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CASE NO.: Appeal (civil)  9547 of 2003 Appeal (civil)  9549 of 2003

PETITIONER: Reserve Bank of India & Anr.                             

RESPONDENT: Cecil Dennis Solomon & Anr.                              

DATE OF JUDGMENT: 04/12/2003

BENCH: DORAISWAMY RAJU & ARIJIT PASAYAT

JUDGMENT: J U D G M E N T (Arising out of SLP(C) No. 12159 of 2002) (Arising out of SLP (C) No. 12160/2002)]

ARIJIT PASAYAT, J.

       Leave granted in both the special leave petitions.  

        Division Bench of the High Court of Bombay at Nagpur Bench has  held by the impugned judgment that the respondents (hereinafter referred  to as ’the employees’) were entitled to pension in terms of the Reserve  Bank of India Pension Regulations, 1990 (in short the ’Pension  Regulations’).  The Reserve Bank of India (hereinafter referred to as  the ’employer’) has questioned the correctness of the judgment.

 Factual position is almost undisputed, and brief reference  thereto would suffice.   

       Respondents were working in various capacities in the employer  organization.  The employees tendered resignation sometimes in 1988.   Subsequent to their resignation, the Pension Regulations came to be  operative. The said Regulation was made in exercise of powers conferred  by clause (j) of sub-section (2) of Section 58 of the Reserve Bank of  India Act, 1934 (for short the ’Act’).  The Central Board of the  employer-bank with the previous sanction of the Central Government made  the Regulations. The Reserve Bank of India Staff Regulations, 1948 (in  short ’Staff Regulations’) which were subsequently amended w.e.f.  7.2.1992 were in operation at the relevant time governing the service  conditions.  Regulation 26 of the 1948 Regulations dealt with the age of  retirement.  Sub-rule (3) thereof which has some relevance to the  present disputes provides that an employee who has attained the age of  50 years may voluntarily retire after giving to the Competent Authority  three months’ notice in writing.  Though several other provisions were  incorporated in the Regulation w.e.f. 7.2.1992, this provision in sub- rule (3) continued unamended.  By Pension Regulations prescriptions were  made for granting pension to certain categories of employees.   Regulations 2(12) and 18 thereof read as follows:

"2(12): ’Retirement’ means retirement in terms of  Staff Regulation 26 and other instructions issued by  the Bank under Settlements/Awards;

18. Forfeiture of service on resignation or dismissal  or termination: Resignation or dismissal or  termination of an employee from the service shall

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entail forfeiture of his entire past service and  consequently shall not qualify for pension payment."

Some of the provisions of Staff Regulations need to be noted. They read  as follows:

       "Regulation 26. (Unamended- prior to 7.2.1992)-  (1)     an employee, other than an employee in Class IV  shall retire at 58 years of age and an employee in  Class IV at 60 years of age;

       Provided that in the case of an employee in  Class IV who has reached the age of 55 years the Bank  may, in its discretion, retire him after giving two  months’ notice in writing if in the opinion of the  competent authority his efficiency is found to have  been impaired.  

       Provided further that the Bank may, in its  discretion, retire an employee, other than an  employee in Class IV, at any time after completion of  50 years of age;  

       Provided further in the case of an employee,  other than an employee in Class IV, who has attained  the age of 55 years,, his continuance in service up  to the age of 58 years shall be subject to his being  found suitable to be retained in service.

       (2)     The power conferred by the provisos to  sub-regulation (1) shall be exercised by the  Governor, with the prior approval of the Central  Board in the case of officers and by the Manager,  subject to such general or special instructions as  may be issued by the Governor, in the case of other  employees.  

       (3)     An employee who has attained the age of  50 years may voluntarily retire after giving to the  competent authority three months’ notice in writing.

       Regulation 26 (Amended with effect from  7.2.1992): (1)  An employee shall retire at 60  years of age but no extension shall be given to any  employee beyond 60 years of age;  

       Provided that an employee who attains the age  of superannuation on any day other than the first  during a calendar month, shall retire on the last day  of that month;

       Provided further that in the case of an  employee in Class IV who has reached the age of 55  years the Bank may, in its discretion, retire him  after giving two months’ notice in writing if in the  opinion of the competent authority his efficiency is  found to have been impaired;  

       Provided further that the Bank may, in its  discretion, retire in public interest an employee,  other than an employee in Class IV, at any time after  completion of 50 years of age;

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       Provided further in the case of an employee in  Class III and Class I, who has attained the age of 55  years, his continuance in service upto the age of 60  years shall be subject to his being found suitable to  be retained in service.

