Resignation Once Accepted Can't Be Withdrawn Citing Mere Delay In Relieving Employee : Supreme Court

The Supreme Court has observed that mere delay in relieving an employee from his duties does not impact the acceptance of his resignation. The Court rejected the argument of the employee that he was entitled to withdraw the resignation citing the delay in relieving him of his duties.

"Once such a resignation was accepted, and not even assailed, there could be no question of the respondent being permitted to resign post acceptance of the resignation. It was only a postponement of the cut off date for administrative reasons, which merely delayed the relieving of the respondent and did not defer the acceptance of the resignation", a bench comprising Justices Sanjay Kishan Kaul and MM Sundresh observed in the case M/s New Victoria Mills & Ors. V. Shrikant Arya.

"The mere fact that some staff continued to work after the closure of the Mill, or the fact that some people may have been deployed in other mills cannot help the respondent's case for reinstatement," the bench added.

Factual Background

Shrikant Arya (respondent in the present case) was working as a Supervisor (Maintenance) in National Textile Corporation Limited ("NTC"/ appellant No 1 in the present case) since 1991 and was thereafter transferred to another industrial unit set up by National Textile Corporation (Uttar Pradesh) Limited, Kanpur (appellant No 2).

Since the textile industry went through difficult times at the turn of the century, appellant No 3 propounded a Modified Voluntary Retirement Scheme ('MVRS/Scheme') to facilitate voluntary retirement of employees and workers in NTC and NTC (UP), Kanpur.

For availing the opportunity under MVRS as per which resignation had to be brought into force forthwith with the only request of disbursing payment for all the benefits of service promptly , Arya addressed a letter dated July 12, 2002. Since there was a pre existing dispute between Arya and NTC relating to deposits in his provident fund account, Arya later made a request for keeping his application under suspension till the provident fund amount was not deposited in his account.

On May 28, 2003 a general information was issued about acceptance of letters of resignation under MVRS in which Arya's name also appeared as per which he had to retire from the services of the mill on June 1, 2003. On June 2, 2003, NTC issued a letter to Arya in which he was advised to attend to his duties since the earlier cut off date was cancelled and a new date had to come into effect shortly.

In the aforesaid scenario, Arya addressed a letter dated July 1, 2003 requesting to cancel his letter dated July 12, 2002 since he had changed his mind about submitting his resignation under the MVRS but on July 14, 2003 Arya's letter under the MVRS was accepted and he had to retire on July 16, 2003.

Aggrieved, Arya approached the Allahabad High Court by way of a writ seeking for quashing of order dated July 14, 2003, direction to the authorities to allow him to join his duties on the post of Supervisor (Maintenance) and payment of all the emoluments to which he was entitled. Arya also sought for payment of his back wages since July 16, 2003 and issuance of directions to permit him to work on the post till the age of his superannuation when he would be entitled to all his retiral benefits.

Case Before Single Judge of Allahabad High Court

Ruling in favour of Arya, the single judge found that it was "not clear" that at any point of time, Arya had given an unconditional offer of resignation under the MVRS. The Single Judge further noted that rather Arya's resignation was conditional on the payment of all dues, which included the provident fund dues which should be first cleared and paid to him.

Case Before Division Bench of Allahabad High Court

Aggrieved by the Single Judge's order NTC filed an appeal before the division bench of the High Court. The Division Bench on March 12, 2019 upheld the Single Judge's order.

The NTC in a civil appeal approached the Top Court.

Counsel's Submissions

Counsel for NTC submitted that Arya had not challenged the letters dated May 28, 2003 and June 2, 2003 that had effectively accepted Arya's resignation request under the MVRS which implied that his acceptance by NTC was complete. It was also contended that Arya had only challenged the revised cut off date, assailing the letter dated July 14, 2003 and July 16, 2003.

Once such a resignation was accepted, and not even assailed, there could be no question of the Arya being permitted to resign post acceptance of the resignation, NTC further contended.

Reliance was placed on the Top Court's judgement in Air India Express Limited & Ors. v. Captain Gurdarshan Kaur Sandhu (2019) 17 SCC 129 to support the plea that mere delay in relieving someone from their duties does not impact the acceptance of their resignation.

Relying on the Top Court's judgements in J.N. Srivastava v. Union of India &Anr. (1998) 9 SCC 559 and Shambhu Murari Sinha v. Project & Development India &Anr (2000) 5 SCC 621. Arya's counsel contended that an employee had a right to withdraw his application for voluntary retirement even after its acceptance if such withdrawal was done prior to the date of employee's actual retirement. It was also contended that the jural relationship of employer and employee between NTC and Arya continued till July 16, 2003 and thus, Arya had locus poenitentiae to withdraw his resignation on July 1, 2003.

Arya's counsel also submitted that the application submitted by Arya was in the nature of an offer and since Arya suspended his resignation vide letter dated 03.03.2003 till such time as NTC deposited his provident fund dues and, thus, the offer stood revoked.

The counsel also referred to the Top Court's judgement in Food Corporation of India & Anr. v. RamKesh Yadav &Anr (2007) 9 SCC 531 to submit that in case of a conditional offer, the offeree could accept a part of the offer which results in performance by the offeror and then reject the condition subject to which the offer is made.

Court's Observations

On the aspect as to whether Arya's resignation was conditional, the bench after taking into consideration the letter dated July 12, 2002 observed that the mere assertion that all benefits arising out of the service period of the applicant would be paid to him was a natural corollary of their resignation and further observed that such a resignation could hardly be called conditional.

"The aforesaid being the position; if we look at this resignation letter under the Scheme, no doubt in terms of Clause 1.6 of the MVRS, the option lay with the management to decline an application without assigning any reasons. That again, to our mind, will not make the resignation conditional. In a contractual context, it would be an offer made by an employee under the Scheme which may or may not be accepted by the appellant-management. Once the acceptance takes place, the contract stands concluded. No doubt such acceptance has to be in terms of the Scheme," Court noted.

With regards to whether the subsequent communications of Arya could give the resignation letter a colour of a conditional resignation and whether the withdrawal was prior to its acceptance, the bench observed that once the letter of resignation was accepted on 28.05.2003, the post stood abolished.

"In contractual terms, appellant No. 1's acceptance of the respondent's offer of resignation as available under the MVRS was completed on 28.05.2003. The respondent cannot be permitted to take advantage of the postponement of the cut off date by a few days, during which time the respondent was asked to attend to office, albeit against no sanctioned post," the bench observed in this context.

The bench also upheld NTC's contention that mere delay in relieving Arya from duties would not impact the acceptance of his resignation.

The Court thereafter while setting aside the order passed by the High Court observed that Arya's resignation letter stood accepted on May 28, 2003 and that he was entitled to benefits under the scheme which had been paid to him without any prejudice to his rights and contentions in the proceedings.

Case Title: M/s New Victoria Mills & Ors. V. Shrikant Arya

Coram: Justice SK Kaul and Justice MM Sundresh

Citation : LL 2021 SC 506

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