T.R. Dua vs Life Insurance Corporation of India

D.K. Kapur, J.

(1) This Regular Second Appeal arises out of a suit instituted by the Life Insurance Corporation of India against ShriT.R. Dua for the recovery of car No. PNT-3913, or, alternatively for the recovery of the sum of Rs. 8300.00. The defendant was an employee of the Corporation and the car in question was given to him under an agreement between him and the Corporation. A letter of resignation dated 12/05/1962 was submitted by the defendant to the Corporation which was accepted with effect from 12th August, 1962. The agreement between the parties relating to the car was that an amount of Rs. 10,000.00 was advanced by the Life Insurance Corporation for the purchase of the car on the basis of an. agreement akin to an hire-purchase agreement. Installments were to be deducted from the salary of the defendant at the rate of Rs. 166.00 per month. The Corporation was initially to purchase the car but had to pay only three-fourths of the price. Under the terms of the agreement, the Corporation was to permit the defendant to use the vehicle during the period he remained in the service of the Corporation. The vehicle was to be used only for the business of the Corporation and the defendant was to pay for the petrol, the oil and other charges for the up-keep of the vehicle. According to the agreement if there was a breach of its terms the Corporation was entitled to terminate the agreement and to resume possession of the vehicle. When the total amount paid by the Corporation had been repaid by the defendant the vehicle was to be transferred to him. It was provided in clause 8 of the agreement (dated 22/10/1961 Exhibit P-14) that in case the defendant ceased to be in the employment of the Corporation for any reason, or died in the service of the Corporation, the Corporation would be entitled to the exclusive possession of the vehicle and the defendant or his heirs would not be entitled to the payments made by the defendant in the Car Account, It was, however, provided that the defendant or his heirs as the case may be, might within one month of the date when the Corporation got this right to possession, pay to the Corporation the balance in the Car Account, in which case the Corporation would transfer the vehicle to the defendant or his legal representatives. It was further provided that if the balance was not paid within one month the Corporation would be entitled to sell the vehicle and out of the moneys received from the sale adjust the balance in the Car Account and pay the surplus (if any) to the defendant or his heirs.

(2) The agreement itself is not at all ambiguous but the dispute between the parties is as to whether the defendant has actually resigned and ceased to be in the employment of the Corporation or hot. According to the defendant he submitted his resignation on 14/05/1962,but withdrew the same on 4/08/1962. On the other hand, according to the Corporation the resignation was accepted with effect from 12/08/1962 and the defendant became disentitled to revoke his resignation after its acceptance. The basic question on which the decision of the suit Therefore depends is whether the defendant continued to be in the employment of the Life Insurance Corporation after 12/08/1962 or not.

(3) On this question, the trial court found that under Regulation 18(1)of the Life Insurance Corporation Staff Regulations, 1960, a notice, of three months had to be given before a Class I employee like the defendant could terminate his services. The letter of resignation is dated 12/05/1962, but it was held that it was forwarded to the Zonal Manager of the Corporation on 14/05/1962, and hence , the earliest date on which the notice period would terminate was found to be 14/08/1962. Before this date it was held that the defendant could withdraw his resignation, and had done so by the letter. ExhibitP-13, withdrawing the resignation which was delivered to the Corporation on 4/08/1962. The resignation had already been accepted by the Zonal Manager on 9/07/1962 with effect from 12/08/1962. On this point, the trial court held that the acceptance of the resignation was unnecessary as the Corporation was not required to accept the resignation before the expiry of the notice period. The trial court, therefore ,concluded that the defendant still remained in service. From this summary of the decision on the main point by the trial court, it will be obvious that the basis of the decision was that the defendant had given three months notice concerning his resignation but had withdrawn the same before the expiry of three months. In view of this decision ,the trial court dismissed the Corporation''s suit.

(4) An appeal was taken by the Corporation to the Additional District Judge, Delhi. The decision of the trial court was reversed on a somewhat different interpretation of the facts and circumstances of the case. It was held that the services of the defendant came to an end on 1 2/08/1962 after the expiry of the notice period. The date of the giving of the notice was found to be 12/05/1962, which was the date borne by the letter Exhibit P-2, sent by the defendant to the Corporation.

(5) On the question of the withdrawal of the resignation, the lower appellate court held that there was no right in the defendant to withdraw his resignation. It was optional for the competent authority to allow the withdrawal of the resignation or not. In this respect, the court followed the judgment reported as Jwala Prasad Vs. State of Uttar Pradesh and Others, . In that case the resignation was accepted and the High Court held that after the acceptance of the resignation the same could not be withdrawn. The Court did not follow Sanker Dutt Shukla Vs. President, Municipal Board, Auraiya and Another, , which is a contrary authority. Thus the lower appellate court came to the conclusion that the resignation became effective on 9/07/1962 when the Zonal Manager wrote an order accepting the resignation. On the question of the date of the letter withdrawal the court held that it was not willing to believe that it was delivered to the Corporation on 4/08/1962, but no alternative date of delivery has been mentioned in the judgment. Thus the lower appellate court came to the conclusion that the resignation could not be withdrawn after it had been accepted.

