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Judgment
B. C. Saksena, J.
This writ petition is directed against an award dated 15th of May, 1991, passed by the Labour Court in Adjudica�tion Case No. 148 of 1989. By the impugned Award Labour Court had granted the relief of reinstatement to Sirish Chandra Pandey, opposite party no. 1 with back wages.
The petitionercompany has been incorporated and registered under the Companies Act. Formerly it was known as IEL Ltd. Opposite party no. 1 was appointed on a post in Grade ''B'' of General Staff by an appoint�ment letter dated 2nd of December, 1969. In the year 198687 the petiti�onerCompany considered the administrative requirement as well as desire on the part of the employees to seek voluntary retirement. It was decided that the employees may be allowed to take premature retirement if they so desire. The interested employees were to offer themselves for premature retirement and on the offer being acceptable to the petitionerCompany they were given benefits as per various options available. The options included the lump sum payment or on instalments annuity payments being paid monthly. The petitioner''s case further is that the amount payable under the various options was duly informed and the employees were required to opt for such option which suited him best. It is stated that about 200 employees in the Fertilizer Division have already taken the voluntary retirement.
The opposite party no. 1 after discussion with the then General Manager of the Company on 5th of February, 1987 and after understanding the total pros and cons and implications of voluntary retirement sought his voluntary retirement by his letter dated 5th May, 1987. Copy of the said letter is Annexure2 to the writ petition and it shows that opposite party no. 1 categorically stated therein "I fully understand that consequent upon my premature retirement on 1st October, 1987 my tenure of employment with the Company shall cease." The petitioner Company informed the opposite party no. 1 by letter dated 27th May, 1987 that in terms of his letter dated 5th February, 1987 it has been decided to accept his request and as desired by him he will be paid a lump sum amount of Rs. 98.048/. In the said letter it was informed "It should be understood that all pay�ments made in terms of this letter are subject to deduction of tax at source in accordance with the provisions of the Income Tax Act as may be appli�cable on the relevant date. Please sign the duplicate of this letter to signify your acceptance." The opposite party no. 1 had taken the origiual of this letter and signed the duplicate copy on 5th of June, 1987 in token of his acceptance.
After a gap of over four months, after the offer was acepted and became final, it is alleged that the opposite party no. 1 by way of an after� thought wrote a letter dated 15th September, 1987 referring to his previous letter of 5th May, 1987 Copy of this letter is Annexure4 to the writ peti�tion. Opposite party stated that a calculation mistake has been made in the number of years of his service. It has wrongly been shown as 12 years whereas it is about 18 years. Other details of this letter would be referred to ater.
In reply to the said letter the petitionerCompany by a letter dated 21987 informed that the clerical computation errer has been correcttd from 12 years to 17 years. It was pointed out that on 5th of June. 1987 the offer of voluntary retirement had been accepted on the teims and condi�tions set out in the letter dated 27th May, 1987 The opposite party no 1 was also informed that the agreement was binding and it is impermissible for him to resile from the same. Opposite party no. 1 was also informed that he will be retiring on 1101987. Alongwith a letter dated 28th September, 1987 a cheque of the amount payable to the respondent was sent. He was also required to sign full and final settlement of dues letter dated 30th September, 1987. Opposite party no. 1 however did not accept the cheque.
Opposite party no. 1 sent a letter dated 6th October, 1987 stating that he was reporting for duty In reply the petitioner Company by letter dated 28th October, 1987 indicating the facts hereinabove "Take a posi�tion that a binding contract had already been arrived at and the opposite party no. 1 has voluntarily retired from 1st October, 1987 and therefore no question for reporting duty arises."
Opposite party no. 1 feeling aggrieved raised a dispute in Concilia�tion and the State of U. P. referred the dispute for adjudication to the Labour Court vide reference order dated May 18, 1989. The reference was registered as Adjudication Case No 148 of 1989.
PetitionerCompany in this written statement took a preliminary objection that the reference was not maintainable since there was no Industrial Dispute. The Labour Court gave the award dated 15th May, 1991. Counter and rejoinder affidavits have been exchanged between the parties. The learned counsel for the parties were also heard.
In the writ petition an interim order was passed on 13th December, 1991. It was provided, "that execution of the Award shall remain stayed subject to the condition that the petitioner pays to opposite party no. 1 a sum of Rs. 1,50,000/ within a period of one week plus the amount accrued on account of pension which was offered to be paid to the opposite party no. 1, which according to the petitioner, roughly comes to round about Rs. 20,000/. The above payment and acceptance of the amount will be without prejudice to the rights of the parties."
