D. Biswas, J. — This appeal is directed against the judgment and order dated 6.7.95 passed in Civil Rule No. 1879 of 1994 whereby the learned Single Judge quashed the order dated 23.3.94 (Annexure U) and 8.1.94 (Annexure S) passed by the appellant company. Being aggrieved thereby, the Oil India Ltd has preferred this appeal controverting the validity and proprietary of the above decision. 2. The respondent was serving as an Engineer in the appellant-company, He was sent on deputation to the Assam Industrial Development Corporation (Refinery and Petrochemical Division) as Manager in the year 1987. While on deputation, he applied for appointment in IBP Company Ltd, a Govt of India Enterprise. The IBP Company offered appointment to the respondent as Senior Manager (Project) in Numaligarh Refinery, Assam. On receipt of the aforesaid order, the respondent requested the appellant company to allow him to go on voluntary retirement as per Voluntary Retirement Scheme of the company. On April 10,1993, the request for voluntary retirement was accepted and the petitioner was provisionally released from the service of the appellant company wef 30.3.1993 (after office hours) subject to clarification from the Department of Public Enterprise. The said letter appended as Annexure M to the writ application is reproduced below : “Ref: PERS/09/DKG-637 April 10,1993 Shri DK Goswami Refinery & Petrochemical Division, Assam Industrial Dev Corporation Dr. B. Baruah Road, Guwahati-781007. Sub: Voluntary Retirement. Sir, We write with reference to your letter dated 25.10.93 wherein you expressed your desire to be released from the service of the company after close of working hours on 30.03.93 under the provisions of the Voluntary Retirement Scheme of the company and thereafter join the IBP Co Ltd for their Numaligarh Refinery Project. We also refer to the letter No. Com/Ind/1/92 dated 11th March 1993 from Shri AP Singh, Commissioner and Secretary to Govt of Assam, Industries Department whereby we were informed that the offer of appointment of you by IBP Co Ltd is as per the provision of the Memorandum of Understanding (Clause 14, Para 14.1)signed between the Govt of Assam and IBP Co Ltd. The Commissioner also clarified that IBP Co Ltd approached Department of Public Enterprises (DPE) through the Ministry of Petroleum and the DPE had confirmed that you could join IBP Co Ltd even after taking voluntary retirement from OIL. This implies that it is permissible to take up employment in a Public Sector Organisation immediately on being released from another Public Sector Undertaking under Voluntary Retirement Scheme (VRS). We are seeking a clarification on this matter from the DPE since many more executives from this organisation are likely to seek release under VRS to join other PSOs. 2.0 Notwithstanding the above, we confirm that your request has been accepted and you stand provisionally released from the services of the company on 'Voluntary Retirement' after the close of working hours on 30.03.93 subject to your clearing all your outstanding loans/dues. 3.0 We have advised our Accounts Department to prepare your final settlement accordingly except the voluntary retirement benefits for the time being which will be released on getting the clarification from DPE. You are requested to contact our Senior Accounts Officer (Staff) in this regard. 4.0 We take this opportunity to record out appreciation for your association with the company and wish you all success in your future endeavours. Yours faithfully, Oil India Limited (Lt Col P. Barua) Dy General Manager (Personnel) For Group General Manager.” 3. It would appear from the aforesaid letter that the request of the respondent to allow him to go on voluntary retirement was accepted provisionally in view of a letter written by the Commissioner and Secretary, Govt of Assam to the effect that Department of Public Enterprise confirmed that the writ petitioner could join IBP Company after taking voluntary retirement from the appellant company. Thereafter the appellant company, on receipt of clarification from the Department of Public Enterprises, Govt of India, vide letter dated 8th January, 1994 (Annexure S) informed that the release of the writ petitioner was being treated as resignation and not voluntary retirement. The said letter reads as below: "PERS/09/DKS-73 January 8,1994 Shri D.K. Goswami Shri D.K. Goswami Sr. Manager (Project) Sr. Manager (Project) Numaligarh Refinery Ltd. Numaligarh Refinery Ltd., C/o Sharma Guest House, Tarun Nagar, 4th Road JG Road, Golaghat (Assam) Guwahati-781005. Your request for benefits under Voluntary Retirement Scheme. Sir, We write further to our letter No. PERS/ 09/DKG-637 dated 10th April, 1993 and the subsequent correspondence on the subject, to inform