1997 JTR(SC) 496
1997 2 ALT(SC) 27 ; 1994 1 ArbLR 308 ; 1997 1 CLR 1111 ; 1997 66 DLT 573 ; 1997 91 FJR 526 ; 1994 2 JT 70 ; 1997 4 JT 300 ; 1997 2 LLJ 819 ; 1997 2 LLN 5 ; 1997 2 PLJR(SC) 70 ; 1994 1 Scale 446 ; 1997 3 Scale 347 ; 1997 4 SCC 280 ; 1997 SCC(L&S) 941 ; 1997 2 SCJ 10 ; 1997 2 SCR 1170 ; 1997 2 SCT 321 ; 1997 3 SCT 354 ; 1997 2 SLR 519 ; 1997 KHC 3594 ; 1997 2 KLT(Online) 1106 ; 1997 3 Supreme 445
1997(3) Supreme 445
SUPREME COURT OF INDIA
K. Ramaswamy and G.T. Nanavati, JJ.
Power Finance Corporation Ltd. -Appellant
versus
Pramod Kumar Bhatia -Respondent
Civil Appeal No. 2416 of 1997
(Arising out of SLP (C) No. 2145 of 1997)
Decided on 17-3-1997
Counsel for the Parties :
For the Appellant : P.P. Rao, Sr. Advocate and S. Nandrajog, Advocate.
For the Respondent : A.K. Sikri and Ms. Madhu Sikri, Advocates.
IMPORTANT POINT
Unless the employee is relieved of duty, after acceptance of the offer of voluntary retirement or resignation jural relationship of employee and employer does not come to an end.
Act
Referred
:CIVIL PROCEDURE CODE : O.39
COPYRIGHT ACT : S.51, S.55, S.52, S.17
SERVICE LAW : .
TRADE AND MERCHANDISE MARKS ACT : S.105, S.30(1)(b)
(A) The relevant statutory frameworks governing service relationships, including provisions from the Trade and Merchandise Marks Act and the Copyright Act, are considered alongside service law principles to assess the validity of administrative actions impacting employee status. Specifically, the procedural safeguards under Order 39 of the Civil Procedure Code inform the adjudication of contractual and statutory entitlements, while Sections 17, 51, 52, and 30(1)(b) of the Copyright Act, read with Section 105 of the Trade and Merchandise Marks Act, provide interpretive context for proprietary and contractual rights that may intersect with employment-related claims in cases involving intellectual property or commercial privileges.
(B) A conditional acceptance of voluntary retirement does not create a vested right until all conditions, such as clearance of outstanding dues, are fulfilled; an employee must be formally relieved of duties for the jural relationship to terminate, and the withdrawal of a scheme before condition fulfillment nullifies any claim of vested entitlement.
Facts of the case:
The respondent, while employed by the appellant Corporation, sought voluntary retirement under a scheme framed by the Corporation to relieve surplus staff. The Corporation conditionally accepted the respondents resignation on December 20, 1994, effective December 31, 1994, pending clearance of outstanding dues. The respondent later requested deduction of dues and relief from duties. The appellant withdrew the voluntary retirement scheme, contending it was erroneously implemented as there was no surplus staff, and denied that a vested right arose. The High Court held that the acceptance created a vested right, but the appellant challenged this finding.
Findings of Court:
The court found that the order of acceptance was conditional and became effective only upon compliance with conditions, including clearance of dues. Since no adjustment was made and the scheme was withdrawn before compliance, no vested right was created, and the respondent was not relieved of duties. Consequently, the High Courts ruling was erroneous.
Issues:
Whether the acceptance of voluntary retirement created a vested right in the respondent despite outstanding dues remaining unpaid and the subsequent withdrawal of the scheme.
Ratio Decidendi:
A conditional acceptance of voluntary retirement does not generate a vested right in an employee until all conditions are fulfilled and the employee is formally relieved of duties; withdrawal of the scheme before condition satisfaction negates any such right.
Result:
The appeal is allowed, the High Courts judgment is reversed, and the writ petition is dismissed without costs.
(A) The relevant statutory frameworks governing service relationships, including provisions from the Trade and Merchandise Marks Act and the Copyright Act, are considered alongside service law principles to assess the validity of administrative actions impacting employee status. Specifically, the procedural safeguards under Order 39 of the Civil Procedure Code inform the adjudication of contractual and statutory entitlements, while Sections 17, 51, 52, and 30(1)(b) of the Copyright Act, read with Section 105 of the Trade and Merchandise Marks Act, provide interpretive context for proprietary and contractual rights that may intersect with employment-related claims in cases involving intellectual property or commercial privileges.
