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CASE NO.:

Appeal (civil) 1404 of 2003

PETITIONER:

SRIKANTHA S.M.

RESPONDENT:

BHARATH EARTH MOVERS LTD.

DATE OF JUDGMENT: 07/10/2005

BENCH:

B.N. SRIKRISHNA & C.K. THAKKER

JUDGMENT:

JUDGMENT

C.K. THAKKER, J.

This appeal is filed by the appellant against the judgment and order passed

by the Division Bench of the High Court of Karnataka on January 28, 2002 in

Writ Appeal No. 5500 of 1998 confirming the order passed by learned single

Judge on September 07, 1998 in Writ Petition No. 26090 of 1993.

To appreciate the points raised in the appeal, few relevant facts may be

stated.

The appellant was selected by the Chairman and Managing Director of Bharath

Earth Movers Limited (`Company' for short) respondent herein, and was

appointed as Senior Manager in the Department of Security and Vigilance for

KGF by an order dated December 11,1989. He reported for duty on December

29, 1989. By an order dated December 03, 1992, the appellant was

transferred to Corporate Office at Bangalore and was relieved on December

04, 1992. The appellant reported at Corporate Office, Bangalore on December

07, 1992. It was his case that he was not assigned any work at Bangalore.

The appellant, in the circumstances, got upset and tendered a letter of

resignation on January 04, 1993. In the said letter, he stated that he was

thankful to the Chief Managing Director for giving him an opportunity to

serve the esteemed organization but he wanted to leave the Company. He

therefore, requested to treat the letter as his resignation and relieve him

from the duties `as per Company rules'. On the basis of the said letter,

the matter was processed and the resignation was accepted by Deputy General

Manager (Personnel) on the same day. The appellant was informed that his

resignation had been accepted and he would be relieved `with immediate

effect'. It was also stated that the appellant would be entitled for pay

towards notice period as per Company rules. By another letter of even date,

however, the appellant was informed that his casual leave had been

sanctioned from January 05, 1993 to January 13, 1993. January 14, 1993

being a holiday, the appellant would be relieved by the close of working

hours on January 15, 1993. It was also stated that the appellant would be

entitled for pay towards the balance of notice period as per Company rules.

It is the case of appellant that from the second letter dated January 4,

1993, it was clear that the resignation submitted by him was to be

effective from January 15, 1993 after office hours. During that period, the

appellant changed his mind and withdrew his resignation by addressing a

letter on January 08, 1993. In the said letter, he made several complaints

and raised grievances and finally stated that if suitable reply would not

be given by January 14, 1993, his letter of resignation dated January 04,

1993 should be treated as withdrawn/cancelled. On January 15, 1993 the

appellant was informed that he would be relieved after office hours on that

day. The service certificate in original alongwith a cheque of Rs. 13,511

was given to him.

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Since the appellant had withdrawn his resignation on January 08, 1993, the

Company could not have accepted it and ought to have continued him in

service. But the appellant was not allowed to work after January 15, 1993.

He, therefore, approached the High Court of Karnataka by filing a writ

petition. The learned single Judge observed in the order that since the

appellant had submitted his resignation on January 04, 1993 and it was

accepted on the same day by the Company, by not continuing him in service,

no illegality had been committed by the Company. Accordingly, the petition

was dismissed. The Division Bench was of the same opinion and dismissed the

appeal. Being aggrieved by the orders passed by the High Court, the

appellant has approached this Court. Notice was issued on August 16, 2002

and after hearing the parties, leave was granted on February 17, 2003.

We have heard learned counsel for the parties.

The learned counsel for the appellant vehemently contended that the

appellant submitted resignation on January 04, 1993. No doubt, the

resignation was accepted by the Company on the same day and he was to be

relieved from service. Later on, however, casual leave was granted for the

period from January 04, 1993 to January 13, 1993 and the appellant was

informed that he would be relieved after office hours on January 15, 1993.

