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2018 DIGILAW 781 (ORI)

Rama Krushna Dhal v. United Commercial Bank

2018-09-03

B.R.SARANGI

body2018
JUDGMENT B.R. Sarangi, J. - The petitioner, who was working as Clerk-cum-Assistant Cashier in United Commercial Bank (UCO Bank), Balasore Branch, Balasore, has filed this application with following prayers: "(i) As to why Annexure-1 and 2 to the Writ Application shall not be quashed; (ii) As to why Annexure-5 & 6 to the Writ Application shall not be quashed; (iii) As to why a direction shall not be issued for allowing the Petitioner to resume his duties as an employee of the opposite parties's Bank. (iv) And in the alternative why a directions shall not be issued to give the financial benefits to the petitioner as per the original V.R.S., 2000. (v) And if the Opposite parties fail to show cause or show insufficient cause the rule may be made absolute; (vi) Further Your Lordships may be pleased to pass such other or orders as may be deemed fit and proper in the particular circumstances of the case." 2. The factual matrix of the case, in hand, is that the petitioner joined as Clerk-cum-Assistant Cashier in UCO bank-opposite party no.1 on 16.02.1981. While he was working as such, UCO Bank floated a scheme called "UCO Bank Employees' Voluntary Retirement Scheme, 2000" by issuing circular to all branches/offices vide No. CHO/PMG/19/2000 dated 16.11.2000. The board of directors of the bank in their meeting held on 29th September, 2000 and 25th October, 2000 adopted the Voluntary Retirement Scheme for the employees of the bank. The same has also got approval of the board of directors. Under the said scheme, an employee opting for voluntary retirement is required to submit duly filled in application in prescribed format on or after 1st January, 2001 but not beyond 31st January, 2001 directly addressing to the Deputy General Manager (Personnel), Personnel Department, Head Office in an envelope marked "Offer To Seek Voluntary Retirement". The said application was to be forwarded, by the respective branches/offices after making due verification, to the respective regional offices. The application should be considered by the competent authority on the basis of "first cum first served" subject to discretion of the competent authority to the extent of number of employees assessed for the purpose subject to certain conditions mentioned in the scheme itself. The acceptance of application for voluntary retirement was subject to adherence to the procedure envisaged in the scheme itself. The acceptance of application for voluntary retirement was subject to adherence to the procedure envisaged in the scheme itself. On acceptance of application for voluntary retirement of an employee by the competent authority, the concerned employee can submit his application for settlement of his terminal benefits as per procedure laid down by the bank. Annexure-1 to the scheme dated 16.11.2000 indicates detailed procedure and other criteria to be followed for the purpose. 2.1 Subsequently, on 07.04.2001, a circular was issued for conversion of "housing loans" of employees of VRS optees into "UCO shelter loan". With due adherence to the provisions contained in the scheme, 2000, the petitioner applied for voluntary retirement from service on 22.01.2001. The circular dated 07.04.2001 with regard to conversion of "housing loans" of employees of VRS optees into "UCO shelter loan" provides that a nonpensioner who opted for VRS has to give an undertaking that out of his terminal benefit to be received under the VRS, he has to deposit a sum equivalent to converted loan amount with the bank. In addition to the same, clauses-9.2.1 and 9.2.3 require that the employee should mortgage his property in favour of the bank. The Regional Manager UCO bank wrote a letter to the petitioner on 16.04.2001 informing him that his application under VRS had been accepted and he would be relieved from the services of the bank at the close of business on 30.04.2001. But the petitioner, after issuance of the circular dated 07.04.2001, found that he would get a sum less than what he would have got under the original scheme. Therefore, he made representation on 30.04.2001 itself, before close of the business, to the authority requesting for withdrawal of the application for voluntary retirement, which had been duly recommended by the Sr. Manager of the bank to the competent authority. But on 13.10.2001, it was communicated to the petitioner that his withdrawal application could not be considered. In response to the same, the petitioner made several requests by way of filing representation to allow him to work in the bank, but the same was not considered. Hence, this writ application. 3. Mr. Debasis Nayak, learned counsel for the petitioner contended that the acceptance of application dated 16.04.2001 of the petitioner for voluntary retirement was conditional one to the extent that he would be relieved from service of the bank at the closure of business on 30.04.2001. Hence, this writ application. 