SANJAY JAIN versus NATIONAL AVIATION CO. OF INDIA LTD.
[2018] 13 S.C.R. 740, Supreme Court of India, 2018
Outcome: Appeal(s) allowed (Granted)
Segment: Ratio
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SANJAY JAIN
v.
NATIONAL AVIATION CO. OF INDIA LTD.
(Civil Appeal No. 7822 of 2011)
NOVEMBER 1, 2018
[ARUN MISHRA  AND VINEET SARAN, JJ.]
Service Law:
Resignation – Acceptance of – Whether required –
Appointment of appellant-employee – There was bond to serve for
a minimum period of five years – After the bond period was over,
appellant served notice for resignation to take effect after expiry
of 30 days period – After the notice period was over, the employee
when approached the employer for release of his pending dues –
Employer asked the employee to report for duty as his resignation
was not accepted – Writ petition challenging the order of employer
– Dismissed by High Court – On appeal, Held: Service conditions
of the employee are governed by Certified Standing Orders framed
under Certifying Officer Under Industrial Employment (Standing
Orders) Act, 1946 – In the Standing Order 18 there is no provision
for acceptance of resignation – A permanent employee has a right
to resign from the services by giving a notice of the period of 30
days – There is no other Standing Order or rule which puts a fetter
on an employee to resign or confers power on the employer to reject
a resignation – The bond period of 5 years was already over – The
resignation became effective on the lapse of 30 days period – To
resign is right of an employee who cannot be forced to serve in
case he is not willing until and unless there is
stipulation in the
Rules or in the terms of appointment or disciplinary proceeding is
pending or contemplated which is sought to be avoided by resigning
from the services – The order of the employer declining to accept
the resignation are quashed – Appeals allowed.
Punjab National Bank v. P.K.Mittal (1989) Supp. (2)
SCC 175 : [1989] 1 SCR 612; State of U.P. v. Achal
Singh (2018) 10 SCALE 89; Dinesh Chandra Sangma
v. State of Assam. (1977) 4 SCC 441 : [1978] 1 SCR
607 – relied on.
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Moti Ram v. Param Dev and Anr. (1993) 2 SCC 725 :
[1993] 2 SCR 250 – distinguished.
Case Law Reference
[1989] 1 SCR 612
relied on
Para 5
(2018) 10 SCALE 89
relied on
Para 5
[1978] 1 SCR 607
            relied on
Para 5
[1993] 2 SCR 250
            distinguished
Para 6
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 7822
of 2011
From the Judgment and Order dated 07.09.2010 of the High Court
of Judicature at Bombay in Writ Petition No. 1740 of 2010
WITH
Civil Appeal No. 10881 of 2018.
Mohan Bir Singh, Udit Gupta, Anup Jain, Ravi Kumar Tomar,
M/s. Udit Kishan And Associates, Advs. for the Appellant.
Shubha S. Saxena, M/s. M. V. Kini & Associates, Advs for the
Respondent.
The following Order of the Court was passed :
      O R D E R
CIVIL APPEAL NO.7822 OF 2011
1. Heard the learned counsel for the parties.
2. The appellant is aggrieved by the judgment and order dated
7.9.2010 passed by the High Court of Bombay, dismissing Writ Petition
No.1740 of 2010. The question arises whether the appellant ceased to
be an employee of the respondent on 1st October 2006 since he had
resigned on 1.9.2006 as 30 days period came to an end on the aforesaid
date.
3. The appellant joined the services of Air India Ltd. as Assistant
Aircraft Engineer in Major Maintenance Division of Engineering
Department w.e.f. 1.9.1992. As per the terms and conditions, he
was  required to serve Air India for a  minimum period of five years, as
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SUPREME COURT REPORTS
[2018] 13  S.C.R.
per the condition stipulated in the letter of his appointment. As on the
date he resigned, he had completed five years of service. The Certified
Standing Orders framed under the Certifying Officer Under Industrial
Employment (Standing Orders) Act, 1946 (in short “The Act of 1946”)
as introduced in Air India Ltd. and as applicable to the establishment,
required the employer to define the terms and the conditions of service
applicable to a workmen and inform him of the same. The Certified
Standing Order, inter alia, deals with the conditions under which an
employee can tender his resignation. He is entitled to receive the
certificate of service rendered at the time of cessation of his employment.
The Certified Standing Order confers a right on the employer under the
Act of 1946 not to accept the resignation if at the relevant time of his
resignation any disciplinary action is pending or is contemplated.
