Sohair Wani and Jay Sharma

Facts of the Case

1. National Textile Corporation Limited (NTC) proposed a Modified Voluntary Retirement Scheme (MVRS/Scheme) to facilitate the voluntary retirement of Appellant’s employees and workers of M/s. New Victoria Mills and some other mills run by National Textile Corporation (Uttar Pradesh) Limited, Kanpur
2. MVRS was proposed in response to the suggestions of the Board for Industrial and Financial Reconstruction (for short, ‘BIFR’), it recommended because National Textile Corporation (Uttar Pradesh) Limited, Kanpur’s production activities were halted and the financial situation was so bad that BIFR suggested shutting the company’s eleven mills, including M/s. New Victoria Mills. In order to protect the interests of the employees, BIFR stipulated that the mills would only be closed if all employees working there were given the opportunity to participate in a voluntary retirement plan.
3. The Respondent attempted to take advantage of the Scheme’s opportunity by sending a letter dated July 12, 2002. But later on, Respondent changed his mind and issued a letter on March 3, 2003 and made a request that MVRS application be withheld as the Respondent was distressed by the fact that there was a prior conflict between M/s. New Victoria Mills and the Respondent over contributions to be made in the Respondent’s provident fund account as the provident fund sum has not been put in his account since 1991.
4. Respondent requested that his MVRS application be postponed until the money was put in his provident fund account and the account was regularised. However, the Respondent’s resignation under the MVRS was accepted by letter dated July 14, 2003 informing him that he will retire on July 16, 2003.
5. Aggrieved by this, Respondent filed civil writ petition before the High Court of Allahabad seeking order of retirement dated July 14, 2003 be quashed, to Allow the Respondent to resume his responsibilities as Supervisor (Maintenance) and pay him all of his emoluments as they are due and to pay him his back earnings since July 16, 2003, and to allow him to continue working at the job until he reaches the age of superannuation, at which point he will be entitled to all of his retiral benefits.
6. Appellant before Allahabad High Court clarified that the full provident fund payment was said to have been deposited with the Office of the Regional Provident Fund Commissioner, but it appears that it was attributed to the wrong individual with a similar name. This was a mistake made by the Regional Provident Fund Commissioner’s office.
7. The Single Judge bench of Allahabad High Court ruled in the favour of Respondent. The Appellants aggrieved by the same filed an appeal with the Allahabad High Court’s Division Bench but again the division bench upheld the single judge bench’s order.
8. The Appellants finally filed Special Leave Petition before the Supreme Court and vide order dated February 17, 2020, a notice was issued and the operation of reward given by ‘division bench’ was stayed and the case was ultimately heard and judgement was reserved on September 7, 2021.

Supreme Court’s Ruling

1. The Supreme Court observed that the question of employment was no longer an issue because the Respondent would have eventually retired in 2018 but would still be eligible for monetary benefits. The supreme court held that there are factual nuances that have contributed to one outcome or the other. Because the current issue is not one of resignation per se, but rather one of exercising an option available under the MVRS, the factual details must be evaluated in the context of the scheme in question.
2. The Supreme Court observed that if one examines the letter dated July 12, 2002 attentively, one can see that the Respondent’s intention was clear: he wanted to submit his resignation. It is not a resignation that will take effect at some point in the future, but rather one that will function in accordance with the Scheme. It’s not a conditional resignation based on the money to be put in his provident fund account, as the Respondent had hoped to achieve. The simple statement that all benefits accruing during the applicant’s service period will be paid to him is a natural corollary of his resignation.
3. The court observed that according to the circumstances of the case, the amount was credited to an account number where there was an issue with the beneficiary’s name/description, which created some confusion/delay. Certainly, the appellant-management could have taken better care of this, but the Appellant had pointed out that the fault stemmed from the handling of the provident fund account by the competent authorities, not the Appellant.
4. The court observed that MVRS scheme contained a clause that mentioned “acceptance of resignation and the abolition of the post took place at the same time”. This also makes it impossible for M/s. New Victoria Mills to nominate anybody else to that position. Thus, the office was terminated, after the letter of resignation was accepted on May 28, 2003. This is because BIFR had propounded for closure for mill of M/s. New Victoria Mills, but it also had taken greater care to safeguard the interests if employees and therefore MVRS was undeniably advantageous to the employees who took use of it. That would be logical, because only then would an employee be motivated to participate in the Scheme.
5. The Supreme Court held that a programme like the MVRS was an invitation to offer. The Respondent’s application under the Scheme on July 12, 2002 was in the character of an offer, but the court did not accept the argument that his resignation may be suspended conditional on the deposit of provident fund dues, which were previously deposited, (albeit a confusion over the credit to which it was named). The acceptance was also not conditioned on the payment of dues, including provident fund dues, because that was a result of the resignation being accepted. The transaction was finalised as a result of the offer and acceptance.
6. The Supreme Court held that the impugned order by learned Single Judge as affirmed by the learned Division Bench be set aside. This Court held that resignation letter of the Respondent stood accepted on May 28, 2003 and the Respondent is entitled to the benefits under the Scheme which have already been paid to the Respondent albeit without prejudice to the rights and contentions of the Respondent in the proceedings.

Conclusion

The decision considers a variety of critical factors relating to an ‘employee resignation’. One of the critical issues was that an employee cannot retract resignation due to a delay in being relieved of responsibilities. An employee may not rescind his or her resignation once the employer has accepted it and communicated the same to the employee. As stated in the judgement, the scheme was in essence an ‘invitation to offer’, the Respondent’s resignation was an offer accepted by the Appellant, and the communication on May 28, 2003 completed the contract, which cannot be revoked on the grounds on which the Respondent is attempting to do so. The court also observed that Respondent’s letters stating revocation of his MVRS application be withheld, appeared to have less of a revocation nature and more of a dissatisfaction with money not being delivered in his provident fund account. Furthermore, as stated in the judgement, the resignation does not seem to be conditional on a straightforward interpretation. Thus, we don’t think that Allahabad High Court’s finding that the ‘resignation is conditional’, was correct.

Supreme Court has rightly justified its decision through various precedents and on the basis of reading all the facts of the matter.