Punjab
National Bank Vs. P.K. Mittal [1989] INSC 52 (13 February 1989)
Rangnathan,
S. Rangnathan, S.
Mukharji, Sabyasachi
(J)
CITATION:
1989 AIR 1083 1989 SCR (1) 612 1989 SCC Supl. (2) 175 JT 1989 (1) 264 1989
SCALE (1)353
ACT:
Labour
and Services: Punjab National Bank Service Regu- lation
No.. 20(2): Withdrawal of resignation letter--Effect of--Whether bank entitled
to accept resignation from an earlier date.
Civil
Services: Resignation by employee--Withdrawal Permissibility and effect of.
HEAD NOTE:
Clause
(2) of Regulation 20 of the Service Regulations of the Punjab National Bank
lays down that no officer shall resign from the service of the bank otherwise
than on the expiry of three months from the service on the bank of a notice in
writing of such resignation. The proviso thereto empowers the competent
authority to reduce the period of three months or remit the requirement of
notice.
The
respondent, a permanent officer of the bank, made an application on 21st January 1986, purporting to resign from the
service with effect from 30th
June, 1986. He,
however, received a letter from the bank on 7th February, 1986 in- forming him that his
resignation letter had been accepted by the competent authority with immediate
effect by waiving the condition of notice.
He
thereupon filed a writ petition in the High Court challenging the validity of
the purported acceptance of his resignation with effect from 7th February, 1986 and for a direction to consider him
as in service up to 30th
June, 1986.
Thereafter, on 15th
April, 1986 he wrote
another letter to the Bank purporting to withdraw the resignation letter dated 21st January, 1986.
The
High Court held that the petitioner's resignation letter would have become
effective only on the
30th June, 1986, that
under the Regulations there was no jurisdiction whatever in the competent
authority to determine his service earlier than that and that until the
resignation became effective on 30th June, 1986 he had a right to withdraw the same. Consequently, it
quashed the order dated 7th
February, 1986 and
declared that the petitioner continued to be in service with the bank.
613 In
this appeal by special leave it was contended for the appellant that Regulation
20(2) provided for a notice to the employer only in order to protect the
employer's interests, that its requirements could, therefore, be waived by the
employer if it so desired unilaterally, that under the proviso to clause (2) it
was competent for the bank to waive any notice at all and to accept the
resignation with immedi- ate effect or with effect from such other date as the
bank may consider appropriate.
Dismissing
the appeal,
HELD:
1. Until the resignation becomes effective on the terms of the letter read with
Service Regulation 20 of the Punjab National Bank, it is open to the employee,
on general principles, to withdraw his letter of resignation. [619C] Raj Kumar
v. Union of India, [1968] 3 SCR 857; Union
of India v. Gopal Chandra Misra, [1978] 3
SCR 12 and Balram Gupta v. Union of India, [1987] Suppl. SCC 228.
2.
Clause (2) of Regulation 20 makes it incumbent on an officer of the bank,
before resigning, to serve a notice in writing of such proposed resignation.
The clause also makes it clear that the resignation will not be effective
other- wise than on the expiry of three months from the service of such notice.
[616H; 617A]
3.
What the proviso to clause (2) contemplates is that in a case where the
employee desires that his resignation should be effective even before the
expiry of the period of three months or without notice being given by him, the
bank may consider such a request and waive the period or require- ment of
notice if it considers it fit to do so. It does not empower the bank to thrust
a resignation on an employee with effect from a date different from the one on
which he can make his resignation effective under the terms of the resig-
nation. In the instant case, the employee had not requested the bank to reduce
the period of notice or to waive the requirement of notice. [617F; 618G]
4.
There are two ways of interpreting clause (2). One is that the resignation of
an employee from service being a voluntary act on his part he is entitled to
choose the date with effect from which his resignation would be effective and give
a notice to the bank accordingly. The only restric- tion is that the proposed
date should not be less than three months from the date on which the notice is
given. In the instant case, the letter dated 21st January 1986, sent by the employee purporting to 614 resign with effect
from 30th June, 1986 fully complied with the terms of
this clause and so the resignation would have become effective only on that
date. The other interpretation is that when an employee gives a notice or
resignation, it becomes effective on the expiry of three months from the date
thereof. On this interpretation the respondent's resig- nation would have taken
effect on or about 21st
April, 1986 even
though he had mentioned a later date. In either view of the matter, the
respondent's resignation did not become effective till 21st April, 1986 or 30th June, 1986. The bank could not have accepted that resignation on any
earlier date. The letter dated 7th February, 1986 was, therefore, without jurisdiction. [617A-B; 618A-B, G-H] The
respondent had thus continued to be in service till the 21st April, 1986 or 30th June, 1986.