The appellant, in the circumstances, could have withdrawn the resignation

before that date. As the appellant withdrew his resignation on January 08,

1993, it was obligatory on the Company to accept the said letter and to

treat him in service. By not doing so, the Company had acted illegally and

unlawfully and the said action ought to have been set aside by the High

Court. According to the counsel, till office hours of January 15, 1993, the

relationship of employer and employee did not come to an end and effect

ought to have been given by the Company to the letter dated January 08,

1993. It was also submitted by the counsel that the appellant was to attain

age of superannuation on December 31, 1994. He was, therefore, entitled to

all the benefits as if he would have continued in service upto the date of

retirement. It was, therefore, prayed that the order passed by the learned

single Judge and confirmed by the Division Bench deserve to be set aside by

allowing the appeal and by granting consequential benefits.

The learned counsel for the respondent, on the other hand, supported the

order passed by the learned single Judge and confirmed by the Division

Bench. It was urged that the appellant resigned from service on January 04,

1993 and on the same day, the resignation was accepted and he was ordered

to be relieved. It was because of the prayer made by the appellant that

casual leave was granted from January 04, 1993 to January 13, 1993 and he

was informed that he would be relieved after office hours on the next

working day i.e. January 15, 1993. From that, however, it cannot be said

that resignation of the appellant was not accepted or the appellant

continued in service upto January 15, 1993. It was also submitted that on

January 15, 1993, the appellant was given his service certificate in

original alongwith all the benefits to which he was entitled and he

accepted them without any protest. It, therefore, did not lie in the mouth

of the appellant that the action was illegal. He is estopped from making

grievance against the Company. It was, therefore, prayed that the appeal

deserves to be dismissed.

Having given anxious consideration to the facts and circumstances of the

case and in the light of Service Rules and various decisions of this Court

to which our attention has been invited, we are of the view that the High

Court was wrong in holding that it was not open to the appellant to

withdraw the resignation.

As is clear from the facts stated hereinabove that the appellant in the

letter of resignation, had expressly stated; ``This may please be

considered as my resignation and relieved from the duties from the date, as

per Company rules''. (emphasis supplied) It is thus clear that his

resignation was to be considered and an appropriate decision was to be

taken as per `Company rules'. Attention of the Court was invited to the

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rules framed by the Company known as `Bharath Earth Movers Limited Service

Rules'. Rule 16 deals with resignation Clause (1) of the Rule 16 is

relevant and may be reproduced:

"A permanent employee may resign his employment by giving one month's

notice in writing or by paying one month's basic pay in lieu of notice to

the Company. The resignation will become valid and effective only after the

Company communicates in writing to the employee accepting his resignation.

If an employee gives notice of his intention to resign, the Management may

accept the resignation and release him at once or at any time before the

date of expiry of the notice period, in which case he will be paid only for

the period he actually works."

Plain reading of the above rule makes it clear that a permanent employee

may resign from service by giving one month's notice in writing or by

paying one month's basic pay in lieu of notice to the Company. Admittedly,

the appellant had not paid one month's basic pay in lieu of notice to the

Company. It is, therefore, clear that since the letter of resignation was

as per Company rules, it was to become effective after one month. The

learned single Judge was also of the same opinion. He observed in the order

that the Company rules required an employee to resign by giving one month's

notice in writing, or if he wanted to be relieved immediately, be paying

one month's pay in lieu of notice period. Since the appellant had not paid

one month's pay in lieu of notice alongwith his letter of resignation, it

could safely be presumed that he had tendered his resignation letter by

giving a notice of one month in writing to the employer. The learned single

Judge then observed that the `intention' of the appellant to resign from

service was accepted by the employer on the same day, i.e. January 04, 1993

and he was informed that he would be relieved from service at once.

According to the learned single Judge, though by another letter of the same

date, the appellant was informed that he had been granted casual leave from

January 05, 1993 to January 13, 1993 and January 14, 1993 being holiday, he

would be relieved from January 15, 1993, it was within the powers of the

Company under the rules and would not change the legal position that once

the resignation was accepted, it was effective. Hence, it was not open to

the appellant to withdraw the resignation on January 08, 1993. Referring to

several judgments, the learned single Judge held that since the resignation

was accepted, the Company was fully justified in ignoring and not accepting

the request of the appellant made in his letter dated January 08, 1993. In

the opinion of the learned single Judge, the act of relieving the appellant

was a subsequent act which had nothing to do with the act of accepting the

resignation and the appellant was not entitled to any benefit.

