Holding

Under Rule 26 of the Central Civil Service Pension Rules, 1972, a resignation forfeits past service and bars any pensionary benefit, and the denial of voluntary retirement cannot be invoked to circumvent this consequence.

Summary

The employee, a daily rated mazdoor appointed in 1968 and regularised as a peon in 1971, tendered his resignation in July 1990 after the employer denied his application for voluntary retirement on the ground that he had not completed twenty years of service. The employer denied pension benefits, invoking Rule 26 of the Central Civil Service (CCS) Pension Rules, 1972, which provides that resignation results in forfeiture of past service. The High Court had held that the employee had voluntarily retired and was entitled to pension, relying on Asger Ibrahim Amin v. LIC. The Supreme Court overruled that view, emphasizing the distinction between resignation and voluntary retirement and stating that the employee’s resignation, not a voluntary retirement, triggered forfeiture of service, rendering the question of twenty years of service irrelevant. The Court also held that the employer’s denial of voluntary retirement could not be used to claim pension benefits after resignation. Consequently, the appeal was allowed and the High Court order set aside.

Issues considered

Does resignation under Rule 26 of the CCS Pension Rules, 1972, result in forfeiture of past service and preclude pension benefits?
Can the denial of an employee's application for voluntary retirement be invoked to claim pension benefits after the employee resigns?
Is the employee's completion of twenty years of service relevant to pension entitlement when resignation has occurred?
What is the correct interpretation of the distinction between resignation and voluntary retirement under the CCS Pension Rules?
Should the approach in Asger Ibrahim Amin v. LIC, which applied voluntary retirement provisions retrospectively, be followed?

Legislation cited

Central Civil Service (Pension) Rules, 1972s. Rule 26
Central Civil Service Pension Rules, 1995s. Rule 23

Subjects

pensionresignationvoluntary retirementforfeiture of serviceCentral Civil Service Pension Rulesservice lawemployee benefits

Judgment

546 [2019]REPORTS
SUPREME COURT 14 S.C.R. 546 [2019] 14 S.C.R.

A BSES YAMUNA POWER LTD.
v.
SH. GHANSHYAM CHAND SHARMA & ANR.
(Civil Appeal No. 9076 of 2019)
B DECEMBER 05, 2019
[DR DHANANJAYA Y CHANDRACHUD
AND HRISHIKESH ROY, JJ.]
Service Law:
C Pension – Claim for – Denied on the ground that the employee
had forfeited his past services, by resigning – Challenged – High
Court held that the employee was entitled to pensionary benefit as
he had completed twenty years of service’ the legal effect of his
resignation letter would amount to voluntary retirement – Appeal to
Supreme Court – Held: There is distinction between ‘resignation’
D
and ‘voluntary retirement’ – As per Pension Rules resignation entails
forfeiture of past service – The employee having opted for
‘resignation’ cannot claim pensionary benefit on the ground that
earlier voluntary retirement was denied to him – Central Civil
Services Pension Rules, 1972 – r. 26.
E Allowing the appeal, the Court
HELD: 1. Rule 26 of the Central Civil Service Pension
Rules, 1972 states that upon resignation, an employee forfeits
his past service. Irrespective of whether the first respondent
had completed the requisite years of service to apply for voluntary
F 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
G an approach cannot be adopted. [Para 12][554-E-G; 555-A]
2. The appellant-employer had denied the first respondent’s
application for voluntary retirement on the ground that the first
respondent had not completed twenty years of service. It was
thus urged that the appellant’s decision to deny the first
H respondent voluntary retirement was illegal as the first
546
BSES YAMUNA POWER LTD. v. SH. GHANSHYAM CHAND 547
SHARMA & ANR.

