NATIONAL TEXTILE CORPORATION (M.P.) LTD. versus M.R. JHADAV

Citation: [2008] 6 S.C.R. 1040 · Decided: 24-04-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Case Allowed

Judgment (excerpt)

[2008] 6 S.C.R. 1040 
-' ~ 
A 
NATIONAL TEXTILE CORPORATION (M.P.) LTD. 
v. 
M.R. JHADAV 
(Civil Appeal No. 2957 of 2008) 
B 
APRIL 24, 2008 
[S.B. SINHA AND V.S. SIRPURKAR, JJ.) 
•. 
·1-
Service Law: 
c 
Retirement - Voluntary Retirement Scheme - Employee 
opting for VR Scheme - Employer informing that although 
administrative approval granted but no final decision taken -
Proposal of Voluntary Retirement not accepted - Meanwhile 
employee retired - Writ petition by employee claiming that 
legal right accrued in his favour to obtain benefits of VR 
D Scheme - Dismissed - On appeal, Held: In absence of 
communication of offer of employer, employee did not derive 
+' 
any legal right to obtain benefits of VR Scheme - VR Scheme 
constitutes offer to treat and is not offer stricto sensu - Only 
when pursuant to said invitation to treat, employee opts for 
E such scheme, it constitutes offer- When such offer is made, it 
is required to be accepted - Unless offer is accepted, binding 
contract does not come into being - Rights and obligations of 
parties thereto would become enforceable only on completion 
of contract - Unless such stage is reached, no valid contract 
F can be said to have come into force -An offer for VR Scheme 
must be made and accepted so long as relationship of 
employer and employee continues - Such relationship come 
to an end on the date on which the employee reaches his age 
of superannuation - Since employee drew salary for entire 
G period during which he was in service and reached age of 
superannuation, he is held to have waived his right to VR 
Scheme 
A voluntary retirement Scheme was floated by the 
appellant-Corporation. Respondent working in appellant-
H 
1040 
NATIONAL TEXTILE CORPORATION (M.P.) LTD. v. 
1041 
M.R. JHADAV 
Corporation opted for the said Scheme on 16.5.2000, w.e.f. A 
31.7.2000. 
An administrative clearance in relation thereto was 
made but no decision taken by a competent authority in 
that behalf was communicated to respondent. 
; 
Respondent on expiry of the said date, i.e., 31.07.2000, 
8 
~ 
requested the appellant for being relieved from his post 
by a letter dated 19.09.2000. 
The General Manager by letter dated 26.9:2000 
intimated respondent about the administrative approval c 
and that the VRS was prepared and sent to Head Office 
for funds and that Head Office informed that funds for VRS 
was not available and thus Head Office directed not to 
relieve respondent on relieving date till further orders. 
Respondent filed writ petition in High Court, which D 
was disposed of, with directions to appellant-Corporation 
to pass appropriate orders. 
Pursuant thereto, an office order dated 7.08.2001 was 
passed by the appellant rejecting the said proposal, 
stating that application of respondent for Voluntary E 
Retirement made could not have been sanctioned in view 
of the VRS not being in vogue and respondent was 
accordingly retired on 31.1.2001 in accordance with the 
orders dated 20.11.2000 whereunder the age of retirement 
was rolled back to 58 years and he stood retired . 
F 
Respondent filed another writ petition before the High 
Court which was allowed. Hence the present appeal. 
Allowing the appeal, the Court 
HELD: 1. When a scheme is floated for voluntary 
retirement, it constitutes an offer to treat. It is not an offer 
stricto sensu. Only when pursuant to the said invitation 
G 
to treat, an employee opts for such a scheme, it 
constitutes an offer. When such an offer is made, it is H 
1042 
SUPREME COURT REPORTS 
[2008] 6 S.C.R. 
.J., 
A required to be accepted. The matter relating to 
implementation of the said offer would indisputably be 
governed by the terms and conditions of the scheme. 
[Para 17) [1048-A-B) 
B 
Tek Chand v. Dile Ram (2001) 3 SCC 290; State of 
Haryana v. S.K. Singhal (1994) 4 SCC 293 - referred to. 
\ 
Manjushree Pathak v. Assam Industrial Development 
-f 
Corpn. Ltd. and Ors. (2000) 7 SCC 390 - held inapplicable. 
2. Subject, of course, to the terms of "invitation to 
c treat" as also those of the offer as envisaged under the 
Indian Contract Act, an offer has to be accepted. Unless 
an offer is accepted, a binding contract does not come 
into being. A Voluntary Retirement Scheme contemplates 
cessation of the relationship of master and servant. The 
D rights and obligations of the parties thereto shall become 
enforceable only on completion of the contract. Unless 
.,... . 
such a stage is reached, no valid contract can be said to

Excerpt shown. Read the full judgment & AI analysis in Lexace.