BANK OF INDIA AND ORS. v. O.P. SWARANAKAR ETC.

We may notice that in Jai Ram v. Union of India, AIR (1954) SC 584 it was held:

"It may be conceded that it is open to a servant, who has expressed a desire to retire from service and applied to his superior officer, to D give him the requisite permission, to change his mind subsequently and ask for cancellation of the permission thus obtained; but, he can be allowed to do so as long as he continues in service and not after it has terminated."

Yefagain in Raj Kumar v. Union ofIndia, [ 1968] 3 SCR 857 it was held: E "When a public servant has invited by his letter of resignation determination of his employment, his services normally stand terminated from the date on which the letter of resignation is accepted by the appropriate authority, and in the absence of any law or rule governing the conditions of his service to the contrary, it will not be F open to the public servant to withdraw his resignation after it is accepted by the appropriate authority. Till the resignation is accepted by the appropriate authority in consonance with the rules governing the acceptance, the public servant concerned has locus poenitentiae but not thereafter". G In Bairam Gupta's case this court was dealing with Central Civil Services (Pension) Rules, 1972 which is a statutory rule. Sub-rule (4) of Rule 48-A prevented withdrawal of resignation letter except with the approval of the authority. The validity of the said rule was not in question. In that case the approval of the authority to withdraw was not given. It was in the aforementioned situation observed:

BANK OF INDIA v. O.P. SWARANAKAR (S.B. SINHA, J.] 481 "That has been done. The approval of the authority was, however, not given. Therefore, the normal r11 le which prevails in certain cases that a person can withdraw his resignation before it is effective would not apply in full force to a case of this nature because here the government servant cannot withdraw except with the approval of such authority".

Having regard to the fact that the issue involved therein stood on a B different footing, this Court made a mere observation to the following effect:

"It may be a salutary requirement that a government servant cannot withdraw a letter of resignation or of voluntary retirement at his sweet will and put the government into difficulties by writing letters of resignation or retirement and withdrawing the same immediately without rhyme or reason. Therefore, for the purpose of appeal we do not propose to consider the question whether sub-rule (4) of Rule 48-A of the Pension Rules is valid or not".

Validity of such a rule was, therefore, not in question. As indicated hereinbefore, the bar of withdrawing the resignation was contained in the statutory rule and, thus Section 5 of the Indian Contract Act would not have been applicable in that case. However, it is advantageous to notice the following observations made in the said decision:

"We do not see how this could not be a good and valid reason. It E is true that he was resigning and in the notice for resignation he had not given any reason except to state that he sought voluntary retirement. We see nothing wrong in this. In the modem age we should not put embargo upon people's choice or freedom. If, however, the administration had made arrangements acting on his resignation or letter of retirement to make other employee available for his job, F that would be another matter but the appellant's offer to retire and withdrawal of the same happened in such quick succession that it cannot be said that any administrative set up or arrangement was affected".

It was further observed: G "In the modem and uncertain age it is very difficult to arrange one's future with any amount of certainty; a certain amount of flexibility is required, and if such flexibility does not jeopardize government or administration, administration should be graceful enough to respond and acknowledge the flexibility of human mind and attitude and allow H

482 SUPREME COURT REPORTS [2002) SUPP. 5 S.C.R.

A the appellant to withdraw his letter of retirement in the facts and circumstances of this case".

In P.K. Mittal's case (supra), a question arose as to whether in contravention of Rule 20 of the Punjab National Bank (Officers) Service Rules, 1979, the bank can reduce the notice period. Ranganathan, J. speaking for the bench held that the same could not have been done and the concerned employee was entitled to withdraw his resignation before it became effective.

In Power Finance Corporation Ltd. v. Pramod Kumar Bhatia, [1997] 4 sec 280) a scheme of voluntary retirement was floated and pursuant thereto the Respondents therein had applied for voluntary retirement but subsequently the Corporation had withdrawn the scheme although the offer had been accepted. Such acceptance was to take effect from 31-12-1994. This court held that the acceptance of his offer to voluntarily retire being subject to adjustment of the amount payable to him, the same did not attain finality. It was held:

"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 1

created in favour of the respondent. The High Comt, therefore, was not right in holding that the respondent has acquired a vested right and, therefore, the appellant has no right to withdraw the scheme subsequently". F This decision is an authority for the propos1t1on that even after acceptance of the offer made by the employee, the scheme can be withdrawn and, if it is so done, the employee does not acquire any vested right.

