1997 INSC 0339
                                         Power Finance Corporation Ltd

                                                           Vs

                                               Pramod Kumar Bhatia

                                          Civil Appeal No. 2416 of 1997

                                       (K. Ramaswamy, G. T. Nanavati JJ)

                                                      17.03.1997

                                                        ORDER

1. Leave granted. We have heard learned counsel on both sides.

2. This appeal by special leave arises from the judgment of the Division Bench of the Delhi High
Court, made on 1-11-1996 in CW No. 2086 of 1995.

3. The admitted position is that the respondent, while working in the appellant-Corporation, had
applied for voluntary retirement, pursuant to the scheme framed by the Corporation to relieve the
surplus staff. Initially, by proceedings dated 20-12-1994, the Corporation accepted his resignation
subject to the clearance of the outstanding dues. The acceptance was to be given effect from 31-12-
1994. By letter dated 6-1-1995, he requested for deduction of a sum of Rs. 37,521.20 out of the
outstanding dues. He also requested thus :

                  "I once again request you that the formal relieving order relieving me from PFC
                  w.e.f. 31-12-1994 be handed over to me immediately. My service period for which ex
                  gratia is payable be informed to me and my dues be paid immediately."

4. Based thereon, it is contended by Mr. P. P. Rao, learned Senior Counsel for the appellant, that
acceptance of the voluntary retirement of the respondent was a conditional one. He himself
understood that unless he is relieved of the duties after payment of outstanding dues, the voluntary
retirement does not become effective. In the meanwhile, realising the mistake committed by the
appellant for effecting the voluntary retirement scheme which does not apply to the Corporation
since there is no surplus staff, the appellant withdrew the scheme. Therefore, there was neither the
scheme nor a concluded order of voluntary retirement of the respondent relieving him from the
duties. The High Court, therefore, is not right in holding that the order dated 20-12-1994 created
vested right in the respondent and the same cannot be divested by subsequent orders.

5. Initially, Mr. A. K. Sikri appeared on behalf of the respondent and argued the matter. Before the
order could be dictated, the respondent himself appeared and said that his counsel may be relieved
and he may be permitted to argue the matter. Accordingly, we permitted him to argue the matter. He
stated that he was relieved from the duty on the basis of an endorsement made on the letter dated
20-12-1994 and what he meant by writing the letter dated 6-1-1995 was to seek a certificate for
relieving him from the duty. The acceptance of the voluntary retirement having become effective
from 31-12-1994, vested right had been created in him. Therefore, the view of the High Court is in
accordance with law.
6. Having regard to the respective contentions, the question that arises for consideration is whether
the respondent acquired a vested right after acceptance of the voluntary retirement by proceedings
dated 20-12-1994. It is seen that the order is a conditional order in that until the dues are paid, the
order does not become effective. The respondent himself admitted that the outstanding dues could
be adjusted from the amount payable to him. Admittedly, no such adjustment has been made. He,
therefore, rightly understood that unless he is relieved of the duties of the post, after the payment of
the outstanding dues, the order accepting his voluntary retirement does not become effective.

7. It is now settled legal position that unless the employee is relieved of the duty, after acceptance of
the offer of voluntary retirement or resignation, jural relationship of the employee and the employer
does not come to an end. Since the order accepting the voluntary retirement was a conditional one,
the conditions ought to have been complied with. Before the conditions could be complied with, the
appellant withdrew the scheme. Consequently, the order accepting voluntary retirement did not
become effective. Thereby no vested right has been created in favour of the respondent. The High
Court, therefore, was not right in holding that the respondent has acquired a vested right and,
therefore, the appellant has no right to withdraw the scheme subsequently.

8. The appeal is accordingly allowed. The judgment of the High Court stands reversed. The writ
petition stands dismissed. No costs.