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Reportable   

IN THE SUPREME COURT OF INDIA  CIVIL APPELLATE JURISDICTION  

 Civil Appeal No.  9076 of  2019  

@SLP (C) No. 6553 of 2018          

BSES Yamuna Power Ltd.                          …Appellant                                                             Versus    Sh. Ghanshyam Chand Sharma & Anr.                   …Respondents  

J U D G M E N T          

Dr Dhananjaya Y Chandrachud, J    

1. By its order dated 26 May 2017 a Division Bench of the High Court of Delhi  

upheld the judgement of a Single Judge dated 21 March 2017 granting  

pensionary benefits to the first respondent. The judgement of the Single Judge  

directed the appellant to pay pensionary benefits to the first respondent on the  

ground that he had completed twenty years of service and had „voluntarily retired‟  

and not „resigned‟ from service. The appellant challenges these findings in the  

present appeal.  

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2. The first respondent was appointed as a daily rated mazdoor on 9 July  

1968. His services were regularised on the post of a Peon on 22 December 1971.   

The first respondent tendered his resignation on 7 July 1990, which was  

accepted by the appellant with effect from 10 July 1990. The first respondent was  

subsequently denied pensionary benefits by the appellant on two grounds. First,  

that he had not completed twenty years of service, making him ineligible for the  

grant of pension. Second, in any case, by resigning, the first respondent had  

forfeited his past services and therefore could not claim pensionary benefits.   

3. The second question of whether by resigning, the first respondent forfeited  

his past service must be addressed at the outset. If the first respondent‟s  

resignation resulted in a forfeiture of past service, the question of whether he has  

completed twenty years of service is rendered irrelevant for such service would  

stand forfeited. In holding the that the legal effect of the first respondent‟s letter of  

resignation would amount to „voluntary resignation‟, the Single Judge of the High  

Court of Delhi relied on the judgement of this Court in Asger Ibrahim Amin v  

LIC 1 .   

4. In Asger Ibrahim Amin, the appellant had resigned in 1991 after  

completing twenty-three years of service with the Life Insurance Corporation of  

India. When the appellant resigned, there existed no provision allowing for  

voluntary retirement. The Central Government subsequently promulgated the Life  

                                                      1  (2016) 13 SCC 797

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Insurance Corporation of India (Employees) Pension Rules 1995 2  setting out the  

conditions to be fulfilled for the grant of pension upon retirement and permitting,  

for the first time, employees to voluntarily retire after twenty years of service.  

Under the LIC Pension Rules, pension on retirement was made retrospectively  

applicable to employees retiring prior to 1995, however, the provisions regarding  

voluntary retirement were not. The LIC Pension Rules also stipulated that  

resignation amounted to a forfeiture of past service. In deciding whether the  

appellant was entitled to pension under the LIC Pension Rules, Justice Vikramajit  

Sen speaking for a two judge Bench of this Court held:   

“16. … [quoting Sheelkumar Jain v New India Assurance Co.  

Ltd. (2011) 12 SCC 197] The aforesaid authorities would  

show that the court will have to construe the statutory  

provisions in each case to find out whether the  

termination of service of an employee was a termination  

by way of resignation or a termination by way of  

voluntary retirement and while construing the statutory  

provisions, the court will have to keep in mind the purpose of  

the statutory provisions…    

17. The appellant ought not to have been deprived of  

pension benefits merely because he styled his  

termination of service as “resignation” or because there  

was no provision to retire voluntarily at that time. The  

commendable objective of the Pension Rules is to extend  

benefits to a class of people to tide over the crisis and  

vicissitudes of old age, and if there are some  

inconsistencies between the statutory provisions and the  

avowed objective of the statute so as to discriminate  

between the beneficiaries within the class, the end of  

justice obligates us to palliate the differences between  

the two and reconcile them as far as possible. We would  

be failing in our duty, if we go by the letter and not by the  

laudatory spirit of statutory provisions and the fundamental  

rights guaranteed under Article 14 of the Constitution of  

India.”   

(Emphasis supplied)  

                                                      2  LIC Pension Rules  

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5.  The court in Asger Ibrahim Amin held that despite the use of the term  

„resignation‟ in the appellant‟s letter, the court had to independently determine  

whether the termination of service amounted to a „resignation‟ or a „voluntary  

retirement‟. As the appellant in Asger Ibrahim Amin had fulfilled the prescribed  

years of service and, at the time of his resignation there was no provision for  

voluntary retirement, the Court held that the appellant had in fact „voluntarily  

retired‟ and not „resigned‟. The LIC Pension Rules only made the provisions on  

retirement applicable retrospectively and did not make the provisions with respect  

to voluntary retirement applicable retrospectively. However, in holding that the  

court must determine whether there existed a case for „voluntary retirement‟ or  

„resignation‟, the effect of the decision was to apply the provisions on voluntary  

retirement retrospectively.  The Court Vikramajit Sen expressly noted this:   

“11. … The respondent Corporation has controverted the plea  

of the appellant that as the relevant date and time viz. 29-1-

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(2-A) of the 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(2-A) was, in fact, notified in  

the Gazette of India on 16-2-1996, that is, after the pension  

scheme case into existence with effect from 1-11-1993.   