The learned counsel for opposite party no. 1 admitted that on 16th of December, 1991 the opposite party no. 1 has received the sum of Rs. 1,50,000/plus Rs. 19482/ towards pension. Total amount paid on 161291 to opposite party no. 1 is Rs. 1,69,482/. This payment and accep�tance made under the interim order as per its terms will be without pre�judice to the parties.
The Labour Court in para 5 of its Award has referred to the pre�liminary objection raised by the employer to the maintainability and legality of the reference itself but has held that it was not necessary to consider the same since at no later stage nor at the time when issues were framed the said point was pressed. It then proceeded to consider whether it was a case of retrenchment and termination of service. It held that the workman while signing the letter dated 5687 has indicated his acceptance and has treated it to be so also. The Labour Court, however, held that since it was not disclosed that income tax would be deducted from the amount payable to him in the letter dated 9187 it amounts to unfair labour practice. The Labour Court referred to various decisions and upheld the plea of the workman that since the voluntary retirement was to take effect from 11087 it was open to him to withdraw his offer of volun�tary resignation and consequently the Labour Court took the view that since the workman had exercised the right to withdraw the offer before it was to become operative the employer erred in treating the workman''s service to have come to an end.
At the hearing of the writ petition the learned counsel for the petitioner urged that the Award of the Labour Court was wholly illegal, improper and perverse and thus was liable to be set aside. He further submitted that since there was a concluded agreement viz offer and accep�tance, it was not open to the workman to withdraw his offer after it having been accepted on 5th of June, 1987.
The learned counsel further urged that under the provisions ol Sec�tion 192 of the Income Tax Act the employer is statutorily bound to deduct the income tax at source before making the payment even by way of volun�tary retirement benefits and thus the findings of the Labour Court that non disclosure that income tax would be deductable from the amount payable to opposite party no. 1 by way of voluntary retirement benefit was illegal.
The first question to be considered, therefore, is about the non maintainability of the reference. It has been urged that the voluntary retirement of a workman has expressly been excluded from the definition of the term ''retrenchment'' as given in Section 2(00) of the Industrial Dis�putes Act and thus it was not a case of retrenchment and there was no question of compliance of the provisions of Section 25F of the Central Act or Section 6N of the U. P. Industrial Disputes Act. The provision of section 2(00) is very explicit. Voluntary retirement is excluded from the definition of the word ''retrenchment''.
The said provision came up for consideration before Hon''ble the Supreme Court in the decision reported in (1990) 4 SCC page 27 J. K. Cotton Spinning and Weaving Mills Company Ltd. v. Slate of U.P. & other. In the said decision it was held that "one of the ways of terminating the contract of employment is resignation. If an employee makes his intention to resign his job known to the employer and the latter accepts the resignation, the contract of employment comes to an end and with it stands severed the employeremployee relationship. Under the common law the resignation is not complete until it is accepted by the proper authority and before such acceptance an employee can change his mind and withdraw the resignation but once the resignation is accepted the contract comes to an end and the relationship of master and servant stands snapped. Merely because the employer is expected to accept the employee''s resignation it cannot be said that the employer has brought about an end to the contract of employment so as to bring the case within the first part of the definition of retrenchment. It was further held that "if an employee takes the initiative and exercises his right to put an end to the contract of service and rhe employer merely as�sents to it, cannot be said that the employer has terminated the employment. In such cases the employer is merely acceding to the employee''s request, may be even reluctantly. Here the employee''s role is active while the employer''s role is passive and formal. The employer cannot force an unwilling employee to work for him.''''
The facts in the present case on this aspect of the matter need to be noted in some detail. It is admitted between the parties that in the year 198687 the Company gave various options to the employees seeking voluntary retirement. On 5th May, 1987 the General Manager of the peti�tionerCompany had discussed with the employees. The total pros and cons and implications of voluntary retirement were discussed. Opposite party no. 1 by his letter dated 5th May, 1987 categorically ttated that "I fully understand that consequent upon my premature retirement on 1st October, 1987 my tenure of employment with the Company shall cease. "Please accept my request for voluntary retirement and arrange to relieve on 11087". A copy of the letter dated 5th February, 1987 of opposite party no. 1 Annexure2 to the writ petition. The petitioner by letter dated 27th May, 1987 intimated opposite paity no. 1 that in terms ol his letter dated 5th February, 1987 it has been decided to accept his request and as desired by him he will be paid a lump sum amount of Rs. 1,98048/(Rs. one lac ninetyeight thousand and fortyeight only). In the said letter it was also informed that "It should also be understood that all payments in terms of this letter is subject to deduction of tax at source in accordance with the provisions of the Income Tax Act as may be applicable on the relevant date. Please sign the duplicate of this letter to signify your acceptance." Oppo ite party no. 1 took the original of the letter and signed the duplicate copy on 5th of June, 1987. Copy of the same is Annexure3 to the writ petition.
