Rohit Dewan v. Syndicate Bank

1976. Clause 22 of the appointment letter which has some bearing on the issue reads thus:- “22. He shall not leave or discontinue his service in the bank without first giving notice in writing, of your intention to leave or discontinue the services or resign. The period of notice required shall be 3 months.”

7. By a letter dated April 13, 2018, the petitioner made an unconditional request for accepting his resignation due to personal reasons. Again on April 27, 2018, the petitioner requested that he may be relieved from the services of the bank latest by June 30, 2018. By a letter dated May 31, 2018, the petitioner requested the bank to continue him in service till July 12, 2018 i.e. till completion of 3 months notice period from the date of resignation letter. On June 20, 2018, the petitioner was informed that in terms of Regulation 20 (2) of Regulations of 1979, the petitioner’s resignation is accepted by the competent authority subject to the conditions prescribed therein. It is further mentioned that the petitioner shall be relieved from the bank’s services on July 12, 2018, as requested by him, on completion of 3 months notice period. According to the petitioner, he never received the letter dated June 20, 2018. By a letter dated June 30, 2018, the petitioner made a request for withdrawal of his resignation and for transfer. On July 3, 2018, the application for withdrawal of resignation was forwarded to the competent authority with the recommendation that the petitioner’s request for withdrawal of resignation may be considered favourably. On July 6, 2018, the petitioner was informed that the competent authority allotted him bank owned quarters in Andheri (East), Mumbai. By letter dated July 9, 2018, the petitioner was informed that the competent authority has accepted the petitioner’s request for withdrawal of resignation and permitted him to continue in the services of the bank. On June 12, 2018, the petitioner was informed that he is relieved with effect from July 12, 2018, after office hours on his resignation from the services of the bank. It is on July 12, 2018, that the petitioner was informed that the competent authority has not accepted the petitioner's application for withdrawal of resignation.

8. Learned counsel for the petitioner invited our attention to clause (2) of Regulation 20 of the Regulations of 1979. Clause (2) of the Regulation 20 reads thus: -

9. The petitioner initially wanted his resignation to be effective from June 30, 2018. Later on, the petitioner requested that he may be relieved from July 12, 2018 i.e. on completion of the notice period of 90 days. Though the petitioner says that the letter dated June 20, 2018 accepting his resignation by the competent authority was never received by him, nonetheless, even if it is to be held that such a letter was received by the petitioner, the letter mentions that the petitioner shall be relieved from the bank services on July 12, 2018 upon completion of 3 months notice period. This clearly presupposes that the notice period was not waived in terms of the Regulation 20 (2) nor is the requirement of the notice remitted. In such circumstances, the resignation was to be effective from July 12, 2018 till which date the petitioner confirmed to be in service of the bank.

10. On record, prior to July 12, 2018, is a communication of the bank informing the petitioner that his resignation has been accepted and that he would stand relieved from July 12, 2018. Curiously, the petitioner was informed by a communication dated July 9, 2018 that his application for withdrawing the resignation has been accepted and the petitioner is permitted to continue in the services of the bank.

11. The point for consideration is when the petitioner’s resignation is to be effective from July 12, 2018, is it open for the petitioner to withdraw the resignation, in the face of the communication that the petitioner’s resignation has been accepted and clearly informed that he would stand relieved from July 12, 2018.

12. Learned counsel for the petitioner relied upon the decision of the Supreme Court in the case of Punjab National Bank vs. P. K. Mittal[1]. The question for consideration before the Supreme Court was interpretation of the service regulations of the Punjab National Bank. The relevant service regulation being Regulation 20, reads as under: - “20(1): Subject to sub-regulation (3) of regulation 16, the bank may terminate the services of any officer by giving him three months’ notice in writing or by paying him three months’ emoluments in lieu thereof. (2) No officer shall resign from the service of the bank otherwise than on the expiry of three months from the service on the bank of a notice in writing of such resignation. Provided further that the competent authority may reduce the period of three months, or remit the requirement of notice.”