But, by that time, he had exercised his right to withdraw the resignation.
Since
the withdrawal letter was written before the resigna- tion became effective,
the resignation stood withdrawn with the result that the respondent continued
to be in the serv- ice of the bank. [619A-B] Delhi Electric Supply Undertaking
v. Tara Chand, [1987] 2 SCR 425, distinguished.
CIVIL
APPELLATE JURISDICTION: Civil Appeal No. 2014 of 1986.
From
the Judgment and Order dated 24.4. 1986 of the Delhi High Court in C.W. No. 477 of 1986.
Dr. Anand
Prakash, D. Mehta, Atul Nanda and S.K. Mehta for the Appellant.
S.K. Bisaria
for the Respondent.
The
Judgment of the Court was delivered by RANGANATHAN, J. A very short question as
to the inter- pretation of the service regulations of the appellant-bank comes
up for consideration in this appeal. The relevant service regulation is
Regulation No. 20 which reads as under:
"20(1)
Subject to sub-regulation (3) of regu- lation 16, the bank may terminate the
services of any officer by giving him three months' notice in writing or by
paying him three months' emoluments in lieu thereof.
615
(2) No officer shall resign from the service of the bank otherwise than on the
expiry of three months from the service on the bank of a notice in writing of
such resignation. Provid- ed further that the competent authority may reduce
the period of three months, or remit the requirement of notice." The
respondent, a permanent officer in the bank, sent a communication to the bank
on 21st January, 1986. By this letter he purported to
resign from the service of the bank due to personal reasons. He added that the
date of receipt of the letter should be treated as the date of the commence- ment
of the notice period so that, inclusive of the same, his resignation would
become effective on 30th
June, 1986.
According
to the respondent, the Deputy General Manager, who was the competent authority
under the Service Regulations, had agreed that the resignation may be accepted
with effect from 30th
June, 1986. However,
what actually transpired was that the respondent received a letter from the
bank on 7th February, 1986 informing him that his resignation letter dated 21st
January, 1986 had been accepted by the competent authority with immediate
effect by waiving the condition of notice and that, consequently, he was being
relieved from the service of the bank with effect from the afternoon of the
same date, namely, 7th February, 1986. The respondent thereupon filed a writ
petition in the High Court challeng- ing the validity of the purported
acceptance of his resigna- tion with effect from 7th February, 1986 and for a
direction to the bank to treat him as in service of the bank up to 30th June,
1986 and as entitled to all benefits while being in such service.
A
further development took place after the filing of the writ petition and before
it came up for hearing. On 15th April, 1986,
the respondent wrote a letter to the bank by which he purported to withdraw the
resignation letter dated 21st
January, 1986. The
High Court, therefore, dealt with the situation resulting from this subsequent
development.
The
High Court held that the petitioner's resignation letter would have become
effective only on the
30th June, 1986.
Under
the regulations there was no jurisdiction whatever in the competent authority
to determine his services earlier.
Until
the resignation became effective on 30th June, 1986, the petitioner had a right to
withdraw the same and in fact had also exercised that right. The High Court
concluded:
"We
may notice that this writ petition was filed at a stage 616 when the petitioner
had not sent his letter dated 15th April, 1986
whereby he withdrew his resignation letter dated 2 Ist January, 1986.
This
is a subsequent development during the pendency of the writ petition.
Therefore, we are not called upon to decide the earlier grievance that the
resignation could not have been accepted at an earlier date. Even to that
submission we would have said that there is no provision of acceptance but that
question does not arise so we will not deal with it further.
Result
is that the impugned order dated 7th of February, 1986 is hereby quashed and it
is declared that the petitioner continues to be in service with the respondent-bank.
