ivil Appeal No 307 of 1987
From the Judgment and Order dated 16101985 of the Allahabad High Court in CMW No 3689 of 1984
GB Pai Ms Urmila Kapoor and section Janani for the Appellant
Prithivi Raj Vishnu Mathut and Ms section Dikshit for the Respondents
The Judgment of the Court was delivered by AHMADI J
When the service of an employee is terminated consequent upon the employer accepting the resignation voluntarily tendered by the employee does the termination so brought about amount to Retrenchment  within the meaning of Section 2s read with Section 6N of the Uttar Pradesh  is the question which we are called upon to decide in this appeal by special leave
The facts relevant to be stated for the disposal of this appeal are as under Ram Singh was employed by the appellant company on 10th March 1960 and was posted in the Bradma machine section of the company
His duties were to attend to the printing of shares pay sheets registers ESI cards etc
 relating to the appellant company
On 1st November 1970 he addressed a letter of resignation to the Manager of the appellant compa ny in the following words RSir I regret to bring to your kind notice that my family circum stances do not permit me to continue my service and hence I am compelled to sever my connections with these Mills imme diately
I therefore request your goodself kindly to arrange for the payment of all my dues at an early date
 Two days thereafter he wrote another letter to the Manager of the company which reads as under 526 RSir Since I have already tendered my resignation from my serv ices I request you kindly to depute somebody in the Bradma Office taking charge and learning the work so that the entrusted work may be carried on smoothly
Thanking you so much for making early arrangement as re quested
 A copy of this letter was endorsed to the Special Executive of the appellant company for information and necessary action
On receipt of the above letters the Manager of the appellant company replied as under The resignation tendered by you vide your letter dated 1st instant is hereby accepted with effect from 16th instant
Please hand over charge of the Company s properties in your possession to Shri RS Mathur and collect payment in full and final settlement from the Mills Pay Office After the receipt of this letter the charge of the Bradma Section was handed over by the employee to the said RS Mathur on 15th November 1970
The amount due to the employee by way of salary allowances etc upto 16th November 1970 was worked out but the actual payment was received by the employee on 22nd December 1970
He was also paid his service gratuity at the end of February 1971
It appears that the employee raised an industrial dispute and sought a reference under Section 4K of the State Act
The employee s demand for a reference was initially rejected by the State Government on 12th November 1973 but it came to be accepted subsequently on 28th November 1974
The appel lant company thereupon filed a writ petition challenging the said reference made by the State Government but the High Court dismissed the petition on 7th September 1981
Pursu ant to the reference the Labour Court made an Award in favour of the employee on 25th January 1984
The Labour Court came to the conclusion that the employee s resignation was not voluntary and therefore his services had been wrongly terminated with effect from 15th November 1970
He was ordered to be reinstated
Against this Award of the Labour Court the appellant approached the High Court under Article 226 of the Constitution
The High Court came to the conclusion that the employee had tendered his resignation voluntarily 527 and without any threat or coercion
It also took the view that the claim for overtime wages was an after thought
However considering the definition of retrenchment  in Section 2s the High Court came to the conclusion that the termination of service of the employee fell within the said definition and as the appellant company had failed to ob serve the requirements of section 6N the termination of service was clearly invalid
The approach to the High Court is reflected in the following passage of its Judgment 8The contention raised is that there was no act of the employer in this connection and hence this may not be said to be a case of retrenchment of the respondent
To this I do not find possible to agree
There is no denial that the respondent had been in continuous service for not less than one year within the meaning of Section 6N
According to Section 2s retrenchment covers termination by the employ er of the service of a workman for any reason whatsoever
To this there are exceptions applicable where the termination is by way of punishment inflicted as a result of a discipli nary_ action or voluntary retirement of the workman or retirement of the workman on attaining the age of superannu ation
The provision is in pari materia with section 200 of the Central Act
The case does not fail within any of these exceptions
Voluntary retirement of a workman may not stand in need of acceptance by the employer this may be hedged in with certain conditions such as those relating to certain number of years having been put in service and the like but resignation may be tendered at any time though it requires acceptance to be effective
There is retrenchment under law where the services of a workman stand terminated for any reason whatsoever
This may not be a consequence directly flowing from an act of the employer
The material factor would be whether there is determination of the rela tionship of employer and workman between the parties
If as a consequence this relationship has ceased or has been brought to an end there is the resultant termination of the services of the workman
