PUNJAB AND SIND BANK AND ANR.versusS. RANVEER SINGH BAWA AND ANR.

A                   PUNJAB AND SiND BANK AND ANR.
                                           v.
                    S. RANVEER SINGH BA WA AND ANR.

                                 APRIL 21, 2004

B          [V.N. KHARE, CJ., S.B. SINHA AND S.H. KAPADIA, JJ.]


         Service Law:

C          Voluntc:ry retirement Scheme-Option-Withdrawal from option after
    receipt of benefit thereunder-Permissibility of-Held_: optee ha\Jing knowingly
    accepted the benefit is estopped from denying the binding effect of the
    Scheme-Hence, cannot resile from the Scheme~Evid(mce Act, I 872-Section
    I I 5-Doctrine of Estoppel,

D         Respondent No. 1 opted for Voluntary Retirement Scheme. He withdrew
    his option for the Scheme before the cut-off date. Thereafter he received the
    benefits under the Scheme without any o,bjection and also appropriated the
    amounts for his benefit. He was not permitted to opt out of the Scheme and
    was relieved from the service. Respondent filed writ petition. Single Judge
    held that the optee was entitled to withdraw his option befor;e its acceptance
E   by the Bank. Division Bench dismissed the Letters Patent Appeal.             ·

          On appeal to this Court appellant contended that the respondent was
    not entitled to withdraw from the Scheme having received payment under the
    Scheme.

F         Allowing the appeal, the Court

          HELD: 1. Estoppel is based upon the acceptance and retention ofben~fits,
    by one having knowledge or notice of the benefits from a contract or a
    transaction. The doctrine of estoppel is a branch of the rule against
G   assumption of inconsistent positions. One who knowingly accepts the benefit
    of a contract is estopped from denying the binding effect on him of such
    contract. This rule has to be applied to do equity. (527-C-D)

         1. Respondent having withdrawn his option and yet without any nbjection
    receiving the benefits under Voluntary Retirement Scheme, principles of
H                                        524
               PUNJAB AND SINO BANK v. S.R.S. BAWA [KAPADIA, J.]                525
       estoppel would apply. His conduct indicates his knowledge about payments in    A
       his accounts; that he never objected to such payments and that he had
                                                                        •
       appropriated the amounts for his benefit. Therefore, he cannot resile from
       the Scheme. (529-B-C]

            Bank of India v. O.P. Swarnakar, (20031 2· SCC 721; Punjab National
       Bank v. Virender Kumar Goel and Ors., (20041 2 SCC 193 and Bank ofIndia        B
       and Ors. v. Pale Ram Dhania, [20041 9 SCC 36, relied on.

            CIVIL APPEL LATE JURISDICTION : Civil Appeal No. 4097 of 2002.

             From the Judgment and Order dated 5.9.2001 of the Delhi High Court       C
       in L.P.A.No. 455 of2001

            Jagat Arora, Rajat Arora, Ms. Ritu Arora and Rajiv Nanda for the
       Appellants .

._,;        Jayant Bhushan, Mandeep Singh Vinaik and Hardeep Singh Anand for D
       the Respondents.

             The Judgment of the Court was delivered by

             KAPADIA, J. The question that arises for consideration in this case is
       - whether respondent who earlier opt~d for voluntary retirement scheme could   E
       be permitted to withdraw therefrom after having received the payments under
       the scheme?

               The facts giving rise to the dispute lie within narrow compass. Appellant
        is a nationalised bank. On 28.10.2000, in order to down size the strength of
       its staff, the appellant floated the voluntary retirement scheme (hereinafter F
       referred to for the sake of brevity as "YRS"). The scheme was to commence
       with effect from 1.12.2000 and it was to rem!lin in operation up to 3 I. I 2.2000.
       On 6.I2.2000, respondent no.I, Ranveer Singh Bawa, opted.for YRS. On
       22. I 2.2000, respondent no. I requested that he be allowed to withdraw his
       option. On 23. I2.2000, the scheme stood modified. On 30. I2.2000 and 17.1.200 I,
       the ·said respondent wrote reminders and requested that he be permitted to G
       withdraw his option. However, in view of clause 10.4 of the scheme, the
       appellant did not permit him to opt out from the YRS. Conseq~ently, w.e.f.
       29. I .200 I, respondent no. I was relieved from service. Aggrieved, he filed the
       writ petition in the High Court on 26.3.2001 inter alia seeking resumption of
       duties without any break in service. On 24.7.2001, the learned Single Judge H
    526                     SUPREME COURT REPORTS [2004] SUPP. 1 S.C.R.

