2026 INSC 328 IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 375 OF 2020

UCO BANK & ORS. … APPELLANTS

VERSUS

SK SHRIVASTAVA … RESPONDENT

WITH

CIVIL APPEAL NO. 376 OF 2020

UCO BANK & ORS. … APPELLANTS

VERSUS

SK SHRIVASTAVA & ORS. … RESPONDENTS

J U D G M E N T

J.K. MAHESHWARI, J .

1.The Civil Appeal No. 375 of 2020 is arising out of the

judgment dated 07.01.2019 in Writ Appeal No. 824 of 2018 by the

High Court of Chhattisgarh, Bilaspur (hereinafter ‘High Court’)

preferred against the judgment dated 28.09.2018 in WP (S) No.

1620 of 2012, wherein the direction for grant of terminal benefits to

1

REPORTABLE

Respondent No. 1 was issued. Learned Single Judge was of the view

that after completion of the notice period of three months as

specified in the notice for voluntary retirement or from the date of

stopping to attend the service, the Respondent be treated retired

voluntarily. Since he stood retired prior to institution of the

disciplinary proceedings, therefore, he is entitled to all

consequential benefits as per Rules governing the field. The

Division Bench reaffirmed the finding of the learned Single Judge

inter alia observing that since option of refusal of notice for

voluntary retirement was not exercised by the Appellant-Bank

before the expiry of notice period i.e. 04.01.2011 or even prior to

16.05.2011 i.e. the date since when the employee decided to severe

the master servant relationship, therefore, communication made

subsequently to refuse the request of voluntary retirement cannot

be given retrospective effect to undo an act which was deemed to

have been done.

2.In Civil Appeal No. 376 of 2020, the judgment dated

12.07.2019 in Writ Appeal No. 321 of 2019 is under challenge,

whereby, the judgment dated 24.04.2019 passed in WP (S) No. 5109

2

of 2012 was assailed. Learned Single Judge while allowing the writ

petition opined that the employee stood retired with effect from the

date of severance of master servant relationship i.e. 16.05.2011,

therefore, the chargesheet issued on 05.03.2012 after retirement is

liable to be quashed. In view of the judgment dated 28.09.2018

delivered in WP (S) No. 1620 of 2012 which was affirmed by the

Division Bench, the learned Single Judge quashed the chargesheet

and the consequential order of dismissal along with costs of Rs.

25,000/-.

3.In the present two appeals filed by the Appellant-bank, the

Respondent herein was the petitioner before High Court. The former

writ petition relates to grant of terminal benefits to him and the

latter relates to challenge to chargesheet and his dismissal from

service. Consequent upon the decision in the previous writ petition,

the latter writ petition was allowed. Since both the appeals have

been filed in relation to the same employee, therefore, both the Civil

Appeals are heard analogously and being decided by this common

judgment.

3

4.The issue pertaining to the voluntary retirement is governed

by the UCO Bank (Employees’) Pension Regulations, 1995

(hereinafter referred to as ‘Pension Regulation’) as stood on the

date on which notice for voluntary retirement was submitted by the

Respondent. The service conditions of the employee are governed by

the UCO Bank (Officers’) Service Regulations, 1979 (hereinafter

referred to as ‘Service Regulation’) applicable for termination or

discontinuation from employment of the Bank. The said Regulation

was later amended on 30.04.2011.

FACTUAL MATRIX

5.The facts unveiling the controversy are that the Respondent

was appointed as Clerk-cum-Godown Keeper in UCO Bank on

10.09.1983 and promoted as an Assistant Manager with effect from

01.01.2000. He was further promoted as Manager w.e.f.

26.04.2007. In July 2010, while working as Branch Manager at

Raipur Branch, some suspicious transactions in the account of

M/s. Bhanu Road Carriers and M/s. Progressive Exim Ltd. came to

the knowledge of the Appellant. Internal correspondence was made

from Head Office to Zonal Office regarding the same. In the

4

meantime, Respondent sent a notice of voluntary retirement on

04.10.2010 to the General Manager, Kolkata. In response, Zonal

Office asked for fresh application under the Pension Regulation. The

Head Office also sought information regarding vigilance, non-

vigilance or court case and an undertaking to the effect that he

would not accept any commercial employment for two years from

the date of acceptance of his voluntary retirement.

6.In the interregnum, the Zonal Office issued a show-cause

notice dated 11.11.2010 and asked explanation regarding alleged

transactions and suspicious entries in the accounts as referred

above. An internal communication between the Head Office and the

Zonal Office dated 11.12.2010 indicates that voluntary retirement of

Respondent was not considered because of proposed changes in

Pension Regulation, therefore, the Respondent was advised to

continue in service, and a communication from Zonal Office to the

Chief Manager, UCO Bank, Bilaspur was made on 20.12.2010 to

that effect. The Head Office wrote another letter to Zonal Office on

06.04.2011 stating that since show cause notice has been issued on

11.11.2010 to the Respondent, therefore his request for voluntary

5

retirement cannot be considered, and the same was communicated

to the branch office.

7.On 09.05.2011, reply to the show cause notice was submitted,

and in the meantime, an undertaking was furnished by the

Respondent on 11.04.2011 that he shall not take any commercial

employment. Since the period specified in the notice for voluntary

retirement had elapsed, hence, after writing a letter dated

14.05.2011, Respondent stopped working with the bank w.e.f.

16.05.2011. Later, vide communication dated 29.06.2011 it was

informed to the Respondent by post sent from Bilaspur Branch that

his request for voluntary retirement is not being accepted. As per

information supplied by the Postal Department, the said letter was

never delivered to the Respondent and the High Court has also

taken note of the said fact.

8.After about eight months from the date when he severed his

employment with the Appellant, the Respondent was charge-sheeted

on 05.03.2012 alleging the suspicious transactions as mentioned

hereinabove. Challenging the non-acceptance of voluntary

retirement and consequent initiation of inquiry and dismissal, the

6

Respondent filed the respective writ petitions, which were allowed

by the learned Single Judge and confirmed in writ appeal by the

High Court vide impugned order. Hence, the present two appeals.