In JN. Srivastava 's case (supra), it was held : G "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.

H In Wg. Cdr T. Parthasarathy's case the fact of the matter was as

BANK OF INDIA v. O.P. SWARANAKAR [S.B. SINHA, J.] 483

follows: A The Respondent submitted an application on 21-7-1985 praying for premature retirement with effect from 31-8-1986. He also furnished a certificate stating that he was aware that any request made by him for cancellation of his application for premature retirement would not be accepted. On 6-11-1985 he moved an amendment to earlier application stating that the actual date of his release could be decided taking into account the pensionary recommendations/ requirements of the Fourth Pay Commission's Report which was expected to come in November, 1985. He subsequently withdrew his offer on 19-2-1986..

The Respondent received a letter dated 20th February, 1986 that he would prematurely retire from service with effect from 31-8-1986. On a Writ Petition moved by the Respondent before the Karnataka High Court, it was held that having regard to the offer made on 19-2-1986, the subsequent action taken by the Department on 20th February, 1986 had no effect. In this Court an argument was advanced that having regard to the policy decision to which the Respondent was aware and having given a certificate at the time of submission of application for premature retirement that he Wl!S aware of the fact that his request for withdrawal or cancellation subsequently would not be accepted, the impugned judgment of .the High Court was erroneous but rejecting the same this court held : E "We have carefully considered the submissions of the learned counsel appearing on either side. The reliance placed for the appellants on the decision reported in Raj Kumar Case is in appropriate to the facts of this case. In that case this Court merely emphasized the position that when a public servant has invited by his letter of resignation determination of his employment his service clearly stands terminated from the date on which the letter of resignation is accepted by the appropriate authority and in the absence of any law or rule governing the condition of the service to the contrary, it will not be open to the public servant to withdraw his resignation after it is accepted by the appropriate authority and that till the resignation is accepted by the appropriate authority in consonance with the rules governing the acceptance, the public servant concerned had locus poenitentiae but not thereafter".

In Shambhu Murari Sinha 's case it was held: H

484 SUPREME COURT REPORTS [2002) SUPP. 5 S.C.R.

A "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 B 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 c 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".

It may be that therein there did not exist a clause to the effect that once an option to voluntary retirement is accepted, the employee cannot withdraw the same, but the law laid down therein would apply herein also.

The submission of learned Attorney General that as soon as an offer is made by an employee, the same would amount to resignation in praesenti cannot be accepted. The scheme was in force for a fixed period. A decision by the authority was required to be taken and till a decision was taken, the jural relationship of employer and employee continued and the concerned employees would have been entitled to payment of all salaries and allowances etc. Thus it cannot be said to be a case where the offer was given in praesenti but the same would be prospective in nature keeping in view of the fact that it was come into .force at a later date and that too subject to acceptance thereof by the employer. We, therefore, are of the opinion that the decisions of this Court, as referred to herein before, shall apply to the facts of the present case also.

However, it is accepted that a group of employees accepted the ex gratia payment. Those who accepted the ex gratia payment or any other benefit under the scheme, in our considered opinion, could not have resiled therefrom.

BANK OF INDIA v. O.P. SWARANAKAR [S.B. SINHA, J.] 485

The Scheme is contractual in nature. The contractual right derived by the concerned employees, therefore, could be waived. The employees concerned having accepted a part of the benefit could not be permitted to apptobate and reprobate nor can they be permitted to resile from their earlier stand.

In Lachoo Mal's case (supra) the law is stated in following terms: B "The general principle is that every one has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity which may be d_ispensed with without infringing any public right or public policy. Thus the maxim which sanctions the non-observance of the statutory provision is cuilibet lice! renuntiare juri pro se introducto. (See Maxwell on Interpretation of Statutes, Eleventh Edition, pages 375 and 376). If there is any express prohibition against contracting out of a statute in it then no question can arise of any one entering into a contract which is so prohibited but where there is no such prohibition it will have to be seen whether an Act is intended to have a more extensive operation as a matter of public policy. In Halsbury's Laws of England, Volume 8, Third Edition, it is stated in Paragraph 248 at page I432:

As a general rule, any person can enter into a binding contract to waive the benefits conferred upon him by an Act of Parliament, or, as it is said, can contract himself out of the Act, unless it can be shown that such an agreement is in the circumstances of the particular case contrary to public policy. Statutory conditions ·may, however, be imposed in such terms that they cannot be waived by agreement, and, in certain circumstances, the Legislatuie has expressly provided that any such agreement shall be void."

