Resigned Govt. Employees Not Entitled To Pension: SC [Read Judgment]

The Supreme Court has observed that an employee who has resigned from service is not entitled to pensionary benefits available to those who 'voluntary retired'.

Ghanshyam Chand Sharma was regularised on the post of a Peon on 22 December 1971. He tendered his resignation on 7 July 1990, which was accepted by the employer with effect from 10 July 1990. He was denied pensionary benefits by the employer BSES Yamuna Power Ltd. on two grounds. First, that he had not completed twenty years of service, making him ineligible for the grant of pension. Second, in any case, by resigning, he had forfeited his past services and therefore could not claim pensionary benefits.

Allowing his writ petition, the High Court directed the employer to grant him pensionary benefits on the ground that he had completed twenty years of service and had "voluntarily retired‟ and not "resigned‟ from service. To hold that his letter of resignation would amount to "voluntary resignation‟, the High Court had relied on the judgement in Asger Ibrahim Amin v LIC.

In the appeal proceedings [BSES Yamuna Power Ltd. vs.Ghanshyam Chand Sharma], it was brought to the notice of the bench that the view taken in Asger Ibrahim Amin which obliterated the distinction between resignation and retirement was overruled in Senior Divisional Manager, LIC v Shree Lal Meena by observing that there is a "real difference between resignation and retirement" and that they cannot be used interchangeably, and the court cannot substitute one for the other merely because the employee has completed the requisite number of years to qualify for voluntary retirement. The bench comprising Justice Dhananjaya Y. Chandrachud and Justice Hrishikesh Roy said:

"The view in Asger Ibrahim Amin was disapproved and the court held that the provisions providing for voluntary retirement would not apply retrospectively by implication. In this view, where an employee has resigned from service, there arises no question of whether he has in fact "voluntarily retired‟ or "resigned‟. The decision to resign is materially distinct from a decision to seek voluntary retirement. The decision to resign results in the legal consequences that flow from a resignation under the applicable provisions. These consequences are distinct from the consequences flowing from voluntary retirement and the two may not be substituted for each other based on the length of an employee‟s tenure. "

Disapproving the approach of the High Court, the bench further observed:

Rule 26 states that upon resignation, an employee forfeits past service. We have noted above that the approach adopted by the court in Asger Ibrahim Amin has been held to be erroneous since it removes the important distinction between resignation and voluntary retirement. Irrespective of whether the first respondent had completed the requisite years of service to apply for voluntary retirement, his was a decision to resign and not a decision to seek voluntary retirement. If this court were to re-classify his resignation as a case of voluntary retirement, this would obfuscate the distinction between the concepts of resignation and voluntary retirement and render the operation of Rule 26 nugatory. Such an approach cannot be adopted. Accordingly, the finding of the Single Judge that the first respondent "voluntarily retired‟ is set aside."

The bench noticed that Rule 26 of the CCS Pension Rules provides that the past service of employee stands forfeited upon resignation. Therefore he is not entitled to pensionary benefits, the bench held. 

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