RESERVE BANK OF INDIA AND ANR.versusCECIL DENNIS SOLOMON AND ANR.

              RESERVE BANK OF INDIA AND ANR.                             A
                                   v.
              CECIL DENNIS SOLOMON AND ANR.

                         DECEMBER 4, 2003

        [DORAISWAMY RAJU AND ARIJIT PASAYAT, JJ.]                        B
     Service Law:

     Reserve Bank ofIndia Pension Regulations, 1990-Regulations 2(12)
and 18-The Reserve Bank of India Staff Regulations, 1948-Regulation
26(3)-Reserve Bank ofIndia Act, 1934-Section 58(2)(1)-Resignation by C
employees-Entitlement to pension-High Court holding that employees
were entitled to pension as resignation from service was akin to voluntary
retirement-Held, the High Court was in error in equating the case of
resignation to voluntary retirement-The two are conceptually different in
service jurisprudence and different consequences would flow depending D
upon one or the other of the courses-Employees having claimed that they
were not seeking benefit under the Pension Regulations, could not point
out any other source to which their claims could be linked-Held,
Employees ' claim for pension on the basis that Central Board of bank
decided to extend the benefit to them by recommending changes in Pension E
Regulations is not sustainable-Central Govt. did not approve the recom-
mendations-Unless ·the recommendations for the amendment are ap-
proved, they have no binding force or application-Sanction of Central
Govt. mandatory as Pension Regulations were framed with the sanction
of Central Govt.                                                           F
     Re~ponden.ts-employees were working in various capacities in the
appellant-bank. They tendered their resignations sometime in 1988.
The Reserve Bank of India Staff Regulations, 1948 were in operation
at the relevant time governing the service conditions. Sub-rule (3) of
Regulatio.- 26 of the Staff Regulations stipulated that ~n employee who G
has attained the age of 50 years may voluntarily retire after giving to
the comp.etent authority 3 months notice in writing. Subsequent to
their resignation, the Reserve Bank ofJndia Pension Regulations, 1990
cam to be operative. Regulation 18 of the Pension Regulations stipu-
lated that resignation of an employee from the service shall entail H
                                   465
    466               SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A   forfeiture of his' entire past service and consequently such employee
    shall not qualify for pension payment. The respondent-employees
    moved the High Court questioning legality of Regulation 18 of the
    Pension Regulations. The High Court held that the respondent-em-
    ployees were entitled to pension as Regulation 18 did not have any
B   retrospective operation and, therefore, the employer was legally bound
    to grant pension. Hence the present appeals.

          On behalf of the appellant-bank, it was contended that the High
    Court erroneously held that resignation 'from service being not equiva-
C   lent to dismissal or termination, is more akin to voluntary retirement;
    that the Pension Regulations clearly ruled out payment of pension for
    those employees who go out by tendering resignation; that there was
    no question of the respondents-employees taking voluntary retirement
    as they had not attained the age of SO years in terms of Regulation 26(3)
    of the Staff Regulation, 1948.
D
          On behalf of respondents-employees it was submitted that the
    Central Board had recommended to extend the benefit to the employ-
    ees like the respondents and that being so, the benefits could not have
    been denied; that Staff Regulations were in the nature of administra-
E   tive decisions and the govt. decision was inconsequential; and once the
    Board had decided to grant the benefit and even had suggested
    amendments to Staff Regulations, there was no question of any govt.
    approval thereon.