As noted hereinabove the opposite party no. 1 by a letter dated 15th September, 1987 referring to his previous letter of 15th May, 1987 raised the issue regarding deduction of Income Tax from voluntary retire�ment amount. He also contended that there is a calculation mistake in counting his number of years of service which is more and not 12 years. Copy of this letter is Annexure4.
There is a controversy between the parties as to the effect of the letter dated 15th September, 1987. While the petitioner maintains that opposite party no. 1 had signed it in token of the acceptance of the terms for deduction of the Income Tax at source, on the other hand opposite party no. 1 maintains that he had signed it by way of acknowledgement of the letter only and did not indicate his acceptance. On a careful reading of Annexure4 I find that there is no merit in the contention of opposite party no. 1. He had on due consideration indicated his acceptance. His objection, however, was about the calculation of 12 years as the period of his service. This grievance was redressed by letter dated 21st September, 1987 Annexure5 by which it was shown that instead of 12 years of service opposite party no. 1 had put in 17 years of service. The opposite party no. 1 by his letter dated 15th September, 1987 had also indicated that he has received legal advice that the Courts give relief in the matter of deduc�tion of income tax if the payment is lump sum payment but is for the period upto the age of superannuation. The stand of the petitioner was that they are duty bound to deduct the income tax at source when making the payment.
It is undisputed between the parties that the amount of Rs. 1,98000/and odd was calculated on the basis of the salary and allowances which the opposite party no. 1 would have drawn till attaining the age of super�annuation and also calculated cash in lieu of pension per month. It was clarified in the letter dated 27th May, 1987 Annexure no. 3 that the afore�said amount has been calculated on the basis of the basic salary and dearness allowances as of January 1987 and since he would be prematurely retiring with effect from 11087 the amount would also change according to entitlement and if there is any change in the basic salary and dearness allowances retrospectively according to opposite party no. 1''s entitle�ment.
At the hearing of the writ petition it was expressly put to opposite party no. 1 that since the objection is to the deduction of the Income Tax, if necessary relief under Section 89 of the Income Tax Act is made admis�sible to him whether he would still opposite to the writ petition. The learned counsel for the petitioner filed a rough chart indicating the pay�ment already made or which remains to be made. A copy of the same was also furnished to the learned counsel for opposite party no. 1. In the rough chart the following figures were indicated ;
Amount payable under the voluntary retirement scheme
Rs. 1,98048.00
Tax to be deducted
Rs. 87,655.00
After adjustment of dues towards loan etc. Net payable due.........
Rs. 76,435.00
Amount paid on 161291 to S. C. Pandey as per interim orders of High Court
Rs. 150,000.00
Amount paid towards pension in view of interim orders
Rs. 19,482.00
Total amount paid on 161291 as per interim orders
Rs. 169,482.00
Pension amount payable since Jan. 92, i. e. 17 months @ Rs. 382/ per month
Rs.7,258.00
P. F. & Gratuity Interest calculated ason 1493 3.5% on P. F. 12% on gratuity
Rs. 99353.00
Interest @ 10% calculated on Rs. 1,98,048 approximately since 1987 say approximately Rs. 20,000/ per annum upto July, 1993
Rs. 1,10,000,00
Interest @ 10% calculated on 1,50,000/ approximately January 1992 sa approximately Rs. 15000/ per annum
Rs. 30,000.00
Since opposite party no. 1 insisted for the decision of the writ petition, same is being decided.
From the facts noted hereinabove it would be evident that the letter dated 15th September, 1987 Annexure4 requires to by construed to determine whether the opposite party no. 1 by the said letter had with�drawn his offer of voluntary retirement. In para 2 of the said letter it was stated by opposite party no. 1 that as for as the deduction of income tax is concerned, it may be deducted after obtaining clearance from the court otherwise the responsibility of payment of tax will be left on him und the full amount of Rs. 198000/ and odd be paid to him. After giving my careful consideration to the contents of the said letter I am of the opinion that opposite party no. 1 did not seek to resile or withdraw his offer of voluntary retirement. The controversy with regard to the deduction of the income tax can be resolved in the manner done by the Supreme Court in various cases. The learned counsel for the petitioner referred to a decision reported in AIR 1985 Supreme Court 144 Sundaram Motors Pvt. Ltd v. Ameerjan and another. In the said case it was held that amount awarded as compensation to a dismissed workman is spread over a period of years and accordingly the workman is entitled to benefit of Section 89 of the Income Tax Act. It was also held that the respondent with the assistance of the appellant and its income tax consultants may make necessary appli�cation to the Income Tax Officer having jurisdiction in the matter for relief under Section 89 and the Officer concerned shall without further enquiry grant him immediate relief under Section 89 and dispose of the proceedings within a period of three months from the date of the applica�tion. It was also provided that if the Income Tax Officer is unable to grant relief within the prescribed time as provided under the Act the appellant will be have to make necessary payments as per provisions of the Income Tax Act to the Central Government and the Central Govern�ment will in turn make payment to the respondent as soon as the concerned Income Tax Officer passed the necessary order, granting relief under Section 89(1) read with Rule 21 (e) of the relevant Rules.
