Supreme Court’s Views on Using the Words “Resignation” in Letter Given at the Time of Quitting the Bank- by R K Pathak
Comments by ABS :
We are reproducing below an
article by Mr R K Pathak which discusses the various case laws which can be
considered as favourable to the bankers who have used the words like
“resignation” at the time they quit the bank. This can be useful to the
bankers who have resigned from bank.
Article by R K Pathak :
Indian
Banking Industry specifically Public Sector Banks have around 10 lacs employees
and these comprises of Award staff ( Workman – Sub staff & Clerical
Cadre) and Supervisory Staff ( Officers from scale I to VII). The
Service conditions of Award staff are governed by Shastry Award & Bipartite
settlement whereas of officers the same are governed by OSR and Officer
Employees [Conduct] Rules 1976.
Interestingly,
the word “Resignation” is not defined in Officer Service Regulation; Employees
Pension Regulation; Sastry Award or bipartite Settlement. However, banks
are still forfeiting the pensionary benefit on Resignation by an employee.
Moreover,
IBA has admitted that concept of voluntary retirement is absent for award staff
& also for officers in some Public Sector
Banks. Banks have also admitted in reply under RTI,
that “the act of Resignation is neither Misconduct under SERVICE RULES /
bipartite settlement nor in Officer Employees [Conduct] Rules 1976.
On 29/10/1993 settlement for introduction of Pension scheme
was signed between IBA & Officers Association & Workman Union and the
complete Scheme after protracted negotiations was finalized & was
circulated the Banks by IBA on 17/03/1994 & was adopted by Board of
directors of the Banks & options were called from the Employees. The
Regulation 10 of BEPR 1993 states ““Forfeiture of service”:
Dismissal, termination of or resignation by an employee from the service except where the Service Regulations/Service
Rules/Settlements do not disentitle such employee from receiving superannuation
benefits shall forfeit his entire past service and consequently
shall not qualify for pension payment.”
But IBA while seeking approval of the GOI, made changes in Forfeiture clause UNILATERALLY as
“Forfeiture of Service”: Resignation or dismissal or removal or termination of
employee from the service of the Bank shall entail forfeiture of his entire
past service and consequently shall not qualify for pensionary
benefits;…” by deleting “except where the
Service Regulations/Service Rules/Settlements do not disentitle such employee
from receiving superannuation benefits “.
As a result of this unilateral act, banks are
losing the battle in High Court and Supreme Court which
is evident from the case of Vijaya Bank Resignee employees, Bank of Baroda V S
K Kool, Andhra Bank CRS employees case, D Malleshwar Rao case and so on.
(A)Case : Sashikala Devi vs Central Bank of India (Decision in
December 2014):
Gist of the Case : In Civil Appeal No(s)11488 of 2014,SLP(C) No. 36909 of 2012 decided on 17/12/2014. [You can download
the judgment by clicking on the link here]. Supreme
Court directed Central Bank of India to release the pension to resignee &
gist of the case is as under:-
Mr. Mauziram, clerk , an employee of Central Bank of India after
serving for 34 years sought resignation on medical ground by giving one month
notice to the Bank. Bank accepted the resignation & relieved him on
28/11/2007. After reliving Mr. Mauziram on 18th December 2007
requested Bank to treat the notice of resignation dated 8/10/2007 as notice of
Voluntary Retirement and release terminal benefits. Bank did not concede
to his request which lead to Writ Petition in Patna High
court [13458 of 2008] which was dismissed on 11/11/2011 (You can download the
judgment by clicking on the link here)
Against the order of Patna High Court, SLP was filed in Supreme
Court in 2012 which was decided on 17/12/2014 and allowed pension to Shashikala
devi[ spouse of Mr. Mauziram].
The observations / findings of Supreme Court
in the matter are as under:-
The short question that falls for our consideration in
this appeal by special leave is whether letter
dated 8th October, 2007 sent by late Shri Mauzi Ram, husband of the appellant,
was in essence a letter seeking
pre-mature retirement on medical
grounds or a letter of resignation from the
service of the respondent-bank. The High Court has
while dismissing the writ petition and the appeal
filed by the deceased-employee declared thatthe letter
in question was a letter of resignation that
resulted in forfeiture of the entire service rendered by the employee
disentitling him to claim any pensionary benefits. The correctness of
that view is under
challenge in this appeal filed by the widow of the deceased employee who passed
away during the
pendency of the proceedings before the High Court.
The bank treating the letter of the employee as a letter of resignation from service
relieved him apparently because
the expression used in the letter
was resignation which obviously meant that no
financial burden would fall upon the bank in terms of retrial benefits otherwise payable to an employee who has served for the requisite
number of years entitling him
to retirement.
From the reading of Regulation 14, 22 & 29 of Pension
Regulation 1995,it is evident that an employee who has completed 20 years of
qualifying service is entitled to seek voluntary retirement from the service of
the Bank provided he gives a notice of not less than three months in writing to
the appointing authority
in that regard. What is important is that
in terms of proviso to Regulation 29(2), if the appointing authority does not refuse to grant permission for retirement before the
expiry of the period specified in the said notice, the retirement becomes effective from the date of
the expiry of the said period.