(Emphasis supplied)  

6. In the present case, the Single Judge of the High Court of Delhi relied on  

the decision in Asger Ibrahim Amin to hold that the first respondent was entitled  

to pensionary benefits. The Single Judge noted that the first respondent had  

completed more than twenty years of service and would have been eligible for

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pension upon voluntary retirement. Therefore, despite the first respondent using  

the term „resignation‟, on an independent determination of the facts of the case,  

the Single Judge held that he had in fact „voluntarily resigned‟ from service‟.   

7. Mr C U Singh, learned Senior Counsel for the appellant, brought to our  

attention that the correctness of the court‟s approach in Asger Ibrahim Amin  

had been called into question by a co-ordinate bench of this Court in Senior  

Divisional Manager, LIC v Shree Lal Meena 3  (“Shree Lal Meena I”), which  

referred the matter to a larger Bench of this Court. Thereafter, a three judge   

Bench of this Court was constituted and delivered a judgement in Senior  

Divisional Manager, LIC v Shree Lal Meena 4  (“Shree Lal Meena II”) overruling  

the view taken in Asger Ibrahim Amin. Both these judgements have been  

placed on the record.   

8. The facts in Shree Lal Meena I and Shree Lal Meena II were analogous  

to those in Asger Ibrahim Amin. The respondent employee had resigned after  

completing twenty years of service. The court was called upon to determine  

whether the respondent‟s „resignation‟ amounted to a forfeiture of his past service  

disentitling him from pension or was in fact „voluntary retirement‟. Justice Dipak  

Mishra (as the learned Chief Justice then was) speaking for a two judge Bench of  

this Court in Shree Lal Meena I observed:   

“28. … Needless to say, resignation has the effect of  

termination of an employee. Voluntary retirement though has  

the effect of termination of an employee yet it has different  

                                                      3  (2015) 17 SCC 43  

4  (2019) 4 SCC 479

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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 1995 Rules  

specifically provides that on resignation, dismissal, removal,  

termination or compulsory retirement, the employee shall  

forfeit 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.   

29. … In Asger Ibrahim Amin, retrospectivity has been given  

to Rule 31 [Pension on voluntary retirement], and for the said  

purpose the amendment to the 1960 Regulations, specifically  

Regulation 19(2-A) 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.”   

(Emphasis supplied)  

9. The court in Shree Lal Meena I took the view that the provision with  

respect to pension on voluntary retirement (Rule 31) was not applicable  

retrospectively because the relevant provision had not been enacted with  

retrospective effect. Crucially, the Court noted that by making the provision on  

voluntary retirement applicable retrospectively, and making a determination in the  

facts of each case whether an employee had „resigned‟ or „voluntarily retired‟, the  

decision in Asger Ibrahim Amin obliterated the distinction between resignation  

and retirement. The court noted that there is a “real difference between  

resignation and retirement”. They cannot be used interchangeably, and the court  

cannot substitute one for the other merely because the employee has completed  

the requisite number of years to qualify for voluntary retirement.   

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10. In Shree Lal Meena II, upholding the interpretation in Shree Lal Meena I,   

Justice Sanjay Kishan Kaul speaking for the three judge Bench, noted that the  

retrospective application of the provision on voluntary retirement in the LIC  

Pension Rules would lead to an absurd result:   

“19. What is most material is that the employee in this  

case had resigned. When the Pension Rules are applicable,  

and an employee resigns, the consequences are forfeiture of  

service, under Rule 23 of the Pension Rules. In our view,  

attempting to apply the Pension Rules to the respondent  

would be a self-defeating argument. As, suppose, the  

Pension Rules, were applicable and the employee like the  

respondent was in service and sought to resign, the  

entire past service would be forfeited, and consequently,  

he would not qualify for pensionary benefits. To hold  

otherwise would imply than an employee resigning  

during the currency of the Rules would be deprived of  

pensionary benefits, while an employee who resigns  

when the Rules were not even in existence, would be  

given the benefit of these Rules.”   

(Emphasis supplied)  

The Court noted that, if the approach followed in Asger Ibrahim Amin was  

adopted in interpreting the LIC Pension Rules, an employee who resigned after  

the enactment of the rules would not be entitled to pensionary benefits but an  

employee who had resigned when the rules were not in force, but had completed  

the prescribed period of service for voluntary retirement, would be entitled to  

pensionary benefits. Such an outcome could not be countenanced and would  

render nugatory the provision which stipulated that upon resignation, past service  

stood forfeited.   

11.  The Court in Shree Lal Meena II elucidated the distinction between  

resignation and voluntary retirement in the following terms:  

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“22. … [quoting RBI v Cecil Dennis Solomon (2004) 9 SCC  

461] In service jurisprudence, the expressions  

“superannuation”, “voluntary retirement”, “compulsory  

retirement” and “resignation” convey different connotations.  

