Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | (b) (g) State Bank of India Act 1955-Banking Companies (Acquisition and Transfer of Undertaking) Act 1970-Contract Act 1872-Sections 2{a) (h) and 5- |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Disposed Off |
Headnote | Service Law: State Bank of India Act, 1955-Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970-Contract Act, 1872-Sections 2(a), (b), (g), (h) and 5-Voluntary Retirement Scheme floated by Nationalised Banks and State Bank of India-Whether application for VRS irrevocable and applicant has right to withdraw the application of voluntary retirement- Held: Scheme having regard to its provisions is an invitation to treat and D not an offer which on acceptance by employee would fructify into a concluded contract-Application for voluntary retirement by employees would constitute an 'offer' thus it could be withdrawn before it is accepted -However, employee having accepted part of benefit cannot be permitted to aprobate or reprobate nor permitted to resile therefrom.Voluntary Retirement Scheme by Banks-Jural relationship between employer and employee-Discussed. Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970-Section 19(4)-Voluntary Retirement Scheme floated by banks-Bank employee challenging validity-High Court holding scheme ultra vires-On F appeal held: Since scheme is not part of statutory regulation but in realm of contract it was not necessary for Central Government to place it before the Parliament-Even if same was regulatory, the laying down rule is merely directory and not mandatory-Thus scheme not bad in law and High Court erred in striking down the scheme. Constitution of India, 1950-Articles 226, 12, 14, and 21-Writ Petition challenging validity of Voluntary Retirement Scheme floated by banks and provision barring withdrawal of request of voluntary retirement-Maintainability of-Held: Writ Petition is maintainable since banks are State under Article 12, thus could be raised under Article 226-ln the event the action of bank is arbitrary and unreasonable it would attract Article A 14-Further, right of employee to continue in employment is a fundamental right under Article 21 which cannot be taken away except in accordance with law. Due to surplus staff, the State Bank of India as well as Nationalised Banks adopted "Employees Voluntary Retirement Scheme". It was applicable to employees who on the date of application had completed 15 years of service or 40 years of age. Employees were specified who were not eligible to seek voluntary retirement. Period of operation of scheme varied from bank to bank. In terms of the scheme those who sought voluntary retirement were entitled to ex-gratia payments and other benefits. Under the scheme bank reserved C with itself the right to withdraw scheme at any time it thinks fit and its decision in this behalf was to be final. Large number of employees submitted applications under the Scheme, out of which small number of them withdrew their applications. Despite their withdrawal their applications were accepted. In some cases it was accepted within the period during which the scheme was operated and in some cases, beyond the period. Aggrieved applicants filed Writ petitions in various High Courts challenging the action of the banks in accepting the applications of the concerned employees despite their withdrawal. Writ applications were also filed by some employees seeking issuance of writ of mandamus directing the respective banks to pay their lawful dues strictly in terms of the scheme. Punjab and Haryana High Court held the scheme ultra vires as the same was not laid before the Parliament Bombay High Court and other High Court held that clause 10.5 of scheme or the scheme framed by the other banks is not operative as the employees have indefeasible right to withdraw their offer before the same is accepted. Hence the present batch of appeals. Various banks inter alia contended that the scheme if read in its entirety would clearly show that the same was an offer and not invitation to treat; that clause 10.5 of the scheme is not illegal, the concerned employees must be held to have resigned in praesenti and thus the contractual bar contained therein cannot be held to be bad in law; that as each of the employees had made irrevocable and unconditional offer of terms and conditions laid down in scheme, they could not have withdrawn therefrom and as some of them accepted ex-gratia payment they were estopped from questioning the same and the employees who accepted ex-gratia payment could not have been permitted by High Court to aprobate or reprobate; that a contract of employment can be terminated unilaterally; that even a tenure of contract of employment can be curtailed by an agreement and in that view of the matter voluntary retirement scheme cannot be said to be illegal; that High Court erred in holding that scheme being a regulation it was necessary for the Central Government to lay it before Parliament; and that as the writ petitions involved enforcement of contract qua contract, they were not maintainable. Employees of the various banks interalia contended that law is laid down that an offer of resignation can be withdrawn before the same is accepted; that scheme is merely an invitation to offer and option pursuant thereto on the part of employee would constitute an offer; that having regard to Section 5 of the Contract Act, employee had an absolute right to withdraw the same before a concluded contract is arrived at, thus clause 10.5 of the Scheme is ultra vires Section 5; that clause 10.5 would not amount to a contractual bar as it was not based on consideration; that when employee has voluntarily withdrawn the offer, doctrine of option will have no application as by reason thereof employee has not received the benefit in one part of the contract and then questioned the rest thereof; that the procedure of the scheme shows that irrevocable nature of option would be relevant only if the same culminates into an acceptance; that mere declaration given by an offer or that he would not withdraw or cancel the offer would not destroy his locus; that even after acceptance the offer could be withdrawn, such an action on the part of the optioner is permissible and thus the application of contractual bar must be held to be applicable only in a case where offeror has been relieved from his part not prior thereto; that it cannot be said that the statutory regulation has nothing to do with the Scheme as pension was to be calculated in terms thereof; that after the offer had been made, concerned banks amended the scheme and instead and in place of full pension the principle of pro-rata pension was introduced by which employees were gravely prejudiced, thus the concerned employees derived a legal right to withdraw from the scheme; and that as the scheme is contractual in nature, benefits which were otherwise available to the employees under the scheme could not have been curtailed. |
Judge | Hon'ble Mr. Justice S.B. Sinha |
Neutral Citation | 2002 INSC 547 |
Petitioner | Bank Of India And Ors. |
Respondent | O.p. Swaranakar Etc. |
SCR | [2002] Supp. (5) S.C.R. 438 |
Judgement Date | 2002-12-17 |
Case Number | 854 |
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