New Delhi, April 7 The Supreme Court said on Tuesday that voluntary retirement is not merely an act of leaving or discontinuing service, but rather a distinct right of an employee that is available upon completion of the requisite number of years of service.
A bench of Justices JK Maheshwari and Vijay Bishnoi delivered its verdict on appeals filed by a bank challenging two separate orders of the Chhattisgarh High Court in 2019.
The high court had directed that a bank employee should be treated as voluntarily retired after completing the three-month notice period as specified in the notice for voluntary retirement or from the date of ceasing to attend service.
The apex court noted that the employee was appointed in September 1983 and was promoted as a manager in April 2007.
It said that in July 2010, while working as a branch manager in Raipur, the bank became aware of some suspicious transactions in two accounts. In the meantime, the employee sent a notice of voluntary retirement on October 4, 2010, to the general manager, and in response, the zonal office requested a fresh application under pension regulations.
Later, since the period specified in the notice for voluntary retirement had elapsed, the employee stopped working with the bank from May 16, 2011.
The top court noted that about eight months after he severed his employment with the bank, he was charged with suspicious transactions on March 5, 2012.
He then moved the high court challenging the rejection of his voluntary retirement and the subsequent initiation of an inquiry and dismissal.
While dealing with the appeals, the bench referred to the relevant provisions of pension and service regulations.
"Upon reading, it is clear that if an employee completes 20 years of qualifying service on or after November 1, 1993, and furnishes a notice of not less than three months to the appointing authority, he may retire voluntarily," the bench noted.
It said that the three-month notice indicating the intention to retire voluntarily was given on October 4, 2010, and the period was supposed to expire on January 4, 2011, but no refusal was ordered within the notice period.
The bench said that the non-approval communicated on June 29, 2011, after the expiry of the notice period and cessation of work, was of no avail. It noted that the bank had issued a show-cause notice on November 11, 2010, but this did not indicate an intention to initiate disciplinary proceedings in accordance with the service regulations.
"Nonetheless, voluntary retirement is not merely an act of leaving or discontinuing service, but a distinct right of an employee that is available upon completion of the requisite number of years of service, etc.," it said.
The bench said that the existence of such a show-cause notice itself was not sufficient without the competent authority refusing to stop the automatic operation of the notice of voluntary retirement.
"In the absence of such a refusal, the notice of voluntary retirement would take effect. In this case, no such order of refusal or withholding was passed by the competent authority within the stipulated period," it said.
"In our view, it is correct to hold that when an employee decides to sever the master-servant relationship and serves a notice indicating such intention specifying the period, it will become effective by operation of law in the absence of any such order," the bench said.
It said that the subsequent act of issuing a charge sheet and consequential order of dismissal was also not justified in law. The bench said that, as directed by the high court, the employee would be entitled to all consequential post-retiral benefits.
It directed the bank to settle all dues within three months, along with applicable interest.