Supreme Court Rejects Retiral Benefits Claim: State of Uttar Pradesh vs. Sudarshana Chatterjee (2019) – Employee Conduct

Introduction

Date of the Judgment: 10 December 2019

Citation: 2019 INSC 1118

Judges: R. Banumathi, J. and A.S. Bopanna, J.

Can an employee claim retirement benefits from a previous employer after joining another service without obtaining proper approval or having their leave sanctioned? The Supreme Court of India recently addressed this critical question in a case involving an employee who moved to a different state’s service. The court examined whether the employee’s actions constituted abandonment of service, thereby forfeiting her right to retiral benefits. This case highlights the importance of following proper procedures when transitioning between government jobs.

Case Background

The respondent, Sudarshana Chatterjee, was appointed as a Lecturer (Anesthesia) at Motilal Nehru Medical College, Allahabad on March 25, 1982. While serving there, she applied for the post of Associate Professor (Anesthesia) at Chhattisgarh Institute of Medical Sciences (CIMS), Bilaspur, seeking a no-objection certificate (NOC) from her employer, the State of Uttar Pradesh, on September 20, 2003. She received an appointment letter from CIMS on April 22, 2004. Subsequently, she applied for a two-year leave without pay on April 30, 2004, to join CIMS. Despite her leave application being pending, she joined CIMS on June 15, 2004. She then applied for and was granted one month’s earned leave from July 23, 2004, to August 22, 2004, citing “personal work.” After August 22, 2004, she did not resume her duties with the State of Uttar Pradesh. The respondent allegedly drew salaries from both the State of Uttar Pradesh and CIMS during this period.

Later, on February 1, 2005, the respondent applied for leave preparatory to retirement from July 23, 2004, until her retirement date of September 30, 2006, also seeking permission to work at CIMS during this period. On January 2, 2006, she applied for voluntary retirement, citing personal reasons. The respondent claimed that none of her applications received a response from her employer. After retiring from CIMS, she sought payment of her retiral benefits from the State of Uttar Pradesh on November 2, 2012. The State rejected her request on April 1, 2015, stating that she had joined CIMS without proper approval or sanctioned leave.

Timeline

Course of Proceedings

The respondent initially filed a writ petition, Writ A. No. 65084 of 2015, in the High Court of Judicature at Allahabad, seeking to quash the order dated April 1, 2015, by which the State of Uttar Pradesh had rejected her claim for retiral benefits. The High Court allowed the writ petition on August 24, 2018, quashing the rejection order and directing the State to reconsider her case, observing that her services could not be ignored for pension purposes. The High Court also noted that the respondent had submitted multiple leave applications.

The State of Uttar Pradesh then filed an appeal before the Supreme Court, challenging the High Court’s decision. Meanwhile, the respondent initiated contempt proceedings against the State for non-compliance with the High Court’s order. Subsequently, the State passed a fresh order on January 4, 2019, again rejecting the respondent’s claim. The High Court disposed of the contempt petition, stating that the new order gave rise to a fresh cause of action. The respondent then filed another writ petition, Writ A. No. 3884 of 2019, challenging the fresh rejection order. The High Court, on March 15, 2019, directed the Principal Secretary of the Medical Education and Training Department to appear in person and explain the rejection. The State of Uttar Pradesh appealed this order to the Supreme Court.

Legal Framework

The case primarily revolves around the interpretation of the Fundamental Rules applicable to the employees of the State of Uttar Pradesh, specifically Rules 67 and 68, which pertain to leave. The Supreme Court noted that under these rules, leave cannot be claimed as a matter of right.

The Court also considered Rule 56 of the rules applicable in the State of UP, which deals with voluntary retirement. The Supreme Court referred to its previous judgment in State of Uttar Pradesh and others v. Achal Singh (2018) 17 SCC 578, which clarified that a notice of voluntary retirement does not automatically come into effect upon the expiry of the three-month notice period. The appointing authority must accept the notice or can refuse it on permissible grounds.

Arguments

Appellants’ Arguments:

• The State of Uttar Pradesh argued that the respondent joined CIMS without obtaining prior approval or having her leave sanctioned.
• The respondent’s actions constituted an abandonment of service, making her ineligible for voluntary retirement or retiral benefits.
• The High Court erred in directing the State to consider the respondent’s case in light of its observations, thereby restricting the State’s decision-making power.
• The High Court was wrong in directing the Principal Secretary to be present in court to explain the order passed by him.
• The respondent misrepresented facts by continuing to identify herself as an “Associate Professor” at Motilal Nehru Medical College, Allahabad, even after joining CIMS.
• The respondent was drawing salary from two State Governments i.e. State of UP and also from CIMS-State of Chhattisgarh.

Respondent’s Arguments:

• The respondent contended that she had applied for a NOC and leave to join CIMS but received no response from the State of Uttar Pradesh.
• Due to her age and family circumstances, she had no option but to join CIMS.
• She had submitted multiple leave applications, and her service at Motilal Nehru Medical College should be considered for pension purposes.
• The State had superannuated her with effect from 30.09.2006, which estopped them from claiming that she had abandoned service.
• Since the respondent had the leave to her credit and it is not a case of “absence” or “overstay”, the High Court rightly directed the appellants to sanction and pay all the retiral benefits.

