L.P.A. No.114 of 2007 -: 1 :- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH L.P.A. No.114 of 2007 Date of decision: October 04, 2008. Kanwal Nain Singh ...Appellant(s) v. State Bank of Patiala & Others ...Respondent(s) CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SURYA KANT 1. Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present: Shri S.C. Sibal, Senior Advocate, with Shri Varinder Singh Rana, Advocate for the Appellant(s). Shri H.N. Mehtani, Advocate for the respondent(s). ORDER Surya Kant, J. - This Letters Patent Appeal under Clause X of the Letters Patent is directed against the judgment dated 24.1.2007 passed by a learned Single Judge of this Court, whereby the appellant's civil writ petition seeking quashing of an order dated 26.2.2004 (Annexure P-8) “accepting” his application for 'voluntary retirement' and accordingly relieving him of his duties with effect from 29.2.2004, has been dismissed. The appellant had also sought a mandamus for his reinstatement and further promotion to Officer Grade-I with all consequential benefits. L.P.A. No.114 of 2007 -: 2 :- [2]. Shorn of the details, the appellant joined the respondent – State Bank of Patiala (in short the Bank) on 29.12.1977 as Cashier-cum-Godown Keeper. He is stated to have maintained unblemished service record to his credit. [3]. On 20.1.2001, the Bank circulated a Scheme called the “State Bank of Patiala Voluntary Retirement Scheme (SBPVRS)”. Any permanent and full-time employee of the Bank could seek voluntary retirement under the Scheme which was to remain operative from 15.2.2001 to 1.3.2001. The employees opting under the Scheme were entitled to certain ex-gratia monetary benefits. [4]. Clause 9(i) of the General Conditions of the Scheme stipulated that staff members desirous of availing benefits under the Scheme could apply in writing through proper channel within the prescribed period, however, the application once made could not be withdrawn and the same was liable to be treated irrevocable. Clause 9(i) of the Scheme reads as follows:- “Staff members desirous of availing benefits under the Scheme will have to submit a written application to the competent authority, through proper channel, in the specified format within the period for which the Scheme is kept open (i.e. 15.2.2001 to 1.3.2001). The application once made cannot be withdrawn and the same will be treated as irrevocable. While making application, the employee will be required to declare the name of nominee, to whom the payment may be made in the event of death of an VRS optee after the competent authority L.P.A. No.114 of 2007 -: 3 :- has accepted his VRS application but before payment has been effected.” (emphasis applied) [5]. Clause 8 of the Scheme further laid down that, “no voluntary retirement shall be deemed to have come into effect unless the decision of the competent authority has been communicated in writing, which will be conveyed within a maximum period of two months after the date of closure of receipt of applications i.e. 01.03.2001”. [6]. The appellant applied for voluntary retirement under the Scheme on 1.3.2001 in the prescribed format, which was addressed to the competent authority. He, however, submitted an application on the very next day, i.e., 2.3.2001, for withdrawal from the voluntary retirement Scheme. His application dated 2.3.2001 was duly forwarded by the Assistant General Manager of the Bank on 4.3.2001 and had been received by the competent authority much before it passed the order dated 19.3.2001 (Annexure P-4) whereby the appellant's request for voluntary retirement under the Scheme was accepted, intimating him that he will be relieved of his duties at the close of the business on 31.3.2001. [7]. Without availing any benefit under the Scheme, the appellant impugned the communication dated 29.3.2001 before this Court by way of CWP No.4881 of 2001. Vide an interim order dated 30.3.2001, it was directed that in case the appellant had not already been relieved of service, he would be allowed to continue. [8]. It appears that the appellant's above stated writ petition and a bunch of other cases were allowed by a Division Bench of this Court vide judgment dated 3.4.2002 passed in CWP No.4647 of 2001 (Mohinder Pal Singh v. Punjab & Sind Bank, Ambala Cantt. & Ors.) whereby the L.P.A. No.114 of 2007 -: 4 :- Scheme itself was quashed. This Court appears to have further held that even if the Scheme was validly framed, it was open to an employee to withdraw his option before the same was accepted and effectively enforced. [9]. The Bank assailed the judgment of this Court by way of Special Leave Petitions which were finally disposed of by the Hon'ble Supreme Court vide judgment dated 17.12.2002 rendered in the case of Bank of India and others v. O.P. Swaranakar, (2003)2 SCC 721. [10]. The respondent-Bank, however, thereafter moved an application before the Supreme Court seeking further clarifications of the judgment dated 17.12.2002, referred to above. The said application was allowed by the Hon'ble Supreme Court vide its order dated 21.1.2004 in the following terms:- “These applications have been filed by the State Bank of Patiala for clarification/directions. The