4. As per the case set up by the employee, Certified Standing
Order prescribes that an employee can leave the service by serving 30
days’ notice or paying the sum equal to 30 days wages. The question of
acceptance arises in a case of a shorter notice, for resignation where
the question of payment of wages as involved. The resignation is effective
after 30 days even without its acceptance. The appellant served notice
for resignation on 1.9.2006 to take effect from 1.10.2006, precisely on
expiry of 30 days’ period. There
was no right available with the Air India
Ltd. to decline to accept the resignation as informed vide communication
dated 20.9.2006.
5. After resigning, there was cessation of employment with the
Air India Ltd. The appellant then joined Jet Airways on 3.10.2006.  He
approached the Air India to release his pending dues, provident fund,
gratuity, and unpaid wages. Air India Ltd. issued a letter dated 16.7.2008
to the effect that since his resignation had not been accepted, he was
asked to report for duty.  The appellant raised the grievance in the
centralized grievance cell and served a reminder for payment of the
dues. Ultimately, the appellant filed writ application in the High Court of
Bombay on 23rd July 2010 which had been dismissed. Consequently, the
appeal has been filed in this Court.
6. It was urged by the learned counsel appearing on behalf of the
appellant that there was no necessity of acceptance of resignation under
Standing Order 18 framed under the Act of 1946. By virtue of the
provisions contained in Standing Orders, 30 days’ notice has to be given
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or wages in lieu of the notice period has to be paid by a permanent
workman. He has relied upon the decisions in Punjab National Bank
v. P.K. Mittal (1989) Supp. (2) SCC 175, State of U.P. v. Achal Singh
(2018) 10 SCALE 89,and Dinesh Chandra Sangma v. State of Assam.
(1977) 4 SCC 441.
7. On the other hand, learned counsel appearing on behalf of the
respondent has relied upon the decision of this Court in Moti Ram v.
Param Dev and Anr. (1993) 2 SCC 725 to contendthat acceptance of
resignation was necessary.
8. In order to appreciate the rival submissions, it is necessary to
consider the provisions contained in Standing Orders 17 and 18 of the
Standing orders framed under the Act of 1946 by Air India.  Standing
Orders 17 and 18 are extracted hereunder:
“17.  Termination of service:
(i)   The services of a workmen may be terminated by the
Competent Authority, without assigning reasons as under:
(a) Of a permanent workman by giving 30 days notice in writing
or wages in lieu of notice.
(b) Of a workman on probation by giving 7 days notice by giving
24 hours notice in writing or wages/stipend in lieu of notice.
(c) Of a temporary workman including apprentice by giving 24
hours notice in writing or wages/stipend in lieu of notice.
(d) of badli or substitute without notice or wages in lieu of notice.
(ii)  No notice is necessary for terminating the service of a workman
employed for a specified period at the end of that period.
(iii)  No notice is necessary for
terminating the services of a casual
or part-time workman.
(iv)  A workman who is absent without permission for a period of
ten days or more will be deemed to have voluntarily abandoned
the services of the Company.
EXPLANATION:
For the purpose of this Standing Order, the word “Wages” shall
include all emoluments which would be admissible, if the workman
was on privilege leave.
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18. RESIGNATION:
(i) No workman shall resign from the service of the Company
except by giving such notice as he would have received under
Standing Order 17 if his services were to be terminated, or
compensation in lieu of such notice, unless, at the request of the
workman, the notice is waived or shorter notice accepted in writing
by the Competent Authority. Such compensation shall be
equivalent to the amount of the wages as defined in the explanation
to Standing Order 17 which the workman would have drawn during
the period by which the notice falls short of the prescribed period,
and shall be deemed to be a liability owed to the company for the
purpose of Regulation 22 (2) of the Air India Employees Provident
fund Regulations, 1954.
(ii) A resignation given under (I) above may be accepted with
immediate effect or at any time before the expiry of the period of
notice, in which case the workman shall be paid his wages in
respect of the entire period of notice given by him.
(iii) In case of shorter period of notice is accepted at the request
of the workmen, he shall be entitled to receive his wages only for
the actual number of days worked.
(iv) If a workman leaves the service of the Company without
giving any notice or by giving inadequate notice, such resignation
shall be liable to be construed as misconduct and may entail any
of the punishments prescribed under Standing Order 20.
(v) Notwithstanding anything
contained in clause (I) and (iii) above,
a workman shall not be entitled to tender his resignation and any
resignation tendered by him shall not be effective or operative
against the company, unless the company decides to accept the
resignation, if, at the time when such resignation is tendered,
disciplinary action is pending against him or is intended or proposed
to be taken against him by the appropriate authority.”
