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CASE NO.: Appeal (civil)  4097 of 2002

PETITIONER: Punjab & Sind Bank & Anr.

RESPONDENT: S. Ranveer Singh Bawa & Anr.

DATE OF JUDGMENT: 21/04/2004

BENCH: CJI V.N. KHARE, S.B. SINHA & S.H. KAPADIA.

JUDGMENT: J U D G M E N T  

KAPADIA, J.

       The question that arises for consideration in this case is  \027 whether respondent who earlier opted for voluntary  retirement scheme could be permitted to withdraw therefrom  after having received the payments under the scheme?  

       The facts giving rise to the dispute lie within narrow  compass.  Appellant is a nationalised bank.  On 28.10.2000, in  order to down size the strength of its staff, the appellant floated  the voluntary retirement scheme (hereinafter referred to for the  sake of brevity as "VRS").  The scheme was to commence with  effect from 1.12.2000 and it was to remain in operation up to  31.12.2000.  On 6.12.2000, respondent no.1, Ranveer Singh  Bawa, opted for VRS.  On 22.12.2000, respondent no.1  requested that he be allowed to withdraw his option.  On  23.12.2000, the scheme stood modified. On 30.12.2000 and  17.1.2001, the said respondent wrote reminders and requested  that he be permitted to withdraw his option.  However, in view  of clause 10.4 of the scheme, the appellant did not permit him  to opt out from the VRS.  Consequently, w.e.f. 29.1.2001,  respondent no.1 was relieved from service.  Aggrieved, he  filed  the writ petition in the High Court on 26.3.2001 inter alia  seeking resumption of duties without any break in service.  On  24.7.2001, the learned Single Judge allowed the writ petition on  the ground that the optee is entitled to withdraw his option  before its acceptance by the bank.  Against the decision of the  learned Single Judge, the appellant carried the matter in appeal  to the Division Bench.  By impugned judgment dated 5.9.2001,  the Division Bench dismissed the Letters Patent Appeal.   Hence, this civil appeal by special leave petition.  

       In the case of Bank of India v. O.P. Swarnakar reported  in [(2003) 2 SCC 721], two questions arose for determination,  namely, whether the scheme is an offer, as contended on behalf  of the bank or an invitation inviting offers from employees; and  secondly, whether the optees having accepted the  payments/benefits under the scheme could be permitted to resile  therefrom.  On the first question, it was held that the said  scheme was contractual in nature; that it constituted invitation  and not an offer; and that no consideration passed in terms of  the scheme so as to constitute an agreement. Under the  circumstances, it was held that revocation was possible and  effective at any time before acceptance as up to such acceptance  no legal obligation existed. On the second question, it was held  that those employees who have accepted the payments/benefits

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under the scheme cannot approbate and reprobate nor can they  be permitted to withdraw.

       When the appeal came up for hearing, it was submitted  on behalf of the appellant on facts that the respondent no.1  herein had received and accepted payments/benefits under the  scheme and consequently, he was not entitled to withdraw  therefrom.  In this connection, reliance was placed on the  averments in the counter-affidavit filed by the appellant on  28.2.2004 in I.A. No.1 of 2003 filed in the present civil appeal.   It was urged that the said respondent had two savings bank  accounts no.4775 and 4777, in which the bank credited salaries,  notice period salary as well as leave encashment benefits under  the scheme, which was never objected to by the respondent.   Further, the credits in the savings bank accounts were used by  the respondent to repay his car loan to the bank amounting to  Rs.65220/-, which was one of the conditions prescribed in the  scheme.  Further, the said respondent had utilized the credits in  the said accounts for investment in fixed deposits.   Accordingly, it was submitted that the respondent had received  the payments under the scheme, he had utilized those payments  to discharge his obligations under the scheme by repayment of  car loan and he had invested the amounts in fixed deposits.   Therefore, he was not entitled to withdraw from the scheme.   Mr. Jayant Bhushan, learned senior counsel appearing on behalf  of the respondent, on the other hand, contended that on  6.12.2000, respondent herein opted for VRS.  He urged that the  scheme was open up to 31.12.2000.  On 22.12.2000, the said  respondent withdrew his offer.  He repeatedly reminded the  management thereafter to accept his request for withdrawal.   Despite reminders, on 29.01.2001, the management relieved the  respondent from service, which was challenged by him by  filing writ petition in Delhi High Court on 26.3.2001.  It was  urged that although the respondent succeeded in the writ  petition, till date the appellant has failed to reinstate the  respondent.  It was submitted that the appellant had unilaterally  credited the salaries, the notice pay and the leave encashment  benefits in the account of the respondent with the appellant \026  bank and consequently, the receipts of payments cannot  constitute waiver or acquiescence on the part of the respondent.   At the highest, it was receipt of payment under protest.  In this  connection, reliance was placed on the fact of pendency of the  writ petition in the High Court.         In the case of Bank of India v. O.P. Swarnakar (supra),  this Court observed that estoppel is based upon the acceptance  and retention of benefits, by one having knowledge or notice of  the benefits from a contract or a transaction.  The doctrine of  estoppel is a branch of the rule against assumption of  inconsistent positions.  One who knowingly accepts the benefit  of a contract is estopped from denying the binding effect on  him of such contract.  This rule has to be applied to do equity.   It was accordingly held that those optees who knowingly  received the payments and utilized them were not entitled to  withdraw from the VRS.  In the case of Punjab National Bank  v. Virender Kumar Goel & Ors. reported in [(2004) 2 SCC  193], the applicant bank submitted that some of the optees  having accepted the benefits under VRS cannot be permitted to  withdraw therefrom.  In that matter, several review petitions  were filed and in some of those review petitions, it was found  that the optees were aware of the credits in their accounts and  they have even withdrawn the amounts deposited and had  utilized the same and consequently in such cases, this Court did  not permit the optees to withdraw from VRS.  To the same  effect is the order passed by this Court in the case of Bank of  India & Ors. v. Pale Ram Dhania, in Civil Appeal No.4098 of

