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Himachal Pradesh Hor... v. Suman Behari Sharma .
Factual and Procedural Background
The respondent, an employee of Himachal Pradesh Horticultural Produce Marketing and Processing Corporation Ltd. (HPMC), was on sanctioned leave until 30-11-1990. On 26-11-1990 he tendered a notice seeking voluntary retirement effective 30-11-1990 and asked for waiver of the required three-month notice period. Without awaiting HPMC’s decision, he failed to report for duty from 1-12-1990 onward.
Prior to this, on 12-12-1989, a charge-sheet had been served on him for alleged misconduct, and he replied on 26-12-1989. Subsequent charge-sheets dated 27-8-1992 (regarding unauthorised absence from 1-12-1990) and 18-9-1992 (regarding further misconduct) were also issued. Additionally, HPMC ordered recovery of Rs 28,214 from the respondent by order dated 28-6-1991.
The respondent filed OA No. 74 of 1993 before the Himachal Pradesh Administrative Tribunal, challenging the two charge-sheets and the recovery order, contending that he had automatically retired on 26-2-1991—three months after his notice—because HPMC had taken no action. The Tribunal accepted this contention, quashed the disciplinary proceedings and recovery, and directed payment of retiral benefits. HPMC appealed to the Supreme Court.
Legal Issues Presented
- Whether clause 3.8(5) of HPMC’s Employees Service Bye-laws confers an automatic right on an employee to retire after giving three months’ notice, without the corporation’s acceptance.
- Whether, in the absence of such acceptance within three months, the respondent stood retired from 26-2-1991, thereby barring HPMC from continuing departmental enquiries and recovery proceedings.
Arguments of the Parties
Appellant (HPMC)
- The Tribunal misinterpreted clause 3.8(5); HPMC is not obliged to accept or reject a voluntary retirement notice within three months.
- “Seek retirement” under clause 3.8(5) implies a request requiring the employer’s permission, similar to clause 3.8(2).
Respondent
- Because HPMC failed to act on his notice within three months, he automatically retired on 26-2-1991.
- Precedents such as Dinesh Chandra Sangma and related cases establish that, upon three months’ notice, acceptance is unnecessary.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Dinesh Chandra Sangma v. State of Assam (1977) 4 SCC 441 | Under FR 56(c), a government servant may retire by giving three months’ notice without need for acceptance. | Distinguished; Court held that Bye-law 3.8 does not grant a similar unconditional right. |
| Union of India v. Harendralal Bhattacharya (1983) 2 SLJ 418 (Del.) | Same principle as Dinesh Chandra Sangma. | Distinguished for the same reason; relied upon by Tribunal but found inapplicable. |
| Ramchandra Chouthe v. State of M.P. (1984) 1 SLJ 52 (MP) | Employee’s right to retire on notice without acceptance when rule so provides. | Distinguished; Court found Bye-law 3.8 requires employer’s permission. |
| Gummadi Sri Krishana Murthy v. District Educational Officer (1990) 3 SLJ 91 (AP) | Highlighted necessity for employer to decide within notice period where rule expressly mandates such decision. | Court noted these remarks were tied to a specific rule containing an express time-limit and did not lay down a general rule applicable here. |
Court's Reasoning and Analysis
The Supreme Court examined Bye-law 3.8 as a whole. Clause 3.8(2) allows an employee to request voluntary retirement after completing 25 years of service or attaining 50 years of age, but only “if permitted” by the competent authority, indicating no automatic right.
Clause 3.8(5) serves as an exception, permitting employees with 20 years of satisfactory service to “seek retirement” after giving three months’ notice. The Court stressed that “seek retirement” implies a request, not an entitlement, and therefore still requires acceptance by HPMC. Reading the bye-law holistically, the Court held that an employee with fewer years of service could not enjoy a broader right than one with more service.
Consequently, precedents interpreting rules that did grant an unconditional right (such as FR 56(c)) were inapplicable. The Tribunal erred in applying those cases and in concluding that the respondent’s employment terminated automatically on 26-2-1991.
Holding and Implications
Appeal Allowed – Tribunal’s order set aside. The respondent did not automatically retire on 26-2-1991, and HPMC is entitled to proceed with the pending departmental enquiries and recovery proceedings, if otherwise permissible. No order as to costs.
The decision affects only the parties by reinstating HPMC’s disciplinary jurisdiction; it sets no new precedent beyond clarifying that Bye-law 3.8 of HPMC requires employer permission for voluntary retirement.
G.T Nanavati, J.— Himachal Pradesh Horticultural Produce Marketing and Processing Corporation Ltd. (for short ‘HPMC’) has filed this appeal against the order passed by the Himachal Pradesh Administrative Tribunal in OA No. 74 of 1993.