3. Mr. Debasis Nayak, learned counsel for the petitioner contended that the acceptance of application dated 16.04.2001 of the petitioner for voluntary retirement was conditional one to the extent that he would be relieved from service of the bank at the closure of business on 30.04.2001. Thereafter, the petitioner may submit his application for settlement of terminal benefits in normal course. It is contended that as the petitioner was not relieved by 30.04.2001 and was continuing in service, his application for withdrawal of option for voluntary retirement could not have been rejected and he should have been allowed to continue in service as before. It is further contended that the petitioner having applied for VRS under the UCO Bank Voluntary Retirement Scheme, 2000 on 22.01.2001, the subsequent circular issued on 07.04.2001 cannot have any application so far as conversion of "housing loans" of employees of VRS optees into "UCO shelter loan" is concerned. If the subsequent circular dated 07.04.2001 is given effect to and the same is not beneficial to the petitioner and he having moved for withdrawal of the application for VRS, before he being effectively relieved from due date, i.e., 30.04.2001, it cannot be said that the withdrawal application cannot be considered pursuant to communication made on 13.10.2001. Thereby, the authorities have acted unreasonably and arbitrarily. It is further contended that the circular issued on 07.04.2001 can only apply prospectively and as such it cannot have any retrospective application as the petitioner had applied on 22.01.2001 under the scheme floated on 16.11.2000. For making a retrospective effect of the circular dated 07.04.2001 the benefit available to the petitioner under the scheme in Annexure-1 is being curtailed, thereby the same cannot be given effect to. More so, the VRS being a contract, the terms of the contract cannot be changed subsequently. Therefore, he seeks for interference of this Court. To substantiate his contention, he has relied upon the judgment of the apex Court rendered in the cases of Power Finance Corporation Ltd. v. Promod Kumar Bhatia, (1997) 4 SCC 280 , J.N. Srivastava v. Union of India, (1998) 9 SCC 559 , Sambhu Murari Singha v. Project & Development India Ltd., (2002) 3 SCC 437 and Bank of India v. O.P. Swarnakar, (2002) 9 Scale 519 . 4. Mr. 4. Mr. Somanath Mishra, learned counsel for the opposite parties contended that the petitioner having applied for voluntary retirement under the VRS scheme, 2000 floated by the bank and the same having been acted upon and consequentially the petitioner paid all the dues in accordance with the scheme, subsequently the petitioner cannot turn round and claim for withdrawal of the application for voluntary retirement submitted by him. Having accepted the application for voluntary retirement on 16.04.2001, the petitioner would have been relieved from bank service at the close of the business on 30.04.2001, and on the very same day, i.e., 30.04.2001 when the petitioner submitted application for withdrawal of the application for voluntary retirement before he was relieved, the same should not have been permitted. More particularly, the acceptance of application for voluntary retirement on 16.04.2001 under the VRS scheme was conditional one to the extent that he would be relieved from service on 30.04.2001, therefore on 30.04.2001 the petitioner was relieved from service itself. As such, the petitioner had already been paid Rs. 39, 108.03 towards leave encashment on 18.06.2001 and Rs. 2,61,042.040 was adjusted for different loans/advances against the petitioner. The bank had paid Rs. 2,64,802/- to the petitioner on 21.12.2002, out of which Rs. 2,13,315.60 was adjusted towards remaining loans of the petitioner and Rs. 51,486.40 was left in his SB account. To substantiate his contention, he has relied upon the judgment the judgment of the apex Court rendered in Vice Chairman and Managing Director. A.P. Sidc Ltd. v. R. Varaprasad and others, (2003) 11 SCC 572 and also judgment of this Court rendered in the case of Chandrakanta Tripathy v. State of Orissa and others, 2014 SCC Online Ori 258. 5. This Court heard Mr. Debasis Nayak, learned counsel for the petitioner, as well as Mr. Somanath Mishra, learned counsel for the opposite party and perused the record. Pleadings having been exchanged between the parties and with the consent of the learned counsel for the parties, this writ petition is being disposed of finally at the stage of admission. 6. 5. This Court heard Mr. Debasis Nayak, learned counsel for the petitioner, as well as Mr. Somanath Mishra, learned counsel for the opposite party and perused the record. Pleadings having been exchanged between the parties and with the consent of the learned counsel for the parties, this writ petition is being disposed of finally at the stage of admission. 6. The undisputed fact being that opposite party floated a VRS scheme on 16.11.2000 (annexure-1 to the writ petition), pursuant to which the petitioner applied for voluntary retirement on 22.01.2001 and the same was also accepted on 16.04.2001 stating inter alia that the petitioner would be relived from service of the bank at the closure of the business on 30.04.2001. On 30.04.2001, the petitioner filed an application for withdrawal of the application for voluntary retirement, but the same was not considered. 7. For just and proper adjudication of the case in hand, causes-10.5 and 10.9 of UCO Bank Employees' Voluntary Retirement Scheme, 2000 are reproduced below:" xxx xxx xxx 10.5 It will not be open for an employee to withdraw the request made for voluntary retirement under the scheme after having exercised such option. xxx xxx xxx 10.9 All payments under the scheme and any other benefit payable to an employee will be subject to the prior settlement/repayment in full of loans, advances, returning of bank's property and any other outstanding dues against him and payable by him to the bank. However, in case of Housing Loan, employee shall have the option of getting it converted into UCO Shelter Scheme applicable for customers. Repayment period will be decided by the Bank. At the discretion of the Bank Interest accrued on Housing Loan has to be paid in full before conversion under UCO Shelter Scheme." 