MADHYA PRADESH STATE ROAD TRANSPORT CORPORATION versus MANOJ KUMAR & ANR.

Citation: [2016] 4 S.C.R. 225 · Decided: 29-08-2016 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Disposed off

Judgment (excerpt)

[2016] 4 S.C.R. 225 
MADHYA PRADESH STATE ROAD TRANSPORT 
CORPORATION 
v. 
MANOJ KUMAR & ANR. 
(Civil Appeal No. 443 7 of2009) 
AUGUST 29, 2016 
[A.K. SIKRI AND R.K. AGRAWAL, JJ.) 
Service /aw - Voluntary retirement Scheme(VRS) - VRS Sche111e 
for employees of the State Road 'fransport Corporation - One of 
the conditions of the VRS Scheme that once the application form 
for opting VRS is sub111i1ted, it would not be open to applicant to 
V.1ithdraw the same - Sche111e opened on July OJ, 2005 till August 
OJ, 2005 - However, in October, 2006 validity of the Sche111e was 
extended till July 3J, 2007 -
Re~pondents-employees sub111itted 
applications for voluntary retirement within the span of original 
period fixed under the scheme - Howeve1; request for withdrawal 
made after August OJ, 2005. C(fter expiry of scheme - Request for 
withdrawal not entertained and applications for VRS accepted -
Challenge to - Held: VRS Sche111e is contractual in nature and 
provisions of the Contract Act would apply - VRS Sche111e floated 
by employer would be treated as invitation to offer and application 
submitted by the e111ployees pursua/11 thereto is an offer which does 
not amount to resignation in praesenti and the offer can be 
withdrawn during the validity period - Even when there is a clause 
in the Sche111e that offer once given cannot be withdrawn at all, 
exception to this principle is that in such cases offer is to be 
withdrm1'11 during the validity period of the Scheme and not thereafter 
even when if it is not accepted during the period of the Sche111e -
On facts, employees could withdraw their offer before the date on 
which the initial scheme expired-August OJ, 2005 and withdrawal 
thereafter was not permissible - There was a big gap/hiatus between 
August OJ, 2005 and October 12, 2006 - There was no VRS Scheme 
in operation fro111 August 02, 2005 to October 11, 2006. 
Disposing of the appeals, the Court 
A 
B 
c 
D 
E 
F 
G 
HELD: 1.1 In cases where the Scheme is contractual in 
nature (and not statutory in character), provisions of the Contract 
H 
225 
226 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
(2016] 4 S.C.R. 
Act would apply. The VRS Scheme floated by the employer would 
be treated as invitation to offer and the application submitted by 
the employees pursuant thereto is an offer which does not amount 
to resignation in praesenti and the offer can be withdrawn during 
the validity period. This would be the position even when there 
is a clause in the Scheme that offer once given cannot be 
withdrawn at all. However, exception to this principle is that in 
such cases offer is to be withdrawn during the validity period of 
the Scheme and not thereafter even when if it is not accepted 
during the period of the Scheme. Such schemes are funded 
schemes and time is given to every employee to opt for voluntary 
retirement. Because these are funded schemes, the Management 
is required to create a fund. The creation of this fund depends 
upon a number of applications; the cost of the Scheme; liability 
which this Scheme would impose on the employer and such other 
variable factors. In this situation, if the employees are allowed to 
withdraw from the Scheme at any time even after its closure, it 
would not be possible to work out the Scheme as all calculations 
of the employer would fail. [Para 20) [245-G-H; 246-A, B-D] 
1.2 The Corporation had floated the Scheme because of 
the reason that it has virtually stopped transport business and 
the purpose of the Scheme was to benefit itself by shrinking the 
strength of the employees as with no transport business need for 
such employees is not there. The Scheme provided that once 
the option is given, the same cannot be withdrawn. It is clear that 
notwithstanding this clanse, the employees had a right to withdraw 
the offer during the validity period but not thereafter. This legal 
principle is even taken note of by the High Court as well in the 
impugned judgment. The High Court has, however, held that 
though the Scheme was valid up to August 01, 2005, but validity 
was extended up to July 31, 2007, the employees could withdraw 
their offers before July 31, 2007. Further, as in all these cases 
where the offer was withdrawn before July 31, 2007, the High 
Court has dismissed the appeals of the Corporation herein. [Para 
21) [246-D-G) 
1.3 The Scheme in the first instance was floated on July 01, 
2005. It clearly mentioned that those interested to opt for the 
Sch

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