SANJAY JAIN versus NATIONAL AVIATION CO. OF INDIA LTD. on 1 November 2018

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CIVIL APPEAL NO.7822 OF 2011

1. Heard the learned counsel for the parties.

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2. The appellant is aggrieved by the judgment and order dated7.9.2010 passed by the High Court of Bombay, dismissing Writ PetitionNo.1740 of 2010. The question arises whether the appellant ceased tobe an employee of the respondent on 1[st] October 2006 since he hadresigned on 1.9.2006 as 30 days period came to an end on the aforesaiddate.

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3. The appellant joined the services of Air India Ltd. as AssistantAircraft Engineer in Major Maintenance Division of EngineeringDepartment w.e.f. 1.9.1992. As per the terms and conditions, hewas required to serve Air India for a minimum period of five years, as H

Aper the condition stipulated in the letter of his appointment. As on thedate he resigned, he had completed five years of service. The CertifiedStanding Orders framed under the Certifying Officer Under IndustrialEmployment (Standing Orders) Act, 1946 (in short “The Act of 1946”)as introduced in Air India Ltd. and as applicable to the establishment,required the employer to define the terms and the conditions of serviceBapplicable to a workmen and inform him of the same. The CertifiedStanding Order, inter alia, deals with the conditions under which anemployee can tender his resignation. He is entitled to receive thecertificate of service rendered at the time of cessation of his employment.The Certified Standing Order confers a right on the employer under theCAct of 1946 not to accept the resignation if at the relevant time of hisresignation any disciplinary action is pending or is contemplated.

4. As per the case set up by the employee, Certified StandingOrder prescribes that an employee can leave the service by serving 30days’ notice or paying the sum equal to 30 days wages. The question ofDacceptance arises in a case of a shorter notice, for resignation wherethe question of payment of wages as involved. The resignation is effectiveafter 30 days even without its acceptance. The appellant served noticefor resignation on 1.9.2006 to take effect from 1.10.2006, precisely onexpiry of 30 days’ period. There was no right available with the Air IndiaLtd. to decline to accept the resignation as informed vide communicationEdated 20.9.2006.

5. After resigning, there was cessation of employment with theAir India Ltd. The appellant then joined Jet Airways on 3.10.2006. Heapproached the Air India to release his pending dues, provident fund,gratuity, and unpaid wages. Air India Ltd. issued a letter dated 16.7.2008Fto the effect that since his resignation had not been accepted, he wasasked to report for duty. The appellant raised the grievance in thecentralized grievance cell and served a reminder for payment of thedues. Ultimately, the appellant filed writ application in the High Court ofBombay on 23[rd] July 2010 which had been dismissed. Consequently, theGappeal has been filed in this Court.

6. It was urged by the learned counsel appearing on behalf of theappellant that there was no necessity of acceptance of resignation underStanding Order 18 framed under the Act of 1946. By virtue of theprovisions contained in Standing Orders, 30 days’ notice has to be given H

or wages in lieu of the notice period has to be paid by a permanentworkman. He has relied upon the decisions in Punjab National Bankv. P.K. Mittal (1989) Supp. (2) SCC 175, State of U.P. v. Achal Singh(2018) 10 SCALE 89,and Dinesh Chandra Sangma v. State of Assam.(1977) 4 SCC 441.

7. On the other hand, learned counsel appearing on behalf of therespondent has relied upon the decision of this Court in Moti Ram v.Param Dev and Anr. (1993) 2 SCC 725 to contendthat acceptance ofresignation was necessary.

8. In order to appreciate the rival submissions, it is necessary toconsider the provisions contained in Standing Orders 17 and 18 of theStanding orders framed under the Act of 1946 by Air India. StandingOrders 17 and 18 are extracted hereunder:

“17. Termination of service:

(i) The services of a workmen may be terminated by theCompetent Authority, without assigning reasons as under:

(a) Of a permanent workman by giving 30 days notice in writingor wages in lieu of notice.