ground taken in these applications is that the State Bank of Patiala is not a nationalized bank. It is hundred per cent a subsidiary of the State Bank of India. The VRS scheme floated by the State Bank of Patiala is in para-materia with the scheme floated by the State Bank of India. This Court in the judgment dated 17.12.2002 allowed the appeals filed by the State Bank of India but nothing has been said about the appeals filed by the State Bank of Patiala. In the interregnum, a two-Judge Bench of this Court, in which one of us (Sema, J) was a member considered the same question in Civil Appeal No.2341 of 2003 arising out of Special Leave Petition No.23530 of 2002 entitled State L.P.A. No.114 of 2007 -: 5 :- Bank of Patiala vs. Jagga Singh disposed of of 13.3.2003 where this court after considering clause 8 of the scheme floated by the State Bank of Patiala and clause 7 of the scheme floated by the State Bank of India had held that the scheme floated by the State Bank of Patiala is almost identical of the scheme floated by the State Bank of India. Accordingly, the appeal filed by the State Bank of Patiala was allowed. Review Petition was also dismissed on 3.12.2003. In view thereof, we clarify that our direction No.2 allowing the appeals filed by the State Bank of India would also include the appeals filed by the State Bank of Patiala. In other words, the appeal filed by the State Bank of Patiala are allowed in terms of our judgment dated 17.12.2002.” [11]. Based upon the above reproduced order passed by the Hon'ble Supreme Court, the Bank passed the impugned order dated 26.2.2004 (Annexure P-8) whereby the appellant's application for VRS has been accepted, relieving him of his duties with effect from 29.2.2004. [12]. The appellant, who, in the meantime, had been further promoted to JMGS-I with effect from 1.5.2003, impugned the order dated 26.2.2004 accepting his application for VRS. His writ petition, however, has been dismissed by the learned Single Judge relying upon yet another Apex Court judgment pertaining to the respondent-Bank only, i.e., State Bank of Patiala v. Romesh Chander Kanoji & Others, (2004(2) SCC 651 and after holding that under the SBPVRS, the employees are precluded from withdrawing from the Scheme after its closure on 1.3.2001. L.P.A. No.114 of 2007 -: 6 :- [13]. The question which arises for our consideration in this appeal, falls in a narrow compass. Armed with the clarificatory order dated 21.1.2004 passed by the Hon'ble Supreme Court coupled with its judgment in State Bank of Patiala v. Romesh Chander Kanoji & Ors.'s case (supra), it is urged on behalf of the Bank that there is little room to doubt the view taken by the learned Single Judge who has rightly held that the offer once given under the SBPVRS is irrevocable. Learned counsel for the appellant, on the other hand, relies upon the ratio decidendi of the judgment in Romesh Chander Kanoji & Ors.'s case, which has been further interpreted by another two-Judges Bench of the Hon'ble Supreme Court in the case of Food Corporation of India and Others v. Ramesh Kumar, (2007)8 SCC 141. [14]. In State Bank of Patiala v. Romesh Chander Kanoji's case (supra), their Lordships' were called upon to determine the scope of the Supreme Court judgment in the case of Bank of India and others v. O.P. Swaranakar, (supra) as also the judgment dated 13.3.2003 passed in Civil Appeal No.2341of 2003 (State Bank of Patiala v. Jagga Singh). The controversy in State Bank of Patiala v. Romesh Chander Kanoji's case (supra) also pertained to the interpretation of the Voluntary Retirement Scheme of the respondent-State Bank of Patiala and that too in somewhat identical circumstances, namely, as to whether an employee of the Bank having applied under the SBPVRS between 15.2.2001 to 1.3.2001 could withdraw his application for voluntary retirement, and if so, at what stage? In para 6 of the report, the Supreme Court held that:- “6. It is evident from above that in the case of SBIVRS, where there is a specific provision for withdrawal, the L.P.A. No.114 of 2007 -: 7 :- employee must exercise his option within the time specified; and in case of nationalized banks where there was no provision to withdraw (and in fact the Scheme forbade withdrawal), the withdrawal must be effected prior to acceptance by the bank. Therefore, in terms of the ratio laid down by this Court, the employee is ensured under SBIVRS the right of withdrawal within the specified period.” (emphasis applied) [15]. In para 7 of the report, the Hon'ble Supreme Court took notice of its previous order in State Bank of Patiala v. Jagga Singh's case and observed:- “The decision of this Court in Bank of India v. O.P. Swarnakar is dated 17-12-2002. The decision was given by a three-Judge Bench of this Court. A similar question came before the Division Bench of this Court once again in the case of State Bank of Patiala v. Jagga Singh by way of Civil Appeal No.2341 of 2003. It was held by the Division Bench that State Bank of Patiala was a subsidiary of State Bank of India; that clause (8) of SBPVRS was similar (7) of SBIVRS; that clause (8) of SBPVRS also gave opportunity to the employee to withdraw and