GODA RAGHURAM, J. ( 1 ) BY order bearing Reference No. HO: Per: pna: 5086:2001, dated 12-12-2001, pursuant to a departmental enquiry and in purported exercise of the power under Rule 21 (1), 26 (3) read with Rule 23 (e) of the General insurance (Conduct, Discipline and Appeal) rules, 1975, the 2nd respondent disciplinary authority imposed on the petitioner a major penalty of reduction to a lower stage by three steps in the time-scale applicable to the post of Assistant Manager while informing him of a right of appeal under Rule 31 of the rules. ( 2 ) THE petitioner assails the above order on the ground that it is illegal, incompetent and without jurisdiction and also seeks a declaration that there is no subsisting relationship of employer and employee between the petitioner and the respondents and also seeks the relief of a direction to the respondents to release the terminal benefits to him as he is entitled to. ( 3 ) ON facts, the petitioner was initially entered service in the United India insurance Company Limited in the year 1984 as Assistant Administrative Officer. After having his promotions as administrative Manager and Assistant manager he was promoted in September, 1997 as Divisional Manager. By letter dated 25-8-1999, the petitioner communicated the intent to resign from service with effect from 24-9-1999 with a request that the notice period be counted from the date of the letter i. e. , 25-8-1999. This letter further requested waiver of the balance notice period of two months on the ground that the petitioner has to his credit sufficient earned leave. ( 4 ) IN response thereto, the employer through the Regional Manager replied by the letter dated 23-9-1999 (received by the petitioner on 30-9-1999), that the competent authority does not accede to the petitioner s request for waiver of notice period and that the decision regarding the acceptance or otherwise of the petitioner s resignation would be intimated to him in due course. Thereafter by the Office Order dated 7-10-1999 the petitioner who was working at the Divisional Office No. IX, Hyderabad was transferred to the Regional Office, hyderabad and was directed to report to the officer in-charge of the Region and to take charge of the post forthwith. Another communication dated 8-10-1999 was addressed to the petitioner calling upon him to hand over charge to the named Assistant manager. Another communication dated 8-10-1999 was addressed to the petitioner calling upon him to hand over charge to the named Assistant manager. ( 5 ) THE petitioner addressed a letter dated 11-10-1999 to the 1st respondent sensitizing the addressee about his resignation letter dated 25-8-1999 seeking relief from service with effect from 24-9-1999, that he has not received any communication thereupon till 24-9-1999, that he received on 30-9-1999 a communication to the effect that waiver of notice period was not acceded to and that in the circumstances, he is agreeable to pay in lieu of the notice period, the gross salary for he short fall of the notice period, required to be given by him as per Clause IV of the "guidelines governing Resignation and voluntary Retirement of Officers". This letter also stated that the petitioner authorizes the company to deduct the above and other dues from his terminal benefits. The letter ended by recording that as per the instructions of the Regional Manager, he has handed over the charge of the Divisional office to his successor at the close of office hours on 11-10-1999 and reiterated the request for immediate relief from duties. ( 6 ) THE Regional Manager by his letter dated 12-10-1999 informed the petitioner that his representation dated 11-10-1999 was being forwarded to the 1st respondent for appropriate action. The 2nd respondent on 25-10-1999 further informed the petitioner by a letter that since action is being contemplated against him for certain irregularities noticed against him in certain claims recommended/approved by him, it is not possible to accept his letter of resignation from the services of the company. This communication dated 25-10-1999 was received by the petitioner on 27-10-1999. Another letter dated 1-11-1999 was addressed to the petitioner stating that he has not so far reported for duty at regional Office, Hyderabad nor has any application from the petitioner requesting for sanction of leave been received, that he is advised to report for duty at Regional Office, hyderabad immediately failing which his absence will be treated as an unauthorised one and appropriate action initiated as per applicable rules. To the above letter, the petitioner replied by his letter dated 8-11-1999 stating that he had already submitted his resignation, authorized the respondents to deduct from his terminal benefits the gross salary for the short fall in the notice period as permissible under clause 4 of the relevant guidelines, that he had been relieved from duties with effect from 11-10-1999 and therefore requests his terminal benefits and other dues be settled immediately. ( 7 ) BY the show-cause notice dated 16-11-1999, the petitioner was called upon to explain why his absence from 12-10-1999 being unauthorised, action be not initiated against him, under Rule 18 of the Rules. This show-cause notice after setting out the chronology of events recorded that the competent authority had not accepted the petitioner s resignation and therefore the petitioner continues to be on the rolls of the company. ( 8 ) THE petitioner submitted his explanation to the show-cause notice by his communication dated 23-11-1999 reiterating the correspondence already adverted to, that in the circumstances he is deemed to have been relieved from the service of the company with effect from 11-10-1999 and thus he cannot be said to have been absent unauthorisedly. This explanation also reiterated the request for settlement of terminal benefits and other dues. Thereafter, by a covering letter dated 24-11-1999, a cheque dated 26-10-1999 was sent to the petitioner representing his salary for the month of October, 1999. In response to this letter, the petitioner replied to the employer stating that he accepts the cheque and the amount contained therein is accepted partly towards salary upto 11-10-1999 and the balance towards terminal benefits payable to him by the employer. ( 9 ) AT this stage, by the Memo bearing reference No. HO: Per: JR:5473:99 dated 29-11-1999 it was communicated to the petitioner that a