(b) Of a workman on probation by giving 7 days notice by giving24 hours notice in writing or wages/stipend in lieu of notice.

(c) Of a temporary workman including apprentice by giving 24hours notice in writing or wages/stipend in lieu of notice.

(d) of badli or substitute without notice or wages in lieu of notice.

(ii) No notice is necessary for terminating the service of a workmanemployed for a specified period at the end of that period.

(iii) No notice is necessary for terminating the services of a casualor part-time workman.

(iv) A workman who is absent without permission for a period often days or more will be deemed to have voluntarily abandonedthe services of the Company.

EXPLANATION:

For the purpose of this Standing Order, the word “Wages” shallinclude all emoluments which would be admissible, if the workmanwas on privilege leave.

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18. RESIGNATION:

(i) No workman shall resign from the service of the Companyexcept by giving such notice as he would have received underStanding Order 17 if his services were to be terminated, orcompensation in lieu of such notice, unless, at the request of theworkman, the notice is waived or shorter notice accepted in writingby the Competent Authority. Such compensation shall beequivalent to the amount of the wages as defined in the explanationto Standing Order 17 which the workman would have drawn duringthe period by which the notice falls short of the prescribed period,and shall be deemed to be a liability owed to the company for thepurpose of Regulation 22 (2) of the Air India Employees Providentfund Regulations, 1954.

(ii) A resignation given under (I) above may be accepted withimmediate effect or at any time before the expiry of the period ofnotice, in which case the workman shall be paid his wages inrespect of the entire period of notice given by him.

(iii) In case of shorter period of notice is accepted at the requestof the workmen, he shall be entitled to receive his wages only forthe actual number of days worked.

(iv) If a workman leaves the service of the Company withoutgiving any notice or by giving inadequate notice, such resignationshall be liable to be construed as misconduct and may entail anyof the punishments prescribed under Standing Order 20.

(v) Notwithstanding anything contained in clause (I) and (iii) above,a workman shall not be entitled to tender his resignation and anyresignation tendered by him shall not be effective or operativeagainst the company, unless the company decides to accept theresignation, if, at the time when such resignation is tendered,disciplinary action is pending against him or is intended or proposedto be taken against him by the appropriate authority.”

9. It is apparent from a bare reading of the provisions contained inStanding Order 18 that workman has a right to resign from the servicesby giving a notice of the period as prescribed under Standing Order 17which provides termination of services by serving 30 days notice upon apermanent workmen and seven days notice with respect to workman who is on probation and temporary workman by serving a 24 hoursnotice. Thus, for a permanent employee, a period of 30 days is providedto terminate or to resign as apparent from a conjoint reading of provisionsof Standing Orders 17 and 18.

10. Clause 2 of Standing Order 18 provides that in case ofresignation is with immediate effect or any time before the expiry ofnotice period, acceptance of resignation is required. Acceptance is notrequired in case a notice has been given of 30 days. It is right of aworkman to serve and resignation tendered by him shall be effective oroperative with exception, if at the time when such resignation is tendered,disciplinary action is pending against him or is intended or proposed to betaken against him by the appropriate authority, unless the company decidesto accept the resignation.

11. In our opinion, from a bare reading of the provisions containedin Standing order 18, it is crystal clear that a permanent employee has aright to resign from the services by giving a notice of the period of 30days as prescribed under Standing Order 17, and is entitled to obtaincertificate from the employer for the period services have been rendered.

12. Clause 2 of the Standing Order 18 provides that in case ofresignation is submitted with immediate effect or any time before theexpiry of notice period, acceptance is necessary. Acceptance ofresignation is not required in case a notice has been given of 30 days. Itwould be operative and effective on the lapse of the period. It is right ofa workman to serve an employer and to resign also by serving notice of30 days. The bond to serve was only for five years as stipulated in theorder of his appointment. The period of bond to serve was admittedlyover. There is no other Standing Order or rule which puts a fetter on anemployee to resign or confers power on the employer to reject aresignation.