It is also noteworthy that in terms of
Regulation 29(3) (a) the appointing authority is
competent to curtail the period of notice of three
months in appropriate cases subject to the condition that the employeeshall not apply for commutation of his
pension before the expiry of the notice period.
In the
case at hand, Mauzi Ram-the deceased employee
had rendered nearly 34 years of service in
the respondent-bank. He was, therefore, qualified to receive pension in terms of the Regulations applicable to him. It is also
evident from a reading of Regulation
29 that the deceased-employee was entitled
to seek voluntary retirement in terms of Regulation 29 for he had completed more than twenty years of service by the 8th October
2007. As on 8th October, 2007 the deceased-employee was
entitled either to resign from
service or to seek premature retirement in terms of Regulation 29 (supra).
The question in that backdrop
is whether letter dated 8th October, 2007 was a letter of resignation simplictor or
could as well be treated to
be a letter seeking voluntary retirement. The High
Court, as seen earlier, has taken the view that the letter was one of resignation that resulted in the forfeiture of past service under
Regulation 22 of the
Regulations. The High Court appears to
have been impressed by the use of the word “resignation”
in the employee’s letter dated 8th October,2007. The use of the
expression “resignation”, however, is not, in our opinion, conclusive.
That is, in our opinion, so even when
this Court has always maintained a clear distinction
between “resignation”
and “voluntary retirement”. Whether or not a given
communication is a letter of
resignation simplictor or
can as well be treated to be a request for voluntary retirement will always depend upon the facts
and circumstances of each case and the provisions of the Rules
applicable. The distinction between the expressions “resignation”
and“voluntary retirement” was
elaborately discussed by this Court in UCO Bank and Ors. v. sanwar Mal(2004) where this Court was examining the provisions
of UCO Bank
(Employees’)
Pension
Regulations 1995 applicable to a bank
employee who
had resigned from
service after giving an
advance notice to
the appointing authority. So also in Reserve Bank of India and Anr V. CECIL Dennis Solomon and Anr.[2004]this
Court was considering the provisions of the
Reserve Bank of India Pension Regulations, 1990
while it made a distinction between what is
resignation on the one hand and voluntary retirement
on the other. At the same time a long line of decisions have recognised that pension is neither a bounty nor a matter of grace but
is a payment for pastservices
rendered by the employee. Decisions of this Court
in D.S. Nakara and Ors V. Union of India (1983)1 SCC 305, and Chairman Railway
Board and Ors. V C.R Hangadhamaiah and Ors.(1997), are clear pronouncements on the subject.
Reference may also be made to Sudhir Chandra Sarkar v. Tata Iron and Steel
and Or
It is also well settled by several decisions of this Court that
while interpreting a statute the Court ought to keep the legislative
intent in mind and eschew an interpretation which tends
to restrict, narrow down or
defeat its beneficial provisions.
Let us
now examine the true purport of the letter submitted by the deceased-employee
in the light of the above
principles. Two distinct aspects stand out from
the record. The first is thatthe deceased-employee had
served for more than 34 years in the bank and was, therefore, entitled
to seek voluntary retirement if he
chose to leave prematurely. The second aspect which is equally important is that the employee had chosen to
leave the employment not because of any disciplinary or other action proposed against him or
any order of transfer or posting with which he was
unhappy or because any proceedings had been
started that could have visited him with any civil consequence if
he had continued in service, but because of
his physical inability to
continue in service on account of diseases with which he was stricken. This is evident from the fact that not only
in the letter, but also in
documents enclosed therewith the employee haslaid great stress on the reasons
for leaving the service
prematurely. No such reasons were necessary if the
employee actually intended to resign in the true sense of that term. Reasons why he was quitting were obviously meant to support his
case that he was doing so
under the compulsion of the circumstances.
The refusal of the management of the bank to treat
letter dated 8th October, 2007 as a request for premature retirement was conveyed to the
employee on 24th June, 2008 in which the respondent-bank made reference to the decision of this Court in
UCO Bank’s case (supra) whereby Regulation 22 of the Pension
Regulations was upheld by this Court.
When viewed in the backdrop of the above facts, it is difficult to reject the
contention urged on behalf of
the appellant that what the deceased-employee intended to do
by his letter dated 8th October, 2007 was
to seek voluntary retirement and not resignation
from his employment. We say so in the light of several
attendant circumstances. In the first place, the
employee at the time of his writing the letter dated 8th October,
2007 was left with just about one and a
half years of service. It will be too
imprudent for anyone to suggest that a bank employee who has worked
with such commitment as earned him the appreciation of
the management would have so thoughtlessly given up
the retiral benefits in the form of pension etc, which he had earned on account
of his continued dedication to
his job. If pension is not a bounty, but a right which the employee
acquires on account of long years of sincere and good work done by him, the Court
will be slow in presuming that the employee intended to
waive or abandon such a valuable right without any cogent reason. At any
rate there ought to be some compelling circumstance to suggest that the employee
had consciously given up the right and benefit, which he had acquired so
assiduously.
In Union
of India and Ors. v. Lt. Col. P.S.