 In support of this view reliance was placed on the decisions of this Court in The State Bank of India vs N Sundara Money   Hindustan Steel Ltd vs The Presid ing Officer Labour Court Orissa  Others   Delhi Cloth and General Mills LId
vs Shambhu Nath Mukherji and Others   Santosh 528 Gupta vs State Bank of Patiala  and L Robert D Souza vs Executive Engineer Southern Railway and Another  Reliance was also placed on the decision of the Kerala High Court in Corporation of Cochin vs Jalaji  Others Proceeding further the High Court concluded as under    the present is a case where there was act of the employer also before the termination became effective
As discussed above the resignation tendered by the respondent could not take effect without the acceptance on the part of the employer
The acceptance was accorded on November 4 1970 expressly in writing
This clearly is an act of the employer which put a seal to the matter and brought about cessation of the relationship of the employer and the work man
Therefore there is no escape from the conclusion that it was a case of retrenchment
It remains to be seen on relevant material whether in fact there was compliance made of the requirement of section 6N However the order of reinstatement passed by the Labour Court Kanpur was set aside and the matter was remanded to the Labour Court for a decision on the question whether there was an infraction of section 6N The High Court however made it clear that the issue of resignation shall not be open to read judication
In other words the only question which the Labour Court was required to consider was whether the retrenchment was in conformity with section 6N of the State Act
Feeling aggrieved by this order the appel lant company has approached this Court under Article 136 of the Constitution
The State Act ie Uttar Pradesh was enacted to provide powers to prevent strikes and lock outs to settle industrial disputes and for other incidental matters
Section 2s defines the term Retrench ment  as under 2s Retrenchment  means the termination by the employer of the service of a workman for any reason whatsoever otherwise than as punishment inflicted by way of discipli nary action but does not include i voluntary retirement of the workmen or 529 ii retirement of the workmen on reaching the age of super annuation if the contract of employment between the employer and workman concerned contains a stipulation in that behalf
 This definition is in pari materia with the definition of retrenchment  found in section 200 of the Central Act ie as it stood prior to its amendment by Act LIX of 1984
Section 6N the State Act reads as under 6N Conditions precedent to retrenchment of workman
No workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until a the workman has been given one month s notice in writing indicating the reasons for retrenchment and the period of notice has expired or the workman has been paid in lieu of such notice wages for the period of the notice Provided that no such notice shall be necessary if the retrenchment is under an agreement which specifies a date for the termination of service b the workman has been paid at the time of retrenchment compensation which shall be equivalent to fifteen days  average pay for every completed year of service or any part thereof in excess of six months and c notice in the prescribed manner is served on the State Government
 This section substantially reproduces section 25F of the Central Act
In the Central Act the proviso came to be omitted by Act LIX of 1984 and instead clause bb came to be added to section 200
The first question which we must consider is whether in the background of facts stated earlier it can be said that the services of the employee were terminated by way of retrenchment  as understood by 530 section 2s and if yes whether the employer was required to comply with the provisions of section 6N of the State Act
It becomes clear on a plain reading of the definition of the term retrenchment  that it comprises of two parts the first part is the inclusive part which defines retrench ment whereas the second part is in the nature of an excep tion and excludes two types of cases from the scope and ambit of the said definition
Under the first part termina tion of an employee s service by the employer for any reason whatsoever otherwise than by way of punishment inflicted as a disciplinary measure amounts to retrenchment
Under the second part cases of i voluntary retirement  ii retire ment on superannuation are excluded from purview of the first part of the definition
Termination of service can be brought about in diverse ways by an employer but every termination is not retrenchment as for example termination of service by way of punishment for proved misconduct
The words for any reason whatsoever  are undoubtedly words of wide import and hence termination of service by the employer will attract the definition of retrenchment unless it is shown to be penal in nature brought about by way of disci plinary action or as falling within one of the two exclusion clauses extracted earlier
In order to counter the employ ee s contention that he was retrenched from service on the employer having communicated the acceptance of his resigna tion the employer has placed reliance on the first clause namely that the workman had voluntarily retired from serv ice
The letter dated 1st November 1970 written by the employee to the Manager of the appellant company expressing his desire to resign his job shows that it was a voluntary act on the part of the employee
This was followed by anoth er letter of 3rd November 1970 whereby the workman request ed the company to depute someone to take charge of the Bradma office so that he gets acquainted with the work to ensure a smooth take over
It was on this request of the employee that the appellant company accepted his resignation by the letter of 4th November 1970 with effect from 16th November 1970