13. No disciplinary proceeding was pending or contemplatedagainst an employee in the case when he resigned. The resignationbecame effective on the lapse of 30 days period. There was no powerwith the employer as per Standing Order 18 to reject such a resignation.Moreover, the bond period of five years service was already over. Acase of voluntary retirement stands on a different footing than that ofresignation. Voluntary retirement is with certain civil consequences ofmonetary benefits. It would depend upon the phraseology used in a A

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Aparticular provision whether prayer made for the resignation or forvoluntary retirement is required to be accepted or it takes effect withoutacceptance. In the facts of the case, since in the Standing Order 18,there is no provision for acceptance of resignation. In case, notice isserved for the requisite period of 30 days, obviously, the appellant hadthe right to resign from the services. The aforesaid conclusion is buttressedBby the following observations made in Punjab National Bankv. P.K.Mittal (supra):

“5. We have given careful thought to this contention of the learnedcounsel and we are of the opinion that the High Court was right inthe conclusion it reached. Clause (2) of regulation 20 makes itincumbent on an officer of the bank, before resigning, to serve anotice in writing of such proposed resignation and the clause alsomakes it clear that the resignation will not be effective otherwisethan on the expiry of three months from the service of such notice.There are two ways of interpreting this clause. One is that theresignation of an employee from service is a voluntary act on thepart of an employee, he is entitled to choose the date with effectfrom which his resignation would be effective and give a notice tothe employer accordingly. The only restriction is that the proposeddate should not be less than three months from the date on whichthe notice is given of the proposed resignation. On thisinterpretation, the letter dated 21st January 1986 sent by theemployee fully complied with the terms of this clause. Though theletter was written in January 1986 the employee gave more thanthree clear months’ notice and stated that he wished to resignwith effect from June 30, 1986, and so the resignation would have C

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become effective only on that date. The other interpretation isthat, when an employee gives a notice of resignation, it becomeseffective on the expiry of three months from the date thereof.Onthis interpretation, the respondent’s resignation would have takeneffect on or about 21.4.1986 even though he had mentioned alater date. In either view of the matter, the respondent’s resignationdid not become effective till 21.4.1986 or 30.6.1986. It would havenormally automatically taken effect on either of those dates asthere is no provision for any acceptance or rejection of theresignation by the employer, as is to be found in other rules, suchas the Government Services Conduct Rules.

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6. Much reliance was placed on the terms of the proviso to clause(2) of regulation 20 to justify the action of the bank in terminatingthe respondent’s services earlier but we do not think that the provisocan be interpreted in the manner suggested by learned counselfor the bank. The resignation letter of the officer has to give atleast three months’ advance notice under the main part of theclause. What the proviso contemplates is that in a case where theemployee desires that his resignation should be effective evenbefore the expiry, of the period of three months or without noticebeing given by him, the bank may consider such a request andwaive the period or requirement of notice if it considers it fit to doso.That question does not arise in the present case because theemployee had not requested the bank to reduce the period ofnotice or to waive the requirement of notice. Dr. Anand Prakashseeks to interpret the proviso as empowering the bank, even withoutany request on the part of the employee, to reduce the period orwaive the requirement of notice. In other words, he says the bankhas the power to accept the resignation with immediate effecteven though the notice is only of a proposed future resignation.We do not think this contention can be accepted. As we havealready mentioned, resignation is a voluntary act of an employee.He may choose to resign with immediate effect or with a noticeof less than three months if the bank agrees to the same.He mayalso resign at a future date on the expiry, or beyond the period, ofthree months but for this no further consent of the bank isnecessary. The acceptance of the argument of Dr. Ananad Prakashwould mean that, even though an employee might express a desireto resign from a future date, the resignation can be accepted,even without his wishes, from an earlier date. This would not bethe acceptance of a resignation in the terms in which it is offered.It amounts really to forcing a date of termination on the employeeother than the one he is entitled to choose under the regulations.As rightly pointed out by the High Court, the termination of serviceunder clause (2) becomes effective at the instance of the employeeand the services of the employee cannot be terminated by theemployer under this clause.”

