Life Insurance Corporation of India Vs Shree Lal Meena

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Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.14739 OF 2015 (@ Special Leave Petition (Civil) No. 24108 of 2012)

Senior Divisional Manager, Life Insurance Corporation of India Ltd. & Ors. ...Appellant(s)

Versus

Shree Lal Meena ...Respondent(s)

O R D E R

Dipak Misra, J.

Leave granted.

2. The present appeal, by special leave, is directed

against the judgment and order dated 16.08.2011 passed

by the Division Bench of the Rajasthan High Court at

Jaipur Bench in D.B. Civil Special

Appeal (Writ) No. 172 of 2008 in S.B. Civil Writ Petition No.

6026 of 1997 wherein the writ Court had allowed the Writ

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Petition preferred by the respondent-employee, for grant of

retiral benefits from the Life Insurance Corporation of India

Ltd. (for brevity, “the Corporation”) on the basis of the Life

Insurance Corporation (Employees) Pension Rules, 1995 (for

short, “the 1995 Rules”).

3. The facts, in nutshell, are that the respondent on

15.06.1990 sent a letter to the competent authority of the

Corporation seeking voluntary retirement on the ground of

illness of his wife. As the said letter was not responded to,

he wrote another letter on 18.06.1990 to the Senior

Divisional Manager of the Corporation, Jaipur reiterating

his prayer for voluntary retirement. The said letter was also

not responded to. Thereafter, the respondent on

14.07.1990, sent the letter of resignation from the services

of the Corporation with immediate effect. There was a

prayer for waiver of notice in the said letter. The request of

the respondent seeking resignation and also waiver of the

notice period was acceded to by the Corporation vide letter

dated 11.01.1991.

4. When the matter stood thus, in the year 1995, the

Corporation brought into force the 1995 Rules with

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retrospective effect from 01.11.1993. After the 1995 Rules

came into force, the respondent submitted a representation

for grant of pension under the 1995 Rules, stating therein

that the said Rules were applicable to him in terms of Rule

3 as he was in service of the Corporation on the 1st day of

January, 1986 and had retired having sought voluntary

retirement before the 1st day of November, 1993. The said

representation was replied to by the Corporation vide letter

dated 06.04.1996 stating that the respondent had, in fact,

resigned from service of the Corporation and hence, he was

not entitled to the grant of pension as per the 1995 Rules.

5. After receipt of the said reply, the respondent entered

into further communication with the Corporation asserting

his claim but as his request was not paid heed to, he

preferred the Writ Petition. As indicated earlier, the learned

single Judge vide order dated 08.09.2006 allowed the Writ

Petition. It is demonstrable from the order of the learned

single Judge that he posed the question whether the

resignation of the employee could be treated as retirement.

He placed reliance on J.K. Cotton Spinning and Weaving

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Mills Company Ltd. v. State of U.P. and Ors1 and on that

basis, came to hold as follows:-

“Here, in the instant case, voluntary retirement was sought though it was considered as a resignation which was accepted on 11.1.91. The Petitioner retired or his resignation was accepted with effect from 14.7.90 which is admittedly prior to 1st day of November, 1993. Thus, it is crystal clear that the scheme is applicable to the petitioner also.”

6. Being of the said opinion, the learned single Judge

directed grant of retiral benefits to the respondent, as per

the 1995 Rules with effect from the date of his resignation,

that is, 12.07.1990 with 6% interest within a period of six

months.

7. Being grieved by the aforesaid order, the Corporation

preferred an intra-court appeal wherein it was contended

that the 1995 Rules could not have been made applicable to

the respondent, for the respondent had sought resignation

which was accepted, and therefore, he could not be equated

with an employee who had voluntarily retired. On behalf of

the respondent, it was urged before the Division Bench that

regard being had to the fact that at the time of writing of

1 AIR 1990 SC 1808 : (1990) 4 SCC 27

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letter dated 14.07.1990, there was no specific provision for

seeking voluntary retirement under the Life Insurance

Corporation of India (Staff) Regulations, 1960 (for short,

“the 1960 Regulations”) and in that backdrop, the

resignation has to be treated as retirement. The principle

stated in J.K. Cotton Spinning and Weaving Mills

Company Ltd. case (supra) was pressed into service.

Stress was laid on the pronouncements in Jaipal Singh v.

Sumitra Mahajan (Smt.) and another2 and Padubidri

Damodar Shenoy v. Indian Airlines Limited and

another3.

