The management of a bank can deny the request for voluntary retirement if it considers the officer very efficient and wants to keep him. In this case decided by the SC last week, Indian Overseas Bank vs Tribhuvan Nath, the officer joined as a clerk but due to exceptional merit and dedication to the bank, he was promoted fast and posted abroad in managerial posts. However, he applied for voluntary retirement. The bank rejected his application. He challenged the action in the Allahabad high court. It held the bank’s decision arbitrary and even mala fide .
The bank appealed to the SC. It upheld the discretion of the bank in accepting or rejecting the application according to the scheme. The bank can shed staff with inferior abilities, while it can retain officers of superior merit. No organisation would like to lose its best people, the SC said while quashing the high court decision. This officer retired before the judgment.
Thus , drafters should keep in mind in the VRS agreement to include a clause
The VRS cannot be opt by all the eligible employees. If bank thinks a particular employee as an efficient and capable , bank may disregard his request for VRS.
