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T.R. Dua Vs. Life Insurance Corporation of India - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtDelhi High Court
Decided On
Case NumberRegular Second Appeal No. 60D of 1966
Judge
Reported inILR1971Delhi217
ActsLife Insurance Corporation of India (Staff) Regulations, 1960 - Regulation 18(1)
AppellantT.R. Dua
RespondentLife Insurance Corporation of India
Advocates: S.L. Sethi and; Ravinder Sethi, Advs
Cases ReferredBahori Lal Paliwal v. District Magistrate
Excerpt:
.....on 19th july, 1962 and was to be effective from 12th august, 1962 i.e., three months after the date of resignation. the appellant, however, withdrew the resignation on 4th august, 1962. in this appeal, it is contended by the respondent corporation that the appellant became disentitled to revoke his resignation after its acceptance.; that the resignation in the instant case could not have been effective before the end of three months and the action of the zonal manager in accepting the resignation was only anticipatory, the matter of resignation is one of general application to all sorts of employees, if a resignation is not effective by a particular date it must be held to be suspended till the date it becomes effective and can be withdrawn before that date.; that till 12th august,..........to the zonalmanager of the corporation on 14/05/1962, and hence , the earliest date on which the notice period would terminate was found to be 14/08/1962. before this date it was held that the defendant couldwithdraw his resignation, and had done so by the letter. exhibitp-13, withdrawing the resignation which was delivered to the corporation on 4/08/1962. the resignation had already been acceptedby the zonal manager on 9/07/1962 with effect from 12/08/1962. on this point, the trial court held that the acceptance of the resignation was unnecessary as the corporation was not required to acceptthe resignation before the expiry of the notice period. the trial court,therefore, concluded that the defendant still remained in service. fromthis summary of the decision on the main point by the.....
Judgment:

D.K. Kapur, J.

(1) This Regular Second Appeal arises out of a suitinstituted by the Life Insurance Corporation of India against ShriT.R. Dua for the recovery of car No. PNT-3913, or, alternatively forthe recovery of the sum of Rs. 8300.00. The defendant was an employeeof the Corporation and the car in question was given to him under'anagreement between him and the Corporation. A letter of resignationdated 12/05/1962 was submitted by the defendant to the Corporation which was accepted with effect from 12th August, 1962. Theagreement between the parties relating to the car was that an amount of Rs. 10,000.00 was advanced by the Life Insurance Corporation for thepurchase of the car on the basis of an. agreement akin to an hire-purchaseagreement. Installments were to be deducted from the salary of thedefendant at the rate of Rs. 166.00 per month. The Corporation wasinitially to purchase the car but had to pay only three-fourths of theprice. Under the terms of the agreement, the Corporation was to permit the defendant to use the vehicle during the period he remained in the service of the Corporation. The vehicle was to be used only for thebusiness of the Corporation and the defendant was to pay for the petrol, the oil and other charges for the up-keep of the vehicle. Accordingto the agreement if there was a breach of its terms the Corporation wasentitled to terminate the agreement and to resume possession of thevehicle. When the total amount paid by the Corporation had beenrepaid by the defendant the vehicle was to be transferred to him.It was provided in clause 8 of the agreement (dated 22/10/1961 Exhibit P-14) that in case the defendant ceased to be in the employment of the Corporation for any reason, or died in the serviceof the Corporation, the Corporation would be entitled to the exclusivepossession of the vehicle and the defendant or his heirs would not beentitled to the payments made by the defendant in the Car Account, It was, however, provided that the defendant or his heirs as the casemay be, might within one month of the date when the Corporationgot this right to possession, pay to the Corporation the balance inthe Car Account, in which case the Corporation would transfer thevehicle to the defendant or his legal representatives. It was furtherprovided that if the balance was not paid within one month the Corporation would be entitled to sell the vehicle and out of the moneys received from the sale adjust the balance in the Car Account and paythe surplus (if any) to the defendant or his heirs.

(2) The agreement itself is not atall ambiguous but the dispute between the parties is as to whether the defendant has actually resignedand ceased to be in the employment of the Corporation or hot. According to the defendant he submitted his resignation on 14/05/1962,but withdrew the same on 4/08/1962. On the other hand, according to the Corporation the resignation was accepted with effect from 12/08/1962 and the defendant became disentitled to revokehis resignation after its acceptance. The basic question on which thedecision of the suit thereforee depends is whether the defendant continued to be in the employment of the Life Insurance Corporation after 12/08/1962 or not.

