Dismissed

Smt. Urmila Chandrakant Gaikwad v. Chairman and Managing Director, Bank of Baroda and Ors.

Bombay HC10 Jul 2014WP/5720/2012

Case brief

AI extract

What is this about?

Writ petition dismissed. The widow sought to claim Voluntary Retirement Scheme benefits for her deceased husband who died before the bank accepted his application. The court held the bank could exercise discretion to reject the application as the applicant was not accepted in writing, entitlement arising only upon acceptance.

What did the court decide?

The petition dismissed. Rule discharged. No costs.

Smt. Urmila Chandrakant Gaikwad Vs Chairman… — Contract and Commercial Disputes | Bombay HC (2014)

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WP/5720/2012

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE JURISDICTION

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WRIT PETITION NO. 5720 OF 2012

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Smt. Urmila Chandrakant Gaikwad, Age Adult, Occupation Household, Residing at B-1, Malkans Co.Op. Housing Society, Paud Phata, Karve Road, Pune 411 038.

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..Petitioner

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Versus

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Chairman and Managing Director, Bank of Baroda, Baroda Corporate Center, C-26, G-Block, Bandra - Kurla Complex, Bandra (E), Mumbai 400 051.

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General Manager, (H.R.M.) and (G.A.), Bank of Baroda, Baroda Corporate Center, C-26, G-Block, Bandra - Kurla Complex, Bandra (E), Mumbai 400 051.

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Zonal Manager, (Maharashtra and Goa), Bank of Baroda, Sharda centre, 2^nd Floor, 11/1 Khilare Road, Erandawane, Pune 411 004.

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Asstt. General Manager, SA, R & P & HRM, Bank of Baroda, Suraj Plaza -1, Sayaji Ganj, Baroda 390 005. .. Respondents

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… Mr. A.M.Joshi a/w Mr.V.K.Bodhare, Advocate for petitioner and Mr. Lancy D'Souza a/w Mr. V.M.Parkar, Advocate for respondent 3.

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CORAM : NARESH H.PATIL AND RAVINDRA V. GHUGE, JJ.

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Reserved on: June 27, 2014 Pronounced on: July 10, 2014

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JUDGMENT: (Per Ravindra V. Ghuge,J.) :-

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Heard the learned advocates for the respective sides at length.

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Rule.

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Rule made returnable forthwith and heard finally by the consent of the parties.

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The petitioner is the widow of the deceased Chandrakant Gaikwad (hereinafter referred to as the deceased), who was an employee of the Respondent Bank namely bank of Baroda. He was appointed in the service of the Respondent Bank on 7 October 1970. It is undisputed that he was a permanent employee of the bank. His last posting was as MM–II Manager in the Sadashiv Peth Branch at Pune. His last drawn gross salary was Rs. 21,240 per month.

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The Respondent Bank vide circular dated 14^th of December 2000, declared a voluntary retirement scheme which was termed as

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the Bank of Baroda Employees (Voluntary Retirement) Scheme2001, (hereinafter referred to as the scheme). As per the eligibility criteria of the said scheme, the deceased was eligible to apply for seeking benefits flowing therefrom. The respondents do not dispute this position.

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As per clause 6 of the said scheme, the competent authority was empowered to intimate the applicant candidates as regards the acceptance or rejection of their application. On rejection, an aggrieved employee had the right to prefer an appeal. Clause 8 of the said scheme entitled an applicant to withdraw the application before 14^th of February 2001.

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It is undisputed that the deceased had made an application on 18^th of January 2001. It is also not disputed that the deceased did not withdraw his application on or before 14^th February 2001. The petitioner therefore contends that the said application ought to have been allowed by the respondents. The deceased passed away on 10^th of March 2001 on account of a cardiac arrest. Decision by the respondents on his application was not conveyed to the deceased before his unfortunate demise.

