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Nalinikant J. Baxi Vs. Chairman and Managing Director Bank of India and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtGujarat High Court
Decided On
Case NumberSpl. C.A. 5973 of 1983
Judge
Reported in(1987)ILLJ388Guj
ActsBanking Companies (Acquisition and Transfer of Undertakings) Act, 1970 - Sections 12
AppellantNalinikant J. Baxi
RespondentChairman and Managing Director Bank of India and ors.
Cases ReferredState of Kerala v. M. Padmanabhan
Excerpt:
labour and industrial - retirement - section 12 of banking companies (acquisition and transfer of undertakings) act, 1970 - petitioner not keeping good health - respondent bank refused to grant approval to petitioner's application for voluntary retirement - circumstances which cast stigma on character of petitioner taken into consideration by bank - bank duty bound to give opportunity of being heard to petitioner - no such opportunity given to petitioner - refusing to grant approval for withdrawal of notice of voluntary premature retirement null and void. - - therein, i passed the following short order while rejecting the petition :the letter of withdrawal of resignation is clearly a conditional one and therefore, it cannot be said that the respondents authorities were wrong in not.....order1. in this very matter while passing the interim order on dec. 30, 1983, i had inter alia observed that it was not understandable as to why the authorities of public sector undertakings should not adopt an approach of justice and fair-play with their employees and further observed : 'they must forget the ethos and attitude of private sector management. the employment in public sector undertakings is the wealth of the nation at large. the bureaucrats managing the affairs of the public sector undertakings have to forget and forsake the principles of management of undertakings on capitalist exploitative principles. they are not supposed to vie with the managers of private sector establishments. they are supposed to remove the evils of capitalism and not to perpetuate the same. they are.....
Judgment:
ORDER

1. In this very matter while passing the interim order on Dec. 30, 1983, I had inter alia observed that it was not understandable as to why the authorities of public sector undertakings should not adopt an approach of justice and fair-play with their employees and further observed :

'They must forget the ethos and attitude of private sector management. The employment in public sector undertakings is the wealth of the nation at large. The bureaucrats managing the affairs of the public sector undertakings have to forget and forsake the principles of management of undertakings on capitalist exploitative principles. They are not supposed to vie with the managers of private sector establishments. They are supposed to remove the evils of capitalism and not to perpetuate the same. They are supposed to act within the leash as envisaged in the Constitution.'

One feels sorry that the aforesaid remarks still remain justified when the final decision is being rendered in this matter.

2. At the relevant time the petitioner was serving with the respondent-Bank, i.e. Bank of India (hereinafter referred to as 'the Bank') as Assistant General Manager, carrying Management Grade Scale V, which is fairly a higher post in the hierarchy of posts in the Bank. The petitioner joined the Bank in June 1946. Details regarding earlier period of service are not very much material except that in the year 1979 the petitioner was serving as Regional Manager, New North West Region at Chandigarh, from where he was transferred to Bombay sometime in Sept. 1979, without specifying any designation. Later on, when he had reached the age of 55, he was transferred in Ahmedabad - his native place - in the month of May 1982. After he assumed charge at Ahmedabad office, he was promoted as Assistant General Manager Grade V as per order dt. July 22, 1982. At Ahmedabad the petitioner was in charge of one main branch of the Bank. Thereafter, as per order dt. July 21, 1983, the petitioner was ordered to be transferred to Bhopal as Assistant General Manager (Audit). The petitioner did not go to Bhopal, but, 'on account of indifferent health' submitted a letter dt. Sept. 12, 1983 and requested that he be permitted to retire prematurely and further requested to treat the letter as three months' notice expiring on Dec. 12, 1983. This notice of voluntary premature retirement was withdrawn by the petitioner by letter dt. Oct. 6, 1983, inter alia, indicating therein the circumstances regarding his health and the circumstance that one B. R. Mehta who was working as Assistant General Manager (Audit) at Ahmedabad, had requested for retirement and the post was likely to fall vacant. On the basis of these and other circumstances, the petitioner requested that he be continued at Ahmedabad, and he also submitted that his notice of voluntary premature retirement be allowed to be withdrawn. The Bank replied through the Ahmedabad Main Office to the effect that no request for premature retirement from Mr. B. R. Mehta, Assistant General Manager (Audit), was received by the Bank. However, in any case, the decision already taken in regard to the voluntary retirement of Shri N. J. Baxi (the petitioner) cannot be reversed; Shri Baxi will retire voluntarily from the Bank's services with effect from 12th December, 1983 as advised in the telex dated October 6, 1983.