9.In the course of hearing, both the parties have placed reliance

on the judgments of this Court in UCO Bank v. Rajinder Lal

Capoor

1

(hereinafter ‘R.L. Capoor - I’), UCO Bank v. Rajinder Lal

Capoor

2

(hereinafter ‘R.L. Capoor - II’) and the judgment of Three-

Judge Bench in Canara Bank v. D.R.P. Sundharam

3

. All the said

judgments deal with Regulation 20(3)(iii) of the Service Regulation,

consequential effect of show cause notice and meaning of deemed

pendency. Considering the peculiar facts of the case and that the

Respondent himself was appearing in person as well as looking to

the questions of law as involved, Mr. Gaurav Agrawal, learned senior

counsel, was appointed as amicus curiae to assist the Court, who

agreed to assist us in examining the legal issues involved in these

two appeals.

ARGUMENTS ADVANCED BY THE PARTIES

1 (2007) 6 SCC 694

2 (2008) 5 SCC 257

3 (2016) 12 SCC 724

7

10.Learned counsel for the Appellant, the Respondent-in-person

and learned amicus curiae have advanced their arguments and were

heard at length. Learned counsel for the Appellant assailed the

judgment of the High Court placing reliance on Regulation 20(3)(ii)

of the Service Regulation and contended that in case a notice to

show cause for institution of disciplinary action has been issued, it

would amount to pendency of the disciplinary proceedings, and

during such pendency, the request for voluntary retirement cannot

be accepted. It is further argued that the deeming fiction as

contained in Regulation 29(1) and (2) of the Pension Regulation may

not be applicable on elapse of three months’ notice period as

specified therein, in case the disciplinary proceeding is pending as

per Regulation 20(3)(ii) of the Service Regulation. In support of his

contentions, reliance has been placed upon the aforementioned

judgments.

11.Per contra, the Respondent-in-person, submitted that while

allowing the writ petition, the High Court recorded the reasons in

detail indicating that the voluntary retirement was deemed to have

been accepted w.e.f. the date of expiry of three months’ notice

8

period or from the date of cessation of employment i.e., 16.05.2011.

It was contended that the show cause notice dated 11.11.2010 does

not indicate about initiation of disciplinary proceedings, as required

under Regulation 20(3)(ii) of the Service Regulation. It is also

contended, in case the disciplinary proceedings is not initiated prior

to retirement, dismissal from service consequent to such

proceedings is arbitrary and without any sanction under the law,

and as such, the findings of the High Court do not warrant

interference. In view of the above submissions, it was prayed that

the Appeals preferred by the Bank may be dismissed with direction

to pay the post retiral and pensionary benefits within time frame

along with interest.

12.Mr. Gaurav Agrawal, learned senior counsel and amicus, has

placed all the facts in detail in his brief note of submissions and

argued that Regulation 29 of the Pension Regulation would apply for

voluntary retirement on completion of 20 years of service in case

the notice to that effect proposing a date of not less than three

months has been given in writing to the appointing authority. As

per the proviso to Regulation 29(2), such notice shall become

9

effective if not refused during the notice period. He submits that

Clauses (i), (ii) and (iii) of Regulation 20(3) of the Service Regulation

operate in different spheres and the judgments referred hereinabove

only deal with the contingency of Regulation 20(3)(iii), therefore,

Regulation 20(3)(ii) of the Service Regulation, particularly in facts of

the present case, requires independent consideration. As per his

contention, show cause notice dated 11.11.2010 does not indicate

the institution of disciplinary proceedings and satisfy the

requirement contemplated in Regulation 20(3)(ii) of the Service

Regulation. It was also stated that nothing has been placed on

record to indicate that the competent authority fulfilling the

requirement of clause 20(3)(ii) of Service Regulation and Clause

29(2) of Pension Regulation has passed any order refusing voluntary

retirement within the notice period. Lastly, it was submitted that

the judgment of the High Court is just, equitable and in accordance

with law, therefore, warrants no interference.

13.It is pointed out, the documents dated 28.07.2010

(communication of Vigilance Department advising to lodge FIR) and

12.08.2010 (a draft show cause notice) placed before this Court

10

along with additional affidavit were not filed with counter affidavit

before the High Court. The communication of these two documents

and internal correspondences of the Head Office to the Zonal Office

dated 11.12.2010, 20.12.2010 and 06.04.2011 to the Respondent

was also not averred in counter affidavit.

14.Learned amicus has drawn a distinction between “notice to

retire” and “request seeking permission to retire” placing reliance on

the judgment of this Court in State of Haryana & Ors. v. S.K.

Singhal

4

. It is his contention that any refusal to accept notice

within the period specified in the notice has not been placed before

the Court. Therefore, in terms of proviso of Regulation 29(2) of the

Pension Regulations, the voluntary retirement is deemed to come

into force immediately after expiry of the date as specified in the

notice. In support, reliance was also placed on Tek Chand v. Dile

Ram

5

.

15.In the facts of both these Appeals, the following four questions

falls for our consideration - (a) Under Regulation 29 of Pension

Regulation, a notice of voluntary retirement if not refused within the

4 (1999) 4 SCC 293

5 (2001) 3 SCC 290

11

prescribed period of three months or before the date as specified in

the notice, whether such notice would be deemed to be accepted on

expiry of such period? (b) Whether issuance of show cause notice

dated 11.11.2010 by the Appellant may fall within the purview of

institution of the disciplinary proceedings and such proceedings be

treated as pending in terms of Regulation 20(3)(i) & (ii) of the Service

Regulation? (c) Whether further action taken by the Appellant in

issuing chargesheet to conduct an inquiry and pass consequential

order of dismissal from service would withstand the scrutiny of law?