9. It is apparent from a bare reading of the provisions contained in
Standing Order 18 that workman has a right to resign from the services
by giving a notice of the period as prescribed under Standing Order 17
which provides termination of services by serving 30 days notice upon a
permanent workmen and seven days notice with respect to workman
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who is on probation and temporary workman by serving a 24 hours
notice.  Thus, for a permanent employee, a period of 30 days is provided
to terminate or to resign as apparent from a conjoint reading of provisions
of Standing Orders 17 and 18.
10. Clause 2 of Standing Order 18 provides that in case of
resignation is with immediate effect or any time before the expiry of
notice period, acceptance of resignation is required. Acceptance is not
required in case a notice has been given of 30 days.  It is right of a
workman to serve and resignation tendered by him shall be effective or
operative with exception, if at the time when such resignation is tendered,
disciplinary action is pending against him or is intended or proposed to be
taken against him by the appropriate authority, unless the company decides
to accept the resignation.
11. In our opinion, from a bare reading of the provisions contained
in Standing order 18, it is crystal clear that a permanent employee has a
right to resign from the services by giving a notice of the period of 30
days as prescribed under Standing Order 17, and is entitled to obtain
certificate from the employer for the period services have been rendered.
12. Clause 2 of the Standing Order 18 provides that in case of
resignation is submitted with immediate effect or any time before the
expiry of notice period, acceptance is necessary.  Acceptance of
resignation is not required in case a notice has been given of 30 days. It
would
be operative and effective on the lapse of the period. It is right of
a workman to serve an employer and to resign also by serving notice of
30 days. The bond to serve was only for five years as stipulated in the
order of his appointment. The period of bond to serve was admittedly
over. There is no other Standing Order or rule which puts a fetter on an
employee to resign or confers power on the employer to reject a
resignation.
13. No disciplinary proceeding was pending or contemplated
against an employee in the case when he resigned. The resignation
became effective on the lapse of 30 days period. There was no power
with the employer as per Standing Order 18 to reject such a resignation.
Moreover, the bond period of five years service was already over. A
case of voluntary retirement stands on a different footing than that of
resignation. Voluntary retirement is with certain civil consequences of
monetary benefits. It would depend upon the phraseology used in a
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particular provision whether prayer made for the resignation or for
voluntary retirement is required to be accepted or it takes effect without
acceptance. In the facts of the case, since in the Standing Order 18,
there is no provision for acceptance of resignation. In case, notice is
served for the requisite period of 30 days, obviously, the appellant had
the right to resign from the services. The aforesaid conclusion is buttressed
by the following observations made in Punjab National Bankv. P.K.
Mittal (supra):
“5. We have given careful thought to this contention of the learned
counsel and we are of the opinion that the High Court was right in
the conclusion it reached. Clause (2) of regulation 20 makes it
incumbent on an officer of the bank, before resigning, to serve a
notice in writing of such proposed resignation and the clause also
makes it clear that the resignation will not be effective otherwise
than on the expiry of three months from the service of such notice.
There are two ways of interpreting this clause. One is that the
resignation of an employee from service is a voluntary act on the
part of an employee, he is entitled to choose the date with effect
from which his resignation would be effective and give a notice to
the employer accordingly. The only restriction is that the proposed
date should not be less than three months from the date on which
the notice is given of the proposed resignation. On this
interpretation, the letter dated 21st January 1986 sent by the
employee fully complied with the terms of this clause. Though the
letter was written in January 1986 the employee gave more than
three clear months’ notice and stated that he wished to resign
with effect from June 30, 1986, and so the resignation would have
become effective only on that date. The other interpretation is
that, when an employee gives a notice of resignation, it becomes
effective on the expiry of three months from the date thereof. On
this interpretation, the respondent’s resignation would have taken
effect on or about 21.4.1986 even though he had mentioned a
later date. In either view of the matter, the respondent’s resignation
did not become effective till 21.4.1986 or 30.6.1986. It would have
normally automatically taken effect on either of those dates as
there is no provision for any acceptance or rejection of the
resignation by the employer, as is to be found in other rules, such
as the Government Services Conduct Rules.
