount of ex-gratia of 60 days’ salary (pay plus
\nstagnation increments plus special pay plus dearness
\nallowance for each completed year of service (for this purpose
\nfraction of service  of six  months and above will be taken as
\none year and accordingly service of less than six months will
\nnot be counted) or salary for the number of months service is
\nleft, whichever is less.  Fraction of a month, if any, will be
\nignored.\n<\/p>\n
6.\tOther benefits :\n<\/p>\n
a)\tGratuity as payable under the extent instructions on the
\nrelevant date.\n<\/p>\n
b)\t Provident Fund contribution as per State Bank of India
\nEmployees’ Provident Fund Rules as on relevant date.
\nPension in terms of State Bank of India Employees’
\nPension Fund Rules on the relevant date (including
\ncommuted value of pension).\n<\/p>\n
c)\tEncashment of balance of Privilege Leave, as
\napplicable, on the relevant date.\n<\/p>\n
d)\tRespective facilities extended to officers\/others such as
\nretention of accommodation, telephone, car,
\ncontinuation of housing loan etc. will be extended to
\nofficers\/others retiring under SBIVRS as per present
\ndispensation, at the discretion of  Competent Authority.
\nHowever, in such cases of retention of physical
\nfacilities, 50% of the amount of ex-gratia payable will
\nbe released only after the employee surrenders the
\nfacility.  No interest, however, will be paid for the
\namount so withheld.  All other outstanding
\nloans\/advances will have to be repaid before date of
\nretirement under SBI VRS, failing which the amount of
\nex-gratia and other terminal benefits payable to the
\nemployee will be appropriated towards the outstanding
\nloans\/advances and the balance amount only will be
\npayable to the employee.\n<\/p>\n
7.\tOther features :\n<\/p>\n
The Bank intends to control the outflow according to its
\nrequirements.  Towards this end, the Bank retains the
\ndiscretion to limit the number of employees allowed to retire
\nin each category of staff viz. officer\/clerical –
\ncash\/subordinate, to be covered under SBIVRS.  As such the
\nBank will have the sole discretion as to the acceptance or the
\nrejection of the request for retirement under SBIVRS
\ndepending upon the requirements of the Bank.  For the
\npurpose of exercising discretion in this regard, category wise
\nlists of eligible applicants would be prepared in descending
\norder of their age and applications of employees coming in
\nhigher age groups above cut-off age would be accepted, the
\ncut-off age in each category will of course depend upon the
\nacceptable number of employees who can be permitted to
\nretire.\n<\/p>\n
No voluntary retirement shall be deemed to have come into
\neffect unless the decision of the Competent Authority has
\nbeen communicated in writing.\n<\/p>\n
General conditions :\n<\/p>\n
i.\tStaff members desirous of availing benefits under the scheme
\nwill have to submit a written application to the Competent
\nAuthority, through proper channel, in the specified  format,
\nwithin the period for which the Scheme is kept open.
\nii.\tA staff member retired under the scheme will not be eligible
\nfor re-employment in the Bank or its subsidiaries\/Associates
\njoint ventures (including offices outside India).
\niii.\tThe employees seeking retirement under SBIVRS will not be
\nentitled to dispute the payments received under the scheme on
\nany ground whatsoever.\tThe retiring staff member and\/or
\ntheir nominees or legal heirs shall have no right\/claim
\ndemands against the Bank on any matter relating to the
\nscheme.\n<\/p>\n
iv.\tAs SBIVRS is voluntary, it shall not be negotiable and shall
\nnot be deemed or construed as a subject matter of right or
\ncontract of service.  It will not be a subject matter of any
\nindustrial disputes under the provisions of the Industrial
\nDisputes Act<\/a>, 1947 and shall not be cited as precedent,
\ncustom, convention, usage or practice any time in future.
\nv.\tAs SBIVRS is voluntary in nature, the employee seeking
\nretirement under the SBIVRS will not be eligible for any
\nretrenchment compensation payable under the provisions of
\nthe Industrial Disputes Act<\/a>.\n<\/p>\n
vi.\tSBIVRS is independent of and without prejudice to the rights
\nof the Bank to dispense with the services of an employee
\neither under the contract of employment, service rules, awards
\nor under the applicable Standing Orders\/Law\/Rules\/terms and
\nconditions of service as may be applicable to the employee
\nconcerned.\n<\/p>\n
vii.\tThe SBIVRS shall not be construed as a revision of any of the
\nprevious retirement schemes of the Bank and as such no claim
\nfrom the employee who has retired\/will be retiring under the
\nexisting schemes shall be entertained.\n<\/p>\n
viii.\tIn case of disputes as to the interpretation of any of the terms
\nand conditions of the scheme, the decision of the Bank shall
\nbe final and binding on all the parties concerned.
\nix.\tBank reserves the right to modify, amend or cancel any or all
\nof the aforesaid clauses and to give effect thereto from any
\ndates it may deem fit.\n<\/p>\n
Pursuant to in furtherance of the powers conferred under Section 50(3)<\/a>, the
\nReserve Bank of India with the previous sanction of the Central Government made
\nthe State Bank of India General Regulations, 1955.  It is also not in dispute that in
\nexercise of the power conferred under Section 43(1)<\/a> of the State Bank of India Act,
\n1955 the Central Board of the State Bank of India made the State Bank of India
\nOfficers Service Rules determining the terms and conditions of the appointment and
\nservices of officers in the Bank.\n<\/p>\n
Following  legal issues arise for determination in these appeals :\n<\/p>\n
A.\tWhether an application by an employee to secure voluntary
\nretirement under the Voluntary Retirement Scheme (VRS) can
\nbe withdrawn by such an employee before the same is
\naccepted by the Competent Authority though the scheme
\ncontained an express stipulation that an application made
\nthereunder is irrevocable and the employee will have no right
\nto withdraw the application once submitted?\n<\/p>\n
B.\tWhether upon making an application under VRS the employer
\nbank secures the authority to unilaterally determine one way
\nor the other the jural relationship of master and servant
\nbetween the parties?\n<\/p>\n
The moot question which is required to be posed and answered is whether the
\nvoluntary retirement scheme is an offer\/proposal or merely an invitation to offer.
