Resignation is a right of an Employee, Subject To Stipulations In Service Rules: Supreme Court Judgement
“To resign is a right of an employee who cannot be forced to serve in case he is not willing until and unless there is some stipulation in the rules or in the terms of appointment or disciplinary proceedings is pending or contemplated which is sought to be avoided by resigning from the services.”
The Supreme Court has held that it is the right of an employee to resign
and he cannot be forced to serve in case he is not willing until and
unless there is some stipulation in the rules or in the terms of
appointment or disciplinary proceedings is pending or contemplated which
is sought to be avoided by resigning from the services.
The bench then observed: “In view of the aforesaid enunciation of law
and on consideration of the provisions contained in Standing order in
the facts and circumstances of the case, we are of the opinion that
appellant has rightly terminated the relationship by serving the
requisite notice for resignation. To resign is a right of an employee
who cannot be forced to serve in case he is not willing until and unless
there is some stipulation in the rules or in the terms of appointment
or disciplinary proceedings is pending or contemplated which is sought
to be avoided by resigning from the services.
Read the Complete Order Here...
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7822 OF 2011
SANJAY JAIN - APPELLANT(S)
VERSUS
NATIONAL AVIATION CO. OF INDIA LTD. - RESPONDENT(S)
WITH
CIVIL APPEAL NO.10881/2018
(ARISING OUT OF S.L.P.(C) NO.27941/2017)
ORDER
CIVIL APPEAL NO.7822 OF 2011
Heard the learned counsel for the parties.
The appellant is aggrieved by the judgment and order dated 7.9.2010
passed by the High Court of Bombay, dismissing Writ Petition No.1740 of
2010. The question arises whether the appellant ceased to be an employee
of the respondent on 1st October 2006 since he had resigned on 1.9.2006
as 30 days period came to an end on the aforesaid date.
The appellant joined the services of Air India Ltd. as Assistant
Aircraft Engineer in Major Maintenance Division of Engineering
Department w.e.f. 1.9.1992. As per the terms and conditions, he was
required to serve Air India for a minimum period of five years, as per
the condition stipulated in the letter of his appointment. As on the
date he resigned, he had completed five years of service. The Certified
Standing Orders framed under the Certifying Officer Under Industrial
Employment (Standing Orders) Act, 1946 (in short “The Act of 1946”) as
introduced in Air India Ltd. and as applicable to the establishment,
required the employer to define the terms and the conditions of service
applicable to a workmen and inform him of the same. The Certified
Standing Order, inter alia, deals with the conditions under which an
employee can tender his resignation. He is entitled to receive the
certificate of service rendered at the time of cessation of his
employment. The Certified Standing Order confers a right on the employer
under the Act of 1946 not to accept the resignation if at the relevant
time of his resignation any disciplinary action is pending or is
contemplated.
As per the case set up by the employee, Certified Standing Order
prescribes that an employee can leave the service by serving 30 days'
notice or paying the sum equal to 30 days wages. The question of
acceptance arises in a case of a shorter notice, for resignation where
the question of payment of wages as involved. The resignation is
effective after 30 days even without its acceptance. The appellant
served notice for resignation on 1.9.2006 to take effect from 1.10.2006,
precisely on expiry of 30 days' period. There was no right available
with the Air India Ltd. to decline to accept the resignation as informed
vide communication dated 20.9.2006.
After resigning, there was cessation of employment with the Air India
Ltd. The appellant then joined Jet Airways on 3.10.2006. He approached
the Air India to release his pending dues, provident fund, gratuity, and
unpaid wages. Air India Ltd. issued a letter dated 16.7.2008 to the
effect that since his resignation had not been accepted, he was asked to
report for duty. The appellant raised the grievance in the centralized
grievance cell and served a reminder for payment of the dues.
Ultimately, the appellant filed writ application in the High Court of
Bombay on 23rd July 2010 which had been dismissed. Consequently, the
appeal has been filed in this Court.
It was urged by the learned counsel appearing on behalf of the appellant
that there was no necessity of acceptance of resignation under Standing
Order 18 framed under the Act of 1946. By virtue of the provisions
contained in Standing Orders, 30 days’ notice has to be given or wages
in lieu of the notice period has to be paid by a permanent workman. He
has relied upon the decisions in Punjab National Bank v. P.K. Mittal
(1989) Supp. (2) SCC 175, State of U.P. v. Achal Singh (2018) 10 SCALE
89, and Dinesh Chandra Sangma v. State of Assam. (1977) 4 SCC 441.
