1. Employment dispute — Resignation of permanent employee by serving notice period under Certified Standing Orders — Dispute over effectiveness of resignation without employer's acceptance. (Para 1 , 2 , 3 , 4 )
Back
Next 
2018 Supreme(SC) 1622
SUPREME COURT OF INDIA
Arun Mishra, Vineet Saran, JJ.
Sanjay Jain - Appellant
Versus
National Aviation Co. Of India Ltd. - Respondent
Civil Appeal No.7822 of 2011
Decided On : 01-11-2018
Important Points
An employee has the right to resign by giving a 30-day notice as per the standing orders, and the resignation becomes effective after the notice period, without the need for acceptance.
Subject
Employment - Termination of Employment
Act Referred
AIR INDIA EMPLOYEES PROVIDENT FUND REGULATIONS: Reg..22(2)
FUNDAMENTAL RULES: R.119
STANDING ORDERS: O.17, O.18
FUNDAMENTAL RULES: R.119
STANDING ORDERS: O.17, O.18
Headnote
resignation - employment termination - Industrial Employment (Standing Orders) Act, 1946 - Standing Orders 17 and 18 - The appellant, an employee of Air India Ltd., resigned after completing five years of service. The employer declined to accept the resignation, leading to a legal dispute. The court held that the employee had the right to resign by giving a 30-day notice as per Standing Order 18, and the resignation became effective after the notice period, without the need for acceptance. The court referred to relevant case laws to support its interpretation of the standing orders.
Fact of the Case:
The appellant, an employee of Air India Ltd., resigned after completing five years of service. The employer declined to accept the resignation, leading to a legal dispute.
Finding of the Court:
The court found that the employee had the right to resign by giving a 30-day notice as per Standing Order 18, and the resignation became effective after the notice period, without the need for acceptance.
Issues: The main issue was whether the employer's acceptance of the resignation was necessary under the standing orders.
Ratio Decidendi: The court interpreted the standing orders and relevant case laws to establish that the employee had the right to resign by giving a 30-day notice, and the resignation became effective without the need for acceptance.
Final Decision: The court quashed the order declining to accept the resignation and directed the employer to pay the appellant's benefits.
Legal Category Hierarchy
Advocates Appeared:
Mohan Bir Singh, Udit Gupta, Anup Jain, Ravi Kumar Tomar, (M/s. Udit Kishan and Associates), Advocates., for the Appellants; Shubha S.Saxena, (M/s. M.V. Kini & Associates), Advocate., for the Respondents
Mohan Bir Singh, Udit Gupta, Anup Jain, Ravi Kumar Tomar, (M/s. Udit Kishan and Associates), Advocates., for the Appellants; Shubha S.Saxena, (M/s. M.V. Kini & Associates), Advocate., for the Respondents
Table of Contents
2. Whether resignation under Standing Orders is a unilateral act effective upon notice expiry or a bilateral act requiring express acceptance by the employer. (Para 5 , 6 )
3. Analysis of Standing Orders 17 and 18 — Notice period compliance — Absence of pending disciplinary proceedings — Distinction between resignation and voluntary retirement. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 17 )
4. Resignation by a permanent employee serving the prescribed notice period is effective upon expiry without employer acceptance, unless disciplinary action is pending or contemplated. (Para 9 , 11 , 15 )
5. Appeal allowed — High Court judgment quashed — Resignation held effective — Direction to pay provident fund, gratuity, and other benefits with interest. (Para 18 )
6. Is acceptance of resignation mandatory for a permanent employee who has served the full notice period?
No. Under the relevant Standing Orders, if a permanent employee serves the prescribed 30-day notice, the resignation becomes effective upon the lapse of that period without requiring the employer's acceptance. (Para 9 , 11 )
7. Under what circumstances is the employer's acceptance of a resignation mandatory?
Acceptance is required if the employee seeks resignation with immediate effect, requests a shorter notice period, or if disciplinary action is pending or contemplated against the employee at the time of resignation. (Para 9 , 11 , 12 )