8. As per the above provisions, it is not open for an employee to withdraw the request made for voluntary retirement under the scheme, after having exercised such option, and more so all payments under the scheme and any other benefit payable to an employee will be subject to the prior settlement/repayment in full of loans, advances, returning of bank's property and any other outstanding dues against him and payable by him to the bank. However, it is also clarified that in case of any "housing loans", employee shall have the option of getting it converted into "UCO shelter loan" applicable for customers and the repayment period will be decided by the bank. Further, on the discretion of bank, interest accrued on housing loan has to be paid in full before conversion under UCO shelter scheme. When such scheme dated 16.11.2000 is in force, on 07.04.2001 another circular was issued, and in terms of clause-10.9 of the scheme to convert the "housing loans" of VRS optees into "UCO bank shelter loan" and for that purpose it is required that option has to be sought from the VRS optees. Nothing has been placed on record to indicate that any option has been sought for from the petitioner for conversion of "housing loans" to "UCO bank shelter loan". Had this opportunity been given to the petitioner, he might or might not have exercised his option for conversion of "housing loan" to "UCO bank shelter loan". Without calling for any option, the bank has deducted the entire amount from the VRS benefit admissible to the petitioner, which is not in conformity with the provisions contained in clause-10.9 read with circular issued on 07.04.2001. More particularly, by the time the petitioner filed his application for VRS on 22.01.2001, the circular dated 07.04.2001 had not seen the light of the day. Therefore, the petitioner had no occasion to exercise his option for conversion of "housing loan" to the "UCO bank shelter loan" account. Admittedly, the petitioner's application for voluntary retirement had been accepted on 16.04.2001, which was to be given effect to after the closure of business hour on 30.04.2001. Thereby, the acceptance of application for voluntary retirement of the petitioner is purely conditional, meaning thereby, the petitioner was allowed to continue till the end of business hour on 30.04.2001, even though the order of acceptance had been communicated vide letter dated 16.04.2001. If the petitioner moved for withdrawal of the application for voluntary retirement under VRS on 30.04.2001, before closure of the business hour, then what would be the consequence that has to be examined on the basis of the law laid down by the apex Court. 9. If the petitioner moved for withdrawal of the application for voluntary retirement under VRS on 30.04.2001, before closure of the business hour, then what would be the consequence that has to be examined on the basis of the law laid down by the apex Court. 9. In Dinesh Chandra Sangma v. State of Assam, AIR 1978 SC 17 , the apex Court held that voluntary retirement is a condition of service which (unless a different intendment is disclosed) gives an option in absolute terms to a public servant to voluntarily retire after giving the requisite notice and after he has reached the qualifying age or rendered the qualifying service, as the case may be. 10. In State of Haryana v. S.K. Singhal, (1994) 4 SCC 293, the apex Court held that the position at what point of time voluntary retirement takes effect has been exhaustively considered. The Court identified two classes of cases: "(a) Where rules are couched in language which results in automatic retirement on expiry of period specified in employees' notice; (b) Where even after the expiry of the specified notice retirement is not automatic but an express order granting permission is required to be communicated i.e. master-servant relationship continue after the period specified in the notice till such acceptance is communicated." 11. In New India Assurance Co. Ltd. v. Raghuvir Singh Narang, (2010) 5 SCC 335 , the apex Court held that where a statutory scheme specifically prohibited the employee from withdrawing option of voluntary retirement, such a scheme would prevail over general principles of contract and that an offer could be withdrawn at any time before its acceptance stands concluded. 12. In A.K. Bindal v. U.O.I., (2003) 5 SCC 163 , the apex Court held that upon accepting the money due, the jural relationship between the employer and employee cases to exist. 13. 12. In A.K. Bindal v. U.O.I., (2003) 5 SCC 163 , the apex Court held that upon accepting the money due, the jural relationship between the employer and employee cases to exist. 