       (2)     The power conferred by the provisions to  sub-regulation (1) shall be exercised by the  Governor, with the prior approval of the Central  Board in the case of officers and by the Manager,  subject to such general or special instructions as  may be issued by the Governor, in the case of other  employees.

       (3)     An employee who has attained the age of  50 years may voluntarily retire after giving to the  competent authority three months’ notice in writing.  

       (3A)    Without prejudice to sub-Regulation (3),  an employee may voluntarily retire after giving to  the competent authority three months notice in  writing provided he has completed 20 years of service  if he is not governed by the Reserve Bank of India  Pension Regulations, 1990 and 20 years of qualifying  service as defined in the Reserve Bank of India  Pension Regulations, 1990, if he is governed by the  Reserve Bank of India Pension Regulations, 1990.

       Provided that this sub-Regulation shall not  apply to an employee who is on deputation or study  leave abroad, unless, after having been transferred  or having returned to India he has resumed the charge  of the post in India and served for a period of not  less than one year. The requirement of this proviso  may, however, be waived at the discretion of the  Governor.  

       Provided further that this sub-Regulation shall  not apply to an employee who seeks retirement from  service for being absorbed permanently in an  autonomous body or a public sector undertaking to  which he is on deputation at the time of seeking  voluntary retirement.

       (3B)    The notice of voluntary retirement given  under sub-Regulation (3A) shall not be valid unless  it is accepted by the Competent Authority;

       Provided that where the Competent Authority  does not communicate its decision not to accept such  notice before the expiry of period specified in the  notice, the retirement shall become effective from  the date of expiry of such  period.  

(3C)    The Competent Authority may, if so  requested by the employee retiring pursuant to sub- Regulation (3) or (3A), waive the notice of voluntary  retirement with respect to its full period or part  thereof if the Competent Authority is satisfied that  such waiver will not cause any administrative  inconvenience.

       (3D)    An employee who has elected to  voluntarily retire pursuant to sub-Regulation (3A)  and has given notice shall not be entitled to

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withdraw the notice except with the permission of the  Competent Authority, provided that the request for  such withdrawal shall be made before the intended  date of his retirement".   

       Since the respondents-employees had tendered resignation, making  them ineligible writ applications were filed before the High Court  questioning legality of Regulation 18.  The High Court by the impugned  judgment held that Regulation did not have any retrospective operation  and, therefore, the employer was legally bound to grant pension.   

       Mr. R.N. Trivedi, learned Additional Solicitor General submitted  that the entire approach of the High Court was erroneous. On one hand it  came to hold that Regulations were not retrospective in operation, yet  ultimate direction was to work out the pension by taking recourse to  1990 Pension Regulations.  It also recorded a finding that there cannot  be any doubt that resignation from service being not equivalent to  dismissal or termination which are the acts of the management, is more  akin to voluntary retirement.  It held that as Regulation 18 of the  Pension Regulations was not attracted, the claim for pension was to be  allowed.  The Pension Regulations clearly ruled out payment of pension  for those employees who go out by tendering resignation.  There was no  question of the respondents-employees taking voluntary retirement as  they had not attained the age of 50 years in terms of sub-Regulation (3)  of Regulation 26 of the Staff Regulation of 1948.  The respondents- employees have not stated as to under  which statute or Regulation they  were claiming pension.  From the tenure of the pleadings in the writ  petition and the arguments it appears that they wanted only to get  advantage of Pension Regulations. But at the same time they contended  that it did not have retrospective operation.                                                Per contra, learned counsel for the respondents-employees  submitted, only 37 employees were to be benefited and only 3 had  approached the Court. That being the position, this is not a fit case  where the jurisdiction under Article 136 of the Constitution of India,  1950 (for short the ’Constitution’) has to be exercised.  Further, by  administrative decisions, the Central Board had decided to extend the  benefit to the employees like the respondents.  That being so, on the  fortuitous ground that the Central Government had declined to accept the  recommendations, the benefits could not have been denied.  Staff  Regulations were in the nature of administrative decisions and the  government decision was inconsequential.  Once the Board had decided to  grant the benefit and even had suggested amendments to Staff  Regulations, there was no question of any government approval thereof.     In Reserve Bank and Another v. S. Jayarajan (1995 supp(4) SCC 584)  the view expressed in V.T. Khanzode and Ors. v. Reserve Bank of India  and Anr. (1982 (2) SCC 7) was reiterated that the Staff Regulations are  administrative in nature. The Central Board is authorized to take such  administrative decisions and Central Government’s approval/decision is  not necessary. Therefore, if changes were to be introduced in the Staff  Regulations and the Central Board takes a decision, there would not be  any necessity for taking approval of the Central Government.  But the  position is different so far as the Pension Regulations are concerned.   The said Regulations were framed with the sanction of the Central  Government and are framed in exercise of the powers conferred by clause  (j) of sub-section (2) of Section 58.  If the Central Board recommended  for changes in the Pension Regulations, sanction of the Central  Government is mandatory. This aspect seems to have been lost sight by  the High Court and the respondents cannot derive any advantage from the  mere recommendations made by the Central Board suggesting changes to the  Regulations.  The Central Government has specifically dealt with the  recommendations and has turned them down. Unless the recommendations for

