Judgment :-

R.V. Raveendran, J.

The respondents were working as Development Officers under the appellant - New India Assurance Co. Ltd. Section 17A of the General Insurance Business (Nationalisation) Act, 1972 ('the Act', for short) inserted by the Amendment Act 3 of 1985 empowered the Central Government to regulate, by issue of notifications, the pay scales and other terms and conditions of service of officers and other employees of the appellant by framing one or more schemes and by adding, amending or varying any scheme. In exercise of the powers under Section 17A of the said Act, the Central Government framed a Scheme by Notification dated 2.1.2003 to amend the General Insurance (Rationalization of Pay Scales and Other Conditions of Service of Development Staff) Scheme, 1976. Paragraph 15-C inserted by the said Amendment Scheme of 2003 gave a special option to the Development Officers of the appellant, to opt within 60 days of commencement of the said Amendment Scheme: (a) for Special Voluntary Retirement Package as per Annexure 1 appended thereto; or (b) to render his services as Development Officer (Administration) under paragraph 21A, as per Annexure II thereto. Sub-para (2) of the said Para 15-C provided that a Development Officer, who does not exercise either of the options, under sub-para (1) within the stipulated period of sixty days, shall continue to render services as such under the General Insurance (Rationalization of Pay Scales and Other Conditions of Service ofDevelopment Staff) Amendment Scheme, 2003.

2. Annexure-1 appended to the Amendment Scheme of 2003 contained the Special Voluntary Retirement Package ('SVRP' for short). Para (1) of SVRP specified the eligibility criteria. Para (2) thereof prescribed the ex-gratia amount and Clause (3) prescribed the other benefits, which a Development Officer seeking SVRP will be entitled. Para 5 thereof laid down the General Conditions of the Scheme and Clauses (3), (4) and (5) of para 5 which are relevant for our purpose are extracted below:

"(3) The mere request of such Development Officer seeking Special Voluntary Retirement Package shall not take effect unless it is accepted in writing by the Company.

(4) A Development Officer shall not be eligible to withdraw the option once made for Special Voluntary Retirement Package.

(5) The Company shall have absolute discretion either to accept or reject the request of a Development Officer seeking Special Voluntary Retirement Package depending upon the requirement of the Company. The reasons for rejection of request of a Development Officer seeking Special Voluntary Retirement Package shall be recorded in writing by the Company. Acceptance or rejection of the request of a Development Officer seeking Special Voluntary Retirement Package shall be communicated to him in writing."

(emphasis supplied)

3. Respondents 1 and 2 on 3.3.2003 opted for the Special Voluntary Retirement Package. The Regional Office of appellant informed the Divisional Office at Indore by letter dated 28.3.2003 that in view of several writ petitions challenging the provisions of the Amendment Scheme, the Head Office had instructed that it will not be possible to relieve all the opting Development Officers with effect from 1.4.2003. The respondents were, accordingly informed on 29.3.2003. This was followed by a circular dated 31.3.2003 issued by the appellant stating that status quo should be maintained in regard to Development Officers who have opted for Special Voluntary Retirement Package. On 31.3.2003, the respondents requested the appellant to extend the scheme and give more time for exercising the option under the Scheme, and if that was not possible, then treat the option earlier exercised by them on 3.3.2003 as withdrawn as till that day (31.3.2003) there was no communication from the appellant regarding acceptance of the voluntary retirement.

4. On 1.4.2003, the appellant relieved the respondents from the services of the Company stating that the co