WP/1016/1995 of K.S.P.DORA. Vs CHAIRMAN & MG DIRECTOR on 5 December 2002

:J U D G M E N T

The facts in both the writ petitions being same, similar andinter-connected, both the writ petitions, which were heard together, are beingdisposed of by this common judgment.

2. Petitioner joined the respondent bank as ProbationaryOfficer long back in 1975. In course of time he was promoted to varioushigher posts and ultimately in April, 1989, he was selected for Overseasassignment and posted at Bangkok. The petitioner availed of two days leave on29th and 30th of April 1993 which was sanctioned by the superior officer,namely the Assistant General Manager at Bangkok. While on leave, thepetitioner submitted his resignation with immediate effect. The petitioneralso enclosed a demand draft for the amount representing 3 months pay. On13.5.93, the petitioner was asked to handover charge and to report for duty atHead Quarters, that is to say, at Chennai. A letter was also received by himstating that resignation was not in conformity with Rule 13(i) of the Rulesapplicable to the bank and as such the resignation letter was rejected andsubsequently the demand draft sent by the petitioner was returned. Thepetitioner sent a reply dated 24.5.93 reiterating that the rules do not prohibit resignation with immediate effect by refunding three months pay inlieu of the notice. However, on 29.5.1993 a letter was again received by thepetitioner wherein it was indicated that resignation was not accepted as itwas not consistent with the Rules. Thereafter a charge memo was issued to thepetitioner wherein it was indicated that the petitioner had absented himselfwithout intimation, prior permission and failed to handover charge as directedby the superior authority and failed to report for duty at Head Office and hadaccepted gainful employment with other employer even though he was stillcontinuing in service under the Bank and had over-stayed at Bangkok even afterthe order of transfer. The petitioner in reply submitted that while going onleave, he had already handed over charge and since he had resigned thereafter,there is no question of handing over charge once again. It was also indicatedthat since he had resigned with immediate effect, the question of remainingabsent from duty did not arise. The other allegations relating to gainfulemployment overstay were denied. Subsequently, in August 1993, secondcharge-sheet was framed wherein inter alia it was indicated that thepetitioner had not followed up the bills which had been dishonoured thuscausing loss to the bank. The petitioner in his reply submitted that themonthly statement regarding return bills have been sent to Head Quartersregularly and the AGM was reviewing the overdue amounts every month and thepetitioner had no responsibility in the matter. Subsequently on behalf of thebank letters were written to an organisation in Bangkok indicating that theyhad improperly employed the petitioner as the petitioner was not relieved fromthe respondent Bank. In October 1994, third charge-sheet was framed relatingto some incidents which had occurred during 1993-94 and notice was issuedregarding enquiry.

3. W.P.No.1015 of 1995 has been filed for quashing the charges framed against the petitioner and W.P.No.1016 of 1995 has been filedfor quashing the letter dated 13.5.1993 rejecting the offer of resignation andfor a further direction to the respondent Bank to settle the terminal benefitsof the petitioner.

4. In spite of the notice, there is no appearance on behalf

of the respondent and no counter affidavit has been filed.

5. The resignation letter of the petitioner with immediate effect had been rejected apparently on the ground that the same was not inaccordance with Rule 13(i) of the Bank.

6. Learned counsel for the petitioner has produced a copy of service conditions of Bharat Overseas Bank Officers. It is necessary tonotice some of the relevant provisions.Chapter IV of the aforesaid compilation relates to appointment,seniority, promotions, termination of service, resignation, retirement andremoval from service. Rule 4 of Chapter IV relates to termination of serviceand Rule 5 relates to resignation. Rule 5 is as follows :- “ 5. RESIGNATION

i) An officer in the permanent establishment shall not resign from the service of the bank without first giving a notice in writing of hisintention to do so. The period of such notice required shall be three monthsand the notice shall be addressed to the Chairman.

Provided that the Chairman may at his discretion permit anofficer to resign without such notice or reduce the period of such notice.

(ii) Notwithstanding anything to the contrary contained inclause (i)

(a) An officer against whom disciplinary proceedings arepending shall not resign from his service in his bank without the priorapproval in writing of the Chairman; and (b) Any notice of resignation given by such an officer beforeor during the disciplinary proceedings shall not taken effect unless it isaccepted by the Chairman.

iii) For the purpose of this rule, disciplinary proceedingsshall be treated as pending against an officer until final orders are passedon them if,

a) He has been placed under suspension.

OR

b) Any notice has been issued to him to show cause whydisciplinary proceedings should not be initiated against him.OR

c) Any charge sheet has been issued against him.”

Chapter XI relates to terminal benefits. Rule 1 of Chapter XI relatesto payment of provident fund. Rules 6 to 14 relate to payment of gratuity.Rules 8 & 9 are as follows :- “ . . .

8. TERMINATION OF SERVICE

If the service of any employee is terminated at any time heshall be aid a gratuity of 15 days salary for each completed year of serviceof the employee under the Bank subject, however, to a maximum of fifteenmonths’ salary.