          Allowing the appeals, the Court
F
         HELD : I. The High Court was in error in equating the case of
    resignation t,o voluntary retirement. The two are _conceptually different
    in the service jurisprudence and different consequ~nces would flow
    depending upon one or the other of the courses. In service jurispru-
G   dence, the expressions superannuation, voluntary retirement, compul-
    sory retirement and resignation convey different connotations. Volun-
    tary retirement and resignation involve voluntary acts on the part of
    the employee to leave service. Though both involve voluntary acts, they
    operate differently. One of the basic distinctions is that in case of
H   resignation it can be tendered at any time; but in case of voluntary
                R.8.1. v. CECIL DENNIS SOLOMON                     467

retirement, it can only be sought for after rendering prescribed period A
of qualifying service. Other fundamental distinction is that in case of the
former, normally retrial benefits are denied but in case of the latter,
same is not denied. In the case of the former, permission or notice is not
mandated, while in the case of the latter, permission of the concerned
employer is a requisite condition. Though resignation is a bilateral B
concept, and becomes effective on acceptance by the competent authority,
yet the general rule can be displaced by express provisions to the
contrary. Voluntary retirement is a condition of service created by
statutory provision whereas resignation is an implied term of any
employer-employee relationship. Further, the respondents who claim C
that they were not claiming the benefit under the Pension Regulations
could not point out any other source to which their claims could be
linked. (473-F-G-H; 474-B-C-D-E, 474-H; 475-A-BJ

     Punjab National Bank v. P.K. Mittal, AIR (1989) SC 1083; Union
ofIndia v. Gopal Chandra Misra, (1978) 2 sec 301 and Dinesh Chandra D
Sangma v. State of Assam, AIR (1978) SC 17, referred to.

     2. The Staff Regulations are administrative in nature. The Central
Board is authorized to take such administrative decisions and Central
Government's approval/decision is not necessary. But the position is
different so far as the Pension Regulations are concerned. The Pension E
Regulations were fr~med with the sanction of the Central Government
and are framed in exercise of the powers conferred by clause G) of sub-
section (2) of Section 58 of Reserve Bank of India Act, 1934. If the
Central Board recommended for changes in the Pension Regulations,
sanction of the Central Government is mandatory. This aspect seems F
to have been lost sight by the High Court and the respondents cannot
derive any advantage from the mere recommendations made by the
Central Board suggesting changes to the Regulations. The Central
Government has specifically dealt with the recommendations and has
turned them down. Unless the recommendations for the amendment
are approved, they have no binding force or application to make any
                                                                        G
claim thereon. (473-C-D-E-F-G)

    Reserve Bank and another v. S. Jayarajan, [1995) Supp. 4 SCC 584
and V.T Khanzode and Ors. v. Reserve Bank of India and Anr., {1982\
2 sec 1, referred to.                                                H
    468               SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A        CIVIL APPELLATE JURISDICTION : Civil Appeal No. 9547 of
    2003.

         From the Judgment and Order dated 28.2.2002 of the Bombay High
    Court at Nagpur in W.P. No. 615 of 1996.

B                                    WITH

          C.A. No. 9549 of 2003.

         R.N. Trivedi, Additional Solicitor General, Kuldip S. Parihar, H.S.
C   Parihar for the Appellants.

        A.K. Sanghi, R.K. Deshpande, Shivaji M. Jadhav, Himanshu Gupta,
    Ms. Sushma Suri (NP) for the Respondents.

          The Judgment of the Court was delivered by
D         ARIJIT PASAYA T, J. Leave granted in both the special leave
    petitions.

             Division Bench of the High Court of Bombay at Nagpur Bench has
    held by the impugned judgment that the respondents (hereinafter referred
E   to as 'the employees') were entitled to pension in terms of the Reserve
    Bank of India Pension Regulations, 1990 (in short the 'Pension Regula-     ..
    tions'). The Reserve Bank of India (hereinafter r~ferred to as the 'em-
    ployer') has questioned the correctness of the judgment.

F         Factual position is almost undisputed, and brief reference thereto
    would suffice.

