Full Judgment
K. Ramaswamy, J.
1. The petitioner is admitedly an employee of the respondent having worked as Clerk-cum-Typist for over 13 years. He submitted his letter of resignation on August 9, 1982 under Ex. P-1 giving one month's time and also issued a reminder under Ex. P-2. The petitioner claimed that he was relieved on August 14, 1982 and he laid an application under Section 44(2) of the Andhra Pradesh Shops and Establishments Act, 1966 (for short 'the Act') claiming several reliefs. Presently we are concerned with regard to the gratuity. The authority under the Act granted to the petitioner wages for two months and refused to grant gratuity. The petitioner carried the matter in appeal. The appellate authority confirmed the order of the competent authority. Thus this revision.
2. The main ground on which both the tribunals have refused to grant the relief and which was reiterated by the learned Counsel for the respondent is that Section 40(3) of the Act enjoins on the employees to give notice of resignation. The petitioner has given notice of resignation giving 30 days' time. He has not stayed back from attending to the duty after expiry of days and he continued to attend the office till September 13, 1982. As a result, the notice of resignation became ineffective and inoperative. Therefore, he is not entitled to payment of gratuity. If he is eligible, it has to be considered only under the Gratuity Act, 1972 (Central Act) but not under the State Act. The question therefore is whether the notice of resignation becomes invalid if the employee after giving notice of resignation continues even after the expiry of one month till September 13, 1982. To appreciate this contention it is necessary to read Sub-section (1) Section 40 of the Act which is as follows:-
No employer shall without a reasonable cause and except for misconduct terminate the service of an employee who has been in his employment continuously for a period of not less than six months without giving such employee, atleast one month's notice in writing or wages in lieu thereof and in respect of an employee who has been in his employment continuously for a period of not less than years, gratuity amounting to 15 days average wages for each year of continuous employment.
Sub-section (3) Section 40 posits thus:
An employee who has completed the age of sixty years or who is physically or mentally unfit having been so declared by a Medical Certificate or who wants to retire on medical grounds, or to resign his service may give up his employment after giving to his employer notice of atleast one month in the case of an employee of 60 years of age and 15 days in any other case and every such employee and the dependent of an employee while in service shall be entitled to receive (gratuity as provided in Sub-section (1). He shall be entitled to receive the wages from the date of giving up the employment until the date on which the gratuity so payable is actually paid subject to a maximum of wages for two months.
A conjoint reading of these provisions would amply demonstrate that an employee having continuous service of 5 years shall not be terminated without reasonable cause except of mis-conduct. If he is terminated, then he is entitled to the gratuity amounting to 15 days' average wages for each year. As per Sub-section (3) of Section 40 of the Act, an employee who wants to retire on attaining the age of 60 years or declared physically or mentally unfit by obtaining Medical certificate or intends to retire on medical grounds or resign his service, in the case of resignation, a person who wants to resign after attaining the age of 60 years he has to give one month's notice and in any other case 15 days' notice. An employee who thus resigns is also entitled to receive gratuity as provided under Sub-section (1) of Section 40 of the Act and wages for the period from the date of giving up of the employment or till the date of the payment of gratuity in any other case for a maximum period of two months.
3. The petitioner had not attained 60 years of age. Therefore, he has to give 15 days' notice. Admittedly under Ex. P-1 he has given notice of resignation. Therefore 15 days' period has to be computed from the date of the receipt of the resignation letter. The question is whether, if the letter of resignation submitted by an employee after its expiry of 15 days enjoined under the statute was not accepted and he was relieved but continued to work, it be comes inoperative after expiry of 15 days. Once a letter of resignation is submitted, the option is open to the employer either to accept the resignation or refuse to accept the resignation. If it is accepted, then it becomes effective from the date of acceptance. In the interregnum, it is open to the employee to withdraw the letter of resignation. Therefore, the letter of resignation continues to be ineffective till it is accepted by the employer. Mere filing of letter of resignation does not put an end to the relationship of Master and Servant between the employer and the employee. As a result the employee is bound to continue to attend the office and discharge the duties unless there is an express agreement to the contrary between the employee and employer. Therefore, the letter of resignation does not become effective after the expiry of 15 days till it is accepted. Acceptance is a condition precedent. It continues to be a valid one so long as it is not accepted. Therefore, the letter of resignation does not cease to be ineffective after the expiry of 15 days mentioned in the letter of resignation. On that ground the employee does not become ineligible for claiming gratuity as mentioned under Section 40(1) of the Act though the letter of resignation was accepted after the expiry of the period mentioned in the letter of resignation and continues to attend to the duty till the date of relief.
4. In these circumstances both the tribunals have committed grievous error of law in considering that the petitioner is not entitled to the gratuity on account of his continuing in the duty after the expiry of the period of 15 days from the date of Ex. P-1.
5. The C.R.P. is therefore allowed. The respondent is directed to pay gratuity to the petitioner in terms of Sub-section (1) of Section 40 of the Act, namely, 15 days' average wage for each year of continuous employment and the authority is directed to compute accordingly and award the amount. In the circumstances of the case, each party is directed to bear his own costs.