Bhargava 1997) 2 SCC 28, this Court was dealing with a case where the
respondent was denied pension on the
ground that he had voluntarily retired from service.
Dismissing the appeal filed by the Union of India, this Court held that Regulation 16
of the Pension Regulations
applicable to the respondent did not deal
with voluntary resignations and could not, therefore be pressed into
service to deny pension to respondent. This
Court said:
”19. Regulation 16 does
not cover
a case of voluntary resignation. Regulation 16(b] does refer to a case where an officer who has to his credit the minimum period of qualifying
service being called upon to resign whose pension
can be reduced.
Had the Regulations intended to take away the
right of aperson to the terminal benefits
on
his voluntary resigning,
then a specific provisionsimilar to regulation 16[b]would have been incorporated in theRegulations but this has not been done.Once an officer has to his credit the minimumperiodofqualifying service, he earns a right to get pension and as theRegulations stand, that
right can be taken away only if an order is passed under Regulation3 or 16. The cases of voluntary
resignations of officers, who
have to their credit the minimum period of qualifying service are not covered by these two Regulations and, therefore,
such officers, who voluntarily resign, cannot be automatically deprived of
the terminal benefits.”
In
Sheel Kumar Jain V. New India Insurance Company limited and Ors. (2011)12 SCC
197, the facts were Some what similar to the case at hand. The appellant in that case was anemployee of an Insurance Company governed
by a Pension Scheme which provided, as in the
case at hand, forfeiture of the entire service of an employee should he resign from his employment. The appellant submitted a letter of
resignation which resulted in
denial of his service benefits under the
scheme aforementioned. This Court, however, held that since
the employee had completed the qualifying service and was entitled to seek voluntary retirement under the scheme he could not be said to have resigned so
as to lose his pension.
In the result this appeal succeeds and is hereby
allowed. The impugned order
passed by the high Court is, hereby, set
aside and the writ petition
filed by the deceased-employee allowed with a direction to the respondent-bank to treat letter dated 8th October, 2007 as a notice for voluntary retirement of
the employee and for curtailment for
three months notice period. Depending upon the view the competent
authority may take on the question of curtailment of the notice
period and/or deduction of three months salary from
out of the retiral benefits of thedeceased-employee, the deceased-employee’s claim for payment of retiral benefits
due under the relevant rules including
pension shall be processed and released in favour of
the appellant-widow as expeditiously as possible but not later than six months from the date a copy of this
order is served upon the bank.
In the event of the bank’s failure to comply with
the directions within
six months as indicated above, the amount payable to the employee and after his death his widow, shall start earning interest @ 10% p.a. from the date the period
of six months expires. The parties are left to
bear their own costs.
(B) Case :
Manohar Singh vs Union of India & Others :
It is interesting to note that on Resignation by an
employees, the word which is neither defined in the service conditions / rules
/ settlement nor classified as misconduct, banks are forfeiting their
past services and pensionary benefits without providing any opportunity of
hearing as pointed by Jodhpur High Court SBCWP No.5988/2006
– Manohar Singh vs. Union of India & ors. [Judgment dt;30/4/2014] You can download the
judgement by clicking on the link given here.
The breach of principles
of natural justice by not providing any opportunity of hearing to the
petitioner is also writ large in the present case. The forfeiture of past
period of service entails adverse civil and financial consequences for the
petitioner. Nothing prevented the
respondent Insurance Company from giving an opportunity of hearing to the
petitioner and putting him to notice that the word “resignation” would entail
forfeiture of past service and he would be deprived of his right to get pension.
The respondent Company could advise the petitioner to either continue to serve
the Company for one month more or 3 months more for notice period or could
agree to the deduction of 3 months' salary in lieu of notice period.
The
public authority is expected to act fairly and not surreptitiously to the
disadvantage of its employees particularly those who have served the Company
for long periods of qualifying service & more. The resignation
or retirement sought by the employee due to unavoidable family circumstances
should not have been further aggravated by causing him the financial loss by
depriving him of the pension to which otherwise he was admittedly entitled had
he actually used the word “retirement” in place of “resignation” in the letter. Clause
22 of the Scheme is not meant to cause harm to the innocent employees and the
Company should not be trigger happy to deprive the employee of his right to get
the pension by forfeiting the past services without even giving an opportunity
of hearing to the petitioner. Mere use of word “resign” with immediate effect,
which immediacy was not even accepted by the respondent, cannot be construed as
a fatal step for the petitioner to take away his right to get the pension under
1995 Pension Scheme.
When
even a dismissed or compulsorily retired employee can be given up to 2/3rd of pension, why an employee who “resigns” should be
deprived of the same altogether without even been told before hand about such a
consequences of his giving a letter of resignation or retirement.
AT LEAST NOW BANK MANAGEMENT / IBA AND UNIONS SHOULD WAKE UP AND
TAKE CORRECTIVE ACTIONS TO RECTIFY UNILATERAL ACT DONE IN 1995 AND RELEASE THE
RIGHTS OF THE EMPLOYEES WITHOUT LITIGATION.
Source:AllBankingSolutions.com
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