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The petitioner further contends that the respondents were

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under an obligation to accept the application filed by the deceased since he had not withdrawn the same on or before 14^th February 2001. Grievances is that the application was kept pending for quite sometime and finally by a communication dated 11^th June 2001, the respondents informed the petitioner that the said application was not considered. It was stated by the respondents in the said communication that the Respondent Bank had a scheme for recruitment of dependents of the deceased employees on compassionate grounds. Copy of the said scheme was supplied to the petitioner.

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By letter dated 21^st of July 2007, the petitioner made an application stating therein that she had made a request in February 2002 seeking recruitment on compassionate grounds which was rejected after one year and nine months in December 2003. She further requested that the Respondent Bank which was celebrating its centenary year, may consider the case of the petitioner for monetary assistance, sympathetically and on humanitarian grounds. By its communication dated 11^th January 2008, the Respondent Bank informed the petitioner that her request for financial relief under the scheme could not be accepted since the net income of the family exceeded 60% of the net salary of the deceased. It was also informed that the rejection of her request made earlier was

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communicated to her in 2003.

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The petitioner has relied upon the judgment of the Karnataka High Court dated 12^th of August 2002 in Writ Petition No. 34717 of 2001 in the matter of R Jyothi Vs. General Manager, Dena Bank and others. Reliance is also placed on the order of the Division bench of of this Court, dated 8^th July 2009 in Writ Petition No. 663 of 2002 in the matter of Darayus N S Postwala and another versus Central Bank of India and another. Reliance is also placed upon a judgment of the Honourable Supreme Court in the case of Manjushree Pathak v. Assam Industrial Development Corporation Limited and others – (2007) 7 SCC 390).

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The petitioner has therefore prayed that the respondent be directed to treat the application of the deceased as having been accepted and the benefits following from the said scheme be paid to the petitioner.

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The respondents have filed an affidavit in reply. The first objection is that the petition has been filed belatedly and cannot be entertained only on the ground of delay. The application filed by the deceased on 18^th January 2001 was rejected on 11^th June 2001. An amount of Rs.3,99,640.94 towards Provident fund,

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Rs.3,39,871 towards gratuity, Rs.1,27,194 towards Additional Retirement Benefit and Rs.1,52,454 towards leave encashment (total amount being Rs. 10,19,159.94) was already paid to the petitioner.

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It is submitted that the said scheme was announced on 14^th of December 2000. Clause 6 clearly indicates that no application is deemed to have been accepted until its acceptance was communicated to the applicant. Clause 9 of the said scheme indicates that the applicant, on acceptance of his application, would be relieved within 30 days of such acceptance and would be allowed to retire voluntarily from the said bank. Thereafter, Clause 10 of the said scheme categorically specified that an employee who has been allowed to retire voluntarily from the Bank under the scheme shall be paid an ex-gratia amount as consideration for his voluntary retirement. Clause 15 of the scheme indicates that no right will accrue to the employee who has applied for the scheme, only for the reason of his eligibility. Clause 15(ii) provided that an application for VRS shall have no effect unless it is accepted and such acceptance is communicated to the applicant in writing by the competent authority.

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The respondents further submitted that since the deceased

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passed away on 10^th of March 2001, his application was not considered. Rejection of his application was communicated to the petitioner on 11^th June 2001. The Respondent Bank while arriving at a decision as regards acceptance or rejection of an application, has to consider as to how many employees had to be retained. Based on its assessment of required manpower, the bank decides how many applications are to be accepted. The said scheme was a contract between the Respondent Bank and the applicant. The said contract is complete only after an application is accepted, such acceptance is communicated and thereafter the applicant is relieved from employment by payment of the money package. Since the applicant deceased passed away, the Respondent Bank had no reason to consider his application. The decision to accept or reject an application was within the exclusive domain of the Respondent Bank and it could not be forced to accept an application under orders of this Court.

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The respondents have relied upon the reported judgments of the Honourable Supreme Court in the cases of Padubidri Damodar Shenoy Vs. Indian Airlines Limited and another – 2009 III CLR 666, Food Corporation of India Vs. Ramesh Kumar – AIR 2007 SC 2864, and Bank of India and others Vs. O.P.Swaranakar etc. AIR 2003 SC 858(1).