8. The Division Bench took note of the decision in J.K.

Cotton Spinning and Weaving Mills Company Ltd. case

(supra), adverted to the aspect that in 1990 there was no

provision for voluntary retirement, appreciated the ratio in

Jaipal Singh’s case (supra) wherein a difference had been

drawn between voluntary retirement and resignation,

analysed the language employed in Rule 3 of the 1995 Rules

that deals with application of the Rules and came to hold as

follows:-

2 2004 (4) SCC 522 3 2009 (10) SCC 514

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“Thus, the Pension Rules permit voluntary retirement and entitlement to pension on completion of 20 years of qualifying service. Under Rule 19 of the Life Insurance Corporation of India Regulations, 1960 speaks of resignation prior to the amendment in the year 1996 and even in the case of resignation the employee concerned is supposed to give a notice of three months to the employer-Corporation and it was only on the acceptance of the resignation that the employee on the expiry of the three months notice period could be allowed to leave on acceptance of resignation. The aforesaid provisions which only spoke of resignation prior to 1996 on the touchstone of Jaipal Singh's case (supra) the so-called resignation submitted by the petitioner-respondent notwithstanding the fact that the regulations do not speak of voluntary retirement, the petitioner sought permission of the employer and requested for waiving three months notice period. The conditions which have been enumerated hereinabove when applied to the facts of the present case clearly show that notwithstanding the fact that the term “voluntary retirement” in the Staff Regulations of LIC of 1960 prior to the amendment of 1996 had not been used, the use of word “resignation” in the Regulation 19 would on the touchstone of the judgment of Jaipal Singh's case (supra) amount to nothing but seeking voluntary retirement in the facts of the present case.”

9. Being of this view, the Division Bench dismissed the

appeal and affirmed the view expressed by the learned

single Judge.

10. We have heard Mr. D.N. Goburdhan, learned counsel

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for the appellants and Mr. Ansar Ahmad Chaudhary,

learned counsel for the respondent.

11. It is not in dispute that at the time of request made by

the respondent seeking voluntary retirement, the

regulations in the field, that is, the 1960 Regulations, did

not provide for voluntary retirement. After the 1995 Rules

came into force, the concept of voluntary retirement was

introduced for the first time. The 1995 Rules were made

applicable to the employees who stood superannuated or

had sought voluntary retirement after completing 20 years

of qualifying service by giving notice of 90 days. The relevant

rules of 1995 Rules are Rule 3, Rule 31 and Rule 34. We

have already mentioned that Rule 3 deals with application

of the Rules to the employees. It comes under the heading

“Application and Eligibility”. Rule 31 and Rule 34 come

under the heading “Classes of Pension”. To have a proper

appreciation of the controversy in issue, it is appropriate to

reproduce relevant parts of Rule 3, Rule 31 and Rule 34 of

the 1995 Rules which read as under:-

“Rule 3. Application - These rules shall apply to employees who,-

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(1) (a) were in the service of the Corporation on or after the 1st day of January, 1986 but had retired before the 1st day of November, 1993; and

(b) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and

(c) refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (b), the entire amount of the Corporation’s contribution to the Provident Fund including interest accrued thereon together with a further simple interest at the rate of six per cent per annum on the said amount from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Corporation; or

(2) (a) have retired on or after the 1st day of November, 1993 but before the notified date; and

(b) exercise an option in writing within one hundred and twenty days from the notified date to become member of the Fund; and

(c) refund within sixty days after the expiry of the said period of one hundred and twenty days specified in clause (b), the entire amount of the Corporation’s contribution to the Provident Fund and interest accrued thereon together with a further simple interest at the rate of twelve per cent per annum on the said amount from the date of settlement of the Provident Fund account till the date of refund of the aforesaid amount to the Corporation; or ....

x x x x x

Rule 31. Pension on voluntary retirement - (1) At any time after an employee has completed

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twenty years of qualifying service he may, by giving notice of not less than ninety days, in writing, to the appointing authority, retire from service:

Provided that this sub-rule shall not apply to an employee who is on deputation unless after having been transferred or having returned to India he has resumed charge of the post in India and has served for a period of not less than one year:

Provided further that this sub-rule shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking to which he is on deputation at the time of seeking voluntary retirement.

(2) The notice of voluntary retirement given under sub-rule (1) shall require acceptance by the appointing authority:

Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.

(3) (a) An employee referred to in sub-rule (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than ninety days giving reasons therefor;

(b) on receipt of a request under clause (a), the appointing authority may, subject to the provisions of sub-rule (2), consider such request for the curtailment of the period of notice of ninety days on merits and if it is satisfied that the curtailment of the period of notice will not

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cause any administrative inconvenience, the appointing authority may relax the requirement of notice of ninety days on the condition that the employee shall not apply for commutation of a part of his pension before the expiry of the notice of ninety days.

(4) An employee, who has elected to retire under this rule and has given necessary notice to that effect to the appointing authority, shall be precluded from withdrawing his notice except with the specific approval of such authority:

Provided that the request for such withdrawal shall be made before the intended date of his retirement.

(5) The qualifying service of an employee retiring voluntarily under this rule shall be increased by a period not exceeding five years, subject to the condition that the total qualifying service rendered by such employee shall not in any case exceed thirty-three years and it does not take him beyond the date of retirement.

(6) The pension of an employee retiring under this rule shall be based on the average emoluments as defined under clause (d) of rule 2 of these rules and the increase, not exceeding five years in his qualifying service, shall not entitle him to any notional fixation of pay for the purpose of calculating his pension.

x x x x x

Rule 34. Payment of pension or family pension in respect of employees who retired or died between 1.1.1986 and 31.10.1993 –

(1) Employees who have retired from the service of the Corporation between the 1st day of

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January, 1986 and the 31st day of October, 1993 shall be eligible for pension with effect from the 1st day of November, 1993.

(2) The family of a deceased employee governed by the provisions contained in sub-rule (7) of rule 3 shall be eligible for family pension with effect from the Ist day of November, 1993.”