In Brijendra Nath Bhargava 's case (supra), the law is stated in following terms:

"It clearly goes to show that if a party gives up the advantage he could take of a position of law it is not open to him to change and say that he can avail of that ground. In Dawsons Bank Ltd. case their Lordships were considering the question of waiver as a little different from estoppel and they observed as under: . H

486 SUPREME COURT REPORTS [2002] SUPP. 5 S.C.R.

A On the other hand, waiver is contractual, and may constitute a cause of action; it is an agreement to release or not to assert a right. If an agent, with authority to make such an agreement on behalf of his principal agrees to waive his principal's rights then (subject to any other question such as consideration) the principal will be bound, but he will be bound by contract.. .. B But in the context of the conclusion that we have reached on the basis of circumstances indicated above that it could not be held that the tenant had constructed his dochatti or balcony a wooden piece without the consent express or implied of the landlord, in our opinion, it is not necessary for us to dilate on the question of waiver any further and c in this view of the matter we are not referring to the other decisions on the question of waiver."

In Halsbury's Laws of England, 4th Edition, Vol.16 (Reissue) para 957 at page 844 it is stated: D "On the principle that a person may not approbate and reprobate a special species of estoppel has arisen. The principle that a person may not approbate and reprobate express two propositions:

(I) That the person in question, having a choice between two courses of conduct is to be treated as having made an election from E which he cannot resile.

(2) That he will be regarded, in general at any rate, as having so elected unless he has taken a benefit under or arising out of the course of conduct, which he has first pursued and with which his subsequent conduct is inconsistent." F In American Jurisprudence, 2nd Edition, Volume 28, 1966, Page 677-680 it is stated:

"Estoppel by the acceptance of benefits: Estoppe I is frequently based upon the acceptance and retention, by one having knowledge or G notice of the facts, of benefits from a transaction, contract, instrument, regulation which he might have rejected or contested. This doctrine is obviously a branch of the rule against assuming inconsistent positions.

As a general principle, one who knowingly accepts the benefits of a H contract or conveyance is estopped to deny the validity or binding

BANK OF INDIA v. O.P. SWARANAKAR [S.B. SINHA, J.) 487 effect on him of such contract or conveyance. A This rule has to be applied to do equity and must not be applied in such a manner as to violate the principles of right and good conscience."

We also accept the contention raised by the learned counsel for the respondents that the concerned appellants could not have accepted the offer of voluntary retirement after expiry of the scheme. All actions by the Banks were required to be taken strictly in terms of the said scheme.

We are furthermore not in a position to accept the arguments of Mr. Mukul Rohtagi to the effect that writ petitions were not maintainable as thereby the writ petitioners intended to enforce a contract. The writ petitioners filed the writ petitions, inter alia, questioning the validity of the scheme. In any event validity of clause I0.5 of the said scheme was in question. The appellants herein are 'State' within the meaning of Article 12 of the Constitution of India. The ques~ions raised by the writ petitioners thus could be raised in D a proceeding under Article 226 of the Constitution of India. Furthermore, in the event it be held that the action of the appellants was arbitrary and unreasonable, the same would attract the wrath of Article 14 of the Constitution of India. Furthermore, the right of the employee to continue in employment, which is a fundamental right under Article 21 of the Constitution of India could not have been taken away except in accordance with law. The decision E of this Court in Har Shankar and Ors. v. The Dy. Excise and Taxation Commr. and Ors., (1975] 1 SCC 737 is not apposite. In that case, this Court was concerned with the question as to whether enforcing the terms and conditions of a contract of supply of liquor which is a privilege would be permissible in a writ proceeding? In the aforementioned situation, the writ was held to be not maintainable. Such is not the position herein F We may now deal with that part of the order of the· Punjab & Haryana High Court whereby it has been held that the entire scheme is ultra vires being violative of clause 4 of section 19 of the 1970 Act.

We do not agree with the decision of the High Court on that count for G more than one reason.

