Voluntary Retirement Deemed Accepted if Not Refused Within Notice Period; Disciplinary Action After Retirement Invalid: Supreme Court

Case Name: UCO Bank & Ors. v. S.K. Shrivastava

Citation: 2026 INSC 328

Date of Judgment/Order: 07 April 2026

Bench: Justice J.K. Maheshwari and Justice Vijay Bishnoi

Held: The Supreme Court held that under Regulation 29 of the UCO Bank (Employees’) Pension Regulations, 1995, a notice of voluntary retirement becomes effective automatically upon expiry of the notice period if the competent authority does not expressly refuse it within that period. The Court further held that mere issuance of a show cause notice does not amount to initiation or pendency of disciplinary proceedings unless it clearly indicates intent to institute such proceedings. Consequently, any disciplinary action, including issuance of chargesheet or dismissal after the employee’s deemed retirement, is invalid in law.

Summary: The dispute arose from an employee of UCO Bank who submitted a notice of voluntary retirement on 04.10.2010 and ceased to attend duties after expiry of the notice period. The Bank later refused the request after the notice period and initiated disciplinary proceedings based on alleged irregular transactions, culminating in dismissal. The High Court held that the retirement had become effective and quashed subsequent disciplinary action. Before the Supreme Court, the Bank argued that issuance of a show cause notice prior to expiry of the notice period constituted pendency of disciplinary proceedings under the Service Regulations, thereby disabling voluntary retirement. The Court undertook a detailed analysis of the interplay between the Pension Regulations and Service Regulations, emphasizing harmonious construction. It held that the proviso to Regulation 29(2) creates a deeming fiction whereby voluntary retirement becomes effective unless expressly refused within the notice period. The Court clarified that a show cause notice must clearly indicate initiation of disciplinary proceedings to attract the embargo, and mere contemplation or vague indication is insufficient. Relying on settled precedents, the Court reiterated that a positive order refusing retirement must be passed and communicated within the notice period; otherwise, the employment relationship stands severed by operation of law.

Decision: The Supreme Court dismissed the appeals filed by UCO Bank, upheld the High Court’s judgments, and declared that the respondent stood voluntarily retired upon expiry of the notice period. The subsequent chargesheet and dismissal order were held invalid, and the Bank was directed to grant all consequential post-retiral and pensionary benefits within three months along with applicable interest, with all pending applications disposed of.