disciplinary enquiry is being initiated under Rule 25 of the Rules. This memo was accompanied by one Article of Charge alleging failure in maintenance of devotion to duty by unauthorized absence for a period of 46 days from 12-10-1999 to 26-11-1999. It also communicated to the petitioner the statement of imputations of misconduct/misbehaviour in support of the article of Charge. The petitioner assailed this initiation of disciplinary proceedings in writ Petition No. 18706 of 2000. The writ petition was disposed of by this Court by the judgment dated 17-8-2001. It also communicated to the petitioner the statement of imputations of misconduct/misbehaviour in support of the article of Charge. The petitioner assailed this initiation of disciplinary proceedings in writ Petition No. 18706 of 2000. The writ petition was disposed of by this Court by the judgment dated 17-8-2001. This Court recorded that it does not express any opinion on the merits of the subject matter and that the respondents are directed to pass appropriate orders based on the enquiry report within a period of eight weeks from the date of receipt of the enquiry report. ( 10 ) IN the circumstances above, the petitioner submitted his explanation to the charge memo on 16-12-1999 reiterating his contention that there was no question of unauthorized absence as he had exercised the option available under the rules to opt for retirement and was also relieved from the service of the company after handing over the charge to his successor and reliever. The contentions in the explanation are substantially to the effect that there was no relationship of master and servant consequent on his having effectively exercised the option of resignation. ( 11 ) AFTER a process of enquiry, Enquiry officer submitted his report dt. 24-10-2001 holding the charge of unauthorised absence proved. Thereupon, a show-cause notice dated 19-11-2001 was issued. The petitioner submitted his explanation to the enquiry report by his letter dated 6-12-2001 addressed to the disciplinary authority. Thereupon the impugned order dated 12-12-2001 was passed imposing on him penalty of reduction of pay to a lower stage by three steps in the pay scale of Assistant manager. ( 12 ) MEANWHILE, by a charge memo dated 31-3-2000 the petitioner was alleged to have committed misconduct in recommending and approving certain claims during his active service with the respondent. The disciplinary proceedings in that regard are still pending. ( 13 ) IN this writ petition, the petitioner seeks a declaration that there is no subsisting relationship of master and servant and on that footing assails the initiation of disciplinary proceedings as well as its culmination in the impugned order. ( 14 ) THE question that arises is whether apropos the petitioner s letter of resignation dated 25-8-1999, the petitioner s service relationship with the respondent stood determined and if so with effect from which date and with what consequences? ( 14 ) THE question that arises is whether apropos the petitioner s letter of resignation dated 25-8-1999, the petitioner s service relationship with the respondent stood determined and if so with effect from which date and with what consequences? ( 15 ) HEARD Sri G. Vidya Sagar, learned counsel for the petitioner and Sri Ramesh ranganathan, learned Additional Advocate general appearing for the respondents instructed by Sri M. V. K. Viswanadham. ( 16 ) THE 2nd respondent has filed a counter-affidavit on behalf of the respondents. The defence theme of the respondent to the relief sought is that an offer of resignation does not become effective unless it is positively accepted by the employer. It is also asserted in the counter-affidavit that the petitioner was in a hurry to submit his resignation and leave the company in view of charge-sheets having been issued to three of the Officers of the Company at that point of time whereby the petitioner was apprehending that he would also be charge-sheeted because of possible enquiries into his role in certain transactions. It is also stated that the C. B. I. is looking into some of the transactions and the answering respondent is not aware of the outcome of those investigations by the c. B. I. The counter-affidavit also asserts at paragraph-34 that the reason for non- acceptance of the petitioner s resignation was that at the relevant time action was being contemplated against him for irregularities noticed in certain claims recommended/approved by him. It is also stated that the petitioner s offer of resignation was not accepted for the above reasons and that this is substantiated by the fact that subsequently departmental enquiry proceedings was initiated in respect of the petitioner s alleged misconduct in recommending/approval of certain claims, by the issuance of the memorandum of charge dated 31-3-2000. The impugned order penalizing the petitioner for proven misconduct of unauthorised absence is justified on the ground that there was a subsisting relationship of employer and employee consequent on the rejection of the petitioner s offer of resignation. As no issue has been joined on the infirmity of the impugned order on the traditional ground of any procedural infirmity in the conduct of disciplinary proceedings, this Court is not called upon to go into that aspect of the matter. As no issue has been joined on the infirmity of the impugned order on the traditional ground of any procedural infirmity in the conduct of disciplinary proceedings, this Court is not called upon to go into that aspect of the matter. ( 17 ) THE only question that falls for determination is whether there was a subsisting employer and employee relationship between the petitioner and the respondent as on the date of issuance of the memorandum of the charges i. e. 29-11-1999, by which disciplinary proceedings in respect of the alleged misconduct of unauthorized absence was initiated. ( 18 ) IN view of the factual and legal profile presented to this Court, if the memorandum of Charges dated 29-11-1999 is competent, then the punishment by the impugned order is unassailable. If it is not for the reason that there was no subsisting jural relationship of employer and employee on 29-11-1999, then both the initiation of departmental enquiry and its culmination by the impugned order would be incompetent and illegal. Legal Regime: ( 19 ) IT is the synoptic refrain of the counsel for the respective parties that the only