Ruling quashes resignees’ right to a pension

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In the judgment of BSES Yamuna Power Ltd v Ghanshyam Chand Sharma, the Supreme Court held that a resignation has the effect of termination, an employee who has resigned cannot claim a pension, and it entails consequences different from that of voluntary retirement.

The respondent, Sharma, was an employee of the appellant BSES and had tendered his resignation. Subsequently, Sharma was denied pension benefits by BSES, primarily on the grounds that he had forfeited his past services by resigning.

The issue came before a single judge of Delhi High Court, who directed BSES to pay pensionary benefits to Sharma on the grounds that he had completed 20 years of service and had “voluntarily retired” and not “resigned” from service. The decision was upheld by the division bench of Delhi High Court.

The question before the Supreme Court was whether by resigning Sharma forfeited his past service, and whether the resignation would amount to “voluntary retirement”.

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The dispute digest is compiled by Bhasin & Co, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.

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