Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 6186 OF 2009 (Arising out of SLP(C) No. 3514 of 2008)

Padubidri Damodar Shenoy           …Appellant

Versus   Indian Airlines Limited & Anr.   …Respondents

JUDGEMENT

R.M. Lodha, J.

Leave granted.

2. In  this appeal  by special  leave,  interpretation and  

construction  of  Regulation  12  of  Service  Regulations  for  

Employees (other than those in the Flying Crew and those in  

the  Aircraft  Engineering  Departments)  –  for  short  ‘Service  

Regulations’ – framed by respondent no. 1, is involved.   

3. Padubidri  Damodar  Shenoy  –  appellant  –  joined  

the services of the Indian Airlines Limited – respondent no. 1 as  

Traffic  Assistant  on  January  13,  1977.  The  appellant  was

promoted from time to time and, lastly, he was promoted  to the  

post  of  Manager  in  the  commercial  department.  In  or  about  

September, 2002, the appellant was posted to work at Muscat  

as  Airport  Manager  but  was  recalled  from  posting  soon  

thereafter  and  posted  as  Manager,  Mumbai  Airport.  The  

appellant challenged the pre-mature recall by filing writ petition  

which was later on withdrawn. It is not necessary to refer to the  

details of that  writ petition as the subject matter of the present  

appeal does not concern that.  What is relevant to be noticed  

here is that  a charge-sheet dated January 16/21, 2003 was  

served  upon  the  appellant;  enquiry  was  conducted  and  the  

appellant was found guilty of misconduct alleged in the charge-

sheet and vide order dated March 31, 2006/April 10, 2006,  the  

appellant’s  time  scale  by  two  incremental  stages  with  

cumulative effect was reduced by way of  punishment.

4. In the year  2003,  the respondent  no.  1 came out  

with  a   scheme  of  Voluntary  Retirement  for  its  employees  

entitled Voluntary Retirement Scheme, 2003 (for short,  ‘VRS,  

2003’).  The appellant applied  for voluntary retirement under  

the said scheme on September 17, 2003.  

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5. On September 30, 2005 the appellant gave a notice  

of his intention to voluntarily retire from service on  completion  

of three months from the date of the notice as the appellant had  

completed 29 years of service.  This was done under regulation  

12 of  the Service Regulations.

6. The appellant’s case is that he sent a reminder to  

the authorities  on December  16,  2005 and when he did  not  

receive any reply, he sent another letter dated June 8, 2006  

informing  the  respondents  that  he  would  cease  to  be  an  

employee of  the respondent  no.  1 after  close of  the working  

hours on June 30, 2006. Again on July 1, 2006, the appellant is  

said to have informed the respondent no. 1 and the concerned  

authority that in terms of notice dated September 30, 2005 he  

has ceased to be an employee of the respondent no. 1 in terms  

of Regulation 12(b) of the Service Regulations and requested  

the respondents to release and pay all his legal dues including  

the provident fund and gratuity within two weeks from July 1,  

2006. Another letter is said to have been sent by the appellant  

on July 20, 2006 asking the respondents to release his legal  

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dues failing which he informed them that he would be  left with  

no alternative but to approach the court.  

7. It appears that by a letter dated July 31, 2006, the  

appellant  was  informed  that  his  application  for  voluntary  

retirement has been forwarded to the Headquarters for decision  

in  the  matter.  The  appellant  was  advised  to  report  for  duty  

immediately,  failing which he was informed that a disciplinary  

action would be taken against him.

8. The appellant sent reply to the said letter on August  

8,  2006  reiterating  his  stand  and  further  informing  the  

respondents  that  he  has  ceased to  be  the  employee of  the  

respondents  from July  1,  2006 and,  therefore,  there  was  no  

question of his reporting for duty.

9. The appellant then filed a writ petition (Writ Petition  

No.  2522  of  2006)  before  the  High  court  of  Judicature  at  

Bombay.   During the pendency of  writ  petition,  the appellant  

received  a  communication dated September 15, 2006 from the  

respondents  that  his  request  for  voluntary  retirement  from  

service has not been acceded to by the competent authority.  

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10. Writ Petition No.2522 of 2006 was contested by the  

respondents. The Division Bench of the High Court heard the  

parties and by its order dated April 23, 2007, dismissed that writ  

petition.

11. The appellant filed a fresh writ  petition being Writ  

Petition  No.1463 of 2007 before the High Court of Judicature at  

Bombay  praying  therein  that  the  communication  dated  

September  15,  2006  rejecting  the  appellant’s  application  for  

voluntary retirement be quashed and set aside and a direction  

be  issued  to  the  respondents   to  approve  the  voluntary  

retirement of the appellant under Regulation 12(b) of Service  

Regulations pursuant to the notice dated September 30, 2005.  

The appellant  also prayed  that  the respondents be further  

directed to release and pay all legal dues of the appellant along  

with interest thereon at 18% per annum from July 1, 2006 till  

payment and extend all post-retirement benefits.

12. The  respondents  contested  that  writ  petition  on  

diverse grounds,  inter alia,  namely: (i)  that the appellant had  

raised the same issue in earlier writ petition (Writ Petition  No.  