The Division Bench, by a cryptic order, dismissed the appeal observing the

when the resignation was submitted on January 04, 1993 by the appellant and

it was accepted on the same day, the fact that he was relieved on January

15, 1993 did not make any difference. To us, both the courts were wrong in

taking the view that the appellant was no more in service after January 04,

1993.

Now, let us consider the controversy on merits. The term `resignation' has

not been defined in the Service Rules. According to dictionary meaning,

however, `resignation' means spontaneous relinquishment of one's own right.

It is conveyed by Latin maxim Resignatio est juris propii spontanea

refutatio. (Resignation is a spontaneous relinquishment of one's own

right). In relation to an office, resignation connotes the act of giving up

or relinquishing the office. `To relinquish an office' means `to cease to

hold the office' or `to leave the job' or `to leave the position'. `To

cease to hold office' or `to loose hold of the office' implies to `detach',

`unfasten', `undo' or `untie' `the binding knot or link' which holds one to

the office and the obligations and privileges that go with it.

In Union of India v. Gopal Chanrd Misra, [1978] 2 SCC 301: [1978] 3 SCR 12,

this Court held that a complete and effective act of resigning an office is

one which severs the link of the resignor with his office and terminates

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its tenure.

In Balram Gupta v. Union of India, [1978] Supp SCC 228, this Court

reiterated the principled in Gopal Chandra Misra and ruled that though that

case related to resignation by a Judge of the High Court, the general rule

equally applied to government servants.

The learned counsel for the parties drew our attention to some of the

decisions of this Court on the point. In Punjab National Bank v. P.K.

Mittal, [1989] Supp 2 SCC 175, an employee resigned from service of the

Bank by a communication dated January 21, 1986. It was to be effective from

June 30, 1986. The Deputy General Manager who was the competent authority

under the Service Regulations, accepted the resignation as per the letter

of resignation i.e. with effect from June 30, 1986. The employee, however,

received a letter from the Bank on February 07, 1986 informing him that his

resignation letter had been accepted by the competent authority with

immediate effect and consequently he was being relieved from the service of

the Bank with effect from that day, i.e. from February 07, 1986. The

employee, therefore, filed a petition challenging the validity of the

purported acceptance of his resignation with effect from February 07, 1986

and for a direction to the Bank to treat him in service upto June 30, 1986

by granting all consequential benefits. The matter, however, did not end

there. On April 15, 1986, the employee addressed a letter to the Bank

purporting to withdraw his resignation letter dated January 21, 1986. The

question which came up for consideration was as to whether the subsequent

development could be taken into account and whether the employee continued

in service in view of the withdrawal of resignation dated April 15, 1986.

Accepting the contention of the employee that he continued in service, the

Court held that his resignation could take effect from June 30, 1986 or on

expiry of three months period provided in the Service Regulations and

before that period he could withdraw the resignation. Since he had

withdrawn the resignation before June 30, 1986, he continued to remain in

service with the Bank.

It was urged on behalf of the Bank that Regulation 20(2) provided for

notice to protect the interest only of the employer (Bank) and to enable it

to make other arrangements in the place of the resigning employee. The

proviso to clause (2) enabled the Bank to reduce the notice-period to less

than three months and as such it was not obligatory for the Bank to wait

till the notice period would expire.

This Court, however, did not agree with the interpretation. Dealing with

the object underlying such provision as giving opportunity to both, the

employer as well as the employee, the Court stated;

"We are of the opinion that clause (2) of the regulation and its proviso

are intended not only for the protection for the bank but also for the

benefit of the employee. It is common knowledge that a person proposing to

resign often wavers in his decision and even in a case where has taken a

firm decision to resign, he may not he ready to go out immediately. In most

cases he would need a period of adjustment and hence like to defer the

actual date of relief form duties for a few months for various personal

reasons. Equally an employer may like to have time to make some alternative

arrangement before relieving the resigning employee. Clause (2) is

carefully worded keeping both these requirements in mind. It gives the

employee a period of adjustment and rethinking. It also enables the bank to

have some time to arrange its affairs, with the liberty, in an appropriate

case, to accept the resignation of an employee even without the requisite

notice if he so desires it. The proviso in our opinion should not be

interpreted as enabling a bank to thrust a resignation on an employee with

effect from a date different from the one on which he can make his

resignation effective under the terms of the regulation. We, therefore,

agree with the High Court that in the present case the resignation of the

employee could have become effective only on or about April 21, 1986 or on

June 30, 1986 and that the bank could not have ``accepted'' that

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resignation on any earlier date. The letter dated February 7, 1986 was,

therefore, without jurisdiction."