\nThe question is whether the banks intended to make an offer or merely issued an
\ninvitation to treat is essentially a question of fact.\n<\/p>\n
 As  would appear from the discussions made hereinafter there appears to be
\nsome difference in the schemes floated by the State Bank of India and the
\nnationalized banks.\n<\/p>\n
We may consider the cases of nationalized bank first.  The circular dated
\n20.8.2000 and the scheme framed by the banks are required to be read together for
\nthe purpose of ascertaining the true intendment thereof.  The scheme essentially was
\nfloated as has been mentioned herein before with a purpose of downsizing the
\nemployees.  Such a scheme although may incidentally be beneficial also to the
\nemployees but was primarily beneficial\tto the banks.  The ultimate aim and object of
\nfloating such a scheme as has been stated in the circular letter issued by the Ministry
\nof Finance was for the purpose of  effective functioning of the banks so as to enable
\nthem to compete with the private banks.\n<\/p>\n
The employees of the nationalized bank may not enjoy a ‘status’ as is the
\ncase of government employees or the statutory authorities whose terms and
\nconditions of service are governed by the constitutional provisions and\/or the statutes
\nand the statutory rules; but there is no gainsaying that the employees of the
\nNationalized banks enjoy security of their employment.\tSo far as the employees of
\nthe State Bank of India are concerned their terms and conditions of service, as
\nnoticed hereinbefore, are governed by statutory rules.\tHowever, so far as the
\nemployees of the nationalized banks are concerned except for the matter of grant of
\npension which is covered by the regulations framed in terms of Section 19<\/a> of the
\n1970 Act, other terms and conditions of their service are not statutory in nature.  But
\nthe State Bank of India as also the nationalized banks are ‘States’ within the meaning
\nof Article 12<\/a> of the Constitution of India.  The services of the workman are also
\ngoverned by several standing orders and bipartite settlements which have the force of
\nlaw.  The banks, therefore, cannot take recourse to ‘hire & fire’ for the purpose of
\nterminating the services of the employees.  The banks are required to act fairly and
\nstrictly in terms of the norms laid down therefor.  Their actions in this behalf must
\nsatisfy the test of Articles 14 and 21 of the Constitution of India. Having regard to
\nthe intendment of the scheme each and every employee would not be entitled to the
\nbenefit of the said scheme.  Those who are facing disciplinary proceedings or
\nworking in a particular class of employment are not eligible therefor.\n<\/p>\n
  An offer indisputably can be made to a group of persons collectively which
\nis capable of being accepted individually but the question which has to be posed and
\nanswered is as to whether having regard to the service jurisprudence; the principles
\nof Indian Contract Act<\/a> would be applicable in the instant case.\t It is the specific case
\nof the ‘Banks’ that the schemes had been floated by way of contract.  It does not
\nhave any statutory flavour.  Reference to the pension scheme framed under the
\nregulations was made for computation of the pension.\n<\/p>\n
It is difficult to accept the contention raised in the Bar that a contract of
\nemployment would not be governed by the Indian Contract Act<\/a>.  A contract of
\nemployment is also a subject matter of contract.  Unless governed by a statute or
\nstatutory rules the provisions of the Indian Contract Act<\/a> would be only applicable at
\nthe formulation of the contract as also the determination thereof.  Subject to certain
\njust exceptions even specific performance of contract by way of a direction for
\nreinstatement of a dismissed employee is also permissible in law.\n<\/p>\n
 It is in the aforementioned backdrop, the questions are required to be
\nanswered.  It is now well-known that the use of the term ‘offer’ or ‘proposal’ is not
\ndecisive.  It, as noticed, would depend upon the fact involved in the matter.\n<\/p>\n
In Anson’s Law of Contract, 26th Edn. at p.25 it is stated:\n<\/p>\n
“Offers and Invitations to Treat:\tIt is sometimes
\ndifficult to distinguish statements of intention which
\ncannot, and are not intended to result in any binding
\nobligation from offers which admit of acceptance, and
\nso become binding promises.  A person advertises
\ngoods for sale in a newspaper, or announces that he
\nwill sell them by tender or by auction; a shopkeeper
\ndisplays goods in a shop window at a certain p rice; or
\na bus company advertises that it will carry passengers
\nfrom A to Z and will reach Z and other intermediate
\nstops at certain times.\t In such cases it may be asked
\nwhether the statement made is an offer capable of
\nacceptance or merely an invitation to make offers, and
\ndo business.  An invitation of this nature, if it is not
\nintended to be binding, is known as an ‘invitation to
\ntreat.”\n<\/p>\n
Chitty on Contract states the law thus:\n<\/p>\n
“Tenders A statement that goods are to be sold by
\ntender is not normally an offer to sell to the person
\nmaking the highest tender; it merely indicates a
\nreadiness to receive offers.  Similarly, an invitation for
\ntenders for the supply of goods or for the execution of
\nworks is, generally, not an offer, even though the
\npreparation of the tender may involve very
\nconsiderable expense.  The offer comes from the
\nperson who submits the tender and there is no contract
\nuntil the person asking for the tenders accepts one of
\nthem.  These rules, may, however, be excluded by
\nevidence of contrary intention: e.g. where the person
\nwho invites the tenders states in the invitation that he
\nbinds himself to accept the highest offer to buy (or as
\nthe case may be, the lowest offer to sell or to provide
\nthe specified services).  In such cases, the invitation
\nfor tenders may be regarded either as itself an offer or
\nas an invitation to submit offers coupled with an
\nundertaking to accept the highest (or, as the case may
\nbe, the lowest) offer; and the contract is concluded as
\nsoon as the highest offer to buy (or lowest offer to sell,
\netc.) is communicated.”\n<\/p>\n
In Treitel’s ‘The Law of Contract, it has been stated thus:\n<\/p>\n
“When parties negotiate with a view to making a
\ncontract, many preliminary communications may pass
\nbetween them before a definite offer is made.  One
\nparty may simply respond to a request for information
\n(e.g. by stating the price at which he might be
\nprepared to sell a house), or he may invite the other to
\nmake an offer; he is then said to make an “invitation to
\ntreat”.\t The question whether a statement is an offer or
\nan invitation to treat depends primarily on the
\nintention with which it was made.”\n<\/p>\n
It has also been stated in the said book:\n<\/p>\n
“The question whether a statement is an offer or an
\ninvitation to treat depends primarily on the intention
\nwith which it was made.\t A statement is only an offer
\nif the person making it intends to be bound as soon as
\nthe person reasonably believes that it was made with
\nthis intention.\t It follows that a statement is not an
\noffer, if it expressly provides that the person making it
\nis not to be bound merely by the other party’s
\nnotification of assent, but only when he himself has
\nsigned the document in which the statement is
\ncontained.”\n<\/p>\n
The law relating to ‘offer’ and ‘acceptance’ is not simple.\n<\/p>\n
  In Hamilton, Rau and Winthraub on Contracts, the learned authors referred
\nto a decision of Habaska Seed Co. Vs. Harsh 98 Nob 89, 152 NW 310 wherein the
\npurported offer “I want $ 2.25 cent per cent for this seed fobcowell,” was held not be
\nan offer on the ground that the defendant did not say “I offer to sell you.\n<\/p>\n
At page 346 of the said treatise, it is stated:\n<\/p>\n
“The rules of offer and acceptance are usually
\nfavourites of law students; they are easily stated and
\ntend to be rather mechnical in their operation.\t They
\nalso involve situations that are relatively easy to grasp
\nand in which various policy consideration are close to
\nthe surface.  However, one should not assume that one
\nhas mastered the law of contracts simply because one
\nis conversant with rules of offer and acceptance.  In
\ndeed the writings of modern contracts scholars tend to
\ndeprecate the importance of the rules of offer and
\nacceptance.  See Geneally G Gilmore, the Death of
\nContract (1974): L. Freidman, Contract Law in
\nAmerica (1965)”.\n<\/p>\n
In Halsbury’s Laws of England, 4th Edition, Volume-9, meaning of  ‘offer’
\nhas been stated in paragraph 227 at page 98 in the following terms:\n<\/p>\n
“227; Meaning of offer.\t An offer is an expression by
\none person or group of persons or by agents on his
\nbehalf, made to another, of his willingness to be bound
\nto a contract with that other on terms either certain or
\ncapable of being rendered contain.\n<\/p>\n
An offer may be made to an individual or to a group of
\npersons or to the world at large.  It may be made
\nexpressly by words, or it may be implied from the
\nproduct of the offerer.”\n<\/p>\n
\tThe request of employees seeking voluntary retirement was not to take effect
\nuntil and unless it was accepted in writing by the competent authority.\t The
\nCompetent Authority had the absolute discretion whether to accept or reject the
\nrequest of the employee seeking voluntary retirement under the scheme.\t A
\nprocedure has been laid down for considering the provisions of the said\t scheme to
\nthe effect that an employee who intends to seek voluntary retirement would submit
\nduly completed application in duplicate in the prescribed form marked “offer to seek
\nvoluntary retirement” and the application so received would be considered by the
\ncompetent authority on first come first serve basis.   The procedure laid down
\ntherefor suggests that the applications of the employee would be an offer which
