2019 (12) TMI 387 - SC - Indian Laws

Pensionary Benefits - respondent had completed twenty years of service and had 'voluntarily retired' and not 'resigned' from service - whether the respondent's 'resignation' amounted to a forfeiture of his past service disentitling him from pension or was in fact 'voluntary retirement'? - HELD THAT - Rule 26 states that upon resignation, an employee forfeits past service - Irrespective of whether the first respondent had completed the requisite years of service to apply for voluntary retirement, his was a decision to resign and not a decision to seek voluntary retirement. If this court were to re-classify his resignation as a case of voluntary retirement, this would obfuscate the distinction between the concepts of resignation and voluntary retirement and render the operation of Rule 26 nugatory. Such an approach cannot be adopted. Accordingly, the finding of the Single Judge that the first respondent 'voluntarily retired' is set aside. Whether the first respondent had completed twenty years in service? - HELD THAT - No evidence has been placed on the record to show that the first respondent took issue with the denial of voluntary retirement between 25 May 1990 and 7 July 1990. To the contrary, in the legal notice dated 1 December 1992 sent by the first respondent to the appellant, the first respondent admitted to having resigned. The first respondent's writ petition was instituted thirteen years after the denial of voluntary retirement and eventual resignation. In the light of these circumstances, the denial of voluntary retirement cannot be invoked before this Court to claim pensionary benefits when the first respondent has admittedly resigned. Whether the first respondent has served twenty years? - HELD THAT - The question is of no legal consequence to the present dispute. Even if the first respondent had served twenty years, under Rule 26 of the CCS Pension Rules his past service stands forfeited upon resignation. The first respondent is therefore not entitled to pensionary benefits. Appeal allowed.

Summary

Issues Involved:
1. Whether the first respondent’s resignation amounted to a forfeiture of past service.
2. Whether the first respondent had completed twenty years of service and was eligible for pensionary benefits.

Issue-wise Detailed Analysis:

1. Whether the first respondent’s resignation amounted to a forfeiture of past service:

The core issue was whether the first respondent's resignation resulted in forfeiture of past service, impacting his eligibility for pensionary benefits. The Single Judge of the High Court of Delhi, relying on the Supreme Court's decision in *Asger Ibrahim Amin v. LIC* [2016] 13 SCC 797, held that the first respondent had "voluntarily retired" rather than "resigned." The Single Judge noted that despite the term "resignation" used by the first respondent, an independent determination of the facts showed he had completed over twenty years of service and would have been eligible for pension upon voluntary retirement.

However, the appellant argued that the approach in *Asger Ibrahim Amin* had been questioned and subsequently overruled by a larger bench in *Senior Divisional Manager, LIC v. Shree Lal Meena* [2019] 4 SCC 479. The Supreme Court in *Shree Lal Meena II* emphasized the distinction between resignation and voluntary retirement, noting that resignation results in forfeiture of past service under Rule 23 of the LIC Pension Rules. The court held that the retrospective application of provisions on voluntary retirement, as interpreted in *Asger Ibrahim Amin*, would lead to an absurd result where employees resigning post-enactment of the rules would be deprived of pension benefits, while those resigning prior would be entitled.

In the present case, the first respondent resigned on 7 July 1990, and Rule 26 of the Central Civil Service Pension Rules 1972 (CCS Pension Rules) states that resignation entails forfeiture of past service. The court held that reclassifying the resignation as voluntary retirement would obfuscate the distinction between the two concepts and render Rule 26 nugatory. Thus, the finding of the Single Judge that the first respondent "voluntarily retired" was set aside.

2. Whether the first respondent had completed twenty years of service and was eligible for pensionary benefits:

The second issue was whether the first respondent had completed twenty years of service, which would have made him eligible for pensionary benefits upon voluntary retirement. The first respondent applied for voluntary retirement on 14 February 1990, which was denied by the appellant on 25 May 1990 on the grounds that he had not completed twenty years of service. The first respondent did not challenge this decision but instead resigned on 7 July 1990.

The court noted that even if the first respondent had completed twenty years of service, the resignation led to the forfeiture of past service under Rule 26 of the CCS Pension Rules. The denial of voluntary retirement did not mitigate the legal consequences of resignation. The first respondent admitted to having resigned in a legal notice dated 1 December 1992 and did not challenge the denial of voluntary retirement or the resignation for thirteen years.

Therefore, the question of whether the first respondent had completed twenty years of service was deemed of no legal consequence to the dispute, as his past service stood forfeited upon resignation. Consequently, the first respondent was not entitled to pensionary benefits.

Conclusion:

The Supreme Court allowed the appeal, setting aside the impugned order of the High Court of Delhi dated 26 May 2017. The court concluded that the first respondent's resignation resulted in forfeiture of past service, and he was not entitled to pensionary benefits, irrespective of whether he had completed twenty years of service. No order as to costs was made.