(d) In the facts and looking to the legal position discussed, whether

the judgments of the High Court warrant interference?

ANAYSIS

16.On appraisal of the rival contentions and to deal with the

questions posed above, for ready reference, it is necessary to first

refer the relevant provisions of the Pension Regulation applicable as

on the date, governing the issue of voluntary retirement. Regulation

29 of Chapter V of the Pension Regulation is relevant therefore

reproduced as under:

12

“29. Pension on Voluntary Retirement. – (1) On or after

the 1

st

day of November, 1993 at any time after an

employee has completed twenty years of qualifying service

he may, by giving notice of not less than three months in

writing to the appointing authority retire from service;

Provided that this sub-regulation shall not apply to an

employee who is on deputation or on study leave abroad

unless after having been transferred or having returned to

India he has resumed charge of the post in India and has

served for a period of not less than one year;

Provided further that this sub-regulation shall not apply to

an employee who seeks retirement from service for being

absorbed permanently in an autonomous body or a public

sector undertaking or company or institution or body,

whether incorporated or not to which he is on deputation at

the time of seeking voluntary retirement;

Provided that this sub-regulation shall not apply to an

employee who is deemed to have retired in accordance

with clause (I) of regulation 2.

(2) The notice of voluntary retirement given under sub-

regulation (1) shall require acceptance by the appointing

authority;

Provided that where the appointing authority does not

refuse to grant the permission for retirement before the

expiry of the period specified in the said notice, the

retirement shall become effective from the date of expiry of

the said period.”

(emphasis supplied)

17.Upon reading, it is quite clear, if an employee on or after 1

st

day

of November 1993 completes twenty years of qualifying service, and

furnishes a notice of not less than three months to the appointing

13

authority, he may retire voluntarily. Provisos of Regulation 29(1) of

the Pension Regulation deal with the contingencies which are not

relevant for the present case. Regulation 29(2) makes it further clear

that notice for voluntary retirement is required to be given as per

Regulation 29(1), which is required to be accepted by the appointing

authority. Regulation 29(2) of Pension Regulation applies subject to

proviso to the said sub-regulation, whereby in case the appointing

authority does not refuses the permission of voluntary retirement

before the period specified in the notice, the voluntary retirement

would be effective ipso facto from the date specified in the notice.

Therefore, in Regulation 29(2), voluntary retirement is qualified by

an act of the appointing authority to refuse within the notice

period. Otherwise, the notice of voluntary retirement shall be

deemed to be accepted from the date or period as indicated in the

notice.

18.In view of the discussions made regarding provisions

contained in Pension Regulation and to understand the import of

the said provision, we may take guidance from judgments delivered

14

by this Court dealing with pari materia provisions and

interpretation thereto.

19.In the case of Dinesh Chandra Sangma Vs. State of Assam

& Ors.

6

a Three-Judge bench of this Court was having an occasion

to deal with a similar issue of voluntary retirement in the context of

Fundamental Rule 56 (c), wherein this Court observed as follows -

7. Before we proceed further we may read F. Rule 56 as

amended:

“F. Rule 56. (a) The date of compulsory retirement of a

Government servant is the date on which he attains

the age of 55 years. He may be retained in service

after this age with sanction of the State Government

on public grounds which must be recorded in writing,

and proposals for the retention of a Government

servant in service after this age should not be made

except in very special circumstances.

(b) Notwithstanding anything contained in these rules

the appropriate authority may, if he is of the opinion

that it is in the public interest to do so, retire

government servant by giving him notice of not less

than three months in writing or three months' pay

and allowances in lieu of such notice, after he has

attained fifty years of age or has completed 25 years

of service, whichever is earlier.

(c) Any government servant may, by giving

notice of not less than three months in writing

to the appropriate authority, retire from service

after he has attained the age of fifty years or

has completed 25 years of service, whichever is

earlier.”

6 (1977) 4 SCC 441

15

*** *** ***

8. ……While the Government reserves its right to

compulsorily retire a government servant, even against his

wish, there is a corresponding right of the government

servant under F. Rule 56(c) to voluntarily retire from

service by giving the Government three months'

notice in writing. There is no question of acceptance

of the request for voluntary retirement by the

Government when the government servant exercises

his right under F. Rule 56 (c). Mr Niren De is

therefore right in conceding this position.

*** *** ***

17. The High Court committed an error of law holding that

consent of the Government was necessary to give legal

effect to the voluntary retirement of the Appellant under F.

Rule 56(c). Since the conditions of F. Rule 56(c) are fulfilled

in the instant case, the Appellant must be held to have

lawfully retired as notified by him with effect from August

2, 1976.

20.By the said judgment it was made clear that, as per relevant

rules, to give effect to the voluntary retirement, the consent of the

Government was not necessary since the notice given by employee

reflects the intention to retire voluntarily from the date so specified

in the notice. Nonetheless, it appears that the said provision did not

contain any option on the part of the government to refuse the

request for voluntary retirement.

16

21.In another judgment of three-Judge Bench in B.J. Shelat Vs.

State of Gujarat and Ors.

7

, wherein this Court dealt with the

question of jurisdiction of the authority to take a disciplinary action

and was observed as thus: -

“6. We will proceed to consider the question of the

jurisdiction of the authority to take disciplinary action

against the Appellant after his retirement. It may be

recalled that the Appellant gave a notice intimating his

intention to retire on July 17, 1973 stating that he intended

to retire on reaching the age of 55 years on December 3,

1973. He attained the age of 55 years on December 3,

1973 and it is common ground that the notice of

suspension was issued by the High Court only on

December 11, 1973. But before December 3, 1973 it is

admitted that a show-cause notice was issued on

November 23, 1973 by the Chief City Magistrate on the

directions of the High Court calling upon the petitioner to

submit his explanation and the Appellant submitted his

explanation on November 26, 1973.