13. Regulation 20(2) of the Service Regulations of Punjab National Bank is similar to Regulation 20(2) of Regulations of 1979 which is the subject of the present writ petition. The facts in Punjab National Bank (supra) were that the officer concerned purported to resign from the service of the bank due to personal reasons by a communication dated January 21, 1986. In the notice it was stated that the date of receipt of the letter should be treated as the date of the commencement of the notice period so that, inclusive of the same, his resignation would become effective on June 30, 1986. The Deputy General Manager, who was the competent authority under the Service Regulations, had agreed that the resignation may be accepted with effect from June 30, 1986. However, what actually transpired was that the respondent received a letter from the bank on February 7, 1986 informing him that his resignation letter dated January 21, 1986 had been accepted by the competent authority with immediate effect by waiving the condition of notice and that, consequently, he was being relieved from the service of the bank with effect from the afternoon of the same date, namely, February 7, 1986. A writ petition was filed by the officer in the High Court challenging the validity of the purported acceptance of his resignation with effect from February 7, 1986 and for a direction to the bank to treat him as in service of the bank up to June 30, 1986 and as entitled to all benefits while being in such service. A further development took place is that, on April 15, 1986, the officer wrote a letter to the bank by which he purported to withdraw the resignation letter dated January 21, 1986. The High Court, therefore, dealt with the situation resulting from this subsequent development and held that the petitioner’s resignation letter would have become effective only on June 30, 1986. Under the regulations there was no jurisdiction whatever in the competent authority to determine his services earlier. Until the resignation became effective on June 30, 1986, the petitioner had a right to withdraw the same and in fact had also exercised that right. The High Court concluded: "We may notice that this writ petition was filed at a stage when the petitioner had not sent his letter dated 15th April, 1986 whereby he withdrew his resignation letter dated 21st January, 1986. This is a subsequent development during the pendency of the writ petition. Therefore, we are not called upon to decide the earlier grievance that the resignation could not have been accepted at an earlier date. Even to that submission we would have said that there is no provision of acceptance but that question does not arise so we will not deal with it further. Result is that the impugned order dated 7th of February, 1986 is hereby quashed and it is declared that the petitioner continues to be in service with the respondent bank. However, in view of the facts of the present case, parties are directed to bear their own costs of the present proceedings."

14. Before the Supreme Court in Punjab National Bank (supra) a contention was raised by learned counsel for the bank that Regulation 20(2) provided for a notice to the employer only in order to protect the employer's interests and to enable the employer, in case it decided to accept the resignation, to make other arrangements in place of the resigning employee. He submitted that, this being a provision for the benefit of the employer, its requirements could be waived by the employer, if it so desired, unilaterally. It was submitted that the proviso to Clause (2) of the regulation indeed makes it clear that it is open to the bank to waive the requirement of notice or to reduce the period of the notice to less than three months. It was, therefore, submitted that when the respondent sent in his resignation on January 21, 1986, it was not incumbent on the bank to wait till June 30, 1986 when the notice period would expire. It was competent for the bank to waive any notice at all and to accept the resignation with immediate effect or with effect from such other date as the bank may consider appropriate. It was further contended by learned counsel that once the resignation letter of the respondent had been accepted by the bank and given effect to, there was no further possibility of the respondent seeking to withdraw the resignation letter as he has purported to do in this case. Their Lordships interpreted the provision of Regulation 20 (2) of the Punjab National Bank Services Regulations and held thus: - “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 being 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 30th of June, 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.

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 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.

7. Dr. Anand Prakash emphasises that as clause (2) and its proviso are intended only to safeguard the bank's interests they should be interpreted on the lines suggested by him. We are of the opinion that clause (2) of the regulation and its proviso are intended not only for the protection of the bank but also for the benefit of the employee. It is common knowledge that a person proposing to resign often wavers in his decision and even in a case where he has taken a firm decision to resign, he may not be ready to go out immediately. In most cases he would need a period of adjustment and hence like to defer the actual date of relief from duties for a few months for various personal reasons. Equally an employer may like to have time to make some alternative arrangement before relieving the resigning employee. Clause (2) is carefully worded keeping both these requirements in mind. It gives the employee a period of adjustment and rethinking. It also enables the bank to have some time to arrange its affairs, with the liberty, in an appropriate case, to accept the resignation of an employee even without the requisite notice if he so desires it. The proviso in our opinion should not be interpreted as enabling a bank to thrust a resignation on an employee with effect from a date different from the one on which he can make his resignation effective under the terms of the regulation. We, therefore, agree with the High Court that in the present case the resignation of the employee could have become effective only on or about 21st April, 1986 or on 30th June, 1986 and that the bank could not have "accepted" that resignation on any earlier date. The letter dated 7th February, 1986 was, therefore, without jurisdiction.

