IMPORTANT POINTS
(1) Decision to resign is materially distinct from a decision to seek voluntary retirement.
(2) Past service stands forfeited upon resignation for the purpose of pension.

JUDGMENT :

Dr Dhananjaya Y. Chandrachud, J

1. By its order dated 26 May 2017 a Division Bench of the High Court of Delhi upheld the judgment of a Single Judge dated 21 March 2017 granting pensionary benefits to the first respondent. The judgment of the Single Judge directed the appellant to pay pensionary benefits to the first respondent on the ground that he had completed twenty years of service and had “voluntarily retired” and not “resigned” from service. The appellant challenges these findings in the present appeal.

2. The first respondent was appointed as a daily rated mazdoor on 9 July 1968. His services were regularised on the post of a Peon on 22 December 1971. The first respondent tendered his resignation on 7 July 1990, which was accepted by the appellant with effect from 10 July 1990. The first respondent was subsequently denied pensionary benefits by the appellant on two grounds. First, that he had not completed twenty years of service, making him ineligible for the grant of pension. Second, in any case, by resigning, the first respondent had forfeited his past services and therefore could not claim pensionary benefits.

3. The second question of whether by resigning, the first respondent forfeited his past service must be addressed at the outset. If the first respondent’s resignation resulted in a forfeiture of past service, the question of whether he has completed twenty years of service is rendered irrelevant for such service would stand forfeited. In holding the that the legal effect of the first respondent’s letter of resignation would amount to “voluntary resignation”, the Single Judge of the High Court of Delhi relied on the judgment of this Court in Asger Ibrahim Amin v LIC, (2016) 13 SCC 797.

4. In Asger Ibrahim Amin, the appellant had resigned in 1991 after completing twenty-three years of service with the Life Insurance Corporation of India. When the appellant resigned, there existed no provision allowing for voluntary retirement. The Central Government subsequently promulgated the Life Insurance Corporation of India (Employees) Pension Rules 1995 [LIC Pension Rules] setting out the conditions to be fulfilled for the grant of pension upon retirement and permitting, for the first time, employees to voluntarily retire after twenty years of service. Under the LIC Pension Rules, pension on retirement was made retrospectively applicable to employees retiring prior to 1995, however, the provisions regarding voluntary retirement were not. The LIC Pension Rules also stipulated that resignation amounted to a forfeiture of past service. In deciding whether the appellant was entitled to pension under the LIC Pension Rules, Justice Vikramajit Sen speaking for a two judge Bench of this Court held:

“16. … [quoting Sheelkumar Jain v New India Assurance Co. Ltd. (2011) 12 SCC 197] The aforesaid authorities would show that the court will have to construe the statutory provisions in each case to find out whether the termination of service of an employee was a termination by way of resignation or a termination by way of voluntary retirement and while construing the statutory provisions, the court will have to keep in mind the purpose of the statutory provisions…

17. The appellant ought not to have been deprived of pension benefits merely because he styled his termination of service as “resignation” or because there was no provision to retire voluntarily at that time. The commendable objective of the Pension Rules is to extend benefits to a class of people to tide over the crisis and vicissitudes of old age, and if there are some inconsistencies between the statutory provisions and the avowed objective of the statute so as to discriminate between the beneficiaries within the class, the end of justice obligates us to palliate the differences between the two and reconcile them as far as possible. We would be failing in our duty, if we go by the letter and not by the laudatory spirit of statutory provisions and the fundamental righ