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CASE NO.: Appeal (civil)  8476 of 2002

PETITIONER: Punjab & Sind Bank & Ors.                                

RESPONDENT: Mohinder Pal Singh & Ors.                                

DATE OF JUDGMENT: 28/10/2005

BENCH: H.K. Sema,S.B. Sinha & A.K. Mathur

JUDGMENT: JUDGMENT

                                O R D E R I.A. No. 7 in CIVIL APPEAL NO. 8476 OF 2002

                Application of a decision of this Court in Bank of India and Others  Vs. O.P. Swarnakar and Others [(2003) 2 SCC 721] falls for consideration in  this application.

       Before, however, we advert to the said question, we may notice the  admitted facts.

       Shri Amarjit Singh Sahni, the Applicant herein at all material times  was working in the Punjab and Sind Bank (for short "the Bank") as a  Cashier-cum-Clerk at the Zonal Office Haryana.  The Bank adopted a  scheme known as "the Punjab and Sind Bank Employee’s Voluntary  Retirement Scheme, 2000" (for short "the Scheme") which was to remain in  operation from 1.12.2000 to 31.12.2000.  In terms of the Scheme, those who  sought for voluntary retirement were entitled to accept ex gratia payments as  specified therein as also the other benefits which are as under:

"Amount of ex gratia An employee seeking voluntary retirement under  the Scheme will be entitled to the ex gratia amount  mentioned below in para (a) or (b), whichever is  less: (a) 60 days’ salary (pay plus stagnation increments  plus special pay plus dearness relief) for each  completed year of service; or (b) salary for the number of months of service left; Other benefits An employee seeking voluntary retirement under  the Scheme will be eligible for the following  benefits in addition to the ex gratia amount  mentioned in para 6 above of this Scheme: (i) Gratuity as per the Payment of Gratuity Act,  1972 or gratuity payable under the Service Rules,  as the case may be, as per existing rules. (ii)(a) Pension (including commuted value of  pension) as per PNB (Employees) Pension  Regulations, 1995. or (b) Bank’s contribution towards PF as per existing

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rules. (iii) Leave encashment as per existing rules."

       The Applicant opted to avail the benefit of the said Scheme wherefor  he filed an application on 15.12.2000.  He, however, withdrew the said offer  on or about 22.12.2000.  It is not the case of the Bank that prior thereto the  application filed by the application was accepted.

       It is furthermore not in dispute that on 29.01.2001, the Applicant filed  a writ petition in the Punjab and Haryana High Court being C.W.P. No. 1458  of 2001.  The matter came up before the High Court on 31.01.2001  whereupon notices were issued and an interim order was passed directing  that if the applicant had not been relieved from service, he would be allowed  to continue therein.  However, he was not permitted to join his service by the  Bank on the plea that he had been relieved from duties on 28.01.2001.   Employees who had, however, not been relieved were permitted to continue.

       It is furthermore not in dispute that the Applicant had a Saving Banks  Account with the Bank wherein a sum of Rs. 1422.21 was deposited on  9.03.2001.  According to the Applicant, as he apprehended that the  Respondent might deposit some other amount in terms of the  aforementioned Scheme in his account, he closed the same on or about  24.04.2001.

       The employees of the Bank as also other nationalized banks filed writ  applications questioning the legality and validity of the Scheme.  Some writ  applications were also filed seeking for issuance of writ of or in the nature of  mandamus directing the respective Banks to pay unto them their lawful dues  strictly in terms of the Scheme.  The said writ applications were allowed by  the Punjab and Haryana High Court holding the Scheme to be invalid in law.   The Bank as also the other banks filed applications for grant of special leave  before this Court questioning the correctness of the said judgment.   

       These appeals upon grant of special leave were disposed of on 17th  December, 2002 in O.P. Swarnakar (supra) wherein this Court opined:

(i)     If the Scheme had been amended as a result whereof the employees  entertained an apprehension that they would not even receive the  entire benefits, they were entitled to revoke the offer. (ii)    An offer made by an employee ipso facto would not amount to a  resignation in praesenti as it was to apply on a future date and  withdrawal thereof before acceptance thereof by the employer would  be valid in law.   (iii)   The offers could not be accepted before expiry of the Scheme. (iv)    The Scheme as such was not invalid in law. (iii)   However, if those employees had accepted the ex gratia payment or  any other benefit under the Scheme, they could not have resiled  therefrom.                   It is not in dispute that the Bank had not accepted the offer of the  Applicant before he withdrew therefrom.  It is also not in dispute that no  such communication was ever made to the Applicant.  It is furthermore not  in dispute that the Applicant was entitled to a sum of Rs. 10,50,000/- by way  of benefits in terms of the Scheme.  The said amount had not been offered to  the Applicant till date.   