(6) The suit of the Corporation was accordingly decreed by the lower appellate court and the suit was decreed in toto. The court, however, did not choose between the two alternatives prayers in the suit. The defendant has now appealed to this Court.

(7) The main question for my decision turns on the effect of the resignation letter. Exhibit P-2. The said letter is dated 12/05/1962and is signed by the defendant. It states-"I beg to tender my resignation and request to be relieved of my duties after expiry of the usual notice." Then it proceeds to discuss a number of other questions such as privilege leave, retention of the car and telephone. It also gave a number of reasons why the defendant had decided to tender his resignation. According to the defendant, this resignation letter was forwarded to the Corporation by another letter dated 14/05/1962which is Exhibit P-20. However, this letter does not make any difference because it is a letter purporting to forward the resignation to the Senior Divisional Manager and is also signed by the appellant as Officer-in-Charge. It thus appears that the forwarding letter has been written by the defendant himself in his capacity as an employee of the Corporation and not as the person tendering the resignation. I will assume for the purpose of this appeal that the resignation was dated 12/05/1962 and that there was no material before the Zonal Manager of the Corporation to come to the conclusion that it was forwarded to the Corporation on 14/05/1962. Thus, the three months period expired on 12/08/1962.

(8) The next question to be examined is the rule relating to termination of the defendant''s services. This is Rule 18(1) of the Life Insurance Staff Regulations 1960. It is necessary to reproduce the rule 18(1) at this stage:-

"AN employee, other than an employee on probation oran employee appointed on a temporary basis, shall not leave or discontinue his service in the Corporation without first giving notice in writing to the competent authority of his intention to leave or discontinue the service. The period of notice required shall be-(a) three months in the case of an employee belonging to Class I;(b) one month in the case of other employees. Provided that such notice may be waived in part or in full by the competent authority at its discretion. In case of breach by an employee of the provisions of this sub-regulation, he shall be liable to pay the Corporation as compensation a sum equal to his salary for the period of notice required of him, which sum may be deducted from any moneys due to him."

(9) Thus the only requirement for a person seeking to discontinue his services is to give a notice in writing to the Corporation intimating his intention to leave or discontinue his service. The period of notice is fixed as three months in the case of class I employees like the defendant, but it is possible that the notice may be waived in part or in full by the competent authority. As the notice of resignation which the defendant gave is dated 12/05/1962, the Zonal Manager took the notice period to be three months i.e., terminating on 12/08/1962, and thus the resignation was accepted on 9/07/1962 by the Zonal Manager vide his order of that date, Exhibit P-1/A, which runsas follows:-

"RESIGNATION accepted w.e.f. 12-8-1962 i.e., the expiry of the notice period.K.R.P.9-7-1962".

(10) In the usual course of things this resignation would have become effective on 12/08/1962 and the basic question which has to be determined is whether the withdrawal of the resignation on 4/08/1962, by letter Exhibit P-13 is effective. This would again depend on the rights of the defendant-appellant to withdraw the resignation after he had submitted the same. According to the rules, the resignation is to be effective at the end of the notice period. Suppose the resignation is not accepted till the last date of the period, then, is the appellant entitled to withdraw the resignation till the last date of the notice period? does the fact that the resignation has been accepted on an earlier date affect his rights to withdraw the same? Points similar to these have arisen in various cases which have been cited before me, and I now propose to deal with those authorities.

(11) In Raj Kumar Vs. Union of India (UOI), , it was held that the resignation of a Government servant does not become effective until his letter of resignation is accepted. It also held that it would not be open to a public servant to withdraw his resignation after it had been accepted by the appropriate authority. However, till the acceptance was made the public servant concerned had locus poenitentiae to change his mind but not after the acceptance. Normally, if this case was to be applied to the facts of the present dispute, the appellant would be not entitled to agitate the question raised in this appeal. The resignation was accepted on 9/07/1962, and intimation in this respect was given to the appellant vide the letter Exhibit P-6which was sent by Kanahya Singh, Senior Divisional Manager to him on 23/07/1962. It was therein clearly stated that the resignation had been accepted by the Zonal Manager with effect from 12/08/1962. Thus the appellant was fully aware that his resignation had already been accepted by the Zonal Manager when he purported to withdraw his resignation on 4/08/1962. The only question that survives is whether the right to withdraw the resignation still remained alive by reason of the fact that the resignation was not immediate but effective only from 12/08/1962. It is necessary to state the question for decision in slightly different terms. The appellant was required by the rules to give a notice regarding the termination of his services. The resignation Therefore could not have been effective before the end of three months and the action of the Zonal Manager in accepting the same was only anticipatory. Did the fact that the resignation was accepted at an earlier date though effective from a latter date mean that the resignation was accepted on 12/08/1962 before which it had already been withdrawn? Thus, the only problem that survives for decision in the appeal is, as to whether the right to withdraw the resignation continued right up to the date on which the resignation became effective, or, whether it terminated as soon as the Zonal Manager passed an order, accepting the same. The Judgment reported as Jwala Prasad Vs. State of Uttar Pradesh and Others, , which has been relied upon by the lower appellate court, was the case of a Patwari who tendered his resignation on 2/02/1953 and asked to be relieved on 3/03/1953.The resignation was accepted on 10/02/1953 but on 2 4/02/1953 the resignation was withdrawn. It was held that the resignation was absolute and there was no right to withdraw the resignation as the resignation was unconditional. It was also held that it was for the appointing authority to consider whether the resignation could be withdrawn as the resignation had been accepted before the withdrawal of, the same. It was there held that there was no right to withdraw the resignation. This authority seems to be contrary to the aforementioned decision of the Supreme Court in Raj Kumar''s case(3)where it was held that before the acceptance of a resignation it can be withdrawn. In Jai Ram Vs. Union of India (UOI), , it was held:-