respondent had completed twenty years of service. Even if he A
was denied voluntary retirement, the first respondent did not
challenge this decision but resigned. The denial of voluntary
retirement does not mitigate the legal consequences that flow
from resignation. No evidence has been placed on the record to
show that the first respondent took issue with the denial of
B
voluntary retirement. To the contrary, in the legal notice sent by
the first respondent to the appellant, the first respondent admitted
to having resigned. The first respondent’s writ petition was
instituted thirteen years after the denial of voluntary retirement
and eventual resignation. In the light of these circumstances,
the denial of voluntary retirement cannot be invoked before this C
Court to claim pensionary benefits when the first respondent has
admittedly resigned. [Para 13, 14][555-B-E]
3. Therefore the question whether the first respondent has
served twenty years, is of no legal consequence to the present
dispute. Even if the first respondent had served twenty years, D
under Rule 26 of the CCS Pension Rules his past service stands
forfeited upon resignation. The first respondent is therefore not
entitled to pensionary benefits. [Para 15][555-F]
Senior Divisional Manager, LIC v Shree Lal Meena
(Shree Lal Meena II”) (2019) 4 SCC 479 – relied on. E
Asger Ibrahim Amin v LIC (2016) 13 SCC 797 – stood
overruled. Senior Divisional Manager, LIC v Shree Lal
Meena (“Shree Lal Meena 1”) (2015) 17 SCC 43 :
[2015] 12 SCR 158 – referred to.
Case Law Reference F
(2016) 13 SCC 797 stood overruled Para 3
[2015] 12 SCR 158 referred to Para 7
(2019) 4 SCC 479 relied on Para 7
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9076 G
of 2019.
From the Judgment and Order dated 26.05.2017 of the High
Court of Delhi at New Delhi in LPA No. 408 of 2017.

H
548 SUPREME COURT REPORTS [2019] 14 S.C.R.

A C. U. Singh, Sr. Adv., Anupam Varma, Nikhil Sharma,
Pukhrambam Ramesh Kumar, Rahul Kinra, Karun Sharma, Advs. for
the Appellant.
Parag Tripathi, Sr. Adv., R. C. Kaushik, Sumeet Pushkarna, Alok
Gupta, Advs. for the Respondents.
B The Judgment of the Court was delivered by
DR DHANANJAYA Y CHANDRACHUD, J
1. By its order dated 26 May 2017 a Division Bench of the High
Court of Delhi upheld the judgement of a Single Judge dated 21 March
C 2017 granting pensionary benefits to the first respondent. The judgement
of the Single Judge directed the appellant to pay pensionary benefits to
the first respondent on the ground that he had completed twenty years
of service and had ‘voluntarily retired’ and not ‘resigned’ from service.
The appellant challenges these findings in the present appeal.

D 2. The first respondent was appointed as a daily rated mazdoor
on 9 July 1968. His services were regularised on the post of a Peon on
22 December 1971. The first respondent tendered his resignation on
7 July 1990, which was accepted by the appellant with effect from
10 July 1990. The first respondent was subsequently denied pensionary
benefits by the appellant on two grounds. First, that he had not completed
E twenty years of service, making him ineligible for the grant of pension.
Second, in any case, by resigning, the first respondent had forfeited his
past services and therefore could not claim pensionary benefits.
3. The second question of whether by resigning, the first
respondent forfeited his past service must be addressed at the outset. If
F the first respondent’s resignation resulted in a forfeiture of past service,
the question of whether he has completed twenty years of service is
rendered irrelevant for such service would stand forfeited. In holding
that the legal effect of the first respondent’s letter of resignation would
amount to ‘voluntary retirement’, the Single Judge of the High Court of
Delhi relied on the judgement of this Court in Asger Ibrahim Amin v
G
LIC 1.
4. In Asger Ibrahim Amin, the appellant had resigned in 1991
after completing twenty-three years of service with the Life Insurance
Corporation of India. When the appellant resigned, there existed no
1
H (2016) 13 SCC 797
BSES YAMUNA POWER LTD. v. SH. GHANSHYAM CHAND 549
SHARMA & ANR. [DR DHANANJAYA Y CHANDRACHUD, J]

provision allowing for voluntary retirement. The Central Government A
subsequently promulgated the Life Insurance Corporation of India
(Employees) Pension Rules 19952 setting out the conditions to be fulfilled
for the grant of pension upon retirement and permitting, for the first
time, employees to voluntarily retire after twenty years of service. Under
the LIC Pension Rules, pension on retirement was made retrospectively B
applicable to employees retiring prior to 1995, however, the provisions
regarding voluntary retirement were not. The LIC Pension Rules also
stipulated that resignation amounted to a forfeiture of past service. In
deciding whether the appellant was entitled to pension under the LIC
Pension Rules, Justice Vikramajit Sen speaking for a two judge Bench
of this Court held: C