12. It is submitted by Mr. Goburdhan, learned counsel for

the appellants that the 1995 Rules only cover the employees

who had retired before the 1st of November, 1993 and the

concept of grant of pension on voluntary retirement has to

be prospective because in the year 1993 there was no

provision for voluntary retirement. Learned counsel would

submit that if all the Rules are read in a conjoint manner, a

situation which could not have been present in the past is

not meant to be brought within or covered. According to

the learned counsel, an employee would be entitled to get

pension if he retired or died between 01.01.1986 and

31.10.1993 and it would be inappropriate to construe the

term resignation as voluntary retirement.

13. Learned counsel for the respondent, per contra, would

contend that the Court has already interpreted the 1960

Regulations and the 1995 Rules keeping in view the concept

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of beneficial legislation and, therefore, the controversy

should be allowed to rest and there is no justification to

interfere with the impugned order.

14. To appreciate the controversy in hand, we are required

to understand the principles stated in J.K. Cotton

Spinning and Weaving Mills Company Ltd. (supra). In

the said case, the question posed by the Court was when

the service of an employee is terminated consequent upon

the employer accepting the resignation voluntarily tendered

by the employee, does the termination so brought about

amount to “retrenchment” within the meaning of Section

2(s) read with Section 6-N of the Uttar Pradesh Industrial

Disputes Act, 1947 (for short, “the State Act”). The High

Court dealing with the issue came to the conclusion that

the termination of service of the employee fell within the

definition of “retrenchment” as enshrined in Section 2(s) of

the State Act. The Court adverted to the definition under

Section 2(s) of the State Act which defines “retrenchment” to

mean the termination by the employer of the service of a

workman for any reason whatsoever, otherwise than

punishment inflicted by way of disciplinary action but did

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not include voluntary retirement of the workman or

retirement of the workman on reaching the age of

superannuation, if the contract of employment between the

employer and the workman concerned contains a

stipulation in that behalf. The Court referred to Section

6-N of the State Act which provided conditions precedent for

retrenchment of a workman. The two-Judge Bench observed

that provisions are pari materia with the 1947 Act. Be it

noted, the Court further posed a question whether an

employee whose resignation has been accepted by the

employer falls within the first exclusion clause of the

definition of the term “retrenchment”. The Court took note

of the fact that the employee had tendered his resignation

voluntarily and the termination of service was brought

about by the acceptance of resignation. The Court referred

to dictionary meaning of the term “resign” and the meaning

of “retire”. We think it appropriate to reproduce the

discussion from the said judgment:-

“6. … The meaning of the terms ‘resign’ and ‘re- tire’ in different dictionaries is as under :

Name of the Dictionary

Meaning of ‘Resign’

Meaning of ‘Retire’

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Black’s Law Dictionary (5th edn.)

Formal re- nouncement or relinquish- ment of an of- fice

To terminate employment or service upon reaching re- tirement age

Shorter Ox- ford English Dictionary (Revised edn. of 1973)

To relinquish, surrender, give up or hand over (some- thing); esp., an office, position, right, claim, etc. To give up an office or po- sition; to re- tire.

The act of re- tiring or with- drawing to or from a place or position

The Ran- dom House Dictionary (College edn.)

To give up an office, position etc.; to relin- quish (right, claim, agree- ment etc.)

To withdraw from office, business or ac- tive life.

7. From the aforesaid dictionary meanings it be- comes clear that when an employee resigns his office, he formally relinquishes or withdraws from his office. It implies that he has taken a mental decision to sever his relationship with his em- ployer and thereby put an end to the contract of service. As pointed out earlier just as an em- ployer can terminate the services of his employee under the contract, so also an employee can in- form his employer that he does not desire to serve him any more. Albeit, the employee would have to give notice of his intention to snap the ex- isting relationship to enable the employer to make alternative arrangements so that his work

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does not suffer. The period of notice will depend on the period prescribed by the terms of employ- ment and if no such period is prescribed, a rea- sonable time must be given before the relation- ship is determined. If an employee is not permit- ted by the terms of his contract to determine the relationship of master and servant, such an em- ployment may be branded as bonded labour. That is why in Central Inland Water Transport Corporation v. Brojo Nath Ganguly4 this Court ob- served as under : (SCC p. 228, para 111)

“By entering into a contract of employment a person does not sign a bond of slavery and a permanent employee cannot be deprived of his right to resign. A resignation by an employee would, however, normally require to be accepted by the employer in order to be effective”.

8. In the present case the employee’s request contained in the letter of resignation was ac- cepted by the employer and that brought an end to the contract of service. The meaning of term ‘resign’ as found in the Shorter Oxford Dictionary includes ‘retirement’. Therefore, when an em- ployee voluntarily tenders his resignation it is an act by which he voluntarily gives up his job. We are, therefore, of the opinion that such a situa- tion would be covered by the expression ‘volun- tary retirement’ within the meaning of clause (i) of Section 2(s) of the State Act. In Santosh Gupta V. State Bank of Patiala5 case Chinnappa Reddy, J. observed as under : (SCC p. 342, para 5)

“Voluntary retrenchment of a workman or the retrenchment of the workman on reach- ing the age of superannuation can hardly be

4 (1986) 3 SCC 156, 228 5 (1980) 3 SCC 340

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described as termination, by the employer, of the service of a workman.”