you that IBP Co. Manager (Project) Sr. Manager (Project) Numaligarh Refinery Ltd. Numaligarh Refinery Ltd., C/o Sharma Guest House, Tarun Nagar, 4th Road JG Road, Golaghat (Assam) Guwahati-781005. Your request for benefits under Voluntary Retirement Scheme. Sir, We write further to our letter No. PERS/ 09/DKG-637 dated 10th April, 1993 and the subsequent correspondence on the subject, to inform you that IBP Co. Ltd as well as the Department of Public Enterprises (DPE) Govt of India have confirmed that there was no understanding between DPE and IB P Co Ltd on the matter of your voluntary retirement from OIL, for consequential employment with IB P Co Ltd, in the Numaligarh Refinery Project. Under the circumstances we are not in a position to extend the benefits under Voluntary Retirement Scheme to you, as you are not eligible for the same as per BPE guidelines on the VRS. 2.0 In view of the above, we are treating your case as release on resignation a and regularise your discharge from OIL accordingly. 3.0 By a copy of this letter we are advising our SAO (Staff)/SAO (Superannuation) to prepare your final settlement. You may please contact them for the final settlements. 4.0 We wish you all success in your future endeavours. Yours faithfully, Oil India Limited (Lt Col P. Bania) Dy General Manager (Personnel) For Group General Manager.” 4. The Annexure U, written on March 23,1994, by the appellant-company also shows that the request made by the writ petitioner to treat his case as voluntary retirement and not resignation was turned down. 5. The question, therefore, arises for consideration is whether the release of the petitioner on voluntary retirement, although provisionally, could have been treated as resignation. 6. Shri NM Lahiri, learned senior Advocate tried to justify the action of the appellant-company on the ground that his release was provisional and subject to clarification from the Department of Public Enterprises. The clarification given by the Department of Public Enterprises does not permit unconditional acceptance of the offer of voluntary retirement of an employee going to join any other Public Sector Undertaking. The clarification given by the Department of Public Enterprises does not permit unconditional acceptance of the offer of voluntary retirement of an employee going to join any other Public Sector Undertaking. The clarification reads as follows : “If they know that an employee has applied for a job in other PSE, in this situation the provision of BPE's OM dated 14.12.82,25.1.88 and 23.6.88 should be invoked by the lending organisation and cash equivalent of gratuity, earned leave, half pay leave standing to his credit, balance in the contributory Provident Fund should be transferred to the borrowing organisation and the benefits of VR Scheme should not be conceded. Each PSE, therefore, has to distinguish such cases themselves.” 7. The Voluntary Retirement Scheme was approved by the Board of Directors in its 263rd Meeting held on 23.11.90. The provisions relevant for the purpose of the dispute at hand are quoted below : “Voluntary Retirement Scheme for Executives : OIL Board of Directors in their 263rd Board Meeting held on 23.11.1990 approved the introduction of Voluntary Retirement Scheme for Executives. The salient features of the scheme are as below: (i) Executives who have completed 10 years service in the company or 40 years of age may seek voluntary retirement by a written request. (ii) The Management will have the right not to grant voluntary retirement for reasons to be recorded in writing. (iii) The terminal benefits available to the executive who seek voluntary retirement would be: (a) the balance of his provident fund accumulation as per CPF regulations. (b) cash equivalent of accumulated earned leave as per the existing rules. (c) gratuity as per the Gratuity Scheme applicable to the Executive. (d) 3 months' notice pay as per the conditions of service applicable to him.” 9. The provisions of the scheme as above shows that Executives who had completed 10 years of service in the company or 40 years of age may seek voluntary retirement by a written request. It further shows that right has been reserved by the Management not to grant voluntary retirement for reasons to be recorded in writing. If for any reason, the Management was not in favour of the release of the writ petitioner on voluntary retirement, they could have easily refused the request. It further shows that right has been reserved by the Management not to grant voluntary retirement for reasons to be recorded in writing. If for any reason, the Management was not in favour of the release of the writ petitioner on voluntary retirement, they could have easily refused the request. But instead of exercising the powers of refusal, the appellant-company vide letter No. PERS/09/DKG-637 dated April 10,1993 (Annexure D) released the petitioner from the services of the company on voluntary retirement. 