(3) On this question, the trial court found that under Regulation 18(1)of the Life Insurance Corporation Staff Regulations, 1960, a notice, ofthree months had to be given before a Class I employee like the defendantcould terminate his services. The letter of resignation is dated 12/05/1962, but it was held that it was forwarded to the ZonalManager of the Corporation on 14/05/1962, and hence , the earliest date on which the notice period would terminate was found to be 14/08/1962. Before this date it was held that the defendant couldwithdraw his resignation, and had done so by the letter. ExhibitP-13, withdrawing the resignation which was delivered to the Corporation on 4/08/1962. The resignation had already been acceptedby the Zonal Manager on 9/07/1962 with effect from 12/08/1962. On this point, the trial court held that the acceptance of the resignation was unnecessary as the Corporation was not required to acceptthe resignation before the expiry of the notice period. The trial court,therefore, concluded that the defendant still remained in service. Fromthis summary of the decision on the main point by the trial court,it will be obvious that the basis of the decision was that the defendanthad given three months notice concerning his resignation but hadwithdrawn the same before the expiry of three months. In view of thisdecision, the trial court dismissed the Corporation's suit.

(4) An appeal was taken by the Corporation to the Additional District Judge, Delhi. The decision of the trial court was reversed on a somewhat different interpretation of the facts and circumstances of the case.It was held that the services of the defendant came to an end on 1 2/08/1962 after the expiry of the notice period. The date of thegiving of the notice was found to be 12/05/1962, which was thedate borne by the letter Exhibit P-2, sent by the defendant to the Corporation.

(5) On the question of the withdrawal of the resignation, the lower appellate court held that there was no right in the defendantto withdraw his resignation. It was optional for the competent authority to allow the withdrawal of the resignation or not. In this respect,the court followed the judgment reported as Jwala Prasad v. State ofUttar Pradesh and others, : (1954)IILLJ698All . In that casethe resignation was accepted and the High Court held that after theacceptance of the resignation the same could not be withdrawn. TheCourt did not follow Sanker Dutt Shukla v. President, Municipal Board,Auraiya and another, : (1956)ILLJ736All , which is a contraryauthority. Thus the lower appellate court came to the conclusion thatthe resignation became effective on 9/07/1962 when the ZonalManager wrote an order accepting the resignation. On the questionof the date of the letter withdrawal the court held that it was notwilling to believe that it was delivered to the Corporation on 4/08/1962, but no alternative date of delivery has been mentionedin the judgment. Thus the lower appellate court came to the conclusionthat the resignation could not be withdrawn after it had been accepted.

(6) The suit of the Corporation was accordingly decreed by the lower appellate court and the suit was decreed in toto. The court, however, didnot choose between the two alternatives prayers in the suit. Thedefendant has now appealed to this Court.

(7) The main question for my decision turns on the effect of the resignation letter. Exhibit P-2. The said letter is dated 12/05/1962and is signed by the defendant. It states-'I beg to tender my resignation and request to be relieved of my duties after expiry of the usualnotice.' Then it proceeds to discuss a number of other questions suchas privilege leave, retention of the car and telephone. It also gave anumber of reasons why the defendant had decided to tender his resignation. According to the defendant, this resignation letter was forwarded to the Corporation by another letter dated 14/05/1962which is Exhibit P-20. Howerver, this letter does not make any difference because it is a letter purporting to forward the resignation tothe Senior Divisional Manager and is also signed by the appellant as Officer-in-Charge. It thus appears that the forwarding letterhas been written by the defendant himself in his capacity as an employee of the Corporation and not as the person tendering the resignation. I will assume for the purpose of this appeal that the resignationwas dated 12/05/1962 and that there was no material before theZonal Manager of the Corporation to come to the conclusion that itwas forwarded to the Corporation on 14/05/1962. Thus, the threemonths period expired on 12/08/1962.