statutory instrument having some bearing on the question is the General Insurance (Termination, Superannuation and retirement of Officers and Development staff) Scheme, 1976, (for short the 1976 scheme ), which has been issued in s. O. No. 627 (E) by the competent authority- central Government in purported exercise of the powers under Section 16 (l) (g) of the General Insurance Business (Nationalisation) Act, 1972. It is the admitted position that the petitioner is an Officer of the respondent and that the respondent is a company within the meaning of the provisions of the 1976 Scheme, which defines the Company as including the respondent company. ( 20 ) PARAGRAPH-5 of the Scheme being relevant for the resolution of the list presented in this case is reproduced: " (5) Determination of Service: (1) An officer or a person of the development Staff, other than one on probation, shall not leave or discontinue his service without first giving notice in writing to the appointing authority of his intention to leave or discontinue the Service and the period of notice required to be given shall be three months. Provided that such notice may be waived in part or in full by the appointing authority at its discretion. Provided that such notice may be waived in part or in full by the appointing authority at its discretion. Explanation I: in this Scheme, month shall be reckoned according to the English calendar and shall commence from the day following that on which the notice is received by the Corporation or the company, as the case may be; explanation II: a notice given by an officer or a person of the Development Staff under this paragraph shall be deemed to be proper only if he remains on duty during the period of notice and such officer or person shall not be entitled to set off any leave earned against the period of such notice. (2) In case of breach by any officer or a person of the Development Staff of the provisions of sub-paragraph (1) he shall be liable to pay to the Corporation or the Company concerned, as the case may be, as compensation a sum equal to his salary for the period of notice required of him which sum may be deducted from any monies due to him. " ( 21 ) ). Reliance is placed on behalf of the petitioner on paragraph-8 in Chapter-XIV of manual of Instructions governing various aspects including service conditions in the respondent company. It is contended on behalf of the respondent that this Manual is not statutory as it is an instrument of instructions to contour the discretion of the administrative authorities of the respondents in dealing with administration matters. However, in the context of the fact that the respondent is admittedly an instrumentality of the State, applicable principles of Constitutional and Public Law would posit an obligation on the respondent to rigidly conform to the procedural and substantive standards it has set for itself in the governance of its affairs vide the principle enunciated in Vitarelliv. Seaton and others quoted with approval in Ramana dayaram Shetty v. The International Air Port authority of India and others. ( 22 ) PARA-8 of the Manual occurring in chapter XIV, in particular, paragraph 8. 1 deals with resignation of employees belonging to Class I and II. It is an admitted position that the petitioner is an Officer belonging to Class II. The relevant portion of the Manual is as under. ( 22 ) PARA-8 of the Manual occurring in chapter XIV, in particular, paragraph 8. 1 deals with resignation of employees belonging to Class I and II. It is an admitted position that the petitioner is an Officer belonging to Class II. The relevant portion of the Manual is as under. "an Officer or a Development Officer shall not leave or discontinue his/her service without giving notice in writing to the appointing authority of his intention and the period of notice shall be three months. Such a notice maybe waived in part or in full by the appointing authority at its discretion. In case of breach, he/she shall be liable to pay the company as compensation a sum equal to his/her salary for the notice period which may be deducted from any amounts due to him. " ( 23 ) BEFORE proceeding on an analysis of the precedents cited on behalf of the respective parties, it is proper to deal with the rival interpretations on the aforesaid two instruments as urged by he counsel for either side. ( 24 ) SRI G. Vidya Sagar, learned counsel for the petitioner would urge that the only consequence of the non-acceptance of the petitioner s request for waiver of the notice period would be the obligation of the petitioner to pay the employer compensation equivalent to his gross salary for the balance of the notice period from 25-9-1999 to 24-11-1999. To buttress this contention, petitioner relies both on paragraph 5 (2) of the 1976 Scheme and paragraph 8. 1 of the Manual. It is contended on behalf of the petitioner that paragraph 5 (2) of the 1976 Scheme enjoins a liability on an Officer of the respondent to pay to the respondent as compensation a sum equivalent to the salary for the period of notice required of him, which sum may be deducted from monies due to him, on account of a breach by him of the provisions of the paragraph 8. 1. In fine, it is contended that while giving of a notice is mandatory, an employee seeking to resign may either give the respondent employer three months notice after which he proposes to avail the option of discontinuing service or may request the part or full waiver of the notice period or may without doing either of the above, breach the requirements of paragraph 5 (1 ). In the third eventuality, contends Sri Vidya Sagar, the singular liability of an employee would be the liability enjoined by paragraph 5 (2) but would not result in his resignation being incompetent. ( 25 ) TO the contrary contends Sri Ramesh ranganathan, learned senior counsel for the respondents, Explanation (II) to paragraph 5 (1) ordains that a notice given under paragraph 5 (1) shall be deemed to be proper only if the employee remains on duty during the period of notice and such officer or person shall not be entitled to set off any leave earned against such period of notice. Respondents claim that on a true and fair construction of Explanation (II), the interpretation is irresistible that discontinuance from service during the notice period by an employee will render the notice of discontinuance or resignation as of no effect. Learned counsel for