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14. In State of U.P. vs. Achal Singh (supra) the Court observedthat it would depend upon phraseology used in the particular provisionwhether a prayer for resignation/voluntary retirement require acceptance.Following observations have been made:

Para 13: In our opinion, whether voluntary retirement is automaticor an order is required to be passed would depend upon thephraseology used in a particular rule under which retirement is tobe ordered or voluntary retirement is sought. The factual positionof each and every case has to be seen along with applicable ruleswhile applying a dictum of the Court interpreting any other rule itshould be Pari Materia. Rule 56(2) deals with the satisfaction ofthe Government to require a Government servant to retire in thepublic interest. For the purpose, the Government may considerany material relating to Government servant and may requisitionany report from the Vigilance establishment.

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23. In the State of Haryana(supra), This Court also observed thatDsome rules are couched in language, which results in an automaticretirement of the employee upon the expiry of the period specifiedin the employee’s notice. On the other hand, certain rules in someother departments are couched in the language which makes itclear that even upon expiry of the period specified in the notice,Ethe retirement is not automatic and an express order grantingpermission is required and has to be communicated. Therelationship of master and servant in the latter type of rulescontinues after the period specified in the notice till such acceptanceis communicated and the refusal of permission could also becommunicated after three months and the employee continues toFbe in service. It is the aforesaid later observations made by thisCourt, which are squarely applicable to the rule in question asapplicable in the State of Uttar Pradesh.”

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15. In Dinesh Chandra Sangma v. State of Assam (1977) 4SCC 441, the provisions of rule 119 of DISI rules came up forGconsideration. It observed;

15. It is a cardinal rule of construction that no word should beconsidered redundant or surplus in interpreting the provisions of astatute or of a rule Explanation 2 does not say an express or implied term of employment but refers to “an express or impliedterm of his contract of employment”. If the language in Explanation2 were different, namely, an express or implied term ofemployment, instead of “contract of employment”, the positionwould have been different. Explanation 2 in Rule 119 albeit apenal rule takes care to use the words contract of employment”and necessarily excludes the two categories of employment,namely, the one under the Central Government and the other underthe State Government. Explanation 2 only takes in its sweep thethird category of employment where the relationship between theemployer and the employee is one governed by a contract ofemployment. Since FR 56 is a statutory condition of service whichoperates in law, without reference to a contract of employment,there is nothing inconsistent between Rule 119 and FR 56.

16. The appellant has voluntarily retired by giving three months’notice not in accordance with an express or implied term of hiscontract of employment, but in pursuance of a statutory rule.Explanation 2 to Rule 119 makes no mention of retirement undera statutory rule and hence the same is clearly out of the way.The submission that rule 119 is superimposed on F.R.56 has noforce in this case.

17. The High Court committed an error of law holding that consentof the Government was necessary to give legal effect to thevoluntary retirement of the appellant under F.R.56(c). Since theconditions of FR 56(c) are fulfilled, in the instant case, the appellantmust be held to have lawfully retired as notified by him with effectfrom 2nd August 1976.

16. In view of the aforesaid enunciation of law and on considerationof the provisions contained in Standing order 18 in the facts andcircumstances of the case, we are of the opinion that appellant has rightlyterminated the relationship by serving the requisite notice for resignation.To resign is a right of an employee who cannot be forced to serve incase he is not willing until and unless there is some stipulation in the rulesor in the terms of appointment or disciplinary proceedings is pending orcontemplated which is sought to be avoided by resigning from the services.Thus, we are of the opinion that the High Court has erred in law inholding otherwise.