7. Rule 161 of the Bombay Civil Services Rules provides for

the retirement of Government servants before attaining the

age of superannuation. Rule 161(1)(aa) provides—

“Notwithstanding anything contained in clause

(a):

(1) An appointing authority shall, if he is of the

opinion that it is in the public interest so to do, have

the absolute right to retire any Government servant to

whom clause (a) applies by giving him notice of not

less than three months in writing or three months'

pay and allowances in lieu of such notice:

*** *** ***

Sub-rule (2)(ii) is as follows:

7 (1978) 2 SCC 202

17

“Any Government servant to whom clause (a)

applies may, by giving notice of not less than three

months in writing to the Appointing Authority, retire

from service... and in any other case, after he has

attained the age of 55 years.”

There is no dispute that the Rule applicable is Rule 161(2)

(ii) and the Appellant is entitled to retire by giving a notice

of not less than 3 months after he has attained the age of

55 years. Under Rule 161(1)(aa)(1) the appointing authority

has an absolute right to retire any Government servant to

whom clause (a) applies in public interest by giving him

notice of not less than three months in writing or three

months' pay and allowances in lieu of such notice. But the

Government servant has no such absolute right. A right is

conferred on the Government servant under Rule 161(2)(ii)

to retire by giving not less than three months' notice on his

attaining the prescribed age. Such a right is subject to the

proviso which is incorporated to the sub-section which

reads as follows:

“ Provided that it shall be open to the

appointing authority to withhold permission to

retire to a Government servant who is under

suspension, or against whom departmental

proceedings are pending or contemplated, and

who seeks to retire under this sub-clause.”

But for the proviso a Government servant would be at liberty to retire

by giving not less than three months' notice in writing to the

appointing authority on attaining the prescribed age.”

22.In the above case, the judgment of Dinesh Chandra Sangma

(Supra) was relied upon and applying the law as prevalent, the

Court observed as thus:

“8. ……. In the case before us it is incumbent on the

appointing authority to withhold permission to retire on one

of the conditions mentioned in the proviso. We are of the

view that the proviso contemplates a positive action

by the appointing authority. The words “It shall be

18

open to the appointing authority to withhold

permission” would indicate that the appointing

authority has got an option to withhold permission

and that could be exercised by communicating its

intention to withhold permission to the Government

servant. The appointing authority may have

considered the question and might not have taken a

decision either way or after considering the facts of

the case might have come to the conclusion that it is

better to allow the Government servant to retire than

take any action against him. For the proviso to become

operative it is necessary that the Government should not

only take a decision but communicate it to the Government

servant.”

23.The Court also interpreted the meaning of the word ‘withhold’

in case the disciplinary proceedings are pending and a person

applied for voluntary retirement, wherein following was observed :-

“9. Mr Patel next referred us to the meaning of the word

“withhold” in Webster's Third New International

Dictionary which is given as “hold back” and submitted

that the permission should be deemed to have been

withheld if it is not communicated. We are not able to read

the meaning of the word “withhold” as indicating that in

the absence of a communication it must be understood as

the permission having been withheld.

10. It will be useful to refer to the analogous provision in

the Fundamental Rules issued by the Government of India

applicable to the Central Government servants.

Fundamental Rule 56(a) provides that except as otherwise

provided in this Rule, every Government servant shall

retire from service on the afternoon of the last day of the

month in which he attains the age of fifty-eight years.

Fundamental Rule 56(j) is similar to Rule 161(aa)(1) of the

Bombay Civil Services Rules conferring an absolute right

19

on the appropriate authority to retire a Government servant

by giving not less than three months' notice. Under

Fundamental Rule 56(k) the Government servant is

entitled to retire from service after he has attained the age

of fifty-five years by giving notice of not less than three

months in writing to the appropriate authority on attaining

the age specified. But proviso (b) to sub-rule 56(k) states

that it is open to the appropriate authority to withhold

permission to a Government servant under suspension

who seeks to retire under this clause. Thus under the

Fundamental Rules issued by the Government of India

also the right to the Government servant to retire is not an

absolute right but is subject to the proviso whereunder the

appropriate authority may withhold permission to a

Government servant under suspension. On a

consideration to Rule 161(2)(ii) and the proviso, we

are satisfied that it is incumbent on the Government

to communicate to the Government servant its

decision to withhold permission to retire on one to

the grounds specified in the proviso.

11. In the view we have taken that the appointing

authority has no jurisdiction to take disciplinary

proceedings against a Government servant who had

effectively retired, the question as to whether the

High Court was right in holding that the disciplinary

authority had sufficient grounds for dismissing the

Appellant does not arise.

…..As already stated, as we have come to the conclusion

that the disciplinary action cannot be taken after the date

of his retirement, we refrain from expressing any opinion

on the correctness of the decision taken by the appointing

authority.”

In the said context, it is evident that until the appointing authority

withholds the permission to let an employee voluntarily retire,

pendency of disciplinary proceedings against such Government

20

servant has no adverse consequence. Therefore, withholding

permission in terms of the rules was found to be a prerequisite.

24.Both the above referred judgments have been further cited

with approval in the case of Union of India and Ors. v. Sayed

Muzaffar Mir

8

and the Court held as thus: -

“3.The learned Additional Solicitor General, Shri Ahmed

appearing for the Appellants, has contended that the right

of premature retirement conferred by the aforesaid

provision could be denied to a railway servant in case he

be under suspension, as was the Respondent at the

relevant time. This is what finds place in the proviso to the

aforesaid provision. The Additional Solicitor General also

seeks to place reliance on what has been stated in Rule

1801(d) which starts with non-obstante clause and states

that the competent authority may require a railway servant

under suspension to continue his service beyond the date

of his retirement in which case he shall not be permitted by

that authority to retire from service and shall be retained in

service till such time as required by that authority. Relying

on these provisions the contention advanced is that though

the Respondent had sought premature retirement by his

letter dated 22-7-1985 and though the three months'

period had expired on 21-10-1985, the Railways were

within the rights not to permit the premature retirement

because of the suspension of the Respondent at the

relevant time, which had come to be ordered in the course

of a disciplinary proceeding which was then pending

against the Respondent.