13. In Power Finance Corporation Ltd. (supra), while considering the scheme of voluntary retirement which had been floated and pursuant thereto respondent filed application for voluntary retirement, but subsequently the corporation had withdrawn the scheme, although the offer had been accepted and such acceptance was to take effect from 31.12.1994, the apex Court held that the acceptance of the offer to voluntarily retire being subject to adjustment of the amount payable to the respondent, the same did not attain finality, therefore it was observed as follows: "It is now settled legal position that unless the employee is relieved of the duty after acceptance of the offer of voluntary retirement or resignation, jural relationship of the employee and the employer does not come to an end. Since the order accepting the voluntary retirement was a conditional one, the conditions ought to have been complied with. Before the conditions could be complied with, the appellant withdrew the scheme. Consequently, the order accepting voluntary retirement did not become effective. Thereby no vested right has been created in favour of the respondent. The High Court, therefore, was no right in holding that the respondent has acquired a vested right and, therefore, the appellant has no right to withdraw the scheme subsequently." 14. In J.N. Srivastava (supra), the apex Court held as follows:- "It is now well settled that even if the voluntary retirement notice is moved by an employee and gets accepted by the authority within the time fixed, before the date of retirement is reached, the employee has locus poenitentiae to withdraw the proposal for voluntary retirement." 15. In Shambhu Murari Sinha (supra), the apex Court held as follows:- "Coming to the case in hand the letter of acceptance was a conditional one inasmuch as, though option of the appellant for the voluntary retirement under the Scheme was accepted but it was stated that the "release memo along with detailed particulars would follow". Before the appellant was actually released from the service, he withdrew his option for voluntary retirement by sending two letters dated 7-8-1997 and 24-9-1997, but there was no response from the respondent. Before the appellant was actually released from the service, he withdrew his option for voluntary retirement by sending two letters dated 7-8-1997 and 24-9-1997, but there was no response from the respondent. By office memorandum dated 25-9-1997 the appellant was released from the service and that too from the next day. It is not disputed that the appellant was paid his salaries etc. till his date of actual release i.e. 26-9-1997, and therefore, the jural relationship of employee and employer between the appellant and the respondents did not come to an end on the date of acceptance of the voluntary retirement and the said relationship continued till 26-9-1997. The appellant admittedly sent two letters withdrawing his voluntary retirement before his actual date of release from service. Therefore, in view of the settled position of the law and the terms of the letter of acceptance, the appellant had locus poenitentiae to withdraw his proposal for voluntary retirement before the relationship of employer and employee came to an end." 16. The question, which has been raised in the present application, was similar in the case of O.P. Swarnakar (supra), and the apex Court, while considering the same, took into consideration the request of the employee seeking for VRS and held as follows:- "The request of employees seeking voluntary retirement was not to take effect until and unless it was accepted in writing by the competent authority. The Competent Authority had the absolute discretion whether to accept or reject the request of the employee seeking voluntary retirement under the scheme. A procedure has been laid down for considering the provisions of the said scheme to the effect that an employee who intends to seek voluntary retirement would submit duly completed application in duplicate in the prescribed form marked "offer to seek voluntary retirement" and the application so received would be considered by the competent authority on first come first serve basis. The procedure laid down therefor, suggests that the applications of the employee would be an offer which could be considered by the bank in terms of the procedure laid down therefor. There is no assurance that such an application would be accepted without any consideration." 17. Even though the bank has floated a scheme and the same has no statutory flavor but the same has been floated by way of contract, therefore, the principle of Indian Contract Act would be applicable. There is no assurance that such an application would be accepted without any consideration." 17. Even though the bank has floated a scheme and the same has no statutory flavor but the same has been floated by way of contract, therefore, the principle of Indian Contract Act would be applicable. Keeping in view the parameters prescribed under the scheme, it can safely be deduced: "(i) The banks treated the application from the employees as an offer which could be accepted or rejected. (ii) Acceptance of such an offer is required to be communicated in writing. (iii) The decision making process involved application of mind on the part of several authorities. (iv) Decision making process was to be formed at various levels. (v) The process of acceptance of an offer made by an employee was in the discretion of competent authority. (vi) The request of voluntary retirement would not take effect in praesenti but in future. (vii) The Bank reserved its right to alter/rescind the conditions of the scheme." 