On the other hand, learned counsel appearing on behalf of the respondent
has relied upon the decision of this Court in Moti Ram v. Param Dev and
Anr. (1993) 2 SCC 725 to contend that acceptance of resignation was
necessary.
In order to appreciate the rival submissions, it is necessary to
consider the provisions contained in Standing Orders 17 and 18 of the
Standing orders framed under the Act of 1946 by Air India. Standing
Orders 17 and 18 are extracted hereunder:
“17. Termination of service:
(i) The services of a workmen may be terminated by the Competent Authority, without assigning reasons as under:
- (a) Of a permanent workman by giving 30 days notice in writing or wages in lieu of notice.
- (b) Of a workman on probation by giving 7 days notice by giving 24 hours notice in writing or wages/stipend in lieu of notice.
- (c) Of a temporary workman including apprentice by giving 24 hours notice in writing or wages/stipend in lieu of notice.
- (d) of badli or substitute without notice or wages in lieu of notice.
(ii) No notice is necessary for terminating the service of a workman employed for a specified period at the end of that period.
(iii) No notice is necessary for terminating the services of a casual or part-time workman.
(iv) A workman who is
absent without permission for a period of ten days or more will be
deemed to have voluntarily abandoned the services of the Company.
EXPLANATION:
For the purpose of this
Standing Order, the word “Wages” shall include all emoluments which
would be admissible, if the workman was on privilege leave.
18. RESIGNATION:
(i) No workman shall resign from the service of the Company except by
giving such notice as he would have received under Standing Order 17 if
his services were to be terminated, or compensation in lieu of such
notice, unless, at the request of the workman, the notice is waived or
shorter notice accepted in writing by the Competent Authority. Such
compensation shall be equivalent to the amount of the wages as defined
in the explanation to Standing Order 17 which the workman would have
drawn during the period by which the notice falls short of the
prescribed period, and shall be deemed to be a liability owed to the
company for the purpose of Regulation 22 (2) of the Air India Employees
Provident fund Regulations, 1954.
(ii) A resignation given under (I) above may be accepted with immediate
effect or at any time before the expiry of the period of notice, in
which case the workman shall be paid his wages in respect of the entire
period of notice given by him.
(iii) In case of shorter period of notice is accepted at the request of
the workmen, he shall be entitled to receive his wages only for the
actual number of days worked.
(iv) If a workman leaves the service of the Company without giving any
notice or by giving inadequate notice, such resignation shall be liable
to be construed as misconduct and may entail any of the punishments
prescribed under Standing Order 20.
(v) Notwithstanding anything contained in clause (I) and (iii) above, a
workman shall not be entitled to tender his resignation and any
resignation tendered by him shall not be effective or operative against
the company, unless the company decides to accept the resignation, if,
at the time when such resignation is tendered, disciplinary action is
pending against him or is intended or proposed to be taken against him
by the appropriate authority."
It is apparent from a bare reading of the provisions contained in
Standing Order 18 that workman has a right to resign from the services
by giving a notice of the period as prescribed under Standing Order 17
which provides termination of services by serving 30 days notice upon a
permanent workmen and seven days notice with respect to workman who is
on probation and temporary workman by serving a 24 hours notice. Thus,
for a permanent employee, a period of 30 days is provided to terminate
or to resign as apparent from a conjoint reading of provisions of
Standing Orders 17 and 18.
Clause 2 of Standing Order 18 provides that in case of resignation is
with immediate effect or any time before the expiry of notice period,
acceptance of resignation is required. Acceptance is not required in
case a notice has been given of 30 days. It is right of a workman to
serve and resignation tendered by him shall be effective or operative
with exception, if at the time when such resignation is tendered,
disciplinary action is pending against him or is intended or proposed to
be taken against him by the appropriate authority, unless the company
decides to accept the resignation.
In our opinion, from a bare reading of the provisions contained in
Standing order 18, it is crystal clear that a permanent employee has a
right to resign from the services by giving a notice of the period of 30
days as prescribed under Standing Order 17, and is entitled to obtain
certificate from the employer for the period services have been
rendered.