The innovativeness of the argument by the respondent was that she had applied for a NOC and leave to join CIMS but received no response from the State of Uttar Pradesh.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue that the court addressed was:

1. Whether the respondent was entitled to retiral benefits from the State of Uttar Pradesh, given that she joined the service of CIMS without proper approval and without getting her leave sanctioned.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues:

Authorities

The Supreme Court considered the following authorities:

The Supreme Court also considered the following legal provisions:

• Fundamental Rules 67 and 68, applicable to the employees of the State of Uttar Pradesh, which pertain to leave.
• Rule 56 of the rules applicable in the State of UP, which deals with voluntary retirement.

Judgment

How each authority was viewed by the Court?

• State of Uttar Pradesh and others v. Achal Singh (2018) 17 SCC 578: The Court relied on this case to clarify that a notice of voluntary retirement does not automatically come into effect upon the expiry of the three-month notice period. The appointing authority has to accept the notice or it can be refused on permissible grounds.
• Shri N.K. Janu, Deputy Director, Social Welfare Forestary Division, Agra and others v. Lakshmi Chandra 2019 (6) SCALE 236: The Court relied on this case to state that the practice of summoning officers to court is not proper and does not serve the purpose of administration of justice.

The Supreme Court held that the High Court erred in its judgment. The Court noted that the respondent had joined CIMS on June 15, 2004, even though her leave application was pending. The Court also noted that the respondent had applied for and was granted one month’s earned leave from July 23, 2004, to August 22, 2004, citing “personal work”. The court emphasized that the respondent had not obtained proper approval or had her leave sanctioned before joining CIMS. The Court stated that the High Court had not kept in view the conduct of the respondent.

The Supreme Court observed that the High Court was not right in putting restrictions upon the appellants by saying that the fresh orders will have to be passed in the light of the observations made by the High Court.

The Court also held that the High Court was not right in directing the Principal Secretary to appear in the court and explain the reason for passing the order dated 04.01.2019.

The Supreme Court set aside the High Court’s order dated August 24, 2018, and the order dated March 15, 2019. The Court directed the High Court to take up Writ A. No. 3884 of 2019 and proceed with the matter in accordance with law, without being influenced by the findings recorded in the earlier judgment.

The Supreme Court stated, “In this manner, the respondent remained in the service of two State Governments i.e. State of UP and State of Chhattisgarh-CIMS and she is alleged to have drawn salary from both the State Governments for the period from June, 2004 to October, 2004.”

The Court further observed, “The High Court, in our view, did not keep in view the conduct of the respondent. The High Court appears to have proceeded merely on the ground that no orders came to be passed on the leave applications filed by the respondent.”

The Court also stated, “The practice of summoning officers to court is not proper and does not serve the purpose of administration of justice in view of the separation of powers of the Executive and the Judiciary.”

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the respondent’s conduct of joining CIMS without obtaining proper approval from her previous employer, the State of Uttar Pradesh. The Court emphasized that the respondent had not followed the due process of seeking permission and having her leave sanctioned before joining the new service. The court also noted that the respondent was allegedly drawing salary from both the State of Uttar Pradesh and CIMS-State of Chhattisgarh. This conduct was seen as a significant factor that disentitled her from claiming retiral benefits from the State of Uttar Pradesh. Additionally, the Court was critical of the High Court’s approach in restricting the State’s decision-making power and directing the Principal Secretary to appear in person, which it deemed inappropriate.

Fact:Law Ratio

The court gave more weightage to the factual aspects of the case, particularly the respondent’s conduct and the circumstances surrounding her joining CIMS without proper approval.

Key Takeaways

✓ Employees must obtain proper approval and have their leave sanctioned before joining another service, especially in government jobs.

✓ Failure to follow due process can lead to the denial of retiral benefits from the previous employer.

✓ Courts should not restrict the decision-making power of government authorities while directing them to reconsider a matter.

✓ Summoning officers to court for explaining orders is generally not appropriate and should be avoided.

Directions

The Supreme Court directed the High Court to take up Writ A. No. 3884 of 2019 and proceed with the matter in accordance with law, without being influenced by any of the findings recorded by the High Court in Writ-A No. 65084 of 2015.

Development of Law

The ratio decidendi of this case is that an employee who joins another service without proper approval and without getting her leave sanctioned is not entitled to retiral benefits from her previous employer. This case reinforces the importance of following due process and highlights that the conduct of the employee is a significant factor in deciding the entitlement of retiral benefits. This case also reiterates the principle that the practice of summoning officers to court is not proper and does not serve the purpose of administration of justice.

Conclusion

The Supreme Court’s judgment in the case of State of Uttar Pradesh vs. Sudarshana Chatterjee underscores the importance of adhering to established procedures when transitioning between government jobs. The Court set aside the High Court’s orders, emphasizing that the respondent’s conduct of joining another service without proper authorization and without having her leave sanctioned disentitled her from claiming retiral benefits from her previous employer. This ruling serves as a reminder to employees to follow due process and highlights that the conduct of the employee is a significant factor in deciding the entitlement of retiral benefits.