Voluntary Retirement Scheme - Not a Right of Bank Officer - Discretion of the Management
IN a landmark judgement, the Supreme Court on Friday ruled that accepting the voluntary retirement of a bank officer was fully the discretion of the management and the officer had no right of VRS.
In this case, the Indian Overseas Bank had rejected the VRS application of an officer. The Officer approached the High Court which directed the Bank to reconsider his application. On such reconsideration, the Bank again rejected his application. The Officer again approached the High Court. The Bank submitted that acceptance or rejection of the request for voluntary retirement under the scheme lay within the absolute discretion of the competent authority.
This seems to have offended the High Court and it wrote a rather angry judgment. The High Court observed thatthebank and its officers had acted in a highly arbitrary, discriminatory and mala fide manner and had not shown any respect to the High Court by totally flouting its earlier judgment. It further said that despite the clear observation in its earlier judgment, the bank authorities had again "dared" to take the stand that it was the absolute discretion of the competent authority either to accept or reject the application. The Court went on to say that the Chief Regional Manager of the bank who had filed the counter affidavit had absolutely no respect for the High Court and further that the court was at first inclined to issue a notice of contempt to him for invoking the absolute discretion of the competent authority which, according to the High Court, amounted to grossly contemptuous averments. The High Court, however, refrained from issuing any contempt notice assuming in his favour that he was probably not able to understand what he said in the affidavit.
The High Court directed the Bank to accept the officer's application for VRS.
On appeal by the Bank to the Supreme Court, the High Court order was stayed. In the meantime, the officer retired in the normal course and so the Supreme Court asked the parties to come to a settlement, but the officer wanted a decision on merits – and he got it – against him.
Discretion not absolute: The Supreme Court observed that the discretion vested in the employer is not absolute in the manner of an unruly horse prancing beyond the control of anyone or anything. In the 62nd year of the Republic, it is rather late in the day for the State or any of the State's agencies or instrumentalities to claim absolute discretion, like the discretion of a despot or a discretion completely divorced from reasonableness.
But at the same time, the Supreme Court noted, “it must also be realized that reasonableness is not something in the abstract. The reasonableness of a decision or an action can only be judged in the totality of the facts and circumstances and having regard to the object and purpose sought to be achieved.
it is not difficult to see how the competent authority in the bank would deal with the applications for voluntary retirement made by individual officers; other things being equal between two applicants he would like to let go the one with the inferior service record and lower potential and consequently he 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.”