3. Since the petitioner's request for the withdrawal of notice of voluntary premature retirement was not accepted by the Bank, the petitioner moved this Court by way of the present petition on Dec. 12, 1983, inter alia, contending that the decision of the bank refusing to grant approval to the withdrawal of the notice of voluntary premature retirement was illegal and void. By way of interim relief, the petitioner prayed that the Bank be directed not to take any action so as to put the petitioner on premature retirement and he be allowed to continue on the post held by him. The interim relief prayed for by the petitioner was granted and ultimately confirmed as per order dated Dec. 30, 1983. The order confirming the interim relief was challenged by the Bank by way of Letters Patent Appeal No. 81 of 1984 before the Division Bench of this High Court. The Division Bench consisting of B. K. Mehta and D. H. Shukla, JJ, as per its order dt. July 19, 1984, confirmed the interim relief granted as per order dt. Dec. 30, 1983, but inter alia observed that the bank will have right to claim the refund of the salary in case the petitioner fails and the petitioner will have right to resist such claim. The Division Bench also observed that the matter may be fixed for final hearing within a period of six weeks from the date of the order.

4. It appears that the Bank did not carry the matter further before the Supreme Court and that is how the matter is required to be heard and decided finally. However, during the pendency of the petition, the petitioner reached the superannuation age on Jan. 31, 1984. Thus the issues involved in the petition have become academic. Even so, all the issues raised by the parties are required to be decided in view of the fact that as per the observations made by the Division Bench while disposing of the Letters Patent Appeal referred to hereinabove, the Bank has right to claim refund of the salary in case the petitioner fails and the petitioner also has a right to resist such claim. Moreover, the Bank has insisted that the issues involved in the petition be decided on merits.

5. The petitioner has not happily worded the prayers. The prayer made by the petitioner is to the effect that the Bank be directed to grant approval to the request made by him for the withdrawal of the notice of voluntary premature retirement. He has also prayed that the Bank be directed to post him at Ahmedabad. His further prayer is that his letter dt. Sept. 12, 1983, i.e. the notice of voluntary premature retirement, be treated as cancelled. However, in substance the parties have argued on the question as to whether the decision of the Bank refusing to grant approval to withdraw the notice of voluntary premature retirement was legal and valid or not. This is how the parties have understood the controversy and on the basis, the matter has been argued.

6. The effect of the interim relief granted (and confirmed in Letters Patent Appeal) was that the petitioner continued to serve at Ahmedabad and he was not transferred to Bhopal. It may be noted that the Bank never came out with a proposal that it was prepared to continue the petitioner in service, but meanwhile the Bank should be permitted to transfer him to Bhopal. It also appears that during the pendency of the petition, the Bank never sought the permission of the Court for transferring the petitioner to Bhopal. Had such permission been asked for or had such a proposal been made, probably, the petitioner might not have been allowed to serve at Ahmedabad. But the Bank never moved an inch from the stiff attitude taken by it and that is why the petitioner could stay at Ahmedabad and indirectly got his transfer order stayed and/or cancelled without the same having been adjudicated finally on merits.

7. The petitioner contended that the decision refusing to grant approval to withdraw the notice of voluntary premature retirement was illegal and void inasmuch as -

(a) the order was not a speaking order;

(b) that the same has been passed without affording an opportunity of being hear to the petitioner;

(c) that it was actuated by a mala fides; and

(d) that the decision refusing to grant approval has been based on irrelevant and extraneous circumstances and therefore it is arbitrary.

The counsel for the petitioner inter alia relied upon a circular issued by the Bank containing provision with regard to voluntary premature retirement by giving notice of three months and the withdrawal of the same before the expiry of the notice period with the approval of the competent authority.

As against the aforesaid contention raised by the counsel for the petitioner, it is contended on behalf of the Bank that the petitioner had no right whatsoever to seek approval for the withdrawal of the notice of voluntary premature retirement submitted by him. According to the Bank, whether or not to grant such approval was purely within the discretion of the Bank and such decision can be challenged only on the ground of mala fides and/or arbitrariness. Initially the counsel for the Bank submitted that the circular had no statutory force. However, realising that the circular had been incorporated in the statutory regulations framed by the Bank, he gave up this contention and submitted that this provision did not confer any unqualified right on the petitioner to voluntarily retire from the services; nor did it confer any right to withdraw the notice of voluntary premature retirement. It was submitted that the application for withdrawal was conditional one and therefore the Bank was within its right to reject the same. According to the Bank, the order was discretionary and it did not visit the petitioner with any civil consequences and therefore, it was not necessary to give hearing to the petitioner or to pass any speaking order.

8. The Bank of India (officers') Service Regulations, 1979 (hereinafter referred to as 'Regulations') have been framed under the provisions of S. 19 read with sub-sec (2) of S. 12 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970). Regulation 19 of the said Regulations deals with the age of retirement and that is relevant for our purpose. There is no dispute with regard to the fact that in case of the petitioner, the age of retirement would be 60 years. Regulation 19 provides for voluntary retirement and the relevant part thereof reads as follows :

Rules regarding voluntary retirement for officer employees. ---------------------------------------------

'An Officer employee may be permitted by the Competent Authority to voluntarily retire from Bank's service any time after the completion of 55 years of age or 30 years of total service as an officer employee or otherwise, whichever is earlier, after giving the Bank 3 months' notice in writing, unless the requirement is wholly or partly waived.

An officer employee may be allowed to withdraw a notice of voluntary retirement subsequently, only with the approval of the Competent Authority provided the request for such withdrawal is made before the expiry of the notice.

An officer employee retiring voluntarily shall be entitled to all benefits under the normal retirement, as per the Service Regulations.'

There is no dispute with regard to the fact that in the case of petitioner the Competent Authority would be the Executive Director of the Bank. At the initial stage, the approval to withdraw the notice of voluntary premature retirement had been refused by the Bank only on the ground that the decision had already been taken by the authority and the same cannot be reversed. It is not stated in the earliest decision which has been communicated to the petitioner that the approval had been refused because it was conditional.

9. However, the argument of the Bank that the application for withdrawal of the notice of voluntary premature retirement has to be unconditional one, may be examined. The regulation governing the notice of voluntary retirement for officer employees and grant of approval in case the withdrawal thereof is sought, does not say that an application for withdrawal of voluntary retirement notice should not contain any condition whatsoever. An application for withdrawal of notice of voluntary retirement may be conditional also. It may contain certain terms and conditions for the purpose of withdrawal of the notice of voluntary retirement. Such an application cannot be thrown away on the ground that it contained certain terms and conditions for the withdrawal of the notice of voluntary retirement. The Competent Authority of the Bank will have to consider the same on merits. It may be that there may be certain conditions which may not be acceptable to the Bank and therefore, the Bank may not grant the approval sought for. But there is nothing in the Regulation which restricts the right of an employee/officer to make an application together with certain conditions. Even if the application for withdrawal of notice of voluntary retirement contained certain conditions, the Competent Authority will have to consider the same on merits and decide accordingly. On consideration of the merits, it may be that the Bank may come to the conclusion that the condition attached was such that the the approval cannot be granted. But that is altogether a different thing. Simply because the application contained certain conditions, it cannot be said that the application was not maintainable at all and that it was not required to be considered on merits. Moreoever, the petitioner contends that his letter of withdrawal of notice of retirement was not conditional, but it was coupled with a request to post him at Ahmedabad. Such construction may be possible. But in above view of the matter, it is not necessary to go into details on this point.

10. In this connection for the Bank has relied upon an order passed by me summarily rejecting Special Civil Appln. No. 2717 of 1983 on Nov. 17, 1983. It was a case of an employee of Oriental Fire and General Insurance Company. Therein, I passed the following short order while rejecting the petition :

'The letter of withdrawal of resignation is clearly a conditional one and therefore, it cannot be said that the respondents authorities were wrong in not accepting the same. Hence rejected.'

11. In that case, an employee submitted resignation on Feb. 1, 1983 stating that his resignation be accepted as he was not keeping good health and it was not possible for him to continue on the job and that he was expected to get another clerical job and therefore he wished to resign from the Company. He requested that he be relived with effect from May 1, 1983. At that time the employee was serving at Modasa. Thereafter, he sent a letter stating that he did not wish to leave the job if he was transferred to Ahmedabad on administrative or clerical side. This request was not acceded to by the employer-Insurance Company. From the affidavit-in-reply, filed by the employer, it became clear that the employee was under suspension from Aug. 19, 1977 to Nov. 23, 1978 and he was subjected to penalty of reduction in the basic salary of the time scale by two stages and was issued warning. Again he was suspended in April 1981 and was subjected to penalty of reduction in the basic salary at the lowest stage. The employee concerned was working on the development side of the Insurance Company and it was not possible to transfer him on administrative or clerical side. In this context it was not possible for the Employer-Company to accept the petitioner's conditional offer of withdrawal of the resignation contained in his letter dt. Aug. 1, 1983. The employee had not attended the service from May 1, 1983 onwards and thereafter he approached this Court and prayed that his letter of withdrawal of resignation with conditions stipulated therein should have been accepted and he should have been allowed to resume duties. In the context of these facts, the order reproduced hereinabove was passed by me. The matter was carried in Letters Patent Appeal and the Division Bench of this High Court (Coram : P. R. Gokulakrishnan C.J. and R. C. Mankad, J.) dismissed the same summarily on June 26, 1985.

From what is stated hereinabove, it should be clear that no principle has been laid down by me while rejecting the aforesaid petition. It is a one-sentence order passed at the admission stage and the same has been passed having regard to the facts and circumstances of the case. It is not understood how this order is pressed into service by the learned counsel for the Bank and how it helps the Bank in construing the provisions of Regulation 19 which provide for voluntary retirement and also provide for withdrawal of notice of voluntary retirement. The question has got to be decided on the basis of the provisions contained in service regulations of the Bank. The reliance placed on the order passed by me in the aforesaid special civil application does not in any way help the Bank.

12. The provisions contained in the Regulations govern the relationship between the Bank and its Officers-employees. These regulations have got to be interpreted having regard to the well-settled principles in service jurisprudence. Similar question arose in Special Civil Application No. 913 of 1983 decided on Feb. 3, 1984 (Coram : R. C. Mankad, J.). In that case a State Government Resolution dated Feb. 3, 1978 which contained similar provision regarding notice of premature voluntary retirement came up for interpretation. The Resolution provided for voluntary retirement after giving three months' notice by the employee concerned. As regards the withdrawal of notice, it was provided as follows :

'Notice for voluntary retirement can be subsequently withdrawn with the approval of the competent authority, provided the request for withdrawal is made before the expiry of the period of notice.' This provision is almost identical with the provision contained in Regulation 19 of the Regulations of Bank. In that case, the questions which arose were as follows : 1. When can the competent authority refuse to grant approval

2. Has the authority unrestricted or arbitrary power of discretion to refuse to grant approval

3. Can the authority, without assigning any reason or ground whatsoever, withhold approval

The Court answered all the three questions in negative and observed :

'Primary object of making this provision seems to be to bring it to the notice of the competent authority that the employee who had given notice to voluntarily retire from service was withdrawing the notice. Since the retirement sought was voluntary, ordinarily the competent authority is expected to accord its approval to the withdrawal of retirement notice. It is only in exceptional or extraordinary cases or circumstances that the competent authority can refuse to grant its approval. In other words, grant of approval is a rule, refusal is an exception. Again exception can be made only on rational or reasonable grounds. It is only to safeguard against exceptional or extraordinary cases or circumstances that the provision for approval is made. This provision is not made to clothe the competent authority with unrestricted, unbridled or arbitrary powers to grant or refuse approval. It cannot refuse to accord its approval at its whim or caprice. Therefore, if the notice of retirement is withdrawn within the prescribed time, that is, before the expiry of the period of notice, ordinarily the competent authority has to accord its approval.'

The Court has further observed as follows :

'Whenever the competent authority refuses to accord its approval, it can do so only for valid and rational reasons revealing or disclosing exceptional circumstances for such action and these reasons must be reflected in its order refusing the approval. The order passed by the competent authority and reasons recorded by it would always be subjected to judicial review. In other words, the order must be a speaking order which would be open to scrutiny by a competent judicial authority or Court. If the order refusing approval gives no reasons or the reasons stated are not valid reasons, the refusal would be void and the employee would continue to be in service as if the approval was granted, the normal rule being to grant approval.'

I am in respectful agreement with the aforesaid principle laid down by R. C. Mankad, J.

13. In this case it may be noted that at the earliest stage when the Bank communicated its decision to the petitioner as per its letter dt. Oct. 20, 1983 (Annexure 'D'), no reason has been advanced for not granting approval to the withdrawal of the notice of voluntary premature retirement. It was only stated that the decision had already been taken in regard to the voluntary retirement of the petitioner and therefore, the same cannot be reversed. Obviously this is no ground at all. As per the provisions of the regulations, an employee has a right to withdraw the notice of voluntary retirement any time before the date expiry of the notice. This right is conferred upon an employee subject to the approval of the Competent Authority. The Competent Authority cannot say that since he has accepted the notice of voluntary premature retirement, he would not consider the request of the petitioner for the withdrawal of notice of voluntary premature retirement though the same has been made within three months period from the date of notice. If that be so, the right which has been conferred on the employee would become negatory. In that case, it would amount to saying that the employee will have a right to withdraw the notice for voluntary retirement any time before the same is accepted by the Competent Authority. Such is not the provision of the Regulation and there is no rational basis for adopting such a construction.

14. It was contended by the counsel for the Bank that the approval to withdraw the notice of voluntary premature retirement was not accorded by the Bank as the same was conditional and as the petitioner was not keeping good health and that his performance was not up to the expectation of the management as per the confidential reports for the year 1982. Admittedly, the petitioner has not been afforded an opportunity of being heard before refusing to grant approval for the withdrawal of the notice of voluntary premature retirement. It has not been brought to the notice of the petitioner that because the letter was conditional and that it was on account of his alleged ill-health and also on account of the confidential reports that the approval sought for was refused. It may be noted that in normal course, the petitioner would have continued in service up to the age of 60 years. As provided under the regulations, a right was conferred upon the petitioner to voluntarily retire earlier than the age of 55 years of age or 30 years of service. He could exercise this right by giving three months notice in writing. As per the same regulation, he could withdraw this notice before the expiry of the notice period subject to the rider that the withdrawal should be approved by the Competent Authority. In the case, the petitioner gave notice of voluntary premature retirement on Sept. 12, 1983. Before the expiry of three months period, i.e. before Dec. 11, 1983, he withdrew the notice of voluntary premature retirement by his letter dt. Oct. 6, 1983. Thus, he fulfilled the condition laid down in the regulation. If the Competent Authority of the bank decided to reject the request of the petitioner and not to grant approval for the withdrawal of the notice of voluntary premature retirement, then in that case, such a decision would surely visit the petitioner with civil consequences. Such a decision would take away the right of the petitioner to continue in service up to the age of 60 years. He would be deprived of the salary till 60 years. There would be reduction in the terminal benefits and he would be deprived of the benefit of gratuity and provident fund to that extent. Thus, it is clear that the decision refusing to grant approval for the withdrawal of the notice of voluntary premature retirement would certainly visit the petitioner with civil consequences.

15. In view of the principles laid down by the Supreme Court in the case of State of Orissa v. Binapani, reported in (1967-II-LLJ-266) a decision visiting or order which involves civil consequences cannot be taken without affording an opportunity of being heard to the affected person. Otherwise it would be against the principles of natural justice. In the case before the Supreme Court, the dispute was with regard to the date of birth. Some preliminary enquiry was made by an officer of the Department regarding the date of birth of the employee concerned. But that report was never disclosed to the employee. This non-disclosure of the report was considered to be violation of the principles of natural justice and the Supreme Court has observed :

'it is true that the order is administrative in character, but even an administrative order which involves civil consequences, as already stated, must be made consistently with the rules of natural justice after informing the first respondent of the case of the State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence'.

In this case also, it is an admitted position that the Bank never brought to the notice of the petitioner that it was not possible to grant approval to the withdrawal of the notice of voluntary premature retirement, because the request was a conditional one or because the petitioner was not keeping good health and there were certain adverse remarks in his confidential reports for the year 1982. In fact, no inquiry regarding his health or regarding the adverse remarks in service record has been held by the Bank. No opportunity of being heard has been afforded to the petitioner.

16. Thus in the instant case, it is clear that the circumstances which case a stigma on the the character of the petitioner, have been taken into consideration by the Bank. To say that a particular person is not keeping good health and therefore, he is not fit to be in service any longer would certainly cast a stigma on the personality of the person. He would be considered unfit for employment anywhere else. Similarly, to say that the confidential reports were adverse to the officer concerned for a particular year and therefore, he could not be continued in service, would surely cast a stigma on his character. If the Bank desired to take these factors into consideration, then the principles of natural justice and fair-play required that the petitioner be afforded an opportunity of being heard. Admittedly, no such opportunity has been offered to the petitioner. Therefore, even if it is believed that the Bank had taken into consideration these factors while refusing to grant approval for the withdrawal of the notice of voluntary premature retirement, then also the decision of the bank in refusing the approval on these grounds has got to be held to be null and void and therefore the same is required to be quashed and set aside.

17. The learned Counsel for the petitioner contended that the order was not a speaking order and therefore also it contravenes the principles of natural justice and therefore, it requires to be quashed and set aside. The contention of the counsel for the Bank that the refusal to grant approval for withdrawal of notice of voluntary premature retirement did not adversely affect the right of the petitioner and it did not involve any civil consequences whatsoever cannot be accepted. The argument that the petitioner himself had invited a loss of service and therefore the decision of the Bank did not involve any civil consequences and therefore the Bank was not required to pass a speaking order also has no merit. Whenever an employee opts for voluntary retirement and gives a notice for voluntary retirement as provided under the regulations, this very provision confers a right upon the employee to withdraw the notice of voluntary retirement. The same provision of regulation confers right on an employee and shows the way how to avoid the civil consequences and continue in service. For avoiding civil consequences and for continuing in service, all that is required for him to do is that he should withdraw the notice of voluntary retirement before the expiry of the notice period. The Competent Authority, if at all wishes to refuse to grant approval, it has got to follow the procedure and it should comply with the requirements of the principles of natural justice and administrative fair-play.

18. It may be noted that, at the initial stage, the Bank came out with a case that the approval was refused because the decision to accept the notice of voluntary retirement was already taken and it could not be reversed. Later on, at the time of hearing of the interim relief, one additional ground was advanced, namely, that the withdrawal was conditional and therefore, it could not be accepted. At that time, no other ground was mentioned. Subsequently, after the order of interim relief dt. Dec. 30, 1983 was passed by me, other grounds; that the petitioner was not keeping good health and that the performance of the petitioner was not up to the mark for the year 1982, have been added when the Letters Patent Appeal was filed and during the hearing of the appeal. On behalf of the petitioner, it is submitted that the grounds added subsequently cannot be taken into consideration to justify the impugned decision of the Bank. In support of this contention reliance is placed on the judgment of the Supreme Court in the case of Mohinder Singh v. Chief Election Commr. reported in AIR 1978 SC 851. Therein the Supreme Court has observed that the validity of an order passed by a statutory functionary has got to be judged by the reasons mentioned in the order. It cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, the order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. I view of this principle laid down by the Supreme Court, the decision of the Bank in refusing to grant approval for the withdrawal of the notice of voluntary premature retirement, cannot be substantiated by the stand taken by it subsequently. Even so, in the instant case, I have permitted the Bank to take additional grounds. Even on the basis of the additional grounds, taken by the Bank, the decision taken by the Bank cannot be justified.

19. On the contrary, in view of the additional grounds advanced by the Bank, the decision of the Bank has got to be characterised as being violative of principles of natural justice. The earlier decision of the Bank was based only on the ground that the application was not considered because the notice of voluntary premature retirement was already accepted and therefore, the decision could not be reversed. The subsequent grounds advanced by the Bank are that the request for withdrawal of the notice was conditional and the petitioner was not keeping good health and that there were adverse remarks in his confidential reports. The first ground that the request for withdrawal was conditional and therefore, it could not be taken into consideration is a technical one. Had it been pointed out to the petitioner that on this technical ground the request for withdrawal of the notice of voluntary retirement cannot be considered, the petitioner could have and probably would have clarified the situation and avoided this technical hitch in his way. He might have been able to persuade the bank that the letter was not conditional one but it was coupled with a request to post him at Ahmedabad. As far as other two grounds are concerned, it is very clear that both these grounds cast stigma on the personality and character of the petitioner. In this view of the matter, these grounds could not have been taken into consideration by the Bank without affording and opportunity of being heard to the petitioner. Hence it was incumbent upon the Bank to afford an opportunity before taking these grounds into consideration.