2522 of  2006)  and by a detailed order,  his  writ  petition was  

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dismissed and, therefore, it  was not open to the appellant to  

re-agitate the same issue; (ii) that the application for voluntary  

retirement is an offer made by an employee and unless it  is  

accepted by the employer,  it  does not become effective. The  

employee is not relieved from service till the offer is accepted  

because the relationship of the employer and employee does  

not  come  to  an  end.    The  offer  of  the  appellant  was  not  

accepted  by  the  first  respondent  and  (iii)  that  the  delayed  

communication does not create any right in the appellant and  

that the Service Regulations do not contemplate reasons to be  

communicated  for  rejection  of  the  application  for  voluntary  

retirement.  

13. The Division Bench of the High Court, after hearing  

the parties,  dismissed the writ  petition on October  17,  2007.  

Hence, the present appeal by special leave.

14. Before  we  turn  to  Regulation  12  of  the  Service  

Regulations, we may observe that the appellant had raised the  

same controversy by filing Writ Petition No. 2522 of 2006. It is  

true that  the communication  dated September  15,  2006 was  

received by him during the pendency of  writ  petition but  the  

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Division  Bench was conscious  of  this  fact  while  passing the  

order dated April 23, 2007. The Division Bench held that right to  

accept or reject the offer for voluntary retirement is that of the  

employer  and  although  this  has  to  be  exercised  within  a  

reasonable time but that, however, does not give any right to  

the employee, if not accepted within reasonable time, to hold  

that  the  employment  has come to  an end.  This  is  what  the  

Division  Bench  said  in  its  order  dated  April  23,  2007  while  

dismissing earlier writ petition :

“The case of the petitioner is that once application is moved  for  retirement,  under  the provisions of  Regulation 16(b),  it  would  be  the  bounden  duty  of  the  Respondents  to  have  decided the same recently.  As the Respondents for a long  period of time did not accept the letter to offer retirement, the  petitioner stopped attending the work as in his opinion, he  ceases  to  be  in  the  employment  and  demanded  the  compensation/retiremental benefits from Respondent No. 1.

After having heard the learned counsel for the petitioner and  the learned counsel for Respondent No. 1 and the relevant  Regulation, we are clearly of the opinion that right to accept  or reject is that of the employer. It is true that this has to be  exercised within a reasonable time, that however does not  give right in employee if not accepted within reasonable time  to hold that the employment  has to come to an end. The  requirement of the regulation is approval of the competent  authority. The Competent Authority has by a communication  on 15.9.2006 refused the request  for  voluntary retirement.  Considering the above, we are of the opinion that no case is  made out for interference by this court.

It is made clear that we are not going  to the merits as to  whether  Respondent  No.  1  was  within  its  jurisdiction  to  

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accept or refuse. If the petitioner is aggrieved, it is for the  petitioner to take whatever action which he desires.”

15. While  dismissing  the subsequent  writ petition, in  

the impugned order,  the Division Bench has observed that it  

was  improper  for  the  appellant  to  have  another  round  of  

litigation on the same point. The Division Bench expressed its  

unhappiness about the conduct of the appellant thus :

“In  its  order  dated  23/4/07,  the  Division  Bench  quoted  Regulation 12(b).  The Division Bench heard arguments on  this  point.  It  is  reflected  in  the  order  that  this  point  was  canvassed. The Division Bench then observed that because  the employer does not exercise the right to accept or reject  the application within a reasonable time that does not give  right in employee to contend that employment has come to  an end. It is distressing to note that though this contention is  rejected  it  is  again  raised  in  the  present  petition.  It  is  improper for the petitioner to have a round of litigation in this  manner  on  the  same  point.  We  are  unhappy  about  this  conduct of the petitioner.”   

16. Now, we come to the core issue. Regulation 12 of  

the Service Regulations, which is the area of controversy, reads  

thus :

“12. An  employee  shall  retire  from  the  service  of  the  Company on attaining the age of 58 years provided that the  competent authority may ask an employee to retire after he  attains the age of 55 years on giving three months’ notice  without assigning any reason. An employee :-

(a) On attaining the age of 55 years; OR

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(b) On  the  completion  of  20  years  of  continuous service may by giving three  months notice voluntarily retire from the  service;

 Provided that the voluntary retirement under Clause (b) shall  be subject to approval of the competent authority.

Provided  further,  notwithstanding  anything  contained  in  regulation  –  12  the  services  of  an  employee  may  at  the  option  of  the  Managing  Director  and  the  employee  being  found  medically  fit,  be  extended  by  one  year  at  a  time  beyond the age of retirement of 58 years for an aggregate  period not exceeding two years.”  

17. Mr.  S.J.  Deshmukh,  learned   counsel  for  the  

appellant  contended that  Regulation 12 vests  the employees  

covered  thereby  with  a  right  to  voluntarily  retire  after  giving  

three months  notice, namely, those who have attained  age of  

55  years  and  also  those  who have   completed  20  years  of  

continuous service and both these categories form one class.  

