(Ajay Rastogi and Sanjiv Khanna, JJ.)
Managing Director, CAMPCO Limited ________________ Appellant;
v.
B. Vishnu Murthy ________________________________ Respondent.
Civil Appeal No(s). of 2022 (Arising out of SLP (Civil) No(s). 19437 of 2019), decided on March 22, 2022
The Order of the court was delivered by
Order
1. Leave granted.
2. The instant appeal has been filed by the appellant assailing the order dated 26th April, 2019 passed by the Division Bench of the High Court of Karnataka affirming the award passed by the Labour Court dated 28th October, 2010 answering the reference in the affirmative terms with the direction to the appellant to reinstate the respondent-workman in service on his original post with continuity of service along with 50% of the back wages from 5th August, 2006 till his reinstatement.
3. The facts in brief culled out from the record and relevant for the purpose are that the respondent-workman was serving as an Operator. While in service, he tendered his resignation on 3rd May, 2006, to be treated as one month’s notice, with a request to accept the same and relieve him from his duties. It will be appropriate to quote the extract of the letter of resignation tendered by the respondent-workman dated 3rd May, 2006 which is as under:—
“From
B. Vishnu Murthi
4-81, Post Katipalla
Via Surathka
Mangalore-574 149
To
The Managing Director
The CAMPCO Ltd.,
Managlore
Through:
The General Manager
CCF., Puttur
Dear Sir,
Sub : Show cause notice submission of resignation
Ref : Your letter No. EST-2/92/A/2006-07/311 dated 15.04.2006
…………………..
With reference to your above show cause notice I state that in continuation to the personnel discussion I had with your kind self, and the subsequent confabulations I had with my treating doctor, I have come to the conclusion to tender my resignation to the post I hold. Therefore I am tendering my resignation to the post of operator in your company and request you to accept the same and relieve me from my duties. It may please be treated as one month notice B. Vishnumurthy.
I thank you for having given me an opportunity to serve in your esteemed organization.
Yours faithfully,
Place: Managlore
Date: 03.05.2006
[B. Vishnu Murthi]’
4. Later, resignation was formally accepted by the Executive Committee in its meeting held on 21st July, 2006 while referring to agenda item no. 22 by resolving that the resignation of the respondent dated 3rd May, 2006 stands accepted w.e.f. 2nd June, 2006 and the respondent stood automatically relieved in consequence thereof. Almost two months’ thereafter, an application was filed by the respondent on 5th August, 2006 for withdrawal of his resignation. In sequel thereto, he was informed about the proceedings of the executive committee’s resolution dated 21st July, 2006 that in terms of his letter of resignation dated 3rd May, 2006 after one month of the notice period, his prayer stood accepted and the relationship of master and servant stood terminated.
5. A formal communication was sent to the respondent-workman on 24th August, 2006 with a further observation that as he had completed more than 10 years of service, the security deposit amount will be refunded to him which became the subject matter of challenge at the instance of the respondent-workman by raising a dispute and accordingly the appropriate Government made a reference vide its order No. K.E 259 IDM 2008 dated 15th April, 2008 for adjudication of dispute before the Labour Court.
6. The learned Labour Court, after taking into consideration the material on record, under its award dated 28th October, 2010 recorded a finding that as there was no acceptance of resignation tendered by the respondent-workman dated 3rd May, 2006 and much prior to its communication regarding acceptance of resignation, withdrawal application was filed by the respondent-workman dated 5th August 2006 and retrospective acceptance thereof was not permissible in law and in consequence, it was directed to the appellant to reinstate the respondent-workman along with 50% of the back wages that came to be challenged at the instance of the appellant before the learned Single Judge of the High Court under Articles 226 and 227 of the Constitution which came to be dismissed by an order dated 22nd July, 2011 and further appeal preferred at the instance of the present appellant also came to be dismissed under the impugned judgment dated 26th April, 2019 which is a subject matter of challenge in appeal before us.
7. Learned counsel for the appellant submits that the letter of resignation tendered by the respondent-workman dated 3rd May, 2006 became effective on the expiry of one month’s notice and as such, no formal acceptance of the letter of resignation was required and even it was not the requirement under the service rules of the appellant. In the given facts and circumstances, the finding which has been recorded that there was no communication of formal acceptance of resignation by the Labour Court and confirmed by the High Court in the impugned judgment is legally not sustainable. In support of his submission, learned counsel has placed reliance on the judgment of this Court in Sanjay Jain v. National Aviation Company of India Limited 2019 (14) SCC 492.
8. Per contra, learned counsel for the respondent, on the other hand, while supporting the finding recorded under the impugned judgment submits that the letter of resignation tendered by the respondent dated 3rd May, 2006 indeed referred to the period of 30 days but in the absence of its acceptance and communication to the respondent which admittedly has not been made in the instant case, before the application for withdrawal was submitted on 5th August, 2006, any acceptance and communication thereafter may not be of any significance and the resignation which was once tendered by the respondent on 3rd May, 2006 stood automatically withdrawn on the subsequent communication made by the respondent vide letter dated 5th August 2006. In the given facts and circumstances, no error has been committed by the High Court in the impugned judgment which may call for interference of this Court.