2. The respondent was an employee of HPMC. On 1-5-1990 he applied for long leave but was allowed to remain on leave till 30-11-1990 only. On 26-11-1990 he applied for voluntary retirement effective from 30-11-1990 and also requested for waiver of notice period of three months. Without ascertaining what happened to his request he did not report for duty on 1-12-1990 and continued to remain absent thereafter. Earlier on 12-12-1989 a charge-sheet was issued against him for certain acts of misconduct. On 26-12-1989 he filed a reply to the said charge-sheet. Again on 27-8-1992 and 18-9-1992 he was served with two more charge-sheets. While the charge-sheet dated 27-8-1992 was in respect to his unauthorised absence from 1-12-1990 the other was in respect of his acts of misconduct. Thereupon, on 30-9-1992 he approached the Tribunal challenging the two memos dated 27-8-1992 and 18-9-1992 whereby departmental enquiries were proposed to be conducted against him and also the order dated 28-6-1991 whereby Rs 28,214 were sought to be recovered from him.
3. The contention of the respondent before the Tribunal was that as no action was taken by the HPMC on his request for retirement he stood retired with effect from 26-2-1991, on expiry of three months from the date of the notice and, therefore, no enquiry could be held against him thereafter. The Tribunal, while interpreting clause 3.8 of the Himachal Pradesh Horticultural Produce Marketing and Processing Corporation Ltd. — Employees Service Bye-laws, which provides for superannuation and retirement, held that the decisions in Dinesh Chandra Sangma v. State of Assam (1977) 4 SCC 441, 1977 SLJ 622, Union of India v. Harendralal Bhattacharya (1983) 2 SLJ 418 (Del) and Ramchandra Chouthe v. State of M.P (1984) 1 SLJ 52 (MP) wherein it has been held that the government servant has a right to voluntarily retire from service by giving three months' notice in writing and that there is no question of acceptance of such request by the Government and that the Government has no power to withhold permission to retire were applicable. It further held that under the rule the HPMC has a privilege to exercise its option to accept or not the request of the employee for premature retirement but that option has to be exercised within the prescribed limit of three months. It also held that as the HPMC did not take any decision on the application of the respondent within three months he stood retired with effect from 26-2-1991. The Tribunal, therefore, quashed the two memos dated 27-8-1992 and 18-9-1992 and directed HPMC that it cannot hold any enquiry against the respondent. The order dated 28-6-1991 passed for recovery of Rs 28,214 was also quashed. It also directed HPMC to give all the retiral benefits due and admissible to the respondent within a period of three months. Aggrieved by this order of the Tribunal HPMC has approached this Court.
4. What is contended by the learned counsel for the appellant is that the Tribunal has not correctly interpreted para (5) of Bye-law 3.8 and committed an error in holding that HPMC has to exercise its option of accepting or rejecting the request of the employee within three months from the date of the notice for premature retirement.
5. On reading the judgment of the Tribunal we find that it first referred to the said three decisions and then observed: “The ratio of the aforementioned judgments is applicable to the present case.” That would mean that the Tribunal has, though not in specific terms, held that the employee of HPMC has a right to retire from service by giving three months' notice in writing and there is no question of acceptance of such request by HPMC. In our opinion, the view taken by the Tribunal is not correct.
6. In Dinesh Chandra Sangma case (1977) 4 SCC 441, 1977 SLJ 622 this Court, interpreting FR 56(c), held that “there is no question of acceptance of the request for voluntary retirement by the Government when the government servant exercises his right under FR 56(c)”. (emphasis supplied) Thus, this Court interpreted FR 56(c) as conferring a right on the government servant to retire from service by giving three months' notice in writing and it was in that context further held that consent of the Government is not necessary to give legal effect to the voluntary retirement of the government servant under that rule.
7. The Delhi High Court in Harendralal case (1983) 2 SLJ 418 (Del) and the Andhra Pradesh High Court in Ramchandra case (1984) 1 SLJ 52 (MP) also proceeded on the basis that the relevant rules conferred a right on the government servant to retire by giving a notice of three months. Therefore, the ratio of those decisions is that when a right is conferred on the employee to retire by giving three months' notice the question of acceptance of such a request would not arise provided all the conditions prescribed by the rule are satisfied. The Tribunal should have first considered whether Bye-law 3.8 confers such a right on the employee of HPMC. Bye-law 3.8 reads as follows:
“(1) Every employee appointed to the service of the Corporation shall normally retire when he attains the age of 58 years but in special cases their services may be retained up to 60 years.
(2) Notwithstanding anything contained in clause (1) any employee may be required by the competent authority, or permitted at his request, to retire from the service of the Corporation on completion of 25 years' service or at the age of 50 years whichever is earlier.
