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Civil Appeal No. 9076 of 2019 @SLP (C) No. 6553 of 2018
BSES Yamuna Power Ltd. …Appellant
JUDGMENT
1. By its order dated 26 May 2017 a Division Bench of the High Court of Delhi upheld the judgement of a Single Judge dated 21 March 2017 granting pensionary benefits to the first respondent. The judgement of the Single Judge directed the appellant to pay pensionary benefits to the first respondent on the ground that he had completed twenty years of service and had „voluntarily retired‟ and not „resigned‟ from service. The appellant challenges these findings in the present appeal.
2. The first respondent was appointed as a daily rated mazdoor on 9 July
1968. His services were regularised on the post of a Peon on 22 December 1971. The first respondent tendered his resignation on 7 July 1990, which was accepted by the appellant with effect from 10 July 1990. The first respondent was subsequently denied pensionary benefits by the appellant on two grounds. First, that he had not completed twenty years of service, making him ineligible for the grant of pension. Second, in any case, by resigning, the first respondent had forfeited his past services and therefore could not claim pensionary benefits.
3. The second question of whether by resigning, the first respondent forfeited his past service must be addressed at the outset. If the first respondent‟s resignation resulted in a forfeiture of past service, the question of whether he has completed twenty years of service is rendered irrelevant for such service would stand forfeited. In holding the that the legal effect of the first respondent‟s letter of resignation would amount to „voluntary resignation‟, the Single Judge of the High Court of Delhi relied on the judgement of this Court in Asger Ibrahim Amin v LIC[1].
4. In Asger Ibrahim Amin, the appellant had resigned in 1991 after completing twenty-three years of service with the Life Insurance Corporation of India. When the appellant resigned, there existed no provision allowing for voluntary retirement. The Central Government subsequently promulgated the Life
Insurance Corporation of India (Employees) Pension Rules 1995[2] setting out the conditions to be fulfilled for the grant of pension upon retirement and permitting, for the first time, employees to voluntarily retire after twenty years of service. Under the LIC Pension Rules, pension on retirement was made retrospectively applicable to employees retiring prior to 1995, however, the provisions regarding voluntary retirement were not. The LIC Pension Rules also stipulated that resignation amounted to a forfeiture of past service. In deciding whether the appellant was entitled to pension under the LIC Pension Rules, Justice Vikramajit Sen speaking for a two judge Bench of this Court held:
LIC Pension Rules
5. The court in Asger Ibrahim Amin held that despite the use of the term „resignation‟ in the appellant‟s letter, the court had to independently determine whether the termination of service amounted to a „resignation‟ or a „voluntary retirement‟. As the appellant in Asger Ibrahim Amin had fulfilled the prescribed years of service and, at the time of his resignation there was no provision for voluntary retirement, the Court held that the appellant had in fact „voluntarily retired‟ and not „resigned‟. The LIC Pension Rules only made the provisions on retirement applicable retrospectively and did not make the provisions with respect to voluntary retirement applicable retrospectively. However, in holding that the court must determine whether there existed a case for „voluntary retirement‟ or „resignation‟, the effect of the decision was to apply the provisions on voluntary retirement retrospectively. The Court Vikramajit Sen expressly noted this: “11. … The respondent Corporation has controverted the plea of the appellant that as the relevant date and time viz. 29-1- 1991 there was no alternative for him except to tender his resignation, pointing out that he could not have sought voluntary retirement under Regulation 19(2-A) of the LIC of India (Staff) Regulations, 1960. If that be so, the respondent being a model employer could and should have extended the advantage of these Regulations to the appellant thereby safeguarding his pension entitlement. However, we find no substance in the argument of the respondent since Regulation 19(2-A) was, in fact, notified in the Gazette of India on 16-2-1996, that is, after the pension scheme case into existence with effect from 1-11-1993.
6. In the present case, the Single Judge of the High Court of Delhi relied on the decision in Asger Ibrahim Amin to hold that the first respondent was entitled to pensionary benefits. The Single Judge noted that the first respondent had completed more than twenty years of service and would have been eligible for pension upon voluntary retirement. Therefore, despite the first respondent using the term „resignation‟, on an independent determination of the facts of the case, the Single Judge held that he had in fact „voluntarily resigned‟ from service‟.
7. Mr C U Singh, learned Senior Counsel for the appellant, brought to our attention that the correctness of the court‟s approach in Asger Ibrahim Amin had been called into question by a co-ordinate bench of this Court in Senior Divisional Manager, LIC v Shree Lal Meena[3] (“Shree Lal Meena I”), which referred the matter to a larger Bench of this Court. Thereafter, a three judge Bench of this Court was constituted and delivered a judgement in Senior Divisional Manager, LIC v Shree Lal Meena[4] (“Shree Lal Meena II”) overruling the view taken in Asger Ibrahim Amin. Both these judgements have been placed on the record.