According to him,  proviso  appended  to Regulation 12 only  

empowers   the  competent  authority   to  withhold   approval  

before  the  notice  period  is  over.   In  other  words,  he  would  

submit, that   the employer can stop the voluntary retirement  by  

not  granting   the  approval  within  the  period  of  notice  and  

communicating  the same  to the concerned employee  that the  

employer  was  not  giving  his  approval.     Learned  counsel  

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submitted that a ‘proviso’  to  particular  provision of  a statute  

only embraces the field which is covered by main provision to  

which it has been enacted and to no other.    He relied  upon a  

decision of this Court in  A.N. Sehgal & Others vs. Raje Ram  

Sheoran & Others1  and submitted that where the  language of  

the main enactment  is explicit and unambiguous,  the proviso  

can  have  no  repercussion  on  the  interpretation  of  the  main  

enactment, so as to exclude from it,  by implication what clearly  

falls within its express terms.  

18. Insofar as norms relating to voluntary retirement are  

concerned,  Mr.  S.J.  Deshmukh,  learned  counsel  for  the  

appellant submitted that the law in this regard is laid down by  

this Court in State of Haryana & Others vs. S.K. Singhal2.  He,  

particularly,  referred to paragraphs 13 and 14 of the  report and  

submitted that  any decision to withhold  approval  has to be  

taken and communicated during the period of notice.  

19. On the other hand,  Mr.  P.S.   Narasimha, learned  

senior  counsel  for  the  respondents  submitted  that  cases  of  

1 1992 Supp. (1)  SCC 304 2 (1999) 4 SCC 293

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voluntary retirement fall  in three categories namely: (i)  where  

voluntary retirement is automatic and comes into force on the  

expiry of notice period; (ii)  where voluntary retirement  comes  

into force on the  expiry  of notice period  unless an order is  

passed within the notice period withholding permission to retire;  

and (iii)  where voluntary retirement does not come into force  

unless permission to this effect  is specifically  granted by the  

controlling authority.  The learned senior counsel would submit  

that  proviso appended to Regulation 12 relates to  category  

(iii).    He also relied upon decision of this Court in S.K. Singhal  

and another decision of this Court in the case of Tek Chand vs.  

Dile Ram3.

20.  Learned  senior  counsel   for  the  respondents  

submitted that notice dated  September 30,  2005 given by the  

appellant to the employer under Regulation 12(b)  expiring on  

December  31,  2005  did  not   become  effective  and  rather  

remained inoperative since the appellant  continued to attend  

his duties not only until the expiry of notice period but thereafter  

as well upto June  30, 2006.    In this regard,  he referred to a  

decision of this Court  in the case of K.L.E. Society vs. Dr.R.R.   3 (2001) 3 SCC 290

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Patil  &  Anr.4.  He  also  submitted  that  the   word  “approval”  

occurring in proviso to Regulation 12 in its context would mean  

“to accept”.   In this regard,  he referred to a decision of this  

Court in the case of  Ashok Kumar Sahu vs. Union of India &  

Ors.5.   Relying  upon a  decision of  this  Court  in  the case of  

H.P.Horticultural Produce Marketing & Processing Corpn. Ltd.   

vs. V. Suman Behari Sharma6, Mr. P.S.Narasimha  submitted  

that ‘proviso’ to Regulation 12 expressly mandates the approval  

of the competent authority or, in other words, approval of the  

competent authority is a condition  precedent to the event of  

voluntary retirement.  

21. Regulation 12 of the Service Regulations, inter alia,  

enables an employee to seek voluntary retirement on attaining  

the age of 55 years or on  completion of 20 years of continuous  

service by giving three months notice.  An employee who has  

attained  the age of 55 years and  has applied for voluntary  

retirement  under  Regulation  12,  his  voluntary  retirement  is  

automatic  on expiry of notice period i.e. three months.  Is it  

equally applicable to  an employee who has not attained the  

4 (2002)  5 SCC 278 5 (2006) 6 SCC 704 6 (1996) 4 SCC 584

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age of 55 years but completed 20 years of continuous service  

and applied for  voluntary retirement.  In our judgment, it is not  

so because for a category covered by clause (b), namely, an  

employee  having  completed  20  years  of  continuous  service  

who  has given three months notice  for voluntary retirement  

from  the service,   a proviso appended thereto provides that  

voluntary  retirement  under  clause  (b)  shall  be  subject  to  

approval  of the competent authority.    

22. It  is  appropriate  at  this  stage   to  consider  the  

decision  of  this  Court  in  S.K.  Singhal. In  S.K.  Singhal,   the  

relevant rule 5.32(B) of the Punjab Civil Services  Rules under  

consideration was as follows:

“5.32(B)(1) At any time a government employee  has  completed  twenty  years’  qualifying  service,  he  may, by giving notice of not less than three months in  writing to the appointing authority retire from service.  However,  a  government  employee  may  make  a  request in writing to the appointing authority to accept  notice  of  less  than  three  months  giving  reason  therefor.  On  receipt  of  a  request,  the  appointing  authority  may  consider  such  request  for  the  curtailment of the period of notice of three months on  merits and if it is satisfied that the curtailment of the  period  of  notice  will  not  cause  any  administrative  inconvenience, the appointing authority may relax the  requirement of notice of three months on the condition  that  the  government  employee  shall  not  apply  for  commutation of a part of his pension before the expiry  of the period of notice of three months.