(Here the word ‘retrenchment’ has reference to ‘retirement’.)

The above observation clearly supports the view which commends itself to us. We are, therefore, of the opinion that the High Court was not right in concluding that because the employer ac- cepted the resignation offer voluntarily made by the employee, he terminated the service of the employee and such termination, therefore, fell within the expression ‘retrenchment’ rendering him liable to compensate the employee under Section 6-N. We are also of the view that this was a case of ‘voluntary retirement’ within the mean- ing of the first exception to Section 2(s) and therefore the question of grant of compensation under Section 6-N does not arise. We, therefore, cannot allow the view of the High Court to stand.”

We have referred to the said decision in detail as the

High Court has placed heavy reliance on the same.

15. In Reserve Bank of India and another v. Cecil

Dennis Solomon and another6, the Court while analysing

the Reserve Bank of India Pension Regulations, 1990,

observed thus:-

“10. In service jurisprudence, the expressions “su- perannuation”, “voluntary retirement”, “compul- sory retirement” and “resignation” convey different connotations. Voluntary retirement and resigna-

6 (2004) 9 SCC 461

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tion involve voluntary acts on the part of the em- ployee to leave service. Though both involve volun- tary acts, they operate differently. One of the basic distinctions is that in case of resignation it can be tendered at any time, but in the case of voluntary retirement, it can only be sought for after render- ing prescribed period of qualifying service. Other fundamental distinction is that in case of the for- mer, normally retiral benefits are denied but in case of the latter, the same is not denied. In case of the former, permission or notice is not man- dated, while in case of the latter, permission of the employer concerned is a requisite condition. Though resignation is a bilateral concept, and be- comes effective on acceptance by the competent authority, yet the general rule can be displaced by express provisions to the contrary. In Punjab Na- tional Bank v. P.K. Mittal7 on interpretation of Reg- ulation 20(2) of the Punjab National Bank Regula- tions, it was held that resignation would automati- cally take effect from the date specified in the no- tice as there was no provision for any acceptance or rejection of the resignation by the employer. In Union of India v. Gopal Chandra Misra8 it was held in the case of a judge of the High Court having re- gard to Article 217 of the Constitution that he has a unilateral right or privilege to resign his office and his resignation becomes effective from the date which he, of his own volition, chooses. But where there is a provision empowering the em- ployer not to accept the resignation, on certain cir- cumstances e.g. pendency of disciplinary proceed- ings, the employer can exercise the power.

11. On the contrary, as noted by this Court in Di- nesh Chandra Sangma v. State of Assam9 while the Government reserves its right to compulsorily re- tire a government servant, even against his wish,

7 1989 Supp. (2) SCC 175 8 (1978) 2 SCC 301 9 (1977) 4 SCC 441

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there is a corresponding right of the government servant to voluntarily retire from service. Volun- tary retirement is a condition of service created by statutory provision whereas resignation is an im- plied term of any employer-employee relationship.”

[emphasis added]

16. In UCO Bank and others v. Sanwar Mal10, a

two-Judge Bench referred to the decision in Cecil Dennis

Solomon (supra) and opined thus:-

“6. To sum up, the Pension Scheme embodied in the regulation is a self-supporting scheme. It is a code by itself. The Bank is a contributor to the pension fund. The Bank ensures availability of funds with the trustees to make due payments to the beneficiaries under the Regulations. The bene- ficiaries are employees covered by Regulation 3. It is in this light that one has to construe Regulation 22 quoted above. Regulation 22 deals with forfei- ture of service. Regulation 22(1) states that resig- nation, dismissal, removal or termination of an employee from the service of the Bank shall entail forfeiture of his entire past service and conse- quently shall not qualify for pensionary benefits. In other words, the Pension Scheme disqualifies such dismissed employees and employees who have re- signed from membership of the fund. The reason is not far to seek. In a self-financing scheme, a sepa- rate fund is earmarked as the Scheme is not based on budgetary support. It is essentially based on adequate contributions from the members of the fund. It is for this reason that under Regulation 11, every bank is required to cause an investiga- tion to be made by an actuary into the financial condition of the fund from time to time and de- pending on the deficits, the Bank is required to

10 (2004) 4 SCC 412

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make annual contributions to the fund. Regulation 12 deals with investment of the fund whereas Reg- ulation 13 deals with payment out of the fund. In the case of retirement, voluntary or on superannu- ation, there is a nexus between retirement and re- tiral benefits under the Provident Fund Rules. Re- tirement is allowed only on completion of qualify- ing service which is not there in the case of resig- nation. When such a retiree opts for self-financing Pension Scheme, he brings in accumulated contri- bution earned by him after completing qualifying number of years of service under the Provident Fund Rules whereas a person who resigns may not have adequate credit balance to his provident fund account (i.e. bank’s contribution) and, therefore, Regulation 3 does not cover employees who have resigned. Similarly, in the case of a dismissed em- ployee, there may be forfeiture of his retiral bene- fits and consequently the framers of the Scheme have kept out the retirees (sic resigned) as well as dismissed employees vide Regulation 22. Further, the pension payable to the beneficiaries under the Scheme would depend on income accruing on in- vestments and unless there is adequate corpus, the Scheme may not be workable and, therefore, Regulation 22 prescribes a disqualification to dis- missed employees and employees who have re- signed. Lastly, as stated above, the Scheme con- templated pension as the second retiral benefit in lieu of employers’ contribution to contributory provident fund. Therefore, the said Scheme was not a continuation of the earlier scheme of provi- dent fund. As a new scheme, it was entitled to keep out dismissed employees and employees who have resigned.

