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Sanjay Jain v. National Aviation Co. of India Ltd.

Civil Appeal · 2018 INSC 1032Decided 1 Nov 2018
Civil Appeal No. 7822 of 2011
Justice Arun Mishra · Justice Vineet Saran

Background

The appellant joined Air India Ltd. as an Assistant Aircraft Engineer in 1992 and, after completing the minimum five-year service period required by his appointment terms, tendered his resignation on 1 September 2006 to take effect after the 30-day notice period, i.e., from 1 October 2006. He then joined Jet Airways. Air India, however, refused to treat the resignation as effective, informed him in 2008 that his resignation had "not been accepted" and asked him to report for duty, and withheld his provident fund, gratuity and other dues. His writ petition challenging this was dismissed by the Bombay High Court, leading to this appeal (along with a connected appeal raising the identical issue).

Decision Breakdown

The Supreme Court examined the Certified Standing Orders framed under the Industrial Employment (Standing Orders) Act, 1946 as applicable to Air India, and held that under the relevant Standing Order, an employee's resignation given with 30 days' notice (or pay in lieu) takes effect automatically on expiry of that notice period, without requiring the employer's acceptance: acceptance is only relevant where a shorter notice and payment of wages in lieu is involved. Distinguishing precedents cited by the respondent (such as Raj Kumar v. Union of India) as dealing with a different statutory/factual context requiring acceptance, the Court held Air India had no right to decline the resignation, allowed the appeal, quashed both the High Court's judgment and Air India's order declining to accept the resignation, and directed payment of provident fund (with interest) and gratuity/other benefits (with 6% annual interest) within three months. The connected appeal (Civil Appeal No. 10881 of 2018) was allowed in identical terms.

Lesson Learnt

Where an employer's own certified standing orders specify that a resignation takes effect automatically after the stipulated notice period, the employer cannot indefinitely refuse to "accept" the resignation to keep the employment relationship alive against the employee's wishes, and withheld dues like provident fund and gratuity attract interest when unlawfully delayed.

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

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