4. There are two answers to this submission. The

first is that both the provisions relied upon by the

learned counsel would require, according to us,

8 1995 Supp (1) SCC 76

21

passing of appropriate order, when the government

servant is under suspension (as was the Respondent),

either of withholding permission to retire or

retaining of the incumbent in service. It is an

admitted fact that no such order had been passed in

the present case. So, despite the right given to the

appropriate/competent authority in this regard, the

same is of no avail in the present case as the right

had not come to be exercised. We do not know the

reason(s) thereof. May be, for some reason the

authority concerned thought that it would be better

to see off the Respondent by allowing him to retire.

5. The second aspect of the matter is that it has been held

by a three-Judge Bench of this Court in Dinesh Chandra

Sangma v. State of Assam [(1977) 4 SCC 441 : 1978 SCC

(L&S) 7] , which has dealt with a pari materia provision

finding place in Rule 56(c) of the Fundamental Rules, that

where the government servant seeks premature retirement

the same does not require any acceptance and comes into

effect on the completion of the notice period. This decision

was followed by another three-Judge Bench in B.J.

Shelat v. State of Gujarat [(1978) 2 SCC 202 : 1978 SCC

(L&S) 208].

6. The period of notice in the present case having expired

on 21-10-1985, and the first order of removal having been

passed on 4-11-1985, we hold that the Tribunal had

rightly come to the conclusion that the order of removal

was non est in the eye of law.”

25.In another case of S.K. Singhal (Supra), this Court was

having an occasion to consider the pari materia provision of Punjab

Civil Services Rules wherein the rule contemplates about “notice to

retire” and “not a request seeking permission to retire”. In the said

22

case, this Court has relied upon the above referred three judgments

and held as thus: -

“13. Thus, from the aforesaid three decisions it is clear that

if the right to voluntarily retire is conferred in absolute

terms as in Dinesh Chandra Sangma case [(1977) 4 SCC

441 : 1978 SCC (L&S) 7] by the relevant rules and there is

no provision in the rules to withhold permission in certain

contingencies the voluntary retirement comes into effect

automatically on the expiry of the period specified in the

notice. If, however, as in B.J. Shelat case [(1978) 2 SCC

202 : 1978 SCC (L&S) 208] and as in Sayed Muzaffar Mir

case [1995 Supp (1) SCC 76 : 1995 SCC (L&S) 256] the

authority concerned is empowered to withhold

permission to retire if certain conditions exist, viz.,

in case the employee is under suspension or in case

a departmental enquiry is pending or is

contemplated, the mere pendency of the suspension

or departmental enquiry or its contemplation does

not result in the notice for voluntary retirement not

coming into effect on the expiry of the period

specified. What is further needed is that the

authority concerned must pass a positive order

withholding permission to retire and must also

communicate the same to the employee as stated

in B.J. Shelat case [(1978) 2 SCC 202 : 1978 SCC

(L&S) 208] and in Sayed Muzaffar Mir case [1995

Supp (1) SCC 76 : 1995 SCC (L&S) 256] before the

expiry of the notice period. Consequently, there is no

requirement of an order of acceptance of the notice to be

communicated to the employee nor can it be said that non-

communication of acceptance should be treated as

amounting to withholding of permission.”

14. Before referring to the second category of cases where

the rules require a positive acceptance of the notice of

voluntary retirement and communication thereof, it is

necessary to refer to the decision of this Court in Baljit

Singh (Dr) v. State of Haryana [(1997) 1 SCC 754 : 1997

23

SCC (L&S) 313] strongly relied upon by the learned counsel

for the Appellants and to Power Finance Corpn. Ltd. v.

Pramod Kumar Bhatia [(1997) 4 SCC 280 : 1997 SCC

(L&S) 941] . The former case arose under Rule 5.32(B) of

the Punjab Civil Services Rules. That rule extracted earlier

contains an express provision in the proviso to sub-rule (2)

that the retirement takes effect automatically if refusal is

not communicated within 3 months. In that case, when the

employee gave notice for voluntary retirement on 20-9-

1993, criminal cases were pending against him. After

expiry of 3 months, on 25-2-1994, the competent authority

declined to accept the notice. A two-Judge Bench of this

Court, however, held that the voluntary retirement did not

come about automatically on the expiry of the notice period

but that it could take effect only upon acceptance of the

notice by the Government and that the acceptance must

also be communicated and till then the jural relationship of

master and servant continues. This Court referred only to

the decision of the two-Judge Bench in Sayed Muzaffar

Mir case [1995 Supp (1) SCC 76 : 1995 SCC (L&S) 256]

and stated that that case was to be confined to its own

facts. The two-Judge Bench of this Court in Baljit

Singh case [(1997) 1 SCC 754 : 1997 SCC (L&S) 313]

did not notice that there were two three-Judge Bench

cases in Dinesh Chandra Sangma [(1977) 4 SCC 441 :

1978 SCC (L&S) 7] and Shelat [(1978) 2 SCC 202 :

1978 SCC (L&S) 208] taking the view under similar

rules that a positive order was to be passed within

the notice period withholding permission to retire

and that the said order was also to be communicated

to the employee during the said period. By stating that

an order of acceptance of the notice was necessary and

that the said acceptance must be communicated to the

employee and till that was done the jural relationship

continued and there was no automatic snapping thereof on

the expiry of 3 months' period, the two-Judge Bench, in our

view, has gone contrary to the two three-Judge Bench

cases which were not brought to its notice. In the above

24

circumstances, we follow the two three-Judge Bench cases

for deciding the case before us.”