(3) Nothing contained in clause (1) and clause (2) shall affect the right of the competent authority to retire an employee without notice or pay in lieu thereof on his being certified by a medical examiner to be nominated for the purpose by such authority as being incapacitated for a further period of continuous service due to his continued illness and accident.
(4) An employee may be permitted to retire at his own request if the competent authority is satisfied that such an employee is incapacitated for a further period of continuous service due to his continued illness and accident:
Provided that before acting under this clause it shall be open to such authority to require the employees to undergo a medical examination by such medical examiner it may nominate for this purpose.
(5) Notwithstanding the provision under para (2) above, the Corporation employees who have a satisfactory service record of 20 years may also seek retirement from the service of the Corporation after giving three months' notice in writing to the appropriate authority. Persons under suspension would not be retired under this clause unless proceedings of the case against them are finalised….”
8. Clause (2) of the bye-law inter alia provides for voluntary retirement from service of HPMC on completion of 25 years' service or on attaining the age of 50 years whichever is earlier. The employee, however, has a right to make a request in that behalf and his request would become effective only if he is ‘permitted’ to retire. The words “may be … permitted at his request” clearly indicate that the said clause does not confer on the employee a right to retire on completion of either 25 years' service or on attaining the age of 50 years. It confers on the employee a right to make a request to permit him to retire. Obviously, if request is not accepted and permission is not granted the employee will not be able to retire as desired by him. Para (5) of the bye-law is in the nature of an exception to para (2) and permits the employee who has not completed 25 years' service or has attained 50 years of age to seek retirement if he has completed 20 years' satisfactory service. He can do so by giving three months' notice in writing. The contention of the learned counsel for HPMC was that though para 5 of the bye-law relaxes the conditions prescribed by para (2), the relaxation is only with respect to the period of service and attainment of age of 50 years and it cannot be read to mean that the requirement of permission is dispensed with. On the other hand, the learned counsel for the respondent submitted that as para 5 opens with the words “Notwithstanding the provision under para (2)” and the words “may be … permitted at his request” are absent that would mean that the employee has a right to retire after giving three months' notice and no acceptance of such a request is necessary. We cannot agree with the interpretation canvassed by the learned counsel for the respondent. The bye-law has to be read as a whole. Para (2) thereof confers a right on the employee to request for voluntary retirement on completion of 25 years' service or on attaining the age of 50 years, but his desire would materialise only if he is permitted to retire and not otherwise. Ordinarily, in a matter like this an employee who has put in less number of years of service would not be on a better footing than the employee who has put in longer service. It could not have been the intention of the rule-making authority while framing para 5 of the bye-law to confer on such an employee a better and a larger right to retire after giving three months' notice in writing. The words “seek retirement” in para 5 indicate that the right which is conferred by it is not the right to retire but a right to ask for retirement. The word ‘seek’ implies a request by the employee and corresponding acceptance or permission by HPMC. Therefore, there cannot be automatic retirement or snapping of service relationship on expiry of three months' period.
9. The Tribunal also failed to appreciate that the following observations made by the Andhra Pradesh High Court in Gummadi Sri Krishana Murthy v. Distt. Educational Officer (1990) 3 SLJ 91 (AP)
“On the facts of this case, we are of the view that the rules above-mentioned intended that the employee has to give advance notice to the employer so that the latter could make necessary arrangements for employing some other person. It was also the intention of the rules that this privilege given to the employer could not be exercised beyond a reasonable period here fixed as three months for the employee should equally know where he stands. For example, the employee might have opted to retire because of offers of employment elsewhere or he might wish to make some other arrangement in regard to his own affairs. In such a situation, the employer could not be given a unilateral right to communicate his acceptance or otherwise at his own sweet will and without any limitation as to time.”
were by way of justification of rule which provided that “provided that the competent authority shall issue an order before the expiry of the notice period accepting or rejecting the notice”. The High Court has not laid down a general proposition of law that when an employee seeks voluntary retirement the employer has to exercise his privilege of accepting or rejecting the request within a reasonable time and if a period is fixed for giving a notice in that behalf then the decision has to be taken within the period so fixed.
10. We are, therefore, of the opinion that the Tribunal was wrong in holding that under para 5 of the bye-law the employee has a right to retire after giving three months' notice and that the respondent stood retired with effect from 26-2-1991 on expiry of three months' notice period as the respondent's request for retirement was not rejected within that period. We, therefore, allow this appeal and set aside the order passed by the Tribunal. It will be open to the appellant to proceed further with the proposed enquiry if it is otherwise expedient and permissible to do so. However, in view of the facts and circumstances of the case there shall be no order as to costs.
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