the respondents would interpret paragraph 5 (2) to mean an additional liability cast on the employee to pay compensation in a sum equal to the employee s salary for the period of notice and not that resignation would take effect and the only liability would be payment of the compensation amount as ordained in paragraph 5 (2) as contended by the petitioner. ( 26 ) IT was also faintly urged on behalf of the respondents, but apparently without much conviction that the 1976 scheme, which traverses the area of superannuation, termination and retirement of officers, does not deal with resignation. In any event, the text, structure and the phraseology employed in paragraph-5 warrants rejection of this contention, however faintly urged. Paragraph-5 deals with leaving or discontinuing service. Broad language has been employed and must be given effect to. Leaving or discontinuing service in any manner is the subject matter of paragraph-5 and there appears no warrant for restricting it by reference to the title of the Scheme. Even otherwise, the expression retirement of Officers is a term of wide import. It takes in retirement by means including resignation. ( 27 ) ON an analysis of paragraph-5 of the 1976 Scheme, which is admittedly statutory, there is no warrant for the interpretation that Explanation-II to paragraph 5 (1) is outside the scope of the area covered by paragraph 5 (2 ). Explanation-II is a draftsman s devise to particularize and delineate the landscape covered by paragraph 5 (1 ). ( 27 ) ON an analysis of paragraph-5 of the 1976 Scheme, which is admittedly statutory, there is no warrant for the interpretation that Explanation-II to paragraph 5 (1) is outside the scope of the area covered by paragraph 5 (2 ). Explanation-II is a draftsman s devise to particularize and delineate the landscape covered by paragraph 5 (1 ). It emphasizes and reiterales the requirements of a notice in writing that is required to be given by an Officer or person of a development staff before leaving or discontinuing service. In fact, the first part of explanation (II) is a particularisation of the requirement of paragraph 5 (1 ). The intention underlying paragraph 5 (1) is to avoid hardship to the employer by sudden cessation from active service by an employee with a discretion vested in the appointing authority to waive the notice period at his discretion. This obligation of the employee to continue in service during the notice period preceding the date of discontinuance from service is effectuated by prescription of the sanction in paragraph 5 (2) that on breach of the requirement of continuance in service during the notice period, or generically any other condition contained in paragraph 5 (1), the employee committing the breach shall be liable to pay the employer the compensation enjoined therein. The regulation has identified the administrative concerns, and has incorporated the sanction for the breach by the Employee of the notice period by providing for compensation to the employer for the consequent administrative inconvenience occasioned by the breach of the notice requirement on the part of the employee. Inasmuch as, paragraph 5 (2) explicitly deals with not only the compensation to be paid by the employee for the breach of the notice period but also provides that such compensation may be deducted from any monies due to him, the contentions urged on behalf of the respondent by Sri Ramesh Ranganathan do not commend acceptance by this Court. ( 28 ) THOUGH not statutory as contended, paragraph 8. 1 in Chapter XIV of the Manual which has been extracted above is also an instrument of instructions to be followed by the respondent employer. It needs to be noticed that paragraph 8. 1 is a reiteration of the generic contents of paragraph 5 of the 1976 scheme. Paragraph-8, and in particular paragraph 8. 1 of the Manual deals with resignation of employees. It needs to be noticed that paragraph 8. 1 is a reiteration of the generic contents of paragraph 5 of the 1976 scheme. Paragraph-8, and in particular paragraph 8. 1 of the Manual deals with resignation of employees. (2) ANALYSIS OF CASE LAW: ( 29 ) ON behalf of the petitioner, reliance is placed firstly on a decision of the Division bench of the Patna High Court in an unreported decision in Prathiba Thukral v. United India Insurance Company Limited and others in Writ Petition No. 183 (SB)/99. It needs to be noticed that the employer respondent in that case is also the respondent here, namely, United India insurance Company Limited. On facts, the petitioner in the case was an Assistant administrative Officer in the Lucknow branch of the respondent who was promoted as an Administrative Officer in 1986. When she was posted as Assistant manager at Meerut, she tendered resignation on 9-6-1998. In reply thereto, the respondent employer addressed the employee on 2-7-1998 stating that three months notice is essential for tendering resignation failing which three months salary from her terminal dues will be liable to be deducted, that she should furnish a declaration about her non-employment with any other employer having recognized provident Fund and that her response to the letter is requested. By her reply dated 21-7-1998, the petitioner submitted her reply on 21-7-1998. While so, a charge-sheet dated 25-9-1999 was served, thereafter regular departmental proceedings were initiated and at that stage the writ petition was filed seeking invalidation of the order dated 15-3-1999 whereby the petitioner s request for resignation was rejected. On an analysis of the provisions of Paragraph-8 of the home Rules (Establishment Manual) of the respondent-company which has been extracted herein supra, the Division Bench of the Patna High Court came to the conclusion that if an employee resigns from the post, he has to give three months notice and in case of default of the notice period, there is a liability to pay compensation in a sum equivalent to his or her salary for the notice period which could be deducted from any amount due to such employee and that in the circumstances, the petitioner should succeed. Consequently a declaration was made that the resignation tendered by the petitioner is deemed to have been accepted on the date it was tendered, i. e. , 9-6-1998 and that the respondents are at liberty to deduct the compensation, i. e. , the salary for the period of three months. ( 30 ) RELIANCE has also been placed on the judgment of the Supreme Court in State of haryana v. S. K. Singhal and others. On facts, the employee, a Medical Officer, governed by the Punjab Civil Services Rules gave three months notice on 16-8-1995 seeking voluntary retirement under Rule 5. 