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Having heard the learned advocates for the respective sides, we have perused the petition paper book with their assistance.

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The application of the deceased was rejected in 2001. The petitioner made an application seeking compassionate appointment with the Respondent Bank. The same has been rejected and is not under challenge in this petition. The petitioner had thereafter made an application for seeking monetary benefits as per the new scheme by the Respondent Bank for the dependents of deceased employees. The said scheme dated 2^nd February 2006 prescribed certain conditions for being eligible to avail of its benefits. The applicant was not held eligible and the said decision was communicated to her in the year 2003. It appears that the petitioner had entered into a correspondence with the Respondent Bank from 2001 onwards till 2008, we find that this petition filed on the 11^th of May 2012 suffers from delay. We do not find convincing reasons having been put forth by the petitioner so as to condone the said delay. Nevertheless, we have still considered this petition on its merits.

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The voluntary retirement scheme has been placed on record.

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Clause 6, 8, 9, 10, 14 and 15 of the said scheme are as under:-

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“ 6. Communication regarding Application submitted for voluntary retirement:

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The Competent Authority specified in ANNEXURE – D shall intimate the eligible employee – applicant regarding acceptance or rejection of his application for voluntary retirement under BOBEVRS-2001, on or before 30^th April, 2001.

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8. Withdrawal of application:

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An employee may withdraw, in wiring, his application for voluntary retirement any time before close of branch / office hours on 14^th February 2001. Request for withdrawal received after 14^th February 2001 shall not be entertained.

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9. Relieving of an employee on voluntary retirement under BOBEVRS-2001:

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Except for unforeseen circumstances and subject to para 15(iii) below, an employee shall be relieved from service within 30 days of communication of acceptance of his application for voluntary retirement.

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10. Ex-Gratia payable to an employee retiring voluntarily under BOBERS-2001:

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An employee, who has been allowed to retire voluntarily from the Bank under BOBEVRS-2001, shall be paid an ex-gratia amount specified at (I) or (ii) below, whichever is lower -

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(i) Sixty days' Salary for each completed year of service OR

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(ii) Salary for the number of months of service left. Explanation:

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** Salary shall comprise of Pay, Stagnation Increment and Special Pay (wherever applicable) and Dearness Allowance, last paid in the month of relieving of the employee from service on voluntary retirement. In the event of no salary being due to an employee on account of loss of pay, etc., the last salary received by him / her shall be reckoned for the purpose of computing the ex-gratia payable.

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** 'Completed Year of Service' shall refer tot he actual period of service completed for reckoning the minimum eligible service of 15 years. Fraction of six months and above shall be treated as one year of service for the purpose of calculating completed years of service and the period of service less than six months shall be ignored.

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14. Date of payment of ex-gratia to employee retiring voluntarily under BOBEVRS – 2001 :

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Except under unforeseen circumstances, the ex-gratia and applicable terminal benefits shall be paid within 30 days of his relieving from service on voluntary retirement. 15. Other Terms and Conditions:

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(i) No right will accrue to an employee who had applied for voluntary retirement under BOBEVRS-2001 only for the reason of his eligibility. The Bank reserves the right to accept or decline any application after recording reasons thereof.

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(ii) Subject to 15(i) above, an application for voluntary retirement shall have no effect unless it is accepted and communicated to the employee in writing by the Competent Authority,

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(iii) Application for voluntary retirement is subject to vigilance clearance as on the date of relieving of the

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employee.

(iv) Any doubt or clarification or interpretation regarding any or all of the provision/s pf BPBEVRS-2001 shall be referred to Chairman and Managing Director / Executive Director, whose decision shall be final and shall be binding.”