(2)  The notice  of voluntary retirement given under  sub-rule  (1)  shall  require   acceptance  by  the  

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appointing authority subject to Rule 2.2 of the Punjab  Civil  Services Rules Vol.II:

Provided   that  where  the  appointing  authority  does not refuse to grant the permission for retirement  before the expiry of the period specified in sub-rule (1)  supra,  the retirement shall become effective from the  date of expiry of the said period:

Provided  further  that  before  a  government  employee  gives  notice  of  voluntary  retirement  with  reference to sub-rule (1) he should satisfy himself by  means of a reference to the appropriate authority that  he  has,  in  fact,  completed  twenty  years’  service  qualifying for pension.”  

23. In paragraph 9 of the report,  this Court considered  

the general scheme of voluntary retirement in service rules and  

also noted earlier decisions of this Court in the case of  Dinesh  

Chandra Sangma vs. State of Assam & Ors.7, B.J. Shelat vs.  

State of Gujarat & Others8, Union of India vs.  Sayed Muzaffar   

Mir9 and   H.P.Horticultural  Produce  Marketing  &  Processing  

Corpn. Ltd.  This Court observed:

  “9.  The  employment  of  government  servants  is  governed by rules.  These rules  provide a particular  age as the age of superannuation.  Nonetheless, the  rules  confer  a  right  on  the  Government  to  compulsorily  retire  an  employee  before  the  age  of  superannuation provided the employee has reached a  particular age or has completed a particular number  of years of qualifying service in case it is found that  his service has not been found to be satisfactory.  The  rules  also  provide  that  an  employee  who  has  completed the said  number  of years in his age or  who has completed  the prescribed number  of years  

7 (1977) 4 SCC 441 8 (1978) 2 SCC 202 9 1995 Supp ( 1) SCC 76

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of  qualifying  service could give notice of, say, three  months that he would  voluntarily retire on the expiry  of the said period of three months.  Some rules are  couched in  language which  results  in  an  automatic  retirement   of  the employee upon the expiry of  the  period  specified  in  the  employee’s  notice.   On  the  other hand, certain rules in some other departments  are  couched in  language which  makes it  clear  that  even upon expiry of the  period specified in the notice,  the retirement is not  automatic and an express order  granting   permission  is  required   and  has  to  be  communicated.   The  relationship  of  master  and  servant in the latter type of rules continues after the  period  specified  in the notice till such acceptance  is  communicated; refusal of  permission could also be  communicated  after  3  months  and  the  employee  continues  to  be  in  service.   Cases  like  Dinesh  Chandra  Sangma v  State  of  Assam (1977)  4  SCC  441; B.J.  Shelat  v.  State of  Gujarat  (1978) 2 SCC  202 and Union of India v. Sayed Muzaffar Mir (1995  Supp.(1)  SCC  76   belong  to  the  former  category  where it is held that upon the expiry of the period, the  voluntary retirement takes effect automatically as no  order of  refusal is passed within the notice period.  On  the  other  hand  H.P.  Horticultural  Produce  Marketing & Processing Corpn. Ltd. vs. Suman Behari  Sharma (1996) 4 SCC 584  belongs to the second  category where the bye-laws were interpreted as not  giving an option “to retire” but only provided a limited  right  to “seek”  retirement thereby implying the need  for a consent of the employer even if the period of the  notice  has  elapsed.   We  shall  refer  to  these  two  categories in some detail.”

24. In  S.K.  Singhal,  this  Court  considered  previous  

decisions at quite some length and held:

  “13. Thus, from the aforesaid  three decisions it is  clear that if the right to voluntarily retire  is conferred  in absolute terms as in Dinesh Chandra Sangma case  by the relevant  rules and there is  no provision in the  rules to withhold permission   in certain contingencies  

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the  voluntary  retirement  comes  into   effect  automatically on the expiry of the period specified in  the notice.  If, however, as in B.J. Shelat case and as  in Sayed Muzaffar Mir case the authority concerned is  empowered to withhold permission to retire  if certain  conditions exist, viz., in case the employee is under  suspension   or  in  case  a  departmental  enquiry  is  pending or is contemplated, the mere pendency of the  suspension  or  departmental   enquiry   or  its  contemplation  does  not   result  in  the  notice  for  voluntary  retirement  not  coming  into  effect  on  the  expiry of the period specified.  What is further needed  is that the authority concerned must pass  a  positive  order withholding permission to retire and must also  communicate the same to the employee as stated in  B.J.  Shelat  case  and  in  Sayed  Muzaffar  Mir  case  before the  expiry of the notice period.  Consequently,  there is no requirement of an order of acceptance of  the notice to be communicated to the employee  nor  can it be said that non-communication of acceptance  should  be  treated  as  amounting  to  withholding  of  permission.

