Case: Shambhu Murari Sinha Vs. Project &amp; Development India Ltd. &amp; Another

The appellant joined the respondent-company as a Draftsman Trainee in the year 1964 and was promoted to the post of General Foreman (Electrical). On October 12, 1995, the respondent-company issued an improved Voluntary Retirement Scheme (for short "VRS") giving more benefits to the employees, which was effective from 12th October, 1995 to 18th October, 1995. The appellant applied for voluntary retirement on 18th October, 1995 under the scheme, which was accepted by the Management on 30th July, 1997 with the condition that "the release memo along with details particulars will follows". On August 07, 1997, the appellant sent a letter withdrawing his option from the VRS by registered post but no response was received by him from the respondents. Again on September 27, 1997 another letter was sent by the appellant withdrawing his option from the scheme. This letter was received on 25th September, 1997 but there was no reply from the respondent. The respondent-company issued a memorandum on 25th September, 1997 releasing the appellant from the service of the company w.e.f. 26th September, 1997 (afternoon). The appellant filed a petition under Article 226 of the Constitution before the High Court challenging the said release order, which was dismissed by the learned Single Judge and it was upheld by the impugned judgment. That is how the matter is before us.3. This appeal came up for final hearing before a Division Bench of this Court and by order dated April 13, 2000, the appeal was allowed on the reasoning that the appellant was not relieved from service and was allowed to continue in service till 26-09-1997, which, for all practical purpose would be the "effective date" as it was on this date that he was relieved from service. As the appellant had already withdrawn the offer from VRS on 07-08-1997, the resignation in spite of its acceptance could be withdrawn before the said "effective date" and, therefore, such withdrawal was valid in law [See Shambhu Murari Sinha vs. Project & Development India & Another (2000) 5 SCC 621 ]. The Division Bench relied on the followinig decisions of this Court namely, Balram Gupta vs. Union of India [(1987) Supp. SCC 228], J.N. Srivastava vs. Union of India [(1998) 9 SCC 559] and Power Finance Corpn. Ltd. vs. Pramod Kumar Bhatia [(1997) 4 SCC 280] .4. A Review Petition was filed by the respondents which was allowed by another Division Bench of this Court and the order is extractedd counsel for the parties.We find that the scheme providing for voluntary retirement of employees, prima facie, discloses that once an option to voluntary retire is exercised by an employee and the same is accepted by the employer, the employee is not entitled to withdraw the voluntary retirement. The said scheme which has bearing on the case was not adverted to while deciding this appeal. Further, the decision of this Court in Balram Gupta vs. Union of India & Anr. 1987 (Supp.) SCC 228, Raj Kumar vs. Union of India & Anr. 1968 (3) SCR 857  and Union of India vs. Gopal Chandra Mishra, 1978 (2) SCC 301  which are applicable to this case were not considered while deciding the appeal. Moreover, the decision under review is likely to affect a large number of employees. We are, therefore, of the opinion that the judgment under review deserves to be reviewed. We, therefore, set aside the judgment dated 13.4.2000 and restore the appeal to its original number. The Review Petition is thus allowed. Let this appeal be posted for hearing.In view of the decision on Review Petition, the Contempt Petition is

Court's reasoning:
though option of the appellant for the voluntary retirement under the scheme was accepted but it was stated that the release memo along with detailed particulars would follow. Before the appellant was actually released from the service, he withdrew his option for voluntary retirement by sending two letters dated August 07, 1997 and September 24, 1997, but there was no response from the respondent. By office memorandum dated 25th September, 1997, the appellant was released from the service and that too from the next day. It is not disputed that the appellant was paid his salaries etc. till his date of actual release i.e. 26th September, 1997, and, therefore, the jural relationship of employee and employer between the appellant and the respondents did not come to an end on the date of acceptance of the voluntary retirement and said relationship continued till 26th of September, 1997. The appellant admittedly sent two letters withdrawing his voluntary retirement before his actual date of release from service. Therefore, in view of the settled position of the law and the terms of the letter of acceptance, the appellant has locus poenitentiae to withdraw his proposal for voluntary retirement before the relationship of employer and employee came to antherefore, hold that the respondent could not have refused to accept the resignation of the appellant as it was sent before the jural relationship of employee and employer came to an end. Consequently, the impugned judgment is liable to be set aside, which we hereby do. The appellant shall be entitled to rejoin his duty and he shall be paid all his salaries and other benefits during the period he was out from the service. The learned counsel for the respondent has stated that by this time the appellant might have retired from service on attaining the age of superannuation, if that be so, he shall be paid full salary and allowances for the entire period he was out of service till the date of his retirement and thereafter, he shall be entitled to get all retiral benefits counting the above period as if he was in service.