Case: Bank of India &amp; Others Vs. O.P. Swaranakar

4. The banks were said to be over-staffed. For the purpose of effective management, man power planning was contemplated by the Ministry of Finance, Government of India, pursuant whereto and in furtherance whereof, the Government considered the desirability of introducing voluntary retirement scheme to help the banks to right-size their force. In a letter dated 22.5.2000, the Director (IR & BOII), Ministry of Finance, intimated to the concerned banks that different committees and experts opined that most of the banks have 25% surplus manpower.It was, therefore, requested that the concerned banks should undertake the exercise of man-power planning on priority basis and send the same to the Banking Division for approval of the Board. A Committee was constituted by the Central Government for consideration of various issues as specified in the report of the Committee on Human Resource Management in Public Sector Banks.Pursuant to or in furtherance of the said purported policy decision, the State Bank of India as well as the Nationalised Banks adopted separately but almost identical scheme known as "Employees Voluntary Retirement Scheme". We may, however, observe that the scheme adopted by the State Bank of India (hereinafter referred to "SBIVRS") in certain respects differ from the scheme of the Nationalised Banks (hereinafter referred to the "said scheme"). For our purpose, we would consider them separately.7. The said scheme was applicable in relation to employees who on the date of application had completed 15 years of service or 40 years of age. The employees specified therein including specialised officers were not eligible to seek voluntary retirement. However, in certain scheme they were ordinarily ineligible for being considered. The period during which the said scheme was to remain operative varies from bank to bank. However, as far as Punjab National Bank was concerned, the said scheme was to remain in operation from 1.11.2000 to 30.11.2000. In terms of the said scheme those who sought for voluntary retirement were entitled to ex-gratia payments as specified therein as as also other benefits which are asOF EX-GRATIAAn employee seeking voluntary retirement under the scheme will be entitled to the ex-gratia amount mentioned below in para (a) or (b), whichever is less:-a) 60 days salary (pay plus stagnation increments plus special pay plus dearness relief) for each completed year of service:ORb) salary for the number of months service left;OTHER BENEFITSAn employee seeking voluntary retirement under the scheme will be eligible for the following benefits in addition to the ex-gratia amount mentioned in para 6 above of this scheme:-i) Gratuity as per Payment of Gratuity Act, 1972 or Gratuity payable under the Service Rules as the case may be, as per existing rules;ii) a) Pension (including commuted value of pension) as per PNB (Employees) Pension Regulations, 1995.ORb) Banks contribution towards PF as per existing rules.iii) Leave encashment as per existing rules".The Scheme contained an eligibility criteria, namely, the employees against whom disciplinary proceedings were contemplated or pending would not be eligible for seeking voluntary retirement. It states that the employees seeking voluntary retirement were eligible for all other retirement benefits. Under the existing said scheme the bank has reserved with itself the right to withdraw the scheme at any time it thinks fit and its decision in this behalf was to be final.9. Para 9 of the said scheme specifies different competent authorities for accepting voluntary retirement of different categories of officers and workmen.A large number of employees (1,01,000 employees approx) submitted their applications out of whom a small under of employees (200 employees approx) withdrew their offer. Despite withdrawal of their offer the same was accepted. In some cases offers despite withdrawal thereof were accepted within the period during which the scheme was operative and in some beyond thewe have already declared this scheme as bad, therefore, we are not in a position to give any relief to the writ petitioners of 10 writ petitions i.e. C.W.P. Nos. 6072, 7277, 7448, 9191, 14325, 15686, 15689 19393, 19711 and 19803 of the year 2001, and in our opinion, these writ petitions are liable to be dismissed. When all rights flow from a valid scheme and the moment the scheme is declared bad on account of statutory restrictions then the petitioners of these 10 writ petitions cannot ask for any advantage or benefit.Now we want to make some observations with regard to those employees who had taken the benefit under the VRS Scheme but they have not approached this court as they appear to be satisfied with the amount/benefits already received by them. With regard to them we want to make it clear that the Banks are not obliged to recall these employees for employment".The Bombay High Court and the other High Courts, on the other hand, held that clause 10.5 of the scheme or the scheme framed framed by the other banks is not operative as the employees have indefeasible rights to withdraw their offer before the same is accepted. In arriving at its aforementioned finding, the High Courts, inter alia, relied on the following decisions of this Court in Union of