Voluntary retirement and resignation involve voluntary acts on  

the part of the employee to leave service. Though both  

involve voluntary 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 rendering the prescribed period  

of qualifying service. Another fundamental distinction is that in  

case of the former, 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 mandated, while in the  

case of the latter, permission of the employer concerned is a  

requisite condition. Though resignation is a bilateral concept,  

and becomes effective on acceptance by the competent  

authority, yet the general rule can be displaced by express  

provisions to the contrary.”   

The above observations highlighted the material distinction between the concept  

of resignation and voluntary retirement. The Court also observed that while  

pension schemes do form beneficial legislation in a delegated form, a beneficial  

construction cannot run contrary to the express terms of the provisions:   

“26. There are some observations on the principles of public  

sectors being model employers and provisions of pension  

being beneficial legislations (see Asger Ibrahim Amin v LIC).  

We may, however, note that as per what we have opined  

aforesaid, the issue cannot be dealt with on a charity  

principle. When the legislature, in its wisdom, brings forth  

certain beneficial provisions in the form of Pension  

Regulations from a particular date and on particular terms  

and conditions, aspects which are excluded cannot be  

included in it by implication.”   

The view in Asger Ibrahim Amin was disapproved and the court held that the  

provisions providing for voluntary retirement would not apply retrospectively by  

implication. In this view, where an employee has resigned from service, there  

arises no question of whether he has in fact „voluntarily retired‟ or „resigned‟. The

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decision to resign is materially distinct from a decision to seek voluntary  

retirement. The decision to resign results in the legal consequences that flow  

from a resignation under the applicable provisions. These consequences are  

distinct from the consequences flowing from voluntary retirement and the two  

may not be substituted for each other based on the length of an employee‟s  

tenure.   

12.  In the present case, the first respondent resigned on 7 July 1990 with  

effect from 10 July 1990. By resigning, the first respondent submitted himself to  

the legal consequences that flow from a resignation under the provisions  

applicable to his service. Rule 26 of the Central Civil Service Pension Rules  

1972 5  states that:   

“26. Forfeiture of service on resignation  

(1) Resignation from a service or a post, unless it is allowed  

to be withdrawn in the public interest by the Appointing  

Authority, entails a forfeiture of past service…”  

Rule 26 states that upon resignation, an employee forfeits past service. We have  

noted above that the approach adopted by the court in Asger Ibrahim Amin has  

been held to be erroneous since it removes the important distinction between  

resignation and voluntary retirement. Irrespective of whether the first respondent  

had completed the requisite years of service to apply for voluntary retirement, his  

was a decision to resign and not a decision to seek voluntary retirement. If this  

court were to re-classify his resignation as a case of voluntary retirement, this  

would obfuscate the distinction between the concepts of resignation and  

                                                      5  CCS Pension Rules

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voluntary retirement and render the operation of Rule 26 nugatory. Such an  

approach cannot be adopted. Accordingly, the finding of the Single Judge that the  

first respondent „voluntarily retired‟ is set aside.   

13. We now turn to the question of whether the first respondent had completed  

twenty years in service. During the present proceedings, our attention was drawn  

to the fact that the first respondent had applied for voluntary retirement on 14  

February 1990. By a letter dated 25 May 1990 the appellant denied the first  

respondent‟s application for voluntary retirement on the ground that the first  

respondent had not completed twenty years of service. It was thus urged that the  

appellant‟s decision to deny the first respondent voluntary retirement was illegal  

as the first respondent had completed twenty years of service.     

14. This argument cannot be accepted. Even if he was denied voluntary  

retirement on 25 May 1990, the first respondent did not challenge this decision  

but resigned, on 7 July 1990. The denial of voluntary retirement does not mitigate  

the legal consequences that flow from resignation. No evidence has been placed  

on the record to show that the first respondent took issue with the denial of  

voluntary retirement between 25 May 1990 and 7 July 1990. To the contrary, in  

the legal notice dated 1 December 1992 sent by the first respondent to the  

appellant, the first respondent admitted to having resigned. The first respondent‟s  

writ petition was instituted thirteen years after the denial of voluntary retirement  

and eventual resignation. In the light of these circumstances, the denial of

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voluntary retirement cannot be invoked before this Court to claim pensionary  

benefits when the first respondent has admittedly resigned.   

15. On the issue of whether the first respondent has served twenty years, we  

are of the opinion that the question is of no legal consequence to the present  

dispute. Even if the first respondent had served twenty years, under Rule 26 of  

the CCS Pension Rules his past service stands forfeited upon resignation. The  

first respondent is therefore not entitled to pensionary benefits.   

16. For the above reasons, we accordingly allow the appeal and set aside the  

impugned order of the High Court of Delhi dated 26 May 2017. There shall be no  

order as to costs.    

.……......................................................J  

                   [Dr Dhananjaya Y Chandrachud]          

..……......................................................J  

              [Hrishikesh Roy]  

New Delhi;  December 5, 2019.