Mere delay in relieving employee from duties does not impact acceptance of resignation: SC

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Read Judgment: M/s. New Victoria Mills & Ors.vs. Shrikant Arya

Pankaj Bajpai

New Delhi, September  28, 2021: While acting in agreement with the legal principle propounded by the respondent that a scheme like the Modified Voluntary Retirement Scheme (MVRS) was an “invitation to offer”, the Supreme Court has opined that mere delay in relieving the employee from duties does not impact the acceptance of his resignation.

A Division Bench of Justice Sanjay Kishan Kaul & Justice M.M. Sundresh observed that it has rightly been contended by the appellants that mere delay in relieving the respondent from duties would not impact the acceptance of his resignation, as observed in case of Air India Express Limited &Ors. v. Captain Gurdarshan Kaur Sandhu.

A different scenario would have arisen, if the resignation letter was not in praesenti and had fixed a future date for its operation, and before that date the resignation letter was withdrawn, added the Bench.

The background of the case was that the National Textile Corporation (second appellant), a subsidiary of third appellant had set up several industrial establishments in the State of Uttar Pradesh. M/s. New Victoria Mills (first appellant), was one such establishment set up by the second appellant in Kanpur.

The respondent was working as a Supervisor (Maintenance) in New Victoria Mills since 1991, having been so appointed on transfer from M/s. Atherton Mills, another industrial unit set up by the second appellant. The textile industry went through difficult times at the turn of the century and accordingly, endeavours were made to examine the feasibility of the continued existence of different textile mills.

A question mark over the existence of these mills in turn had ramifications for the persons who were employed with these mills. In order to safeguard the interests of these employees, a Modified Voluntary Retirement Scheme (MVRS/Scheme) was propounded by third appellant to facilitate the voluntary retirement of employees and workers of first appellant and certain other mills operated by second appellant. BIFR came into the picture when the production activities of second appellant were brought to a standstill and it had been declared a sick undertaking.

The financial condition of second appellant was so precarious that BIFR recommended closure of nine out of eleven mills of second appellant, including first appellant.While making this recommendation, in order to secure the interests of the employees, BIFR imposed a condition that the mills would only be closed if all employees working therein were given the benefit of a voluntary retirement scheme.

Thus, MVRS came to be promulgated in supersession of the earlier revised voluntary retirement scheme.The Management reserved the right to refuse the MVRS application without assigning any reasons.

The respondent sought to avail of the opportunity under the Scheme and addressed a letter dated July 12,2002. The resignation was sought to be brought into force forthwith with the only request that payment of all benefits of service be disbursed promptly.

General information was issued about acceptance of letters of resignation under the MVRS on May 28,2003 in which the name of the respondent figured at serial No.4. The four persons were to retire from the services of the mill on June 1,2003. However, a letter was issued by first appellant on June 2,2003, after the cut-off date had already come into effect from June 1,2003; informing the respondent that the said date be treated as cancelled and a new cut-off date would be informed shortly.

The respondent was advised to attend to his duties. However, vide letter dated July 14,2003 the resignation submitted under the MVRS was accepted intimating that the respondent was to retire from July 16,2003. It was this letter which triggered off the litigation, with the respondent filing Civil Miscellaneous Writ Petition before the High Court seeking the prayer for quashing of the impugned order dated July 14,2003.

The Top Court reiterated that the respondent has locus poenitentiae to withdraw the resignation letter as the jural relationship between the parties continued till the actual date of his resignation.

The Division Bench said that there does seem to have an element of infirmity in the manner in which the respondent sought to vent his grievance, but in view of larger consideration, are not required to look into the aspect of whether this is fatal to his claim.

The construction has been given to the MVRS as per its clauses and the action of the parties under the Scheme, which results in the conclusion that the resignation had already been accepted on May 28,2003 before the respondent endeavoured to withdraw the same on June 1,2003, added the Bench.

The Apex Court noted that the resignation was to operate prospectively from a specified date and was withdrawn before that date, despite being accepted which is a different factual scenario.

The application submitted by the respondent under the Scheme on 12.07.2002 was in the nature of an offer but we cannot accept the plea that vide letter dated 03.03.2003 there could be suspension of his resignation conditional on the deposit of provident fund dues which actually already were deposited. The acceptance was also not conditional clearing of dues, including provident fund dues, as that was a consequence which would flow from the acceptance of the resignation”, observed the Court.

Thus, in pursuance of the offer and acceptance on May 28, 2003, the transaction was completed, concluded the Apex Court.

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