9. We have heard learned counsel for the parties and with their assistance perused the material available on record.
10. Rule 14.3 of the service rules of the appellant Company which is relevant for the purpose is reproduced as under:—
“Under Rule 14.3 of the Central Arecanut and Cocoa Arecanut and Cocoa Marketing and processing cooperative Limited service Rules.
14.3- An employee including an employee on probation or an employee appointed on temporary basis shall not leave or discontinue his/her service in the CAMPCO without giving notice, in writing, to the competent authority of his/her attention to leave or discontinue the services. The period of notice required shall be 90 days for the post of Officers of Grade-I and above and 30 days for other posts.
14.31-In case of breach of this said rule he/she shall be liable to pay the CAMPCO as compensation the sum equivalent to his/her salary for the period of notice required of him/her, which sum may be deducted from any amount due to her/his, on the other hand if the management wants to terminate the service of an employee then he/she is eligible to claim notice pay as described above; and
14.32-Notice period and leave during notice period cannot run concurrently as a matter of right.”
11. It clearly indicates that if an employee who is holding the post of Officer Grade I, leaves the company, may serve a notice of 90 days and for others, notice of 30 days is the requirement. There is no such rule to the contrary that a letter of resignation tendered by the employee has to be formally accepted.
12. In the instant case, letter of resignation tendered by the respondent-workman on 3rd May, 2006 clearly indicates that it was a 30 days’ notice in compliance of Rule 14.3 of the service rules and became automatically effected on expiry of the period stipulated, i.e. 30 days(w.e.f. 2nd June, 2006) for which no formal acceptance was required under the scheme of rules. The formal acceptance was made by the appellant by its resolution dated 21st July, 2006 is only for the purpose to clear the outstanding dues, if any, related to the respondent-workman who stood resigned from service and the relationship of the employer and employee stands terminated on expiry of the period as stipulated, as in the instant case, on expiry of 30 days period, i.e. from 2nd June, 2006. The resolution of the executive committee was to clear the outstanding dues of the respondent workman as he had completed more than 10 years of service.
13. This Court, in Sanjay Jain case (supra) had an occasion to examine the controversy as to what will be the effect if there is no rule for formal acceptance of resignation tendered by an employee. The relevant paras are referred to as under:—
“15. In view of the aforesaid enunciation of law and on consideration of the provisions contained in Standing Order 18 in the facts and circumstances of the case, we are of the opinion that the appellant has rightly terminated the relationship by serving the requisite notice for resignation. To resign is a right of an employee who cannot be forced to serve in case he is not willing until and unless there is some stipulation in the rules or in the terms of appointment or disciplinary proceedings is pending or contemplated which is sought to be avoided by resigning from the services. Thus, we are of the opinion that the High Court has erred in law in holding otherwise.
17. Relying on the said decisions, the learned counsel for the respondent has contended that in the case of a contract of employment, the same is required to be terminated. It cannot be unilateral action. The factual matrix of the aforesaid decision was totally different. Though the employee had tendered the resignation it had not been accepted on the date on which he filed the nomination form in order to contest an election. In that context, observations have been made. However, it was observed that it would depend upon the phraseology used in a particular provision whether there is a necessity for acceptance or any other formality is required when it could be said that the person ceases to hold the office. With all fairness, the aforesaid proposition has not been disputed by the learned counsel appearing on behalf of the respondent. In this case, there is no such requirement of acceptance by such an employee under the provisions of Standing Order 18 read with Standing Order 17. Thus, the decision in Moti Ram [Moti Ram v. Param Dev, (1993) 2 SCC 725] is not applicable.”
14. That apart, after a formal acceptance of the resignation by the competent authority on 21st July, 2006, an application was filed by the respondent for withdrawal of letter of resignation on 05th August, 2006 after the relationship of master and servant stood terminated loses its significance and is not valid to be entertained. In the given facts and circumstances, the award passed by the Labour Court of reinstatement of the respondent-workman with 50% back wages and confirmed by the High Court in the impugned judgment is not sustainable in law and deserves to be set aside.
15. It is informed to this Court that the respondent-workman had served for some time during the interregnum period and later superannuated on 31st December 2019. We make it clear that whatever the salary has been paid to him during the interregnum period, in terms of the award dated 28th October, 2010 shall not be recovered.
16. Consequently, the appeal succeeds and is accordingly allowed. The judgment of the Division Bench of the High Court dated 26th April, 2019 is quashed and set aside with a direction that no recovery shall be made from the respondent-workman for the period he has actually served under the terms of the award dated 28th October, 2019. No costs.
17. Pending applications, if any, shall stand disposed of.
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s). 19437/2019
(Arising out of impugned final judgment and order dated 26-04-2019 in WA No. 15502/2011 passed by the High Court Of Karnataka At Bengaluru)
The Managing Director the CAMPCO Limited.….Petitioner(s)
v.
B. Vishnu Murthy.….Respondent(s)
(FOR ADMISSION and I.R.)
Date : 22-03-2022 This petition was called on for hearing today.
(Before Ajay Rastogi and Sanjiv Khanna, JJ.)
UPON hearing the counsel the Court made the following
ORDER
18. Leave granted.
19. The appeal is allowed in terms of the signed order.
20. Pending application(s), if any, shall stand disposed of.
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