10. It is clear from the aforesaid order dated April 10,1993 that acceptance of the request of the writ petitioner and his release with effect from 30.03.1993 was made on consideration of a letter written by the Commissioner and Secretary to the Govt of Assam, Industries Department, informing that the writ petitioner was appointed by IBP Company Ltd as per memorandum of understanding between the Govt of Assam and IBP Company and that the DPE had confirmed that the petitioner could join IBP Company Ltd even after taking voluntary retirement from it. The petitioner was released subject to further clarification on this matter from the Department of Public Enterprises. Letter No.Com/Ind/1/92 dated 11th March, 1993 (Annexure C) written by the Commissioner and Secretary also confirm that the aforesaid information was given by him to the appellant company. But later on receipt of information from IBP Company and the Department of Public Enterprises that there was no understanding between them, the appellant-company decided to treat the case of the respondent as release on resignation. 11. It would appear that the respondent under no circumstances appears to be instrumental in getting the letter written by the Commissioner and Secretary to the Govt of Assam. Rather the documents on record show that he had initially requested the authority to keep his request in abeyance till clarification is received from the Govt of India. Therefore, the respondent cannot be penalised for the lapses, if any, committed by others. 12. Shri Lahiri, learned Senior Advocate referring to the clarification dated 29th May, 1992 given by the Department of Public Enterprises insisted that the instructions in Serial No. 5 shows that an executive cannot go on voluntary retirement as a matter of right when he seeks such retirement to join another company. 12. Shri Lahiri, learned Senior Advocate referring to the clarification dated 29th May, 1992 given by the Department of Public Enterprises insisted that the instructions in Serial No. 5 shows that an executive cannot go on voluntary retirement as a matter of right when he seeks such retirement to join another company. The impugned letter dated 23.3.94 makes it clear that the petitioner was not eligible for the benefits under the Voluntary Retirement Scheme as he had taken up employment in another public sector undertaking. Shri Lahiri, learned senior counsel also pointed out that the Ministry of Finance vide circular dated 26.11.92 (Annexure V) clarified that the Voluntary Retirement Scheme should be in accordance with the guidelines given therein and one of such guidelines provide that the vacancy caused of voluntary retirement is not to be filled up and the retiring employee is not to be employed in any other company or concern belonging to the same management. According to Shri Lahiri, the provisions of the scheme have to be implemented along with the instructions and guidelines given by the Govt of India from time to time. 13. After a careful consideration of the submission as above, we are of the view that the instructions given by the Department of Public Enterprises in the year 1992 was already within the knowledge of the appellant-company even when the petitioner was released on voluntary retirement. They had the option as per provisions of the Voluntary Retirement Scheme either to accept or to reject the offer made by the respondent. But instead of refusal, they released the respondent subject to clarification from the Govt of India. The scheme does not provide for provisional retirement of an employee on voluntary retirement. That apart, the aforesaid instructions on which the appellant-company is now relying upon were not incorporated in the Voluntary Retirement Scheme by way of amendment. These instructions which were well within their knowledge were not taken note of by the appellant-company at the time of release. Therefore, the respondent whose case was considered in isolation and release order cannot be made to suffer for no fault of his own. The conditions on which the appellant-company are now relying ought to have been indicated in the scheme itself as it would be general application to all concerned. Therefore, the respondent whose case was considered in isolation and release order cannot be made to suffer for no fault of his own. The conditions on which the appellant-company are now relying ought to have been indicated in the scheme itself as it would be general application to all concerned. The appellant-company cannot at this belated stage relying upon certain communications from the DPE and the Finance Ministry convert the release order of the respondent on voluntary retirement to release on resignation. 