"IT may be conceded that it is open to a servant, who has expressed a desire to retire from service and applied to his superior officer to give him the requisite permission, to change his mind subsequently and ask for cancellation of the permission thus obtained: but he can be allowed to do so so long as he continues in service and not after it has terminated."

(12) Thus, the Supreme Court was of the view that a Government servant could withdraw his resignation while he still remained in service but not after he had retired. I may mention that the case in question was exceptional, because the attempt to withdraw the resignation was made during the leave preparatory to retirement i.e., after the public servant had quit his post and thus lost the lien on the post.

(13) In Sanker Dutt Shukla Vs. President, Municipal Board, Auraiya and Another, , it was held that where the resignation was to become effective from 1/04/1955 it could be withdrawn before that date because it was not accepted in law before that date and, hence in spite of the acceptance of the resignation at an earlier date the court held that the resignation had not become effective. The facts were that a resignation was handed over by the employee concerned to the President of the Municipal Board on 24/02/1955though it was dated 1/04/1955. Before 1/04/1955 the resignation was withdrawn. The application to withdraw the resignation was rejected and the resignation was accepted by the President of the Municipal Board. It was held by the Court that as the resignation was not in existence before 1/04/1955 it could be withdrawn before that the common law position was indicated by the judgment in Riordon v. War Office, 1959 (1) W.L.R. 1046, where it was held asunder:-

"THE giving of a notice terminating a contractual employment, whether by employee or employer, is the exercise of the right under the contract of employment to bring the contract to an end either immediately or in the future. It is a unilateral act ,requiring no acceptance by the other party, and, like a notice to quit a tenancy, once given it cannot in my view be withdrawn save by mutual consent."

(14) Thus the view of the English Court was that a notice like the present could not be withdrawn. This seems to run counter to the view expressed by the Supreme Court in Raj Kumar Vs. Union of India (UOI), , already referred to which is the decision given on the appeal from this very case to the Supreme Court. I must take it that the legal position at least in India, as at present is that till the resignation has become effective it can be withdrawn. This means that in the present case the resignation could be withdrawn before 12/08/1962. This view is also in consonance with the Full Bench Judgment of the Allahabad High Court in Bahori Lal Paliwal Vs. District Magistrate, Bulandshahr and Another, , where it was held that a resignation could be withdrawn before it was accepted. Thus the English view in Riordon''s case has not been accepted by the Indian Courts. Now the question remains as to whether the appellant in this case could withdraw his resignation in the circumstances of the present case.

(15) The case law cited above as far as india is concerned shows that the accepted legal position is that the Government servant or an employee cannot resign unilaterally. In order to be effective, the resignation must be accepted by the employer. Thus, although the appellant was permitted by the rule to terminate his services by a notice yet the resignation could not be effective till it was accepted. However, the rule provided that the notice had to be of three months and Therefore inspire of the order accepting the resignation on 9/07/1962 and being Communicated to the appellant on 25/07/1962. the date of acceptance of the resignation remained the date on which the period of notice terminated i.e., 12/08/1962. This means that there was no effective termination of the services of the appellant before 12/08/1962. The case law cited above shows that the resignation could be withdrawn before it was accepted. When was the resignation accepted in the present case? If it was accepted on 9/07/1962 then the appellant could not withdraw it. If it was accepted on 12/08/1962 then he could withdraw it. In my view, the fact that the resignation was effective from 12/08/1962 really means that till 1 2/08/1962 the appellant was entitled to withdraw the resignation because the resignation could not be accepted earlier then 12/08/1962. In other words, I come to the conclusion that there was a withdrawal of the resignation before the resignation became effective which rendered the resignation non-existent in the eyes of law and thereby kept the appellant in the service of the Corporation.

(16) In the circumstances, I have to accept this appeal and reverse the judgment of the lower appellate court and restore that of the trial court.

(17) The parties will bear their own costs in this appeal. Leave to appeal to the Letters Patent Bench granted.