\ncould be considered by the bank in terms of the procedure laid down therefor.\tThere
\nis no assurance that such an application would be accepted without any
\nconsideration.\n<\/p>\n
\tAcceptance or otherwise of the request of an employee seeking voluntary
\nretirement is required to be communicated to him in writing.  This clause is crucial in
\nview of the fact that therein the acceptance or rejection of such request has been
\nprovided.  The decision of the authority rejecting the request is appealable to the
\nAppellate authority.  The application made by an employee as an offer as well as the
\ndecision of the bank thereupon would be communicated to the respective General
\nManagers.  The decisions making process shall take place at various levels of the
\nbanks.\n<\/p>\n
\tThe following, therefore, can be deduced:\n<\/p>\n
(i)\tThe banks treated the application from the employees as an offer which
\ncould be accepted or rejected.\n<\/p>\n
(ii)\tAcceptance of such an offer is required to be communicated in writing.\n<\/p>\n
(iii)\tThe decision making process involved application of mind on the part of
\nseveral authorities.\n<\/p>\n
(iv)\t  Decision making process was to be formed at various levels.\n<\/p>\n
(v)\t The process of acceptance of an offer made by an employee was in the
\ndiscretion of competent authority.\n<\/p>\n
(vi)\t The request of voluntary retirement would not take effect in praesenti but
\nin future.\n<\/p>\n
(vii)\tThe Bank reserved its right to alter\/rescind the conditions of the
\nscheme.\n<\/p>\n
 From what has been noticed herein before, it is apparent that the Nationalized
\nbanks in terms of the scheme had secured for themselves an unfettered and unguided
\nright to deal with the jural relationship between themselves and their employees.\n<\/p>\n
It is not a case where on mere making of option on the part of the employee
\nthe offer is to be accepted or even there will be reasonable certainty that some norms
\nshould be maintained.  There is no consideration for the contractual bar clause.  The
\nsubmission of the learned counsel appearing on behalf of the banks that the proposal
\nto the effect that the option made by an employee would be considered, is a
\nconsideration cannot be accepted.\n<\/p>\n
Once it is held that the provisions of the Indian Contract Act<\/a>, 1872 would be
\napplicable, the scheme admittedly being contractual in nature, the provisions of the
\nAct shall apply.  The Scheme having regard to its provisions as noticed hereinbefore
\nwould merely constitute invitation to treat and not an offer.\n<\/p>\n
\tA proposal is made when one person signifies to another his willingness to do
\nor abstain from doing anything with a view to obtaining the assent of the other to
\nsuch act or abstinence (See Section 2(a)<\/a>).  Herein the banks by reason of the scheme
\nor otherwise have not expressed their willingness to do or abstain from doing
\nanything with a view to obtaining assent of the employees to such act.\tIt will bear
\nrepetition to state that not only the power of the bank to accept or reject such
\napplication is absolutely discretionary, it, as noticed herein before, could also amend
\nor rescind the scheme.\tThe Scheme, therefore, cannot be said to be an offer which,
\non the acceptance by the employee, would fructify in a concluded contract.\n<\/p>\n
\tThe proposal of the employee when accepted by the Bank would
\nconstitute a promise within the meaning of Section 2(b)<\/a> of the Act.  Only then the
\npromise becomes an enforceable contract.  In the instant case the banks when
\nfloating the scheme did not signify that on the employees assenting thereto a
\nconcluded contract would come into being in terms whereof they would be
\npermitted to retire voluntarily and get the benefits thereunder.\n<\/p>\n
\tFurthermore, in terms of the said scheme no consideration passed so as to
\nconstitute an agreement.  Once it is found that by giving their option under the
\nscheme, the employees did not derive an enforceable right, the same in absence of
\nany consideration would be void in terms of Section 2(g)<\/a> of the Contract Act as
\nopposed to Section 2(h)<\/a> thereof.\n<\/p>\n
\tFurthermore, even by opting for the scheme as floated by the banks, no
\nconsideration is passed far less amounting to reciprocal promise.\n<\/p>\n
\tOnce it is found, as would appear from the position rendered by this court
\nthat the employees do not have an enforceable right upon making an option the same
\nwould be void in terms of Section 2(g)<\/a> of the Contract Act as opposed to Section
\n2(h)<\/a> thereof.\n<\/p>\n
 The distinction between an offer and invitation to treat has been dealt with
\nsome clarity in Gibson v. Manchester City Council reported in 1979 All.E.R. 972.\n<\/p>\n
  In that case the council adopted a policy of selling council’s house to Mr.
\nGibson.\t The council wrote a letter to Mr. Gibson that “it may be prepared to sell the
\nhouse to you at the purchase price of  Pounds 2,725 less 20% = Pounds 2180 (free
\nhold)”.\t He was invited to make a formal application which he did.  Before the
\ndocuments could be executed the control of the council changed hands as a result
\nwhereof policy of selling the council house was reversed.\n<\/p>\n
  When it was claimed by Mr. Gibson that the transaction amounted to a
\nbinding contract, the House of Lords negativing the same held that the letter in
\nquestion was an invitation to treat and Mr. Gibson’s application was an offer and not
\nan acceptance.\n<\/p>\n
\tIn the instant case, there was even no reasonable certainty that the scheme
\nwould be acted upon.  Furthermore terms and conditions thereof could be amended
\nand even the scheme itself could be rescinded.\n<\/p>\n
\tWe, therefore, have no hesitation in coming to the conclusion that the
\nvoluntary scheme was not a proposal or an offer but merely an invitation to treat and
\nthe applications filed by the employees constituted ‘offer’.\n<\/p>\n
\tOnce the application filed by the employees is held to be an ‘offer’; Section
\n5<\/a>, in absence of any other independent binding contract or statute or statutory rules to
\nthe contrary would come into play.\n<\/p>\n
\tIn Cheshire, Fifoot & Furmston’s Law of Contract (14th edition) at Page 62
\nthe law is stated as under:-\n<\/p>\n
“It has been established ever since the case of Payne v
\nCave in 1789 that recovation is possible and effective
\nat any time before acceptance: up to this moment ex
\nhypothesi no legal obligation exists.  Nor, as the law
\nstands, is it relevant that the offeror has declared
\nhimself ready to keep the offer open for a given period.
\nSuch an intimation is but part and parcel of the original
\noffer, which must stand or fall as a whole.  The offeror
\nmay, of course, bind himself, by a separate and
\nspecific contract, to keep the offer opn; but the offeree,
\nif such is his allegation, must provide all the elements
\nof a valid contract, including assent and consideration.
\nIn Routledge v Grant the defendant offered on 18
\nMarch to buy the plaintiff’s house for a certain sum, ‘a
\ndefinite answer to be given within six weeks from the
\ndate’.\tBest CJ held that the defendant could withdraw
\nat any moment before acceptance, even though the
\ntime limit had not expired.  The plaintiff could only
\nhave held the defendant to his offer throughout the
\nperiod, if he had bought the option by a separate and
\nbinding contract.”\n<\/p>\n
\tThis principle, as noticed herein before, has been accepted in a large number
\nof decisions relied upon by Mr. Nageshwar Rao and Mr. Dwivedi (supra).\tWe may,
\nhowever, only refer to Devi Krishan Goyal (supra).\n<\/p>\n
The relevant rule, interpretation whereof fell for consideration of this Court
\ntherein is as under:\n<\/p>\n
“These rules shall be applicable to the Teachers of
\nthose State Government Aided Higher Secondary
\nSchools which are working under any local body or
\nany nonadministrative management, within the ambit
\nof Salary Disbursement Act, 1971 on 30th June, 1978
\nor thereafter and who will give their option in favour
\nof retirement at the age of 58 years, within six months
\nof the Publication of these Rules.  An option, once
\nused will be deemed to be final.  The date of retirement
\nshall be the end of session”.\n<\/p>\n
Interpreting the said rule this court held:\n<\/p>\n
“we are of the view that the High Court should not have
\nrejected the writ application.\tIt has not been disputed
\nanywhere that option stood withdrawn before it was
\naccepted.  The provision in the rule “an option once used
\nwill be deemed to be final” would not mean that when an
\noffer made it is not open to be withdrawn before it is
\naccepted.  The respondent No.1 obviously acted under the
\nwrong notion and the High Court did not appreciate this
\naspect.\t We would accordingly hold that the appellant was
\nentitled to withdraw the option”.\n<\/p>\n
We may at once point out  that the stands of the learned counsel appearing on
\nbehalf of banks is inconsistent and self-contradictory.\t Whereas once it was argued
\nthat the offer was made by the bank by floating the scheme and once an application
\nis filed, the same would amount to acceptance of offer; on the same breath they took
\nrecourse to the ‘doctrine of option’ which is applicable only at the instance of the
\nofferor, who in this case would be the employees.\n<\/p>\n
\tThe submission in our considered opinion proceed on a total misconception.
\nBy  reason of making  such option or firm offer the offeror must get some benefit or
\nthe offeree must incur some detriment.\n<\/p>\n
\tThe contracts in which the said principle can be applied would be a case
\nwhere there would usually be a money payment.\tIn the instant case apart from the
\nfact that no consideration is passed, the banks standing in the category of offeree
\neither expressly or impliedly had not promised to do or refrain from doing something
\nin exchange for the offeror’s promise not to revoke the offer.\tIn all fairness to Mr.