(8) The next question to be examined is the rule relating to terminationof the defendant's services. This is Rule 18(1) of the Life InsuranceStaff Regulations 1960. It is necessary to reproduce the rule 18(1) atthis stage:-

'AN employee, other than an employee on probation oran employee appointed on a temporary basis, shall not leaveor discontinue his service in the Corporation without firstgiving notice in writing to the competent authority of his intention to leave or discontinue the service. The period of noticerequired shall be-(a) three months in the case of an employee belongingto Class I;(b) one month in the case of other employees.Provided that such notice may be waived in part or infull by the competent authority at its discretion.In case of breach by an employee of the provisions ofthis sub-regulation, he shall be liable to pay the Corporationas compensation a sum equal to his salary for the period ofnotice required of him, which sum may be deducted from anymoneys due to him.'

(9) Thus the only requirement for a person seeking to discontinuehis services is to give a notice in writing to the Corporation intimatinghis intention to leave or discontinue his service. The period of noticeis fixed as three months in the case of class I employees like the defendant, but it is possible that the notice may be waived in part or in fullby the competent authority. As the notice of resignation which thedefendant gave is dated 12/05/1962, the Zonal Manager took thenotice period to be three months i.e., terminating on 12/08/1962, and thus the resignation was accepted on 9/07/1962 by theZonal Manager vide his order of that date, Exhibit P-1/A, which runsas follows:-

'RESIGNATION accepted w.e.f. 12-8-1962 i.e., the expiry of thenotice period.K.R.P.9-7-1962'.

(10) In the usual course of things this resignation would have becomeeffective on 12/08/1962 and the basic question which has to bedetermined is whether the withdrawal of the resignation on 4/08/1962, by letter Exhibit P-13 is effective. This would againdepend on the rights of the defendant-appellant to withdraw the resignation after he had submitted the same. According to the rules, theresignation is to be effective at the end of the notice period. Supposethe resignation is not accepted till the last date of the period, then,is the appellant entitled to withdraw the resignation till the last date ofthe notice period? does the fact that the resignation has been acceptedon an earlier date affect his rights to withdraw the same? Points similarto these have arisen in various cases which have been cited before me,and I now propose to deal with those authorities.

(11) In Raj Kumar V. Union of India, : (1970)ILLJ13SC , it washeld that the resignation of a Government servant does not becomeeffective until his letter of resignation is accepted. It also held thatit would not be open to a public servant to withdraw his resignationafter it had been accepted by the appropriate authority. However,till the acceptance was made the public servant concerned had locuspaenitentie to change his mind but not after the acceptance. Normally,if this case was to be applied to the facts of the present dispute, theappellant would be not entitled to agitate the question raised in thisappeal. The resignation was accepted on 9/07/1962, and intimationin this respect was given to the appellant vide the letter Exhibit P-6which was sent by Kanahya Singh, Senior Divisional Manager to himon 23/07/1962. It was therein clearly stated that the resignationhad been accepted by the Zonal Manager with effect from 12/08/1962. Thus the appellant was fully aware that his resignation hadalready been accepted by the Zonal Manager when he purported towithdraw his resignation on 4/08/1962. The only question thatsurvives is whether the right to withdraw the resignation still remainedalive by reason of the fact that the resignation was not immediate buteffective only from 12/08/1962. It is necessary to state thequestion for decision in slightly different terms. The appellant wasrequired by the rules to give a notice regarding the termination ofhis services. The resignation thereforee could not have been effectivebefore the end of three months and the action of the Zonal Managerin accepting the same was only anticipatory. Did the fact that theresignation was accepted at an earlier date though effective from alatter date mean that the resignation was accepted on 12/08/1962 before which it had already been withdrawn? Thus, the onlyproblem that survives for decision in the appeal is, as to whether theright to withdraw the resignation continued right up to the date onwhich the resignation became effective, or, whether it terminated assoon as the Zonal Manager passed an order, accepting the same. TheJudgment reported as Jwala Prasad V. State of Uttar Pradesh : (1954)IILLJ698All , which has been relied upon by the lower appellate court, was the case of a Patwari who tendered his resignation on 2/02/1953 and asked to be relieved on 3/03/1953.The resignation was accepted on 10/02/1953 but on 2 4/02/1953 the resignation was withdrawn. It was held that theresignation was absolute and there was no right to withdraw theresignation as the resignation was unconditional. It was also held thatit was for the appointing authority to consider whether the resignation could be withdrawn as the resignation had been accepted before thewithdrawal of,the same. It was there held that there was no right towithdraw the resignation. This authority seems to be contrary to theaforementioned decision of the Supreme Court in Raj Kumar's case(3)where it was held that before the acceptance of a resignation it can bewithdrawn. In Jai Ram V. Union of India, : AIR1954SC584 , it was held:-

'IT may be conceded that it is open to a servant, whohas expressed a desire to retire from service and applied tohis superior officer to give him the requisite permission, tochange his mind subsequently and ask for cancellation of thepermission thus obtained: but he can be allowed to do so solong as he continues in service and not after it hasterminated.'