India and others vs. Gopal Chandra Misra and others (1978) 2 SCC 301 ), Balram Gupta vs. Union of India and another (1987) Supp. SCC 228), Punjab National Bank vs. P.K. Mittal (1989) Supp.2 SCC 175), Union of India and another vs. Wing Commander T. Parthasarathy (2001) 1 SCC 158 ) and Shambhu Murari Sinha vs. Project & Development India Ltd. and another (2002) 3 SCC 437 ).The scheme was introduced by the banks with the approval of the Board of Directors.13. Questioning the action on the part of the banks, in accepting the applications of the concerned, employees despite their withdrawal, writ petitions were filed in the Punjab & Haryana High Court, Bombay High Court, Uttaranchal High Court etc.14. Before the Punjab & Haryana High Court, the legality or validity of the said scheme also come to be questioned. Writ applications were also filed by some employees seeking for issuance of writ of mandamus directing the respective banks to pay unto them their lawful dues strictly in terms of the scheme.15. The Punjab & Haryana High Court by reason of its judgment impugned herein 3.4.2002, inter alia,the V.R. Scheme as framed is not a valid piece of subordinate legislation inasmuch as the provision of Section 19 sub clause (1) and sub clause (4) of the Act have not been complied with and has, therefore, to be set aside.Even if it is assumed for the sake of arguments that the scheme is validily framed, it would be open to an employee to withdraw his option before the same has been accepted and effectively enforced.For the reasons recorded above, we allow 71 writ petitions i.e. C.W.P. Nos. 1458, 1472 of 2001 and C.W.P. Nos. 303 an d1765 of 2002 etc. etc. in which the petitioners have made a prayer for the withdrawal of their options and the impugned orders accepting the options of voluntary retirement stand quashed. All these petitioners shall be reinstated in service with all consequential benefits. It is however, made clear that those petitioners who have received the benefits under the scheme including the ex-gratia payment whether with or without protest, shall return the entire amount received by them with interest at the rate of 9% per annum from the date of the receipt of the said amount till the date of return. On return of the aforesaid amount the consequential benefits regarding the payment of arrears of salary and allowances from the date of their release to the date of reinstatement shall be given to them by the respondents. These petitioners shall also have the benefit of continuity of service and the interregnum period shall be regularised in accordance with law and regulations.

Reasoning:
23. Having regard to the difficulties which may be faced by some of the employees, by a circular a cut-off date of 15.2.2001 was fixed; thereby granting opportunities to the employee to withdraw the option exercised by him. The logic and necessity therefor, inter alia,the purpose of the SBIVRS was inter alia to have overall reduction in the existing strength of the employees. However, the bank were also required to control the outflow according to its requirements, for which the bank retained the discretion to limit the number of employees allowed to retire.ii) A decision was taken by the bank that around 10% employees may be allowed to retire under the VRS; the petitioners bank had to process the applications of all the employees who had opted for VRS. This ratio of 10% could be achieved only after the bank receives a definite figure about the number of persons opting for VRS and withdrawing later.iii) Further the final decision of the category of persons eligible under VRS could be taken only after the petitioner bank had the final tally regarding the last and final figure of number of the persons who had opted under the VRS.iv) The scheme was purely voluntary and the conscious decision of the employees, hence there could be no reason for his withdrawal of application at a later date. However, keeping in view the interest of the employee, it was decided that the employee might be permitted to withdraw the application on or before 15.2.2001.v) It was a time bound scheme whereunder the employee was to be relieved and paid entire monetary benefits by 31.3.2001, for which arrangements were to be made.Pursuant to in furtherance of the powers conferred under Section 50(3), the Reserve Bank of India with the previous sanction of the Central Government made the State Bank of India General Regulations, 1955. It is also not in dispute that in exercise of the power conferred under Section 43(1) of the State Bank of India Act, 1955 the Central Board of the State Bank of India made the State Bank of India Officers Services Rules determining the terms and conditions of the appointment and services of officers in the Bank.We may consider the cases of nationalized bank first. The circular dated 20.8.2000 and the scheme framed by the banks are required to be read together for the purpose of ascertaining the true intendment thereof. The scheme essentially was floated as has been mentioned herein before with a purpose of downsizing the employees. Such a scheme although may incidentally be beneficial also to the employees but was primarily beneficial to the banks. The ultimate aim and object of floating such a scheme as has been stated in the circular letter issued by the