“16. … [quoting Sheelkumar Jain v New India Assurance Co.
Ltd. (2011) 12 SCC 197] The aforesaid authorities would show
that the court will have to construe the statutory provisions
in each case to find out whether the termination of service
of an employee was a termination by way of resignation or a D
termination by way of voluntary retirement and while
construing the statutory provisions, the court will have to keep in
mind the purpose of the statutory provisions…
17. The appellant ought not to have been deprived of
pension benefits merely because he styled his termination E
of service as “resignation” or because there was no
provision to retire voluntarily at that time. The commendable
objective of the Pension Rules is to extend benefits to a class of
people to tide over the crisis and vicissitudes of old age, and if
there are some inconsistencies between the statutory F
provisions and the avowed objective of the statute so as to
discriminate between the beneficiaries within the class, the
end of justice obligates us to palliate the differences between
the two and reconcile them as far as possible. We would be
failing in our duty, if we go by the letter and not by the laudatory
G
spirit of statutory provisions and the fundamental rights guaranteed
under Article 14 of the Constitution of India.”
(Emphasis supplied)

2
LIC Pension Rules H
550 SUPREME COURT REPORTS [2019] 14 S.C.R.

A 5. The court in Asger Ibrahim Amin held that despite the use of
the term ‘resignation’ in the appellant’s letter, the court had to
independently determine whether the termination of service amounted
to a ‘resignation’ or a ‘voluntary retirement’. As the appellant in Asger
Ibrahim Amin had fulfilled the prescribed years of service and, at the
time of his resignation there was no provision for voluntary retirement,
B
the Court held that the appellant had in fact ‘voluntarily retired’ and not
‘resigned’. The LIC Pension Rules only made the provisions on retirement
applicable retrospectively and did not make the provisions with respect
to voluntary retirement applicable retrospectively. However, in holding
that the court must determine whether there existed a case for ‘voluntary
C retirement’ or ‘resignation’, the effect of the decision was to apply the
provisions on voluntary retirement retrospectively. The Court Vikramajit
Sen expressly noted this:
“11. … The respondent Corporation has controverted the plea of
the appellant that as the relevant date and time viz. 29-1-1991
D there was no alternative for him except to tender his
resignation, pointing out that he could not have sought voluntary
retirement under Regulation 19(2-A) of the LIC of India (Staff)
Regulations, 1960. If that be so, the respondent being a model
employer could and should have extended the advantage
of these Regulations to the appellant thereby safeguarding
E his pension entitlement. However, we find no substance in the
argument of the respondent since Regulation 19(2-A) was, in fact,
notified in the Gazette of India on 16-2-1996, that is, after the
pension scheme case into existence with effect from 1-11-1993.
(Emphasis supplied)
F
6. In the present case, the Single Judge of the High Court of Delhi
relied on the decision in Asger Ibrahim Amin to hold that the first
respondent was entitled to pensionary benefits. The Single Judge noted
that the first respondent had completed more than twenty years of service
and would have been eligible for pension upon voluntary retirement.
G Therefore, despite the first respondent using the term ‘resignation’, on
an independent determination of the facts of the case, the Single Judge
held that he had in fact ‘voluntarily resigned’ from service’.
7. Mr C U Singh, learned Senior Counsel for the appellant, brought
to our attention that the correctness of the court’s approach in Asger
H
BSES YAMUNA POWER LTD. v. SH. GHANSHYAM CHAND 551
SHARMA & ANR. [DR DHANANJAYA Y CHANDRACHUD, J]

