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The denial of voluntary retirement does not mitigate the legal consequences that flow from resignati

BSES YAMUNA POWER LTD.VS. SH. GHANSHYAM CHAND SHARMA & ANR., CIVIL APPEAL NO. 9076 OF 2019 @SLP (C) NO. 6553 OF 2018. – 5 DECEMBER 2019.

The bench encompassing Justice Dr Dhananjaya Y Chandrachud and Justice Hrishikesh Roy collectively pronounced judgment on the distinction between “voluntarily retired‟ or “resigned‟ . The first respondent was denied pensionary benefits by the appellant on two grounds. First, that he had not completed twenty years of service, making him ineligible for thegrant of pension. Second, in any case, by resigning, the first respondent had forfeited his past services and therefore could not claim pensionary benefits. 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.  For that it relied on the decision in Asger Ibrahim Amin v LIC.

MR C U Singh learned Senior Counsel appeared on behalf of the appellants and they argued that a three judge Bench in Senior Divisional Manager, LIC v Shree Lal Meena overruled the view taken in Asger Ibrahim Amin. They clearly pointed out the decisions in Shree Lal Meena I and Shree Lal Meena II.

The Court observed the following:

  1. There was 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 had completed the requisite number of years to qualify for voluntary retirement.

  2. 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.

  3. Where an employee has resigned from service, there aroused no question of whether he has in fact “voluntarily retired‟ or “resigned‟. The decision to resign was materially distinct from a decision to seek voluntary retirement.

  4. 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 19725 stated that upon resignation, an employee forfeits past service.

  5. If it was re-classified that his resignation as a case of voluntary retirement, that would obfuscate the distinction between the concepts of resignation and 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‟ was set aside.

  6. The denial of voluntary retirement does not mitigate the legal consequences that flow from resignation.

The Court pronounced the following:

“The denial of voluntary retirement cannot be invoked before this Court to claim pensionary benefits when the first respondent has admittedly resigned. 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. 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.”

Jumanah Kader

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