X v. Registrar, MP High Court: Recognising Involuntary Resignations as Constructive Dismissal

[Saurabh Mishra is an Advocate-on-Record, Supreme Court of India and Akshat Bhushan a 3rd Year student pursuing BA LLB (Hons.) at Hidayatullah National Law University, Raipur]

In its judgment dated 10 February 2022, the Supreme Court held that a resignation by an employee, which is found to be tendered amid an unfair and unjust work environment, is not voluntary and amounts to ‘constructive dismissal’.  This post examines how the Court dealt with the issue of ‘constructive dismissal’ and looks at the law on back wages.

Facts

X was appointed as Additional Sessions and Districts Judge in Gwalior in 2011. She was directed to be transferred from Gwalior to Siddhi in Madhya Pradesh. Her case was that the transfer committee ordered her transfer for mala fide reasons and contrary to the procedure.

X made a representation to the Registrar General of the High Court of Madhya Pradesh (MP High Court), requesting an extension of eight months so that her daughter who was studying in Standard 12 could complete her academic session. In the alternative, she requested that she be transferred to Sehore, Raisen, Dewas, or Ujjain, where her daughter could avail similar educational facilities as in Gwalior. However, both her representations were rejected. In these circumstances, she resigned, and her resignation was accepted within two days.

Subsequently, X sent a letter to the President, Chief Justice of India and the Chief Justice of the MP High Court, seeking an investigation. X alleged that she was sexually harassed by a judge and that her transfer was initiated at his behest. A Judges Inquiry Committee (JIC) found irregularities in her transfer and suggested that X be re-instated.

After the JIC report, X again made a representation to the MP High Court, which was rejected. Finally, X filed a writ petition before the Supreme Court, under Article 32 of Constitution of India, inter alia, seeking re-instatement on the ground that her resignation was not voluntary and that it amounted to ‘constructive dismissal’.

Transfer was in Contravention of the Transfer Policy

The transfer policy specified that an officer cannot be directly transferred from City A to City C or D (Clause 16). The officer could apply for an extension if her children were appearing in the final year of board or university examination (Clause 9). The officer could forward a list of three to five cities as options for being transferred to, in case the representation for extension under Clause 9 is rejected (Clause 10).

The Court found that the transfer of X was not in accordance with the policy because (i) X’s transfer order transferred her directly from City A to City C; (ii) the procedure set out in Clause 9 was not followed; and (iii) X  had forwarded a list of four cities as options where she wanted to be transferred, but no heed was paid to this by the transfer committee.

Resignation in the Given Circumstances cannot be Voluntary

The Court relied on Prabhat Atri v. State of UP. In this case, the Court referred to Corpus Juris Secundum where the expression ‘resignation’ is defined as a ‘voluntary surrender of service’. Further, it must not be under coercion or duress. It was also held in Moti Ram v Param Dev  that the resignation should be unconditional with a spontaneous intention to give up office.

The Court in Prabhat Atri relied on PK Ramchandra Iyer v. Union of India. The employee in PK Ramchandra resigned in exasperation owing to unfair treatment at work. The employer saw this as an opportunity to get rid of the employee and accepted the resignation. The Court re-instated the employee and held that the tendering of resignation was a reaction by the employee for the harassment faced by him.

The Court in the case under discussion observed that X resigned in frustration and compelling circumstances as she was forced to make a choice between the future of her daughter and accepting her transfer at Siddhi. Therefore, the resignation was not voluntary and the relationship between the employee and employer could not be said to have been severed.  

Back Wages

In Surendra Kumar Verma v. Central Government Industrial Tribunal-cum Labour Court, the Supreme Court held that that “plain common-sense dictates that the removal of an order terminating the services of workmen must ordinarily lead to the reinstatement of the services of the workmen. It is as if the order has never been, and so it must ordinarily lead back to wages too.”

The Court found X’s resignation as ‘forced resignation’ and held it to be ‘constructive dismissal’. Consequently, X was directed to be reinstated. As a sequitur, the ‘resignation’, which is treated as never having been tendered, should have meant that X will be entitled to back wages. Grant of back wages is the general rule and a departure from that may be made in certain circumstances. There are certain circumstances in which an employee may not be granted back wages. For instance, if the employee is gainfully employed with same emoluments somewhere else or if the employee was not permanent or if the employee was unauthorisedly absent from work or if the financial condition of the employer was such that it could not pay back wages.

In the facts of this case, the Court found that the duration of probation was two years, which ended on 1 August 2013, prior to the transfer order. Thus, X was a permanent employee whose performance was rated highly in the Annual Confidential Reports. There is nothing in the judgment to suggest that X was gainfully employed in some other job with the same emoluments. The employer here could not have pleaded financial distress.  Since none of the conditions for non-grant of back wages appear to have existed, X could have been awarded back wages in the present case. However, it appears that X did not press for the relief of back wages.

Conclusion

This decision recognises the arduous environment and treatment at workplace in certain circumstances, which can lead meritorious professionals to resign. The observation of the Court that the dispute here was seen as an ordinary employment-related matter will possibly provide a remedy to those litigants who are similarly situated as X, but in private employment.

Saurabh Mishra & Akshat Bhushan

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