(emphasis supplied)

In Balram Gupta, referred to above, the employee withdrew his notice of

voluntary retirement on account of persistent and personal requests from

the staff members. But the prayer for withdrawal was not allowed by the

employer on the ground that it had already been accepted by the Government.

Moreover, Rule 48-A (4) of the Central Civil Service (Pension) Rules, 1972

precluded the Government servant from withdrawing his notice except with

specific approval of the appointing authority.

Deprecating the stand taken by the Government, this Court held that it was

not proper for the Government not to accede to the request of the employee.

``In the modern age we should not put embargo upon people's choice or

freedom'', - stated the Court.

The Court added;

"In the modern and uncertain age it is very difficult to arrange one's

future with any amount of certainty; a certain amount of flexibility is

required, and if such flexibility does not jeopardize government or

administration, administration should be graceful enough to respond and

acknowledge the flexibility of human mind and attitude and allow the

appellant to withdraw his letter of retirement in the facts and

circumstances of this case. Much complications which had arisen could have

been thus avoided by such graceful attitude. The court cannot but condemn

circuitous ways ``to ease out'' uncomfortable employees. As a model

employer the government must conduct itself with high probity and candour

with its employees.''

In Power Finance Corporation Ltd. v. Pramod Kumar Bhatia, [1997] 4 SCC 280,

a workman applied for voluntary retirement pursuant to the scheme framed by

the Corporation to relieve surplus staff. The Corporation vide an order

dated December 20, 1994 accepted voluntary retirement of the workman with

effect from December 31, 1994 subject to certain conditions. Subsequently,

however, the Corporation withdrew the scheme. It was held that the order

dated December 20, 1994 was conditional and unless the employee was

relieved from the duty on the fulfillment of the those conditions, the

order of voluntary retirement did not become effective. The employee,

therefore, could not assert that the voluntary retirement was effective and

claim benefits on that basis.

The Court said;

"It is now settled legal position that unless the employee is relieved of

the duty after acceptance of the offer of voluntary retirement or

resignation, jural relationship of the employee and the employer does not

come to an end. Since the order accepting the voluntary retirement was a

conditional one, the conditions ought to have been complied with. Before

the conditions could be complied with, the appellant withdrew the scheme.

Consequently, the order accepting voluntary retirement did not become

effective. Thereby no vested right his been created in favour of the

respondent. The High Court, therefore, was not right in holding that the

respondent has acquired a vested right and, therefore, the appellant has no

right to withdraw the scheme subsequently.'' (emphasis supplied).

In J.N. Srivastava v. Union of India and Anr, [1998] 9 SCC 559, a notice of

voluntary retirement was given by an employee on October 03, 1989 which was

to come into effect from January 31,1990. The notice was accepted by the

Government on November 02,1989 but the employee withdrew the notice vide

his letter dated December 11, 1989. It was held that withdrawal was

permissible though it was accepted by the Government, since it was to be

made effective from January 31, 1990 and before that date it was withdrawn.

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In Shambhu Murari Sinha v. Project and Development India and Anr. (Shambhu

Murari Sinha 1), [2000] 5 SCC 621, an application for voluntary retirement

of an employee dated October 18, 1995 was accepted by the employer vide

letter dated July 30, 1997 with further intimation that ``release memo

alongwith detailed particulars will follow''. The workman was actually

relieved on September 26, 1997. In the meanwhile, however, by a letter,

dated august 7, 1997, he withdrew the application dated October 18, 1995,

by which he sought voluntary retirement. It was held that the effective

date of voluntary retirement was September 26, 1997 and before that date it

was permissible for the workman to withdraw his retirement. The appellant

was, therefore, held entitled to remain in service.

In Shambhu Murari Sinha v. Project and Development India Ltd. and Anr.

