Case: SADANAND PUTHRAN Vs. UNITED INDIA INSURANCE CO. LTD

dated 4.4.2013 seeking pension on the basis of the 1995 Scheme, resting his case on the aforesaid judgment. There was no response to this representation, resulting in the appellant filing a writ petition before the Bombay High Court. The Division Bench of the Bombay High Court, in terms of the impugned judgment dated 07.04.2016 rejected the same. The reasoning of the Division Bench was that the case of the appellant was of resignation and not of voluntary retirement. The appellant had tendered his resignation before 1.11.1993, while the conditions for availing of the benefit were: (i) the employees must have retired on or after 1.11.1993, and before the notified date; and (ii) the employee must have exercised the option to voluntarily retire within 120 days from the notified date, to become a member of the General Insurance Corporation (Employees’) Pension Fund while refunding the amount of Provident Fund contributed by the insurance company. These two aspects were stated to be absent in the case of the appellant, who had never opted for voluntary retirement within the requisite period nor refunded the amount, which were pre-requisites for availing the benefit of the new pension scheme.29. The opinion of the Division Bench was also based on a relevant fact, that the condition in terms of clause 4(4A) required completion of 55 years of age, while the appellant was not of 55 years of age on the date of his resignation or its acceptance. The said clause reads as under: “(4A) Not-withstanding anything contained in the foregoing sub- paragraphs, an Officer or a person of the Development staff may be permitted, subject to vigilance clearance, to seek voluntary retirement, - (a) on completion of 55 years of age or at any time thereafter on giving ninety days notice in writing to the appointing authority of his intention to retire; or Provided that on a written request from an officer or a person of the Development Staff, such notice may be waived in full or in part by the appointing authority; or (b) in accordance with the provisions contained in paragraph 30 of the General Insurance (Employees’) Pension Scheme, 1995, made under section 17A of the General Insurance Business (Nationalisation) Act, 1972, (57 of 1972) and published under notification of the Government of India, in the Ministry of Finance (Department of Economic Affairs) Insurance Division number S.O. 585 (E) dated 28th June, 1995.” 30. The last relevant aspect is that the 1995 Scheme provided in clause 22 as under: “22. Forfeiture of service - Resignation or dismissal or removal or termination or compulsory retirement of an employee from the service of the Corporation or a Company shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits.” 31. Thus, once again, there is this clause of forfeiture of service in case of resignation. 32. In order to elucidate the legal principle further, we may note that Sheel Kumar Jain took note of the judgment of the three Judges’ Bench in Sudhir Chandra Sarkar v. Tata Iron and Steel Co. Ltd. & Ors. (1984) 3 SCC 369 An uncovenanted employee of respondent-Company, paid on a monthly basis, sought to recover a sum as gratuity, for continued service rendered over 29 years, under the Retiring Gratuity Rules, 1937, after having resigned from service. The employee was paid the provident fund dues. The High Court of Patna opined against the employee. When the matter reached this Court, one of the contentions raised by the respondent- Company was that the employee had resigned and not retired from service. It was noticed that Rule 1(g) defines ‘retirement’ as “the termination of service by reason of any cause other than removal by discharge due to misconduct.” The employee had not been removed by discharge due to misconduct. The termination of service, being on account of resignation, it was held to qualify within the definition of ‘retirement’ under the Rules. The rest of the judgment, dealing with the principles as to how gratuity should be treated, is not relevant. 33. We, thus, notice that all that was opined by the three Judges’ Bench in the aforesaid case was based on the definition of ‘retirement’ as per the Retiring Gratuity Rules, 1937, which was expansive and all inclusive, excluding only the removal by discharge due to misconduct. Thus, nothing more could have been read into this judgment.34. We may also add that there are some observations in the aforesaid case that pension and gratuity are both retiral benefits and an employee, with long years of service should be assured social security to some extent, in the form of either pension or gratuity or provident fund, whichever retiral benefit is operative in the industrial establishment. In the given facts of the appeal before us, the benefit of provident fund has been given as that was the scheme applicable at the relevant stage of time. The principle laid down is not that all of them should be simultaneously be granted, but that, at least one of them should be granted, though there is no prohibition against more than one being granted.35. In view of what we have discussed aforesaid, all three aspects stated by us are relevant and disentitle the appellant to any relief. We have already explained the difference between resignation and voluntary retirement. Mere categorisation by the appellant himself of his resignation as “premature retirement” is of no avail. The same principle discussed aforesaid, of forfeiture of service, would be applicable here and the appellant did not have the requisite age when he resigned even were the 1976 Scheme to be made applicable.36. We may also find that the appellant remained silent for years together and that this Court, taking a particular view subsequently, in Sheel Kumar Jain , would not entitle stale claims to be raised on this behalf, like that of the appellant. In fact the appellant slept over the matter for almost a little over two years even after the pronouncement of the judgment.