32 (B) of the Punjab Civil Services Rules-II on his completing 20 years of qualifying service. There was no response from the employer within the three months period i. e. , upto 16-11-1995. Subsequently, by the order dated 13-12-1995, the petitioner was informed that he could not be deemed to have retired. The issue that eventually came to be considered by the Supreme Court was whether the employee was deemed to have automatically retired from service when permission to retire was not positively refused within the notice period. As there was a conflict of views expressed qua certain earlier decisions of the Supreme Court, on a major analysis of the precedents on the aspect, the Supreme Court, identified two classes of cases of employees seeking voluntary retirement. To set out the two classes identified by the Supreme Court in its own felicitous expression "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. ". 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. ". ( 31 ) WITH regard to the first class, the supreme Court relying upon the earlier decisions of three Judge Benches in Dinesh chandra Sangama v. State of Assam and others and B. J. Shelat v. State of Gujarat and others, reiterated the principle and ratio that in the absence of any rule or statute that on the expiry of the period specified in the notice of retirement, retirement is not automatic but requires an express grant of permission for retirement, retirement would come into effect on the expiry of the notice period. Paragraphs 10 to 13 of the judgment requires to be extracted which reads as under: (10) In Dinesh Chandra Sangma s case (1977) 4 SCC 441 , this court was dealing with F. R. 56 (c) as it stood then. The Court pointed out that FR 56 (b) and FR 56 (c) referred to rights respectively conferred on the State and on the employee. FR 56 (b) conferred a right on Government to compulsorily retire an employee in public interest by giving him notice of not less than 3 months in writing or 3 months pay and allowances in lieu of such notice after he attained 50 years of age or had completed 25 years of service, whichever was earlier. Correspondingly FR 56 (c) stated as follows: "fr 56 (c): Any Government servant may, by giving notice of not less than three months in writing to the appropriate authority, retire from service after he has attained the age of fifty years or has completed 25 years of service, whichever is earlier. It was held by the three-Judge Bench that it was clear that effect of FR 56 (c) was statutory unlike in the case of contracts of employment requiring an express order of acceptance of the retirement notice. It was stated:"there is no question of acceptance of the request for voluntary retirement by the Government when the government servant exercises his right under FR 56 (c ). "it was again stated"fr 56 is one of the statutory rules which binds the Government as well as the Government Servant. It was stated:"there is no question of acceptance of the request for voluntary retirement by the Government when the government servant exercises his right under FR 56 (c ). "it was again stated"fr 56 is one of the statutory rules which binds the Government as well as the Government Servant. The condition of service which is envisaged in Rule 56 (c) giving an option in absolute terms to a Government servant, to voluntarily retire with three months previous notice after he reaches 50 years of service, cannot therefore be equated with a contract of employment as envisaged in explanation 2 to Rule 119. "and as follows:"the appellant has voluntarily retired by three months notice not in accordance with an express or implied term of his contract of employment, but in pursuance of a statutory rule. " (11) Another three-Judge Bench in b. J. Shelat s case (1978) 2 SCC 202 was dealing with Rule 161 (2 (i) of the bombay Civil Service Rules which contained a proviso similar to the proviso (b) of PR 56 (k) to the effect that"it shall be open to the appointing authority to withhold permission to retire to a Government servant who is under suspension, or against whom departmental proceedings are pending or contemplated, and who seeks to retire under this sub-clause",it was noticed that no suspension was in force and no departmental proceedings were pending but, on facts, it could be said that a departmental proceeding was under contemplation. However, on a reading of the Rule and the proviso, it was held that inasmuch as no order refusing permission was passed or communicated within the notice period, the voluntary retirement took effect automatically. The court observed that this result followed even though the right to retire conferred on the employee was not as absolute as in dinesh Clwndra Sangam s case but was a qualified right. The court held as follows:"a right is conferred on the government Servant under Rule 161 (2 (ii) to retire by giving not less than three months notice on his attaining the prescribed age. Such a right is subject to the proviso which is incorporated to the Ss. which reads as follows. . . . . . . The court held as follows:"a right is conferred on the government Servant under Rule 161 (2 (ii) to retire by giving not less than three months notice on his attaining the prescribed age. Such a right is subject to the proviso which is incorporated to the Ss. which reads as follows. . . . . . . But for the proviso, a Government servant would be at liberty to retire by giving not less than three months notice in writing to the appointing authority on attaining a prescribed age, this position has the court was considering the effect of the (Assam) fundamental Rule 56 (c ). . . . . . "the court further stated:"but for the proviso to Rule 161 (2 (ii), the decision of this court in the case cited above would be applicable and the right would have been absolute. But the proviso has restricted the right conferred on the Government servant. Thus the permission to retire can be withheld by the appointing authority either when the Government servant is under suspension or against whom departmental proceedings are pending or contemplated. . . No departmental proceeding was pending but on the facts, one cannot say that a proceeding was not under