(12) Thus, the Supreme Court was of the view that a Government servantcould withdraw his resignation while he still remained in service butnot after he had retired. I may mention that the case in question wasexceptional, because the attempt to withdraw the resignation was made during the leave preparatory to retirement i.e., after the publicservant had quit his post and thus lost the lien on the post.

(13) In Sankar Dutt Shukla V. President, Municipal Board, Auraiya andanother, : (1956)ILLJ736All , it was held that where the resignation was to become effective from 1/04/1955 it could be withdrawn before that date because it was not accepted in law before that date and, hence in spite of the acceptance of the resignation at an earlierdate the court held that the resignation had not become effective. Thefacts were that a resignation was handed over by the employee concerned to the President of the Municipal Board on 24/02/1955though it was dated 1/04/1955. Before 1/04/1955 the resignation was withdrawn. The application to withdraw the resignation was rejected and the resignation was accepted by the President of theMunicipal Board. It was held by the Court that as the resignation wasnot in existence before 1/04/1955 it could be withdrawn beforethat the common law position was indicated by the judgment in Riordon v. War Office, 1959 (1) W.L.R. 1046, where it was held asunder:-

'THE giving of a notice terminating a contractual employment, whether by employee or employer, is the exercise of theright under the contract of employment to bring the contractto an end either immediately or in the future. It is a unilateralact, requiring no acceptance by the other party, and, like anotice to quit a tenancy, once given it cannot in my view bewithdrawn save by mutual consent.'

(14) Thus the view of the English Court was that a notice like the presentcould not be withdrawn. This seems to run counter to the view expressed by the Supreme Court in Raj Kumar v. Union of India, : (1970)ILLJ13SC , already referred to which is the decision given on theappeal from this very case to the Supreme Court. I must take it thatthe legal position at least in India, as at present is that till the resignation has become effective it can be withdrawn. This means that in thepresent case the resignation could be withdrawn before 12/08/1962. This view is also in consonance with the Full Bench Judgmentof the Allahabad High Court in Bahori Lal Paliwal v. District Magistrate, Bulandshahr and another : AIR1956All511 , whereit was held that a resignation could be withdrawn before it was accepted. Thus the English view in Riordon's case has not been acceptedby the Indian Courts. Now the question remains as to whether theappellant in this case could withdraw his resignation in the circumstances of the present case.

(15) The case law cited above as far as india is concerned shows that theaccepted legal position is that the Government servant or an employeecannot resign unilaterally. In order to be effective, the resignationmust be accepted by the employer. Thus, although the appellant waspermitted by the rule to terminate his services by a notice yet the resignation could not be effective till it was accepted. However, the ruleprovided that the notice had to be of three months and thereforee inspire of the order accepting the resignation on 9/07/1962 and being Communicated to the appellant on 25/07/1962. the date of acceptance of the resignation remained the date on which the period of noticeterminated i.e., 12/08/1962. This means that there was no effective termination of the services of the appellant before 12/08/1962. The case law cited above shows that the resignation could bewithdrawn before it was accepted. When was the resignation acceptedin the present case? If it was accepted on 9/07/1962 then theappellant could not withdraw it. If it was accepted on 12/08/1962 then he could withdraw it. In my view, the fact that the resignation was effective from 12/08/1962 really means that till 1 2/08/1962 the appellant was entitled to withdraw the resignationbecause the resignation could not be accepted earlier then 12/08/1962. In other words, I come to the conclusion that there was a withdrawal of the resignation before the resignation became effective whichrendered the resingation non-existent in the eyes of law and therebykept the appellant in the service of the Corporation.

(16) In the circumstances, I have to accept this appeal and reverse the judgment of the lower appellate court and restore that of the trial court.

(17) The parties will bear their own costs in this appeal. Leave to appeal to the Letters Patent Bench granted.


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