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]12. A reading of the aforesaid clause shows that there is a specific exclusion of an employee in whose case the twin conditions of havingbefore the commencement of the Pension Rules and drawing of pension under the Staff Regulations is satisfied.Thus, the definition ofenvisages two eventualities – first a person who had retired in terms of the Staff Regulations; and secondly, a voluntary retirement under the provisions of the Pension Rules themselves.The aforesaid Rules, thus, show that resignation entails forfeiture of the entire past service and consequently would not qualify for pensionary benefits. Rule 31 deals with ‘Pension on voluntarywhich is admissible on completion of 20 years of qualifying service, with a notice of not less than 90 days inthe Pension Rules been only prospective in application, there is no doubt that Shree Lal Meena could not even have endeavoured to prefer a claim. In order to appreciate this aspect, the extent to which retrospectivity applies would have to be analysed, strictly on the basis of these Pension Rules, which are also contributory in their character.17. The undisputed fact is that as on the date when Shree Lal Meena was revolving the thought in his mind of voluntary retirement, there was no such provision in the Staff Regulations applicable. Thus, his repeated communications setting forth a thought process for ‘voluntaryhad no legal backing on that date. It is in these circumstances that no response was forthcoming to his letters, when he talked about a concept which did not exist. Conscious of this aspect and wanting to leave the services of the LIC, Shree Lal Meena took recourse to what was permissible on that date, i.e.,Section 3 of the Staff Regulations has a headingThe other expression used before the relevant Regulation 18 is ‘Determination ofThe Regulation itself uses the expression ‘leave orservice. In whatever manner these expressions are understood, in legal and common parlance, they amount to, first a unilateral act on the part of an employee, desirous of not continuing with her/his service with the employer and then, the acceptance of the same by the employer, subject to a notice period, which, in the present facts, had been waived at the request of the employee. Thus, on the relevant date he took a conscious decision to dis- engage himself from the services of the appellant, on the terms & conditions as prevalent on that date. As to what happened five years hence, in our view, would have no bearing on any benefit, which can accrue to such employee as a respondent, except to the extent which is specifically made applicable to him.What is most material is that the employee in this case had resigned. When the Pension Rules are applicable, and an employee resigns, the consequences are forfeiture of service, under Rule 23 of the Pension Rules. In our view, attempting to apply the Pension Rules to the respondent would be a self-defeating argument. As, suppose, the Pension Rules were applicable and the employee like the respondent was in service and sought to resign, the entire past service would be forfeited, and consequently, he would not qualify for pensionary benefits. To hold otherwise would imply that an employee resigning during the currency of the Rules would be deprived of pensionary benefits, while an employee who resigns when these Rules were not even in existence, would be given the benefit of these Rules.20. Now turning to the discussion of the judicial pronouncements in this behalf, we are of the view that any judgment has to be read for the law it lays down, by reference given to a factual matrix. Lines or sentences here and there should not be read in absolute terms, de hors the factual matrix in the context of which those observations were made.CIT v. Sun Engineering Works (P.) Ltd. (1992) 4 SCC 363. 21. The judgment in JK Cotton Spinning & Weaving Mills Co. Ltd., Kanpur has, thus, to be considered in that context. What was the issue in that case? The first paragraph of the judgment itself clarifies that aspect. Whether determination of an employer-employee relationship amounted to retrenchment, within the meaning of the provisions of the Act applicable is what was being looked into. We have already noticed, while referring to the facts of that case hereinbefore, that the employee in question tried to act clever by half. He firstly resigned. The resignation was accepted and the consequent monetary benefit flowed to him. Thereafter, he sought to bring his resignation within the meaning ofunder Section 2(s) read with Section 6N of the Uttar Pradesh Industrial Disputes Act, 1947. The definition ofitself clearly excluded voluntary retirement of the workman. The employee, having voluntarily resigned, the termination of relationship of employer and employee could not come within the meaning ofThis Court analysed the difference between the meaning of resignation and retrenchment. The resignation was voluntary. It is in this context that it was observed that a voluntary tendering of resignation would be similar to voluntary retirement and not retrenchment. Nothingmore and nothing less. Thus, in our view, the High Court, both the learned Single Judge and the Division Bench, appeared to have read much more into this judgment than the legal proposition which it sought to propound. The principles in the context of the controversy before us are well enunciated in the judgment of this Court in Reserve Bank of India & Anr. v. Cecil Dennis Solomon & Anr.On a similar factual matrix, the employees had resigned some time in 1988. The RBI Pension Regulations came in operation in 1990. The employees who had resigned earlier sought applicability of these Pension Regulations to themselves. The