14. Before  referring  to  the  second  category  of  cases where the rules require a positive acceptance  of  the  notice  of  voluntary  retirement  and  communication thereof, it is necessary to refer to the  decision of this Court in  Baljit Singh (Dr) v.  State of   Haryana [1997 (1) SCC 754]  strongly relied upon by  the learned counsel for the appellants and to  Power  Finance Corpn. Ltd. v. Pramod Kumar Bhatia [ (1997)   4  SCC  280].  The  former  case  arose  under  Rule  5.32(B) of the Punjab Civil Services Rules. That rule  extracted earlier contains an express provision in the  proviso to sub-rule (2) that the retirement takes effect  automatically if refusal is not communicated within 3  months. In that case, when the employee gave notice  for voluntary retirement on 20-9-1993, criminal cases  were pending against him. After expiry of 3 months,  on  25-2-1994,  the  competent  authority  declined  to  accept the notice. A two-Judge Bench of this Court,  however,  held  that  the  voluntary  retirement  did  not  come about automatically on the expiry of the notice  period  but  that  it  could  take  effect  only  upon  acceptance of the notice by the Government and that  the acceptance must also be communicated and till  then  the  jural  relationship  of  master  and  servant  continues. This Court referred only to the decision of  the two-Judge Bench in Sayed Muzaffar Mir case and  stated that that case was to be confined to its own  

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facts.  The  two-Judge  Bench  of  this  Court  in  Baljit   Singh case  did not notice that there were two three- Judge Bench cases in Dinesh Chandra Sangma  and  Shelat taking  the  view  under  similar  rules  that  a  positive  order  was  to  be  passed  within  the  notice  period withholding permission  to  retire  and that  the  said  order  was  also  to  be  communicated  to  the  employee during the said period.  By stating that an  order of acceptance of the notice was necessary and  that  the said acceptance must  be communicated to  the  employee  and  till  that  was  done  the  jural  relationship  continued  and  there  was  no  automatic  snapping thereof on the expiry of 3 months’  period,  the two-Judge Bench, in our view, has gone contrary  to the two three-Judge Bench cases which were not  brought to its notice. In the above circumstances, we  follow the two three-Judge Bench cases for deciding  the case before us.  

15. Learned counsel for the appellant also relied  on  a  two-Judge  Bench  decision  in  Power  Finance  Corpn. Ltd. v. Pramod Kumar Bhatia. That was a case  where  the  letter  of  voluntary  retirement  was  conditionally  accepted  subject  to  payment  of  dues  and  the  employee  wrote  a  further  letter  seeking  adjustment  thereof  but  before  that  was  done,  the  scheme itself was withdrawn. There are again some  observations made to the effect  that  there must  be  acceptance of  request  to  retire  and that  it  must  be  communicated. Neither Dinesh Chandra Sangma nor  Shelat was  referred  to.  In  our  opinion,  the  express  provision in the proviso to sub-rule (2) of Rule 5.32(B)  in the case before us does not permit such a view to  be taken. The said observations again run contrary to  the  decision  in  the  two  three-Judge  Bench  cases  referred  to  above.  Our  comments  on  Baljit  Singh  apply equally to this case, so far as the observations  are concerned.

16. We  then  come  to  the  second  category  of  cases  where  the  rules  require  that  an  order  of  acceptance of notice be passed to make the voluntary  retirement  effective.  In  HPMC v.  Suman  Behari   Sharma it  will  be  noticed,  the  principle  in  Dinesh  Chandra  Sangma case was accepted but  the  case  was distinguished on the ground that Bye-law 3.8(2)  in HPMC case provided differently and that under that  bye-law  an  employee  could  be  permitted  at  his  request to retire on completion of 25 years’ service or  50 years of  age.  Para (5)  of  Bye-law 3.8 stated as  follows: (SCC p.588, para 7)

“(5) Notwithstanding the provision under para (2)  above,  the  corporation  employees  who  have  a  

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satisfactory service record of 20 years  may also  seek retirement  from  the  service  of  the  Corporation  after  giving  three  months’  notice  in  writing to the appropriate authority. Persons under  suspension would not be retired under this clause  unless proceedings of the case against them are  finalised....”(emphasis supplied)

While clause (2) speaks of 25 years’ service, clause  (5) speaks of 20 years’ service.

17. The  employee  applied  on  26-11-1990  for  voluntary  retirement  effective  from  30-11-1990  and  also requested for waiver of notice of 3 months. He  did not report to duty right from 1-12-1990. Earlier on  12-12-1989, a charge-sheet was issued against him  for certain acts of misconduct. On 26-12-1990 he filed  a  reply  to  the  charge-sheet.  On 22-8-1992  another  charge-sheet  was  served  for  unauthorised  absence  and  one  more  on  18-9-1992.  On  30-9-1992  he  approached  the  Tribunal  contending  that  he  stood  retired on expiry of 3 months from notice, w.e.f. 26-2- 1990. The Tribunal accepted the said plea. Reversing  the  order  of  the  Tribunal,  this  Court  held  while  distinguishing  Dinesh  Chandra  Sangma  case1 and  other similar High Court judgments, that clause (2) of  the bye-law merely  gave a right  to make a request  and  the  request  would  become  effective  only  if  permitted. Under clause (2) of the bye-law, it was a  “right  to a request”  and not “a right  to retire”.  If  the  request  was  not  accepted  and  permission  was  not  granted, the employee could not claim that there was  an automatic retirement on the expiry of the period.  Even under clause (5) while it was true that there was  a non obstante  clause,  it  was only  an exception to  clause (2) to a limited extent,  i.e.,  completion of 20  years’  satisfactory  service  [rather  than  25  under  clause (2)] but the grant of “permission” to the request  seeking retirement was necessary even under clause  (5) and was not dispensed with. If under clause (2) a  person who had put in 25 years had to “seek to retire”  and had to be “permitted to retire”, a person with only  20  years’  service  under  clause  (5)  could  not  have  been  placed  on  a  better  footing,  it  was  held.  The  Court emphasised: (SCC pp.588-89, para 8)

