Case: J. K. Cotton Spinning and Weaving Mills Company Limited Vs. State of Uttar Pradesh and Others

2(oo). In Hindustan Steel Ltd. ((1976) 4 SCC 222 ) the termination of service was by efflux of time. Placing reliance on the law laid down in Sundara Money case ((1976) 1 SCC 822 ) and the proviso to Section 25-F(a), this Court held that the termination of service was by way of retrenchment. In the case of Delhi Cloth Mills ((1977) 4 SCC 415 ) the employees name was taken as automatically removed from the rolls of the company under the Standing Order 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 ((1980) 3 SCC 340 ) was a case of termination of service on account of her failure to pass the prescribed test. That was the reason for terminating her service. All the same it was the employers action which resulted in the termination of her service attracting Section 2(oo). In the case of Robert DSouza ((1982) 1 SCC 645 ) the termination was founded 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 tendering 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. 10. 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 it be a voluntary act of the employee expressing a desire to quit 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 within the expression voluntary retirement ? The meaning of the terms resign and retire in different dictionaries is as under: Blacks Law Dictionary Formal renouncement To terminate (5th edn.) or relinquishment of employment or an office service upon reaching retirement age Shorter Oxford English To relinquish, surr- The act of Dictionary ender, give up or retiring or (Revised edn. of 1973) hand over (something); withdrawing esp., an office, posit- to or from ion, right, claim, etc. a place or To give up an office or position position; to retire The Random House To give up an office, To withdraw Dictionary (College edn.) position etc.; to from office relinquish (right claim, business or agreement etc.) active life 11. From the aforesaid dictionary meanings it becomes clear that when an employee resigns his office, he formally relinquishes or withdraws from his office. It implies that he has taken a mental decision to serve 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 v. Brojo Nath Ganguly ((1986) 3 SCC 156 , 228) this Court observed as under : (SCC p. 228, para 111) "By entering into 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 employee would, however, normally require to be accepted by the employer in order to be effective" 12. In the present case the employees 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 voluntarily tenders 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 expression voluntary retirement within the meaning of clause (i) of Section 2(s) of the State Act. In Santosh Gupta case ((1980) 3 SCC 340 ) Chinnappa Reddy, J. observed as under : (SCC p. 342, para 5) "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.) The above observation clearly supports the view which commends itself 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 employee under Section 6-N. We are also of the view that this was a case of voluntary retirement within the meaning of the first exception to Section 2(s) and therefore the question of grant of compensation under Section 6-N does not arise. We, therefore, cannot allow the view of the High Court to stand. 13.

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

Explanation:
1[ds]It becomes clear on a plain reading of the definition of the term retrenchment that it comprises of two part; the first part is the inclusive part which defines retrenchment whereas the second part is in the nature of an exception and excludes two types of cases from the scope and ambit of the saidthis correspondence it is crystal clear that the employee desired to serve 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 right to put an end to the contract of employment by informing his employer of his intention to give up the job. This right is specifically conferred by clause 21 of the Standing Orders certified under Section 5 of the Industrial Employment (Standing Orders) Act,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 quit, such termination cannot be said to be at the instance of the employer to fall within the first part of the definition of retrenchment in Section 2(s) of the Statecases are, therefore, not helpful since they turn on their own special facts. None of them deals with a case of voluntary resignation tendered by ancan be no doubt that a resignation must be voluntarily tendered for if it is tendered on account of duress or coercion, it ceases it be a voluntary act of the employee expressing a desire to quit service. In the present case the High Court has come to the conclusion that the employee had tendered his resignation voluntarily.From the aforesaid dictionary meanings it becomes clear that when an employee resigns his office, he formally relinquishes or withdraws from his office. It implies that he has taken a mental decision to serve 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.In the present case the employees 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 voluntarily tenders 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 expression voluntary retirement within the meaning of clause (i) of Section 2(s) of the Stateabove observation clearly supports the view which commends itself 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 employee under Section 6-N. We are also of the view that this was a case of voluntary retirement within the meaning of the first exception to Section 2(s) and therefore the question of grant of compensation under Section 6-N does not arise. We, therefore, cannot allow the view of the High Court to stand