POWER FINANCE CORPORATION LTD. versus PRAMOD KUMAR BHATIA

Citation: [1997] 2 S.C.R. 1170 · Decided: 17-03-1997 · Supreme Court of India · Bench: K. RAMASWAMY, G.T. NANAVATI · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

t 
A 
POWER FINANCE CORPORATION LTD. 
v. 
PRAMOD KUMAR BHATIA 
MARCH 17, 1997 
B 
[K. RAMASWAMY AND G.T. NANAVATI, JJ.) 
S e1vice. Law: 
Voluntary retirement-Order accepting the offe,.,_When becomes effec-
c tive-Scheme framed by Corporation· to relieve surplus staff-Employee ap-
plying for voluntary retirement under the Scheme-Co1poratio11 accepted the 
resigiiation by proceedings dated December 20, 1994 subject to the clearance 
' 
of the outstanding dues-Acceptance was to be given effect from 
31.12.1994-Meanwhile the Corporation withdrew the Scheme-High Cowt 
D holding that order dated 20.12.1994 created a vested right in the employee and 
the same cannot be divested by subsequent orders-Held, Order dated 
20.12.1994 is a conditional order in that 1111til the dues are paid the order does 
not become effective- Unless the employee is relieved of the duty after 
acceptance of the offer of voluntary retirement or resignation, jural relation-
ship of ihe employee and the employer does not come to an end.-Since the 
E 
order accepting the voluntary retirement, was conditional one and before 
compliance with the conditions the Corporation withdrew the Scheme, the 
order did not become effective-Thereby no vested right has been created in 
favour of the employee. 
F 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2416 of 
1997. 
From the Judgment and Order dated 1.11.96 of the Delhi High Court 
in W.P. No. 2086 of 1995. 
• 
G 
P.P. Rao and S. Nandrajog for the Appellant. 
AK. Sikri and Ms. Madhu Sikri for the Respondent. 
The following Order of the Court was delivered : 
H 
Leave granted. We have heard learned counsel on both sides. 
1170 
• 
-il 
POWER FINANCE CORPN. LTD. v. P.K. BHATIA 
1171 
This appeal by special leave arises from the judgment of the Division A 
Bench of the Delhi Court, made on 1.11.1996 in C.W. No. 2086/95. 
The admitted position is that the respondent, while working in the 
appellant-Corporation, had applied for voluntary retirement, pursuant to 
the scheme framed by the Corporation to relieve the surplus staff. Initially, 
by proceedings dated December 20, 1994, the Corporation accepted his 
resignation subject to the clearnnce of the outstanding dues. The accep-
tance was to be given effect from December 31, 1994. By letter dated 
January 6, 1995, he requested for deduction of a sum of Rs. 37,521.20 out 
of the outstanding dues. He also requested thus: 
"I once again request you that the formal relieving order relieving 
me from PFC w.e.f. 31.12.1994 be handed over to me immediately. 
My service period for which ex-gratia is payable be informed to 
me and my dues be paid immediately." 
B 
c 
Based thereon, it is contended by Mr. P.P. Rao, learned senior D 
counsel for the appellant, that acceptance of the voluntary retirement of 
the respondent was a conditional one. He himself understood that unless 
he is relieved of the duties after_payment of outstanding dues, the voluntary 
retirement does not become effective. In the meanwhile, realising the 
mistake committed by the appellant for effecting the voluntary retirement 
scheme which docs not apply to the Corporation since there is no surplus· E 
staff, the appellant withdrew the scheme. Therefore, there was neither the 
scheme nor a concluded order of voluntary retirement of the respondent 
relieving him from the duties. The High Court, therefore, is not right in 
holding that the order dated December 20, 1994 created vested right in the 
respondent and the same cannot be divested by subsequent orders. 
F 
Initially, Mr. A.K. Sikri appeared on behalf of the respondMt and 
argued the matter. Before the order could be dictated, the respondent 
himself appeared and said that his counsel may be relieved and he may be 
permitted to argue the matter. Accordingly, we permitted him to argue the 
matter. He stated that he was relieved from the duty on the basis of an G 
endorsement made on the letter dated December 20, 1994 and what he 
meant by writing the letter dated January 6, 1995 was to seek a certificate 
for relieving him from the duty~ The acceptance of the voluntary retirement 
having become effec~ive from December 31, 1994, vested right had been 
created in him. Therefore, the view of the High Court is in accordance with 
~ 
H 
A 
B 
c 
D 
E 
1172 
SUPREME COURT REPORTS 
[1997] 2 S.C.R. 
Having regard to the respective contentions, the question: that arises 
for consideration is: whether the respondent acquired a vested right after 
accept

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