Clause 2 of the Standing Order 18 provides that in case of resignation
is submitted with immediate effect or any time before the expiry of
notice period, acceptance is necessary. Acceptance of resignation is not
required in case a notice has been given of 30 days. It would be
operative and effective on the lapse of the period. It is right of a
workman to serve an employer and to resign also by serving notice of 30
days. The bond to serve was only for five years as stipulated in the
order of his appointment. The period of bond to serve was admittedly
over. There is no other Standing Order or rule which puts a fetter on an
employee to resign or confers power on the employer to reject a
resignation.
No disciplinary proceeding was pending or contemplated against an
employee in the case when he resigned. The resignation became effective
on the lapse of 30 days period. There was no power with the employer as
per Standing Order 18 to reject such a resignation. Moreover, the bond
period of five years service was already over. A case of voluntary
retirement stands on a different footing than that of resignation.
Voluntary retirement is with certain civil consequences of monetary
benefits. It would depend upon the phraseology used in a particular
provision whether prayer made for the resignation or for voluntary
retirement is required to be accepted or it takes effect without
acceptance. In the facts of the case, since in the Standing Order 18,
there is no provision for acceptance of resignation. In case, notice is
served for the requisite period of 30 days, obviously, the appellant had
the right to resign from the services. The aforesaid conclusion is
buttressed by the following observations made in Punjab National Bank v.
P.K. Mittal (supra):
“5. We have given careful thought to this contention of the learned
counsel and we are of the opinion that the High Court was right in the
conclusion it reached. Clause (2) of regulation 20 makes it incumbent on
an officer of the bank, before resigning, to serve a notice in writing
of such proposed resignation and the clause also makes it clear that the
resignation will not be effective otherwise than on the expiry of three
months from the service of such notice. There are two ways of
interpreting this clause. One is that the resignation of an employee from service is a voluntary act on the part of an employee, he
is entitled to choose the date with effect from which his resignation
would be effective and give a notice to the employer accordingly. The
only restriction is that the proposed date should not be less than
three months from the date on which the notice is given of the proposed
resignation. On this interpretation, the letter dated 21st
January 1986 sent by the employee fully complied with the terms of this
clause. Though the letter was written in January 1986 the employee gave
more than three clear months' notice and stated that he wished to resign
with effect from June 30, 1986, and so the resignation would have
become effective only on that date. The
other interpretation is that, when an employee gives a notice of
resignation, it becomes effective on the expiry of three months from the
date thereof. On this interpretation, the respondent's
resignation would have taken effect on or about 21.4.1986 even though he
had mentioned a later date. In either view of the matter, the
respondent's resignation did not become effective till 21.4.1986 or
30.6.1986. It
would have normally automatically taken effect on either of those dates
as there is no provision for any acceptance or rejection of the
resignation by the employer, as is to be found in other rules, such as
the Government Services Conduct Rules.
6. Much reliance was placed on the terms of the proviso to clause (2) of
regulation 20 to justify the action of the bank in terminating the
respondent's services earlier but we do not think that the proviso can
be interpreted in the manner suggested by learned counsel for the bank.
The resignation letter of the officer has to give at least three months'
advance notice under the main part of the clause. What
the proviso contemplates is that in a case where the employee desires
that his resignation should be effective even before the expiry, of the
period of three months or without notice being given by him, the bank
may consider such a request and waive the period or requirement of
notice if it considers it fit to do so. That question does not
arise in the present case because the employee had not requested the
bank to reduce the period of notice or to waive the requirement of
notice. Dr. Anand Prakash seeks to interpret the proviso as empowering
the bank, even without any request on the part of the employee, to
reduce the period or waive the requirement of notice. In other words, he
says the bank has the power to accept the resignation with immediate
effect even though the notice is only of a proposed future resignation.
We do not think this contention can be accepted. As
we have already mentioned, resignation is a voluntary act of an
employee. He may choose to resign with immediate effect or with a notice
of less than three months if the bank agrees to the same. He
may also resign at a future date on the expiry, or beyond the period, of
three months but for this no further consent of the bank is necessary.
