SC expounds: Gratuity shall be payable if termination of employment is by resignation after 5 years of continuous service.

Through the judgment of the case – Rajasthan State Road Transport Corporation Ltd. & Others v. Smt. Mohani Devi & Another, Justice R. Banumathi and Justice A.S.Bopanna at the Supreme Court have accepted the contention advanced by the respondent- Mohani Devi, widow of the deceased employee of the appellant- RSRTC, that section 4(1)(b) of the Payment of Gratuity Act, 1972, provides that the gratuity shall be payable if the termination of employment is after 5 years of continuous service and such termination would include resignation as well.

The Apex-Court has clarified it further, that in that view, if the gratuity amount has not been paid to the respondent’s husband, the liability to pay the same would subsist and the widow Mohani Devi will be entitled to receive the same in accordance with the provisions of the Act.

The short question, which arose for consideration in this case was as to whether the husband of the respondent had acquired an indefeasible right to seek for voluntary retirement from service and in that light whether the Rajasthan High Court was justified  in arriving at the conclusion that the subsequent resignation of May 3, 2006, submitted by the husband of the widow be considered as an application for voluntary retirement and treat the cessation of employer-employee relationship under the provision for Voluntary Retirement.

While considering the above aspect, a perusal of the factual matrix in this case would indicate that the respondent’s husband had joined the service of the Appellant- Transport Corporation at Alwar Depot as conductor on March 15, 1979. The application seeking voluntary retirement was submitted on July 28, 2005.By that time the respondent’s husband no doubt had put in more than 25 years of service. Insofar as the eligibility to apply seeking voluntary retirement in view of the completed length of service, the respondent’s husband had acquired such right.

The appellant-Transport Corporation did not consider it appropriate to accept the application and grant the voluntary retirement. In that circumstance the husband of the respondent submitted his resignation on May 3, 2006, claiming to be under depression and his health condition had deteriorated further. The authorities accepted the resignation on May 31, 2006.He was relieved of his duties and the benefits were paid to him.

Thereafter, the respondent’s husband is stated to have immediately submitted an application pointing out that he had erred in mentioning ‘resignation’ and he desired to retire in view of his earlier application for voluntary retirement. In that application, it was also mentioned that no decision had been taken by the authorities on his first application of July 28, 2005 and therefore, he be treated as having voluntarily retired with consequent retiral benefits. After her husband’s death, the respondent approached the HC with such prayer.

A Single Judge Bench at the HC held that the respondent’s husband had moved an application indicating deteriorating health and forcing such employee to work would be an act of oppression.  Additionally, it was held that the voluntary retirement application was not decided within the period prescribed as per the clause 19-D(2) of the Pension Scheme  and reliance was placed on Clause 18-D(2)of RSRTC Standing Orders as per which an employee of the Corporation, who had rendered pensionable service was entitled to seek voluntary retirement. It held that the respondent’s husband would be deemed to have retired even though he had moved another application terming his retirement as resignation in view of the law laid down in the judgment – Sheel Kumar Jain v. The New India Assurance Co. Ltd. – 2012 (1) SLR 305.Thuds, the appellants were directed to treat respondent’s husband as voluntarily retired and to release the retiral benefits to which he was entitled.

Being aggrieved, an appeal was filed by the appellants herein before the HC division bench with no success and the said appeal was dismissed by the division bench finding no infirmity in the reasoning of the S.B. The same D.B. verdict has been challenged before the SC in this case.

The SC’s finding has been that the factual aspects which were relevant for decision making in this case have not been referred by the HC during the course of its order but has merely assumed that the voluntary retirement application should be deemed to have been accepted when there was no rejection.

As has been noticed by the Court from the objection statement filed by the respondent herein herself, the bright to seek voluntary retirement is stipulated in Rule 50 of Rajasthan Civil Services Pension Rules, 1996. Since the same provides for 20 years of qualifying service, the respondent’s husband was qualified to apply. However, what is relevant to take note of is that sub-Rule (2) thereof provides that the notice of voluntary retirement given by the employee shall require acceptance by the appointing authority.

In this case, the undisputed position is that there was no acceptance and in that circumstance the husband of the respondent had submitted his resignation of May 3, 2006. Though the HC has indicated deemed acceptance, the same would not be justified in the instant facts since the position which has not been taken note of by the HC is that as on the date when the husband of the respondent had made the application for voluntary retirement on July 28, 2005, he had been already issued Charge-Sheets of December 16, 2004 and July 11, 2005 alleging misconduct.

Though the respondent, through the objection Statement seeks to contend that the charge alleged against her husband was not justified, that aspect of the matter would not be germane to the present consideration since the position of law is well established that pending disciplinary proceedings if an application for voluntary retirement is submitted there would be no absolute right seeking for acceptance since the employer if keen on proceeding with the inquiry would be entitled not to consider the application for voluntary retirement. Hence there would be no obligation to accept.

In this case, the proceedings relating to the charge-sheet was taken forward and completed through the final order of September 3, 2005. The punishment of withholding of the increment was imposed.  In such circumstance the non-consideration of the application for voluntary retirement would be justified.

The SC has noted that the acceptance of the resignation was acted upon by receiving the terminal benefits. If that be the position, when the writ petition was filed belatedly in the year 2012 and that too after the death of the employee, who had not raised any grievance during his life time, consideration of the prayer made by the respondent was not justified. The HC has, therefore, committed an error in passing the concurrent orders.

The SC has directed that the appellants shall calculate the gratuity and pay the same to the respondent-wife, if already not paid. Payment was ordered to be made in four weeks. The SC has allowed the appeal and set aside the two impugned judgments delivered by the HC.

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