8. The facts in Shree Lal Meena I and Shree Lal Meena II were analogous to those in Asger Ibrahim Amin. The respondent employee had resigned after completing twenty years of service. The court was called upon to determine whether the respondent‟s „resignation‟ amounted to a forfeiture of his past service disentitling him from pension or was in fact „voluntary retirement‟. Justice Dipak Mishra (as the learned Chief Justice then was) speaking for a two judge Bench of this Court in Shree Lal Meena I observed:
9. The court in Shree Lal Meena I took the view that the provision with respect to pension on voluntary retirement (Rule 31) was not applicable retrospectively because the relevant provision had not been enacted with retrospective effect. Crucially, the Court noted that by making the provision on voluntary retirement applicable retrospectively, and making a determination in the facts of each case whether an employee had „resigned‟ or „voluntarily retired‟, the decision in Asger Ibrahim Amin obliterated the distinction between resignation and retirement. The court noted that there is a “real difference between resignation and retirement”. They cannot be used interchangeably, and the court cannot substitute one for the other merely because the employee has completed the requisite number of years to qualify for voluntary retirement.
10. In Shree Lal Meena II, upholding the interpretation in Shree Lal Meena I, Justice Sanjay Kishan Kaul speaking for the three judge Bench, noted that the retrospective application of the provision on voluntary retirement in the LIC Pension Rules would lead to an absurd result: “19. 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 than an employee resigning during the currency of the Rules would be deprived of pensionary benefits, while an employee who resigns when the Rules were not even in existence, would be given the benefit of these Rules.” The Court noted that, if the approach followed in Asger Ibrahim Amin was adopted in interpreting the LIC Pension Rules, an employee who resigned after the enactment of the rules would not be entitled to pensionary benefits but an employee who had resigned when the rules were not in force, but had completed the prescribed period of service for voluntary retirement, would be entitled to pensionary benefits. Such an outcome could not be countenanced and would render nugatory the provision which stipulated that upon resignation, past service stood forfeited.
11. The Court in Shree Lal Meena II elucidated the distinction between resignation and voluntary retirement in the following terms:
The above observations highlighted the material distinction between the concept of resignation and voluntary retirement. The Court also observed that while pension schemes do form beneficial legislation in a delegated form, a beneficial construction cannot run contrary to the express terms of the provisions:
The view in Asger Ibrahim Amin was disapproved and the court held that the provisions providing for voluntary retirement would not apply retrospectively by implication. In this view, where an employee has resigned from service, there arises no question of whether he has in fact „voluntarily retired‟ or „resigned‟. The decision to resign is materially distinct from a decision to seek voluntary retirement. The decision to resign results in the legal consequences that flow from a resignation under the applicable provisions. These consequences are distinct from the consequences flowing from voluntary retirement and the two may not be substituted for each other based on the length of an employee‟s tenure.
12. In the present case, the first respondent resigned on 7 July 1990 with effect from 10 July 1990. By resigning, the first respondent submitted himself to the legal consequences that flow from a resignation under the provisions applicable to his service. Rule 26 of the Central Civil Service Pension Rules states that:
Rule 26 states that upon resignation, an employee forfeits past service. We have noted above that the approach adopted by the court in Asger Ibrahim Amin has been held to be erroneous since it removes the important distinction between resignation and voluntary retirement. Irrespective of whether the first respondent had completed the requisite years of service to apply for voluntary retirement, his was a decision to resign and not a decision to seek voluntary retirement. If this court were to re-classify his resignation as a case of voluntary retirement, this would obfuscate the distinction between the concepts of resignation and CCS Pension Rules voluntary retirement and render the operation of Rule 26 nugatory. Such an approach cannot be adopted. Accordingly, the finding of the Single Judge that the first respondent „voluntarily retired‟ is set aside.
13. We now turn to the question of whether the first respondent had completed twenty years in service. During the present proceedings, our attention was drawn to the fact that the first respondent had applied for voluntary retirement on 14 February 1990. By a letter dated 25 May 1990 the appellant denied the first respondent‟s application for voluntary retirement on the ground that the first respondent had not completed twenty years of service. It was thus urged that the appellant‟s decision to deny the first respondent voluntary retirement was illegal as the first respondent had completed twenty years of service.
14. This argument cannot be accepted. Even if he was denied voluntary retirement on 25 May 1990, the first respondent did not challenge this decision but resigned, on 7 July 1990. The denial of voluntary retirement does not mitigate the legal consequences that flow from resignation. No evidence has been placed on the record to show that the first respondent took issue with the denial of voluntary retirement between 25 May 1990 and 7 July 1990. To the contrary, in the legal notice dated 1 December 1992 sent by the first respondent to the appellant, the first respondent admitted to having resigned. The first respondent‟s writ petition was instituted thirteen years after the denial of voluntary retirement and eventual resignation. In the light of these circumstances, the denial of voluntary retirement cannot be invoked before this Court to claim pensionary benefits when the first respondent has admittedly resigned.
15. On the issue of whether the first respondent has served twenty years, we are of the opinion that the question is of no legal consequence to the present dispute. Even if the first respondent had served twenty years, under Rule 26 of the CCS Pension Rules his past service stands forfeited upon resignation. The first respondent is therefore not entitled to pensionary benefits.
16. For the above reasons, we accordingly allow the appeal and set aside the impugned order of the High Court of Delhi dated 26 May 2017. There shall be no order as to costs..……......................................................J [Dr Dhananjaya Y Chandrachud]..……......................................................J [Hrishikesh Roy] New Delhi; December 5, 2019.