Ibrahim Amin had been called into question by a co-ordinate bench of A
this Court in Senior Divisional Manager, LIC v Shree Lal Meena3
(“Shree Lal Meena I”), which referred the matter to a larger Bench
of this Court. Thereafter, a three judge Bench of this Court was
constituted and delivered a judgement in Senior Divisional Manager,
LIC v Shree Lal Meena4 (“Shree Lal Meena II”) overruling the
B
view taken in Asger Ibrahim Amin. Both these judgements have been
placed on the record.
8. The facts in Shree Lal Meena I and Shree Lal Meena II
were analogous to those in Asger Ibrahim Amin. The respondent
employee had resigned after completing twenty years of service. The
court was called upon to determine whether the respondent’s ‘resignation’ C
amounted to a forfeiture of his past service disentitling him from pension
or was in fact ‘voluntary retirement’. Justice Dipak Mishra (as the learned
Chief Justice then was) speaking for a two judge Bench of this Court in
Shree Lal Meena I observed:
“28. … Needless to say, resignation has the effect of termination D
of an employee. Voluntary retirement though has the effect of
termination of an employee yet it has different consequences. In
the former case, the ex-employee could not be entitled to pension,
whereas in case of voluntary retirement, the latter one, the
employee would be entitled to pension depending upon the terms E
postulated in the regulations or rules or the scheme. Rule 23 of
the 1995 Rules specifically provides that on resignation, dismissal,
removal, termination or compulsory retirement, the employee shall
forfeit past service and he shall not qualify for pensionary benefit.
Thus, resignation given under the 1995 Rules would not entitle an
employee to get pension. F

29. … In Asger Ibrahim Amin, retrospectivity has been given to
Rule 31 [Pension on voluntary retirement], and for the said purpose
the amendment to the 1960 Regulations, specifically Regulation
19(2-A) has been taken recourse to. In our view, when Rule
31 covers the field of voluntary retirement and does not G
make it retrospective, there being a real difference between
resignation and retirement, it is not seemly to read the

3
(2015) 17 SCC 43
4
(2019) 4 SCC 479 H
552 SUPREME COURT REPORTS [2019] 14 S.C.R.

A amended Regulations to the Rules to make the same
retrospective. Therefore, we are unable to concur with the view
expressed in Asger Ibrahim Amin.”
(Emphasis supplied)
9. The court in Shree Lal Meena I took the view that the
B
provision with respect to pension on voluntary retirement (Rule 31) was
not applicable retrospectively because the relevant provision had not
been enacted with retrospective effect. Crucially, the Court noted that
by making the provision on voluntary retirement applicable retrospectively,
and making a determination in the facts of each case whether an
C employee had ‘resigned’ or ‘voluntarily retired’, the decision in Asger
Ibrahim Amin obliterated the distinction between resignation and
retirement. The court noted that there is a “real difference between
resignation and retirement”. They cannot be used interchangeably, and
the court cannot substitute one for the other merely because the employee
D has completed the requisite number of years to qualify for voluntary
retirement.
10. In Shree Lal Meena II, upholding the interpretation in Shree
Lal Meena I, Justice Sanjay Kishan Kaul speaking for the three judge
Bench, noted that the retrospective application of the provision on
E voluntary retirement in the LIC Pension Rules would lead to an absurd
result:
“19. What is most material is that the employee in this case
had resigned. When the Pension Rules are applicable, and an
employee resigns, the consequences are forfeiture of service,
F under Rule 23 of the Pension Rules. In our view, attempting to
apply the Pension Rules to the respondent would be a self-
defeating argument. As, suppose, the Pension Rules, were
applicable and the employee like the respondent was in
service and sought to resign, the entire past service would
be forfeited, and consequently, he would not qualify for
G pensionary benefits. To hold otherwise would imply than
an employee resigning during the currency of the Rules
would be deprived of pensionary benefits, while an
employee who resigns when the Rules were not even in
existence, would be given the benefit of these Rules.”
H (Emphasis supplied)
BSES YAMUNA POWER LTD. v. SH. GHANSHYAM CHAND 553
SHARMA & ANR. [DR DHANANJAYA Y CHANDRACHUD, J]