Ministry of Finance was for the purpose of effective functioning of the banks so as to enable them to compete with the privatefar as the employees of the State Bank of India are concerned their terms and conditions of services, as noticed hereinbefore, are governed by statutory rules. However, so far as the employees of the nationalized banks are concerned except for the matter of grant of pension which is covered by the regulations framed in terms of Section 19 of the 1970 Act, other terms and conditions of their service are not statutory in nature. But the State Bank of India as also the nationalized banks are "States" within the meaning of Article 12 of the Constitution of India. The services of the workman are also governed by several standing orders and bipartite settlements which have the force of law. The banks, therefore, cannot take recourse to "hire & fire" for the purpose of terminating the services of the employees. The banks are required to act fairly and strictly in terms of the norms laid down therefor. Their actions in this behalf must satisfy the test of Articles 14 and 21 of the Constitution of India. Having regard to the intendment of the scheme each and every employee would not be entitled to the benefit of the said scheme. Those who are facing disciplinary proceedings or working in a particular class of employment are not eligible therefor.The request of employees seeking voluntary retirement was not to take effect until and unless it was accepted in writing by the competent authority. The Competent Authority had the absolute discretion whether to accept or reject the request of the employee seeking voluntary retirement under the scheme. A procedure has been laid down for considering the provisions of the said scheme to the effect that an employee who intends to seek voluntary retirement would submit duly completed application in duplicate in the prescribed form marked "offer to seek voluntary retirement" and the application so received would be considered by the competent authority on first come first serve basis. The procedure laid down therefor, suggest that the applications of the employee would be an offer which could be considered by the bank in terms of the procedure laid down therefor. There is no assurance that such an application would be accepted without any consideration.55. Acceptance or otherwise of the request of an employee seeking voluntary retirement is required to be communicated to him in writing. This clause is crucial in view of the fact that therein the acceptance or rejection of such request has been provided. The decision of the authority rejecting the request is appealable to the Appellate authority. The application made by an employee as an offer as well as the decision of the bank thereupon would be communicated to the respective General Managers. The decisions making process shall take place at various levels of theis apparent that the Nationalized banks in terms of the scheme had secured for themselves an unfettered and unguided right to deal with the jural relationship between themselves and their employees.58. It is not a case where on mere making of option on the part of the employee the offer is to be accepted or even there will be reasonable certainty that some norms should be maintained. There is no consideration for the contractual bar clause. The submission of the learned counsel appearing on behalf of the banks that the proposal to the effect that the option made by an employee would be considered, is a consideration cannot be accepted.59. Once it is held that the provisions of the Indian Contract Act, 1872 would be applicable, the scheme admittedly being contractual in nature, the provisions of the Act shall apply. The Scheme having regard to its provisions as noticed hereinbefore would merely constitute invitation to treat and not an offer.Once it is found, as would appear from the position rendered by this court that the employees do not have an enforceable right upon making an option the same would be void in terms of Section 2(g) of the Contract Act as opposed to Section 2(h) thereof.In the instant case, there was even no reasonable certainty that the scheme would be acted upon. Furthermore terms and conditions thereof could be amended and even the scheme itself could be rescinded.69. We, therefore, have no hesitation in coming to the conclusion that the voluntary scheme was not a proposal or an offer but merely an invitation to treat and the applications filed by the employees constituted "offer".70. Once the application filed by the employees is held to be an "offer"; Section 5, in absence of any other independent binding contract or statute or statutory rules to the contrary would come into play.We may at once point out that the stands of the learned counsel appearing on behalf of banks is inconsistent and self-contradictionary. Whereas once it was argued that the offer was made by the bank by floating the scheme and once an application is filed, the same would amount to acceptance of offer; one the same breath they took recourse to the "doctrine of option" which is applicable only at the instance of the offeror, who in this case would be the employees.75. The submission in our considered opinion proceed on a total misconception. By reason of making such option or firm offer