provisions, once again, had a similar clause of forfeiture of service, on resignation or dismissal or termination.In our view, the aforesaid principles squarely apply in the facts of the present case and the relevant legal principles is that voluntary retirement is a concept read into a condition of service, which has to be created by a statutory provision, while resignation is the unilateral determination of an employer-employee relationship, whereby an employee cannot be a bonded labour.We may only note that in the above discussed judgement, an argument assailing the Regulation for forfeiture of service, based on Article 14 of the Constitution of India was repelled. The provisions under the new Regulations were held not to be in the nature of penalty, but a disentitlement, as a consequence of having resigned from service and, thus, being disentitled from having become a member of the fund. There are other judgments also in the same line, but not laying down any additional principles and, thus, it would suffice to just mention them, i.e. M.R. Prabhakar & Ors. v. Canara Bank & Ors. (2012) 9 SCC 671  and J.M. Singh v. Life Insurance Corporation of India & Ors. (2012) 9 SCC 671 25. There are some observations on the principles of public sectors being model employers and provisions of pension being beneficial legislations.Shashikalav. Central Bank of India, (2014) 16 SCC 260 ; Asger Ibrahim Amin v. Life Insurance Corporation of India (2016) 13 SCC 797We may, however, note that as per what we have opined aforesaid, the issue cannot be dealt with on a charity principle. When the Legislature, in its wisdom, brings forth certain beneficial provisions inThe reasoning of the Division Bench was that the case of the appellant was of resignation and not of voluntary retirement. The appellant had tendered his resignation before 1.11.1993, while the conditions for availing of the benefit were: (i) the employees must have retired on or after 1.11.1993, and before the notified date; and (ii) the employee must have exercised the option to voluntarily retire within 120 days from the notified date, to become a member of the General Insurance Corporationscheme.29. The opinion of the Division Bench was also based on a relevant fact, that the condition in terms of clause 4(4A) required completion of 55 years of age, while the appellant was not of 55 years of age on the date of his resignation or its acceptance.Thus, once again, there is this clause of forfeiture of service in case of resignation.We, thus, notice that all that was opined by the threeBench in the aforesaid case was based on the definition ofper the Retiring Gratuity Rules, 1937, which was expansive and all inclusive, excluding only the removal by discharge due to misconduct. Thus, nothing more could have been read into this judgment.34. We may also add that there are some observations in the aforesaid case that pension and gratuity are both retiral benefits and an employee, with long years of service should be assured social security to some extent, in the form of either pension or gratuity or provident fund, whichever retiral benefit is operative in the industrial establishment. In the given facts of the appeal before us, the benefit of provident fund has been given as that was the scheme applicable at the relevant stage of time. The principle laid down is not that all of them should be simultaneously be granted, but that, at least one of them should be granted, though there is no prohibition against more than one being granted.35. In view of what we have discussed aforesaid, all three aspects stated by us are relevant and disentitle the appellant to any relief. We have already explained the difference between resignation and voluntary retirement. Mere categorisation by the appellant himself of his resignation asis of no avail. The same principle discussed aforesaid, of forfeiture of service, would be applicable here and the appellant did not have the requisite age when he resigned even were the 1976 Scheme to be made applicable.36. We may also find that the appellant remained silent for years together and that this Court, taking a particular view subsequently, in Sheel Kumar Jain , would not entitle stale claims to be raised on this behalf, like that of the appellant. In fact the appellant slept over the matter for almost a little over two years even after the pronouncement of the41. A Division Bench of the Andhra Pradesh High Court, in terms of the impugned order dated 09.10.2015 rejected the petition filed by the appellants on the ground that when the appellants resigned, there was no Pension Regulations providing for voluntary retirement in existence, and merely because the Pension Regulations have been made applicable for persons retiring within a past period of window, it would not give the same benefit to the employees who had resigned from service. The reasoning of the judgment is predicated on M.R. Prabhakar & Ors. v. Canara Bank & Ors.It is relevant to note that M.R. Prabhakar & Ors. dealt with a similar scheme for employees of the Canara Bank, and the plea was that such of the employees who had resigned must be construed as voluntarily retired, thus, entitling them to pensionary benefits. Suffice to say that, once again, the principle was of differentiation between the concept of ‘voluntaryRegulation 2(y) as applicable to the employees of Canara Bank, being pari materia to Rule 2(y) under the Pension Regulations of 1995, had brought in ‘voluntaryin the definition ofbut had not considered it appropriate to bring in the concept ofService jurisprudence, recognising the concept ofas different, and in the same regulations these expressions being used in different connotations, left no manner of doubt that the benefit could not be extended, especially as resignation was one of the disqualifications for seeking pensionary benefits, under the Regulations.