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6. Much reliance was placed on the terms of the proviso to clause
(2) of regulation 20 to justify the action of the bank in terminating
the respondent’s services earlier but we do not think that the proviso
can be interpreted in the manner suggested by learned counsel
for the bank. The resignation letter of the officer has to give at
least three months’ advance notice under the main part of the
clause. What the proviso contemplates is that in a case where the
employee desires that his resignation should be effective even
before the expiry, of the period of three months or without notice
being given by him, the bank may consider such a request and
waive the period or requirement of notice if it considers it fit to do
so. That question does not arise in the present case because the
employee had not requested the bank to reduce the period of
notice or to waive the requirement of notice. Dr. Anand Prakash
seeks to interpret the proviso as empowering the bank, even without
any request on the part of the employee, to reduce the period or
waive the requirement of notice. In other words, he says the bank
has the power to accept the resignation with immediate effect
even though the notice is only of a proposed future resignation.
We do not think this contention can be accepted. As we have
already mentioned, resignation is a voluntary act of an employee.
He may choose to resign with immediate effect or with a notice
of less than three months if the bank agrees to
the same. He may
also resign at a future date on the expiry, or beyond the period, of
three months but for this no further consent of the bank is
necessary. The acceptance of the argument of Dr. Ananad Prakash
would mean that, even though an employee might express a desire
to resign from a future date, the resignation can be accepted,
even without his wishes, from an earlier date. This would not be
the acceptance of a resignation in the terms in which it is offered.
It amounts really to forcing a date of termination on the employee
other than the one he is entitled to choose under the regulations.
As rightly pointed out by the High Court, the termination of service
under clause (2) becomes effective at the instance of the employee
and the services of the employee cannot be terminated by the
employer under this clause.”
(emphasis supplied)
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14. In State of U.P. vs. Achal Singh (supra) the Court observed
that it would depend upon phraseology used in the particular provision
whether a prayer for resignation/voluntary retirement require acceptance.
Following observations have been made:
Para 13:  In our opinion, whether voluntary retirement is automatic
or an order is required to be passed would depend upon the
phraseology used in a particular rule under which retirement is to
be ordered or voluntary retirement is sought.   The factual position
of each and every case has to be seen along with applicable rules
while applying a dictum of the Court interpreting any other rule it
should be Pari Materia.   Rule 56(2) deals with the satisfaction of
the Government to require a Government servant to retire in the
public interest.  For the purpose, the Government may consider
any material relating to Government servant and may requisition
any report from the Vigilance establishment.
23. In the State of Haryana(supra), This Court also observed that
some rules are couched in language, which results in an automatic
retirement of the employee upon the expiry of the period specified
in the employee’s notice.  On the other hand, certain rules in some
other departments are couched in the language which makes it
clear that even upon expiry of the period specified in the notice,
the retirement is not automatic and an express order granting
permission is required and has to
be communicated. The
relationship of master and servant in the latter type of rules
continues after the period specified in the notice till such acceptance
is communicated and the refusal of permission could also be
communicated after three months and the employee continues to
be in service.  It is the aforesaid later observations made by this
Court, which are squarely applicable to the rule in question as
applicable in the State of Uttar Pradesh.”
15. In Dinesh Chandra Sangma v. State of Assam (1977) 4
SCC 441, the provisions of rule 119 of DISI rules came up for
consideration. It observed;
15. It is a cardinal rule of construction that no word should be
considered redundant or surplus in interpreting the provisions of a
statute or of a rule Explanation 2 does not say an express or
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implied term of employment but refers to “an express or implied
term of his contract of employment”. If the language in Explanation
2 were different, namely, an express or implied term of
employment, instead of “contract of employment”, the position
would have been different. Explanation 2 in Rule 119 albeit a
penal rule takes care to use the words contract of employment”
and necessarily excludes the two categories of employment,
namely, the one under the Central Government and the other under
the  State Government.  Explanation 2 only takes in its sweep the
third category of employment where the relationship between the
employer and the employee is one governed by a contract of
employment.  Since FR 56 is a statutory condition of service which
operates in law, without reference to a contract of employment,
there is nothing inconsistent between Rule 119 and FR 56.
16. The appellant has voluntarily retired by giving three months’
notice not in accordance with an express or implied term of his
contract of employment, but in pursuance of a statutory rule.
Explanation 2 to Rule 119 makes no mention of retirement under
a statutory rule and hence the same is clearly out of the way.
The submission that rule 119 is superimposed on F.R.56 has no
force in this case.
17. The  High  Court committed an error of law holding that consent
of the Government was necessary to give legal effect to the
voluntary retirement of the appellant under F.R.56(c). Since the
conditions of FR  56(c) are fulfilled, in the instant case, the appellant
must be held to have lawfully retired as notified by him with effect
from 2nd August 1976.