Firstly, the scheme is not a part of the statutory regulation. It was in the realm of contract. That being so it was not necessary for the Central Government' to place the same before the Parliament. H

488 SUPREME COURT REPORTS [2002] SUPP. 5 S.C.R.

A Secondly, even if the same was a regulation, the laying down rule is merely a directory one and not mandatory.

In Jan Mohammad's case (supra), the law is stated in following terms:

"Finally, the validity of the rules framed under the Bombay Act 22 of B the 1939 was canvassed. By s.26(1) of the Bombay Act the State Government was authorised to make rules for the purpose of carrying out the provisions of the Act. It was provided by sub-s. (5) that the rules made under s.26 shall be laid before each of the Houses of the Provincial Legislature at the session thereof next following and shall be liable to be modified or rescinded by a resolution in which both c Houses concur and such rules shall, after notification "in the Official· Gazette, be d~emed to have been modified or rescinded accordingly. It was argued by the petitioner that the rules framed under the Bombay Act, 22 of 1939 were not placed before the Legislative Assembly or the Legislative Council at the first session and therefore they had no D legal validity. The rules under Act 22 of 1939 were framed by the Provincial Government of Bombay in 1941. At that time there was no Legislature in session, the Legislature having been suspended during the emergency arising out of World War II. The session of the Bombay Legislative Assembly was convened for the first time after 1041 on May 20, 1946 and that session was prorogued on May 24, 1946. The E second session of the Bombay Legislative Assembly was convened on July 15, 1946 and that of the Bombay Legislative Council on September 3, 1946 and the rules were placed on the Assembly Table in the second session before the Legislative Assembly on September 2, 1946 and before the Legislative Council on September 3, 1946. F Section 26(5) of Bombay Act 22 of 1939 does not prescribe that the rules acquired validity only from the date on which they were placed before the Houses of Legislature. The rules are valid from the date on which they are made under s. 26(1). It is true that the Legislature has prescribed that the rules shall be placed before the Houses of Legislature, but failure to place the rules before the Ho!!ses of G Legislature does not affect the validity of the rules, merely because .they have not been placed before the Houses of the Legislature. Granting that the provisions of sub-s. (5) of s.26 by reason of the failure to place the rules before the Houses of Legislature were violated, we are of the view that sub-s.(5) of s. 26 having regard to the purposes . for which it is made, and in the context in· which it occurs, cannot be H

BANK OF INDIA v. O.P. SW ARANAKAR (S.B. SINHA, J.] 489 regarded as mandatory. The rules have been in operation since the A year 1941 and by virtue of s.64 of the Gujarat Act 20 of 1964 they continue to remain in operation."

In Atlas Cycle Industries' case (supra) the same view has been reiterated. B We, therefore, are of the opinion that the scheme in question cannot be said to be bad in law.

The Punjab and Haryana High Court in its impugned judgment has refused to grant any relief in ten writ petitions, wherein prayers were made to the effect that the bank .should be directed to act in terms of the said scheme. The relief prayed for by the concerned petitioners were denied by the High Court on the ground that the same was .not enforceable. We have not accepted that part of the judgment of the High Court. In that view of the matter, the High Court must now consider the claim of the said writ petitioners on merits and pass an appropriate order in accordance with law. The said matters are, therefore, remitted to the High Court for consideration thereof afresh.

For the reasons aforementioned, we direct that :

I. The appeals preferred by the Nationalised Banks arising from the E High Courts are dismissed except the cases where the concerned employees have accepted a part of the benefit under the scheme; However, in respect of such of the employees who despite acceptance of a part of the retirement benefit under the scheme had continued under the orders of the High Court and has retired on attaining the age of superannuation, this order shall not apply;

2 The appeals filed by the State Bank of India are allowed;

3. The appeals arising from the judgments of the Uttaranchal High Court are allowed and the judgments of the said High Court are set aside;

4. The appeals arising from the judgments of the Punjab and Haryana High Court in relation to ten writ petitions which were filed by the employees for a direction upon the Bank that the benefits under the scheme be paid to them are set aside and the matters H

490 SUPREME COURT REPORTS (2002) SUPP. S S.C.R.

A are remitted to the High Court for consideration thereof afresh on merits and in accordance with law;

These appeals are disposed of on the above terms. However, in the facts and.circumstances of the case, the parties shall pay and bear their own costs throughout. B N.J. Appeals disposed of.