8. The result of the above interpretation is that the employee continued to be in service till the 21st April, 1986 or 30th June, 1986, on which date his services would have come normally to an end in terms of his letter dated 21st January, 1986. But, by that time, he had exercised his right to withdraw the resignation. Since the withdrawal letter was written before the resignation became effective, the resignation stands withdrawn, with the result that the respondent continues to be in the service of the bank. It is true that there is no specific provision in the regulations permitting the employee to withdraw the resignation. It is, however, not necessary that there should be any such specific rule. Until the resignation become effective on the terms of the letter read with regulation 20. It is open to the employee, on general principles, to withdraw his letter of resignation. That is why, in some cases of public services, this right of withdrawal is also made subject to the permission of the employer. There is no such clause here. It is not necessary to labour this point further as it is well settled by the earlier decisions of this Court in Raj Kumar v. Union of India[2], Union of India v. Gopal Chandra Misra[3] and Balram Gupta v. Union of India[4].

9. Learned counsel for the appellant relied on certain observations in Delhi Electric Supply Undertaking v. Tara Chand[5]. Certain other decisions were also cited by Dr. Anand Prakash but we do not think that they have any bearing on the issue before us. Tara Chand was a case under regulation 8 of the regulations made by the Delhi 2 AIR 1969 SC 180.

5 (1978) 2 SLR 425 (Del). Electric Supply Undertaking under the Electricity (Supply) Act, 1948. The regulation permitted the termination of the services of a servant of the undertaking "on notice of three months from either side without any cause to be assigned in case of permanent servants". The employee in that case sent a letter to the employer stating that "he was compelled to resign for various reasons" and this resignation was accepted by the undertaking. The Delhi High Court in its judgment (to which one of us was a party) observed that notice under the regulation was intended for the benefit of the employer which could, if it considered necessary or proper, waive the period of notice and accept the resignation with immediate effect. But that was a case where the employee, though bound to give three months' notice, expressed his desire to resign with immediate effect and it was also accepted by the employer. It was not the case that he had given notice indicating a desire to be relieved at a future date. The analogy of that case would have applied to the present case as well if the respondent here had expressed his desire to be relieved immediately even before the expiry of the three months' notice period and the bank had accepted it. The employer would then certainly have been entitled to accept the resignation, as requested by the employee, waiving the notice period. The distinction between that case and the present one is that, here, the employee has chosen a future date on which his resignation would be effective but he is being forced to "resign" before such date.”

15. Having regard to the interpretation placed by the Supreme Court on Regulation 20(2) of the Punjab Nation Bank Services Regulations, which provision is similar to the one with which we are dealing with in the present case, we have no hesitation in observing that our task in deciding the question that arises for consideration becomes relatively easy and that in our opinion, the decision of the Supreme Court in Punjab National Bank (supra) squarely applies to the facts of the present case.

16. Coming to the facts of the present case, Clause (2) of Regulation 20 makes it incumbent on an officer of the Bank, before resigning, to serve a notice in writing of his intention to resign and that the period of notice required is 3 months. The purport of Clause (2) of Regulation 20 is that the resignation will not be effective otherwise than on the expiry of three months from the service of such notice. The petitioner submitted his resignation to the bank on April 13, 2018 and requested that he may be relieved latest by June 30, 2018 i.e. before expiry of 90 days. The petitioner on April 27, 2018 requested the bank to reduce the period of notice or waive the notice period for 12 days. The petitioner, thereafter, requested the bank to relieve him from the services of the bank on July 12, 2018. The request for being relieved on July 12, 2018 was accepted by the competent authority and he was informed that he would stand relieved from July 12, 2018 as requested by the petitioner. Though the petitioner has submitted that the letter of acceptance of his resignation was never received by him, in our opinion, having regard to the language of Clause (2) of Regulation 20, such an acceptance will not have a material effect on the question to be decided in this writ petition, as in any case the resignation was to be effective from July 12, 2018. Initially, the petitioner had requested for waiver of the notice period but later on expressed that he be relieved upon completion of the notice period (90 days). Thus, this is not a case where the petitioner requested for waiving the notice period or that the bank has waived the notice period or the bank has reduced the notice period or that it has remitted the requirement of notice. The resignation, therefore, was to be effective only from July 12, 2018.