8. How does the court determine if a resignation is unilateral or bilateral in character?
It depends on the phraseology of the specific rules or contract governing the employment. If the rules provide for automatic effect upon notice expiry without a requirement for acceptance, it is unilateral. (Para 13 , 16 , 17 )
9. What is the legal distinction between resignation and voluntary retirement regarding acceptance?
Voluntary retirement often involves monetary benefits and civil consequences, making its effectiveness dependent on the specific phraseology of the rules regarding whether an express order of acceptance is required. (Para 12 )
ORDER
CIVIL APPEAL NO.7822 OF 2011
1. Heard the learned counsel for the parties. The appellant is aggrieved by the judgment and order dated 7.9.2010 passed by the High Court of Bombay, dismissing Writ Petition No.1740 of 2010. The question arises whether the appellant ceased to be an employee of the respondent on 1 st October 2006 since he had resigned on 1.9.2006 as 30 days period came to an end on the aforesaid date.
2. The appellant joined the services of Air India Ltd. as Assistant Aircraft Engineer in Major Maintenance Division of Engineering Department w.e.f. 1.9.1992. As per the terms and conditions, he was required to serve Air India for a minimum period of five years, as per the condition stipulated in the letter of his appointment. As on the date he resigned, he had completed five years of service. The Certified Standing Orders framed under the Certifying Officer Under Industrial Employment (Standing Orders) Act, 1946 (in short "The Act of 1946") as introduced in Air India Ltd. and as applicable to the establishment, required the employer to define the terms and the conditions of service applicable to a workmen and inform him of the same. The Certified Standing Order, inter alia, deals with the conditions under which an employee can tender his resignation. He is entitled to receive the certificate of service rendered at the time of cessation of his employment. The Certified Standing Order confers a right on the employer under the Act of 1946 not to accept the resignation if at the relevant time of his resignation any disciplinary action is pending or is contemplated.
3. As per the case set up by the employee, Certified Standing Order prescribes that an employee can leave the service by serving 30 days' notice or paying the sum equal to 30 days wages. The question of acceptance arises in a case of a shorter notice, for resignation where the question of payment of wages as involved. The resignation is effective after 30 days even without its acceptance. The appellant served notice for resignation on 1.9.2006 to take effect from 1.10.2006, precisely on expiry of 30 days' period. There was no right available with the Air India Ltd. to decline to accept the resignation as informed vide communication dated 20.9.2006.
4. After resigning, there was cessation of employment with the Air India Ltd. The appellant then joined Jet Airways on 3.10.2006. He approached the Air India to release his pending dues, provident fund, gratuity, and unpaid wages. Air India Ltd. issued a letter-dated 16.7.2008 to the effect that since his resignation had not been accepted, he was asked to report for duty. The appellant raised the grievance in the centralized grievance cell and served a reminder for payment of the dues. Ultimately, the appellant filed writ application in the High Court of Bombay on 23 rd July 2010, which had been dismissed. Consequently, the appeal has been filed in this Court.
5. It was urged by the learned counsel appearing on behalf of the appellant that there was no necessity of acceptance of resignation under Standing Order 18 framed under the Act of 1946. By virtue of the provisions contained in Standing Orders, 30 days' notice has to be given or wages in lieu of the notice period has to be paid by a permanent workman. He has relied upon the decisions in Punjab National Bank v. P.K. Mittal (1989) Supp. (2) SCC 175 , State of U.P. v. Achal Singh (2018) 10 SCALE 89 , and Dinesh Chandra Sangma v. State of Assam. (1977) 4 SCC 441 .
6. On the other hand, learned counsel appearing on behalf of the respondent has relied upon the decision of this Court in Moti Ram v. Param Dev and Anr. (1993) 2 SCC 725 to contend that acceptance of resignation was necessary.
7. In order to appreciate the rival submissions, it is necessary to consider the provisions contained in Standing Orders 17 and 18 of the Standing orders framed under the Act of 1946 by Air India. Standing Orders 17 and 18 are extracted hereunder:
"17. Termination of service:
