Retirement benefits cannot be denied in a case of Voluntary Retirement #indianlaws

The Supreme Court held that the Appellant ought not to be deprived of pension benefits merely because he styled his termination of services as “resignation” or because there was no provision to retire voluntarily at that time. The commendable objective of the Pension Rule is to extend benefits to a class of people to tide over the crisis and vicissitudes of old age, and if there are some inconsistencies between the statutory provisions and the avowed objective of the statute so as to discriminate between the beneficiaries within the class, the end of justice obligates to palliate the differences between the two and reconcile them as far as possible. The State being a model employer should construe the provisions of a beneficial legislation in a way that extends the benefit to its employees, instead of curtailing it.

Should the claim of pension be denied in a situation where one resigns voluntarily after completing some good years of continued service in the absence of any provision of voluntary retirement?

The moot question before court in the instant matter was as to whether one is entitled to claim pension even though he resigned from service of his own volition and, if so, whether his claim on this count had become barred by limitation or laches?

In service jurisprudence, the expressions “superannuation”, “voluntary retirement”, “compulsory retirement” and “resignation” convey different connotations. Voluntary retirement and resignation involve voluntary acts on the part of the employee to leave service. Though both involve voluntary acts, they operate differently. One of the basic distinctions is that in case of resignation it can be tendered at any time, but in the case of voluntary retirement, it can only be sought for after rendering prescribed period of qualifying service. Other fundamental distinction is that in case of the voluntary retirement, normally retiral benefits are denied but in case of the retirement, the same is not denied.

In case of the former, permission or notice is not mandated, while in case of the latter, permission of the employer concerned is a requisite condition. Though resignation is a bilateral concept and becomes effective on acceptance by the competent authority, yet the general rule can be displaced by express provisions to the contrary.

The Appellant in the present matter after having worked for 23 years and 7 months in the Life Insurance Corporation had tendered his resignation owing to “family circumstances and indifferent health”. The request of the Appellant for waiver of the stipulated three month’s notice was favourably considered by the Corporation. The Appellant was thereby allowed to discontinue his services.

The Appellant has worked for over twenty years and had tendered his resignation in accordance with the provision of Regulation 18 of LIC of India (Staff) Regulations, 1960, which, as is apparent from its reading, does not dissimulate between the termination of service by way of resignation on the one hand and voluntary retirement on the other, or distinguish one from the other. Significantly, there was no provision for voluntary retirement at the relevant time, and it was for this reason that the Pension Rules of 1995 specifically provided for it under Rule 31.

The Supreme Court held that the Appellant ought not to be deprived of pension benefits merely because he styled his termination of services as “resignation” or because there was no provision to retire voluntarily at that time. The commendable objective of the Pension Rule is to extend benefits to a class of people to tide over the crisis and vicissitudes of old age, and if there are some inconsistencies between the statutory provisions and the avowed objective of the statute so as to discriminate between the beneficiaries within the class, the end of justice obligates to palliate the differences between the two and reconcile them as far as possible.

The State being a model employer should construe the provisions of a beneficial legislation in a way that extends the benefit to its employees, instead of curtailing it. The Appellant was accordingly held eligible to the claim of pension.

[Asger Ibrahim Amin vs. Life Insurance Corporation of India]

(SC, 12.10.2015 – Civil Appeal No. 10251 of 2014)