Voluntary retirement scheme revocation before acceptance depends on offer structure, waiver by benefits, and scheme-specific contractual terms.

A voluntary retirement scheme that leaves acceptance or rejection to the employer, permits alteration or rescission, and requires written acceptance is an invitation to treat, not a binding offer; the employee's option is therefore revocable before acceptance under Section 5 of the Indian Contract Act, 1872. That right is lost only where the employee has accepted scheme benefits, in which case waiver and approbation and reprobation prevent withdrawal. The State Bank of India scheme was treated differently because its cut-off date, time-bound operation, and clause 7 created enforceable contractual rights and obligations on its own terms, so the nationalised bank reasoning did not apply identically.

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Issues: (i) Whether the voluntary retirement scheme floated by the banks constituted a binding offer or only an invitation to treat, and whether an employee who opted under the scheme could withdraw the option before acceptance by the competent authority despite a clause making the option irrevocable; (ii) Whether, in the case of the State Bank of India scheme, the employer could determine the jural relationship between the bank and the employee in the manner asserted by the bank.

Issue (i): Whether the voluntary retirement scheme floated by the banks constituted a binding offer or only an invitation to treat, and whether an employee who opted under the scheme could withdraw the option before acceptance by the competent authority despite a clause making the option irrevocable.

Analysis: The scheme had to be read as a whole. The bank retained discretion to accept or reject applications, the request was not to take effect until accepted in writing, the decision-making process involved multiple levels, and the bank could even alter or rescind the scheme. On these features, the scheme was not a binding offer but merely an invitation to treat, while the employee's application was the offer. Once the employee's application was treated as the offer, Section 5 of the Indian Contract Act, 1872 applied, and an offer could be revoked before acceptance unless there was a separate binding contract or statutory bar. The irrevocability clause, unsupported by consideration, could not override that principle. However, employees who had accepted ex gratia or other benefits under the scheme could not resile and were bound by waiver and the principle against approbation and reprobation.

Conclusion: The employees who withdrew their applications before acceptance were entitled to do so, but employees who had accepted benefits under the scheme could not withdraw and challenge it. The nationalised bank scheme was not an enforceable offer, and the withdrawal before acceptance was valid, subject to the bar arising from acceptance of benefits.

Issue (ii): Whether, in the case of the State Bank of India scheme, the employer could determine the jural relationship between the bank and the employee in the manner asserted by the bank.

Analysis: The State Bank of India scheme was materially different. It expressly contemplated a cut-off date for withdrawal, was implemented in a time-bound manner, and clause 7 created an enforceable mechanism for consideration of applications. The scheme thus generated contractual rights and obligations, and the bank had not amended the scheme in the same manner as the nationalised banks. The court held that the scheme operated differently on its own terms and that the High Court had erred in treating the SBI matter as identical to the nationalised bank cases.

Conclusion: The State Bank of India appeals succeeded, and the bank's position under its scheme was upheld.

Final Conclusion: The judgment upheld withdrawal before acceptance under the nationalised banks' scheme, except where the employee had already accepted scheme benefits, but upheld the State Bank of India's appeals on the distinct terms of its own scheme; the Punjab and Haryana High Court matters relating to claims for scheme benefits were remitted for fresh consideration.

Ratio Decidendi: A voluntary retirement scheme framed on terms that leave acceptance or rejection wholly to the employer and reserve power to modify or rescind the scheme is an invitation to treat, not a binding offer; the employee's option is revocable before acceptance under Section 5 of the Indian Contract Act, 1872, unless the employee has waived the right by accepting benefits or a separate enforceable bar exists.

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