SRIKANTHA S.M. versus M/S. BHARATH EARTH MOVERS LTD.

Citation: [2005] SUPP. 4 S.C.R. 156 · Decided: 07-10-2005 · Supreme Court of India · Bench: B.N. SRIKRISHNA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
B 
c 
SRIKANTHA S.M. 
V. 
MIS. BHARATH EARTH MOVERS LTD. 
OCTOBER 7, 2005 
[B.N. SRIKRISHNA AND C.K. THAKKER, JJ.] 
Service Law: 
Bharath Earth Movers Limited Service Rules: 
Rule 16--Resignation--Wilhdrawal of--Permissibility--Employee 
submilled a lei/er of resignation on 4.1.1993 and requested to be relieved 
from his duties 'as per company rules '--Resignation accepted on the same 
day-Employee was informed that he would be relieved 'with immediate 
D effect '--However, the employee was informed that his casual leave had been 
sanctioned from 5.1.1993 to 13.1.1993 and, 14././993 being a holiday, the 
employee would be relieved by the close of working hours on 15.1.1993--
During this period the employee changed his mind and withdrew his resignation 
by letter dated 8.1.1993--The employee stated that if a suitable reply was not 
given by 14.1.1993, the letter of resignation dated 4. 1.1993 should be treated 
E as withdrawn/cancelled-The employee was informed by a letter dated 
15. 1. 1993 that he would be relieved after officer hours on that day-Service 
certificate in original along with a cheque was given to him-High Court 
upheld the company's action and held that it was not open to the employee 
to withdraw the resignation-Correctness of-Held: Rule 16 makes it clear 
F that. a permanent employee may resign from service by giving one month's 
notice in writing or by paying one month's basic pay in lieu of notice to the 
company-As the employee has not paid one month's basic pay in lieu of 
notice the resignation became effective after one month from the date of his 
resignation letter i.e. from 3.2.1993--Hence. the employee is entitled to 
withdraw his resignation before 3.2.1993--Therefore, by not giving effect to 
G the lett~r dated 8.1.1993 whereby the employee withdrew his resignation the 
company acted contraiy to law-Hence, action of company quashed and set 
aside-Employee entitled to all consequential benefits. 
Words and phrases Resignation-meaning. 
H 
156 
SRIKANTHA S.M. v. BHARA TH EARTH MOVERS LTD. 
157 
The appellant was employed as a Senior Manager in the respondent A 
company and was transferred to the Corporate Office. The appellant was 
not assigned any work at the Corporate Office and, therefore, the 
appellant tendered a letter of resignation on 4.1.1993 and requested the 
respondent-company to relieve him from his duties 'as per company rules'. 
The resignation was accepted on the same day. By another letter, the 
appellant was informed that his casual leave had been sanctioned from B 
5.1.1993 to 13.1.1993 and, 14.1.1993 being a holiday, the appellant would 
be relieved by the close of working hours on 15.1.1993. On 15.1.1993, the 
appellant was informed that he would be relieved after office hours on 
that day. The service certificate in original along with a cheque was given 
to him. 
The High Court held that since the appellant had submitted his 
resignation on 4.1.1993 and it was accepted on the same day by the 
company, by not continuing him in service, no illegality had been 
committed by the company. Hence, the appeal. 
Allowing the appeal, the Court 
HELD: 1. Rule 16 of the Bharath Earth Movers Limited Service 
Rules makes it clear that a permanent employee may resign from service 
by giving one month's notice in writing or by paying one month's basic 
c 
D 
pay in lieu of notice to the company. Admittedly, the appellant had not E 
paid one month's basic pay in lieu of notice to the company. It is, therefore, 
clear that since the letter of resignation was as per company rules, it was 
to become effective after one month. (161-F, GI 
2.1. Though the respondent-company had accepted the resignation 
of the appellant on 4.1.1993 and the appellant was ordered to be relieved F 
on that day, by a subsequent letter, he was granted casual leave from 
4.1.1993 to 13.1.1993. Moreover, he was informed that he would be 
relieved after office hours on 15.1.1993. The vinculum juris, therefore, 
continued and the relationship of employer and employee did not come 
to an end on 4.1.1993. The relieving order and payment of salary also make G 
it abundantly clear that he has continued in service of the company up to 
15.1.1993. [166-G, H] 
2.2. The appellant had asserted that he had not received terminal 
benefits such as gratuity, provident fund, etc. It is thus proved that up to 
15.1.1993, the appellant remained in service. lfit is so, as per settled law, H 
158 
SUPREME COURT REPORTS (2005] SUP

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