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the amendment are approved, they have no binding force or application to  make any claim thereon.  Further, the respondents who claim that they  were not claiming the benefit under the Pension Regulations could not  point out any other source to which their claims could be linked. The  respondents-employees were getting superannuation benefits accruing to  them under the contributory provisions and gratuity schemes. The High  Court was also in error in equating the case of resignation to voluntary  retirement. The two are conceptually different in the service  jurisprudence and different consequences would flow depending upon one  or the other of the courses.    

Under Regulation 26 of the Staff Regulations, four types of  retirements were contemplated as on Ist  November, 1990 i.e. (a)  Retirement on Superannuation, (b) Compulsory Retirement on Invalidation,  (c) Compulsory Retirement and (d) Voluntary Retirement. Resignation does  not fit into any one of the said categories.  

In service jurisprudence, the expressions superannuation,  voluntary retirement, compulsory retirement and resignation convey  different connotations. Voluntary retirement and resignation involve  voluntary acts on the part of the employee to leave service. Though both  involve voluntary acts, they operate differently. One of the basic  distinctions is that in case of resignation it can be tendered at any  time; but in the case of voluntary retirement, it can only be sought for  after rendering prescribed period of qualifying service. Other  fundamental distinction is that in case of the former, normally retiral  benefits are denied but in case of the latter, same is not denied. In  case of the former, permission or notice is not mandated, while in case  of the latter, permission of the concerned employer is a requisite  condition. Though resignation is a bilateral concept, and becomes  effective on acceptance by the competent authority, yet the general rule  can be displaced by express provisions to the contrary. In Punjab  National Bank v. P.K. Mittal (AIR 1989 SC 1083), on interpretation of  Regulation 20(2) of the Punjab National Bank Regulations, it was held  that resignation would automatically take effect from the date specified  in the notice as there was no provision for any acceptance or rejection  of the resignation by the employer. In Union of India v. Gopal Chandra  Misra (1978 (2) SCC 301), it was held in the case of a Judge of the High  Court having regard to Article 217 of the Constitution that he has an  unilateral right or privilege to resign his office and his resignation  becomes effective from the date which he, of his own volition, chooses.  But where there is a provision empowering the employer not to accept the  resignation, on certain circumstances e.g. pendency of disciplinary  proceedings, the employer can exercise the power.          On the contrary, as noted by this Court in Dinesh Chandra Sangma  v. State of Assam (AIR 1978 SC 17), while the Government reserves its  right to compulsorily retire a Government servant, even against his  wish, there is a corresponding right of the Government servant to  voluntarily retire from service. Voluntary retirement is a condition of  service created by statutory provision whereas resignation is an implied  term of any employer-employee relationship.  

Looking from any angle the High Court judgment is indefensible and  is set aside and the writ petitions filed by the respondents-employees  stand dismissed.  Appeals are allowed. There shall be no orders as to  costs.