(B) A conditional acceptance of voluntary retirement does not create a vested right until all conditions, such as clearance of outstanding dues, are fulfilled; an employee must be formally relieved of duties for the jural relationship to terminate, and the withdrawal of a scheme before condition fulfillment nullifies any claim of vested entitlement.
Facts of the case:
The respondent, while employed by the appellant Corporation, sought voluntary retirement under a scheme framed by the Corporation to relieve surplus staff. The Corporation conditionally accepted the respondents resignation on December 20, 1994, effective December 31, 1994, pending clearance of outstanding dues. The respondent later requested deduction of dues and relief from duties. The appellant withdrew the voluntary retirement scheme, contending it was erroneously implemented as there was no surplus staff, and denied that a vested right arose. The High Court held that the acceptance created a vested right, but the appellant challenged this finding.
Findings of Court:
The court found that the order of acceptance was conditional and became effective only upon compliance with conditions, including clearance of dues. Since no adjustment was made and the scheme was withdrawn before compliance, no vested right was created, and the respondent was not relieved of duties. Consequently, the High Courts ruling was erroneous.
Issues:
Whether the acceptance of voluntary retirement created a vested right in the respondent despite outstanding dues remaining unpaid and the subsequent withdrawal of the scheme.
Ratio Decidendi:
A conditional acceptance of voluntary retirement does not generate a vested right in an employee until all conditions are fulfilled and the employee is formally relieved of duties; withdrawal of the scheme before condition satisfaction negates any such right.
Result:
The appeal is allowed, the High Courts judgment is reversed, and the writ petition is dismissed without costs.
ORDER
Leave granted. We have heard learned counsel on both sides.
2. This appeal by special leave arises from the judgment of the Division Bench of the Delhi High Court, made on 1.11.1996 in C.W. No. 2086/95.
3. The admitted position is that the respondent, while working in the appellant-Corporation, had applied for voluntary retirement, pursuant to the scheme framed by the Corporation to relieve the surplus staff. Initially, by proceedings dated December 20, 1994, the Corporation accepted his resignation subject to the clearance of the outstanding dues. The acceptance was to be given effect from December 31, 1994. By letter dated January 6, 1995, he requested for deduction of a sum of Rs. 37,521.20 out of the outstanding dues. He also requested thus:
"I once again request you that the formal relieving order relieving me from PFC w.e.f. 31.12.1994 be handed over to me immediately. My service period for which ex-gratia is payable be informed to me and my dues be paid immediately."
4. Based thereon, it is contended by Mr. P.P. Rao, learned senior counsel for the appellant, that acceptance of the voluntary retirement of the respondent was a conditional one. He himself understood that unless he is relieved of the duties after payment of outstanding dues, the voluntary retirement does not become effective. In the meanwhile, realising the mistake committed by the appellant for effecting the voluntary retirement scheme which does not apply to the Corporation since there is no surplus staff, the appellant withdrew the scheme. Therefore, there was neither the scheme nor a concluded order of voluntary retirement of the respondent relieving him from the duties. The High Court, therefore, is not right in holding that the order dated December 20, 1994 created vested right in the respondent and the same cannot be divested by subsequent orders.
5. Initially, Mr. A.K. Sikri appeared on behalf of the respondent and argued the matter. Before the order could be dictated, the respondent himself appeared and said that his counsel may be relieved and he may be permitted to argue the matter. Accordingly, we permitted him to argue the matter. He stated that he was relieved from the duty on the basis of an endorsement made on the letter dated December 20, 1994 and what he meant by writing the letter dated January 6, 1995 was to seek a certificate for relieving him from the duty. The acceptance of the voluntary retirement having become effective from December 31, 1994, vested right had been created in him. Therefore, the view of the High Court is in accordance with law.
6. Having regard to the respective contentions, the question that arises for consideration is: whether the respondent acquired a vested right after acceptance of the voluntary retirement by proceedings dated December 20, 1994? It is seen that the order is a conditional order in that until the dues are paid, the order does not become effective. The respondent himself admitted that the outstanding dues could be adjusted from the amount payable to him. Admittedly, no such adjustment has been made. He, therefore, rightly understood that unless he is relieved of the duties of the post, after the payment of the outstanding dues, the order accepting his voluntary retirement does not become effective.
7. 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 has 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.
8. The appeal is accordingly allowed. The judgment of the High Court stands reversed. The writ petition stands dismissed. No costs.
Appeal allowed.
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