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In accordance with the above stated clauses, the Respondent Bank had informed the petitioner that the application of the deceased was not considered since he unfortunately passed away. Clause 15 does not give any right to an applicant until his application is accepted and the decision of the Management is communicated to him in writing by the competent authority. It is therefore clear to us that the deceased may have been eligible for the benefits under the scheme. However, when no right was created in any employee to earn the benefits under the said scheme though being eligible, we do not see as to how the petitioner could claim a right to earn such benefits under the scheme.

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The application filed by the deceased was not withdrawn. The petitioner therefore contends that the Respondent Bank was under an obligation to consider the said application notwithstanding the death of the applicant. Submission is that if the application was liable to be allowed, the petitioner should be

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paid the benefits under the said scheme. The Respondent Bank has adopted the stand that an application for voluntary retirement, if allowed, has to be necessarily followed by a relieving order and payment of money as assured under the scheme. Since the applicant himself passed away, the claim of such a deceased applicant stands extinguished. The Respondent Bank could neither consider the application of the deceased employee nor could have relieved him from employment.

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In the case of R Jyothi (supra) before the Karnataka High Court, the learned advocate on behalf of the Respondent Bank had made a statement before the Court which was recorded as:-

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‘As noticed by me earlier, it is fairly admitted by the Counsel for the bank that his application were to be considered on merits, the bank would not have refused his request for voluntary retirement.’

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So also, the scheme before the Karnataka High Court contained clause 10.8 was as follows:-

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“In the event of the death of an employee, whose request for voluntary retirement under the scheme has been accepted, the compensation which would have become due and payable to the deceased employee will be paid to the person nominated to receive such dues.”

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The Karnataka High Court had taken into account the statement made by the Respondent Bank and clause 10.8 and therefore had allowed the petition. In the instant case, the Respondent Bank submits that clause 15 under the said scheme specifically rules out any claim that an applicant would be entitled to the benefits under the scheme only for the reason of his eligibility. So also, the scheme before us does not contain any such clause similar to clause 10.8 as was before the Karnataka High Court. As such, we find that the terms and conditions set out in the scheme before us are different from those which were before the Karnataka High Court.

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In the case of Darayus N S Postwala (supra), the Division Bench of the Court held, “the case of the petitioners stands on a stronger footing because it is the specific case of the petitioners that the application of the said Mrs Homai Darayus Postwala for VRS was already accepted prior to her death and the list might have been published later on.....” In our view, once it is held that the application of the said Mrs Homai Darayus Postwala for VRS was accepted by respondent No.1 Bank earlier in point of time and subsequently, even if the said Mrs. Homai Darayus Postwala had died, the relevant date is the date on which the respondent No.1 Central Bank of India accepted the application of the said Mrs

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Homai Darayus Postwala for VRS. It was for these reasons that the petition was allowed. In the case on hand, it is an admitted position that the Respondent Bank had conveyed to the petitioner, vide letter dated 11^th June 2001, that the application of the deceased was not considered.

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So far as the Manjushree Pathak's case (supra) is concerned, we find that the ratio laid down in the said judgment by the Honourable Supreme Court is not applicable to this case on account of distinguishable facts.

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The Respondent Bank has placed reliance upon the judgment of the Honourable Apex Court in the case of Padubidri Damodar (supra) case. The apex court has held that there cannot be an automatic acceptance of an application for VRS. Even if the employer does not convey its decision, accepting or rejecting the offer within the specified period mentioned by the employee in his application, it would not amount to an automatic acceptance of his application.

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The Respondent Bank has relied upon the judgment of the Honourable Supreme Court in the case of Food Corporation (supra). The said case pertains to the right of an applicant to withdraw an

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application for VRS. We do not find that the said judgment has any application in this case.