A   allowed the writ petition on the ground that the optee is entitled to withdraw
    his option before its aq:eptance by the bank. Against the decision of the
    learned Single Judge, the appellant carried the matter in appeal to the Division
    Bench. By impugned judgment dated 5.9.2001, the Division Bench dismissed
    the Letters Patent Appeal. Hence, this civil appeal by special leave petition.

B          In the case of Bank ofIndia v. O.P. Swarnakar, reported in [2003] 2 SCC
    721, two questions arose for determination, namely, whether the scheme is an
    offer, as contended on behalf of the bank or an invitation inviting offers from
    employees; and secondly, whether the optees having accepted the payments/
    benefits under the scheme could be permitted to resile therefrom. On the first
C   question, it was held that the said scheme was contractual in nature; that it
    constituted invitation and not an offer; and that no consideration passed in
    terms of the scheme so as to constitute an agreement. Under the circumstances,
    it was held that revocation was possible and effective at any time before
    acceptance as up to such acceptance no legal obligation existed. On the
    second question, it was held that those employees who have accepted the
D   payments/benefits under the scheme cannot approbate and reprobate nor can
    they be permitted to withdraw.

           When the appeal came up for hearing, it was submitted on behalf of the
    appellant on facts that the respondent no. I herein had received and accepted
E   payments/benefits under the scheme and consequently, he was not entitled
    to withdraw therefrom. In this connection, reliance was placed on the averments
    in the counter-affidavit filed by the appellant on 28.2.2004 in I.A. No.I of 2003
    filed in the present civil appeal. It was urged that the said respondent had
    two savings bank accounts no. 4775 and 4777, in which the bank credited
    salaries, notice period salary as well as leave encashment benefits under the
F   scheme, which was never objected to by the respondent Further, the credits
    in the savings bank accounts were used by the respondent to repay his car
    loan to the bank amounting to Rs. 65220, which was one of the conditions
    prescribed in the scheme. Further, the said respondent had utilized the credits
    in the said accounts for investment in fixed deposits. Accordingly, it was
G   submitted that the respondent had received the payments under the scheme,
    he had utilized those payments to discharge his obligations under the scheme
    by repayment of car loan and he had invested the amounts in fixed deposits.
    Therefore, he was not entitled to withdraw from the scheme. Mr. Jayant
    Bhushan, learned senior counsel appearing on behalf of the respondent, on
    the other hand, contended that on 6.12.2000, respondent herein opted for
H   VRS. He urged that the scheme was open up to 31.12.2000. On 22.12.2000, the
                      PUNJAB AND SINO BANK v. S.R.S. BA WA [KAPADIA, J.]                   527
-c
             said respondent withdrew his offer. He repeatedly reminded the management             A
             thereafter to accept his request for withdrawal. Despite reminders, on 29.01.200 l,
             the management relieved the respondent from service, which was challenged
             by him by filing writ petition in Delhi High Court on 26.3.2001. It was urged
             that although the respondent succeeded in the writ petition, till date the
             appellant has failed to reinstate the respondent. It was submitted that the           B
             appellant had unilaterally credited the salaries, the notice pay and the leave
             encashment benefits in the account of the respondent with the appellant bank
             and consequently, the receipts of payments cannot constitute waiver or
             acquiescence on the part of the respondent. At the highest, it was receipt of
             payment under protest. In this connection, reliance was placed on the fact of
             pendency of the writ petition in the High Court.                                      C
                    In the case of Bank of India v. O.P. Swarnakar (supra), this Court
             observed that estoppel is based upon the acceptance and retention of benefits,
             by one having knowledge or notice of the benefits from a contract or a
     . _,I   transaction. The doctrine of estoppel is a branch of the rule against assumption
             of inconsistent positions. One who knowingly accepts the benefit of a contract        D
             is estopped from denying the binding effect on him of such contract. This
             rule has to be applied to do equity. It was accordingly held that those optees
             who knowingly received the payments and utilized them were not entitled to
             withdraw from the VRS. In the case of Punjab National Bank v. Virender
             Kumar Goel and Ors., reported in (2004] 2 SCC 193, the applicant bank                 E
             submitted that some of the optees having accepted the benefits under VRS
             cannot be permitted to withdraw therefrom. In that matter, several review
             petitions were filed and in some of those review petitions, it was found that
             the optees were aware of the credits in their accounts and they have even
             withdrawn the amounts deposited and had utilized the same and consequently
             in such cases, this Court did not permit the optees to withdraw from VRS. To          F,
             the same effect is the order passed by this Court in the case of Bank of India
             and Ors. v. Pale Ram Dhania, in Civil Appeal No. 4098 of 2002 decided on
             12.2.2004. In the light of the above judgments, we have to consider the facts
             of the present case.