contemplation. "having stated that the right conferred on the Government servant was not absolute but conditional and that one of the conditions, namely, that departmental proceedings were contemplated, was in existence which could have been taken advantage of by the Government, the court held as follows: "in the case before us, it is incumbent on the appointing authority to withhold permission to retire on one of the conditions mentioned in the proviso. We are of the opinion that the proviso contemplates a positive action by the appointing authority. " and it was finally declared: "for the proviso to become operative, it is necessary that the Government should not only take a decision but communicate it to the Government servant. . . . admittedly the order of suspension was not communicated before the date of superannuation". And explaining the identical proviso in the proviso (b) to FR 56 (K), this court again reiterated 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. . admittedly the order of suspension was not communicated before the date of superannuation". And explaining the identical proviso in the proviso (b) to FR 56 (K), this court again reiterated 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. " it was further made clear that the appointing authority "has no jurisdiction to take disciplinary action against a Government servant who had effectively retired. " it was held that: "disciplinary action cannot be taken after the date of retirement. " therefore, it was necessary to communicate the decision of refusal of permission before the expiry of the notice period. (12) The third case which falls in the first category is the one in Union of India and others v. Sayed Muzaffar Mir JT1994 (6) SC 288 decided by a Bench of two learned Judges. In this case, the above- said two rulings were followed. The case arose under Rule 1802 (b) (1) of the railway Establishment Code. In that case, the respondent had given a notice on 22-7-1985 of 3 months to the railways to retire from service as visualised by Rule 1802 (b ). The period expired on 21-10-1985 and the order or removal was passed on 4-11-1985. The proviso to the Rule permitted withholding of permission to retire in case the employee was under suspension. As a fact, the employee was under suspension at the relevant time and this could have been taken advantage of by the Government. In fact, Rule 1801 (d) which started with a non-obstante clause, stated that the competent authority might require a railway servant under suspension to continue his service beyond the date of his retirement in which case he shall not be permitted by the authority. It was held that even though the officer was under suspension and the request for retirement could be denied, still an order withholding such permission or requiring him to continue, was required to be passed. It was "admitted" that no such order was passed. Therefore, it was held that the employer had not exercised a right given to it under Rule 1801 (d ). It was "admitted" that no such order was passed. Therefore, it was held that the employer had not exercised a right given to it under Rule 1801 (d ). The court further observed that in Dinesh chandra Sangam s case ( (1977) 4 SCC 441 ) it was held that "the same does not require acceptance and comes into effect on the completion of the notice period" and that the decision was followed in B. J. Shelat s case ( (1978) 2 scc 202 ). The court finally held: "the period of notice in the present case having expired on 21-10-1985, and the first order of removal having been passed on 4-11-1985, we hold that the tribunal had rightly come to the conclusion that the order of removal was non est in the eye of law. " (13) Thus, from the aforesaid three decisions it is clear that if the right to voluntarily retirement is conferred in absolute terms as in Dinesh Chandra sangma s case by the relevant rules and there is no provision in Rules to with hold permission in certain contingencies the voluntary retirement comes into effect automatically on the expiry of the period specified in the notice. If, however, as in B. J. Shelat s case and as in Bayed Muzaffar Mir s case, the concerned authority is empowered to withhold permission to retire if certain conditions exist, viz. in case the employee is under suspension or in case departmental inquiry is pending or is contemplated, the mere pendency of the suspension or departmental inquiry or its contemplation does not result in the notice for voluntary retirement not coming into effect on expiry of period specified. What is further needed is that the concerned authority must pass a positive order withholding permission to retire and must also communicate the same to the employee as stated in B. J. Shelat s case and in Sayed Muzaffar Mir s 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 noncommunication of acceptance should be treated as amounting to withholding of permission. 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 noncommunication of acceptance should be treated as amounting to withholding of permission. ( 32 ) THE second class of cases where the retirement is not automatic on expiry of the notice period, but requires for its effectuation the positive grant of permission to proceed on retirement was dealt with in paragraphs 14 to 17 of the judgment supra. Provisions of Rule 5. 32 (b) of the Punjab civil Service Rules which fell for consideration in the above judgment of the supreme Court is somewhat analogous to paragraph 5 of the 1976 scheme, both contemplate a notice to retire and not for a permission to retire. Both in the Punjab Civil services Rules and the 1976 Scheme what is contemplated is only permission for seeking exemption from the three months period. Further, paragraph 5 (2) of 1976 Scheme enjoins a liability on the employee to pay compensation for the deficit in the notice period on his breach of the conditionalities incorporated in paragraph 5 (1 ). ( 33 ) FOLLOWING the ratio enunciated in the judgment of the Supreme Court (supra -3), the interpretation obligated on the holistic consideration of Paragraph -5 of the 1976 scheme is that it brings about the cessation of master and servant relationship on the date the employee discontinues from the active service of the employer subsequent to submitting a written notice of such discontinuance subject to the liability on the employee to compensate the employer for the deficit in the notice period