From this correspondence it is crystal clear that the employee desired to sever his relations with the appellant company on account of his family circumstances
But for this request made by the employee there was no reason for the appellant company to terminate the contract of service on its own
Just as an employer has a right to terminate the service of an employee an employee too has a fight to put an end to the contract of employment by inform ing his employer of his intention to give up the job
This fight is specifically conferred by clause 21 of the Standing Orders certified under Section 5 of the Industrial Employ ment Standing Orders Act 1946
This clause reads as under 531 Any permanent clerk desirous of leaving the company s service shall give one month s notice in writing to the Manager unless he has a specific agreement providing for a longer or shorter notice
If any permanent clerk leaves the service of the company without giving notice he shall be liable to be sued for damages Similar clause with reduced notice period is also to be found in the certified Standing Orders for operatives
Therefore one of the ways of terminating the contract of employment is resignation
If an employee makes his inten tion to resign his job known to the employer and the latter accepts the resignation the contract of employment comes to an end and with it stands severed the employer employee relationship
Under the common law the resignation is not complete until it is accepted by the proper authority and before such acceptance an employee can change his mind and withdraw the resignation but once the resignation is accept ed the contract comes to an end and the relationship of master and servant stands snapped
Merely because the em ployer is expected to accept the employee s resignation it cannot be said that the employer has brought about an end to the contract of employment so as to bring the case within the first part of the definition of retrenchment
A contract of service can be determined by either party to the con tract
If it is determined at the behest of the employer it may amount to retrenchment unless it is by way of punishment for proved misconduct
But if an employee takes the initia tive and exercises his right to put an end to the contract of service and the employer merely assents to it it cannot be said that the employer has terminated the employment
In such cases the employer is merely acceding to the employee s request may be even reluctantly
Here the employee s role is active while the employer s role is passive and formal
The employer cannot force an unwilling employee to work for him
Under clause 21 of the certified Standing Orders all that the employee is required to do is to give the employer a notice to quit and on the expiry of the notice period his service would come to an end
A formal acceptance of the employee s desire by the employer cannot mean that it is the employer who is putting an end to the contract of employ ment
It would be unfair to saddle the employer with the liability to pay compensation even where the service is terminated on the specific request of the employee
Such an intention cannot be attributed to the legislature
We are therefore of the opinion that where a contract of service is determined on the employee exercising his right to quite such termination cannot be said to be at the instance of the employer 532 to fall within the first part of the definition of retrench ment in section 2s of the State Act
The High Court has placed reliance on four decisions of this Court to which we may now advert
In Sundara Money s case the employment was for a fixed duration of 9 days on the expiry whereof the service was to end
This condition was imposed unilaterally
The employment was to terminate not because the employee did not desire to serve but because of the unilateral condition imposed by the employer
The initiative for the termination therefore came from the employer attracting the wide terminology of section 200
In Hindustan Steel Ltd the termination of service was by efflux of time
Placing reliance on the law laid down in Sundara Money s case and the proviso to section 25Fa this Court held that the termination of service was by way of retrenchment
In the case of Delhi Cloth Mills the employ ee s name was taken as automatically removed from the rolls of the company under the Standing Orders for continued absence without prior intimation
The striking off the name was clearly an act of the employer resulting in termination of service amounting to retrenchment
Santosh Gupta s was a case of termination of service on account of her failure to pass the prescribed test
That was the reason for terminat ing her service
All the same it was the employer s action which resulted in the termination of her service attracting section 200
In the case of Robert D souza the termination was rounded on the ground of unauthorised absence from duty which clearly was an act of the employer
In all the above cases on which the High Court placed reliance no question of termination of service on the employee voluntarily ten dering his resignation arose for consideration
These cases are therefore not helpful since they turn on their own special facts
None of them deals with a case of voluntary resignation tendered by an employee
We may now examine the question from another angle namely whether an employee whose resignation has been accepted by the employer falls within the first exclusion clause to the definition of the term retrenchment 
There can be no doubt that a resignation must be voluntarily tendered for if it is tendered on account of duress or coercion it ceases to be a voluntary act of the employee expressing a desire to quite service
In the present case the High Court has come to the conclusion that the employee had tendered his resignation voluntarily