\nReddy, we may set out hereunder the authorities relied upon by him.\n<\/p>\n
In Anson’s Law of Contract (28th edition page 53), it is stated:\n<\/p>\n
“Firm Offers:\tIt will be noted that in Offord v. Davies,
\ndiscussed above, the mere fact that the defendants
\npromised to guarantee payment for 12 months did not
\npreclude that from revoking before that period had
\nelapsed.  It is a rule of English law that a promise to
\nkeep an offer open needs consideration to make it
\nbinding and would thus only become so if the offeror
\ngets some benefit, or the offeree incurs some
\ndetriment, in respect of the promise to keep the offer
\nopen.  The offeree in such a case is said to ‘purchase
\nan option’; that is, the offeror, in consideration usually
\nof a money payment, sometimes nominal, makes a
\nseparate contract not to revoke the offer during a stated
\nperiod.\t The position is similar where the offeree
\nexpressly or impliedly promises to do or refrain from
\ndoing something in exchange for the offeror’s promise
\nnot to revoke the offer.  For example, the offeree may
\npromise not to negotiate with anyone else for a fixed
\nperiod.\t Again, a building tendering for a construction
\ncontract may have invited quotations for a fixed period
\n(i.e. firm offers) from electricity or carpentry sub-
\ncontractors and expressly or impliedly promised to use
\nthe figures contained in those offers in its tender.  In
\nthese cases the offeror by its promise precludes itself
\nfrom exercising its right to revoke the offer; but where
\nit receives no consideration for keeping the offer open,
\nit says in effect, ‘You may accept within such and such
\na time, but this limitation is entirely for my benefit,
\nand I make no binding promise not to revoke my offer
\nin the meantime’.  The Law Revision Committee
\nrecommended that ‘an agreement to keep an offer open
\nfor a definite period of time or until the occurrence of
\nsome specified event shall not be unenforceable by
\nreason of the absence of consideration’.  Despite this
\ncriticism, subject to two exceptions, it seems to be
\ngood law”.\n<\/p>\n
In Chitty on  Contract, it is stated:\n<\/p>\n
“Firm offers. By a “firm” offer is meant one containing a
\npromise not to revoke it for a specified time.\tThe mere
\nfact that such a promise has been made does not prevent
\nthe offeror from revoking the offer within that period since
\nnormally the promise will be unsupported by
\nconsideration.\tMost obviously such consideration will be
\nprovided if the offeree pays (or promises to pay) a sum of
\nmoney for the promise and so buys an option.\n<\/p>\n
Consideration may also be provided by some other
\npromise; for example, in the case of an offer to sell a
\nhouse, the offeree may provide consideration for the
\nofferor’s promise not to revoke the offer for a specified
\ntime by promising not to dispose of those shares elsewhere
\nduring that time.  The performance of the offeree’s
\npromise to keep the offer open.\t In one case a vendor of
\nland entered into a so-called “lock-out” agreement by
\nwhich he promised a prospective purchaser not to consider
\nother offers if that purchaser would exchange contracts
\nwithin two weeks; and it was said that “the promise by the
\n[purchaser] to get on by limiting himself to just two
\nweeks” constituted consideration for the vendor’s promise
\nnot to consider other offers.  The case is not strictly one of
\na firm offer since the vendor’s promise would not in terms
\nhave prevented him from simply deciding not to sell at all;
\nbut the practical effect of a binding “lock-out” agreement
\nmay be to prevent the vendor from withdrawing his offer;
\nand the reasoning quoted above could apply to the case of
\na firm offer.  The reasoning gives rise to some difficulty in
\nthat it does not appear that the purchaser made any
\npromise to exchange contracts within two weeks.\t It seems
\nmore plausible to say that the vendor’s promise had
\nbecome binding as a unilateral contract under which the
\npurchaser had provided consideration by actually making
\nefforts to meet the deadline, even though he had not
\npromised to do so.  Similar reasoning can apply if a seller
\nof land promises to keep an offer open for a month, asking
\nthe buyer during that period to make efforts to raise the
\nnecessary money.  If the buyer makes such efforts
\n(without promising to do so), it is arguable that he has by
\npart performance accepted the seller’s offer of a unilateral
\ncontract to keep the principal offer open.  Similarly, it is
\npossible for a person, to whom a promise not to revoke an
\noffer for the sale of a house has been made, to provide
\nconsideration for that promise by incurring the expense of
\na survey.  On the other hand, the equitable principle
\napplied in Hughes v. Metropolitan Ry. and in the High
\nTrees case will not avail the offeree since it only operates
\ndefensively and does not create new causes of action
\nwhere none existed before.  Nor does it seem probably that
\nthe offeree will be able to claim damages in tort under the
\nprinciples laid down in Hedley Byne & Co. Ltd v. Heller
\n& Partners Ltd<\/a>.\n<\/p>\n
\tIn Halsbury’s Laws of England (4th Ed.), Para 235 at Page 160, the law is
\nstated as under:\n<\/p>\n
“235. Options.\tA contract of option is one whereby
\nthe grantor of the option offers to enter into what may be
\ncalled a “major” contract with a second person and makes
\na separate contract to keep his offer open.  Usually, but not
\nnecessarily, the person to whom the grantor of the option
\nbinds himself to keep the offer open is that second person,
\nwho may be conveniently referred to as the “option-
\nholder”.  The contract of option may make it possible for
\nthe rights of the option-holder to be assigned.\n<\/p>\n
The contract of option may be unilateral or bilateral.\tIt
\nmay exist either as a separate option contract, or as part of
\na larger contract such as one of the following: a lease with
\nan option in the lessee to renew the lease or but the
\nreversion; a hire purchase agreement; a sale with an option
\nof repurchase granted to either the seller or the buyer; a
\nsale with an option for the buyer to make further purchases
\non similar terms; a service or agency agreement with an
\noption in either party to renew.  Certain contracts of option
\nhave been made void or illegal by statute.\n<\/p>\n
With regard to the envisaged major contract, the effect of
\nthe contract of option is to create an irrevocable offer and
\na power of acceptance.\tThe offer is irrevocable in the
\nsense that it is a breach of the contract of option to revoke
\nit, and its effect is to create a power of acceptance in the
\noption-holder good against the grantor of the option and
\nsometimes also against third parties.  Thus the grantor of
\nthe option is under a conditional duty, and the option-
\nholder has a conditional right of performance of the option
\noffer, that condition being the exercise of the power of
\nacceptance by the option-holder; as the envisaged major
\ncontract may be bilateral or unilateral, that condition may
\nbe an acceptance or other act by the option-holder.
\nFurthermore, the exercise of the option may itself be
\nsubject to certain conditions precedent, such as a time
\nlimit, or the occurrence of a certain event, or the duration
\nof a major contract of which it forms a part, or the mode in
\nwhich it may be exercised.”\n<\/p>\n
\tIn Chitty on Contract (28th edition para 3-161) it is stated that the position
\nbeing uncertain as the rule can still cause hardship; a legislation limiting the right to
\nwithdraw firm offers is desirable.\n<\/p>\n
In Anson’s Law of Contracts it is stated at page 51:\n<\/p>\n
“(a) Revocation of the Offer:\tThe law relating to the
\nrevocation of an offer may be summed up in two rules;
\n(1) an offer may be revoked at any time before
\nacceptance, and (2) an offer is made irrevocable by
\nacceptance.\n<\/p>\n
(i)\tRevocable before acceptance:\tThe first of these
\nrules may be illustrated by the case of Offord v.
\nDavies:\n<\/p>\n
D made a written offer to O that, if he would discount
\nbills for another firm, they (D) would guarantee the
\npayment of such bills to the extent of Pound 600
\nduring a period of twelve calendar months.  Some bills
\nwere discounted by O, and duly paid, but before the
\ntwelve months had expired D, the guarantors, revoked
\ntheir offer and notified O that they would guarantee no
\nmore bills.  O continued to discount bills, some of
\nwhich were not paid, and then sued D on the
\nguarantee.\n<\/p>\n
It was held that the revocation was a good defence to
\nthe action.  The alleged guarantee was an offer, for a
\nperiod of 12 months, of promises for acts, of
\nguarantees for discounts.  Each discount turned the
\noffer into a promise, pro tanto, but the entire offer
\ncould at any time be revoked except as regards
\ndiscounts made before notice of revocation.”\n<\/p>\n
The learned author, as noticed from the passage quoted herein before, clearly
\nstated that an offer may be revoked even before it is accepted.\n<\/p>\n
\tFurthermore, a large number of employees have withdrawn their offer only
\nwhen a proviso is sought to be added to Regulation 28 aforementioned.  In terms of
\nthe Scheme the employees, who expected to get benefits of clause 4 of Regulation 29
\nwould be deprived therefrom.  It is not in this dispute that the qualifying period for
\npension qualifying for receiving pension was 20 years.\tOnly upon completion of 20
\nyears, in terms of the statutory regulation contained in Regulation 29, an employee
\ncould opt for voluntary retirement and in terms thereof, he would be entitled to the
\nbenefits specified therein.  The said regulations had specifically been mentioned for
\nthe purpose of computation which would include invocation of Sub-regulation 4 of
\nRegulation 29 providing for relaxation of 5 years towards the qualifying period.  The
\nemployees must have proceeded on the basis that despite the fact that they have
\nmerely rendered 15 years of service which was not a qualifying service under the
\nregulations, they would be entitled to the pensionary benefits in terms of the scheme.