x x x x x

9. … The words “resignation” and “retirement” carry different meanings in common parlance. An employee can resign at any point of time, even on

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the second day of his appointment but in the case of retirement he retires only after attaining the age of superannuation or in the case of voluntary re- tirement on completion of qualifying service. The effect of resignation and retirement to the extent that there is severance of employment (sic is the same) but in service jurisprudence both the ex- pressions are understood differently. Under the Regulations, the expressions “resignation” and “re- tirement” have been employed for different purpose and carry different meanings. The Pension Scheme herein is based on actuarial calculation; it is a self-financing scheme, which does not depend upon budgetary support and consequently it con- stitutes a complete code by itself. The Scheme es- sentially covers retirees as the credit balance to their provident fund account is larger as compared to employees who resigned from service. Moreover, resignation brings about complete cessation of master-and-servant relationship whereas volun- tary retirement maintains the relationship for the purposes of grant of retiral benefits, in view of the past service. Similarly, acceptance of resignation is dependent upon discretion of the employer whereas retirement is completion of service in terms of regulations/rules framed by the Bank. Resignation can be tendered irrespective of the length of service whereas in the case of voluntary retirement, the employee has to complete qualify- ing service for retiral benefits. Further, there are different yardsticks and criteria for submitting res- ignation vis-à-vis voluntary retirement and accep- tance thereof. Since the Pension Regulations dis- qualify an employee, who has resigned, from claiming pension, the respondent cannot claim membership of the fund. In our view, Regulation 22 provides for disqualification of employees who have resigned from service and for those who have been dismissed or removed from service. Hence, we do not find any merit in the arguments ad- vanced on behalf of the respondent that Regulation

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22 makes an arbitrary and unreasonable classifi- cation repugnant to Article 14 of the Constitution by keeping out such class of employees. …”

17. In Sheelkumar Jain v. New India Assurance

Company Limited and others11, the Court made a

distinction between effect of resignation and voluntary

retirement while interpreting the General Insurance

(Employees) Pension Scheme, 1995 and distinguished the

decisions in Cecil Dennis Solomon (supra) and Sanwar

Mal (supra) while observing thus:-

“In these two decisions, Sanwar Mal (supra) and Cecil Dennis Solomon (supra), the Courts were not called upon to decide whether the termination of services of the employee was by way of resigna- tion or voluntary retirement. In this case, on the other hand, we are called upon to decide the is- sue whether the termination of the services of the appellant in 1991 amounted to resignation or vol- untary retirement.” Be it noted, in the said case it has also been stated

that:-

“The aforesaid authorities would show that the court will have to construe the statutory provi- sions in each case to find out whether the termi- nation of service of an employee was a termina- tion by way of resignation or a termination by way of voluntary retirement and while construing the statutory provisions, the court will have to

11 (2011) 12 SCC 197

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keep in mind the purposes of the statutory provi- sions.”

18. In this regard, learned counsel for the respondent has

placed heavy reliance on the decision in National

Insurance Company Limited and another v. Kirpal

Singh12 wherein the Court observed that the question that

fell for determination was whether the respondents who

opted for voluntary retirement from service of the appellant

companies were entitled to claim pension under the General

Insurance (Employees) Pension Scheme, 1995. The Court

took note of the definition of the terms “retirement”,

“superannuation pension” and “pension on voluntary

retirement” and in that context, observed:-

“10. The only impediment in adopting that inter- pretation lies in the use of the word “retirement” in Para 14 of the Pension Scheme, 1995. A re- stricted meaning to that expression may mean that Para 14 provides only for retirements in terms of Paras (2)(t)(i) to (iii) which includes vol- untary retirement in accordance with the provi- sions contained in Para 30 of the Pension Scheme. There is, however, no reason why the expression “retirement” should receive such a re- stricted meaning especially when the context in which that expression is being examined by us would justify a more liberal interpretation; not only because the provision for payment of pen-

12 (2014) 5 SCC 189

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sion is a beneficial provision which ought to be interpreted more liberally to favour grant rather than refusal of the benefit but also because the Voluntary Retirement Scheme itself was intended to reduce surplus manpower by encouraging, if not alluring employees to opt for retirement by of- fering them benefits like ex gratia payment and pension not otherwise admissible to the employ- ees in the ordinary course. We are, therefore, in- clined to hold that the expression “retirement” appearing in Para 14 of the Pension Scheme, 1995 should not only apply to cases which fall under Para 30 of the said Scheme but also to a case falling under the Special Voluntary Retire- ment Scheme of 2004. So interpreted, those opt- ing for voluntary retirement under the said SVRS of 2004 would also qualify for payment of pension as they had put in the qualifying service of ten years stipulated under Para 14 of the Pension Scheme, 1995.