However, in view of the facts of the present case, parties are directed to bear
their own costs of the present proceedings." The bank has preferred this
appeal. Dr. Anand prakash, learned counsel for the appellant-bank, submitted
that regulation 20(2) provided for a notice to the employer only in order to
protect the employer's interests and to enable the employer, in case it decided
to accept the resignation, to make other arrangements in place of the resigning
employ- ee. He submitted that, this being a provision for the bene- fit of the
employer, its requirements could be waived by the employer, if it so desired,
unilaterally- The proviso to clause (2) of the regulation indeed makes it clear
that it is open to the bank to waive the requirement of notice or to reduce the
period of the notice to less than three months.
He,
therefore, submitted that, when the respondent sent in his resignation on 21st January, 1986, it was not incumbent on the bank
to wait till 30th June,
1986 when the notice period
would expire. It was competent for the bank to waive any notice at all and to
accept the resignation with immedi- ate effect or with effect from such other
date as the bank may consider appropriate. It was further contended by learned
counsel that, once the resignation letter of the respondent had been accepted
by the bank and given effect to, to there was no further possibility of the
respondent seeking to withdraw the resignation letter as he has pur- ported to
do in this case. Learned counsel, therefore, submitted that the bank's letter
dated 7th February,
1986 was quite valid
and effective and that the respondent's writ petition ought to have been
dismissed.
We
have given careful thought to this contention of the learned counsel and we are
of the opinion that the High Court was right in the conclusion it reached.
Clause (2) of regulation 20 makes it incumbent on an officer of the bank,
before resigning, to serve a notice in writing 617 of such proposed resignation
and the clause also makes it clear that the resignation will not be effective
otherwise than on the expiry of three months from the service of such notice.
There are two ways of interpreting this clause. One is that the resignation of
an employee from service being a voluntary act on the part of an employee, he
is entitled to choose the date with effect from which his resignation would be
effective and give a notice to the employer accordingly.
The
only restriction is that the proposed date should not be less than three months
from the date on which the notice is given of the proposed resignation. On this
interpretation, the letter dated 21st January, 1986 sent by the employee fully complied with the terms of this
clause. Though the letter was written in January, 1986 the employee gave more
than three clear months' notice and stated that he wished to resign with effect
from 30th of June, 1986 and so the resig- nation would have become effective
only on that date. The other interpretation is that, when an employee gives a
notice of resignation, it becomes effective on the expiry of three months from
the date thereof. On this interpretation, the respondent's resignation would
have taken effect on or about 21.4.1986 even though he had mentioned a later
date.
In
either view of the matter, the respondent's resignation did not become
effective till 21.4.1986 or 30.6.1986. It would have normally automatically
taken effect on either of those dates as there is no provision for any
acceptance or rejection of the resignation by the employer, as is to be found
in other rules, such as the Government. Services Con- duct Rules.
Much
reliance was placed on the terms of the proviso to clause (2) of regulation 20
to justify the action of the bank in terminating the respondent's services
earlier but we do not think that the proviso can be interpreted in the manner
suggested by learned counsel for the bank. The resig- nation letter of the
officer has to give at least three months' advance notice under the main part
of the clause.
What
the proviso contemplates is that in a case where the employee desires that his
resignation should be effective even before the expiry, of the period of three
months or without notice being given by him, the bank may consider such a
request and waive the period or requirement of notice if it considers it fit to
do so. That question does not arise in the present case because the employee
had not requested the bank to reduce the period of notice or to waive the
requirement of notice. Dr. Anand Prakash seeks to interpret the proviso as empowering
the bank, even without any request= on the part of the employee, to reduce the
period or waive the requirement of notice. In other words, he says the bank has
power to accept the resignation with immediate effect even though 618 the
notice is only of a proposed future resignation. We do not think this
contention can be accepted. As we have al- ready mentioned, resignation is a
voluntary act of an em- ployee. He may choose to resign with immediate effect
or with a notice of less than three months if the bank agrees to the same. He
may also resign at a future date on the expiry, or beyond the period, of three
months but for this no further consent of the bank is necessary. The acceptance
of the argument of Dr. Ananad Prakash would mean that, even though an-employee
might express a desire to resign from a future date, the resignation can be
accepted, even without his wishes, from an earlier date. This would not be the
acceptance of a resignation in the terms in which it is offered. It amounts
really to forcing a date of termination on the employee other than the one he
is entitled to choose under the. regulations. As rightly pointed out by the
High Court, the termination of service under clause (2) becomes effective at
the instance of the employee and the services of the employee cannot be
terminated by the employer under this clause.