(Shambhu Murari Sinha II), [2002] 3 SCC 437, the view taken in Shambhu

Murari Sinha 1 was reiterated. It was held that when voluntary retirement

was withdrawn by an employee, he continued to remain in service. The

relationship of employer and employee did not come to an end and the

employee had locus penitentiae to withdraw his proposal for voluntary

retirement. He was, therefore, entitled to rejoin duty and the Corporation

was bound to allow him to work.

On the basis of the above decisions, in our opinion, the learned counsel

for the appellant is right in contending that though the respondent-Company

had accepted the resignation of the appellant on January 04, 1993 and was

ordered to be relieved on that day, by a subsequent letter, he was granted

casual leave from January 04, 1993 to January 13, 1993. Moreover, he was

informed that he would be relieved after office hours on January 15, 1993.

The vinculum juris, therefore, in our considered opinion, continued and the

relationship of employer and employee did not come to an end on January 04,

1993. The relieving order and payment of salary also make it abundantly

clear that he was continued in service of the Company upto January 15,

1993.

In affidavit in reply filed by the Company, it was stated that resignation

of the appellant was accepted immediately and he was to be relieved on

January 04, 1993. It was because of the request of the appellant that he

was continued upto January 15, 1993. In the affidavit in rejoinder, the

appellant had stated that he reported for duty on January 15, 1993 and also

worked on that day. At about 12.00 noon, a letter was issued to him stating

therein that he would be relieved at the close of the day. A cheque of Rs.

13,511 was paid to him at 17.30 hrs. The appellant had asserted that he had

not received terminal benefits such as gratuity, provident fund, etc. It is

thus proved that upto January 15, 1993, the appellant remained in service.

If it is so, our opinion, as per settled law, the appellant could have

withdrawn his resignation before that date. It is an admitted fact that a

letter of withdrawal of resignation was submitted by the appellant on

January 08, 1993. It was, therefore, incumbent on the Company to give

effect to the said letter. By not doing so, the Company has acted contrary

to the law and against the decisions of this Court and hence, the action of

the Company deserves to be quashed and set aside. The High Court, in our

opinion, was in error in not granting relief to the appellant. Accordingly,

the action of the Company as upheld by the High Court is hereby set aside.

The next question is, as to what benefits the appellant is entitled to. As

he withdrew the resignation and yet he was not allowed to work, he is

entitled to all consequential benefits. The learned counsel for the

respondent-Company no doubt contended that after January 15, 1993, the

appellant had not actually worked and therefore, even if this Court holds

that the action of the respondent-Company was not in consonance with law,

at the most, the appellant might be entitled to other benefits except the

salary which should have been paid to him. According to the counsel, the

principle of ``no work, no pay'' would apply and when the appellant has

admittedly not worked, he cannot claim salary for the said period.

We must frankly admit that we unable to uphold the contention of the

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respondent-Company. A similar situation had arisen in J.N. Srivastava and a

similar argument was advanced by the employer.The Court, however, negatived

the argument observing that when the workman was willing to work but the

employer did not allow him to work, it would not be open to the employer to

deny monetary benefits to the workman who was not permitted to discharge

his duties. Accordingly, the benefits were granted to him. In Shambhu

Murari Sinha II also, this Court held that since the relationship of

employer and employee continued till the employee attained the age of

superannuation he would be entitled to ``full salary and allowances'' of

the entire period he was kept out of service. In Balram Gupta, in spite of

specific provision precluding the Government servant from withdrawing

notice of retirement, this Court granted all consequential benefits to him.

The appellant is, therefore, entitled to salary and other benefits.

For the foregoing reasons, in our opinion, the appeal deserves to be

allowed and is accordingly allowed. The action of the respondent-Company in

accepting the resignation of the appellant from January 04, 1993 and not

allowing him to work is declared illegal and unlawful. It is, therefore,

hereby set aside. The orders passed by the learned single Judge and the

Division Bench upholding the action of the Company are also set aside. The

respondent-Company is directed to treat the appellant in continuous service

upto the age of superannuation i.e. December 31, 1994 and give him all

benefits including arrears of salary. The Company may adjust any amount

paid to the appellant on January 15, 1993 or thereafter. The appeal is

accordingly allowed with costs.