The acceptance of the argument of Dr. Ananad Prakash would mean that,
even though an employee might express a desire to resign from a future
date, the resignation can be accepted, even without his wishes, from an
earlier date. This would not be the acceptance of a resignation in the
terms in which it is offered. It amounts really to forcing a date of
termination on the employee other than the one he is entitled to choose
under the regulations. As rightly pointed out by the High Court, the
termination of service under clause (2) becomes effective at the
instance of the employee and the services of the employee cannot be
terminated by the employer under this clause."
(emphasis supplied)
In State of U.P. vs. Achal Singh (supra) the Court observed that it
would depend upon phraseology used in the particular provision whether a
prayer for resignation/voluntary retirement require acceptance.
Following observations have been made:
Para 13: In our
opinion, whether voluntary retirement is automatic or an order is
required to be passed would depend upon the phraseology used in a
particular rule under which retirement is to be ordered or voluntary
retirement is sought. The factual position of each and every case has to
be seen along with applicable rules while applying a dictum of the
Court interpreting any other rule it should be Pari Materia. Rule 56(2)
deals with the satisfaction of the Government to require a Government
servant to retire in the public interest. For the purpose, the
Government may consider any material relating to Government servant and
may requisition any report from the Vigilance establishment.
23. In the State of Haryana(supra), This Court also observed that 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 the 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 and the refusal of permission could also
be communicated after three months and the employee continues to be in
service. It is the aforesaid later observations made by this Court,
which are squarely applicable to the rule in question as applicable in
the State of Uttar Pradesh.”
In Dinesh Chandra
Sangma v. State of Assam (1977) 4 SCC 441, the provisions of rule 119 of
DISI rules came up for consideration. It observed;
15. It is a cardinal rule of construction that no word should be
considered redundant or surplus in interpreting the provisions of a
statute or of a rule Explanation 2 does not say an express or implied
term of employment but refers to "an express or implied term of his
contract of employment". If the language in Explanation 2 were
different, namely, an express or implied term of employment, instead of
"contract of employment", the position would have been different.
Explanation 2 in Rule 119 albeit a penal rule takes care to use the
words contract of employment" and necessarily excludes the two
categories of employment, namely, the one under the Central Government
and the other under the State Government. Explanation 2 only takes in
its sweep the third category of employment where the relationship
between the employer and the employee is one governed by a contract of
employment. Since FR 56 is a statutory condition of service which
operates in law, without reference to a contract of employment, there is
nothing inconsistent between Rule 119 and FR 56.
16. The appellant has voluntarily retired by giving three months' notice
not in accordance with an express or implied term of his contract of
employment, but in pursuance of a statutory rule. Explanation 2 to Rule
119 makes no mention of retirement under a statutory rule and hence the
same is clearly out of the way. The submission that rule 119 is
superimposed on F.R.56 has no force in this case.
17. The High Court committed an error of law holding that consent of the
Government was necessary to give legal effect to the voluntary
retirement of the appellant under F.R.56(c). Since the conditions of FR
56(c) are fulfilled, in the instant case, the appellant must be held to
have lawfully retired as notified by him with effect from 2nd August
1976.
In view of the aforesaid enunciation of law and on consideration of the
provisions contained in Standing order 18 in the facts and circumstances
of the case, we are of the opinion that appellant has rightly
terminated the relationship by serving the requisite notice for
resignation. To resign is a right of an employee who cannot be forced to
serve in case he is not willing until and unless there is some
stipulation in the rules or in the terms of appointment or disciplinary
proceedings is pending or contemplated which is sought to be avoided by
resigning from the services. Thus, we are of the opinion that the High
Court has erred in law in holding otherwise.
Learned counsel appearing on behalf of the respondent has relied upon
the decision in Moti Ram vs. Param Dev and Anr. (1993) 2 SCC 725 Para 16
and 18:
16. As pointed out by this Court, 'resignation' means the spontaneous
relinquishment of one's own right and in relation to an office, it
connotes the act of giving up or relinquishing the office. It has been
held that in the general juristic sense, in order to constitute a
complete and operative resignation there must be the intention to give
up or relinquish the office and the concomitant act of its
relinquishment. It
has also been observed that the act of relinquishment may take
different forms or assume a unilateral or bilateral character, depending
on the nature of the office and the conditions governing it. Union of
India v. Shri Gopal Chandra Misra & Ors., [1978] 3 SCR 12 at p. 21).