“The words ‘seek retirement’ in para 5 indicate  that the right which is conferred by it is not the  right to retire but a right to ask for retirement.  The  word  ‘seek’  implies  a  request  by  the  employee  and  corresponding  acceptance  or  permission by HPMC. Therefore, there cannot  be automatic retirement or snapping of service  relationship on expiry of three months’ period.”

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On that basis, it was held that though the rejection of  the request was not communicated within the notice  period, there was no automatic retirement. There are  no such provisions in the case before us.

18. In  the  case  before  us  sub-rule  (1)  of  Rule  5.32(B)  contemplates  a  “notice  to  retire”  and  not  a  request  seeking  permission  to  retire.  The  further  “request”  contemplated  by  the  sub-rule  is  only  for  seeking  exemption  from the  3  months’  period.  The  proviso to sub-rule (2) makes a positive provision that  “where  the  appointing  authority  does  not  refuse  to  grant the permission for retirement before the expiry  of the period specified in sub-rule (1), the retirement  shall become effective from the date of expiry of the  said period. The case before us stands on a stronger  footing than Dinesh Chandra Sangma case so far as  the employee is  concerned.  As already stated Rule  2.2  of  the  Punjab  Civil  Services  Rules  Vol.  II  only  deals  with a  situation  of  withholding or  withdrawing  pension to a person who has already retired.”

25. In  Tek Chand vs. Dile Ram3, a three Judge Bench  

of this Court considered  S.K. Singhal   in paragraph 34 of the  

report and then went on to hold as follows:

35. In our  view, this judgment  fully supports the  contention  urged  on  behalf  of  the  appellant  in  this  regard. In this judgment, it is observed that there are  three  categories  of  rules  relating  to  seeking  of  voluntary retirement after notice. In the first category,  voluntary retirement automatically comes into force on  expiry of notice period. In the second category also,  retirement comes into force unless an order is passed  during notice period withholding permission to retire  and in the third category voluntary retirement does not  come  into  force  unless  permission  to  this  effect  is  granted by the competent authority.  In such a case,  refusal  of  permission  can  be  communicated  even  after  the  expiry  of  the  notice  period.  It  all  depends  upon  the  relevant  rules.  In  the  case  decided,  the  relevant  Rule  required  acceptance  of  notice  by  

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appointing  authority  and  the  proviso  to  the  Rule  further laid down that retirement shall come into force  automatically if the appointing authority did not refuse  permission during the notice period. Refusal was not  communicated  to  the  respondent  during  the  notice  period  and  the  Court  held  that  voluntary  retirement  came into  force  on  expiry  of  the  notice  period  and  subsequent order conveyed to him that he could not  be deemed to have voluntary retired had no effect.  The  present  case  is  almost  identical  to  the  one  decided by this Court in the aforesaid decision.

36. This Court in  B.J. Shelat v.  State of Gujarat  while  dealing  with  a  case  of  voluntary  retirement,  referring  to  the  Bombay  Civil  Service  Rules,  Rule  161(2)(ii) proviso and Rule 56(k) of the Fundamental  Rules, in a similar situation, held that a positive action  by the appointing authority was required and it  was  open  to  the  appointing  authority  to  withhold  permission indicating the same and communicating its  intention  to  the  government  servant  withholding  permission for voluntary retirement and that no action  can  be  taken  once  the  government  servant  has  effectively  retired.  Paras  9  and  10  of  the  said  judgment read thus: (SCC pp. 207-08)

“9. Mr Patel next referred us to the meaning of the  word  ‘withhold’  in  Webster’s  Third  New  International  Dictionary which  is  given  as  ‘hold  back’ and submitted that the permission should be  deemed  to  have  been  withheld  if  it  is  not  communicated.  We  are  not  able  to  read  the  meaning of the word ‘withhold’ as indicating that in  the  absence  of  a  communication  it  must  be  understood  as  the  permission  having  been  withheld. 10.  It  will  be  useful  to  refer  to  the  analogous  provision in the Fundamental Rules issued by the  Government  of  India  applicable  to  the  Central  Government  servants.  Fundamental  Rule  56(a)  provides that except as otherwise provided in this  Rule,  every government servant shall  retire from  service  on  the  afternoon  of  the  last  day  of  the  month  in  which  he  attains  the  age  of  fifty-eight  years.  Fundamental  Rule 56(j)  is  similar  to Rule  161(aa)(1)  of  the  Bombay  Civil  Services  Rules  conferring  an  absolute  right  on  the  appropriate  authority to retire a government servant by giving  