20. The petitioner also contended that the decision refusing to grant approval for withdrawal of the notice of voluntary premature retirement was actuated by mala fides. The petitioner specifically contended that on Mr. R. P. Vaidya, General Manager (Personal) entertained prejudice against him. When the petitioner was posted as Regional Manager, New North West Region, at Chandigarh and was working there, it was not liked by some high officers of the Bank and hence he was transferred to Bombay without specifying any designation. This transfer took place in the year 1979. The petitioner made an appeal to the superior officers of the bank and prayed that he be given proper designation and his grievances be redressed. The matter remained lingering for a considerable time, and ultimately in the month of May 1982, the petitioner was transferred to Ahmedabad and posted as Chief Manager in Senior Management Grade Scale IV. In the month of Aug. 1982 he was promoted as Assistant General Manager in Senior Management Grade Scale V. Thus, according to the petitioner, his grievance was redressed to some extent. But the officers who entertained prejudice against him including Mr. R. P. Vaidya, General Manager Personnel continued to persecute him. They saw to it that he was transferred to Bhopal against the policy and/or practice of the Bank of not transferring the employees who were about to reach the age of superannuation within a year or two. It is also contended that when the petitioner submitted request withdrawing the notice of voluntary premature retirement, unusual correspondence took place on telex between the Ahmedabad Office and Bombay Office. According to the petitioner, this is generally never done. It is particularly submitted that even though he made specific allegations against Mr. R. P. Vaidya General Manager (Personnel), no affidavit-in-reply has been filed by him controverting the allegations of mala fides. The affidavit-in-reply has been filed by some other officers of the Bank.

21. The petitioner was transferred to Ahmedabad on May 1, 1982. Thereafter, by order dt. July 22, 1982, he was promoted to the post of Assistant General Manager. After a period of about one year, i.e. on July 21, 1983, the petitioner had been ordered to be transferred to Bhopal as Assistant General Manager (Audit). Normally, it can be presumed that an audit branch of the bank would require a person with vigilant eye and an alert mind. The Bank has come out with a case that during the year 1982, the petitioner was not able to come up to the expectation of the management in his new assignment. In the column 'commitment to the tasks assigned' it is remarked 'Lack-lustre approach to the tasks assigned'. These are the remarks in the confidential report written by one Mr. N. S. Parulekar, the General Manager of the Bank. It is not clear on which date this remark has been written. The Executive Director of the Bank has made an endorsement agreeing with the aforesaid remarks on Mar. 1, 1983.

22. If the aforesaid service record is written sincerely and seriously, then it is not understood why and for what grounds, the petitioner was sought to be transferred to Bhopal as Assistant General Manager (Audit). If a person who was not able to come up to the expectation of the management in discharge of his duties as a Branch Manager, how he could have been found fit for the post of Assistant General Manager (Audit). A pointed question was put to the counsel for the Bank to explain this position. Counsel for the Bank was clearly told that in the facts and circumstances of the case, unless satisfactory explanation was given, it appeared that the service record of the petitioner was written with some malice or in casual manner or that the transfer of the petitioner to Bhopal was ordered maliciously. Counsel for the Bank was given time of more than 15 days to render an explanation if there be any. Even so, he has not been able to show anything from the record or he has not been able to get any explanation from the officers of the Bank. Hence one would be tempted to ask - 'With what lustrous approach the confidential reports of the petitioner have been written by the superior officers of the Bank One feels sorry that this should happen in public sector undertaking at such a high level. This circumstance alone is sufficient to infer that the action of the Bank refusing to grant the request of the petitioner was actuated by mala fides. However, this circumstances coupled with other circumstances which have been narrated hereinabove reinforces the contention of the petitioner that the refusal of the Bank to grant approval for the withdrawal of the notice of premature voluntary retirement was actuated by mala fides.

