Case: Sheelkumar Jain Vs. New India Assurance Co. Ltd.

01.07.1969 the appellant was appointed as an Inspector in Liberty Insurance Company Limited. Under the General Insurance Business (Nationalised) Act, 1972 (for short `the Act), Liberty Insurance Company was nationalized and merged in the respondent no.1-Company. The services of the appellant were absorbed in respondent No.1-Company and in September, 1984, he was promoted as Assistant Administrative Officer and posted at the GunaBranch as Assistant Branch Manager. In the year 1989, he was transferred to Indoreand posted as Assistant Administrative Officer and thereafter as Divisional Accountant and in 1991 he was promoted to the post of Administrative Officer. The appellant then served a letter dated 16.09.1991 to the General Manager of respondent No.1- Company at the Head Office of the company at Bombay saying that he would like to resign from his post and requesting him to treat the letter as three months notice and to relieve him from his services. The Assistant Administrative Officer, Indore, by his letter dated 28.10.1991 informed the appellant that his resignation has been accepted by the competent authority with effect from 16.12.1991, i.e. after completion of three months notice. Accordingly, the appellant was relieved from his services on 16.12.1991. Thereafter, the General Insurance (Employees) Pension Scheme, 1995 (for short `the Pension Scheme, 1995) was made by the Central Government in exercise of its powers under Section 17-A of the Act. The Pension Scheme, 1995 applied also to employees who were in the service of respondent No.1-Company on or after first January, 1986 but had retired before the first day of November, 1993 and exercised an option in writing within 120 days from the notified date provided he refunded within the specified period the entire amount of the companys contribution to the provident fund including interest thereon as well as the entire amount of non-refundable withdrawal, if any, made from the companys contribution to the provident fund amount and interest thereon. On 20.10.1995, the appellant submitted an application to the respondent No.1- Company opting for the Pension Scheme, 1995 and gave an undertaking to refund to respondent No.1-Company the entire amount of companys contribution to his provident fund account together with interest as well as the entire amount of non-refundable withdrawal, if any, made by him from companys contribution to his provident fund account and interest thereon. The respondent No.1-Company, however, intimated the appellant by letter dated 25.10.1995 that the Pension Scheme, 1995 was not applicable to those who have resigned from the respondent No.1-Company and since the appellant has resigned, he will not be entitled for the Pensions Scheme, 1995.4. The appellant then filed Writ Petition No.692of 1996 before the Madhya Pradesh High Court, IndoreBench, which was dismissed by the learned Single Judge by order dated 15.02.2000. Aggrieved, the appellant initially filed Special Leave Petition before this Court, but thereafter withdrew the same and challenged the order of the learned Single Judge before the Division Bench of the Madhya Pradesh High Court in Writ Appeal No.224of 2006. The Division Bench of the Madhya Pradesh High Court held in the impugned order that under Clause 22 of the Pension Scheme, 1995, resignation entails forfeiture of the past services and as the appellant has resigned from service, even if he had worked for 20 years in respondent No.1-Company, he cannot be equated with an employee who had taken voluntary retirement from service under Clause 30 of the Pension Scheme, 1995 and the Pension Scheme, 1995 did not apply to the appellant and dismissed the Writ Appeal.

Reasoning: The UCO Bank declined to accept his option to admit him into the pension scheme. SanwarMal filed a suit for a declaration that he was entitled to pension under the Pension Regulations and for a mandatory injunction directing the UCO Bank to make payment of arrears of pensions along with interest. The suit was decreed and the decree was affirmed in first appeal and thereafter by the High Court in second appeal. The UCO Bank carried an appeal to this Court and this Court differentiatedand allowed the appeal and set aside the judgment of the High Court. In these two decisions, the Courts were not called upon to decide whether the termination of services of the employee was by way of resignation or voluntary retirement. In this case, on the other hand, we are called upon to decide the issue whether the termination of the services of the appellant in 1991 amounted to resignation or voluntarythe appellant served his letter dated 16.09.1991 to the General Manager of respondent No.1- Company, he had no knowledge of the difference between `resignation under Clause 22 and `voluntary retirement under Clause 30 of the Pension Scheme, 1995. Similarly, the respondent No.1-Company employer had no knowledge of the difference between `resignation and `voluntary retirement under Clauses 22 and 33 of the Pension Scheme, 1995 respectively. Both the appellant and the respondent No.1have acted in accordance with the provisions of sub-clause (1) of Clause 5 of the Scheme, 1976 at the time of determination of service of the appellant in the year 1991. It is in this background that we have now to decide whether the determination of service of the appellant under sub-clause (1) of Clause 5 of the Scheme, 1976 amounts to resignation in terms of Clause 22 of the Pension Scheme, 1995 or amounts to voluntary retirement in terms of Clause 30 of the Pension Scheme, 1995. Clause 22 of the Pension Scheme, 1995 states that resignation 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 pensionarybenefits, but does not define the termUnder sub-clause (1) of Clause 30 of the Pension Scheme, 1995, an employee, who has completed 20 years of qualifying service, may by giving notice of not less than 90 days in writing to the appointing authority retire from service and under sub-clause (2) of Clause 30 of the Pension Scheme, 1995, the notice of voluntary retirement shall require acceptance by the appointing authority. Since `voluntary retirement unlike `resignation does not entail forfeiture of past services and instead qualifies for pension, an employee to whom Clause 30 of the Pension Scheme, 1995 applies cannot be said to have `resigned from service. In the facts of the present case, we find that the appellant had completed 20 years qualifying service and had given notice of not less than 90 days in writing to the appointing authority of his intention to leave service and the appointing authority had accepted notice of the appellant and relieved him from service. Hence, Clause 30 of the Pension Scheme, 1995 applied to the appellant even though in his letter dated 16.09.1991 to the General Manager of respondent no.1-Company he had used the wordCourt will have to construe the statutory provisions in each case to find out whether the termination of service of an employee was a termination by way of resignation or a termination by way of voluntary retirement and while construing the statutory provisions, the Court will have to keep in mind the purposes of the statutory provisions. The general purpose of the Pension Scheme, 1995, read as a whole, is to grant pensionarybenefits to employees, who had rendered service in the Insurance Companies and had retired after putting in the qualifying service in the Insurance Companies. Clauses 22 and 30 of the Pension Scheme, 1995 cannot be so construed as to deprive of an employee of an Insurance Company, such as the appellant, who had put in the qualifying service for pension and who had voluntarily given up his service after serving 90 days notice in accordance with sub-clause (1) of Clause 5 of the Scheme, 1976 and after his notice was accepted by the appointing authority.