Libertatem Magazine

Employees who have resigned cannot claim pension under the voluntary retirement scheme

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Hutoxi  Noshir  Shroff   vs.   Bank of India


A writ petition by former employees of the respondent bank who asserted that differentiating between ‘resignation’ and ‘voluntary retirement’ was bad in law and unjustified, was dismissed by a Division Bench comprising of M.S. Karnik and A.A. Sayed, JJ. The petitioners’ contention was that since they had been employees of the bank for more than 20 years and had resigned because they had no provision pertaining to voluntary retirement upon completion of 20 years of service, they were entitled to be covered under the Bank of India (Employees) Pension Regulations, 1995.

The Regulations of 1995 provided for entitlement to avail pension after 20 years of service on grounds of voluntary retirement for persons retiring between 1986 and 1993. The petitioners resigned between the aforementioned period and sought that the court declares ‘retirement’ to include ‘resignation’.

That is, in our opinion, so even when this Court has always maintained a clear distinction between “resignation” and  “voluntary retirement”. Whether or not a given communication is a letter of resignation simpleton or can as well be treated to be a request for voluntary retirement will always depend upon the facts and circumstances of each case and the provisions of the Rules applicable. The distinction between the expressions “resignation” and “voluntary retirement” was elaborately discussed by this Court in UCO Bank and Ors. v. sanwar  Mal (2004) where this Court was examining the provisions of UCO Bank (Employees’) Pension Regulations 1995 applicable to a bank employee who had resigned from service after giving an advance notice to the appointing authority. So also in Reserve Bank of India and Anr V. CECIL Dennis Solomon and Anr.[2004] this Court was considering the provisions of the Reserve Bank of India Pension Regulations, 1990 while it made a distinction between what is the resignation on the one hand and voluntary retirement on the other. At the same time, a long line of decisions has recognized that pension is neither a bounty nor a matter of grace but is a payment for past services rendered by the employee. Decisions of this Court in D.S. Nakara and Ors V. Union of India (1983)1 SCC 305, and Chairman Railway Board and Ors. V C.R Hangadhamaiah and Ors.(1997), are clear pronouncements on the subject.


Learned Counsel for the petitioners contends that after putting more than 20 years of service the petitioners resigned on personal grounds. They had no option but to resign because there was no provision of voluntary retirement upon completion of 20 years of service than existing. In the submission of the learned Counsel, the PR of 1995 is discriminatory. According to him, the employees who are covered by the PR of 1995 have an option of receiving the pension upon completion of 20 years of qualifying service vide Regulation 29. In his submission as the petitioners have completed more than 20 years and as the petitioners are similar situated, the petitioners also should be extended the benefit of Regulation 29 by treating their resignations as voluntary retirement.

We are of the view that the petitioners failed to show any pre-existing rights in their favor either in the statutory settlements or PR of 1995. The petitioners had resigned from the services prior to 1/11/1993, therefore, were not covered by the PR of 1995. The petitioners could not show established preexisting legal, statutory or fundamental rights in their favor to claim the benefits of the PR of 1995. Consequently, the reliance placed by the petitioners either on Regulation 29 or Regulation 22 in support of their contentions, cannot be accepted since they are not covered by the scheme of pension introduced by the Bank w.e.f 1/11/1993.


The Court rejected their contentions, accepted the cases put forward by the respondent, relied on the definition of ‘retirement’ under the Regulations and held that under service jurisprudence, the concept of resignation is not covered under retirement. Since the petitioners’ employment terms were governed by the Officers Service Regulation, 1979, the Court came to the conclusion that they were not entitled to receive the pension under the new scheme. Therefore, the petitioners had voluntarily relinquished their services.

Learning Outcome

It will be too imprudent for anyone to suggest that a bank employee who has worked with such commitment has earned him the appreciation of the management would have so thoughtlessly given up the retiral benefits in the form of pension etc, which he had earned on account of his continued dedication to his job. If the pension is not a bounty, but a right which the employee acquires on account of long years of sincere and good work done by him, the court will be slow in presuming that the employee intended to waive or abandon such a valuable right without any cogent reason. At any rate, there ought to be some compelling circumstances to suggest that the employee had consciously given up the right and benefit, which he had acquired so assiduously.

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