16. In view of the aforesaid enunciation of law and on consideration
of the provisions contained in Standing order 18 in the facts and
circumstances of the case, we are of the opinion that appellant has rightly
terminated the relationship by serving the requisite notice for resignation.
To resign is a right of an employee who cannot be forced to serve in
case he is not willing until and unless there is some stipulation in the rules
or in the terms of appointment or disciplinary proceedings is pending or
contemplated which is sought to be avoided by resigning from the services.
Thus, we are of the opinion that the High Court has erred in law in
holding otherwise.
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17. Learned counsel appearing on behalf of the respondent has
relied upon the decision in Moti Ram vs. Param Dev and Anr. (1993) 2
SCC 725 Para 16 and 18:
16. As pointed out by this Court, ‘resignation’ means the
spontaneous relinquishment of one’s own right and in relation to
an office, it connotes the act of giving up or relinquishing the office.
It has been held that in the general juristic sense, in order to
constitute a complete and operative resignation there must be the
intention to give up or relinquish the office and the concomitant
act of its relinquishment. It has also been observed that the act of
relinquishment may take different forms or assume a unilateral or
bilateral character, depending on the nature of the office and the
conditions governing it.  Union of India v. Shri Gopal Chandra
Misra & Ors., [1978] 3 SCR 12 at p. 21). If the act of
relinquishment is of unilateral character, it comes into effect when
such act indicating the intention to relinquish the office is
communicated to the competent authority. The authority to whom
the act of relinquishment is communicated is not required to take
any action and the relinquishment takes effect from the date of
such communication where the resignation is intended to operate
in praesenti. A resignation may also be prospective to be operative
from a future date and in that event, it would take effect from the
date indicated therein and not from the date of
communication. In
cases where the act of relinquishment is of a bilateral character,
the communication of the intention to relinquish, by itself, would
not be sufficient to result in relinquishment of the office and some
action is required to be taken on such communication of the intention
to relinquish, e.g., acceptance of the said request to relinquish the
office, and in such a case the relinquishment does not become
effective or operative till such action is taken. As to whether the
act of relinquishment of an office is unilateral or bilateral in
character would depend upon the nature of the office and
conditions governing it.
18. A contract of employment, however, stands on a different
footing wherein the act of relinquishment is of bilateral character
and resignation of an employee is effective only on acceptance of
the same by the employer. Insofar as Government employees are
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concerned, there are specific provisions in the service rules which
require acceptance of the resignation before it becomes effective.
In Raj Kumar v. Union of India, [1968] 3 SCR 857, it has been
held “But when a public servant has invited by his letter of
resignation determination of his employment, his services normally
stand terminated from the date on which the letter of resignation
is accepted by the appropriate authority, and in the absence of
any law or rule governing the conditions of his service to the
contrary, it will not be open to the public servant to withdraw his
resignation after it is accepted by the appropriate authority. Till
the resignation is accepted by the appropriate authority in
consonance with the rules governing the acceptance, the public
servant concerned has locus poenitentiae but not thereafter”.
(emphasis supplied)
18. Relying on said decisions, the learned counsel for the respondent
has contended that in the case of a contract of employment same is
required to be terminated. It cannot be unilateral action. The factual
matrix of the aforesaid decision was totally different. Though the
employee had tendered the resignation it had not been accepted on the
date on which he filled the nomination form in order to contest an election.
In that context, observations have been made.  However, it was observed
that it would depend upon the phraseology used in a particular provision
whether there is a necessity for acceptance or any
other formality is
required when it could be said person ceases to hold the office. With all
fairness, the aforesaid proposition has not been disputed by the learned
counsel appearing on behalf of the respondent. In this case, there is no
such requirement of acceptance by such an employee under the provisions
of the Standing Order 18 read with 17.  Thus, the decision in Moti Ram
(supra) is not applicable.
19. Resultantly, we allow the appeal. The judgment and order
passed by the High Court and the order passed by the respondent declining
to accept the resignation are hereby quashed. The benefits which may
be available shall be paid to the appellant. Provident fund with the
prevailing rate of interest from time to time. The gratuity, if payable or
any other benefit, shall be paid with interest @ 6% per annum. Let the
outstanding amount, if any, be paid within a period of three months from
today.
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CIVIL APPEAL NO.10881/2018
20. Leave granted.
21. This appeal being similar is also allowed in the same terms of
Civil Appeal No.7822 of 2011 decided today.
Kalpana K. Tripathy
 Appeals allowed.