or for any other breach of the requirement of paragraph 5 (1 ). ( 34 ) ON behalf of the respondents, reliance is placed on a line of decisions dealing with resignations in the context of the employee s right to withdraw his offer of resignation before effectuation of the resignation. The first of the cases relied on is Raj Kumar v. Union of India and others. In this case, a member of the I. A. S. sought relief from service which was accepted. Before communication of the order of acceptance, he withdrew his offer of resignation. The first of the cases relied on is Raj Kumar v. Union of India and others. In this case, a member of the I. A. S. sought relief from service which was accepted. Before communication of the order of acceptance, he withdrew his offer of resignation. The principal question that fell for the consideration of the Supreme Court was whether the employee had the locus paenitentiae to withdraw his offer of resignation after it was accepted and as to which is the effective date of communication of such acceptance by the employer. In the context of considering that substantive question, the Supreme Court noticed that the memorandum of the Government of india dated 6-5-1958 which dealt with the procedure for resignation from service was not statutory in character. At paragraph 5 of the judgment, the Supreme Court held as under: "but where 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. " ( 35 ) THE above observation of the supreme Court has been reiterated in raj Narain v. Indira Gandhi and others. After reiterating the observations in Raj Kumar s case cited supra-6, the Supreme Court observed that the "question as to when yashpal Kapur s resignation became effective will have to be examined with reference to his conditions of service. " (emphasis added ). ( 36 ) THE aspect again fell for consideration of the Supreme Court in Union of India v. Gopal Chandra Misra and others, where again the question was regarding the parameters and circumstances in which a prospective resignation becomes effective and whether it could be withdrawn before it becomes so effective. The observation in the earlier judgment in Raj Kumar s case cited supra-6 was reiterated. It is however worth noticing the observations of the Supreme Court in the context of dealing with the aspect of resignation per se. The observation in the earlier judgment in Raj Kumar s case cited supra-6 was reiterated. It is however worth noticing the observations of the Supreme Court in the context of dealing with the aspect of resignation per se. This is what has been observed in paragraph 51 of the Judgment reported in Gopal Chandra Misra s case cited supra-8: "in the case of Government servant or a functionary who cannot, under the conditions of his service/or office, by his own unilateral act of tendering resignation, give up his service/or office, normally the tender of resignation becomes effective and his service/or office-tenure, terminated, when it is accepted by the competent authority". (emphasis added ). ( 37 ) DISCERNIBLY, the above expression in the judgment in Gopal Chandra Misra s case (cited supra-8), marks a slight shift in the emphasis from that apparent in Raj Kumar s case cited supra-6. The ratio appears to be that a Government servant or a functionary cannot unilaterally bring about his effective resignation or give up his service or office, except in the manner the resignation is to become effective under the conditions of his service or office. ( 38 ) BE that as it may, this aspect again fell for the consideration of the Supreme Court in P. Kasilingam v. P. S. G. College of Technology and others, another authority relied upon by the respondents. This was also a case of tender of resignation from a future date and withdrawal of it prior to such date. The earlier decision in Raj Kumar s case (cited supra-6), was reiterated. It requires to be noticed that while referring to the earlier decision in Raj Kumar s case cited supra-6, the Supreme Court in this case recorded as under: "it was held that the services of government servant normally stand terminated from the dare on which the letter of resignation is accepted by the appropriate authority, unless there is any law or statutory rule governing the conditions of service to the contrary" and added that there was no reason why the same principle would not apply to the case of any other employee". (emphasis added ). ( 39 ) RELIANCE is also placed on certain observations of the Supreme Court in central Inland Water Transport Corporation ltd. , v. Broja Nath and others, particularly those at paragraph 112 of the said judgment. (emphasis added ). ( 39 ) RELIANCE is also placed on certain observations of the Supreme Court in central Inland Water Transport Corporation ltd. , v. Broja Nath and others, particularly those at paragraph 112 of the said judgment. It must be noticed that in this case, the supreme Court was dealing with a condition in a contract of employment which empowered the employer to terminate the services of an employee on issuing notice of a given period or payment of wages in lieu of such notice period. But, such rule in so far as the employer is empowered to terminate the services of even a temporary employee on short notice come to be considered in the context of the constitutional injunctions in against arbitrary state action and the provisions of section 23 of the Contract Act in the context of a challenge that such a contractual term in a contract of public employment is subversive of public policy within the meaning of Section 23 of the Indian Contract act. It is in this context that the observations in paragraph 112 have been made and the observations are as under. "by entering into a contract of employment a person does not sign a bond of slavery and a permanent employee cannot be deprived of his right to resign. A resignation by an employee would, however, normally require to be accepted by the employer in order to be effective. It can be that in certain circumstances an employer would be justified in refusing to accept the employee s resignation as, for instance, when an employee wants to leave in the middle of a work which is urgent or important and for the completion of which his presence and participation are necessary. An employer can also refuse to accept the resignation when there is a disciplinary inquiry pending against the employee. In such a case, to permit an employee to resign would