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2002 decided on 12.2.2004.  In the light of the above  judgments, we have to consider the facts of the present case.

       At the outset, it may be mentioned that before the High  Court the only question which arose for determination in this  case was \027 whether the respondent herein was entitled to  withdraw his option before the cut-off date.  The question \026 as  to whether the said respondent had received the  payments/benefits and had utilized the same was not there  before the High Court.  The last question has been raised by the  bank in I.A. No.1 of 2003 in the present civil appeal.

       We quote hereinbelow paragraphs 3, 4 and 5 of the  counter affidavit dated 28.2.2004: "3.     That the account statement submitted along  with the additional affidavit at pages 23-24 relates  to Savings Bank Account No.4775 maintained by  the respondent.  A perusal of the same would show  that on 27.12.2000 salary to the tune of  Rs.15,154.00 was credited to his account.   Subsequently, on 25.1.2001 another credit entry  amounting to Rs.14,600.42p was made on account  of salary.  On 29.1.2001, a credit entry amounting  to Rs.23,548.59 on account of notice period salary  as applicable under Voluntary Retirement Scheme  was made.   

4.      That thereafter on 1.2.2001 the respondent  himself transferred a sum of Rs.60,000/- in the said  account and on that very day he adjusted his car  loan amount to Rs.65,220.00 payable to the bank.   It is stated that under Voluntary Retirement  Scheme every employee who took the voluntary  retirement scheme and the benefits thereunder had  to adjust the loans payable by him to the bank and  it was in pursuance to the provision of the scheme  that the respondent cleared the loan amount and  also closed the said account on 1.2.2001.  It is  noteworthy that in between, he had transferred a  sum of Rs.13,406.74p on 30.1.2001 and another  sum of Rs.13,859 to his other account.   The  deponent states that this clearly shows that the  operation of the said account by the respondent.   

5.      That the respondent was maintaining  another account being Account No.4777 at  Maharajpur Branch of the appellant bank.  A copy  of which has been annexed by the respondent at  page 22 wherein the transfers had been made in  this account.  The respondent had used and  transacted the accounts as is evident from the  account statement annexed herewith for the period  from 6.12.2000 to 16.10.2001.  The respondent has  only annexed a part of the statement for the period  from 4.1.2001 to 31.3.2001.  The statement from  6.12.2000 to 16.10.2001 as annexed by the  appellant bank would show that the respondent  operated this account on regular basis.  He had  made a payment of Rs.30000/- on 13.1.2001 to  State Bank of India towards Public Provident Fund  and another deposit of Rs.60,000/- was made to  SBI on 5.1.2001 as PPF deposit.  The leave  encashment benefit of Rs.1,42,406.40 p. was  credited in this account on 26.3.2001.  The  respondent made a FDR to the tune of

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Rs.1,42,406.40 p. on 31.3.2001 for a period of  three years which is still lying with him and is due  only on 31.3.2004."

       From the averments herein, it is clear that respondent  no.1 had two savings bank accounts no.4775 and 4777.  He had  withdrawn his option on 22.12.2000 and yet without any  objection he receives three credits in his account on 27.12.2000,  25.01.2001 and 29.01.2001 on account of salary (including  notice pay).  Thereafter, he repays his car loan; invests  Rs.30,000/- in PPF and Rs.1,42,406.40 in fixed deposit for  three years, which is a long term investment.  Therefore the  principles of estoppel extensively discussed by this Court in the  case of Bank of India v. O.P. Swarnakar (supra) applies to the  facts herein.  The conduct of respondent no.1 indicates his  knowledge about payments in his accounts; that he never  objected to such payments and that he had appropriated the  amounts for his benefit.  Therefore, he cannot resile from the  scheme.  

       For the aforestated reasons, this appeal deserves to be  allowed.  We order accordingly.  The judgment and order under  challenge is set aside, with no order as to costs.