Holding

A resignation or voluntary retirement, even after acceptance, may be withdrawn before the effective date, which is the date of relief from service.

Summary

The appellant, a government employee, applied for voluntary retirement under a scheme and his request was accepted by the employer on 30 July 1997, but he was not relieved from service until 26 September 1997. Before being relieved, he sent a letter on 7 August 1997 withdrawing his retirement request, which the employer ignored. He filed a writ petition challenging the refusal to accept the withdrawal; the High Court dismissed it. The Supreme Court examined whether a resignation (or voluntary retirement) that has been accepted can be withdrawn before the date it becomes effective, i.e., before the employee is actually released from service. Relying on earlier decisions, the Court held that the employee may withdraw the offer before the effective date, and therefore set aside the High Court’s order, directing that the appellant continue in service with all benefits. No order as to costs was made.

Issues considered

Whether a person who has exercised the option of voluntary retirement can withdraw the offer after it has been accepted by the employer but before it becomes effective.

Subjects

voluntary retirementresignation withdrawaleffective dateservice lawemployee reliefacceptance of resignationSupreme Court

Judgment

J I

SHAMBHU MURARI SINHA A
v.
PROJECT AND DEVELOPMENT INDIA AND ANR

APRIL 13, 2000

[S. SAGHIR AHMAD AND R.C. LAHOTI, JJ.] B

Service Law-Voluntary Retirement-Effective date-Option exercised
by an employee accepted by management-However he was not relieved-
Whether it is open to a person having exercised option of voluntary retirement
to withdraw the offer after its acceptance but before it is made effective-Held, C
Yes-Resignation, inspite of its acceptance, can be withdrawn before the
effective date-Effective date is the date when the employee is relieved from
service.

The appellant submitted an application seeking voluntary retire-
ment under a Voluntary Retirement Scheme. The offer was accepted by D
the respondent-management but the appellant was not relieved from
service and be was allowed to continue in service till 26.9.1997 when he
was relieved from the post. However, the appellant submitted a letter on
7.8.1997 withdrawing the offer of voluntary retirement which was not
given effect to by the respondent-management. The appellant filed a writ E
petition which was dismissed. The Writ appeal filed against that judg-
ment was also dismissed by the Division Bench of the High Court. In this
,. appeal, filed against the judgment of the High Court, the question raised
is whether it is open to a person having exercised option of voluntary
retirement to withdraw the offer after its acceptance but before it is made F
effective.

Allowing the appeal, the Court

HELD : The resignation, inspite of its acceptance, can be withdrawn
before the 'effective date'. In the instant case though the option of volun-
tary retirement exercised by the appellant was accepted by the respondent- G
management on 30. 7.1997, the appellant was not relieved from service and
be was allowed to continue service till 26.9.1997, which, for all practical
purpose, would be the 'effective date' as it was on this date that he was
relieved from service. In the meantime, the appellant had already with·
drawn the offer of voluntary retirement vide his letter dated 7.8.1997. The H
9
10 SUPREME COURT REPORTS [2000] 3 S.C.R.
A appellant shall be allowed to continue in service with all consequential
benefits. [110-G]

Bairam Gupta v. Union of India & Anr., (1987) Supp. SCC 228; J.N.
Srivastava v. Union of India & Anr., (1998) 9 SCC 559 and Power Finance
Corporation Ltd. v. Pramod Kumar Bhatia, [ 1997) 4 SCC 280, relied on.
B
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2639 of 2000.

From the Judgment and Order dated 21.6.99 of the Patna High Court
in LP.A. No. 57 of 1999 (R).

c S.B. Upadhyay for the Appellant.

S.K. Sinha for the Respondents.

The Judgment of the Court was delivered by ~

S. SAGHIR AHMAD, J. Leave granted.
D
In pursuance of the scheme for voluntary retirement, the appellant
submitted an application dated 18.10.1995 seeking voluntary retirement. The
offer was accepted by the respondent-management by their letter dated
.
30.7.1997. In the letter, it was, inter alia, mentioned as under : . ...4..
E "In response to Circular No. PD/PERS/IRJ60 (11)/374 dated 5.9.1995
and No. PD/PERS/IRJ60 (111)/400 dated 12.10.1995 and your option
for vol. retirement. Under the scheme mentioned in the above
circulars, Management has accepted your option for Vol. Retirement.
The release memo alongwith detailed pa11iculars will follow.
F )(
Under the above V.R. Scheme there is a provision for retention of
quarter for a period of 5 (five) years for which you are required to
enter into an agreement, as such please obtain the format duly typed
on non- judicial stamp paper from the office of S.P.O. For completing
the agreement paper, the name of your father and quarter/bungalow
G No. is required, as such please give the above information in writing
to us for the above purpose. The agreement paper may be returned ...,....
duly signed by you and your witness to the Sr. Pers. Officer. It may
be noted that you have to pay the charges of non-judicial paper and
demi paper.''.
H
S.M. SINHA v. PROJECT AND DEVELOPMENT INDIA [S.S. AHMAD, J.] 11
Since it was specifically stated in that letter that release memo along A
with detailed particulars will follow, the appellant continued in service till
26.9.1997 when he was relieved from the post in question. In the meantime,
the appellant had already submitted a letter to the respondent on 7.8.1997
(followed by another letter dated 24.9.1997) withdrawing the letter dated
18.10.1995 by which he had sought voluntary retirement. But this letter was
B
not given effect to by the respondent-management.

Y The appellant then filed a writ petition in the High Court which was
dismissed by the Single Judge. The Writ Appeal filed against that judgment
was dismissed by the Division Bench of the High Court by the impugned
judgment. The High Comt did not accept the contention of the appellant that C
he having withdrawn the letter of voluntmy retirement should be allowed to
continue in service.

From the facts stated above, it would be seen that though the option of
voluntary retirement exercised by the appellant by his letter dated 18.10.1995
was accepted by the respondent-management by their letter dated 30.7.1997, D
the appellant was not relieved from service and he was alJowed to continue
in service till 26.9.1997, which, for all practical pmposes, would be the
"effective date" as it was on this date that he was relieved from service. In the
meantime, as pointed out above, the appellant had already withdrawn the offer
of voluntary retirement vide his letter dated 7. 8.1997. The question which, E
therefore, arises in this appeal is whether it is open to a person having
exercised option of voluntary retirement to withdraw the said offer after its
acceptance but before it is made effective. The question is squarely answered
by the three decisions, namely, Bairam Gupta v. Union of India & Am:, [1987]
Supp. SCC 228; J.N. Srivastava v. Union of India & Am:, [1998] 9 SCC 559
and Power Finance Cmporation !Jd. v. Pramod Kumar Bhatia [1997] 4 SCC F
280, in which it was held that the resignation, in spite of its acceptance, can
be withdrawn before the "effective date". That being so, the appeal is allowed.
The impugned judgment of the High Court is set aside with the direction that
the appellant shall be allowed to continue in service with all consequential
benefits. There will, however, be no order as to costs. G

........ RA. Appeal allowed .