x x x x x

17. In the case at hand Para 2 of the Pension Scheme, 1995 (extracted earlier) defines the ex- pressions appearing in the Scheme. But what is important is that such definitions are good only if the context also supports the meaning assigned to the expressions defined by the definition clause. The context in which the question whether pension is admissible to an employee who has opted for voluntary retirement under the 2004 Scheme assumes importance as Para 2 of the Scheme starts with the words “In this Scheme, unless the context otherwise requires”. There is nothing in the context of the 1995 Scheme which would exclude its beneficial provi- sions from application to employees who have opted for voluntary retirement under the Special Scheme, 2004 or vice versa. The term retirement must in the context of the two schemes, and the

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admissibility of pension to those retiring under the SVRS of 2004, include retirement not only under Para 30 of the Pension Scheme, 1995 but also those retiring under the Special Scheme of 2004. That apart, any provision for payment of pension is beneficial in nature which ought to re- ceive a liberal interpretation so as to serve the ob- ject underlying not only of the Pension Scheme, 1995 but also any special scheme under which employees have been given the option to seek vol- untary retirement upon completion of the pre- scribed number of years of service and age.”

19. In Shashikala Devi v. Central Bank of India and

others13, the issue was whether the bank was justified in

treating a letter of the employee as a letter of resignation

from service. The Court referred to Regulation 29 of the

Central Bank of India (Employees) Pension Regulations,

1995 and took note of the fact that the employee was

entitled to take voluntary retirement and, in that context

observed whether or not a given communication is a letter of

resignation simpliciter or can as well be treated to be a re-

quest for voluntary retirement will always depend upon the

facts and circumstances of each case and the provisions of

the rules applicable. Elaborating the said facet, the Court

adverted to the concept of pension and examined the true

13 (2014) 16 SCC 260

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purport of the letter and came to hold that the letter was to

seek voluntary retirement and not resignation from

employment. The Court placed reliance on the

pronouncements of Sudhir Chandra Sarkar v. TISCO

Ltd.14 and Union of India v. Pradeep Kumari15.

20. Learned counsel for the respondent also placed

reliance on Asger Ibrahim Amin v. Life Insurance

Corporation of India16 wherein the Court was interpreting

the 1995 Rules with which we are concerned in this case. In

the said case, a contention was raised that the employee

having resigned from service was not eligible to claim

pension under the 1995 Rules. The Court referred to Rule

31 of the 1995 Rules which deals with voluntary retirement.

The Court referred to the authority in Sheelkumar (supra)

and thereafter referred to paragraph 10 of Cecil Dennis

Solomon case (supra) which we have reproduced

hereinbefore and opined thus:-

“The legal position deducible from the above observations further amplifies that the so-called resignation tendered by the Appellant was after satisfactorily serving the period of 20 years ordinarily qualifying or enabling voluntary

14 (1984) 3 SCC 369 15 (1995) 2 SCC 736 16 (2015) 9 JT 329 : (2015) 10 SCALE 639

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retirement. Furthermore, while there was no compulsion to do so, a waiver of the three months notice period was granted by the Respondent Corporation. The State being a model employer should construe the provisions of a beneficial legislation in a way that extends the benefit to its employees, instead of curtailing it.”

21. It is noticeable that the two-Judge Bench

distinguished the authorities in Shyam Babu Verma v.

Union of India17, State of M.P. v. Yogendra

Shrivastava18, M.R. Prabhakar v. Canara Bank19, Kirpal

Singh (supra) and Sanwar Mal (supra) and eventually

ruled thus:-

“We thus hold that the termination of services of the Appellant, in essence, was voluntary retirement within the ambit of Rule 31 of the Pension Rules of 1995. The Appellant is entitled for pension, provided he fulfils the condition of refunding of the entire amount of the Corporation’s contribution to the Provident Fund along with interest accrued thereon as provided in the Pension Rules of 1995. Considering the huge delay, not explained by proper reasons, on part of the Appellant in approaching the Court, we limit the benefits of arrears of pension payable to the Appellant to three years preceding the date of the petition filed before the High Court. These arrears of pension should be paid to the Appellant in one instalment within four weeks from the date of refund of the entire amount payable by the Appellant in accordance of the

17 (1994) 2 SCC 521 18 (2010) 12 SCC 538 19 (2012) 9 SCC 671

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Pension Rules of 1995. In the alternative, the Appellant may opt to get the amount of refund adjusted against the arrears of pension. In the latter case, if the amount of arrear is more than the amount of refund required, then the remaining amount shall be paid within two weeks from the date of such request made by the Appellant. However, if the amount of arrears is less than the amount of refund required, then the pension shall be payable on monthly basis after the date on which the amount of refund is entirely adjusted.”

22. It is submitted by the learned counsel for the

appellants that though the authority in Asger Ibrahim

Amin (supra) deals with the 1995 Rules, it has really been

guided by the concept of “beneficial legislation” and

distinguished the authorities in similar situations and,

therefore, the matter requires to be considered by a larger

Bench. Emphasis is laid on the spinal issue that the

resignation cannot be equated with voluntary retirement,

unless there is a deeming provision to that effect.