consequently the appeal filed by State Bank of Patiala was allowed in terms of the decision in the case of Bank of India v. O.P. Swarnakar. The decision in the case of Bank of India v. O.P. Swarankar has since been followed in several cases.” [16]. Thereafter, comes the dictum flowing from para 9 of the report, L.P.A. No.114 of 2007 -: 8 :- which reads as follows:- “We do not find any merit in the above argument. It is important to bear in mind that the Schemes in question are basically funded schemes. Under such Schemes, time is given to every employee to opt for voluntary retirement and similarly time is given to the management to work out the Scheme. Clause (5) of SBPVRS gave fifteen days' time to the employees to opt for the Scheme and under clause (8) a period of two months is given to the management to create a fund. The creation of the fund would depend upon the number of applications; the cost of the Scheme; liability which the Scheme would impose on the bank and such other variable factors. If the employees are allowed to withdraw from the Scheme at any time after its closure, it would not be possible to work out the Scheme as all calculations of the management would fail. In the case of Bank of India v. O.P. Swarnakar SBIVRS is held to be an invitation to offer. Following the said judgment, we hold that SBPVRS is an invitation to offer and not an offer. Clause (5) of the said SBPVRS inter alia states that the Scheme will remain open during the period 15-2-2001 to 1-3-2001 whereas Rule 8 thereof provides for mode of acceptance by the management. It is in the light of Rules 5 and 8 that one has to read clause (9)(i) which provides for general conditions and under which it is provided that application once made cannot be withdrawn. In chitty on Contracts (28th Edn., L.P.A. No.114 of 2007 -: 9 :- p.125), the learned author states that “an offer may be withdrawn at any time before it is accepted. That this rule applies even though the offeror has promised to keep the offer open for a specified time, for such a promise is unsupported by consideration.” Therefore, clause (5) of SBPVRS gives locus poenitentiae to the employee to withdraw by 1-3-2001 after which the mode of acceptance contemplated by clause (8) of SBPVRS would apply and the Bank will proceed to vet the applications. As stated above, the Bank needs time to ascertain its liability; it is required to find out the cost of creation of a separate fund which in turn depends on the number of applications and if the employees are permitted to withdraw after the date of closure, it would be impossible for the Bank to implement the Scheme. Therefore, clause (5) gives time to the employee to withdraw by 1-3-2001 and the Bank is given time of two months thereafter to complete the designated mode of acceptance (see Halsbury's Laws of England, 4 th Edn., p.133). Reading clauses (5), (8) and (9) (i), it is clear that employees are precluded from withdrawing from SBPVRS after the closure of the Scheme on 1-3-2001.” (emphasis applied) [17]. As may be noticed, in para 6 of the judgment in State Bank of Patiala v. Romesh Chander Kanoji's case (supra), the Hon'ble Supreme Court enunciated that where there is a specific provision for withdrawal of request/consent for voluntary retirement under the VRS, the employee must L.P.A. No.114 of 2007 -: 10 :- exercise his option within the time specified and in case of Nationalized Banks where there was no provision to withdraw and in fact the Scheme forbade such withdrawal, “the withdrawal must be effected prior to acceptance by the Bank”. [18]. However, on a specific consideration of the Voluntary Retirement Scheme of the respondent-Bank and on interpretation of clause 9 (i) of the Scheme, their Lordships in para 9 of the judgment ruled that “employees are precluded from withdrawing from the SBPVRS after closure of the Scheme on 1.3.2001.”. Subject to the above, it was, however, further held that the SBPVRS is similar to SBIVRS and consequently the judgment in the case of Bank of India and others v. O.P. Swaranakar (supra) has been squarely applied in the case of State Bank of Patiala also. [19]. The interpretation of clause 9(i) of the SBPVRS being the subject matter of this appeal and the appellant having, admittedly, withdrawn his option for voluntary retirement on 2.3.2001, i.e., after the closure of the Scheme on 1.3.2001, we would have unhesitatingly affirmed the view taken by the Learned Single Judge but for the subsequent interpretation of the ratio decidendi of its judgment in State Bank of Patiala v. Romesh Chander Kanoji's case (supra), by a two-Judges Bench of the Hon'ble Supreme Court in the case of Food Corporation of India and Others v. Ramesh Kumar, (2007)8 SCC 141. [20]. Clause VIII(d) of the Voluntary Retirement Scheme framed by the Food Corporation of India is somewhat pari-materia to clause 9(i) of the SBPVRS as it provides that - “once an employee submits his application for voluntary retirement under this Scheme to the competent authority, it shall be treated as final and it is not open to the employee to withdraw the L.P.A. No.114 of 2007 -: 11 :- same. The competent authority within notice period (3 months) shall take