If the act of relinquishment is of unilateral character, it comes into
effect when such act indicating the intention to relinquish the office
is communicated to the competent authority. The authority to whom the
act of relinquishment is communicated is not required to take any action
and the relinquishment takes effect from the date of such communication
where the resignation is intended to operate in praesenti. A
resignation may also be prospective to be operative from a future date
and in that event, it would take effect from the date indicated therein
and not from the date of communication. In cases where the act of
relinquishment is of a bilateral character, the communication of the
intention to relinquish, by itself, would not be sufficient to result in
relinquishment of the office and some action is required to be taken on
such communication of the intention to relinquish, e.g., acceptance of
the said request to relinquish the office, and in such a case
the relinquishment does not become effective or operative till such
action is taken. As to whether the act of relinquishment of an office is
unilateral or bilateral in character would depend upon the nature of
the office and conditions governing it.
18. A contract of employment, however, stands on a different footing
wherein the act of relinquishment is of bilateral character and
resignation of an employee is effective only on acceptance of the same
by the employer. Insofar
as Government employees are concerned, there are specific provisions in
the service rules which require acceptance of the resignation before it
becomes effective. In Raj Kumar v. Union of India, [1968] 3 SCR 857, it
has been held "But when a public servant has invited by his letter of
resignation determination of his employment, his services normally stand
terminated from the date on which the letter of resignation is accepted
by the appropriate authority, and in the absence of any law or rule
governing the conditions of his service to the contrary, it will not be
open to the public servant to withdraw his resignation after it is
accepted by the appropriate authority. Till the resignation is accepted
by the appropriate authority in consonance with the rules governing the
acceptance, the public servant concerned has locus poenitentiae but not
thereafter".
(emphasis supplied)
Relying on said decisions, the learned counsel for the respondent has
contended that in the case of a contract of employment same is required
to be terminated. It cannot be unilateral action. The factual matrix of
the aforesaid decision was totally different. Though the employee had
tendered the resignation it had not been accepted on the date on which
he filled the nomination form in order to contest an election. In that
context, observations have been made. However, it was observed that it
would depend upon the phraseology used in a particular provision whether
there is a necessity for acceptance or any other formality is required
when it could be said person ceases to hold the office. With all
fairness, the aforesaid proposition has not been disputed by the learned
counsel appearing on behalf of the respondent. In this case, there is
no such requirement of acceptance by such an employee under the
provisions of the Standing Order 18 read with 17. Thus, the decision in
Moti Ram (supra) is not applicable.
Resultantly, we allow the appeal. The judgment and order passed by the
High Court and the order passed by the respondent declining to accept
the resignation are hereby quashed. The benefits which may be available
shall be paid to the appellant. Provident fund with the prevailing rate
of interest from time to time. The gratuity, if payable or any other
benefit, shall be paid with interest @ 6% per annum. Let the outstanding
amount, if any, be paid within a period of three months from today.
CIVIL APPEAL NO.10881/2018
(Arising out of S.L.P.(C) No.27941/2017)
Leave granted.
This appeal being similar is also allowed in the same terms of Civil Appeal No.7822 of 2011 decided today.
..................J.
(ARUN MISHRA)
..................J.
(VINEET SARAN)
NEW DELHI,
1ST NOVEMBER 2018
ITEM NO.114 COURT NO.7 SECTION IX
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Civil Appeal No(s).7822/2011
SANJAY JAIN Appellant(s)
VERSUS
NATIONAL AVIATION CO. OF INDIA LTD. Respondent(s)
WITH
SLP (C)No.27941/2017
Date : 01-11-2018 These matters were called on for hearing today.
CORAM :
HON'BLE MR. JUSTICE ARUN MISHRA
HON'BLE MR. JUSTICE VINEET SARAN
For Appellant(s) Mr. Mohan Bir Singh,Adv.
- Mr. Udit Gupta,Adv.
- Mr. Anup Jain,Adv.
- Mr. Ravi Kumar Tomar, AOR
- M/S.Udit Kishan And Associates, AOR
For Respondent(s) Mr. Shubha S.Saxena,Adv.
- M/S.M.V.Kini & Associates, AOR
Leave granted in SLP (C)No.27941/2017.
The appeals are allowed in terms of the signed order.
(B.Parvathi) (Jagdish Chander)
Court Master Branch Officer