14. The clarification given by the Department of Public Enterprises in column 5 shows that the management of public enterprises have been asked to exercise its own managerial discretion and produce while disposing of the cases of voluntary retirement. The clarification further requires the management to invoke the powers of office memorandum dated 14.12.1982, 25.1.1988 and 23.6.1988 issued by Department of Public enterprises if they find that an employee seeking vdluntary retirement has opted for a job in any other public sector undertaking. This condition also appear to be contrary to the provisions of section 27 of the Indian Contract Act. An employee going on voluntary retirement and not taking any job in any public sector undertaking will be entitled to full benefits under the Voluntary Retirement Scheme, but the said benefits will be restricted to certain amounts only if such employee takes fresh employment after retirement. The clarification given to this effect cannot be said to be in keeping with the spirit of the provisions of section 27 of the Indian Contract Act. The company while disposing of a request for voluntary retirement cannot discriminate in respect of benefits which an employee is entitled to on such retirement on consideration that the employee concerned was going to take over a job in some other company. A bare reading of the guidelines/circular shows that this was issued without any authority of law and against the basic principles behind 'voluntary retirement'. 15. The law relating to voluntary retirement is settled. The option lies with the employee, and once this option is exercised by an employee, the employer is duty bound to accept it if such option is as per the scheme of voluntary retirement. The respondent was entitled to go on voluntary retirement as per criteria laid down in the scheme. 15. The law relating to voluntary retirement is settled. The option lies with the employee, and once this option is exercised by an employee, the employer is duty bound to accept it if such option is as per the scheme of voluntary retirement. The respondent was entitled to go on voluntary retirement as per criteria laid down in the scheme. The employer had the powers to refuse the request in exercise of the provisions incorporated in the scheme itself. Since the option exercised by the respondent in the instant case was accepted by the appellant authority, such acceptance cannot be subjected to any condition as to the future employment which the employee concerned may take up. The employer cannot prescribe any term and condition in order to restrict future avocation of an employee after retirement. The bar for appointment after retirement may suit the employment policy of the public sector undertakings and they may be by way of policy decide not to appoint any retired employee of any other public sector undertakings. However, such a condition cannot allowed to operate as a clog on the right of the employees to seek voluntary retirement under any scheme. 16. The ratio laid down in Dinesh Chandra Sangma vs. State of Assam & others reported in AIR 1978 SC 17 although relatable to a Govt servant is indicative of the principles behind the concept of voluntary retirement. According to Supreme Court, once the option is exercised by a Govt servant as per provision of FR 56 (C), the question of acceptance of the request for voluntary retirement by the Govt servant does not arise. The acceptance is automatic on expiry of the period of notice. In Adhishesha Reddy P. & others vs. The Bharat Gold Mines Ltd & another reported in 1993 Lab 1C 67, it has been held that the request for voluntary retirement can be refused only when the rules or the service conditions give such option to the employer. There cannot be any difference in the principles for the public sector undertakings also. In the instant case, the d option was there with the authority under the scheme to reject the prayer of the respondent. That option not having been resorted to, the appellant-company cannot now on the basis of certain clarification from the Govt of India treat the case of the respondent as release on resignation. 17. In the instant case, the d option was there with the authority under the scheme to reject the prayer of the respondent. That option not having been resorted to, the appellant-company cannot now on the basis of certain clarification from the Govt of India treat the case of the respondent as release on resignation. 17. After a careful consideration of the judgment under appeal, we are of the view that this appeal has no merit and deserves dismissal. 18. Consequently, the appeal is dismissed. No order as to costs.