Does termination of service brought about by the acceptance of resignation fall with the expression voluntary retirement  The meaning of the term resign  and retire  in different dictionaries is as under 533 TABLE Name of the Meaning of Resign  Meaning of Retire  Dictionary Black s Law Formal renouncement to terminate employ Dictionary or relinquishment ment or service upon 5th Edn of an office
reaching retirement age
Shorter Ox To relinquish The act of retiring ford English surrender give up or withdrawing to Dictionary or hand over some or from a place or Revised thing esp an from a place or Edn of 1973 office position position
right claim etc
To give up an office or position to retire
The Random To give up an office To withdraw from of House Dic  position etc to fice business or tionary relinquish right active life claim agreement etc From the aforesaid dictionary meanings it becomes clear that when an employee resigns his office he formally relin quishes or withdraws from his office
It implies that he has taken a mental decision to sever his relationship with his employer and thereby put an end to the contract of service
As pointed out earlier just as an employer can terminate the services of his employee under the contract
So also an employee can inform his employer that he does not desire to serve him any more
Albeit the employee would have to give notice of his intention to snap the existing relationship to enable the employer to make alternative arrangements so that his work does not suffer
The period of notice will depend on the period prescribed by the terms of employment and if no such period is prescribed a reasonable time must be given before the relationship is determined
If an employee is not permitted by the terms of his contract to determine the relationship of master and servant such an employment may be branded as bonded labour
That is why in Central Inland Water Transport Corporation vs Brojonath Ganguly 1986 3SCC 156 at page 228 this Court observed as under 534 By entering upon a contract of employment a person does not sign a bond of slavery and a permanent employee cannot be deprived of his right to resign
A resignation by an employ ee would however normally require to be accepted by the employer in order to be effective In the present case the employee s request contained in the letter of resignation was accepted by the employer and that brought an end to the contract of service
The meaning of term resign  as found in the Shorter Oxford Dictionary includes retirement 
Therefore when an employee volun tarily tenders his resignation it is an act by which he voluntarily gives up his job
We are therefore of the opinion that such a situation would be covered by the ex pression voluntary retirement  within the meaning of cluase i of Section 2s of the State Act
In Santosh Gupta s case Chinnappa Reddy J observed as under Voluntary retrenchment of a workman or the retrenchment of the workman on reaching the age of superannuation can hardly be described as termination by the employer of the service of a workman
Here the word retrenchment  has reference to retirement  above observation clearly supports the view which com mends to us
We are therefore of the opinion that the High Court was not right in concluding that because the employer accepted the resignation offer voluntarily made by the employee he terminated the service of the employee and such termination therefore fell within the expression retrenchment  rendering him liable to compensate the em ployee under section 6N
We are also of the view that this was a case of volun voluntary retirement  within the mean ing of the first exception to section 2s and therefore the question of grant of compensation under section oN does not arise
We therefore cannot allow the view of the High Court to stand
For the above reasons we allow this appeal set aside the orders of the Courts below and hold that the employee is not entitled to any compensation under section 6N of the State Act
The appeal is allowed accordingly
No costs throughout
Lal Appeal allowed


Summary:
To a question whether lamination of duty paid kraft paper with polyethylene resulting in polyethylene laminated paper  would amount to manufacture  and excisable under Excise Law the Collector of Central Excise Appeals an swered in the negative and held that the appellant was eligible to claim refund of duty paid by it
In reaching this finding he followed the decision in Standard Packag ings Nellore vs Union of India AP
Against the said order the Collector of Central Excise preferred an appeal before the Customs Central Excise and Gold Control Appellate Tribunal
The Tribunal reversed the order of the Collector Appeals and held that the appellant was liable to duty
Aggrieved the appellant has preferred this appeal under Section 35 Lb of the 
It was contended that duty was already paid on kraft paper and there was no change in the essential characteristic or the user of the paper after lamination and that both the goods belong to the same entry
Dismissing the appeal HELD 11
By process of lamination of kraft paper with polyethylene different goods come into being
Laminated kraft paper is distinct separate and different from the kraft paper
Lamination indisputably by the well settled principles of excise law amounts to manufacture
632C D 631 12 Manufacture  is bringing into being goods as known in the excise laws that is to say known in the market having distinct separate and identifiable function
632F 13
Even if the goods belong to the same entry the goods are different identifiable goods known as such in the market
If that is so manufacture occurs and if manufac ture takes place it is dutiable
632F Empire Industries Ltd  Ors
vs Union of India  Ors
  and Collector of Central Excise Kanpur vs Krishna Carbon Paper Co  relied on