26.After taking clue from the above judgments, if we look into the

language of Regulation 29(2) of the Pension Regulation which deals

with the voluntary retirement, acceptance of the notice by the

appointing authority is subject to compliance of proviso, whereby

refusal to let the employee retire voluntarily ought to be ordered

before expiry of the notice period, and communicate, otherwise, in

terms of proviso to Regulation 29(2), voluntary retirement shall be

deemed to be effective on lapse of the notice period. Therefore, a

positive act of passing an order of refusal is required to be

undertaken by the appointing authority.

27.In the judgment of Tek Chand (Supra) decided by another

Three-Judge Bench, this Court has considered all the above

referred judgments and in the context of the language used in the

proviso to sub-rule (2) of Rule 48-A of the Central Services Pension

Rules, 1972 dealing with the voluntary retirement, the Court in

paragraphs 33 and 35, held as thus: -

“33. It is clear from sub-rule (2) of the Rule that the

appointing authority is required to accept the notice of

voluntary retirement given under sub-rule (1). It is open to

25

the appointing authority to refuse also, on whatever

grounds available to it, but such refusal has to be before

the expiry of the period specified in the notice. The proviso

to sub-rule (2) is clear and certain in its terms. If the

appointing authority does not refuse to grant the

permission for retirement before the expiry of the period

specified in the said notice, the retirement sought for

becomes effective from the date of expiry of the said

period. In this case, admittedly, the appointing authority

did not refuse to grant the permission for retirement to

Nikka Ram before the expiry of the period specified in the

notice dated 5-12-1994. The learned Senior Counsel for the

Respondent argued that the acceptance of voluntary

retirement by appointing authority in all cases is

mandatory. In the absence of such express acceptance the

government servant continues to be in service. In support

of this submission, he drew our attention to Rule 56(k) of

the Fundamental Rules. He also submitted that acceptance

may be on a later date, that is, even after the expiry of the

period specified in the notice and the retirement could be

effective from the date specified in the notice. Since the

proviso to sub-rule (2) of Rule 48-A is clear in itself and the

said Rule 48-A is self-contained, in our opinion, it is

unnecessary to look to other provisions, more so in the light

of law laid down by this Court. An argument that

acceptance can be even long after the date of the

expiry of the period specified in the notice and that

the voluntary retirement may become effective from

the date specified in the notice, will lead to

anomalous situation. Take a case, if an application for

voluntary retirement is accepted few years later from the

date specified in the notice and voluntary retirement

becomes operative from the date of expiry of the notice

period itself, what would be the position or status of such

a government servant during the period from the date of

expiry of the notice period up to the date of acceptance of

the voluntary retirement by the appointing authority? One

either continues in service or does not continue in service.

It cannot be both that the voluntary retirement could be

26

effective from the date of expiry of the period mentioned in

the notice and still a government servant could continue in

service till the voluntary retirement is accepted. The proviso

to sub-rule (2) of Rule 48-A of the Rules does not admit

such situation.

35. In our view, this judgment fully supports the contention

urged on behalf of the Appellant in this regard. In this

judgment, it is observed that there are three

categories of rules relating to seeking of voluntary

retirement after notice. In the first category,

voluntary retirement automatically comes into force

on expiry of notice period. In the second category

also, retirement comes into force unless an order is

passed during notice period withholding permission

to retire and in the third category voluntary

retirement does not come into force unless

permission to this effect is granted by the competent

authority. In such a case, refusal of permission can

be communicated even after the expiry of the notice

period. It all depends upon the relevant rules. In the

case decided, the relevant Rule required acceptance

of notice by appointing authority and the proviso to

the Rule further laid down that retirement shall

come into force automatically if the appointing

authority did not refuse permission during the notice

period. Refusal was not communicated to the

Respondent during the notice period and the Court

held that voluntary retirement came into force on

expiry of the notice period and subsequent order

conveyed to him that he could not be deemed to have

voluntary retired had no effect. The present case is

almost identical to the one decided by this Court in the

aforesaid decision.”

28.In the above mentioned precedents, the pari materia provisions

dealing with the contingency of voluntary retirement have been

27

dealt with and it was made clear that subject to applicable law, the

request if not refused within the period specified in the notice or

withheld, the deemed approval of voluntary retirement would be

effective on expiry of notice period.

29.There may be three contingencies for the employees with

respect of retirement. First is on attaining the age of

superannuation; second would be a situation of compulsory

retirement in public interest and third is where an employee sought

retirement voluntarily indicating his intention to cease the master-

servant relationship. In the third contingency, subject to applicable

regulations or rules, where an employee voluntarily ceases the

employment and indicates his intention in the notice of voluntary

retirement, until it is refused or withheld by an order within the

notice period, the intention of the employee would become effective

from the date as specified by him. Meaning thereby, if an employee

voluntarily wishes to severe his relationship with employer, and by

virtue of rule, the prescription is not followed, i.e., requiring the

authorities to indicate their intention to refuse the request, as per

28

deemed approval clause, in our opinion, the request becomes

effective ipso facto.

30.In the case at hand, the notice of three months indicating

intention to retire voluntarily was given on 04.10.2010 and the

period was supposed to expire on 04.01.2011, to which refusal was

not ordered within the notice period. The non-approval

communicated on 29.06.2011, after expiry of the notice period and

cessation of work vide notice dated 14.05.2011 with effect from

16.05.2011, is of no avail to the bank.

31.Reverting to the arguments as advanced by the Appellant,

relying upon Regulation 20(3)(ii) of Service Regulation, it sets forth

an embargo upon an officer against leaving or discontinuing or

resigning from service of bank without giving a notice in writing.

The said provision is relevant, therefore, reproduced for ready

reference as under: -

“20. Termination of Service. –

(1) **** **** ****

(2) **** **** ****

(3) (i) An officer against whom disciplinary proceedings are

pending shall not leave/discontinue or resign from his

service in the bank without the prior approval in writing of

29

competent authority and any notice or resignation given by

such an officer before or during the disciplinary

proceedings shall not take effect unless it is accepted by

the Competent Authority.

