The Supreme Court has held that resignation and voluntary retirement are two distinct legal concepts, and an employee who resigns from service cannot later seek pensionary benefits reserved for those who retire voluntarily. The Court ruled that such a substitution would be “improper” and contrary to the statutory pension regulations.
The judgment was delivered in United Bank of India (now Punjab National Bank) vs Swapan Kumar Mullick, where the respondent, a former bank employee, had resigned in 2006 citing mental depression but later sought to claim pension benefits under a 2010 circular that allowed certain categories of retirees to opt into the pension scheme.
Background
Swapan Kumar Mullick joined United Bank of India in 1970 and resigned in August 2006. In August 2010, he submitted an application to opt into the bank’s pension scheme, which was reopened under a circular issued following a bipartite settlement. The bank rejected his application, citing Regulation 22 of the United Bank of India (Employees’) Pension Regulations, 1995, which disqualifies employees who resign from service.
The Single Judge of the Calcutta High Court allowed his writ petition, treating the resignation as voluntary retirement. The Division Bench later set aside that decision but directed the bank to consider amending the regulation and to re-evaluate Mullick’s case. Both parties appealed to the Supreme Court.
Supreme Court’s Findings
The Bench of Justices Dipankar Datta and Ujjal Bhuyan reaffirmed the settled legal distinction between resignation and voluntary retirement.
The Court observed:
“Conceptually, therefore, ‘resignation’ and ‘voluntary retirement’ are different. Employees resigning from service and employees retiring from service voluntarily constitute two different classes. Treating the two classes differently may not offend Article 14; and there is no justification to hold so, on facts and in the circumstances.”
Quoting Regulation 22 of the 1995 Regulations, the Court noted:
“Resignation or dismissal or removal or termination of an employee from the service of the Bank shall entail forfeiture of his entire past service and consequently shall not qualify for pensionary benefits.”
The Court emphasised that:
“Importantly, when a provision for voluntary retirement does exist, yet, an employee elects to resign, such resignation (irrespective of the length of service) cannot be treated as voluntary retirement unless, in a given case, the employee also satisfies the conditions for voluntary retirement.”
It further held:
“The consistent trend of the decisions from Sanwar Mal … to BSES Yamuna Power Ltd. … has been to hold ‘resignation’ and ‘voluntary retirement’ as two distinct concepts with varying consequences on severance of relationship and that substitution of the two for each other based solely on the duration of an employee’s service would run counter to the intendment of statutory regulations and, therefore, is improper. We see no reason to take a different view.”
On High Court’s Directions to Amend Regulations
The Supreme Court also set aside the High Court’s directions that had asked the Bank’s Board to “consider” amending Regulation 22. It ruled:
“The jurisdiction of a high court is limited to the extent of pointing out why a law, in the given circumstances, is necessary for regulating the affairs of the public/society and/or to remedy a particular mischief that is noticed in course of proceedings; but in such a case too, it is only a nudge in the form of a request that could be made to the executive to consider the desirability of enacting/framing such a law or to amend an existing law.”
The Court held:
“The Division Bench overstepped its bounds by directing the Board of Directors of the Bank to consider amending Regulation 22 even when the vires of such a regulation was not under challenge in Mullick’s writ petition.”
Relief Under Article 142
While rejecting the legal claim, the Court invoked its powers under Article 142 of the Constitution to provide limited relief to Mullick, who had resigned due to mental depression and served for over 35 years.
The Court noted:
“We appreciate Mullick’s candour in not continuing in service despite his mentally depressed state of mind. Being the head cashier and dealing with public money, of which the Bank was the custodian, Mullick by tendering resignation averted a crisis situation which could have ensued had he, because of mental depression, mishandled cash and failed to perform his duty as before.”
The Court directed:
“Though Mullick may not have exercised option in terms [of the bipartite settlement dated 8th March, 2024], we grant him a fortnight’s time more to opt for pension as a very special case… If Mullick returns the sum received by him on account of provident fund together with the applicable rate of interest within the time stipulated by the Bank, he will be entitled to pension at such rate and on such terms as are provided in the settlement.”
In the alternative:
“He may instead request for financial relief within a fortnight… the Bank shall, as a model employer, proceed to pay to Mullick relief in a sum of Rs.5,00,000/- (Rupees five lakh) only within two months from date of its receipt. This particular grant of financial relief is, however, not to be treated as a precedent.”
Conclusion and Final Order
- Mullick’s appeal was dismissed.
- The Bank’s appeal was partly allowed.
- The Supreme Court affirmed the High Court’s direction (A) but set aside directions (B) to (D).
- Relief under Article 142 was granted as a “very special case.”
