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2026 Supreme(Telangana) 354
IN THE HIGH COURT FOR THE STATE OF TELANGANA HYDERABAD
NAMAVARAPU RAJESHWAR RAO, J.
Smt.K.Kalyani and others - Petitioners
Versus
The Managing Director & CDO HRD Department and others - Respondents
W.P.No.13509 OF 2002
Decided On : 06-05-2026
Important Points
Subject
Service Law - Voluntary Retirement
Act Referred
Headnote
Facts of the case:
The deceased employee applied for Voluntary Retirement Scheme (VRS) introduced by the respondent bank. The application was accepted by the competent authority and communicated to the branch manager. However, the applicant died prior to the cut-off date. The bank rejected the claims of his legal heirs on the ground that the applicant was not in service on the effective date of retirement, rendering the application invalid.
Findings of Court:
The court held that since the entire exercise of scrutiny and acceptance was completed, the bank acted unfairly in denying benefits to the legal heirs. The bank is directed to pay the eligible VRS amount to the petitioners after adjusting any terminal benefits already paid.
Issues: Whether the legal heirs of an employee who applied for VRS but expired prior to the specified effective date are entitled to the benefits under the scheme.
Ratio Decidendi: An instrumentality of the State is bound by the principle of fairness. Once the process of application and acceptance for voluntary retirement is complete, the subsequent death of an employee shortly before the effective date shouldn't deprive the legal heirs of their entitlement, especially when other nationalized banks follow such a practice.
Result: Petition allowed with directions for payment within four months.
For the Petitioner: Sri K.V.V.Vedantha Charya
For the Respondent: Sri V.V.S.S.R.Anjaneyulu.
| Table of Content |
|---|
| 1. factual background concerning the application for vrs and subsequent rejection. (Para 4) |
| 2. arguments regarding the contractual nature of vrs and the requirement of valid communication of acceptance. (Para 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12) |
| 3. analysis of the completion of vrs formalities and entitlement of legal heirs. (Para 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 23 , 24) |
| 4. application of established legal precedents obligating the employer to act fairly. (Para 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32) |
ORDER :
NAMAVARAPU RAJESHWAR RAO, J.
This writ petition is filed declaring the letters dated 29.03.2001 and 06.11.2001 passed by the respondents respectively as illegal and arbitrary, and consequently direct the respondents to pay an amount of Rs.9,48,474/- to the petitioners under the Voluntary Retirement Scheme (for short ‘VRS’) pertaining to late Sri K.S.R.Sastry.
2. The brief facts of the case are as follows :-
(a) Sri K.S.R.Sastry, who is the husband of the 1st petitioner and father of petitioners 2 to 4 joined in the service of the respondents’ Bank on 09.11.1971 and died on 27.02.2001.
(b) The State Bank of India announced VRS for its employees, vide Circular No.Per/39/200-2001, dated 30.12.2000, who have put in 15 years of service or have completed 40 years of age as on 31.12.2000. Mr.K.S.R.Sastry (hereinafter referred to as ‘the applicant’) applied for VRS on 15.01.2001 and his application was sent to the Deputy General Manager, State Bank of India, Hyderabad Circle through Branch Manager, Fathekhanpet Branch, State Bank of India, Nellore.
(c) The Branch Manager, after a discrete enquiry, found that the applicant was eligible for making the application for VRS and accordingly the application of the applicant was forwarded to the Deputy General Manager and Circle Development Officer, who accepted the said application and communicated the same to the Branch Manager, S.B.I., Fatekhanpet Branch, Nellore, vide Sl.No.2, dated 03.03.2001. However, the applicant died on 27.02.2001 due to a heart attack, and the same was informed to the Branch Manager, Fathekhanpet Branch, Nellore.
(d) On 18.03.2001, the 1st petitioner made an application to the Branch Manager requesting payment of the benefits accrued under VRS and other benefits pertaining to the applicant. The Assistant Manager, Region-II, Zonal Office, Tirupathi, vide proceedings 29.03.2001, stated that the effective date of retirement under VRS was 31.03.2001 and that the VRS application of the applicant has become invalid; therefore, the same cannot be considered.
(e) The 1st petitioner again addressed a letter dated 01.06.2001 to the 6th respondent stating that once the application for VRS was accepted and the applicant is no more, the benefits have to be extended to the heirs of the deceased employee. The Branch Manager replied on 16.11.2001, stating that, since the applicant’s death occurred before the relevant date i.e., 31.03.2001, the VRS application became invalid and cannot be considered under SBI VRS. Aggrieved thereby, the present writ petition is filed.
3. Learned counsel appearing for the petitioner submits that the applicant made an application on 15.01.2001 seeking VRS and that the applicant died on 27.02.2001 due to a heart attack. The respondents are bound to accept the applicant’s application, since the applicant made the application before the relevant date. However, the respondents refused to accept the VRS application. Therefore, appropriate orders be passed in the writ petition by setting aside the impugned proceedings and directing the respondents to pay an amount of Rs.9,48,474/- to the petitioners under VRS, as they are the legal heirs of the applicant.
4. The respondents filed a counter affidavit stating as follows :-
(a) The applicant joined the service of the Respondent Bank in the year 1971 and continued till his death on 27.2.2001. The State Bank of India announced VRS for its employees vide Circular Per/39/2000-2001 dated 30.12.20