17. Learned counsel for the bank emphasizes that the bank had already taken a decision to accept the resignation and that the petitioner would stand relieved from July 12,

2018. According to him, this satisfies the requirement of Clause (2) of Regulation 20 as after the decision was taken by the bank to accept the resignation, the only consequence that remained was relieving the petitioner with effect from July 12, 2018 after office hours. Learned counsel’s submission is that upon acceptance of the resignation with a clear stipulation that the petitioner would stand relieved from the date indicated in the notice, there is then no question of the petitioner withdrawing the resignation as the decision of the bank attains finality, as the relieving order is a consequence of what was requested by the petitioner himself. We do not find favour with the submissions made by learned counsel for the bank. We borrow in extenso the reasoning of the Supreme Court in Punjab National Bank (supra) while rejecting the contentions of learned counsel for the bank.

18. In terms of Clause (2) of Regulation 20, 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. The petitioner did initially request the bank to reduce the period of notice but later on did not insist for such reduction and in fact made a request that he should be relieved upon completion of 90 days which request was accepted by the bank.

19. As held by Their Lordships in Punjab National Bank (supra), the resignation is a voluntary act of an employee. He may choose to resign with immediate effect or with a notice of less than 3 months if the bank agrees to the same. The acceptance of the argument of learned counsel for the bank 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. No doubt, the bank communicated the acceptance of resignation of the petitioner much prior to the date when it was to be effective and endorsed the petitioner’s request for being relieved upon completion of the notice period. There may be a situation where immediately upon tendering a resignation, the employer may inform the officer of its decision of accepting the resignation from the date mentioned in the notice in terms of the request made by the officer. Is it that the officer is precluded from withdrawing the resignation if he has a change of mind before it becomes effective? This question has been clearly answered by the Supreme Court in paragraph 7 of Punjab National Bank (supra). Though the facts before the Supreme Court were that the resignation was thrust on the officer even before the date from which it was to be effective as per the notice, the aspect of withdrawal of resignation before it becomes effective is elaborately dealt with in paragraph 8 of the decision in Punjab National Bank (supra). We find that the petitioner continued in service till July 12, 2018, but, by that time, he had exercised his right to withdraw the resignation. Since the withdrawal letter was written and communicated before the resignation became effective, the resignation stands withdrawn, with the result that the respondent continues to be in the service of the bank. It is true that there is no specific provision in the regulations permitting the employee to withdraw the resignation. It is, however, not necessary that there should be any such specific rule. Until the resignation becomes effective on the terms of the resignation letter read with Regulation 20, it is open to the petitioner, on general principles, to withdraw his letter of resignation. Their Lordships have observed that in some cases of public services, this right of withdrawal is also made subject to the permission of the employer. There is no such clause here.

20. We, therefore, have no hesitation in holding that merely because the bank had communicated to the petitioner that his resignation is accepted and that he would be relieved from July 12, 2018, would have no bearing, as the petitioner chose to withdraw his resignation before it became effective. On the date when the petitioner withdrew his resignation, the petitioner was continuing in service. It needs to be emphasized that by the letter dated July 9, 2018, the petitioner was informed that the competent authority accepted the petitioner’s request for withdrawal of resignation and permitted him to continue in the services of the bank. The petitioner, in any case was continuing in the services as his resignation was to take effect from July 12,

2018. Once having taken a decision to accept the petitioner’s request for withdrawal of the resignation, the request for withdrawal did not survive for being accepted, therefore there was no question of terminating the service of the petitioner after such acceptance of the request for withdrawal. Moreover, having permitted him to continue in service, we do not find any justification in the respondents informing the petitioner by the impugned order that his resignation has been accepted and he stands relieved. Such action on the part of the respondents, in our opinion, is arbitrary and irrational. The petition deserves to succeed for the reasons aforestated.

21. Learned counsel for the bank relied upon the decision in Raj Kumar (supra). We are afraid that the decision is rendered in a different fact situation. Moreover, the well settled law laid down by the Supreme Court in Raj Kumar (supra) was referred to in Punjab National Bank (supra). Punjab National Bank (supra), as discussed earlier, dealt with a similar provision as in the present case, and therefore is directly applicable to the present facts. We are, therefore, of the view that the decision relied upon by the bank in Raj Kumar (supra) does not assist the case of the bank.

22. Resultantly, the writ petition succeeds and is accordingly allowed in terms of prayer clause (a).

23. The respondent–bank is directed to reinstate the petitioner with continuity of service but without back-wages. However, in the facts of the present case, the parties are left to bear their own costs.

24. The interim application is also disposed of. (M. S. KARNIK, J.) (CHIEF JUSTICE) Later: Prayer for stay made by Mr. Piyush Shah, learned counsel appearing on behalf of the respondent nos.[1] to 3, is considered and refused. (M. S. KARNIK, J.) (CHIEF JUSTICE)