The Court noted that, if the approach followed in Asger Ibrahim Amin A
was adopted in interpreting the LIC Pension Rules, an employee who
resigned after the enactment of the rules would not be entitled to
pensionary benefits but an employee who had resigned when the rules
were not in force, but had completed the prescribed period of service
for voluntary retirement, would be entitled to pensionary benefits. Such
B
an outcome could not be countenanced and would render nugatory the
provision which stipulated that upon resignation, past service stood
forfeited.
11. The Court in Shree Lal Meena II elucidated the distinction
between resignation and voluntary retirement in the following terms:
C
“22. … [quoting RBI v Cecil Dennis Solomon (2004) 9 SCC 461]
In service jurisprudence, the expressions “superannuation”,
“voluntary retirement”, “compulsory retirement” and “resignation”
convey different connotations. Voluntary retirement and resignation
involve voluntary acts on the part of the employee to leave service.
Though both involve voluntary acts, they operate differently. One D
of the basic distinctions is that in case of resignation it can be
tendered at any time, but in the case of voluntary retirement, it
can only be sought for after rendering the prescribed period of
qualifying service. Another fundamental distinction is that in case
of the former, normally retiral benefits are denied but in case of E
the latter, the same is not denied. In case of the former, permission
or notice is not mandated, while in the case of the latter, permission
of the employer concerned is a requisite condition. Though
resignation is a bilateral concept, and becomes effective on
acceptance by the competent authority, yet the general rule can
be displaced by express provisions to the contrary.” F

The above observations highlighted the material distinction between
the concept of resignation and voluntary retirement. The Court also
observed that while pension schemes do form beneficial legislation in a
delegated form, a beneficial construction cannot run contrary to the
express terms of the provisions: G

“26. There are some observations on the principles of public sectors
being model employers and provisions of pension being beneficial
legislations (see Asger Ibrahim Amin v LIC). We may, however,
note that as per what we have opined aforesaid, the issue cannot
H
554 SUPREME COURT REPORTS [2019] 14 S.C.R.

A be dealt with on a charity principle. When the legislature, in its
wisdom, brings forth certain beneficial provisions in the form of
Pension Regulations from a particular date and on particular terms
and conditions, aspects which are excluded cannot be included in
it by implication.”
B 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
C 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.
D
12. In the present case, the first respondent resigned on 7 July
1990 with effect from 10 July 1990. By resigning, the first respondent
submitted himself to the legal consequences that flow from a resignation
under the provisions applicable to his service. Rule 26 of the Central
Civil Service Pension Rules 19725 states that:
E
“26. Forfeiture of service on resignation
(1) Resignation from a service or a post, unless it is allowed to be
withdrawn in the public interest by the Appointing Authority, entails
a forfeiture of past service…”
F 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
G 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
5
H CCS Pension Rules
BSES YAMUNA POWER LTD. v. SH. GHANSHYAM CHAND 555
SHARMA & ANR. [DR DHANANJAYA Y CHANDRACHUD, J]

an approach cannot be adopted. Accordingly, the finding of the Single A
Judge that the first respondent ‘voluntarily retired’ is set aside.
13. We now turn to the question of whether the first respondent
had completed twenty years in service. During the present proceedings,
our attention was drawn to the fact that the first respondent had applied
for voluntary retirement on 14 February 1990. By a letter dated 25 May B
1990 the appellant denied the first respondent’s application for voluntary
retirement on the ground that the first respondent had not completed
twenty years of service. It was thus urged that the appellant’s decision
to deny the first respondent voluntary retirement was illegal as the first
respondent had completed twenty years of service. C
14. This argument cannot be accepted. Even if he was denied
voluntary retirement on 25 May 1990, the first respondent did not
challenge this decision but resigned, on 7 July 1990. The denial of
voluntary retirement does not mitigate the legal consequences that flow
from resignation. No evidence has been placed on the record to show D
that the first respondent took issue with the denial of voluntary retirement
between 25 May 1990 and 7 July 1990. To the contrary, in the legal
notice dated 1 December 1992 sent by the first respondent to the appellant,
the first respondent admitted to having resigned. The first respondent’s
writ petition was instituted thirteen years after the denial of voluntary
retirement and eventual resignation. In the light of these circumstances, E
the denial of voluntary retirement cannot be invoked before this Court to
claim pensionary benefits when the first respondent has admittedly
resigned.
15. On the issue of whether the first respondent has served twenty
years, we are of the opinion that the question is of no legal consequence F
to the present dispute. Even if the first respondent had served twenty
years, under Rule 26 of the CCS Pension Rules his past service stands
forfeited upon resignation. The first respondent is therefore not entitled
to pensionary benefits.
16. For the above reasons, we accordingly allow the appeal and G
set aside the impugned order of the High Court of Delhi dated 26 May
2017. There shall be no order as to costs.

Kalpana K. Tripathy Appeal allowed.
H