       Even out of the total amount of leave encashment of Rs. 14,459.21, a  sum of Rs. 13,037/- was deducted and only a sum of Rs. 1,422.21 was  credited in the account of the Applicant on 9.03.2001.  The Bank accepts  that the Applicant had never been communicated that the said amount was  being deposited in terms of the Scheme.   When questioned as to why the  amount of Rs. 10,50,000/- or any other amount to which the Applicant might  have been entitled to by way of the Scheme had not been offered to the  Applicant, the learned counsel for the Bank faintly suggested that the same  could not be done as the Applicant closed his bank account.  We cannot

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accept such contention.  It is not a case where after the expiry of the Scheme,  an employee requested the Bank to be permitted to withdraw from option.   The only question which, therefore, arises for consideration is as to whether  the Applicant herein waived his right.

       Waiver of a right implies his knowledge of the existing right.  A  person cannot be said to have waived his right unless it is established that his  conduct was such so as to enable the Court to arrive at a conclusion that he  did so with knowledge that he had a right but despite the same acted in such  a manner which would imply that he has waived the same.

       The Applicant in the instant case not only withdrew his offer before  the same was accepted, he even filed a writ petition when he came to know  that the Bank had unilaterally accepted offers of certain employees despite  the same having been withdrawn and terminated their services with  immediate effect.  As noticed hereinbefore, the judgment in O.P. Swarnakar  (supra) was delivered on 17th December, 2002.  Immediately thereafter, he  issued a notice that he be permitted to report for duty as he had not accepted  the retiral benefits.  His representation went unheeded.  He thereafter sent  legal notices on 22nd February, 2003 and 28th March, 2003.  The stand of the  Bank at all material times was and still is that a sum of Rs. 14,459.21 was  paid to him by way of leave encashment of 31 days upon deduction of  income tax therefor.  But, it is accepted that at no point of time he had been  told that the said amount had been deposited in his account as a part of  benefit under the Scheme.  Even, there had been no communication to the  Applicant by the Bank that he is being paid out of the total leave encashment  of Rs. 14,459.21, after deducting a huge sum of Rs. 13,037/-, a sum of Rs.  1,422.21.  We fail to understand as to how out of the said amount of Rs.  14,459.21, a sum of more than Rs. 13,000/- could be deducted by way of  income tax.  Leave encashment benefit is one of the additional benefits.  The  main benefit of the Scheme indisputably was the ex-gratia payment.  An  employee even if continued in service would have been entitled to the  additional benefits which are in the nature of terminal benefits.

       It is also beyond anybody’s comprehension as to why despite expiry  of about five years the main benefit of the Scheme or in any event the total  benefit amounting to Rs.10,50,000/- to which the Applicant was otherwise  entitled to in terms of the Scheme had not been paid to him.   

       The Bank is a ’State’ within the meaning of Article 12 of the  Constitution of India.  We expect fair and better dealings from a ’State’ vis- ‘-vis its own employees.  It is not for an employee who did not accept that  his offer had validly been accepted in terms of the Scheme could not have  been expected to approach the Bank for payment of his dues.  It was for the  Bank to make such an offer.  The Scheme says so.  The law in this behalf is  also clear.  He had not even been offered his salary or notice pay.

       In a case of this nature, the court is entitled to take into consideration  the entire facts and circumstances of the matter and for that purpose the  conduct of the Bank is also relevant.

       We, therefore, in the peculiar facts of this case, are not in a position to  accept that by reason of such a deposit of a meager sum of Rs. 1,422.21 in  respect whereof the applicant had no knowledge, and in relation whereto he  had not been informed, and only because he closed the account so as to  prevent the Bank from depositing any further amount in his account cannot  be said to have waived his right to continue in service.

       The learned counsel appearing on behalf of the Bank relied upon the  decision of this Court in Punjab & Sind Bank and Another Vs. S. Ranveer  Singh Bawa and Another [(2004) 4 SCC 484].  Therein, having regard to the  facts and circumstances of the case, this Court clearly came to the  conclusion:

"8. From the averments herein, it is clear that

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Respondent 1 had two savings bank accounts Nos.  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, 25-1-2001 and 29-1-2001 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 principle  of estoppel extensively discussed by this Court in  the case of Bank of India v. O.P. Swarnakar  applies to the facts herein. The conduct of  Respondent 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."

                                               (Emphasis supplied)

       The said decision has no application to the fact of the present case.    

       The conduct of the Applicant herein does not indicate any knowledge  about the payment in his account or his willful appropriation thereof as to  constitute a waiver.  The Applicant had contended that even the Bank had  acted in a discriminatory manner as in the account of certain employees  some deposits had been made but in respect of others, no such deposits had  been made.  The said allegation also has not been denied.

       For the reasons aforementioned, this application is allowed.  The Bank  is hereby directed to permit the Applicant to join his duties.  He is entitled to  be reinstated in service with all consequential benefits and continuity in  service except for the period during which he was on leave.  However, in the  facts and circumstances of this case, we do not intend to award any interest  on the said sum or any costs against the Respondent.  The Respondent shall,  however, be entitled to deduct the amount actually paid to the Applicant or  payable in his account, if any.