(ii) Disciplinary proceedings shall deemed to be pending

against any employee for the purpose of this regulation if

he has been placed under suspension or any notice has

been issued to him to show cause why disciplinary

proceedings shall not be instituted against him and will be

deemed to be pending until final orders are passed by the

Competent Authority.

(iii) The officer against whom disciplinary proceedings

have been initiated will cease to be in service on the date

of superannuation but the disciplinary proceedings will

continue as if he was in service until the proceedings are

concluded and final order is passed in respect thereof. The

concerned officer will not receive any pay and/or

allowance after the date of superannuation. He will also

not be entitled for the payment of retirement benefits till

the proceedings are completed and final order is passed

thereon except his own contributions to CPF.”

32.Upon reading, it is discernable that if disciplinary proceedings

against an officer are pending and he wishes to leave/discontinue or

resign, he may be permitted to do so by prior approval of the

competent authority in writing. Such notice, if any, given by the

officer before or during the disciplinary proceedings, shall not be

given effect unless accepted by the competent authority. The

pendency of the disciplinary proceedings would include suspension

or issuance of a show-cause notice for institution of the disciplinary

30

proceedings. Regulation 20(3)(iii) of the Service Regulation applies

where the disciplinary proceedings were initiated prior to attaining

the age of superannuation, and prescribes the recourse to the bank

after attaining the age of superannuation, which is not of much

relevance in the facts of this case.

33.The argument as advanced to apply Regulation 20(3)(i) and

20(3)(ii) of the Service Regulation may have some relevance as it

imposes embargo upon an officer against ‘leaving or discontinuing or

resigning’ from service without the prior approval of the authority if

disciplinary proceedings are pending. It also provides what would

mean by pendency of disciplinary proceedings. As discussed,

Regulation 29 of Pension Regulation governs the voluntary

retirement and its acceptance until refused by the appointing

authority within notice period, otherwise it would become effective

on lapse of the time specified in the notice.

34.Looking at the provision of Regulation 20(3)(i), (ii), (iii) of

Service Regulations and Regulation 29(1) and (2) of the Pension

Regulation, it ought to be read in tandem harmoniously. Regulation

20(3)(i) & (ii) of the Service Regulation deals with cessation of

31

service and when it would not affect the pendency of disciplinary

proceedings. It puts an embargo only in two specific contingencies,

first, where the officer is placed under suspension, second, where a

show-cause notice has been issued for institution of disciplinary

proceedings. In either of the situation, an officer would require prior

approval of the competent authority. Indeed it is true that voluntary

retirement is also a mode to ‘leave or discontinue’ service, therefore

to such extent, Regulation 20(3)(i) & (ii) may have relevance.

Nonetheless, voluntary retirement is not a mere act of leaving or

discontinuing, rather, a distinct right of an employee that is

available on completion of the requisite number of years of service,

etc. For exercising the option of voluntary retirement, Regulation 29

of the Pension Regulation is the main provision. Given the

situation, without considering both provisions harmoniously,

otherwise, this leads to an anomalous situation. We say so because

as per intent of Regulation 20(3)(i) & (ii), the employee cannot leave

without approval of the competent authority pending the

disciplinary proceedings irrespective of the fact that he has tendered

notice to that effect. However, on literal reading of proviso to

Regulation 29(2) of Pension Regulation, the intent thereof seems to

32

be otherwise i.e., unless refused by the competent authority within

the period prescribed in the notice, the voluntary retirement shall

become automatically effective. It is in this context provisions of

both regulations ought to be harmoniously constructed.

35.Under Regulation 20(3)(i) & (ii) of Service Regulation,

competent authority can retain the employee against whom

disciplinary proceedings are pending, unless permitted. At the same

time, Regulation 29(2) of the Pension Regulation requires

acceptance of the notice of voluntary retirement by authority.

Nonetheless, its proviso contemplates that the notice for voluntary

retirement becomes effective unless positively refused by the

competent authority. On said reading, the intent can be gathered

that while drafting Regulation 29 of Pension Regulation, the intent

of Regulation 20(3)(i) and (ii) of Service Regulation has been duly

taken care of, albeit in a different language. While Regulation 20(3)

(i) & (ii) of Service Regulation permits the authority to not grant

‘approval’ where disciplinary proceedings are pending; Regulation

29 of Pension Regulation also achieves the same effectively, through

its proviso, by permitting the authority to ‘refuse’ voluntary

33

retirement, but within the notice period. Therefore, essence and

intent are the same subject to some restrictions. In this manner,

said provisions are to be applied harmoniously.

36.Now reverting to the argument of issuance of the show cause

notice dated 11.11.2010 is concerned, such notice must indicate

the intention of institution of disciplinary proceedings, to trigger the

embargo under Regulation 20(3)(ii) of the Service Regulation. For

understanding the nature and context of the show-cause notice

dated 11.11.2010, its relevant operative part is reproduced

hereunder: -

“Due to above action M/s. Progressive Exim Ltd. is

aggrieved on the Bank and the Bank’s image has suffered.

Since money was withdrawn from Current account of M/s.

Bhanu Road Carriers, which was not belonging to them,

the Bank was out of fund for a period from 08/10/2008 to

02/06/2010.

You are advised to submit your explanation within seven

days from the receipt of this letter. If no reply received

from you it will be construed that you have nothing

to say in the matter and further course of action will

be taken against you.”

37.After reading the operative portion as above, it is clear, an

explanation vis-à-vis allegations was sought from the officer and in

absence of which, bank was to take further recourse. In our view,

34

the aforesaid content of show cause notice, is not suggestive of the

intention to institute disciplinary action. Mere mention of ‘further

course of action’ cannot be construed as intention to institute

disciplinary proceedings. Therefore, even said contention of the

Appellant falls flat.

