LexBANK OF INDIA AND ORS. versus O.P. SWARANAKAR ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
BANK OF INDIA AND ORS.
v.
O.P. SWARANAKAR ETC.
DECEMBER 17, 2002
B
[G.B. PATTANAIK, CJ., H.K. SEMA AND S.B. SINHA, JJ.]
Service Law:
State Bank of India Act, 1955-Banking Companies (Acquisition and
C Transfer of Undertaking) Act, 1970-Contract Act, 1872-Sections 2{a), (b),
(g), (h) and 5-Voluntary Retirement Scheme.floated by Nationalised Bauks
and State Bank of India-Whether application for VRS irrevocable and
applicant has right to withdraw the application of voluntary retiremen/-
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an 'offer' thus it could be withdrawn before it is accepted -However, employee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 resi/e therefrom.
E
Voluntaiy Retirement Scheme by Banks-Jura/ 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.
G
H
Constitution of India, 1950-Artic/es 226, 12, 14, and 21-Writ Petition
challenging validity of Voluntary Retirement Scheme floated by banks and
provision barring withdrawal of request of voluntary retiremenl-
Maintainability of-Held: Writ Petition is maintainable since banks are
State under Article 12, thus could be raised under Article 226-ln the event
438
BANK OF INDIA v. O.P. SWARANAKAR
439
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 Rc:_tirement Scheme". It was applicable B
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 D
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. E
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 I 0.5 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.
F
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 G
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 werExcerpt shown. Read the full judgment & AI analysis in Lexace.