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not  less  than  three  months’  notice.  Under  Fundamental  Rule 56(k)  the government servant  is  entitled  to  retire  from  service  after  he  has  attained the age of fifty-five years by giving notice  of  not  less  than  three  months  in  writing  to  the  appropriate  authority  on  attaining  the  age  specified. But proviso (b) to sub-rule 56(k) states  that  it  is  open  to  the  appropriate  authority  to  withhold  permission  to  a  government  servant  under suspension who seeks to retire under this  clause. Thus under the Fundamental Rules issued  by the Government of India also the right of the  government  servant  to  retire  is  not  an  absolute  right but is subject to the proviso whereunder the  appropriate authority may withhold permission to a  government  servant  under  suspension.  On  a  consideration  of  Rule  161(2)(ii)  and the  proviso,  we  are  satisfied  that  it  is  incumbent  on  the  Government  to  communicate  to  the  government  servant its decision to withhold permission to retire  on one of the grounds specified in the proviso.”

In  this  decision  effect  of  Rule  56(k)  of  the  Fundamental Rules is also considered which answers  the  argument  of  the  learned  counsel  for  the  respondent on this aspect. It may also be noticed that  under  Rule  48-A  in  the  Government  of  India’s  decision  giving  instructions  to  regulate  voluntary  retirement it is stated:  

“Even where  the  notice  of  voluntary  retirement  given by a government servant requires acceptance  by the appointing authority,  the government  servant  giving  notice  may  presume  acceptance  and  the  retirement  shall  be  effective  in  terms  of  the  notice  unless the competent authority issues an order to the  contrary before the expiry of the period of notice.”

26. In the case of  Jaipal Singh vs. Sumitra Mahajan &  

Anr.10,  in an appeal from election petition, this Court  had an  

10 (2004) 4 SCC 522

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occasion  to  consider  the  difference  between   “voluntary  

retirement” and “resignation”.  This Court held thus:

10…….In the case of Reserve Bank of India v. Cecil   Dennis Solomon (2004) 9 SCC 461, this  Court  has  laid  down  that  in  service  jurisprudence  there  is  a  difference  between  “voluntary  retirement”  and  “resignation” as they convey different connotations. It  has  been  held  that  voluntary  retirement  and  resignation involve voluntary acts on the part  of the  employee to leave service  and though both  involve  voluntary  acts,  they  operate  differently.  One  of  the  basic distinctions between the two is that in the 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. In the case of resignation, a prior permission  is  not  mandatory  while  in  the  case  of  voluntary  retirement, permission of the employer concerned is a  requisite condition. Under Rule 16 of the 1958 Rules,  an employee who seeks voluntary retirement has to  give three months’ notice to enable the employer to  complete the designated mode of  acceptance.  (See  Halsbury’s Laws of England, 4th Edn., Vol. 9, p. 133.)  Lastly, in a given case, the appointing authority may  refuse to waive the said notice period which shows  that resignation may be unilateral whereas voluntary  retirement  is  bilateral.  A  similar  question  came  up  before this Court in the case of UCO Bank v. Sanwar  Mal [(2004) 4  SCC 412] in which this Court has inter  alia held  that  in  the  case  of  “resignation”,  the  relationship of employer and employee terminates on  acceptance  of  resignation  whereas  in  the  case  of  “retirement”,  voluntary  or  on  superannuation,  the  relationship continues for the purposes of payment of  retiral  benefits.  In the case of retirement,  there is a  nexus between such retirement and retiral benefits…. ”

27. The aforesaid decisions of  this Court   do provide  

some guidance  but the controversy  in hand has to be decided  

in  the  light   of  the  words   used  in  proviso   appended   to  

Regulation  12.   The  key  words  therein   are  that   voluntary  

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retirement  under clause (b) ‘shall be subject to approval’ of the  

competent authority.   In ‘Principles of Statutory Interpretation’  

(Seventh Edition, 1999), Justice G.P. Singh has quoted words  

of  Lord Macmillan in  Madras & Southern Maharatta Rly. Co.  

Ltd. vs. Bezwada Municipality11 which read thus:

“The proper function of a proviso is to except  and to deal with a case which would otherwise  fall  within  the  general  language of  the main  enactment  and its effect is confined to that case.”

28. In the aforesaid book, author has also quoted the  

opinion  of Lord Macnaghten  in  Local Govt. Board vs. South  

Stoneham Union12 as follows:

“The proviso may be a qualification of the preceding  enactment which is expressed in terms too general to  be quite accurate”.

29. In  the  case  of  Shah Bhoraj  Kuverji  Oil  Mills  and  

Ginning  Factory  vs.  Subhash  Chandra  Yograj  Sinha13,  this  

Court  held,  “…as  a  general  rule,  a  proviso  is  added  to  an  

enactment to qualify or create an exception to what is in the  

enactment…”  

11 AIR 1944 PC 71 12 (1909) AC 57, p.62 13 AIR 1961 SC 1596

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30. In the case of  CIT, Mysore etc. vs. Indo Mercantile  

Bank Ltd.14, this court observed:

“ The proper function of a proviso is that it qualifies  the generality of the main enactment by providing an  exception and taking out as it were,  from the main  enactment,   a  portion  which,   but  for  the  proviso  would fall within the  main enactment.  Ordinarily it is  foreign to the proper function of proviso to read it as  providing  something  by  way  of  an  addendum  or  dealing with a subject which is foreign to the main  enactment”.