\nBy introducing the proviso to Regulation 28 pension was sought to be made pro rata
\nin place of full pension.\n<\/p>\n
The basic concept of the scheme, therefore, underwent a change which also
\ngoes to show that the banks had sought to invoke its power of amending the scheme.
\nOnce the scheme is amended and\/or an apprehension is created in the mind of the
\nemployees that they would not even receive the entire benefits as envisaged under
\nthe scheme, they were entitled to revoke their offers.\tTheir action in our considered
\nopinion is reasonable.\tIt may be that some of the employees only opted for the
\nprovident fund benefit which did not undergo any amendment but the same would
\nnot change the attitude on the part of the banks.\n<\/p>\n
\tWe, therefore, do not find any error in the judgment of the High Court on this
\nscore.\n<\/p>\n
However, the case of the State Bank of India stand slightly on a different
\nfooting.  Firstly, the State Bank of India had not amended the scheme.\tIt, as noticed
\nhere before, even permitted withdrawal of the applications after 15th February.\t The
\nscheme floated by the State Bank of India contained a clause (clause 7) laying down
\nthe mode and manner in which the application for voluntary retirement shall be
\nconsidered.  The relevant clause as referred to herein before creates an enforceable
\nright.\tIn the event the State Bank failed to adhere to its preferred policy, the same
\ncould have been specifically enforced by a court of law.  The same would, therefore,
\namount to some consideration.\n<\/p>\n
Furthermore in the case of State Bank of India, the Punjab and Haryana High
\nCourt failed to take into consideration the provisions of the State Bank of India Act<\/a>,
\n1955  It further failed to take into consideration that the matter relating to grant of
\npension was not covered by any statutory regulation.\n<\/p>\n
We are, however, not prepared to accept the submission of Mr. Salve to the
\neffect that by reason of the said scheme, merely the tenure of service has been
\ncurtailed to some extent which is permissible in law.\n<\/p>\n
Mr. Harish Salve in support of its contention has relied upon para 37-115
\nfrom Chitty on Contracts.\n<\/p>\n
The said paragraph itself shows that for bringing into a change in the tenure
\nof contract, the existing contract of service must be substituted or amended by
\nanother contract.  The later contract also must be an enforceable contract.  Once it is
\nheld the later contract is not a contract within the meaning of the provisions of the
\nIndian Contract Act<\/a>, the question of invoking this aforementioned principle would
\nnot arise.\n<\/p>\n
We may at this juncture notice the decisions of this court covering the
\nsubject.\n<\/p>\n
In Gopal Chandra Misra’s case (supra) this court was considering a question
\nwhere a Judge of a High Court in terms of Article 217<\/a> of the Constitution of India
\nwithdraw the resignation submitted by him.  Resignation by a constitutional
\nauthority is a unilateral act.\tIn the case of resignation by a constitutional authority, it
\nis governed by the constitutional provisions as resignation of a constitutional
\nauthority does not require an express acceptance.  The same being unilateral in
\ncharacter, it was observed:\n<\/p>\n
“The substantive body of this letter (which has been
\nextracted in full in a foregoing part of this judgment) is
\ncomprised of three sentences only.  In the first
\nsentence, it is stated : “I beg to resign my office as
\nJudge, High Court of Judicature at Allahabad”.\tHad
\nthis sentence stood alone, or been the only content to
\nhis letter, it would operate as a complete resignation in
\npraesenti, involving immediate relinquishment of the
\noffice and termination of his tenure as Judge.\tBut this
\nis not so.  The first sentence is immediately followed
\nby two more, which read : “I will be on leave till July
\n31, 1977.  My resignation shall be effective on August
\n1, 1977″.  The first sentence cannot be divorced from
\nthe context of the other two sentences and construed in
\nisolation.  It has to be read along with the succeeding
\ntwo which qualify it.  Construed as a whole according
\nto its tenor, the letter dated May 7, 1977, is merely an
\nintimation or notice of the writer’s intention to resign
\nhis office as Judge, on a future date, viz., August 1,
\n1977”.\n<\/p>\n
\tIn that case, thus, a resignation which was not in praesenti has been held to be
\ncapable of being withdrawn.  It did not constitute a juristic act.\n<\/p>\n
We may notice that in Jai Ram v. Union of India<\/a> (AIR 1954 SC 584) it was
\nheld:\n<\/p>\n
“It may be conceded that it is open to a servant, who
\nhas expressed a desire to retire from service and
\napplied to his superior officer, to give him the requisite
\npermission, to change his mind subsequently and ask
\nfor cancellation of the permission thus obtained; but,
\nhe can be allowed to do so as long as he continues in
\nservice and not after it has terminated.”\n<\/p>\n
Yet again in Raj Kumar v. Union of India<\/a> [(1968) 3 SCR 857] it was held:\n<\/p>\n
“When a public servant has invited by his letter of
\nresignation determination of his employment, his
\nservices normally stand terminated from the date on
\nwhich the letter of resignation is accepted by the
\nappropriate authority, and in the absence of any law or
\nrule governing the conditions of his service to the
\ncontrary, it will not be open to the public servant to
\nwithdraw his resignation after it is accepted by the
\nappropriate authority.\tTill the resignation is accepted
\nby the appropriate authority in consonance with the
\nrules governing the acceptance, the public servant
\nconcerned has locus poenitentiae but not thereafter”.\n<\/p>\n
\tIn Balram Gupta’s case this court was dealing with Central Civil Services
\n(Pension) Rules, 1972 which is a statutory rule.  Sub-rule (4) of Rule 48-A prevented
\nwithdrawal of resignation letter except with the approval of the authority.  The
\nvalidity of the said rule was not in question.\tIn that case the approval of the
\nauthority to withdraw was not given.  It was in the aforementioned situation
\nobserved:\n<\/p>\n
“That has been done.  The approval of the authority
\nwas, however, not given.  Therefore, the normal rule
\nwhich prevails in certain cases that a person can
\nwithdraw his resignation before it is effective would
\nnot apply in full force to a case of this nature because
\nhere the government servant cannot withdraw except
\nwith the approval of such authority”.\n<\/p>\n
\tHaving regard to the fact that the issue involved therein stood on a different
\nfooting, this Court made a mere observation to the following effect:\n<\/p>\n
“It may be a salutary requirement that a government
\nservant cannot withdraw a letter of resignation or of
\nvoluntary retirement at his sweet will and put the
\ngovernment into difficulties by writing letters of
\nresignation or retirement and withdrawing the same
\nimmediately without rhyme or reason.  Therefore, for
\nthe purpose of appeal we do not propose to consider
\nthe question whether sub-rule (4) of Rule 48-A of the
\nPension Rules is valid or not”.\n<\/p>\n
\tValidity of such a rule was, therefore, not in question.  As indicated
\nhereinbefore, the bar of withdrawing the resignation was contained in the statutory
\nrule and, thus Section 5<\/a> of the Indian Contract Act would not have been applicable in
\nthat case.  However, it is advantageous to notice the following observations made in
\nthe said decision:\n<\/p>\n
“We do not see how this could not be a good and valid
\nreason.\t It is true that he was resigning and in the
\nnotice for resignation he had not given any reason
\nexcept to state that he sought voluntary retirement.  We
\nsee nothing wrong in this.  In the modern age we
\nshould not put embargo upon people’s choice or
\nfreedom.  If, however, the administration had made
\narrangements acting on his resignation or letter of
\nretirement to make other employee available for his
\njob, that would be another matter but the appellant’s
\noffer to retire and withdrawal of the same happened in
\nsuch quick succession that it cannot be said that any
\nadministrative set up or arrangement was affected”.\n<\/p>\n
\tIt was further observed:\n<\/p>\n
“In the modern and uncertain age it is very difficult to
\narrange one’s future with any amount of certainty; a
\ncertain amount of flexibility is required, and if such
\nflexibility does not jeopardize government or
\nadministration, administration should be graceful
\nenough to respond and acknowledge the flexibility of
\nhuman mind and attitude and allow the appellant to
\nwithdraw his letter of retirement in the facts and
\ncircumstances of this case”.\n<\/p>\n
