Case: SENIOR DIVISIONAL MANAGER, LIFE INSURANCE CORPORATION OF INDIA LTD Vs. SHREE LAL MEENA

C.A. No.14739 of 20153. Shree Lal Meena, the respondent in the appeal was an employee of the Life Insurance Corporation of India Limited (for short ‘LIC?). On completion of more than 20 years of service, he addressed a letter dated 15.6.1990 to the LIC, expressing concerns about the poor health of his wife and himself and the possibility that he may be seeking voluntary retirement on account thereof. There being no response to this letter, Shree Lal Meena followed the said letter with another letter dated 18.6.1990, reiterating the same aspect. Once again, there was no response. Finally, he tendered a letter of resignation on 14.7.1990, for it to take effect immediately, by waiving off the mandatory notice period of three months under Regulation 18 of the Life Insurance Corporation of India (Staff) Regulations, 1960 (hereinafter referred to as the ‘Staff Regulations?). The acceptance of the resignation was communicated by the LIC vide letter dated 11.1.1991, to take effect from 14.7.1990, waiving off the statutory notice period.4. It is pertinent to note that there was no scheme or provision for voluntary retirement applicable to Shree Lal Meena during this period of time. Shree Lal Meena was paid all his dues as were admissible to him. The beneficial scheme operating at the relevant time was a Contributory Provident Fund Scheme under Regulation 76 of the Staff Regulations.5. More than 5 years later, the Life Insurance Corporation of India (Employees) Pension Rules, 1995 (for short ‘Pension Rules?) were promulgated, on 28.6.1995, but were brought into force with retrospective effect, from 1.11.1993, unless expressly provided against. The applicability of Section 3(1)(a) of the Pension Rules made the scheme applicable to all the employees who were in service of the LIC on or after 1.1.1986, but had retired before 1.11.1993, given that the employees satisfied the other conditions provided for in the Pension Rules.6. Shree Lal Meena was in service after 1.1.1986. He had, however, resigned with effect from 14.7.1990. Had he not resigned he would have continued in service and would have retired sometime around the year 2000. He had also made an endeavour, prior to his resignation, proposing voluntary retirement for himself. Shree Lal Meena was, thus, of the view that the Pension Rules should be made applicable to him and accordingly made a request, which was, however, declined on 6.4.1996 by the LIC on the ground that he had ‘resigned? from service. He, thus, issued a notice of demand vide letter dated 28.8.1997, which met with the same fate and finally filed a writ petition before the Rajasthan High Court in 1997 itself, which was decided in his favour, by the learned Single Judge of that Court, vide judgment dated 8.9.2006.7. The gravamen of the judgment of the learned Single Judge is the request made by Shree Lal Meena for voluntary retirement and that it was the absence of any provision for the same under the Staff Regulations, which had caused him to tender his resignation. This view was sought to be supported by the judgment of this Court in JK Cotton Spinning &Weaving Mills Co. Ltd., Kanpur v. State of U.P .,AIR 1990 SC 1808 opining that where an employee voluntarily tenders his resignation, termination of service, post acceptance of such resignation by the employer would fall in the category of ‘voluntary retirement?, given all other ingredients of voluntary retirement were being met. It may be noted that in the factual contours of the controversy of that judgment, the question really posed was whether in the case of services of an employee being terminated consequent to a voluntary resignation, such termination so brought about would amount to retrenchment within the meaning of Section 2(s) read with Section 6N of the Uttar Pradesh Industrial Disputes Act, 1947. As per the provisions of Section 2(s) of that Act, the definition of ‘retrenchment? excludes a case of voluntary retirement. Since the employee had tendered his resignation voluntarily, and had subsequently claimed compensation on account of retrenchment, this Court, in that case had opined against the employee. The learned Single Judge of the Rajasthan High Court also recorded that there was no dispute that Shree Lal Meena had the requisite years of service to be entitled to pensionary benefits if the scheme had existed at the relevant point of time.8. LIC, aggrieved by this order, appealed to the Division Bench of the High Court, which endeavour, however, failed as the appeal was dismissed vide order dated 16.8.2011. The plea of the LIC, based on the judgment of this Court in Reserve Bank of India & Anr. v. Cecil Dennis Solomon & Anr. (2004) 9 SCC 461 No.10904 of 201627. The appellant joined the respondent United India Insurance Company Limited as a Clerk on 13.8.1960 and served for a long period of 32 years. He, however, tendered his resignation on 1.10.1993 for ?family reasons?, but on his own, termed it as ?premature retirement?, so as to claim future benefits. Request for waiving of notice period was also made. The letter of resignation was accepted on 30.11.1993, giving effect to such resignation from that day itself. It is relevant to note that at the time the appellant resigned, he was governed by the General Insurance (Termination, Superannuation and Retirement of Officers and Development Staff) Scheme, 1976 (for short ‘1976 Scheme?), which had no concept of voluntary retirement. However, almost three years after the appellant resigned, an amendment was made to the 1976 Scheme by inserting clause 4(4A), introducing the concept of V oluntary Retirement Scheme on 1.11.1996. This clause, however, was made retrospectively applicable from 1.11.1993. It appears that the object was to have consonance with the General Insurance (Employees?) Pension Scheme, 1995 (hereinafter referred to as the ‘1995 Scheme?).28. It is in the year 2011 that the judicial pronouncement by this Court in Sheel Kumar Jain v. New India Assurance Company Limited (2011) 12 SCC 197 gave benefit of this scheme to certain employees. The judgment was delivered on 28.7.2011. Once again, almost after two years, the appellant made a representation 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 writpetition 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 pension39. The appellants in this case were employees of the respondent- Bank, viz., Andhra Bank, who resigned from service during the window period of 1991 and 1993 giving three months? notice. The grounds for resignation varied. The employees were governed by the then existing Service Rules, being the Andhra Bank Officers? Service Regulations, 1982. It was much later that Andhra Bank (Employees) Pension Regulations, 1995 (for short ‘Pension Regulations?) were introduced, effective from its date of notification. There was no retrospectivity involved in this case. But the Pension Regulations were made applicable for employees, who ‘retired? on or after 01.01.1986 but before 01.11.1993.40. The appellants sought benefit under these Pension Regulations, even though they had ‘resigned? from their job, which request was rejected.41. 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.

Reasoning:
C.A. No.14739 ofA reading of the aforesaid clause shows that there is a specific exclusion of an employee in whose case the twin conditions of having ‘retired? before the commencement of the Pension Rules and drawing of pension under the Staff Regulations is satisfied.Thus, the definition of ‘retirement? envisages 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 voluntary retirement?, which 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 ‘voluntary retirement? had 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., ‘resignation?. Section 3 of the Staff Regulations has a heading ‘Termination?. The other expression used before the relevant Regulation 18 is ‘Determination of Service?. The Regulation itself uses the expression ‘leave or discontinue? service. 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 of ‘retrenchment? under Section 2(s) read with Section 6N of the Uttar Pradesh Industrial Disputes Act, 1947. The definition of ‘retrenchment? itself 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 of ‘retrenchment?. This 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 inscheme.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 three Judges? Bench in the aforesaid case was based on the definition of ‘retirement? asper 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 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 ‘voluntary retirement? and ‘resignation?. Regulation 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 ‘voluntary retirement? in the definition of ‘retirement?, but had not considered it appropriate to bring in the concept of ‘resignation?. Service jurisprudence, recognising the concept of ‘resignation? and ‘retirement? as 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.