31. In A.N. Sehgal & Ors1.,  upon which reliance  

has  been   placed  by  the  learned  counsel  for  the  

appellant,  this Court stated as follows:

“14. It  is  a  cardinal  rule  of  interpretation  that  a  proviso  to  a  particular  provision  of  a  statute  only  embraces  the  field  which  is  covered  by  the  main  provision.  It  carves  out  an  exception  to  the  main  provision to which it has been enacted by the proviso  and to no other. The proper function of a proviso is to  except and deal with a case which would otherwise  fall  within  the  general  language  of  the  main  enactment,  and its effect  is to confine to that  case.  Where the language of the main enactment is explicit  and  unambiguous,  the  proviso  can  have  no  repercussion  on  the  interpretation  of  the  main  enactment,  so  as  to  exclude from it,  by implication  what clearly falls within its express terms.

15. The scope of the proviso, therefore, is to carve  out  an  exception  to  the  main  enactment  and  it  excludes  something  which  otherwise  would  have  been within the rule.  It  has to operate  in the same  field  and  if  the  language of  the  main  enactment  is  clear, the proviso cannot be torn apart from the main  enactment nor can it be used to nullify by implication  

14 AIR 1959 SC 713

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what the enactment clearly says nor set at naught the  real object of the main enactment, unless the words of  the proviso are such that it is its necessary effect.”

32. The use of the word ‘shall’   in the proviso,  prima  

facie   leads to an inference  that provision is imperative.  There  

is nothing  in the context to suggest  that it is merely  directory.  

It is followed by the words, ‘subject  to approval’.  The effect of  

the  use  of words  ‘subject  to’ is to introduce  a condition.  The  

expression, “shall be subject to approval”  is indicative  of its  

intendment  that  the  voluntary  retirement  applied  by  the  

employees  covered  by  clause  (b)   is  effective  only   upon  

approval by the competent authority.  The effect of  these words  

is  to  introduce  a  condition  and  thereby  make  voluntary  

retirement  applied  by   employees  covered  by  category  (b)  

conditional  upon  its  approval   by  the  competent  authority.  

There is nothing to indicate in Regulation 12  that if employer  

decides   to  withhold   approval  of  voluntary  retirement,  such  

refusal   of  approval  must  be communicated to  the petitioner  

during the  period of  notice.   True it  is   that  notice of  three  

months for voluntary retirement given by an employee covered  

by  clause  (b)  remains   valid  even  if  no  communication  is  

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received within  notice period but it becomes effective  only on  

its approval by the competent authority.  As a  matter of fact,  

this seems to have been understood by both the parties.   The  

appellant  issued  a  notice  of  voluntary  retirement  under  

Regulation 12 (b) on September 30, 2005.  The notice period  

was   to  expire  on  December  31,  2005.    It  is  an  admitted  

position that the competent authority neither gave approval nor  

indicated disapproval to the appellant within the notice period of  

three months.     The employee never treated that there has  

been  cessation   of  employment  on  expiry  of  three  months  

notice period inasmuch as he continued to  attend his  duties  

after December 31, 2005 until  June 30, 2006.      It is only by  

his letter dated  June 8, 2006 that   the appellant requested the  

respondent  to  relieve  him  in  terms  of  his  notice  dated  

September  30,  2005  by   June  30,  2006  and  he  stopped  

attending  work from  July 1, 2006.  The letter    dated June 8,  

2006 does not make any material difference as the fact of the  

matter  is  that  after  expiry  of  notice  period,   the  appellant  

continued to attend his duties for many months thereafter.     By  

the  letter  dated  September  15,  2006   the  respondent  

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communicated to the appellant that his application for voluntary  

retirement  under  Service  Regulation  12(b)  has  not  been  

acceded to by the competent authority.   Since the notice for  

voluntary retirement by an employee who has not attained  55  

years  but  has  completed   20  years  of  continuous  service,  

under  proviso  appended  to  Regulation  12(b),  is  subject  to  

approval by the  competent authority and that approval was not  

granted,   the  voluntary  retirement  of  the  respondent  never  

came  into effect.     

33. It  may  be  that  voluntary  retirement  under  a  

particular  scheme  framed  by  an   employer  is  different  from  

voluntary retirement  provided in  the Service Regulations and  

some of the observations by the Division Bench with reference  

to voluntary retirement  under  a special  scheme may not  be  

relevant but the ultimate decision of the Division Bench does  

not suffer from any legal infirmity.

34. By way of foot-note,  we may record that before we  

proceeded  with  the  hearing  of  the  matter,   we   granted  an  

opportunity to the parties to resolve the dispute amicably and  

an offer was made by the respondents to the appellant in this  

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regard but the appellant   showed his disinclination to accept  

the offer made by the respondents.     

35. Be  that  as  it  may,   the  appeal  must  fail  and  is  

dismissed with no order as to costs.

……………………J   (Tarun Chatterjee)

……. ……………..J

       (R. M. Lodha)

New Delhi September 10, 2009.

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