\tIn P.K. Mittal’s case (supra), a question arose as to whether in contravention
\nof Rule 20 of the Punjab National Bank (Officers) Service Rules, 1979, the bank can
\nreduce the notice period.  Ranganathan, J. speaking for the bench held that the same
\ncould not have been done and the concerned employee was entitled to withdraw his
\nresignation before it became effective.\n<\/p>\n
\tIn Power Finance Corporation Ltd. v. Pramod Kumar Bhatia<\/a> [(1997) 4 SCC
\n280] a scheme of voluntary retirement was floated and pursuant thereto the
\nRespondents therein had applied for voluntary retirement  but subsequently the
\nCorporation had withdrawn the scheme although the offer had been accepted.  Such
\nacceptance was to take effect from 31-12-1994.\tThis court held that the acceptance
\nof his offer to voluntarily retire being subject to adjustment of the amount payable to
\nhim, the same did not attain finality.\tIt was held:\n<\/p>\n
“It is now settled legal position that unless the
\nemployee is relieved of the duty, after acceptance of
\nthe offer of voluntary retirement or resignation, jural
\nrelationship of the employee and the employer does
\nnot come to an end.  Since the order accepting the
\nvoluntary retirement was a conditional one, the
\nconditions ought to have been complied with.  Before
\nthe conditions could be complied with, the appellant
\nwithdrew the scheme.  Consequently, the order
\naccepting voluntary retirement did not become
\neffective.  Thereby no vested right has been created in
\nfavour of the respondent.  The High Court, therefore,
\nwas not right in holding that the respondent has
\nacquired a vested right and, therefore, the appellant has
\nno right to withdraw the scheme subsequently”.\n<\/p>\n
\tThis decision is an authority for the proposition that even after acceptance of
\nthe offer made by the employee, the scheme can be withdrawn and, if it is so done,
\nthe employee does not acquire any vested right.\n<\/p>\n
In J.N. Srivastava’s case(supra), it was held  :\n<\/p>\n
“It is now well settled that even if the voluntary
\nretirement notice is moved by an employee and gets
\naccepted by the authority within the time fixed, before
\nthe date of retirement is reached, the employee has
\nlocus poenitentiae to withdraw the proposal for
\nvoluntary retirement.\n<\/p>\n
In Wg. Cdr T. Parthasarathy’s case the fact of the matter was as follows:\n<\/p>\n
\tThe Respondent submitted an application on 21-7-1985 praying for
\npremature retirement with effect from 31-8-1986.  He also furnished a certificate
\nstating that he was aware that any request made by him for cancellation of his
\napplication for premature retirement would not be accepted.  On 6-11-1985 he
\nmoved an amendment to earlier application stating that the actual date of his release
\ncould be decided taking into account the pensionary recommendations\/ requirements
\nof the Fourth Pay Commission’s Report which was expected to come in November,
\n1985.  He subsequently withdrew his offer on 19-2-1986.\n<\/p>\n
The Respondent received a letter dated 20th February, 1986 that he would
\nprematurely retire from service with effect from 31-8-1986.  On a Writ Petition
\nmoved by the Respondent before the Karnataka High Court, it was held that having
\nregard to the offer made on 19-2-1986, the subsequent action taken by the
\nDepartment on 20th February, 1986 had no effect.  In this Court an argument was
\nadvanced that having regard to the policy decision to which the Respondent was
\naware and having given a certificate at the time of submission of application for
\npremature retirement that he was aware of the fact that his request for withdrawal or
\ncancellation subsequently would not be accepted, the impugned judgment of the
\nHigh Court was erroneous but rejecting the same this court held :\n<\/p>\n
“We have carefully considered the submissions of the
\nlearned counsel appearing on either side.  The reliance
\nplaced for the appellants on the decision reported in
\nRaj Kumar Case is in appropriate to the facts of this
\ncase.  In that case this Court merely emphasized the
\nposition that when a public servant has invited by his
\nletter of resignation determination of his employment
\nhis service clearly stands terminated from the date on
\nwhich the letter of resignation is accepted by the
\nappropriate authority and in the absence of any law or
\nrule governing the condition of the service to the
\ncontrary, it will not be open to the public servant to
\nwithdraw his resignation after it is accepted by the
\nappropriate authority and that till the resignation is
\naccepted by the appropriate authority in consonance
\nwith the rules governing the acceptance, the public
\nservant concerned had locus poenitentiae but not
\nthereafter”.\n<\/p>\n
\tIn Shambhu Murari Sinha’s case it was held:\n<\/p>\n
“Coming to the case in hand the letter of acceptance
\nwas a conditional one inasmuch as, though option of
\nthe appellant for the voluntary retirement under the
\nScheme was accepted but it was stated that the “release
\nmemo along with detailed particulars would follow”.
\nBefore the appellant was actually released from the
\nservice, he withdrew his option for voluntary
\nretirement by sending two letters dated 7-8-1997 and
\n24-9-1997, but there was no response from the
\nrespondent.  By office memorandum dated 25-9-1997
\nthe appellant was released from the service and that too
\nfrom the next day.  It is not disputed that the appellant
\nwas paid his salaries etc. till his date of actual release
\ni.e. 26-9-1997, and, therefore, the jural relationship of
\nemployee and employer between the appellant and the
\nrespondents did not come to an end on the date of
\nacceptance of the voluntary retirement and the said
\nrelationship continued till 26-9-1997.\tThe appellant
\nadmittedly sent two letters withdrawing his voluntary
\nretirement before his actual date of release from
\nservice.  Therefore, in view of the settled position of
\nthe law and the terms of the letter of acceptance, the
\nappellant had locus poenitentiae to withdraw his
\nproposal for voluntary retirement before the
\nrelationship of employer and employee came to an
\nend”.\n<\/p>\n
\tIt may be that therein there did not exist a clause to the effect that once an
\noption to voluntary retirement is accepted, the employee cannot withdraw the same,
\nbut the law laid down therein would apply herein also.\n<\/p>\n
\tThe submission of learned Attorney General that as soon as an offer is made
\nby an employee, the same would amount to resignation in praesenti cannot be
\naccepted.  The scheme was in force for a fixed period.\tA decision by the authority
\nwas required to be taken and till a decision was taken, the jural relationship of
\nemployer and employee continued and the concerned employees would have been
\nentitled to payment of all salaries and allowances etc.\t Thus it cannot be said to be a
\ncase where the offer was given in praesenti but the same would be prospective in
\nnature keeping in view of the fact that it was come into force at a later date and that
\ntoo subject to acceptance thereof by the employer.  We, therefore, are of the opinion
\nthat the decisions of this Court, as referred to herein before, shall apply to the facts of
\nthe present case also.\n<\/p>\n
However, it is accepted that a group of employees accepted the ex gratia
\npayment.  Those who accepted the ex gratia payment or any other benefit under the
\nscheme, in our considered opinion, could not have resiled therefrom.\n<\/p>\n
\tThe Scheme is contractual in nature.  The contractual right derived by the
\nconcerned employees, therefore, could be waived.  The employees concerned having
\naccepted a part of the benefit could not be permitted to approbate and reprobate nor
\ncan they be permitted to resile from their earlier stand.\n<\/p>\n
\tIn Lachoo Mal’s case (supra) the law is stated in following terms:\n<\/p>\n
“The general principle is that every one has a right to
\nwaive and to agree to waive the advantage of a law or
\nrule made solely for the benefit and protection of the
\nindividual in his private capacity which may be
\ndispensed with without infringing any public right or
\npublic policy.\tThus the maxim which sanctions the
\nnon-observance of the statutory provision is cuilibet
\nlicet renuntiare juri pro se introducto. (See Maxwell on
\nInterpretation of Statutes, Eleventh Edition, pages 375
\nand 376).  If there is any express prohibition against
\ncontracting out of a statute in it then no question can
\narise of any one entering into a contract which is so
\nprohibited but where there is no such prohibition it will
\nhave to be seen whether an Act is intended to have a
\nmore extensive operation as a matter of public policy.
