M/s. New Victoria Mills & Ors. v. Shrikant Arya

Civil Appeal · 2021 INSC 552Decided 27 Sept 2021
Civil Appeal No. 5685 of 2021
Justice Sanjay Kishan Kaul · Justice M.M. Sundresh

Background

The respondent, a supervisor at a textile mill run by a National Textile Corporation subsidiary, applied in 2002 for voluntary retirement under a scheme created to manage the financially distressed mill's workforce reduction. He simultaneously flagged an unresolved dispute over provident fund deposits. The mill accepted his (and others') resignations effective 1 June 2003, but then postponed that cut-off date without explanation. Before a new cut-off date was fixed, the employee wrote asking to cancel his resignation application; the mill nonetheless treated the resignation as already accepted and relieved him from 16 July 2003. He successfully challenged this before the Allahabad High Court (both a Single Judge and a Division Bench), which held his resignation had effectively been withdrawn before it took final effect.

Decision Breakdown

The Supreme Court held that once the mill accepted the resignation on 28 May 2003, a concluded contract was formed under the scheme, and it made no difference that the mill later delayed the formal relieving date for administrative reasons. The resignation letter was not conditional on the provident fund issue being resolved first: the employee was only asking that dues be paid, which was a natural consequence of resignation, not a precondition to it. Since the acceptance was already complete, the employee had no further right to withdraw. The Court distinguished this from cases where a resignation was expressly made effective on a future date and was withdrawn before that date. The High Court's orders were set aside and the mill's appeal was allowed.

Lesson Learnt

Once an employer unconditionally accepts an employee's resignation or voluntary-retirement application, the employee generally cannot withdraw it later merely because the employer delays the administrative formality of relieving them from duty.

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