38.Insofar as reliance is placed on the judgments of R.L. Capoor

– I (Supra) and its review in R.L. Capoor – II (Supra), it is

necessary to understand its factual matrix. In the said case, the

employee was working as a Branch Manager in UCO Bank and was

allowed to superannuate on 1-11-1996. Prior to his retirement, only

show-cause notices were issued to him on 24-10-1996 and 30-10-

1996 in connection with alleged irregularities committed while

sanctioning and disbursing loans under the PMRY Scheme. A

charge-sheet was issued only on 13-11-1998, nearly two years after

his superannuation, and upon conclusion of enquiry, the penalty of

removal from service was imposed, which was also affirmed in

appeal. The Respondent's writ petition was allowed in part by the

High Court, which converted the penalty into compulsory

35

retirement, and the LPA preferred by the Bank was dismissed,

taking the matter to this Court.

39.In the judgment of R.L. Capoor

– I (Supra), this Court

dismissed the Bank's appeal and held the entire disciplinary

proceeding is illegal and without jurisdiction on the ground that

Regulation 20(3)(iii) of the Service Regulation could be invoked only

when disciplinary proceedings had been initiated prior to

superannuation, and since initiation of a proceeding is only upon

issuance of a charge-sheet and not merely upon a show-cause

notice, the legal fiction thereunder could not be attracted.

40.The Bank thereafter filed a Review Petition, giving rise to the

judgment of R.L. Capoor – II (Supra), seeking to rely upon

Regulation 20(3)(ii) of the Service Regulation. The review petition

was dismissed and this Court held that the legal fiction of deemed

pendency under Regulation 20(3)(ii) of the Service Regulation is of

limited scope, operating only to prevent an officer from resigning

during such proceedings, and cannot be extended to constitute

initiation of disciplinary proceedings for purposes of Regulation

20(3)(iii).

36

41.In both of these cases, therefore, this Court primarily

examined the scope and import of Regulations 20(3)(i), 20(3)(ii) and

20(3)(iii) of the Service Regulation, and elaborated upon the

meaning of the legal fiction as created by the expression ‘deemed to

be pending’. Therefore, both these judgements only dealt with a very

specific issue i.e., applicability of legal fiction contained in

Regulation 20(3)(ii) for the purpose of Regulation 20(3)(iii). As such,

we find ourselves in agreement with the submission made by the

learned amicus that R.L. Capoor - I (Supra) and R.L. Capoor – II

(Supra) only deals with the contingency of Regulation 20(3)(iii) and

do not apply on the facts of the present case.

42.The view taken in RL Capoor – I (Supra) and R.L. Capoor - II

(Supra) has also been reiterated in the judgment of D.R.P.

Sundharam (Supra) by a Three-Judge Bench of this Court. It is to

observe here that in neither of these judgements the effect of the

Regulation 29 of Pension Regulation has been considered. More so,

all the judgments relate to the Regulation 20(3)(iii) of the Service

Regulation without dealing with the purport of Regulation 20(3)(i) &

(ii) of Service Regulation which is applicable to the facts of the case

37

at hand. Judgements of this Court in State Bank of India & Ors.

v. Navin Kumar Sinha

9

and UCO Bank & Ors. v. M.B.Motwani

(Dead) thr. L.Rs and Ors

10

, dealt with the cases involving

retirement on attaining the age of superannuation and the dispute

was adjudicated in light of R.L.Capoor – I (Supra), R.L.Capoor – II

(Supra) and D.R.P. Sudharam (Supra). As such, these judgements

will not have any implication on the fact of the present appeals.

43.In light of the discussions made above and by applying the

rule of harmonious construction with respect to the interplay of the

said provisions of the Pension Regulation and the Service

Regulation, the situation as emerges is that the officer submitted

his notice of voluntary retirement on 04.10.2010, giving three

months' notice as required, which would be effective till 04.01.2011.

In the meantime, a show cause notice was issued by the Appellant

on 11.11.2010 and as discussed, it would not indicate the intention

to institute disciplinary proceedings in terms of Regulation 20(3)(ii)

of the Service Regulation. Nonetheless, the existence of such a show

cause notice itself is not sufficient without refusal by competent

9 2024 SCC OnLine SC 3369

10 (2024) 13 SCC 109

38

authority to stop the automatic operation of the notice of voluntary

retirement. In absence, the notice of voluntary retirement would

take its course. In the present case, no such order of refusal or

order of withholding was passed by the competent authority within

the stipulated period. The notice of voluntary retirement, therefore,

became effective automatically by efflux of time upon the expiry of

the three-month period on 04.01.2011. This Court, accordingly,

finds no infirmity in the view taken by the High Court, which is

liable to be upheld.

44.Before parting with this judgment, we deem it necessary to

place on record our appreciation for the invaluable assistance

rendered by learned Amicus Curiae Mr. Gaurav Agrawal, Senior

Advocate by way of filing erudite submissions, therefore, we

acknowledge his assistance and place the same on record.

CONCLUSION

45.In the light of discussion made hereinabove, in our view, while

passing the impugned judgment, the High Court has not committed

any infirmity. The judgment rendered by the High Court is after a

thorough examination of facts and applicable regulations, therefore,

39

the conclusion drawn as such is in right perspective. In our view, it

is correct to hold that when an employee decides to severe master

servant relationship and serves a notice indicating such intention

specifying the period, by operation of law it will become effective in

absence of any order of refusal. The subsequent act of issuing

chargesheet and consequential order of dismissal is also not

justified in law. As directed by the High Court, the Respondent

shall be entitled to all consequential post-retiral benefits in terms of

this order as well. The Bank is directed to settle all the dues within

a period of three months along with applicable interest rate.

Accordingly, the appeals filed by the Appellant-Bank fail and are,

hereby, dismissed.

46.Pending application(s), if any, shall stand disposed of.

…….…………….…………J.

(J.K. MAHESHWARI)

…….…………….…………J.

(VIJAY BISHNOI)

New Delhi;

April 07, 2026.

40