23. The Court had referred to Section 3 of the 1960

Regulations which deals with “Termination” and contains

Regulation 18 and Regulation 19. The relevant part of

Regulation 18 reads as under:-

“Regulation 18. Determination of Service:

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(1) An employee, other than an employee on pro- bation or an employee appointed on a temporary basis, shall not leave or discontinue his service in the Corporation without first giving notice in writ- ing to the competent authority of his intention to leave or discontinue the service. The period of notice required shall be-

(a) three months in the case of an employee be- longing to Class I

(b) one month in the case of other employees.

Provided that such notice may be waived in part or in full by the competent authority at its discre- tion.

In case of breach by an employee of the provi- sions of the sub-regulation, he shall be liable to pay the Corporation as compensation a sum equal to his salary for the period of notice re- quired of him, which sum may be deducted from any moneys due to him.

(2) The Chairman, the Executive Committee or the Corporation may determine the service of any permanent employee at any time on giving him- (a) three month’s notice or salary in lieu thereof if he is an employee in Class 1, and

(b) one month’s notice or salary in lieu thereof if he is an employee in any other class

Provided however, that the period of notice will be doubled in the case of employees who have served for 10 years or more.

Provided further that no order under this regula- tion shall be made by an authority subordinate to the appointing authority

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(3) Nothing contained in this regulation shall affect the right of the appointing authority to retire, discharge, remove or dismiss an employee without notice or salary in lieu thereof in accordance with the provisions of Regulation 39 or to terminate the services of any employee belonging to Class II in accordance with the provisions contained in Schedule III.

Explanations 1. The expression “month” used in this regulation shall be reckoned according to the English calendar and shall commence from the day following that on which notice is received by the Corporation or the employee as the case may be.

x x x x x”

Relevant part of Regulation 19 is to the following

effect:-

“Regulation 19. Superannuation and Retirement: (1) An employee belonging to Class III or Class IV and a transferred employee belonging to Class I or Class II shall retire on completion of age 60; but the competent authority may, if it is of the opinion that it is in the interest of the Corporation to do so, direct such employee to retire on completion of 55 years of age or at any time thereafter, on giving him three months notice or salary in lieu thereof.

Provided that an employee who is a member of any approved superannuation fund as defined in clause (a) of Section 58-N of the Indian Income tax Act, 1922 and which has been recognised and allowed to be continued by the Corporation, shall be permitted upon request to retire before the date of retirement specified in this sub-regulation either (a) on completion of 25 years of service or

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(b) on completion of 20 years of service, provided he has reached age 50 or (c) on completion of 20 years of service if he is incapacitated for further active service.

(2) An employee belonging to Class I or Class II appointed to the service of the Corporation on or after 1st September, 1956 shall retire on completion of 60 years of age, but the competent authority may, if it is of the opinion that it is in the interest of the Corporation to do so, direct such employee to retire on completion of 50 years of age or at any time thereafter on giving him three months’ notice or salary in lieu thereof.

x x x x x”

24. The relevant part of Regulation 19(2A) which was noti-

fied on 16.02.1996 reads as follows:-

“Regulation 19(2A). (a) Notwithstanding what is stated in sub-rules (1) and (2) above, an employee may be permitted to retire at any time on completion of the age 55 after giving three months notice in writing to the appointing authority of his intention to retire.

(b) (i) Notwithstanding the provisions of Clause (a), an employee governed by the Life Insurance Corporation of India (Employees) Pension Rules, 1995 may be permitted to retire at any time after he has completed twenty years of qualifying service, by giving notice of not less than ninety days, in writing to the appointing authority.

Provided that this sub-clause shall not apply to an employee who is on deputation unless after having been transferred or having returned to India, he has resumed charge on the post in

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India and has served for a period of not less than one year.

Provided further that this sub-clause shall not apply to an employee who seeks retirement from service for being absorbed permanently in an autonomous body or a public sector undertaking to which he is on deputation at the time of seeking voluntary retirement.

(ii) The notice of voluntary retirement given under sub-clause (i) of clause (b) shall require acceptance by the appointing authority.

Provided that where the appointing authority does not refuse to grant the permission for retirement before the expiry of the period specified in the said notice, the retirement shall become effective from the date of expiry of the said period.

(iii) (A) An employee referred to in sub-clause (1) may make a request in writing to the appointing authority to accept notice of voluntary retirement of less than ninety days giving reasons therefor;

(B) On receipt of such a request, the appointing authority may, subject to the provisions of sub-clause (ii) of clause (b), consider such request for the curtailment of the period of notice of ninety days on merits and if it is satisfied that the curtailment of the period of notice will not cause any administrative inconvenience, the appointing authority may relax the requirement of such notice.

x x x x x”

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25. It is apposite to note here that in Asger Ibrahim Amin

(supra), the two-Judge Bench has referred to the scheme of

the 1995 Rules and taken note of the voluntary retirement

as mentioned in the sub-rule (ii) of Rule 2(s). It has also

referred to the relevant part of Rule 31 which we have

already reproduced hereinabove and considered the

question regarding interpretation of retrospective

applicability of the notification in the following manner:-

“The Respondent Corporation has vehemently argued that the termination of services is under Regulation 18 (supra) of the LIC (Staff) Regulations, 1960 and is not covered by the Pension Rules of 1995. Respondent Corporation has controverted the plea of the Appellant that at the relevant date and time, viz. 28.1.1991 there was no alternative for him except to tender his resignation, pointing out that he could not have sought voluntary retirement under Regulation 19(2A) of LIC of India (Staff) Regulations, 1960. If that be so, the Respondent being a model employer could and should have extended the advantage of these Regulations to the Appellant thereby safeguarding his pension entitlement. However, we find no substance in the argument of the Respondent since Regulation 19(2A) was, in fact, notified in the Gazette of India on 16.2.1996, that is after the pension scheme came into existence with effect from 1.11.1993. Otherwise there would have been no conceivable reason for the Appellant not to have taken advantage of this provision which would have protected his pensionary rights.”

