(This writ petition is filed under Article 226 of the Constitution of India praying to quash the order dated 13.3.2007 (under Annexure-G to the writ petition) passed by the respondent and direct the respondent to pay to the petitioner all the terminal benefits such as provident fund, gratuity, leave encashment etc., together with interest at 15% per annum from 6.3.2007 till date of payment and also issue him an order of relief relieving him from the services of the Bank at the end of office hours on 5th March 2007 as mandated by para 522(2) of the Sastry Award.)
Heard the learned counsel for the petitioner and the learned counsel for the respondent.
2. The facts are as follows:-
The petitioner was working as a Clerk in the services of the respondent-Bank. The petitioner is said to have issued a notice of resignation dated 31.1.2007 whereby it was indicated that he be relieved from the services of the Bank at the end of Office hours on 5th March 2007. This according to the petitioner was in terms of the Sastry Award, governing the service conditions of the petitioner. However, by virtue of an order dated 13.3.2007, the respondent-Bank had refused to accept the notice of resignation submitted by the petitioner. It is this, which is the cause for the present petition in the background of the refusal by the Bank of the intention of the petitioner to resign from the services of the Bank. It is stated that the petitioner was initially recruited as a Clerk in the year 1979. His services were confirmed and the petitioner had claimed such appointment on the basis of the petitioner belonging to a Scheduled Tribe. It is further stated that there were complaints that the petitioner had secured employment by producing a false caste certificate and the Bank had initiated disciplinary proceedings against the petitioner by issuance of a charge sheet dated 16.11.1989. An enquiry was conducted, which was contested by the petitioner and on the finding of the Enquiry Officer that the caste certificate submitted by the petitioner was genuine and that he was not guilty of any misconduct, the Disciplinary Authority, however reversed the findings of the Enquiry Officer by a notice dated 1.9.90 and proposed to impose the penalty of dismissal from service. This was questioned by the petitioner in a writ petition in W.P.No.18570/90 before this Court, and during the pendency of that writ petition, this Court had stayed all further proceedings pursuant to the notice and ultimately, by an order dated 4.10.1996, the petition was allowed. The notice issued by the Bank was quashed while reserving liberty to the Deputy Commissioner of the jurisdictional District to re-do the matter regarding the caste status of the petitioner in accordance with law. The District Caste Verification Committee is said to have confirmed the caste status of the petitioner and issued him a validity certificate, dated 8.9.2000. The Bank, however, insisted that the petitioner did not belong to a Scheduled Tribe and called for certain clarifications from the Deputy Commissioner as regards the validity certificate issued. The Deputy Commissioner by a further order, confirmed that the petitioner belonged to a Scheduled Tribe and that the certificate issued to him was final. But even after such clarification, the Bank insisted that the petitioner did not belong to the Scheduled Tribe. It is in this acrimonious situation that the petitioner had applied for voluntary retirement. This was rejected by the Bank by an order dated 29.6.2001. By another order dated 30.6.2001 it was indicated that such rejection was on account of the false caste status claimed by the petitioner, which controversy was pending and since the Bank was not satisfied with the validity certificate issued by the competent authority. This was challenged by the petitioner by filing a writ petition in W.P.No.26934/01. In turn the Bank had also belatedly filed a writ petition in W.P.No.23386/05 questioning the validity certificate issued in favour of the petitioner. Both the writ petitions were dismissed by a common order, by a learned Single Judge of this Court. That having been challenged in appeals, a Division Bench of this Court had dismissed the appeal filed by the petitioner and allowed the appeal filed by the Bank, which had questioned the validity certificate issued in favour of the petitioner. In that background, the petitioner had, thereafter, submitted a letter of resignation, which was belatedly rejected, according to the petitioner. Therefore, it is claimed by the petitioner that his resignation is deemed to have been accepted and claims the terminal benefits, which he would be entitled to by virtue of the same. It is this, which is the point for consideration, namely, whether the petitioner could be said to have resigned from the services of the respondent-Bank having regard to the sequence of events. The letter of resignation submitted by the petitioner reads as follows:-
“Under Para 522(2) of the Sastry Award I hereby give notice to resign from the services of the Bank with effect from 5th March 2007. I request that my resignation be accepted and I be relieved from the services of the Bank at the end of office hours on the above said date.