Dr. Anand
Prakash emphasises that as clause (2) and its proviso are intended only to
safeguard the bank's interests they should be interpreted on the lines
suggested by him. We are of the opinion that clause (2) of the regulation and its
proviso are intended not only for the protection of the bank but also for the
benefit of the employee. It is common knowledge that a person proposing to
resign often wavers in his decision and even in a case where he has taken a
firm decision tO resign, he may not be ready to go out immediate- ly. In most
cases he would need a period of adjustment and hence like to defer the actual
date of relief from duties for a few months for various personal reasons.
Equally an employer may like to have time to make some alternative arrangement
before relieving the resigning employee. Clause (2) is carefully worded keeping
both these requirements in mind. It gives the employee a period of adjustment
and rethinking. It also enables the bank to have some time to arrange its
affairs, with the liberty, in an appropriate case, to accept the resignation of
an employee even without the requisite notice if he so desires it. The proviso
in our opinion should not be interpreted as enabling a bank to thrust a
resignation on an employee with effect from a date different from the one on
which he can make his resignation effective under the terms of the regulation.
We, therefore, agree with the High Court that in the present case the
resignation of the employee could have become effective only on or about 21st
April, 1986 or on 30th June, 1986 and that the bank could not have
"accepted" that resignation on any earlier date. The letter dated 7th
February, 1986 was, therefore, without jurisdiction- 619 The result of the
above interpretation is that the employee continued to be in service till the
21st April, 1986 or 30th June, 1986, on which date his services would have come
normally to an end in terms of his letter dated 21st January, 1986. But, by
that time, he had exercised his right to withdraw the resignation. Since the
withdrawal letter was written before the resignation became effective, the
resignation stands withdrawn, with the result that the respondent continues to
be in the service of the bank. It is true that there is no specific provision
in the regulations permitting the employee to withdraw the resignation. It is,
however, not necessary that there should be any such specif- ic rule. Until the
resignation become effective on the terms of the letter read with regulation
20. it is open to the employee, on general principles, to withdraw his letter
of resignation. That is why, in some cases of public services, this right of
withdrawal is also made subject to the permis- sion of the employer. There is
no such clause here. It is not necessary to labour this point further as it is
well settled by the earlier decisions of this Court in Raj Kumar v. Union of
India, [1963] 3 SCR 857; Union of India v. Gopal Chandra Misra, [1978] 3 SCR 12
and Balram Gupta v. Union of India, [1987] Suppl. SCC 228.
Learned
counsel for the appellant relied on certain observations in Delhi Electric
Supply Undertaking v. Tara Chand, [1987] 2 SLR 426. Certain other decisions
were also cited by Dr. Anand Prakash but we do not think that they have any
bearing on the issue before us. Tara Chand was a case under regulation 8 of the
regulations made by the Delhi Electric Supply Undertaking under the Electricity
(Supply) Act, 1948. The regulation permitted the termination of the services of
a servant of the undertaking "on notice of three months from either side
without any cause to be assigned in case of permanent servants". The
employee in that case sent a letter to the employer stating that "he was
compelled to resign for various reasons" and this resignation was accept- ed
by the undertaking. The Delhi High Court in its judgment (to which one of us
was a party) observed that notice under the regulation was intended for the
benefit of the employer which could, if it considered necessary or proper,
waive the period of notice and accept the resignation with immediate effect.
But that was a case where the employee, though bound to give three months'
notice, expressed his desire to resign with immediate effect and it was also
accepted by the em- ployer. It was not the case that he had given notice indi- cating
a desire to be relieved at a future date. The analogy of that case would have
applied to the present case as well if the respondent here had expressed his
desire to be re- lieved immediately even before the expiry of the three months'
notice period and the bank had accepted it. The 620 employer would then
certainly have been entitled to accept the resignation, as requested by the
employee, waiving the notice period. The distinction between that case and the
present one is that, here, the employee has chosen a future date on which his
resignation would be effective but he is being forced to "resign"
before such date.
For
the reasons discussed above, we affirm the decision of the High Court and
dismiss this appeal. As the employee has got a relief much larger than the one
for which he initially came to Court and which has been made possible by his
subsequent conduct, we make no order as to costs.
P
.S.S. Appeal dis- missed.
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