the offeror must get some benefit or the offeree must incur some detriment.76. The contracts in which the said principle can be applied would be a case where there would usually be a money payment. In the instant case apart from the fact that no consideration is passed, the banks standing in the category of offeree either expressly or impliedly had not promised to do or refrain from doing something in exchange for the offerors promise not to revoke the offer. In all fairness to Mr. Reddy, we may set out hereunder the authorities relied upon by him.The learned author, as noticed from the passage quoted herein before, clearly stated that an offer may be revoked even before it is accepted.82. Furthermore, a large number of employees have withdrawn then offer only when a proviso is sought to be added to Regulation 28 aforementioned. In terms of the Scheme the employees, who expected to get benefits of clause 4 of Regulation 29 would be deprived therefrom. It is not in this dispute that the qualifying period for pension qualifying for receiving pension was 20 years. Only upon completion of 20 years, in terms of the statutory regulation contained in Regulation 29, an employee could opt for voluntary retirement and in terms thereof, the would be entitled to the benefits specified therein. The said regulations had specifically been mentioned for the purpose of computation which would include invocation of Sub-regulation 4 of Regulation 29 providing for relaxation of 5 years towards the qualifying period. The employees must have proceeded on the basis that despite the fact that they have merely rendered 15 years of service which was not a qualifying service under the regulations, they would be entitled to the pensionary benefits in terms of the scheme. By introducing the proviso to Regulation 28 pension was sought to be made pro rata in place of full pension.83. The basic concept of the scheme, therefore, underwent a change which also goes to show that the banks had sought to invoke its power of amending the scheme. Once the scheme is amended and/or an apprehension is created in the mind of the employees that they would not even receive the entire benefits as envisaged under the scheme, they were entitled to revoke their offers. Their action in our considered option is reasonable. It may be that some of the employees only opted for the provident fund benefit which did not undergo any amendment but the same would not change the attitude on the part of the banks.84. We, therefore, do not find any error in the judgment of the High Court on this score.The submission of learned Attorney General that as soon as an offer is made by an employee, the same would amount to resignation in praesenti cannot be accepted. The scheme was in force for a fixed period. A decision by the authority was required to be taken and till a decision was taken, the jural relationship of employer and employee continued and the concerned employees would have been entitled to payment of all salaries and allowance etc. Thus it cannot be said to be a case where the offer was given in praesenti but the same would be prospective in nature keeping in view of the fact that it was come into force at a later date and that too subject to acceptance thereof by the employer. We, therefore, are of the opinion that the decision of this Court, as referred to herein before, shall apply to the facts of the present case also.104. However, it is accepted that a group of employees accepted the ex gratia payment. Those who accepted the ex gratia payment or any benefit under the scheme, in our considered opinion, could not have resiled therefrom.We also accept the contention raised by the learned counsel for the respondents that the concerned appellants could not have accepted the offer of voluntary retirement after expiry of the scheme. All actions by the Banks were required to be taken strictly in terms of the said scheme.We may may now deal with that part of the order of the Punjab & Haryana High Court whereby it has been held that the entire scheme is ultra vires being violative of sub-regulation 4 of Regulation 19 of the Regulations.111. We do not agree with the decision of the High Court on that count for more than one reason.112. Firstly, the scheme is not a part of the statutory regulation. It was in the realm of contract. That being so it was not necessary for the Central Government to place the same before the Parliament.113. Secondly, even if the same was a regulation, the laying down rule is merely a directly one and not mandatory.We, therefore, are of the opinion that the scheme in question cannot be said to be bad in law.117. The Punjab and Haryana High Court in its impugned judgment has refused to grant any relief in ten writ petitions wherein prayers were made to the effect that the bank should be directed to act in terms of the said scheme. the relief prayed for by the concerned petitioners were denied by the High Court on the ground that the same was not enforceable. We have not accepted that part of the judgment of the High Court. In that view of the matter, the High Court must now consider the claim of the said writ petitioners on merits and pass an appropriate order in accordance with law. The said matters are, therefore, remitted to the High Court for consideration thereof afresh.