          Respondents were working in various capacities in the employer
  organization. The employees tendered resignation sometimes in 1988.
  Subsequent to their resignation, the Pension Regulations came to be
G operative. The said Regulation was made in exercise of powers conferred
  by clause 0) of sub-section (2) of Section 58 of the Reserve Bank oflndia
  Act, 1934 (for short the 'Act'). /fhe Central Board of the employer-bank
  with the previous sanction of the Central Government made the Regula-
  tions. The Reserve Bank of India Staff Regulations, 1948 (in short 'Staff
H Regulations') which were subseq~ently amended w.e.f. 7.2.1992 were in
          R.BJ. v. CECI.L DENNIS SOLOMON [PASAYAT, J.]                    469

operation at the relevant time governing the service conditions. Regulation A
26 of the 1948 Regulations dealt with the age of retirement. Sub-rule (3)
thereof which has some relevance to the present disputes provides that an
employee who has attained the age of 50 years may voluntarily retire after
giving to the Competent Authority three months' notice in writing. Though
several other prov~sions were incorporated in the Regulation w.e.f. 7 .2. l 992, B
this provision in sub-rule (3) continued unamended. By Pension Regula-
tions prescriptions were made for granting pension to certain categories of
employees. Regulations 2(12) and 18 thereof read as follows:

         "2(12): 'Reti_rement' means retirement in terms of Staff Regula-
         tion 26 and other instructions issued by the Bank under Settle- C
         ments/Awards;

         18. Forfeiture of service on resignation or dismissal or termina-
         tion: Resignation or dismissal or termination of an employee from
         the service shall entail forfeiture of his entire past service and D
         consequently shall not qualify for pension payment."

     Some of the provisions of Staff Regulations need to be noted. They
read as follows:

              "Regulation 26. (Unamended prior to 7.2.1992)- (1) An E
         employee, other than an employee in Class IV shall retire at 58
         years of age and an employee in Class IV at 60 years of age;

               Provided that in the case of an employee in Class IV who
         has reached the age of 55 years. the Bank may, in its discretion,      p
         retire him after giving two months' notice in writing if in the
         opinion of the competent authority his efficiency is found to have
         been impaired.

              Provided further that the Bank may, in its discretion, retire
         an employee, other than an employee in Class IV, at any time after G
         completion of 50 years of age;

              Provided further in the case of an employee, other than an
         employee in Class IV, who has attained the age of 55 years, his
         continuance in service up to the age of 58 years shall be subject H
     470             SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

 A         to his being found suitable to be retained in service.

                (2) The power conferred by the provisos to sub-regulation
           (l) shall be exercised by the Governor, with the prior approval
           of the Central Board in the case of officers and by the Manager,
           subject to such general or special instructions as may be issued
 B         by the Governor, in the case of other employees.

                (3) An employee who has attained the age of 50 years may
           voluntarily retire after giving to the competent authority three
           months' notice in writing.
 c
                Regulation 26 (Amended with effect from 7.2.1992): (1) An
           employee shall retire at 60 years of age but l"!O extension shall be
           given to any employee beyond 60 years of age:

                Provided that an employee who attains the age of superan-
·D         nuation on any day other than the first during a calendar month,
           shall retire on the last day of that month:

                  Provided further that in the case of an employee in Class IV
           who has reached the age of 55 years the Bank may, in its
 E         discretion, retire him after giving two months' notice in writing
           if in the opinion of the competent authority his efficiency is found
           to have been impaired:

                Provided further that the Bank may, in its discretion, retire
           in public interest an employee, other than an employee in Class
 F         IV, at any time after completion of 50 years of age:

                Provided further in the case of an employee in Class III and
           Class I, who has attained the age of 55 years, his continuance in
           service upto the age of60 years shall l;>e subject to his being found
 G         suitable to be retained in service.

                (2) The power conferred by the provisions to sub-regulation
           (l) shall be exercised by the Governor, with the prior approval
           of the Central Board in the case of officers and by the Manager,
           subject to such general or special instructions as may be issued
 H
R.B.I. v. CECIL DENNIS SOLOMON [PASAYAT, J.]                 471

by the Governor, in the case of other employees.                   A
     (3) An employee who has attained the age of 50 years may
voluntarily tetire after giving to the competent authority three
months' notice in writing.

