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Indian Bank v. Mahaveer Khariwal

Civil Appeal · 2021 INSC 39Decided 22 Jan 2021
Civil Appeal No. 2760 of 2010
Justice Ashok Bhushan · Justice R. Subhash Reddy · Justice M.R. Shah

Background

A Chief Manager with Indian Bank, after being transferred from its Colombo branch to Delhi, sought and was refused extension of personal leave, and then applied for voluntary retirement, requesting a waiver of the mandatory three months' notice period under Regulation 29 of the Pension Regulations, 1995 (offering to have the notice-period salary deducted instead). On the 90th day, the bank rejected his application without giving specific reasons, stating he was ineligible. The employee challenged this before the Delhi High Court; a Single Judge upheld the rejection but the Division Bench, on appeal, quashed it and directed release of his retiral dues. The bank then appealed to the Supreme Court.

Decision Breakdown

The Supreme Court held that the employee's request for a waiver of the three-months' notice was itself in proper form under Regulation 29(3), and the bank's rejection letter gave no reasons for refusing that specific request, as required. It also rejected the bank's argument that the employee was on "deputation" abroad (which would have barred voluntary retirement under a proviso to Regulation 29(1)), finding on the documents that he had been formally transferred to Colombo, not deputed. Since the rejection of the voluntary retirement application was itself illegal, the employee was deemed validly retired from the date he applied, meaning the employer-employee relationship had already ended and any later disciplinary proceedings against him were void. The appeal was dismissed and the High Court's order upheld.

Lesson Learnt

When an employer rejects an employee's statutory request (such as a notice-period waiver for voluntary retirement) without giving the reasons the regulations require, that rejection itself can be struck down as illegal, and once that happens, any later departmental action taken against the employee, treating them as still in service, falls apart too.

Official source (sci.gov.in)View Judgment (PDF)

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