9. VOLUNTARY RETIREMENT OR RESIGNATION

If an employee voluntarily retires on completing theretirement age of fifty eight years or on the expiry of any extension ofservice granted to him or resigns from service after completing five yearsservice, he shall be paid a gratuity of 15 days salary for each completed yearof service of the employee under the Bank, subject however to a maximum offifteen months’ salary.”

7. A perusal of the rules relating to termination makes it

clear that the rules contemplate that there can be termination by issuingthree months’ notice or by paying three months’ salary in lieu of such notice.Rules relating to resignation contemplate that an employee can resign bygiving three months notice. The proviso, however, makes it clear that theChairman has discretion to accept resignation even before completion of threemonths period. The other provisions in the Rule, however contemplate that anofficer against whom disciplinary proceedings are pending, shall not bepermitted to resign unless such resignation is accepted by the Chairman. Itis also made clear that disciplinary proceedings shall be treated as pendingagainst the officer until final orders are passed if, such an officer isplaced under suspension or if, any notice had been issued to show cause whydisciplinary proceedings should not be initiated or any charge sheet has beenissued against any such officer.

8. In the present case, the petitioner had given his resignation letter with an intention to resign with immediate effect. Thepetitioner was under misconception that since three months notice had not beengiven, salary for three months should be refunded.

9. The question as to whether resignation is to be accepted with immediate effect is a matter of discretion of the Chairman, who canaccept such resignation with immediate effect even though no prior threemonths notice is given. Even though there is discretion of the Chairman toaccept the resignation with immediate effect or to refuse to accept suchresignation, it is obvious that such discretion is to be exercised judiciouslyand not in an arbitrary or capricious fashion.

10. In the present case, the only reason for not accepting the resignation with immediate effect appears to be co-related with the actionof the petitioner in giving demand draft representing three months pay and ithas been indicated that such resignation is not contemplated under the rules.At the stage when the resignation letter was given by the petitioner, nodisciplinary proceeding was pending against the petitioner or evencontemplated and the disciplinary proceedings were initiated subsequently.The subsequent disciplinary proceedings initiated by the bank did not relateto any misfeasance or malfeasance on the part of the petitioner in theimmediate past, but due to subsequent act of the petitioner refusing to rejoinat the head quarters. The subsequent supplemental charges relate to theincidents much prior to the date of resignation. It is obvious that therespondent thought of initiating disciplinary proceedings only because thepetitioner, after his resignation was refused, had not joined the HeadQuarters.

11. The only reason for not accepting the resignation is on the footing that the resignation seeking for immediate acceptance by refundingthree months salary was not contemplated in the Rules. Even though such offerto refund three months salary was not contemplated, the rules had givendiscretion to accept any resignation with immediate effect even though priornotice had not been given. It is obvious from various correspondence that the

Chairman never considered the question of acceptance of resignation withimmediate effect as contemplated in the proviso to the rule relating toresignation. Even assuming that the offer to return three months salary wasnot contemplated, nothing prevented the Chairman from considering the questionas to whether the resignation should be accepted with immediate effect or not.Since there is no appearance and no counter affidavit has been filed, nothingis forthcoming as to why the resignation was not accepted. As alreadyindicated at the time of giving the resignation, no disciplinary proceedingshad been initiated nor even contemplated.

12. Keeping in view these aspects, I see no reason as to why the resignation should not have been accepted with immediate effect. Thepetitioner was on leave on 29 & 30.4.1993 and the resignation letter was dated29.4.1993. In such view of the matter, it must be taken that if thepetitioner had resigned and his service had come to an end with immediateeffect from 30.4.1993 and the relationship of employer and employee should bedeemed to have been severed from 1.5.1993. Once this conclusion is arrivedat, the subsequent action of the bank in initiating departmental proceedingsand framing charges against the petitioner must be taken to be illegal.

13. Even otherwise, the charges appear to be very trivial in nature and apparently a churlish reaction to the letter of resignation of thepetitioner and the subsequent refusal to rejoin duty.

14. The next question is relating to payment of terminal benefits. The Rules which have been quoted indicate that even in case oftermination of service an officer is entitled to terminal benefits. Havingregard to the facts and circumstances of the case and keeping in view theprovisions contained in the Rules relating to termination, it is a fit casewhere a direction is to be given to the bank to pay the terminal benefits tothe petitioner treating the petitioner to have resigned with effect from30.4.1993.

15. The petitioner has prayed for payment of interest. So far as payment of provident fund is concerned, the rule itself contemplatespayment of interest as provident fund should be paid along with admissibleinterest. However, so far as payment of gratuity is concerned, I do not thinkit is a fit case where there should be any direction regarding payment ofinterest. The direction regarding payment of provident fund and gratuity ascontemplated in the Rules should be complied with within a period of threemonths from the date of communication of the order.

16. Subject to the above directions, both the writ petitions are allowed. Since there is no appearance on behalf of the respondents, thereshall be no order as to costs. Consequently, W.M.P.No.1560 of 19 95 isclosed.

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ToThe Chairman & Managing Director,Bharat Overseas Bank Limited,7,Habeeb Tower,756, Anna Salai,Madras 600 002.