I submitted an application dated 12.1.2001 seeking retirement under the Canara Bank Employees Special Voluntary Retirement Scheme. The said application was rejected by the Bank by its orders dated 29.6.2001 and 30.6.2001. My writ petition No.26934 of 2001 against the said orders of rejection has been dismissed by a learned Single Judge of the Hon’ble High Court of Karnataka by order dated 12.1.2007. Without prejudice to my rights and contention that I am eligible for benefits of the Scheme and rejection of my application under the Scheme was wrongful I am resigning from the services of the Bank in view of my family circumstances which do not permit me to continue in the services of the Bank any further. I may be paid terminal benefits as applicable to a case of resignation, on acceptance of my resignation and relief from the services of the Bank. In case I succeed in my challenge to the rejection of my application under the Scheme I would be entitled to receive differential retiral benefits as if have retired under the Scheme.”
To the said notice, the respondent-Bank has issued the following reply as on 13.3.2007:-
“Referring to your resignation letter, we wish to state as under.
The matter regarding your caste status has not yet been resolved and hence notice given by you for resignation to the service of the Bank w.e.f. 05.03.2007 cannot be accepted.
“Orders of Deputy General Manager”
3. The learned counsel for the petitioner would submit that the Shastry Award at Paragraph 522(2) to 522(3) reads as follows:-
“522(2) A permanent employee desirous of leaving the service of the bank shall give one month’s notice in writing to the manager. A probationer desirous of leaving service shall give 14 day’s notice in writing to the manager. A permanent employee or a probationer shall, when he leaves service, be given an order of relief signed by the manager.
522(3) If any permanent employee leaves the service of the bank without giving notice, he shall be liable to pay the bank one month’s pay and allowances. A probationer, if he leaves service without giving notice, shall be liable for 14 days pay and allowances.”
From a reading of the above clause, it is contended that if an employee gives one month’s notice in writing to the Management with an intention that it may be either accepted or rejected and if the employer does not choose to reply to the same, it would follow as a natural consequence that by lapse of the notice period the same is deemed to have been accepted unless otherwise indicated by the employer. In this regard, he places reliance on a decision of the Apex Court in the case of Punjab National Bank vs. P.K. Mittal (1989 Supp (2) Supreme Court Cases 175) as also the decision in Ms. R. Sridevi vs. Canara Bank Represented by its General manager (ILR 2007 KAR 1147) and would submit that irrespective of the controversy as to the caste certificate of the petitioner, the petitioner was well within his right to seek to resign from the services of the Bank. If the Bank was not inclined to relieve the petitioner for any reason, it was for the Bank to indicate this within the notice period, which is specified. The Bank having chosen not to do so and having belatedly indicated that it is not in a position to accept the resignation would not be binding on the petitioner. It is this primary contention, which is sought to be canvassed by the learned counsel for the petitioner.
4. On the other hand, the learned counsel for the respondent would vehemently contest the present petition and would point out that the letter of resignation unless accepted by the employer would not be effective at all. The learned counsel would point out that there was a serious controversy as to the petitioner’s caste status, which had culminated in a Division Bench of this Court confirming that the validity certificate issued by the competent authority was bad in law and that the petitioner did not belong to a Scheduled Tribe. This has attained finality only recently and it was for this reason that the respondent had categorically indicated that the petitioner’s resignation could not be accepted since the controversy was pending consideration before this Court. In the face of this being to the knowledge of the petitioner, the petitioner seeking to resign from the services of the Bank was not permissible. Having regard to the controversy that was hanging fire, it could not be claimed by the petitioner that there was a deemed acceptance of the resignation, even if there was a belated reply on the part of the respondent-Bank. There was certainly no acceptance of the resignation. The learned counsel would further contend that the conduct of the petitioner in having relief on a false caste certificate to secure employment and thereafter having enjoyed the benefit of service over the years, cannot now lightly shirk the responsibility of answering his misconduct. Therefore, the question of the Bank allowing the petitioner to resign from the services of the Bank to escape the rigour of punishment that would necessarily have to be imposed on him for having produced a false certificate to claim the status of a Scheduled Tribe candidate and having secured employment on that basis, is a serious misconduct which entails serious consequences and therefore, the question of petitioner being permitted to resign from the services of the Bank and also being conferred with all benefits that are sought would amount to a mockery of the law and it would also amount to abuse of process of this Court, if this Court were to entertain such claims in the light of the circumstance whereby the validity certificate issued in favour of the petitioner has been quashed by a Division Bench of this Court and therefore, is no longer capable of being relied upon by the petitioner to claim the status of a Schedule Tribe candidate.
