Mere Delay In Relieving An Employee From Duties Won't Impact Acceptance Of His Resignation: Supreme Court

A Bench of the Supreme Court has held that an employee, who sought voluntary retirement from service and moved an application for that purpose, he cannot rescind it at a later stage on the ground of delay in relieving him from the duty. The Bench observed that, "Once the resignation letter had been accepted, the chapter was over."

The Bench of Justice Sanjay Kishan Kaul and Justice MM Sundresh has observed that, "Once such a resignation was accepted, and not even assailed, there could be no question of the respondent being permitted to resign post acceptance of the resignation. It was only a postponement of the cut off date for administrative reasons, which merely delayed the relieving of the respondent and did not defer the acceptance of the resignation."

Facts of the Case

Respondent was working as Supervisor (Maintenance) with M/s. New Victoria Mills (appellant-1), which was one of the industrial units set up by the National Textile Corporation (Uttar Pradesh) Limited (appellant-2), since 1991. The NTCL (Uttar Pradesh) was a subsidiary of the National Textile Corporation Limited (appellant-3) which came out with a Modified Voluntary Retirement Scheme to facilitate the voluntary retirement of employees and workers of appellant No.1 and certain other mills operated by appellant No.2.

The respondent moved a resignation letter on July 12, 2002 requesting that payment of all benefits of service be disbursed promptly. There was a pre-existing dispute between the respondent and appellant over depositing amount of provident fund in his account and he had grievance that the PF amount has not been deposited in his account since 1991. As the issue of provident fund was not resolved, the respondent, by writing a letter on March 3, 2003, had intimated the appellant to keep his resignation under the MVRS under suspension till the amount of PF was deposited in his account.

A general information was issued about the acceptance of letters of resignation under the MVRS on May 28, 2003 in which the name of the respondent figured at serial No.4. The four persons were to retire from the services of the mill on June 1, 2003. However, a letter was issued by appellant no. 1 on June 2, 2003, after the cutoff date had already come into effect from June 1, 2003, informing the respondent that the said date be treated as cancelled and a new cutoff date would be informed shortly. The respondent was advised to attend to his duties.

The respondent addressed a letter dated July 1, 2003 requesting that his letter dated July 12, 2002 under the MVRS be treated as having been canceled because he had changed his mind about submitting his resignation under the MVRS, believing that his resignation letter had still not been accepted. However, vide letter July 14, 2003 the resignation submitted under the MVRS was accepted intimating that the respondent was to retire from July 16, 2003.

The respondent approached the Allahabad High Court seeking to quash the order dated July 14, 2003, a direction to allow him to join his duties on the post of Supervisor (Maintenance), pay him all his emoluments as entitled and to pay him his back-wages since July 16, 2003 and permit him to work on the post till the age of his superannuation when he would be entitled to all his retiral benefits. The Single Judge of the High Court allowed the petition and the appeal filed by the appellants against the Single Judge was dismissed by the Division Bench. Therefore the appeal was filed before the Supreme Court by the employer.

Submissions by the Counsels

The Counsel for the appellant would submit that the respondent had not even challenged the letters dated May 28, 2003 or June 2, 2003, which effectively accepted his resignation request under the MVRS. This would imply that the acceptance of resignation by appellant No. 1 was complete. What the respondent had sought to challenge was only the revised cutoff date by assailing the letter dated July 14, 2003, which sought to relieve the respondent from July 16, 2003.

The counsel for the respondent would submit that a voluntary retirement scheme like the MVRS was in the nature of an "invitation to offer" and would, thus, be governed by the principles of contract law. Thus, the application submitted by the respondent under the Scheme was in the nature of an offer. The respondent suspended his resignation till such time as appellant No.1 deposited his provident fund dues and, thus, the offer of the respondent stood revoked. The application of the respondent under the MVRS was preconditioned on appellant No.1 clearing his dues, particularly his provident fund dues. Appellant No.1 did not comply with the attached condition relating to the provident fund dues.

After hearing the parties, the Bench observed that the resignation letter was not conditional and promise of payment of financial dues is a natural corollary of the resignation.

"If we look closely at the letter dated July 12, 2002, the intent of the respondent was clear, i.e., to submit his resignation. It is not a resignation operative from a future date but one which would operate as per the Scheme. It is also not a conditional resignation as was sought to be canvassed by the respondent. The mere assertion that all benefits arising out of the service period of the applicant would be paid to him is a natural corollary of their resignation. We do believe that such a resignation can hardly be called conditional."

The Bench noted when the acceptance of resignation takes place, the contract stands concluded.

"In a contractual context, it would be an offer made by an employee under the Scheme which may or may not be accepted by the appellant-management. Once the acceptance takes place, the contract stands concluded. No doubt such acceptance has to be in terms of the Scheme. Thus, the crucial question is whether the subsequent communications of the respondent could give the resignation letter a colour of a conditional resignation and whether the withdrawal was prior to its acceptance."

The Bench observed that once the right of the employee to receive the terminal benefits under the MVRS scheme was accepted, he would not entitled to withdraw the resignation on the ground of delay of disbursement.

"The right of a person whose resignation has been accepted is to receive inter alia the benefit of the provident fund amount as one of the terminal benefits under the Scheme. The fact that there was some discrepancy on account of the description of the name in the account for which there was some prior communication itself, will not imply that any delay in disbursement of the provident fund amount would entitle the respondent to withdraw his resignation. If there is any unreasonable delay, the amount may carry interest."

The Bench did not entertain an argument canvassed by the respondent that once the date from which he was to be relieved was extended, it would amount to non-acceptance of his resignation.  

"This plea is supported by the fact that since the acceptance of resignation and the abolition of the post were simultaneous exercises, how could the respondent be asked to continue to work, as there would be no post against which the respondent could so work. The postponement of the cut off date and the consequent payment which would have to be made to the respondent for those few days is really a matter of financial exercise for appellant No.1, with which the respondent cannot concern himself as long as his resignation is accepted."

The Court set aside the judgment of the Division Bench of the High Court.