be to allow him to go away from the service and escape the consequences of an adverse finding against him in such an inquiry. There can also be other grounds on which an employer would be justified in not accepting the resignation of an employee. The Corporation ought to make suitable provisions in that behalf in the said Rules. There can also be other grounds on which an employer would be justified in not accepting the resignation of an employee. The Corporation ought to make suitable provisions in that behalf in the said Rules. " ( 40 ) IT is a settled principle of precedent law that the conclusions and observations in a Judgment are often coloured by the context of the facts that fall for determination in particular cases and are not to be construed as a statutory edict or as binding verities for all circumstances and for all times, occasions and contexts. It requires however to be noticed that in the last sentence in the aforesaid paragraph of the judgment, the Supreme Court has recorded that "the Corporation ought to make suitable provisions in that behalf in the said rules. " ( 41 ) THEREFORE, it is possible to infer that the ratio deducible from decisions of the supreme Court in the resignation class of cases is to the effect that entering into employment does not result in an infinite bondage of employment, a permanent employee is entitled to exercise his right to resign and his employer is empowered to decline approval for such resignation and to interdict this area of liberty of the employee, provided a legal environment is in place empowering the employer to enforce such prohibition, for rational reasons like, say pendency of disciplinary proceedings or such like administrative circumstances where permitting resignation of employee at will would be subversive of institutional or public interest. ( 42 ) IN the present case, both the provisions of paragraph-5 of the 1976 Scheme which is statutory and paragraph 8. 1 of the Manual of instructions which is obligatory neither expressly nor by any other necessary implication reserve or preserve a right in the respondent employer to prohibit the resignation of an employee at his choice. There is also nothing in the above two provisions, nor any other provision is brought to the notice of the Court, which requires either the employee to obtain the leave of the employer to leave or discontinue the service or permits the employer to exercise the choice of veto on such request/ choice of resignation. There is also nothing in the above two provisions, nor any other provision is brought to the notice of the Court, which requires either the employee to obtain the leave of the employer to leave or discontinue the service or permits the employer to exercise the choice of veto on such request/ choice of resignation. Both paragraph-5 of the 1976 Scheme and paragraph 8 of the manual merely incorporate a requirement of a written notice to be issued by the employee intimating his intention to retire and the requirement to give three months notice, which requirement is effectuated by a sanction of penalty on the employee for breach of the notice period in discontinuing the service before such notice period. This sanction enjoined in paragraph 5 (2) of the 1976 scheme and paragraph 8. 1 of the manual is a sanction for the employee s conduct in leaving or discontinuing the service before expiry of the notice period in circumstances where either he has not requested any waiver of the notice period or such request having been made has not been acceded to by the employer. ( 43 ) IN the case on hand, the petitioner submitted his letter of resignation on 25-8-1999 and intimated his intention to discontinue service from 24-9-1999 requesting that the balance two months of the notice period be adjusted towards leave to his credit. This part of the request could not have been entertained in view of explanation (II) to paragraph 5 (1) of the 1976 scheme. Therefore and in the context of the fact that the petitioner factually discontinued from active service from 11-10-1999 on having been relieved on his transfer to the Regional Office, the conduct of the petitioner must fall within and liable for the sanction enjoined by paragraph 5 (2 ). Consequently, the petitioner would be liable to pay the pro tanto gross salary for the period of short fall of the notice. As he has clearly indicated his intention to relinquish service from 25-9-1999, this Court is not inclined to treat the factual service of the petitioner from 25-9-1999 to 12-10-1999 as service, which could be counted for reduction of the liability under paragraph-5 (2 ). ( 44 ) ON the analysis above, this Court is of the considered view that the petitioner ceased to be in the service of the respondents with effect from 24-9-1999. ( 44 ) ON the analysis above, this Court is of the considered view that the petitioner ceased to be in the service of the respondents with effect from 24-9-1999. He is liable to the respondent employer for payment of compensation in terms of an amount of the gross salary that he was eligible to draw for the period 25-9-1999 to 24-11-1999 which is the two months deficit in the notice period he was obligated to conform to under paragraph- 5 (1) and in the context of which his liability arises under 5 (2) of the 1976 scheme. ( 45 ) IN the light of the clear language employed in paragraph 5 (2), the respondents are at liberty to recover this amount liable to be paid by the petitioner, from the terminal and other benefits payable to the petitioner by the respondents. As the petitioner s active and jural relationship with the respondent as an employee stood determined with effect from 24-9-1999 as per the analysis above and in the absence of any plea by the respondents that they are entitled to initiate disciplinary proceedings after cessation of an employer and employee relationship, the initiation of disciplinary proceedings against the petitioner for unauthorized absence by the memorandum of charges dt. 29-11-1999 and culminating in the impugned order dated 12-12-2001 is incompetent, without jurisdiction and non est. Consequently, the impugned order bearing reference No. HO:per: PNA: 5086:2001, dated 12-12-2001 is set aside. The petitioner would be entitled to his terminal benefits payable by the respondents, subject to deduction of his liability under paragraph 5 (2) of the 1976 scheme. ( 46 ) THE writ petition is allowed as above, no order as to costs.