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The management of a nationalised bank has the discretion either to accept or reject an employee's request for voluntary retirement under the Voluntary Retirement Scheme (VRS) and he cannot claim a mandatory right that his request should be accepted, the Supreme Court has held.
A Bench of Justices Aftab Alam and R.M. Lodha said: “The object of the Scheme was not to reward the good officers or to punish the bad ones. Even though depending upon personal circumstances, VRS might have appeared to some individual officers as personally beneficial, it was not envisaged by the bank as a means to give personal rewards or to punish individual employees by granting or refusing to grant VRS to them.”
The Bench set aside an Allahabad High Court judgment quashing the decision of the Indian Overseas Bank not to accept the VRS request of respondent-officer Tribhuwan Nath Srivastava holding that the bank had no absolute discretion to reject the request under the IOB Officers/Employees Voluntary Retirement Scheme – 2000, which remained in operation for five weeks from December 15, 2000 to January 19, 2001.
Writing the judgment, Justice Alam said: “The objective of the scheme as stated in the circular issued by the bank was to adopt measures to have optimum human resources at various levels in keeping with the business strategies, skill profile to achieve balanced age and requirement of the bank.”
On the respondent's contention that the bank had considered the request of even ineligible employees but not his, though he had an exemplary record, the Bench said:
“The grant of voluntary retirement to an employee who may not be strictly eligible under the scheme may not improve the claim of another applicant who might not only be eligible but with highly superior credentials.
“Other things being equal between two applicants, the bank would like to let go the one with the inferior service record and lower potential and, consequently, it would accept the application of the officer with the lower merit and may not accept the request of the officer with superior merit. This is for the simple reason that in the process of shedding surplus manpower no organisation would like to lose its best people.
“We are not unconscious that the denial of request for voluntary retirement to an officer in practice may result in souring of relationship between the concerned officer and the bank [as it actually happened in this case] and as a consequence the concerned officer in future may not show the same competence and efficiency in the discharge of his duties for which he was sought to be retained in service.
“But that is a matter of personnel management and the competent authority is expected to factor in such considerations while taking a decision on individual applications. Such considerations would certainly not be a ground for the court to interfere with the decision of the competent authority. From a purely subjective point of view, the decision of the competent authority may appear to be ‘unfair' or even a ‘punishment' to the officer with the superior merit. Nevertheless, it would be the proper and reasonable exercise of discretion in view of the basic objective of the scheme. Such considerations would certainly not be a ground for the court to interfere with the decision of the competent authority.”
The Bench held that in this case the bank had properly appraised the respondent's claim for voluntary retirement and its decision not to accept the request was within the legitimate exercise of discretion that did not warrant any interference by the High Court. It held the impugned judgment unsustainable and allowed the bank's appeal.
A Bench of Justices Aftab Alam and R.M. Lodha said: “The object of the Scheme was not to reward the good officers or to punish the bad ones. Even though depending upon personal circumstances, VRS might have appeared to some individual officers as personally beneficial, it was not envisaged by the bank as a means to give personal rewards or to punish individual employees by granting or refusing to grant VRS to them.”
The Bench set aside an Allahabad High Court judgment quashing the decision of the Indian Overseas Bank not to accept the VRS request of respondent-officer Tribhuwan Nath Srivastava holding that the bank had no absolute discretion to reject the request under the IOB Officers/Employees Voluntary Retirement Scheme – 2000, which remained in operation for five weeks from December 15, 2000 to January 19, 2001.
Writing the judgment, Justice Alam said: “The objective of the scheme as stated in the circular issued by the bank was to adopt measures to have optimum human resources at various levels in keeping with the business strategies, skill profile to achieve balanced age and requirement of the bank.”
On the respondent's contention that the bank had considered the request of even ineligible employees but not his, though he had an exemplary record, the Bench said:
“The grant of voluntary retirement to an employee who may not be strictly eligible under the scheme may not improve the claim of another applicant who might not only be eligible but with highly superior credentials.
“Other things being equal between two applicants, the bank would like to let go the one with the inferior service record and lower potential and, consequently, it would accept the application of the officer with the lower merit and may not accept the request of the officer with superior merit. This is for the simple reason that in the process of shedding surplus manpower no organisation would like to lose its best people.
“We are not unconscious that the denial of request for voluntary retirement to an officer in practice may result in souring of relationship between the concerned officer and the bank [as it actually happened in this case] and as a consequence the concerned officer in future may not show the same competence and efficiency in the discharge of his duties for which he was sought to be retained in service.
“But that is a matter of personnel management and the competent authority is expected to factor in such considerations while taking a decision on individual applications. Such considerations would certainly not be a ground for the court to interfere with the decision of the competent authority. From a purely subjective point of view, the decision of the competent authority may appear to be ‘unfair' or even a ‘punishment' to the officer with the superior merit. Nevertheless, it would be the proper and reasonable exercise of discretion in view of the basic objective of the scheme. Such considerations would certainly not be a ground for the court to interfere with the decision of the competent authority.”
The Bench held that in this case the bank had properly appraised the respondent's claim for voluntary retirement and its decision not to accept the request was within the legitimate exercise of discretion that did not warrant any interference by the High Court. It held the impugned judgment unsustainable and allowed the bank's appeal.