23. This leaves us with the question of unpaid terminal benefits payable to the petitioner by the Bank. The question of payment of salary, etc. is not directly involved in this petition. But in view of the observations made by the Division Bench of this High Court in the order passed in Letters Patent Appeal No. 81 of 1984, the petitioner had preferred Civil Application No. 732 of 1985 requesting that the Bank should be directed to pay him the terminal benefits which were withheld by the Bank for no valid reason. As per the order passed on the civil application, the Bank was directed to calculate the terminal benefits as if the petitioner retired from service on Dec. 12, 1983 and pay the entire terminal benefits on or before May 19, 1985. The question with regard to the rest of the payment of the terminal benefits i.e. calculating the terminal benefits on the basis that the petitioner has retired on Jan. 31, 1985 was left open to be decided at the time of final hearing of this petition. Against this order, the matter was carried in appeal, being Letters Patent Appeal No. 189 of 1985, by the Bank. Therein the Division Bench has passed the following order on July 19, 1985 :

'Both these Letters Patent Appeal and Civil Application are heard together. After hearing the learned Advocates, we order that the salary for the disputed period, namely, period between 12th December, 1983 and 31st January, 1985, not to be given over, but it will be treated as a Fixed Deposit with this Bank to be held in trust and if the respondent ultimately succeeds, the amount to be paid over to him with interest that accrued due. Rest of the amount is to be paid to the respondent. The calculations to be made by the appellant-Bank and the payments will be made in the course of a month from today. The question of interest on that amount is left open, to be agitated at the time of final hearing of the Special Civil Application No. 5973 of 1983 Letters Patent Appeal and Civil Application accordingly disposed of'. The aforesaid order has been clarified by the Division Bench as per its order dated August 8, 1985 wherein it is stated that when the reference was made to the salary for the disputed period, it was meant that the amount equal to the salary of the disputed period is to be deducted by the Bank out of the terminal benefits and to be kept as a fixed deposit with them and if the petitioner ultimately succeeds in the Special Civil Application No. 5973 of 1983, this amount will be given over to him subject to further orders that may be passed in the appeal or by the Supreme Court.

24. In the facts and circumstances, it is clear that there was no valid reason whatsoever for the Bank to withhold the amount ofterminal benefits which became payable to the petitioner. The petitioner reached superannuation on January 31, 1985. No valid reason has been advanced by the bank for withholding the amount of terminal benefits payable to the petitioner. In view of the judgment of the Supreme Court in the case of State of Kerala v. M. Padmanabhan (1985-I-LLJ-530), the pension and gratuity are not bounty to be distributed by the Government to its employees on their retirement but are valuable rights and property in their hands and any capable delay in settlement and disbursement thereof must be visited with the penalty of payment of interest at the current market rate till actual payment. The liability to pay penal interest on these dues at the current market rate commences at the expiry of two months from the date of retirement. In the instant case, the facts and circumstances clearly show that the Bank has not only attempted to persecute the petitioner, but thereafter has made an attempt to inflict further injury on him by withholding the amount of terminal benefits for no reason whatsoever. Hence the respondent Bank is required to be directed to pay the petitioner the amount of terminal benefits and all other dues payable to the petitioner by the Bank with penal interest till the date of payment. As laid down by the Supreme Court, the liability to pay penal interest on these dues at the current market rate (which is 18% at present) commences at the expiry of two months from the date of retirement till payment. The Bank is required to be directed to calculate the interest on the dues of the petitioner at the rate of 18% per annum from April 1, 1985, i.e. two months after the date of retirement of the petitioner and pay the principal amount together with interest to the petitioner.

25. In the result, the petition succeeds. The decision of the respondent-Bank refusing to grant approval to the notice of withdrawal of premature voluntary retirement, is held to be illegal and void and the same is quashed and set aside and the petitioner is deemed to have continued in service of the respondent-Bank as if notice of premature voluntary retirement given by him was duly withdrawn and cancelled and he was entitled to continue in service till the date he would have ordinarily attained the age of superannuation, i.e. up to January 31, 1985, and also entitle dot all the service benefits flowing therefrom. The respondent-Bank is further directed to pay the terminal benefits and other dues, if any, of the petitioner with 18% interest per annum from April 1, 1985 onwards. Rule made absolute accordingly with no order as to costs.

26. Petition allowed.


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