1. This is a petition under Arts. 226 and 227 of the Constitution of India. Petitioner is one Savabhai Nanjibhai. Respondent 3 is the manager of a concern, bearing the name New India Pickers (hereafter called 'the works'). Respondent 2 is a partner of a firm which firm has taken a contract from the works, under which it manufactures pickere at the works. Respondent 1 was at the relevant time the presiding officer of the first labour court at Ahmedabad. The petitioner challenges a decision recorded by respondent 1 in September 1961 in a proceeding under S. 33C of the Industrial Disputes Act, 1947. The petitioner prays that that decision be quashed and that a certificate for payment of the amount of his gratuity may be issued to him in order to enable him to recover the same as arrear of land revenue.
2. The facts are as follows : Petitioner is the employee of respondent 2. In 1960, he had put in ten years' service with respondent 2. Petitioner is a member of the Leather Mazdoor Sabha, a union registered under the Indian Trade Unions Act. A settlement was arrived at between the union, on the one hand, and respondent 2, on the other, which was to come into force from 1 August, 1958. One of the terms of this settlement introduced a scheme of gratuity in the concern of respondent 2. Some of the clauses of this scheme which are material for the purposes of this petition are as follows :
Demand Decision '1. On death of an employee 13 days' wages for each while in service of the completed year of service company or his becoming to be paid to him or physically or mentally executors or nominees incapacitated for further as the case may be. service. 2. On voluntary retirement On the same scale as (1) above. or resignation of an employee after seven years' continuous service in the company. 3. On termination of service On the same scale as (1) above.'by the company after five years' continuous service.
3. On 13 October 1960, petitioner submitted a written resignation and intimated to respondent 2 that the same would be effective from 18 October, 1960. Thereupon, on 14 October 1960, intimation was sent to petitioner, through the union, by respondent 2 that his resignation was not accepted and that he should report to duty as usual. Petitioner alleged that he was relieved from duty by respondent 2 on 17 October 1960. Respondent 2 challenged this allegation. He contended that petitioner was not relieved from duty on that day but that, on the contrary, petitioner had not reported for work from 18 October 1960 and that, on that ground, petitioner's name was struck off the roll. The finding of respondent 1 is that petitioner was not relieved from duty and that his name was struck off the roll because of his absence from duty from 18 October 1960 onwards. Petitioner claimed gratuity under Clause (2) of the aforesaid scheme of payment of gratuity on the ground that he had resigned after seven years, continuous service with respondent 2. He contended that, therefore, he was entitled to the payment of gratuity as provided for in the scheme. The claim was made by petitioner both from respondents 2 and 3. Those respondents refused the claim. Thereupon, petitioner made an application under S. 33C of the Industrial Disputes Act before the presiding officer of the labour court at Ahmedabad. As already stated, respondent 1, who was the presiding officer, rejected that application after recording the finding that petitioner had not been relieved by respondent 2. Respondent 1 considered an argument advanced on behalf of petitioner that his intimation, dated 13 October 1960, was resignation within the meaning of Clause (2) aforesaid and that, that being so, on its mere tender, that resignation became effective and petitioner was entitled to the payment of gratuity. Respondent 1 came to the conclusion that a mere tender of resignation is not the same thing as a resignation within the meaning of the clause. He held that, in order that a resignation might be effective, it required to be accepted by respondent 2 and that, as on the facts, he was satisfied that that resignation was not accepted, the claim of petitioner was not established.
4. Sri Patel argues on behalf of petitioner that respondent 1 had committed an error of law in holding that resignation was an offer and that it could be effective only by acceptance thereof by the employer. His argument is that a contract of service is essentially a contract which can be terminated at will. He contends that an employee is not a serf, that it is the right of every employee to terminate the contract of service at any time he likes and, the moment the employee exercises this particular right, it amounts to resignation and, in order that it may be effective, it is not necessary that it should be accepted by the employer. He contends that, by taking the aforesaid view, respondent 1 has equated resignation with a contract and he contends that this is not the correct legal position. The argument is that the contract of service was formed at the beginning when the employment commenced and that there was no question of any fresh contract being entered into between the parties, but that the question was only of either performance or the termination of the contract. He contends that, in the present case, wbat happened was that petitioner snapped the tie of service between himself and respondent 2, that petitioner being entitled to do so at will, the moment the resignation was submitted, the tie was effectively snapped and, therefore, the resignation was effective. He refers us to the dictionary meaning of the word 'resignation.' One of the meanings given in Shorter Oxford Engliah Dictionary, 3rd Edn., of the word 'resignation' is 'the action of resigning an office.' The word 'resigned' has been defined as 'given up, abandoned or surrendered.' The word 'resign' has been defined as meaning 'to relinquish, surrender, give up or hand over.' On the basis of these definitions, the contention of Sri Patel is that a resignation is always a unilateral act. When a person resigns his office or from his service, he does an act of his own volition by himself and, in order that a person may be said to resign, it is not necessary that there should be an acceptance of that particular act by the person to whom the resignation in tendered. In this connexion, Sri Patel also drawn our attention to the use of the words 'voluntary' and 'retirement.' He contends that the juxtaposition of the word 'retirement' with the word 'resignation' conveys the same idea and that idea is emphasized by the use of the word 'voluntary.' The word 'retirement' has also been defined in Shorter Oxford Dictionary as meaning, amongst others, 'withdrawal from something.' Sri Patel contends that the word 'resignation' must be contrasted with the expression 'termination of service' used in Clause (3) aforesaid. He contends that, just as an employer can terminate service, similarly, an employee can resign and that in either case, nothing further is required to be done from either side, because each side is sui juris and neither side is bound either to take or give service against its will.
