IMPORTANT POINT
IMPORTANT POINT
The court upheld the enforceability of liquidated damages for unfulfilled service obligations post-voluntary retirement, determining the amount based on the unrendered service period.

JUDGMENT:

(per Hon’ble Sri Justice Laxmi Narayana Alishetty)

This Writ Appeal is filed aggrieved by the order passed by the learned single Judge of this Court in W.P.No.9190 of 2011 dated 02.12.2010.

2. Heard Sri K.Lakshmi Narayana, learned counsel appearing for appellant-bank and Sri J.Ch.Y.Narasimham, learned counsel for respondent.

3. The facts of the case in nutshell are that respondent was working as Deputy General Manager Grade-VI in appellant-bank and during the course of employment, he had worked in Foreign posting from 31.12.1993 to 07.07.1997. The respondent had executed an agreement dated 24.08.1993 and another agreement dated 29.12.1993 and as per the terms of the agreement, dated 29.12.1993, respondent agreed to work for a period of five years in India after foreign posting and in default, to pay liquidated damages of Rs.7.50 lakhs. The respondent returned to India on 07.07.1997 after rendering services in foreign posting and worked till his retirement.

4. Appellant-Bank introduced a Voluntary Retirement Scheme (VRS) vide Circular dated 01.11.2000 and pursuant to the said scheme, respondent made an application on 24.11.2000 for voluntary retirement and the respondent addressed a letter dated 29.12.2000, followed by another letter dated 01.01.2001, wherein the respondent requested the appellant-bank to waive the bond condition or in alternative, to accept pro-rata bond amount, which comes to Rs.93,750/-. The respondent clarified that the total bond period is eight years and he had completed seven years of service and only one year service is left over, for which pro-rata amount towards liquidated damages comes to Rs.93,750/-. The appellant-bank vide letter dated 01.01.2001 accepted the application of the respondent for voluntary retirement under the VRS scheme, without stipulating any conditions. Respondent addressed another letter on 13.03.2001 once again requesting the appellant-bank not to recover the full bond amount and accept pro-rata amount of Rs.93,750/-. However, the appellant-bank vide communicated dated 28.04.2001 declined the request of the respondent for recovery of the amount on pro-rata basis.

5. Aggrieved by the same, respondent filed W.P.No.9190 of 2001 and contended that the appellant-bank has no jurisdiction to add further conditions to the existing conditions in the scheme and having accepted voluntarily retirement, appellant-bank cannot later burden the respondent with any mandatory liability.

6. The appellant-bank opposed the request and contended that no cause of action arose at Hyderabad and therefore, the writ petition before erstwhile High Court of Andhra Pradesh was not maintainable. It is further contended that respondent applied for voluntary retirement subject to acceptance of terms and conditions of the scheme and had received an amount of Rs.12,76,440/- apart from normal terminal benefits. Therefore, his liability to pay the liquidated damages of Rs.7.5 lakhs under the agreement, dated 29.12.1993 was not absorbed by the voluntary retirement since the same is subject to fulfilment of terms of bond. Under the Circular dated 01.11.2000, the Board of Directors of appellant-bank are empowered to waive the conditions of ineligibility subject to fulfilment of bond or other requirements.

7. Learned single Judge, having considered the contentions put-forth by both the parties, allowed the writ petition and directed the appellant-bank to deduct only the amounts offered by the petitioner in his letters dated 01.01.2001 and 13.03.2001 and no other amounts. Learned single Judge further observed that appellant-bank was permitted to recover a sum of Rs.93,750/- from the amounts due and payable to the respondent on his voluntary retirement, however, shall not be entitled to recover any further amounts under agreement dated 29.12.1993.

8. Learned counsel for appellant-bank has contended that as per the terms of agreement dated 29.12.1993, the respondent agreed to work for a period of five years of service in