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SUPREME COURT OF INDIA
Sanjay Kishan Kaul, M.M. Sundresh, JJ.
M/s. New Victoria Mills & Ors. – Appellants
Versus
Shrikant Arya - Respondent
Civil Appeal No. 5685 of 2021
Decided On : 27-09-2021
Service Law – Voluntary Retirement – Modified Voluntary Retirement Scheme – Withdrawal of application of voluntary retirement – Once acceptance takes place, contract stands concluded – Right of a person whose resignation has been accepted is to receive benefit of provident fund amount as one of terminal benefits under the Scheme – Fact that there was some discrepancy on account of description of name in account for which there was some prior communication itself, will not imply that any delay in disbursement of provident fund amount would entitle respondent to withdraw his resignation – If there is any unreasonable delay, amount may carry interest – Respondent cannot be permitted to take advantage of postponement of cut off date by a few days, during which time respondent was asked to attend to office against no sanctioned post – MVRS was beneficial to employees who availed of the same – Mere fact that some staff continued to work after closure of Mill, or fact that some people may have been deployed in other mills cannot help respondent’s case for reinstatement – Wordings of Scheme are clear that acceptance of resignation has to simultaneously happen with abolition of post and thereafter, payments have to be disbursed – Mere delay in relieving respondent from duties would not impact acceptance of his resignation – Resignation letter of respondent stood accepted on 28.05.2003 and respondent is entitled to benefits under the Scheme which have already been paid to respondent albeit without prejudice to rights and contentions of respondent in proceedings – Impugned order set aside. (Paras 31, 32, 39, 40, 41, 42, 43, 46 and 47)
Facts of the case:
Management reserved the right to refuse the MVRS application without assigning any reasons in terms of Clause 1.6 of MVRS. Submission of the appellants before us was that respondent had not even challenged the letters dated 28.05.2003 or 02.06.2003, which effectively accepted the respondent’s resignation request under the MVRS. This would imply that the acceptance of resignation by appellant No. 1 was complete. What the respondent had sought to challenge was only the revised cut off date by assailing letter dated 14.07.2003, which sought to relieve the respondent from 16.07.2003. Crucial question is whether subsequent communications of respondent could give the resignation letter a colour of a conditional resignation and whether withdrawal was prior to its acceptance.
Findings of Court:
In the given facts of the case, it appears that the account was credited to an account number where it ought to have been credited, but there was some problem in the name/description of the beneficiary which had caused some confusion/delay. No doubt the appellant-management ought to have taken better care of this but then the appellant had pointed out that problem arose on account of the management by the concerned authority of the provident fund account, and not the appellant.
Result : Appeal allowed.
JUDGMENT :
SANJAY KISHAN KAUL, J.
1. National Textile Corporation Limited (for short ‘NTC’), is a public sector undertaking constituted and registered under the Companies Act, 1956. Appellant No.2 before us is the National Textile Corporation (Uttar Pradesh) Limited, Kanpur, a subsidiary of appellant No. 3 that has set up several industrial establishments in the State of Uttar Pradesh. M/s. New Victoria Mills, appellant No.1, is one such establishment set up by appellant No.2 in Kanpur. Respondent was working as a Supervisor (Maintenance) in appellant No.1 since 1991, having been so appointed on transfer from M/s. Atherton Mills, another industrial unit set up by appellant No.2.
2. The textile industry went through difficult times at the turn of the century and accordingly, endeavours were made to examine the feasibility of the continued existence of different textile mills. A question mark over the existence of these mills in turn had ramifications for the persons who were employed with these mills. In order to safeguard the interests of these employees, a Modified Voluntary Retirement Scheme (for short ‘MVRS/Scheme’) was propounded by appellant No.3 to facilitate the voluntary retirement of employees and workers of appellant No.1 and certain other mills operated by appellant No.2. It is of significance to note that this MVRS was proposed pursuant to the recommendations made by the Board for Industrial and Financial Reconstruction (for short ‘BIFR’), with the objective of rationalising surplus manpower and reducing the losses of appellant No.2. BIFR had come into the picture as the production activities of appellant No.2 were brought to a standstill and it had been declared a sick undertaking under the Sick Industrial Companies (Special Provisions) Act, 1985. The financial condition of appellant No.2 was so precarious that BIFR recommended closure of nine out of eleven mills of appellant No.2, including appellant No.1. While making this recommendation, in order to secure the interests of the employees, BIFR imposed a condition that the mills would only be closed if all employees working therein were given the benefit of a voluntary retirement scheme. Thus, MVRS came to be promulgated in supersession of the earlier revised voluntary retirement scheme.
3. The Management reserved the right to refuse the MVRS application without assigning any reasons in terms of Clause 1.6 of the MVRS. Clauses 1.6 of the MVRS reads as under :
1.6.1 Where disciplinary proceeding are either pending or are contemplated against the employee concerned for imposition of major penalty.
1.6.2 Where prosecution in a Criminal Court is contemplated or may have already been launched in any Court of Law and
1.6.3 Employees who resign from the services of the company in a normal manner are not entitled in MVRS.”
4. Further clause 4.0 of the MVRS provided for the benefits under the MVRS, which reads as under:
4.1 Balance in the Provident Funds Accounts payable as per Employees Provident Fund Act and rules made thereunder.
4.2 Cash equivalent of accumulated earned leave/privilege/leave as per the rules of the mills/office, concerned.
4.3 Gratuity as per Payment of Gratuity Act or the Gratuity Scheme, if any.”
5. The procedure for the MVRS was set out in Clause 5.0. Suffice to produce some of its relevant sub-clauses, which have been referred to as under:
5.1 An eligible employee may submit an application in the prescribed form for voluntary retirement under the scheme by tendering resignation from the post held and service in NTC to the Competent Authority. The post falling vacant as a result of an employee’s voluntary retirement under the scheme shall in all cases stand abolished simultaneously w
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