5. In this regard, the learned counsel would draw attention of this Court to several judgments of the Apex Court on the propositions put forth, namely, that the letter of resignation of an employee is not complete unless it is accepted by the employer. In this regard, reliance is placed on the judgment in J.K. Cotton Spinning And Weaving Mills Company Limited vs. State of U.P. and Others (1990 (4) Supreme Court Cases 27) with particular reference to a portion of Paragraph 4 which reads as hereunder:-
“21. Any permanent clerk desirous of leaving the company’s service shall give one month’s notice in writing to the Manager unless she has a specific agreement providing for a longer or shorter notice. If any permanent clerk leaves the service of the company without giving notice, he shall be liable to be sued for damages.”
Similar clause with reduced notice period is also to be found in the certified Standing Orders for operatives. Therefore, one of the ways of terminating the contract of employment is resignation. If an employee makes his intention to resign his job known to the employer and the latter accepts the resignation, the contract of employment comes to an end and with it stands severed the employer-employee relationship. Under the common law the resignation is not complete until it is accepted by the proper authority and before such acceptance an employee can change him mind and withdraw the resignation but once the resignation is accepted the contract comes to an end and the relationship of master and servant stands snapped. Merely because the employer is expected to accept the employee’s resignation it cannot be said that the employer has brought about an end to the contract of employment so as to bring the case within the first part of the definition of retrenchment. A contract of service can be determined by either party to the contract. If it is determined at the behest of the employer it may amount to retrenchment unless it is by way of punishment for proved misconduct. But if an employee takes the initiative and exercises his right to put an end to the contract of service and the employer merely assents to it, it cannot be said that the employer has terminated the employment. In such cases the employer is merely acceding to the employee’s request, may be even reluctantly. Here the employee’s role is active while the employer’s role is passive and formal. The employer cannot force an unwilling employee to work for him. Under Clause 21 of the certified Standing Orders all that the employee is required to do is to give the employer a notice to quit and on the expiry of the notice period his service would come to an end. A formal acceptance of the employee’s desire by the employer cannot mean that it is the employer who is putting an end to the contract of employment. It would be unfair to saddle the employer with the liability to pay compensation even where the service is terminated on the specific request of the employee. Such an intention cannot be attributed to the legislature. We are, therefore, of the opinion that where a contract of service is determined on the employee exercising his right to quit, such termination cannot be said to be at the instance of the employer to fall within the first part of the definition of retrenchment in Section 2(s) of the State Act.”
The learned counsel would point out that the clause, with reference to which the Apex Court has decided the matter, was akin to the clause in the Shastry Award on which the petitioner also places reliance and therefore, would apply on all fours to the present case on hand. The learned counsel would also contend that the decision in Central Inland Water Transport Corporation Limited and Another vs. Brojo Nath Ganguly and Another (1988 (3)Supreme Court Cases 156) has expounded on an unconscionable term of contract with reference to a resignation by an employee and has stated as follows:-
“A resignation by an employee would, however, normally require to be accepted by the employer in order to be effective. It can be that in certain circumstances an employer would be justified in refusing to accept the employee’s resignation as, for instance, when an employee wants to leave in the middle of a work which is urgent or important and for the completion of which his presence and participation are necessary. An employer can also refuse to accept the resignation when there is a disciplinary inquiry pending against the employee. In such a case, to permit an employee to resign would be to allow him to go away from the service and escape the consequences of an adverse finding against him in such an inquiry.”
The learned counsel would submit that unless the resignation is accepted by the employer, it cannot be said that the resignation is deemed to have been accepted. The learned counsel would also place reliance on Kumari Madhuri Patil and Another vs. Additional Commissioner, Tribal Development and Others (1994 (6) Supreme Court Cases 241) to assert that in line with the guidelines laid down by the Apex Court there is no scope for the Bank to conduct an enquiry as to the caste status of the petitioner and the caste status of the petitioner having been enquired into and the validity certificate having been issued by the competent authority and that certificate having been held invalid insofar as the petitioner is concerned by a Division Bench of this Court, the matter attains finality insofar as the caste status of the petitioner is concerned and therefore, till such time there was finality to that aspect of the matter, the Bank was not in a position to accept the resignation or to consider the case of the petitioner and it is only now that the Bank is in a position to take the decision as to whether the petitioner could be permitted to resign from the services of the Bank or whether he could be terminated and therefore, submits that there is no warrant for interference by this Court.