     (3A) Without prejudice to sub-Regulation (3), an employee 8
may voluntarily retire after giving to the competent authority three
months' notice in writing provided he has completed 20 years of
service if he is not governed by the Reserve Bank of India Pension
Regulations, 1990 and 20 years of qualifying service as defined
in the Reserve Bank of India Pension Regulations, 1990, if he is C
governed by the Reserve Bank of India Pension Regulations,
1990:

     Provided that this sub-Regulation shall not apply to an
employee .who is on deputation or study leave abroad, unless, after D
having been transferred or having returned to India he has
resumed the charge of the post in India and served for a period
of not less than one year. The requirement of this proviso may,
however, be waived at the discretion of the Governor:

    · Provided fu11her that this sub-Regulation shall not apply to E
an employee who seeks retirement from service for being ab-
sorbed permanently in an autonomous body or a public sector
undertaking to which he is on deputation at the time of seeking
voluntary retirement.
                                                                   F
    (3B) The notice of voluntary retirement given under sub-
Regulation (3A) shall not be valid unless it is accepted by the
Competent Authority:

     Provided that where the_ Competent Authority does not
communicate its decision not to accept such notice before the G
expiry of period specified in the notice, the retirement shall
become effective from the date of expiry of such period.

(3C) The Competent Authority may, if so requested by the
employee retiring pursuant to sub-Regulation (3) or (3A), waive H
    472                 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A            the notice of voluntary retirement with respect to its full period
             or part thereof if the Competent Authority is satisfied that such
             waiver will not cause any administrative inconvenience.

                   (30) An employee who has elected to voluntarily retire
             pursuant to sub-Regulation (3A) and has given notice sha\I not be
B
             entitled to withdraw the notice except with the permission of the
             Competent Authority, provided that the request for such with-
             drawal shall be made before the intended date of his retirement''.

           Since the respondents-employees had tendered resignation, making
C them ineligible writ applications were filed before the High Court ques-
    tioning legality of Regulation 18. The High Court by the impugned
    judgment held that Regulation did not have any retrospective operation
    and, therefore, the employer was legally bound to grant pension.

D           Mr. R.N. Trivedi, learned Additional Solicitor General submitted
    that the entire approach of the High Court was erroneous. On one hand
    it came to hold that Regulations were not retrospective in operation, yet
    ultimate direction was to work out the pension by taking recourse to 1990
    Pension Regulations. It also recorded a finding that there cannot be any
E   do\jbt that resignation from service being not equivalent to dismissal. or
    termination which are the acts of the management, is more akin to
    voluntary retirement. It held that as Regulation 18 of the Pension
    Regulations was not attracted, the claim for pension was to be allowed. The
    Pension Regulations clearly ruled out payment of pension for those
F   employees who go out by tendering resignation. There was no question
    of the respondents-employees taking voluntary retirement as they had not
    attained the age of 50 years in terms of sub-Regulation (3) of Regulation
    26 of the Staff Regulation of 1948. The respondents-employees have not
    stated as to under which statute or Regulation they were claiming pension.
    From the tenure of the pleadings in the writ petition and the arguments it
G   appears that they wan+ed only to get advantage of Pension Regulations. But
    at the same time they contended that it did not have retrospective operation.

         Per contra, learned counsel .for the respondents-employees submitted,
    only 37 employees were to be benefited and only 3 had approached the
H   Court. That being the position, this is not a fit 'case where the jurisdiction
         R.B.I. v. CECIL DENNIS SOLOMON [PASAYAT, J.]               473

under Article 136 of the Constitution of India, 1950 (for short the A
'Constitution') has to be exercised. Further, by administrative decisions,
the Central Board had decided to extend the benefit to the employees like
the respondents. That being so, on the fortuitous ground that the Central
Government had declined to accept the recommendations, the benefits
could not have been denied. Staff Regulations were in the nature of B
administrative decisions and the government decision was inconsequential.
Once the Board had decided to grant the benefit and even had suggested
amendments to Staff Regulations, there was no question of any government
approval thereof.