                   At the outset, it may be mentioned that before the High Court the only          G
             question which arose for determination in this case was - whether the
             respondent herein was entitled to withdraw his option before the cut-off date.
             The question - as to whether the said respondent had received the payments/
             benefits and had utilized the same was not there before the High Court. The
             last question has been raised by the bank in I.A. No. I of 2003 in the present H
    528                   SUPREME COURT REPORTS (2004) SUPP. 1 S.C.R.

A civil appeal.
          We quote hereinbelow paragraphs 3, 4 and 5 of the counter affidavit
    dated 28.2.2004:

           "3. That tlie account statement submitted along with the additional
B          affidavit at pages 23-24 relates to Savings Bank Account No .. 4775
           maintained by the respondent. A perusal of the same would show that
           on 27.12.2000 salary to the tune of Rs. 15,154.00 was credit~d to his     1·

           account. Subsequently, on 25.l.2001 another credit entry amounting        'f
           to Rs. l4,600.42p was made on account of salary. On 29.l.2001, a credit
           entry amounting to Rs.23,548.59 on account of notice period salary as     ,
c          applicable under Voluntary Retirement Scheme was made.

           4. That thereafter on 1.2.2001 the respondent himself transferred a sum
           of Rs. 60,000 in the said account and on that very day he adjusted
           his car loan amount to Rs.65,220.00 payable to the bank. It is stated
           that under Voluntary Retirement Scheme every employee who took the
D          voluntary retirement scheme and the benefits thereunder had to adjust
           the loans payable by him to the bank and it was in pursuance to the
           provision of the scheme that the respondent cleared the loan amount
           and also closed the said account on 1.2.2001. It is noteworthy that in
           between, he had transferred a sum of Rs. 13,406.74p on 30.l.2001 and
E          another sum of Rs. 13,859 to his other account. The deponent states
           that this clearly shows that the operation of the said account by the
           respondent.

           5. That the respondent was maintaining another account being Account
           No. 4777 at Maharajpur Branch of the appellant bank. A copy of
F          which has been annexed by the respondent at page 22 wherein the
           transfers had. been made in this account. The respondent had used
           and transacted the accounts as is evident from the account statement
           annexed herewith for the period from 6.12.2000 to 16.10.2001. The
           respondent has only annexed a part of the statement for the period
           from 4.1.2001 to 31.3.2001. The statement from 6.12.2000 to 16.10.2001
G          as annexed by the appellant bank would show that the respondent
           operated this account on regular basis. He had made a payment of Rs.
           30000 on 13 .1.200 I to State Bank of India towards Public Provident
           Fund and another deposit of Rs. ,60,000 was made to SBI on 5.1.2001
           as PPF deposit. The leave encashment benefit of Rs. 1,42,406.40 p.
H          was credited in this account on 26.3.2001. The respondent made a
               PUNJAB AND SINO BANK v. S.R.S. BAWA [KAPADIA, J.]                    529
              FDR to the tune of Rs. 1,42,406.40 p. on 31.3.2001 for a period of three      A
              years which is still lying with him and is due only on 31.3.2004."

            From the averments herein, it is clear that respondent no. I had two
      savings bank accounts no.477) and 4777. He had withdrawn his option on
      22.12.2000 and yet without any objection he receives three credits in his
      account on 27.12.2000, 25.01.200 I and 29.01.200 I on account of' salary (including   B
      notice pay). Thereafter, he repays his car loan; invests Rs. 30,000 in PPF and
      Rs. 1,42,406.40 in fixed deposit for three years, which is a long term investment.
      Therefore the principles of estoppel extensively discussed by this Court in
      the case of Bank of India v. O.P. Swarnakar (supra) applies to the facts
      herein. The conduct of respondent no. I indicates his knowledge about                 C
      payments in his accounts; that he never objected to such payments and that
      he had appropriated the amounts for his benefit. Therefore, he cannot resile
      from the scheme.

·-,         For the aforestated reasons, this appeal deserves to be allowed. We
      order accordingly. The judgment and order under challenge is set aside, with          D
      no order as to costs.

      K.KT.                                                            Appeal allowed.