\nIn Halsbury’s Laws of England, Volume 8, Third
\nEdition, it is stated in Paragraph 248 at page 1432:\n<\/p>\n
\tAs a general rule, any person can enter into a
\nbinding contract to waive the benefits conferred upon
\nhim by an Act of Parliament, or, as it is said, can
\ncontract himself out of the Act, unless it can be shown
\nthat such an agreement is in the circumstances of the
\nparticular case contrary to public policy.  Statutory
\nconditions may, however, be imposed in such terms
\nthat they cannot be waived by agreement, and, in
\ncertain circumstances, the Legislature has expressly
\nprovided that any such agreement shall be void.”\n<\/p>\n
In Brijendra Nath Bhargava’s case (supra), the law is stated in following terms:\n<\/p>\n
“It clearly goes to show that if a party gives up the
\nadvantage he could take of a position of law it is not
\nopen to him to change and say that he can avail of that
\nground.\t In Dawsons Bank Ltd. case their Lordships
\nwere considering the question of waiver as a little
\ndifferent from estoppel and they observed as under:\n<\/p>\n
On the other hand, waiver is contractual, and may
\nconstitute a cause of action; it is an agreement to
\nrelease or not to assert a right.  If an agent, with
\nauthority to make such an agreement on behalf of his
\nprincipal agrees to waive his principal’s rights then
\n(subject to any other question such as consideration)
\nthe principal will be bound, but he will be bound by
\ncontract.\n<\/p>\n
But in the context of the conclusion that we have
\nreached on the basis of circumstances indicated above
\nthat it could not be held that the tenant had constructed
\nthis dochatti or balcony a wooden piece without the
\nconsent express or implied of the landlord, in our
\nopinion, it is not necessary for us to dilate on the
\nquestion of waiver any further and in this view of the
\nmatter we are not referring to the other decisions on
\nthe question of waiver.”\n<\/p>\n
In Halsbury’s Laws of England, 4th Edition, Vol.16 (Reissue) para 957 at
\npage 844 it is stated:\n<\/p>\n
“On the principle that a person may not approbate and
\nreprobate a special species of estoppel has arisen.  The
\nprinciple that a person may not approbate and
\nreprobate express two propositions:\n<\/p>\n
(1)\tThat the person in question, having a choice between
\ntwo courses of conduct is to be treated as having made
\nan election from which he cannot resile.\n<\/p>\n
(2)\tThat he will be regarded, in general at any rate, as
\nhaving so elected unless he has taken a benefit under
\nor arising out of the course of conduct, which he has
\nfirst pursued and with which his subsequent conduct is
\ninconsistent.”\n<\/p>\n
\tIn American Jurisprudence, 2nd Edition, Volume 28, 1966, Page 677-680 it is
\nstated:\n<\/p>\n
“Estoppel by the acceptance of benefits:\tEstoppel
\nis frequently based upon the acceptance and retention,
\nby one having knowledge or notice of the facts, of
\nbenefits from a transaction, contract, instrument,
\nregulation which he might have rejected or contested.
\nThis doctrine is obviously a branch of the rule against
\nassuming inconsistent positions.\n<\/p>\n
As a general principle, one who knowingly accepts the
\nbenefits of a contract or conveyance is estopped to
\ndeny the validity or binding effect on him of such
\ncontract or conveyance.\n<\/p>\n
This rule has to be applied to do equity and must not
\nbe applied in such a manner as to violate the principles
\nof right and good conscience.”\n<\/p>\n
\tWe also accept the contention raised by the learned counsel for the
\nrespondents that the concerned appellants could not have accepted the offer of
\nvoluntary retirement after expiry of the scheme.  All actions by the Banks were
\nrequired to be taken strictly in terms of the said scheme.\n<\/p>\n
We are furthermore not in a position to accept the arguments of Mr. Mukul
\nRohtagi to the effect that writ petitions were not maintainable as thereby the writ
\npetitioners intended to enforce a contract.  The writ petitioners filed the writ
\npetitions, inter alia, questioning the validity of the scheme.\tIn any event validity of
\nclause 10.5 of the said scheme was in question.\t The appellants herein are ‘State’
\nwithin the meaning of Article 12<\/a> of the Constitution of India.\tThe questions raised
\nby the writ petitioners thus could be raised in a proceeding under Article 226<\/a> of the
\nConstitution of India.\tFurthermore, in the event it be held that the action of the
\nappellants was arbitrary and unreasonable, the same would attract the wrath of
\nArticle 14<\/a> of the Constitution of India.  Furthermore, the right of the employee to
\ncontinue in employment, which is a fundamental right under Article 21<\/a> of the
\nConstitution of India could not have been taken away except in accordance with law.
\nThe decision of this Court in Har Shankar and Ors. v. The Dy. Excise and Taxation
\nCommr. and Ors<\/a>.\t [(1975) 1 SCC 737] is not apposite.  In that case, this Court\twas
\nconcerned  with the question as to whether enforcing the terms and conditions of a
\ncontract of supply of liquor which is a privilege would be permissible in a writ
\nproceeding?  In the aforementioned situation, the writ was held to be not
\nmaintainable.  Such is not the position herein<\/p>\n
\tWe may now deal with that part of the order of the Punjab & Haryana High
\nCourt whereby it has been held that the entire scheme is ultra vires being violative of
\nsub-regulation 4 of Regulation 19 of the Regulations.\n<\/p>\n
We do not agree with the decision of the High Court on that count for more
\nthan one reason.\n<\/p>\n
Firstly, the scheme is not a part of the statutory regulation.\tIt was in the
\nrealm of contract.  That being so it was not necessary for the Central Government to
\nplace the same before the Parliament.\n<\/p>\n
\tSecondly, even if the same was a regulation, the laying down rule is merely a
\ndirectory one and not mandatory.\n<\/p>\n
In Jan Mohammad’s case (supra), the law is stated in following terms:\n<\/p>\n
“Finally, the validity of the rules framed under the
\nBombay Act 22 of the 1939 was canvassed.   By
\ns.26(1) of the Bombay Act the State Government was
\nauthorised to make rules for the purpose of carrying
\nout the provisions of the Act.\t It was provided by sub-
\ns. (5) that the rules made under s.26 shall be laid before
\neach of the Houses of the Provincial Legislature at the
\nsession thereof next following and shall be liable to be
\nmodified or rescinded by a resolution in which both
\nHouses concur and such rules shall, after notification
\nin the Official Gazette, be deemed to have been
\nmodified or rescinded accordingly.   It was argued by
\nthe petitioner that the rules framed under the Bombay
\nAct, 22 of 1939 were not placed before the Legislative
\nAssembly or the Legislative Council at the first session
\nand therefore they had no legal validity.   The rules
\nunder Act 22 of 1939 were framed by the Provincial
\nGovernment of Bombay in 1941.  At that time there
\nwas no Legislature in session, the Legislature having
\nbeen suspended during the emergency arising out of
\nWorld War II.  The session of the Bombay Legislative
\nAssembly was convened for the first time after 1041
\non May 20, 1946 and that session was prorogued on
\nMay 24, 1946.  The second session of the Bombay
\nLegislative Assembly was convened on July 15, 1946
\nand that of the Bombay Legislative Council on
\nSeptember 3, 1946 and the rules were placed on the
\nAssembly Table in the second session before the
\nLegislative Assembly on September 2, 1946 and
\nbefore the Legislative Council on September 3, 1946.
\nSection 26(5) of Bombay Act 22 of 1939 does not
\nprescribe that the rules acquired validity only from the
\ndate on which they were placed before the Houses of
\nLegislature.  The rules are valid from the date on
\nwhich they are made under s. 26(1)<\/a>.   It is true that the
\nLegislature has prescribed that the rules shall be placed
\nbefore the Houses of Legislature, but failure to place
\nthe rules before the Houses of Legislature does not
\naffect the validity of the rules, merely because they
\nhave not been placed before the Houses of the
\nLegislature.   Granting that the provisions of sub-s. (5)
\nof s.26 by reason of the failure to place the rules before
\nthe Houses of Legislature were violated, we are of the
\nview that sub-s.(5) of s. 26<\/a> having regard to the
\npurposes for which it is made, and in the context in
\nwhich it occurs, cannot be regarded as mandatory.
\nThe rules have been in operation since the year 1941
\nand by virtue of s.64 of the Gujarat Act 20 of 1964
\nthey continue to remain in operation.”\n<\/p>\n
\tIn Atlas Cycle Industries’ case (supra) the same view has been reiterated.\n<\/p>\n
\tWe, therefore, are of the opinion that the scheme in question cannot be said
\nto be bad in law.\n<\/p>\n
\tThe Punjab and Haryana High Court in its impugned judgment has refused to
\ngrant any relief in ten writ petitions, wherein prayers were made to the effect that the
\nbank should be directed to act in terms of the said scheme.  The relief\t prayed for by
\nthe concerned petitioners were denied by the High Court on the ground that the same
\nwas not enforceable.  We have not accepted that part of the judgment of the High
\nCourt.\tIn that view of the matter, the High Court must now consider the claim of the
\nsaid writ petitioners on merits and pass an appropriate order in accordance with law.