18. If the scheme is admittedly contractual in nature, the provisions of Indian Contract At, 1872 would be applicable. Once it is found that by giving the option under the scheme, the employee did not derive an enforceable right, the same in absence of any consideration would be void in terms of section 2(g) of the Contract Act as opposed to Section 2(h) thereof. Admittedly, the offer made by the petitioner on 22.01.2001 was accepted on 16.04.2001 on conditional basis stating that he would be relieved from service of the bank on the closure of the business hour on 30.04.2001 and he was to submit his application for settlement of terminal benefits in normal course, which clearly indicates that there was no passing of consideration to the petitioner even though the same had been accepted on 16.04.2001 giving a rider that he would be relieved from 30.04.2001. Therefore, if the petitioner submitted his application on 30.04.2001 for withdrawal of his application for voluntary retirement before he was relieved from office after closure of business on the very same day, the same could not have been denied after long lapse of six months period, i.e., on 13.10.2001 stating inter alia that his withdrawal application cannot be considered. 19. In R. Varaprasad (supra), as relied upon by Mr. 19. In R. Varaprasad (supra), as relied upon by Mr. Somanath Mishra, learned counsel for the opposite party, consideration has altogether been made to a different context wherein the apex Court held that question of withdrawal of the applications made for voluntary retirement, after their acceptance, did not arise and the employee could not be permitted to do so in law. The factual matrix of the said case was that the employees are covered by VRS Phase-III and the Corporation fixed the cut-off date as 31.10.1998 for VRS Phase-III. The employees had applied under the scheme on 31.10.1998 and 10.10.1998 respectively. The Corporation accepted their options on 24.11.1998 and 27.10.1998 which were acknowledged by the employees on 26.11.1998 and 02.11.1998. Thereafter, they applied for withdrawal of the option given for VRS on 08.01.1999 and 26.02.1999 respectively. The employees could not be relieved from service along with large number of other employee, who were relieved on 31.07.1999 under VRS Phase-III because of the interim order granted by the High Court. Therefore, the apex Court held that question of withdrawal of their applications made for seeking voluntary retirement, after their acceptance, did not arise and they could not be permitted to do so in law. It is settled principle of law that voluntary retirement once accepted in terms of the scheme or rules, as the case may be, cannot be withdrawn. 20. In State Bank of Patiala v. Romesh Chander Kanoji, (2004) 2 SCC 651 , it is categorically held that after the date of closure of VRS, the parties stood precluded from withdrawing it in view of the judgment of the Apex Court in Bank of India v. O.P. Swarnakar, (2003) 2 SCC 721 . The view taken in State Bank of Patiala v. Jagga Singh, (2004) 2 SCC 201 has also impliedly affirmed the view taken in O.P. Swarnakar case (supra) 21. In Chandrakanta Tripathy (supra) this Court held that the petitioner is entitled to get his dues as per the VRS which had been released by the P.E. Department in favour of the Corporation to be paid to the petitioner within a period of three months. 22. Considering the law as discussed above, this Court is of the considered view that the petitioner's application for voluntary retirement having been accepted, may it be conditional basis, the same cannot be permitted to be withdrawn. 22. Considering the law as discussed above, this Court is of the considered view that the petitioner's application for voluntary retirement having been accepted, may it be conditional basis, the same cannot be permitted to be withdrawn. So far as applicability of the circular dated 07.04.2001 is concerned, the same has got prospective application and on that basis the deduction made, without giving opportunity and without asking for any option from the petitioner, cannot be held to be justified and thus is contrary to clause-10.9 of the VRS Scheme, 2000. The deduction of the housing loan from the VRS benefit unilaterally, without calling for an option, cannot sustain in the eye of law. More particularly, the entire action has been taken pursuant to the circular issued on 07.04.2001, which has no application to the case of the petitioner, when he submitted his application on 22.01.2001 and as such by that time the circular in question had not seen the light of the day. Thereby, the impugned action of the authorities is arbitrary, unreasonable and contrary to the provisions of law. 23. In view of the aforesaid facts and circumstances, this Court is of the considered view that by the time the petitioner had approached this Court by filing the present application on 22.11.2002, he was of 43 years, and by this time he must have attained 59 years of age and his application for voluntary retirement had been accepted on conditional basis on 16.04.2001 giving effect from closure of business of 30.04.2001 and as such the petitioner has received his terminal benefits. But deduction of his financial benefits towards housing loan, having been done arbitrarily, unreasonably and without calling for any option in terms of clause-10.9 of scheme, the bank is directed to call for an option from the petitioner for conversion of "housing loan" of employees under the UCO bank VRS optee into "UCO shelter loan" in terms of clause 10.9 of the scheme and if any financial benefit is accrued to the petitioner, the same shall be released/refunded in favour of the petitioner accordance with law forthwith as per the Voluntary Retirement Scheme, 2000. 24. The writ petition is allowed to the extent indicated above. However, there shall be no order as to cost.