Case: – U.P. Singh v/s Punjab National Bank; Civil Appeal No. 5494 of 2013
In a landmark judgment, the Supreme Court upheld the deemed voluntary retirement of a bank employee, setting a precedent in employment law. The case, revolved around the complex issues of employee suspension, voluntary retirement, and employer-employee obligations.
The petitioner, a former Clerk-cum-Cashier with the respondent bank, was suspended in 1982 due to disorderly conduct. Following an enquiry that confirmed his misconduct, he was transferred to a different branch. His failure to join the new post led the bank to deem him as having voluntarily retired under the terms of the Bipartite Agreement between the Indian Bank’s Association and Workmen Unions.
After a six-year delay, the petitioner contested this decision, leading to a series of legal battles. The Tribunal initially ruled in his favor, but this decision was overturned by a Single Judge and subsequently upheld by a division bench.
The Supreme Court noted that the master-servant relationship persists during suspension, requiring the employee to adhere to all relevant rules and regulations. The Court found that the bank’s cessation of the petitioner’s subsistence allowance did not terminate his employment status. Moreover, his subsequent enrolment as an advocate and his lack of challenge to the initial transfer order indicated his acceptance of the situation.
The bench applied Clause XVI of the Bipartite Agreement, which stipulates that an employee absent for over 90 consecutive days without leave is deemed to have voluntarily retired after a 30-day notice period. The Court observed that the bank had extended leniency by issuing a final notice, which the petitioner acknowledged but did not comply with.
The Court also addressed the petitioner’s delay in challenging the legality of his transfer, stating that one cannot unilaterally decide an order’s legality and disregard it. The failure to seek timely legal remedy was seen as an acceptance of the order.
The Supreme Court dismissed the appeal, upholding the High Court’s decision. This case reinforces the principle that employees remain bound by their employment terms during suspension and emphasizes the legal weight of inaction or delay in contesting employment decisions.

Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate

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