After accepting retirement benefits employee can’t withdraw VRS: Bombay HC

Bombay High Court has held that once an employee accepts retirement benefits from the employer, he or she cannot be reinstated or allowed to continue his employment with the company.

Sadiq Qureshi, who worked with the Corporation Bank, which has now merged with Union Bank of India, had opted for the voluntary retirement scheme (VRS) in 2017. His application of VRS acceptance was accepted by the Bank on 06 September, 2017. It was clearly communicated to the employee that his service will come to an end on 14 September.

However, just a day before his last working day, Qureshi wrote a request expressing that he be reinstated, and that his request for VRS be cancelled.

The Bank, however, failed to acknowledge Qureshi’s request. Instead, starting from 14 September, 2017, Qureshi began receiving his retirement benefits such as the gratuity amount of Rs10,00,000. Qureshi is also receiving a monthly pension of Rs 38,450.

After three years, on 12 March, 2020, Qureshi once again wrote to the Bank repeating his request for reinstatement and withdrawing VRS plea. When the Bank refused to entertain Qureshi’s request, he sought to challenge the Bank in the High Court.

At the Bombay High Court, The Division Bench of Justice A.S. Chandurkar and Justice G.A. Sanap observed that the employee had made a request to withdraw his VRS before his last day of service and the Bank had failed to acknowledge the same. However, since the employee had duly accepted all retirement benefits for three years, this disentitle him to the relief of reinstatement with continuity of service as requested by him.

The Court referred to Punjab National Bank Vs. Virender Kumar Goel & Ors, 2004 Latest Caselaw 36 SC wherein it was observed that the employee having accepted the benefit under the scheme by withdrawing the amounts deposited and utilising the same, was not permitted to approbate and reprobate.

“The petitioner cannot be permitted to take inconsistent positions at the same time, one by seeking to withdraw his notice of voluntary retirement before the intended date of such voluntary retirement and on the other hand continue to receive the retirement benefits,” the Court observed.