United Bank Of India vs Swapan Kumar Mullick 2025 INSC 881 - Service Law - Resignation & Voluntary Retirement - Art. 226 Constitution - Policy Matters

Service Law- “Resignation” and “voluntary retirement”- A public servant, who is in permanent employment, is entitled to continue in service till his retirement on superannuation. However, any such employee may sever his relationship with his employer prior to the date of superannuation by any of the two modes, i.e., resignation and voluntary retirement - Both are modes bringing about an early severance of employer-employee relationship, there exists clear distinction between the two - Distinction : Resignation, being a voluntary relinquishment of employment, is an implied term of employer - employee relationship. As noticed in the cited precedents, resignation can be exercised anytime while the employee is in service. But unless specified otherwise, say cases where resignation is unilateral , majorly, resignation is bilateral which, to be effective, requires acceptance by the employer. Nowadays, it is not uncommon to find clauses in offers of employment providing the conditions for a resignation to take effect. In changing times, resignation tendered soon after entry in service and before completion of the mandatory period of service mentioned in the offer, does come with a price. On the other hand, an employee may seek voluntary retirement if an option is provided by the employer as a condition of service to such employee to retire from service on fulfilment of the specified terms and conditions. Any employee may, thus, offer to retire voluntarily upon completion of the requisite period of service and upon fulfilling other requirements. An offer to retire voluntarily, made by an employee, is normally accepted by the employer unless, of course, there is any debilitating factor. Further, if the employer introduces a scheme for voluntary retirement and the pre-conditions are satisfied upon receipt of any offer, the employee may be permitted to retire voluntarily in accordance therewith. Importantly, when a provision for voluntary retirement does exist, yet, an employee elects to resign, such resignation (irrespective of the length of service) cannot be treated as voluntary retirement unless, in a given case, the employee also satisfies the conditions for voluntary retirement. What is applicable in a case of voluntary retirement ex proprio vigore may not apply to resignation in all cases. Also, if an employee does not wish to continue in service, whatever be the reason therefor, and any provision/scheme for voluntary retirement is non-existent, the only mode open to him for severing the relationship, if he so desires, is resignation; and once he does resign, he agrees to submit to the consequences thereof as are applicable. (Para 51-52)

Constitution of India - Article 14 -United Bank of India (Employees’) Pension Regulations, 1995- Clubbing of resignation with dismissal, removal and termination of service leading to forfeiture of past service and consequent disentitlement to pensionary benefits per se do not offend Article 14. Such regulation is a signal to the employees warning them of the consequences should there be severance of relationship by any of the modes, referred to therein. While a resignation, when asked for by an employee, may be accepted upon exercise of discretion by the employer, the other modes are referable to punitive measures. It is as a matter of policy that forfeiture of past service and disentitlement to pension have been provided. (Para 54)

Constitution of India - Article 32.226 - Judicial review courts should refrain from assessing the merits of policies formulated by legislative or regulatory authorities which are codified in statutes/regulations. Such codified policy may be wise or flawed, the policy may be effective in achieving the objectives or could warrant a revision by way of an improvement. However, any shortcomings in the policy do not render the regulation ultra vires. Courts cannot invalidate a regulation merely because in its opinion the policy is unwise or ineffective. The scrutiny has normally to be restricted to the process of policy making. As long as the policy is not beyond the scope of the regulation-making power or does not transgress the bounds of the parent enactment or is in violation of any of the limitations imposed by the Constitution, there is little or no scope for interference by the Courts - Whether the policy is wise or prudent is not a matter for the courts to be concerned with (Para 55-56)

Constitution of India - Article 226 -The power under Article 226 of the Constitution cannot be exercised by a high court to direct the legislature/executive to enact a law (primary or subordinate) or frame a regulation/bye-law. These are executive functions which are required to be performed based on policy decisions taken at the appropriate level. The jurisdiction of a high court is limited to the extent of pointing out why a law, in the given circumstances, is necessary for regulating the affairs of the public/society and/or to remedy a particular mischief that is noticed in course of proceedings; but in such a case too, it is only a nudge in the form of a request that could be made to the executive to consider the desirability of enacting/framing such a law or to amend an existing law. (Para 67) [Context: Although, in this case, HC required the Board of Directors of the Bank to ‘consider’ an amendment to Regulation 22 of the 1995 Regulations, SC observed that user of the word ‘consider’ is really a mandate on the Bank to amend Regulation 22 of the 1995 Regulations.]

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