6. By way of reply the learned counsel for the petitioner would submit that as seen from Madhuri Patil’s case, the Supreme Court has laid down that the report by the Caste Verification Committee is final and is not subject to any further proceedings except in proceedings under Article 226 of the Constitution of India. It is also specifically laid down that an order passed by a Single Judge under Article 226 proceedings, cannot be tested in an appeal before a Division Bench and it could only be by way of special leave petition under Article 136 of the Constitution of India. In that light of the matter, the very appeal filed by the Bank questioning the validity certificate issued in favour of the petitioner was incompetent and hence, the Division Bench judgment is rendered per incuriam insofar as the finding as to the caste certificate is concerned and he would submit that it cannot be said that it has attained finality by virtue of the said judgment. In any event, the issue as to the caste certificate of the petitioner is independent of his right to claim resignation, which has remained unanswered till the expiry of the notice period and therefore, the resignation is deemed to have been accepted by applying the general principles of Contract law and therefore, the petition would have to be allowed.
7. In the light of the above facts and circumstances, the first point for consideration is whether the petitioner was in a position to resign from service would have to be answered in his favour. Whether that was capable of acceptance or not is another matter. The petitioner had submitted his letter of resignation. It was open to the respondent-Bank to have rejected or to have stated that is not capable of considering his letter of resignation, within the period prescribed, namely, thirty days from the date of receipt of such notice and that not having been done by the Bank, it is deemed to have been accepted. The belated reply submitted by the Bank would be ineffective since the prescription of the notice period would then become redundant. Notwithstanding the pendency of the controversy as to the caste certificate of the petitioner, the question whether the petitioner’s letter of resignation is deemed to have been accepted would have to be answered in favour of the petitioner.
8. The decision sought to be relied upon by the respondent, namely, in J.K. Cotton Spinning and Weaving Mills Company Limited vs. State of U.P. and Others (1990 (4) SCC 27) is concerned, it was a case where the resignation of the employee was accepted by the employer and it is thereafter the employee sought to challenge the resignation as being one of retrenchment and that having been accepted by the Tribunal, the matter was challenged before the High Court and the High Court having held that there was indeed a resignation, which was duly accepted by the employer, the same was carried to the Apex Court and the Apex Court has merely affirmed the judgment of the High Court. That was not a case where similar situation, as in the present case on hand, was addressed. Therefore, the same would not apply to the facts of the present case.
9. Insofar as Central Inland Water Transport Corporation Limited and Another vs. Brojo Nath Ganguly and Another (1986 (3) Supreme Court Cases 156), the points for consideration therein were whether a Government Company as defined under Section 617 of Companies Act, 1956 is “State” within the meaning of Article 12 and 36 of the Constitution of India and whether unconscionable terms in a contract of employment entered into with the Corporation was void under Section 23 of the Contract Act as being opposed to public policy etc. These issues are not relevant in answering the point for consideration that would arise in the present case on hand. The incidental observation as to unconscionable terms in a contract and the counsel for the respondent seeking to press into service the observation of the Supreme Court in relation to unconscionable terms in a contract to the effect that the incidental observation by the Supreme Court that the resignation by an employee would require to be accepted by the employer in order to be effective, is no doubt a proposition, which would have to be accepted on the face of it. But the Supreme Court was not considering the question as to what would be the effect if the notice is not accepted within the prescribed notice period. The answer, in the opinion of this Court, is in favour of the petitioner. If there is a notice period, as in the present case on hand, and if the Bank does not choose to reply to the intention of the employee to resign from service and when a specific date is prescribed by the employee, it would be deemed to have been accepted from that date. It was the duty of the Bank to indicate that it was not possible for the Bank to relieve him from service in view of the pending controversy or on account of such other situation. The Bank not having done so and by a cryptic letter dated 13.3.2007 having indicated that the petitioner’s casts status had not yet been resolved and that his resignation cannot be accepted, would have no effect and therefore, the petitioner is deemed to have resigned from the services of the respondent-Bank. Insofar as the petitioner’s claim for the terminal benefits to be granted to him, even if the respondent-Bank chooses to assert that on principle an enquiry can be conducted against the employee even after cessation of the master and servant relationship, which could be extended to the present case and the terminal benefits due to the petitioner could be denied by virtue of the petitioner having used a false certificate to secure employment, would have to be brought home by appropriate proceedings. The findings of the Division Bench of this Court that the validity certificate issued in favour of the petitioner being invalid etc., is an issue, which need not be addressed by this Bench having regard to the fact that the Division Bench of this Court has in the face of the law laid down by the Supreme Court in Madhuri Patil’s case, held against the petitioner. It is for the petitioner to work out his remedy insofar as that finding is concerned. Therefore, subject to the finality of the caste status of the petitioner, the petitioner can lay claim for any terminal benefits that he would be entitled by virtue of his resignation.
10. With that observation, the petitioner stands allowed in part.