In the present case the learned counsel for the opposite party no. 1 could not dispute that under Section 192 of the Income Tax Act the employer has the mandatory statutory duty to make deduction at source of the Income Tax payable to the opposite party no. 1 to urge retirement benefit. As noted hereinabove the said amount is to cover and would be spread over a number of years till actual date of retirement of opposite party no. 1,
The petitionercompany has thus to make the deduction at source. However, in the light of the Supreme Court decision in the case of Sundaram Motors (supra) the necessary directions can be given.
In view of the findings hereinabove that opposite party no. 1 by his letter dated 15th September, 1987 had not sought to withdraw from the offer of voluntary retirement, there was a concluded contract and opposite party no. 1 was to demit the office on 11087. In the circumstances I am further satisfied that no Industrial Dispute can be said to have arisen betWeen the parties and the reference itself as madewas without jurisdiction and not maintainable. The petitioners were only seeking to enforce volun�tary retirement to which opposite party no. 1 had agreed and it does not amount to his retrenchment.
The learned counsel for opposite party no. 1 however urged that even if it is accepted that opposite party no. 1 had sought voluntary retire�ment from 11087 he could withdraw the offer at anytime before the said date. I am not impressed with the submission. The various decisions which were relied upon for the said proposition had been cited before the Labour Court and have once again been cited before me. The question considered in the said case was whether it was open to an emplo�yee concerned to withdraw his offer or resignation before the date when the resignation was to become operative. It needs to be noted that in the case of voluntary resignation there is no quid pro quo as is involved in a voluntary retirement of a workman under a golden hand shake scheme. It is settled law that the employer has the right to take a Managerial decision with regard to curtailment of its work force and in pursuance of the same if scheme for voluntary retirement is given and the workman unequivo�cally accepts the same then there is a concluded contract. The right to withdraw the offer will not be available to the employee since the emplo�yer as per scheme would have altered its position and would not make any appointment in place of the employees seeking voluntary retirement under the scheme.
In the instant case even prior to 5th of June, 1987 there was une�quivocal offer and acceptance by the letter dated 27th May, 1987. The finding of the Labour Court that non disclosure of the fact that the income tax would be deducted from the sum payable to opposite party no. 1 by way of voluntary retirement benefit was an act of unfair labour practice is wholly untenable.
There is statutory duty cast on the employer to deduct the incom tax at source. Opposite party no. 1 must have been receiving his salary after deduction of income tax. Nondisclosure of this obvious statutory requirement would in my opinion not amount to unfair labour cou practice.
In view of the discussion hereinabove the impugned award is aside as also the reference made by the State Government to the Labour Court. The writ petition is allowed. It is, however, provided that opposite party no. 1 shall with the assistance of the petitioner and its Income Tax Consultants shall make necessary application to the Income Tax. Officer having jurisdiction in the matter for grant of relief to him under Section 89 read with rule 21(e) of the Income Tax Act and the relevarlvent rules. The balance amount out of Rs. 1,98,048.00 shall be paid, opposite party no. 1 after making the requisite income tax deduction. The Income Tax Authority will in turn make refund as soon as the concern Income Tax Officer passes the necessary orders granting relief under section 89(1) of the Income Tax Act to opposite party no. 1 and opposite party no. 1 will undertake to make the necessary payment to the Income Tax Authority which would become payable on the said amount of Rs. 198.48/ on its break up per annum till opposite party no. 1 attains the age of 60 years viz. age of superannuation. This direction is being given on the explicit finding, recorded hereinabove that amount of Rs. 198048/ (Rs. one lac ninetyeight thousand and forty eight) represents the amount which would otherwise be payable till the opposite party no. 1 attains the superannuation. The petitioner will also make payments to opposite party no. 1 as per rough chart which was filed before this court. The opposite party no. 1 will be deemed to have retired with effect from 11087, subject to the observations made hereinabove. In the circums�tances of the case there would be no orders as to costs.