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In the Bank of India's case (supra), the Honourable Supreme Court has held in paragraph numbers 59, 60, 63, 64, 65, 66, 67 and 68 as under :-

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“59. The request of employees seeking voluntary retirement was not to take effect until and unless it was accepted in writing by the competent authority. The Competent Authority had the absolute discretion whether to accept or reject the request of the employee seeking voluntary retirement under the scheme. A procedure has been laid down for considering the provisions of the said scheme to the effect that an employee who intends to seek voluntary retirement would submit duly completed application in duplicate in the prescribed form marked "offer to seek voluntary retirement" and the application so received would be considered by the competent authority on first come first serve basis. The procedure laid down therefor suggests that the applications of the employee would be an offer which could be considered by the bank in terms of the procedure laid down therefor. There is no assurance that such an application would be accepted without any consideration.

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60. Acceptance or otherwise of the request of an employee seeking voluntary retirement is required to be communicated to him in writing. This clause is crucial in view of the fact that therein the acceptance or rejection of

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such request has been provided. The decision of the authority rejecting the request is appealable to the Appellate authority. The application made by an employee as an offer as well as the decision of the bank thereupon would be communicated to the respective General Managers. The decisions making process shall take place at various levels of the banks.

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63. It is not a case where on mere making of option on the part of the employee the offer is to be accepted or even there will be reasonable certainty that some norms should be maintained. There is no consideration for the contractual bar clause. The submission of the learned counsel appearing on behalf of the banks that the proposal to the effect that the option made by an employee would be considered, is a consideration cannot be accepted.

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64. Once it is held that the provisions of the Indian Contract Act, 1872 would be applicable, the scheme admittedly being contractual in nature, the provisions of the Act shall apply. The Scheme having regard to its provisions as noticed herein before would merely constitute invitation to treat and not an offer.

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65. A proposal is made when one person signifies to another his willingness to do or abstain from doing anything with a view to obtaining the assent of the other to such act or abstinence (See Section 2(a)). Herein the banks by reason of the scheme or otherwise have not expressed their willingness to do or abstain from doing anything with a view to obtaining assent of the employees to such act. It will bear

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repetition to state that not only the power of the bank to accept or reject such application is absolutely discretionary, it, as noticed herein before, could also amend or rescind the scheme. The Scheme, therefore, cannot be said to be an offer which, on the acceptance by the employee, would fructify in a concluded contract.

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66. The proposal of the employee when accepted by the Bank would constitute a promise within the meaning of Section 2(b) of the Act. Only then the promise becomes an enforceable contract. In the instant case the banks when floating the scheme did not signify that on the employees assenting thereto a concluded contract would come into being in terms whereof they would be permitted to retire voluntarily and get the benefits thereunder.

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67. Furthermore, in terms of the said scheme no consideration passed so as to constitute an agreement. Once it is found that by giving their option under the scheme, the employees did not derive an enforceable right, the same in absence of any consideration would be void in terms of Section 2(g) of the Contract Act as opposed to Section 2(h) thereof.

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68. Furthermore, even by opting for the scheme as floated by the banks, no consideration is passed far less amounting to reciprocal promise.”

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From the above judgment, it is clear that an application for

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VRS is not deemed to be allowed unless the competent authority

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conveys its acceptance in writing to the concerned employee. Any request of an employee seeking voluntary retirement, through an application made for the said purpose, is to be either accepted or rejected. The decision in this regard has to be communicated to the concerned applicant. In the light of the case law cited above, an acceptance of VRS application is neither automatic nor is it a deeming fiction unless provided in the Rules or the Voluntary Retirement Scheme. The deeming fiction necessarily is a creation of law or a statute. Unless so provided by the Rules or in the Voluntary Retirement Scheme, an applicant cannot claim deemed acceptance.

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In the result, we do not find any merit in this petition. This writ petition is therefore dismissed. Rule is discharged. No costs.

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(RAVINDRA V. GHUGE, J.)

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(NARESH H.PATIL, J.)

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dragon A.K.Losarwar, PS

Smt. Urmila Chandrakant Gaikwad v. Chairman and Managing Director, Bank of Baroda and Ors.

Case brief

What is this about?

What did the court decide?

Smt. Urmila Chandrakant Gaikwad v. Chairman and Managing Director, Bank of Baroda and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

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