a decision to accept or reject the request and shall communicate the same to the official concerned”. (emphasis applied) [21]. While interpreting the above reproduced clause VIII (d) of the FCI's Scheme, the Hon'ble Supreme Court in the case of Food Corporation of India and Others v. Ramesh Kumar, (supra), referred to its previous decisions in the cases of Bank of India and others v. O.P. Swaranakar, (supra) and State Bank of Patiala v. Romesh Chander Kanoji's case (supra) and on interpretation thereof, held as follows:- “Therefore, now the position stands settled that in case of a V.R.S. Scheme of State Bank of India where 15 days' time limit for revocation has been laid down in case the incumbent withdraws his offer within 15 days then the offer given by the incumbent cannot be treated against him and it will be deemed that he has revoked his offer. In case of other banks there is a condition that once the offer has been given it shall not be permitted to be revoked but in view of the above decision the incumbent can still withdraw the offer if it has not been accepted by the Management. Now adverting to the present scheme of the Food Corporation, para 8 clearly stipulates that the incumbent has no right to revoke the same and the Management will decide the same within three months. That means the Management still has three months' time to consider and decide whether to act upon the offer given by the incumbent or not. But if the incumbent revokes his offer before the Corporation accepts it then in that case, the revocation of the offer is complete and the Corporation cannot act upon that offer. In the present Clause there is one more additional factor which is that the Management has to take a decision within three months. Therefore, once the revocation is made by the L.P.A. No.114 of 2007 -: 12 :- incumbent before three months then in that case the Corporation cannot act upon the offer of voluntary retirement unless it is accepted prior to its withdrawal. In the present case, it is clear that the incumbent had given an offer for voluntary retirement on the 13.9.2004 and he revoked his offer on 27.9.2007 but the same was accepted on 9.11.2004 i.e. after the revocation of his offer. In view of the law laid down by this Court in the case of State Bank of Patiala (Supra) the incumbent has already revoked his offer before it could be accepted. Therefore, in this view of the matter, the approach of the High Court appears to be correct and does not require any interference. The revocation made by the incumbent on 27.9.2004 of his offer of retirement cannot be acted upon as he has revoked it before the Corporation could act upon it. Hence, we are of the opinion, that the view taken by the High Court is correct. Consequently, all the three appeals are dismissed but without any order as to costs.” (emphasis applied) [22]. The principle(s) underlying a decision of the Supreme Court are binding hand and foot on a High Court or other inferior Courts. The ratio of a previous decision as culled out by a subsequent Bench of the Supreme Court while following such decision, shall be the binding precedent within the meaning of Article 141 of the Constitution. [23]. In the case in hand, it is indeed not in dispute that the appellant withdrew his application for voluntary retirement on 2.3.2001 which was duly forwarded by the Assistant General Manager to the competent authority on 4.3.2001 and had reached before the competent authority well in advance before the order dated 19.3.2001 (Annexure P-4) 'accepting' his request for 'voluntary retirement' under the Scheme with effect from 31.3.2001 came to be passed. Following the interpretation of ratio L.P.A. No.114 of 2007 -: 13 :- decidendi of the judgment in State Bank of Patiala v. Romesh Chander Kanoji's case (supra) made by the Apex Court in its later judgment in Food Corporation of India and Others v. Ramesh Kumar's case (supra), we are of the view that the appellant having revoked his offer for 'voluntary retirement' much before it was actually accepted, the Bank could not have forcibly retired him vide the impugned order. [24]. For the reasons afore-stated, we accept the appeal; set aside the judgment dated 24.1.2007 passed by the learned Single Judge and while allowing the appellant's writ petition, quash the impugned order dated 26.2.2004 (Annexure P-8) and direct the respondent-Bank to reinstate the appellant in service. [25]. In the ordinary course, the appellant would have been entitled for all the consequential benefits, including arrears of pay. However, besides making a statement on instructions, his learned counsel has filed the appellant's affidavit dated 21.8.2008 to the effect that in the event of acceptance of his claim, he will not seek back wages though would be entitled to all other benefits. We accordingly direct that the appellant shall not be entitled for the arrears of pay for the period he has remained out of service, however, the entire period shall be counted towards seniority, promotion and continuity of service for the purpose of notional fixation of his pay. [26]. No order as to costs. [ Surya Kant ] Judge October 4, 2008. [ T.S. Thakur ] kadyan Chief Justice