Reserve Bank Of India vs Cecil Dennis Solomon

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2003 Supreme(SC) 453

2004(2) Supreme 371
SUPREME COURT OF INDIA
(From Bombay High Court at Nagpur)
Doraiswamy Raju and Arijit Pasayat, JJ.
Reserve Bank of India and Anr. -Appellants
versus
Cecil Dennis Solomon and Anr. -Respondents
Civil Appeal No. 9547 of 2003
(Arising out of SLP (C) No 12159 of 2002)
With
C.A. No. 9549 of 2003
(Arising out of SLP (C) No. 12160/2002)
Decided on 4-12-2003
Counsel for the Parties :
For the Appellants : R.N. Trivedi, Additional Solicitor General, Kuldip S. Parihar, H.S. Parihar, Advocates.
For the Respondents : A.K. Sanghi, R.K. Deshpande, Shivaji M. Jadhav, Himanshu Gupta, Ms. Sushma Suri, Advocate (NP)/Advocates.

Headnote:(i) Reserve Bank of India Pension Regulations, 1990-Respondent employees held entitled to pension under Regulations by High Court in writ petition-Appeal-Respondents had tendered resignation in 1988 and subsequently pension regulation came into operation-Reserve Bank of India Staff Regulations 1948 (amended w.e.f. 7-2-1992) were in operation when respondents had resigned-Pension Regulations were made for granting pension to certain categories of employees-Regulations were fraud with sanction of Central Govt. and if Central Board recommended changes, sanction of Central Govt. was mandatory-High Court was in error in equating case of resignation to voluntary retirement-Impugned judgment was indefensible was liable to be set aside.
       Held : 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. Therefore, if changes were to be introduced in the Staff 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 (2) of Section 58. If 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 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 respondents 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 were getting superannuation benefits accruing to them under the contributory 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 consequences would flow depending upon one or the other of the courses. (Para 7)
       (ii) SERVICE LAW-Expression s voluntary retirement and resignation-Though both involve voluntary acts, they operate differently.
       Held : 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 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 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, 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. (Para 9)

JUDGMENT

Arijit Pasayat, J.-Leave granted in both the special leave petitions.

2. Division Bench of the High Court of Bombay at Nagpur Bench has held by the impugned judgment that the respondents (hereinafter referred to as the employees ) were entitled to pension in terms of the Reserve Bank of India Pension Regulations, 1990 (in short the Pension Regulations ). The Reserve Bank of India (hereinafter referred to as the employer ) has questioned the correctness of the judgment.

3. 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 operative. The said Regulation was made in exercise of powers conferred by clause (j) of sub-section (2) of Section 58 of the Reserve Bank of India Act, 1934 (for short the Act ). The Central Board of the employer-bank with the previous sanction of the Central Government made the Regulations. The Reserve Bank of India Staff Regulations, 1948 (in short Staff Regulations ) which were subsequently amended w.e.f. 7.2.1992 were in operation at the relevant time governing the service conditions. Regulation 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 provisions were incorporated in the Regulation w.e.f. 7.2.1992, this provision in sub-rule (3) continued unamended. By Pension Regulations prescriptions were made for granting pension to certain categories of employees. Regulations 2(12) and 18 thereof read as follows:

"2(12): `Retirement means retirement in terms of Staff Regulation 26 and other instructions issued by the Bank under Settlements/Awards;

18. Forfeiture of service on resignation or dismissal or termination: Resignation or dismissal or termination of an employee from the service shall entail forfeiture of his entire past service and 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 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, 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 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 to his being found suitable to be retained in service.

(2) The power conferred by the provisos to sub-regulation (1) 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 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.

Regulation 26 (Amended with effect from 7.2.1992) : (1) An employee shall retire at 60 years of age but no extension shall be given to any employee beyond 60 years of age:

Provided that an employee who attains the age of superannuation 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 employe

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2003 Supreme(SC) 453

Cases Referred (5)