[Emphasis added]

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26. As we find the aforesaid analysis has been made on

the basis of the principles stated in Sheelkumar’s case

(supra). Submission of Mr. Goburdhan, learned counsel for

the appellants is that the analysis made in Asger Ibrahim

Amin (supra) in respect of the 1995 Rules is not correct. It

is apt to note here that 1995 Rules has been given

retrospective effect on two scores, namely, the provisions

will apply retrospectively with effect from the 1st day of

November, 1993; and even employees who retired after the

1st day of January, 1986 and before the 1st day of November,

1993 could be entitled to exercise option to be covered

under the pension scheme, subject to stipulated

pre-conditions. We have already referred to Rule 3 of the

1995 Rules. As is demonstrable, the retiring employees who

had been paid provident fund had to exercise their option

and refund the amount paid with interest within the

requisite time frame. Appreciated in this manner, it is

obvious that the 1995 Rules do not postulate and do not

give liberty/right to the retiring employees covered by Rule

3 to exercise option at any time. The window period and

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pre-conditions were specific and mandatory. It has been

noted in Asger Ibrahim Amin (supra) that there was no

provision for voluntary retirement before the enforcement of

the 1995 Rules. Voluntary retirement provision was

introduced by the 1995 Rules under Rule 31 of the said

Rules. Prior to enforcement of the aforesaid Rules, there

was no concept in the Corporation which pertained to

voluntary retirement. Section 2(s) of the 1995 Rules refers

to voluntary retirement in accordance with the provisions

contained in Rule 31 of the 1995 Rules. Rule 31 has not

been given retrospective operation and effect. The

retrospective operation of the 1995 Rules in entirety is

limited to the employees, who had retired in normal course

of superannuation. Needless to say, resignation has the

effect of termination of an employee. Voluntary retirement

though has the effect of termination of employee yet it has

different consequences. In the former case, the ex-employee

could not be entitled to pension, whereas in case of

voluntary retirement, the latter one, the employee would be

entitled to pension depending upon the terms postulated in

the regulations or rules or the scheme. Rule 23 of the

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1995 Rules specifically provides that on resignation,

dismissal, removal, termination or compulsory retirement,

the employee shall forfeit the entire past service and he

shall not qualify for pensionary benefit. Thus, resignation

given under the 1995 Rules would not entitle an employee

to get pension.

27. We may further note here that whether an employee

can take voluntary retirement would depend upon the

conditions of employment and the rules applicable to the

scheme of voluntary retirement. When Rule 31 was not in

operation, the question would arise whether the benefit can

be given to an employee who had retired from service. Be it

noted that the 1995 Rules are not entirely retrospective.

They have limited retrospectivity. Rule 31 expressly has not

been made retrospective. Retrospectivity creates a given

fiction and, therefore, unless there is express provision or it

can be impliedly inferred from the plain and unambiguous

language used, a provision should not be given

retrospectivity. To arrive at the real meaning, it is always

necessary to understand the scope and object of the whole

enactment or the rules. In the said context, the relevant

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factors are general scope and purview of the statute; remedy

sought to be achieved; former state of law and what was

contemplated. Unless these conditions are satisfied, it is

difficult to treat Rule 31 of the 1995 Rules as retrospective,

in the absence of any deemed clause that the employees

who had earlier resigned shall be treated as employees as if

they had voluntarily retired. In fact, if such an

interpretation is placed on the said Rule, it will be travelling

beyond the language employed therein. In Asger Ibrahim

Amin (supra), retrospectivity has been given to Rule 31, and

for said purpose the amendment to the 1960 Regulations,

specifically Regulation 19(2A) has been taken recourse to.

In our view, when Rule 31 covers the field of voluntary

retirement and does not make it retrospective, there being a

real difference between resignation and retirement, it is not

seemly to read the amended regulations to the rules to

make the same retrospective. Therefore, we are unable to

concur with the view expressed in Asger Ibrahim Amin

(supra).

28. In view of the aforesaid analysis, let the matter be

placed before Hon’ble Chief Justice of India for constitution

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of a larger Bench. Till the matter is decided, the Life

Insurance Corporation, the appellant herein, shall go on

paying fifty per cent of the pensionary amount to the

respondent, commencing from 1st December, 2015.

......................J. (Dipak Misra)

........................J. (Prafulla C. Pant)

New Delhi; November 26, 2015.

LIFE INSURANCE CORPORATION OF INDIA Vs SHREE LAL MEENA

LIFE INSURANCE CORPORATION OF INDIA Vs SHREE LAL MEENA