      In Reserve Bank and Another v. S. Jayarajan, [1995] Supp 4 SCC C
584 the view expressed in V.,T Khanzode and Ors. v. Reserve Bank ofIndia
and Anr., (1982] 2 SCC 7 was reiterated that the Staff Regulations are
administrative in nature. The Central Board is authorized to take such
administrative decisions and C~ntral Government's approval/decision is
not necessary. Therefore, if changes were to be introduced in the Staff D
Regulations and the Central Board takes a decision, there would not be any
necessity for taking approval of the Central Government. But the position
is different- so far as the Pension Regulations are concerned. The said
Regulations were framed with the sanction of the Central Government and·
are framed in exercise of the powers conferred by clause (j) of sub-section E
(2) of Section 58. lf the Central Board recommended for changes in the
Pension Regulations, sanction of the Central Government is mandatory.
This aspect seems to have been lost sight by the High Court and the
respondents cannot derive any advantage from the mere recommendations
made by the Central Board suggesting changes to the Regulations. The
Central Government has specifically dealt with the recommendations and F
has turned them down. Unless the recommendations for the amendment
are approved, they have no binding force or application to make any claim
thereon. Further, the responderits who claim that they were not claiming
the benefit under the Pension Regulations could not point out any other
source to which their claims could be. linked. The respondents-employees G
were getting superannuation benefits accruing to them under the contribu-
tory provisions and gratuity schemes. The High Court was also in error in
equating the case of resignation to,; voluntary retirement. The two are
conceptually different in the service jurisprudence and different conse-
quences would flow dependirig upon one or the other of the courses.       H
    474                 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.

A         Under Regulation 26 of the Staff Regulations, four types of retire-
    ments were contemplated as on 1st November, 1990 i.e. (a) Retirement
    oh Superannuation, (b) Compulsory Retirement on Invalidation, (c) Com-
    pulsory Retirement and (d) Voluntary Retirement, Resignation does not fit
    into any one of the said categories.
B         In service jurisprudence, the expressions superannuation, voluntary
    retirement, compulsory retirement and resignation convey different conno-
    tat:ons. Voluntat)' retirement and resignation involve voluntary acts on the
    part of the employee to leave service. Though both involve voluntary acts,
    they operate differently. One of the basic distinctions is that in case of
C   resignation it can be tendered at any time; but in the case of voluntary
    retirement, it can only be sought for after rendering prescribed period of
    qualifying service. Other fundamental distinction is that in case of the
    former, normally retiral benefits are denied but in case of the latter, same
    is not denied. In case of the former, permission or notice is not mandated,
D   while in case of the latter, permission of the concerned employer 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. In Punjab National
    Bank v. P. K. Mitt al, AIR ( 1989) SC 1083, on interpretation of Regulation
E   20(2) of the Punjab National Bank Regulations, it was held that resignation
    would automatically take effect from the date specified in the notice as
    there was no provision for any acceptance or rejection of the resignation
    by the employer. In Union of India v. Gopal Chandra Misra, (1978] 2 SCC
    301, it was held in the case of a Judge of the High Court having regard
    to Article 217 of the Constitution that he has an unilateral right or privilege
F   to resign his office and his resignation becomes effective from _the date
    which he, of his own volition, chooses. But -where there is a provision
    empowering the employer not to accept the resignation, on certain
    circumstances e.g. pendency of disciplinary proceedings, the employer can
    exercise the power.
G
          On the contrary, a: noted by this Court in Dinesh Chandra Sangma
    v. State of Assam, AIR ( 1978) SC 17, while the Government reserves its
    right to compulsorily retire a Government servant, even against his wish,
    there is a corresponding right of the Government servant to voluntarily
H   retire from service. Voluntary retirement is a condition of ser~ice created
         R.8.1. v. CECIL DENNIS SOLOMON [PASAYAT, J.]                   475

by statutory provision whereas resignation is an implied term of any A
employer-employee relationship.

       Looking from any angle the High Court judgment is indefensible and
is set aside and the writ petitions filed by the respondents-employees stand
dismissed. Appeals are allowed. There shall be no orders as to costs.
                                                                               B
M.P.                                                     Appeals allowed.