\nThe said matters are, therefore, remitted to the High Court for consideration thereof
\nafresh.\n<\/p>\n
 For the reasons aforementioned, we direct that :\n<\/p>\n
1.\tThe appeals preferred by the Nationalised Banks arising from the
\nHigh Courts  are dismissed except the cases where the concerned
\nemployees have accepted a part of the benefit under the scheme;
\nHowever, in respect of such of the employees who despite acceptance
\nof a part of the retirement benefit under the scheme had continued
\nunder the orders of the High Court and has retired on attaining the
\nage of\tsuperannuation, this order shall not apply;\n<\/p>\n
2.\tThe appeals filed by the State Bank of India are allowed;\n<\/p>\n
3.\tThe appeals arising from the judgments of the Uttaranchal High Court
\nare  allowed and the judgments of the said High Court are set aside;\n<\/p>\n
4.\tThe appeals arising from the judgments of the Punjab and Haryana
\nHigh Court in relation to ten writ petitions which were filed by the
\nemployees for a direction upon the Bank that the benefits under the
\nscheme be paid to them are set aside and the matters are remitted to
\nthe High Court for consideration thereof afresh on merits and in
\naccordance with law;\n<\/p>\n
\tThese appeals are disposed of on the above terms.  However, in the facts and
\ncircumstances of the case, the parties shall pay and bear their own costs throughout.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002 Author: Sb Sinha Bench: Cji, H.K. Sema, S.B. Sinha. CASE NO.: Appeal (civil) 854 of 2002 Appeal (civil) 855 of 2002 Appeal (civil) 870 of 2002 Appeal (civil) 874 of 2002 Appeal (civil) 877 of 2002 Appeal (civil) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-247382","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nBank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002 - Free Judgements of Supreme Court & High Court | Legal India\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002\" \/>\n<meta property=\"og:site_name\" content=\"Free Judgements of Supreme Court & High Court | Legal India\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LegalindiaCom\/\" \/>\n<meta property=\"article:published_time\" content=\"2002-12-16T18:30:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2016-05-19T23:25:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1\" \/>\n\t<meta property=\"og:image:width\" content=\"512\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Legal India Admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@legaliadmin\" \/>\n<meta name=\"twitter:site\" content=\"@Legal_india\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Legal India Admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"86 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002\"},\"author\":{\"name\":\"Legal India Admin\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/person\\\/0bfdffe9059fb8bb24a86d094609c5ea\"},\"headline\":\"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002\",\"datePublished\":\"2002-12-16T18:30:00+00:00\",\"dateModified\":\"2016-05-19T23:25:06+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002\"},\"wordCount\":17047,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\"},\"articleSection\":[\"Supreme Court of India\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002\",\"name\":\"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002 - Free Judgements of Supreme Court & High Court | Legal India\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#website\"},\"datePublished\":\"2002-12-16T18:30:00+00:00\",\"dateModified\":\"2016-05-19T23:25:06+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#website\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\",\"name\":\"Free Judgements of Supreme Court & High Court | Legal India\",\"description\":\"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\"},\"alternateName\":\"Free judgements of Supreme Court & High Court of India | Legal India\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#organization\",\"name\":\"Judgements of Supreme Court & High Court | Legal India\",\"alternateName\":\"Legal India\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/wp-content\\\/uploads\\\/sites\\\/5\\\/2025\\\/09\\\/legal-india-icon.jpg\",\"contentUrl\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/wp-content\\\/uploads\\\/sites\\\/5\\\/2025\\\/09\\\/legal-india-icon.jpg\",\"width\":512,\"height\":512,\"caption\":\"Judgements of Supreme Court & High Court | Legal India\"},\"image\":{\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/LegalindiaCom\\\/\",\"https:\\\/\\\/x.com\\\/Legal_india\"]},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/#\\\/schema\\\/person\\\/0bfdffe9059fb8bb24a86d094609c5ea\",\"name\":\"Legal India Admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g\",\"caption\":\"Legal India Admin\"},\"sameAs\":[\"https:\\\/\\\/www.legalindia.com\",\"https:\\\/\\\/x.com\\\/legaliadmin\"],\"url\":\"https:\\\/\\\/www.legalindia.com\\\/judgments\\\/author\\\/legal-india-admin\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002 - Free Judgements of Supreme Court & High Court | Legal India","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002","og_locale":"en_US","og_type":"article","og_title":"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002 - Free Judgements of Supreme Court & High Court | Legal India","og_url":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002","og_site_name":"Free Judgements of Supreme Court & High Court | Legal India","article_publisher":"https:\/\/www.facebook.com\/LegalindiaCom\/","article_published_time":"2002-12-16T18:30:00+00:00","article_modified_time":"2016-05-19T23:25:06+00:00","og_image":[{"width":512,"height":512,"url":"https:\/\/i0.wp.com\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg?fit=512%2C512&ssl=1","type":"image\/jpeg"}],"author":"Legal India Admin","twitter_card":"summary_large_image","twitter_creator":"@legaliadmin","twitter_site":"@Legal_india","twitter_misc":{"Written by":"Legal India Admin","Est. reading time":"86 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002#article","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002"},"author":{"name":"Legal India Admin","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea"},"headline":"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002","datePublished":"2002-12-16T18:30:00+00:00","dateModified":"2016-05-19T23:25:06+00:00","mainEntityOfPage":{"@id":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002"},"wordCount":17047,"commentCount":0,"publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"articleSection":["Supreme Court of India"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002","url":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002","name":"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002 - Free Judgements of Supreme Court & High Court | Legal India","isPartOf":{"@id":"https:\/\/www.legalindia.com\/judgments\/#website"},"datePublished":"2002-12-16T18:30:00+00:00","dateModified":"2016-05-19T23:25:06+00:00","breadcrumb":{"@id":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.legalindia.com\/judgments\/bank-of-india-ors-vs-o-p-swarnakar-etc-on-17-december-2002#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.legalindia.com\/judgments\/"},{"@type":"ListItem","position":2,"name":"Bank Of India & Ors vs O.P. Swarnakar Etc on 17 December, 2002"}]},{"@type":"WebSite","@id":"https:\/\/www.legalindia.com\/judgments\/#website","url":"https:\/\/www.legalindia.com\/judgments\/","name":"Free Judgements of Supreme Court & High Court | Legal India","description":"Search and read the latest judgements, orders, and rulings from the Supreme Court of India and all High Courts. A comprehensive database for lawyers, advocates, and law students.","publisher":{"@id":"https:\/\/www.legalindia.com\/judgments\/#organization"},"alternateName":"Free judgements of Supreme Court & High Court of India | Legal India","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.legalindia.com\/judgments\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.legalindia.com\/judgments\/#organization","name":"Judgements of Supreme Court & High Court | Legal India","alternateName":"Legal India","url":"https:\/\/www.legalindia.com\/judgments\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/","url":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","contentUrl":"https:\/\/www.legalindia.com\/judgments\/wp-content\/uploads\/sites\/5\/2025\/09\/legal-india-icon.jpg","width":512,"height":512,"caption":"Judgements of Supreme Court & High Court | Legal India"},"image":{"@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/LegalindiaCom\/","https:\/\/x.com\/Legal_india"]},{"@type":"Person","@id":"https:\/\/www.legalindia.com\/judgments\/#\/schema\/person\/0bfdffe9059fb8bb24a86d094609c5ea","name":"Legal India Admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4faa9d728ed1af3b73d52225c7f12901ac726fe6f7ea0a3348a1d51f3a930987?s=96&d=mm&r=g","caption":"Legal India Admin"},"sameAs":["https:\/\/www.legalindia.com","https:\/\/x.com\/legaliadmin"],"url":"https:\/\/www.legalindia.com\/judgments\/author\/legal-india-admin"}]}},"modified_by":null,"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/247382","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/comments?post=247382"}],"version-history":[{"count":0,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/posts\/247382\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/media?parent=247382"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/categories?post=247382"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalindia.com\/judgments\/wp-json\/wp\/v2\/tags?post=247382"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}