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17. Learned counsel appearing on behalf of the respondent hasrelied upon the decision in Moti Ram vs. Param Dev and Anr. (1993) 2SCC 725 Para 16 and 18:

16. As pointed out by this Court, ‘resignation’ means thespontaneous relinquishment of one’s own right and in relation toan office, it connotes the act of giving up or relinquishing the office.It has been held that in the general juristic sense, in order toconstitute a complete and operative resignation there must be theintention to give up or relinquish the office and the concomitantact of its relinquishment. It has also been observed that the act ofrelinquishment may take different forms or assume a unilateral orbilateral character, depending on the nature of the office and theconditions governing it. Union of India v. Shri Gopal ChandraMisra & Ors., [1978] 3 SCR 12 at p. 21).If the act ofrelinquishment is of unilateral character, it comes into effect whensuch act indicating the intention to relinquish the office iscommunicated to the competent authority. The authority to whomthe act of relinquishment is communicated is not required to takeany action and the relinquishment takes effect from the date ofsuch communication where the resignation is intended to operatein praesenti. A resignation may also be prospective to be operativefrom a future date and in that event, it would take effect from thedate indicated therein and not from the date of communication. Incases where the act of relinquishment is of a bilateral character,the communication of the intention to relinquish, by itself, wouldnot be sufficient to result in relinquishment of the office and someaction is required to be taken on such communication of the intentionto relinquish, e.g., acceptance of the said request to relinquish theoffice,and in such a case the relinquishment does not becomeeffective or operative till such action is taken. As to whether theact of relinquishment of an office is unilateral or bilateral incharacter would depend upon the nature of the office andconditions governing it.

18. A contract of employment, however, stands on a differentfooting wherein the act of relinquishment is of bilateral characterand resignation of an employee is effective only on acceptance ofthe same by the employer. Insofar as Government employees are concerned, there are specific provisions in the service rules whichrequire acceptance of the resignation before it becomes effective.In Raj Kumar v. Union of India, [1968] 3 SCR 857,it has beenheld “But when a public servant has invited by his letter ofresignation determination of his employment, his services normallystand terminated from the date on which the letter of resignationis accepted by the appropriate authority, and in the absence ofany law or rule governing the conditions of his service to thecontrary, it will not be open to the public servant to withdraw hisresignation after it is accepted by the appropriate authority. Tillthe resignation is accepted by the appropriate authority inconsonance with the rules governing the acceptance, the publicservant concerned has locus poenitentiae but not thereafter”.

18. Relying on said decisions, the learned counsel for the respondenthas contended that in the case of a contract of employment same isrequired to be terminated. It cannot be unilateral action. The factualmatrix of the aforesaid decision was totally different. Though theemployee had tendered the resignation it had not been accepted on thedate on which he filled the nomination form in order to contest an election.In that context, observations have been made. However, it was observedthat it would depend upon the phraseology used in a particular provisionwhether there is a necessity for acceptance or any other formality isrequired when it could be said person ceases to hold the office. With allfairness, the aforesaid proposition has not been disputed by the learnedcounsel appearing on behalf of the respondent. In this case, there is nosuch requirement of acceptance by such an employee under the provisionsof the Standing Order 18 read with 17. Thus, the decision in Moti Ram(supra) is not applicable.

19. Resultantly, we allow the appeal. The judgment and orderpassed by the High Court and the order passed by the respondent decliningto accept the resignation are hereby quashed. The benefits which maybe available shall be paid to the appellant. Provident fund with theprevailing rate of interest from time to time. The gratuity, if payable orany other benefit, shall be paid with interest @ 6% per annum. Let theoutstanding amount, if any, be paid within a period of three months fromtoday.

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752SUPREME COURT REPORTS[2018] 13 S.C.R.

ACIVIL APPEAL NO.10881/2018

20. Leave granted.

21. This appeal being similar is also allowed in the same terms ofCivil Appeal No.7822 of 2011 decided today.

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Appeals allowed.

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