5. The word 'resignation' or the expression 'termination of service' does not appear to have been defined in the settlement. Our attention is not drawn to any part of the settlement which can throw any light on the interpretation of the aforesaid two expressions. Whether resignation can or cannot be effective without its acceptance by the employer is not merely a question of law but depends upon the circumstances of each case. Primarily it depends upon the terms of the contract of service. If an agreement between the employer and the employee is that, before resignation can be effective, acceptance thereof by the employer is necessary, then, it cannot be said that resignation is effective without such acceptance. When a person holding a statutory office resigns, sometimes the statute itself provides for acceptance of resignation. Where there is such a specific provision, resignation is not effective until it is accepted. But the question often arises as to what the statutes or parties intended to do in cases where they have not specifically provided for on the subject. In all such cases, the question to be determined is as to what the intention of the legislature or parties was. When the terms of the contract do not throw any light on the subject, sometimes, the nature of the contract of service may do so. When a person holds a public office, the law may presume that he cannot abandon or withdraw from that office at his sweet will and that his obligation as a public servant will not end by his resignation unless it is acsepted. The law may so presume on the ground that otherwise the public interest will suffer if the public servant is allowed to leave his office before arrangement is made for discharging the functions attached to his office. As pointed out in Sudarsana Rao v. J. A. Christian Pillai [A.I.R. 1924 Mad. 396], whether acceptance of resFignation is or is not necessary depends upon the circumstances of each case. In that case, the question was whether the mere resignation of the office of an honorary magistrate does or does not take effect on the tender of resignation and before its acceptance Ramesam, J., made the following observations on this topic :
'It may be that the need for acceptance does not apply to honorary appointments and it is a question of fact in each case whether the resignation amounted to a renunciation without acceptance, and may depend to a certain extent on the contents of the letter of resignation .....'
6. However, there is one Bombay case which in our judgment, is practically on all fours with the fact of the present case. In that case a letter of resignation was sent by a railway servant in which he said that he was unwilling to serve the railway company any longer and requested the acceptance of his resignation within 24 hours. The railway company did not send any reply to the railway servant, but, instead it served him with a notice that he was dismissed from the service of the railway company. On this, the question arose as to whether the servant had ceased to be a servant by reason of his resignation or whether his purported dismissal was effective. Jenkins, C.J., made the following observations in that case - Ganesh v. G.I.P. Railway Company [2 B.E.R. 790] - which, in our judgment, are quite opposite and, with great respect, lay down the correct law on the subject :
'Now a contract of service is continuing in its nature, and its continuance and the obligations under it can only be terminated in certain defined modes. Mere resignation obviously is not enough unless it be assented to or unless it complies with those terms which the law implies or the prior agreement of the parties may permit. Here it is not suggested that the resignation of 5 May, staisfied any of these conditions. Then what differnce does it make that the plaintiff in accordance with the intimation in his letter of 5 May, absented himself from his duties None that I can see.
Supposing he had not been on leave, but while in the active performance of his duties he had left his employment contrary to his obligation, could it then be said that he had terminated his contract of service so that he was not liable to dismissal Surely not; nor can I see that the accident of his being on leave makes any difference. The plaintiff by absenting himself from his duties did not terminate the contract; all he did was to give his employer the right to determine it, and that the company maintain they did by dismissing him. The plaintiff's argument comes to this, that a man can by violating hie obligations determine his contract against the will of the other side, and in my opinion that argument offends the first principles of contract law.'
7. In our judgment, the aforesaid observations are a clear answer to the arguments of Sri Patel which we have summarized above. In our judgment, before a resignation can be effective, it must terminate the contract of service in a legally defined mode. If the resignation is accepted, then, the contract will be discharged by consent of parties. If, on the other hand, the resignation is not so accepted, then, in the absence of any other term to the contrary, the law implies that the contract of service can be terminated by a reasonable notice and unless the employee complies with this implied term of law, it cannot be said that the contract of service has been put an end to and, consequently, the resignation will not be effective. In our judgment, if the view were to to taken that the moment an employee tenders his resignation, it becomes effective and the bond of service is completely snapped, it is likely to introduce chaos in the sector of employment and, unless one is compelled to do so, one will not agree to such a proposition. It will not be proper to permit a person to take advantage by committing a breach of contract. In our judgment, there is nothing in the context in which the word 'resignation' and the other allied terms are used in the aforesaid clauses which can show that the parties intended that the bond of service could be snapped at once and not in some legally recognized mode. In the absence of any such express provision, it is clear that resignation without termination of contract of service will amount to breach thereof.
8. On the aforesaid view, Sri Patel contends that one aspect of the matter, which should have been taken into consideration, has not been done and that is that, in the present case, petitioner had given a notice of five days. He contends that the law does not prescribe any particular number of notice-days for terminating a contract of service and that that aspect needs to be considered afresh. Having regard to our aforesaid conclusion, in our judgment, this aspect does require to be considered and as the same has not been done, we propose to remand the case to the labour court at Ahmedabad so that it may consider as to whether, under the circumstances of the case, the notice of five days which petitioner gave was or was not sufficient to terminate the contract of service and thus to make the resignation effective.
9. For the aforesaid reasons, we propose to quash and set aside the decision dated 28 September 1961 of respondent 1, make the rule absolute and remand the matter to the labour court at Ahmedabad for being dealt with in accordance with law and in the light of this judgment. That Court will determine whether the period of notice which petitioner gave was or was not sufficient to terminate the contract of service between respondent 2 and petitioner.
10. Rule made absolute to the extent mentioned above. In the circumstances of this case, each party will bear its own costs.