VRS not a right: Supreme Court
Employer must accept applications received
• VRS was not a proposal or an offer but merely an invitation
• Competent authority has absolute discretion to accept or reject request
• Voluntary retirement will not take effect unless accepted in writing by competent authority
New Delhi : The Supreme Court on Wednesday held that voluntary retirement of an employee under a scheme cannot be sought as a matter of right and it is not mandatory for the employer to accept all applications received under the scheme.
A Bench, comprising Justice A.R. Lakshmanan and Justice Tarun Chatterjee, said the request of employees seeking voluntary retirement was not to take effect unless and until it was accepted in writing by the competent authority.
It noted that the competent authority had the absolute discretion whether to accept or reject the request of the employee seeking voluntary retirement under the scheme.
It said that VRS was not a proposal or an offer but merely an invitation and the applications filed by the employees constituted an offer and it could be rejected.
In the instant case, T.S.N. Raju and R. Rama Rao, two employees of the Visakhapatnam Port Trust (VPT), rejected the request of two employees who sought retirement under the VRS. On a writ petition, a single judge of the Andhra Pradesh High Court directed the VPT to accept the VRS.
On appeal, a Division Bench affirmed the directions of the single judge and asked the VPT to pass orders in one month. The present appeal was against this judgment.
Allowing the appeal, the apex court Bench said the VPT had an absolute right either to accept or reject the applications filed by the employees for retirement under the VRS.
Writing the judgment for the Bench, Justice Lakshmanan said the order of the single judge was without jurisdiction and beset with material irregularities.
The Bench said that at any rate the single judge could only direct the VPT to consider the applications for voluntary retirement and pass appropriate orders and he could not give a direction that the applications should be accepted.
It said the VPT Chairman was competent to frame the scheme having regard to the exigencies of work and no one could claim voluntary retirement as a right. The judges pointed out that the VPT had the absolute discretion in this matter and there was no assurance that once an application was submitted it would be accepted.
The reasons assigned by the single judge and the division bench were erroneous and unsound, the Bench held and set aside the impugned judgment.