Indian Bank vs The Presiding Officer and G. Thavamani

M. Jaichandren, J.—The present writ appeal has been filed by the appellant against the order of the learned single Judge of this Court, dated

28.7.2010, made in W.P. No. 11467 of 1998. The petitioner is the appellant in the present writ appeal. The writ petition, in W.P. No. 11467 of

1998, had been filed for the issuance of a writ of Certiorari to quash the award passed by the Industrial Tribunal, Chennai, dated 29.10.1997,

made in I.D. No. 68 of 1992.

The second respondent in the present writ appeal had been employed as a temporary sub-staff in the erstwhile Bank of Thanjavur Limited, from

15.5.1985. He had been terminated from service, by the Bank of Thanjavur limited, with effect from 31.12.1989. In such circumstances, he had

raised an industrial dispute, u/s 10(1) of the Industrial Disputes Act, 1947. The said dispute had been taken on file by the Industrial Tribunal,

Chennai, in I.D. No. 68 of 1992.

At the time when the matter was under the consideration of the Central Government, for being referred, the erstwhile Bank of Thanjavur Limited

was amalgamated with the appellant Indian Bank, as per the provisions of the Banking Regulation Act, 1949, with effect from 20.2.1990. In such

circumstances, the appellant Indian Bank had been added as the respondent in the industrial dispute pending on the file of the Industrial Tribunal,

Chennai.

It had been contended on behalf of the appellant Indian Bank that, on the date of the amalgamation, the second respondent was not in service,

as he had already been terminated from service, on 31.12.1989.

It had been contended on behalf of the appellant that the second respondent was not working in the erstwhile Bank of Thanjavur Limited, on a

permanent basis and therefore, he was not entitled to be reinstated in service. It had also been contended that there was no post of temporary sub-

staff in the appellant Indian Bank. As such, the second respondent is not entitled to be reinstated in service, in the appellant Indian Bank.

On considering the evidence available on record, the first respondent Industrial Tribunal had passed an award, dated 29.10.1997, holding that

the action of the management of the appellant Indian Bank (the erstwhile Bank of Thanjavur Limited) in terminating the service of the second

respondent, from the post of temporary sub-staff, with effect from 31.12.1989, was not justified and therefore, he was entitled to be reinstated,

with continuity of service and other consequential benefits.

Challenging the award passed by the first respondent Industrial Tribunal, the appellant Indian Bank had filed the writ petition before this Court,

in W.P. No. 11467 of 1998.

The learned counsel appearing on behalf of the appellant Indian Bank had contended that, as the second respondent had been allegedly

retrenched from service, on 31.12.1989, there was no occasion for the management of the appellant Indian Bank to verify the statements made by

the workman. No records were available with the appellant Bank to verify as to whether the second respondent had worked for more than 240

days in a year.

It had been further contended on behalf of the appellant Bank that there was no case pending at the time of the amalgamation, and as per Clause

10 of the Scheme of amalgamation only those cases, which were pending on the date of the amalgamation, could be continued against the appellant

Indian Bank. Even if the second respondent had worked in the erstwhile Bank of Thanjavur Limited, for a period of 240 days, he cannot be

regularised in service, automatically. However, at the time of the hearing of the writ petition, it had been admitted, by the learned counsel appearing

on behalf of the Indian Bank, the petitioner in the writ petition, that, when the second respondent had been discontinued from service, with effect

from 31.12.1989, the provisions of Section 25-F of the Industrial Disputes Act, 1947, had not been followed.

It had been further submitted that the Branch Manager of the erstwhile Bank of Thanjavur Limited, who had appointed the second respondent,

had been instructed to refrain from engaging temporary sub-staff. However, the second respondent had been appointed in violation of such

directions. It had also been pointed out that the second respondent had not made any request for the regularization of his service.

Per contra, the learned counsel for the second respondent had contended that the provisions of Section 25-F of the Industrial Disputes Act,

1947, had not been followed before terminating the service of the respondent, with effect from 31.12.1989. Therefore, the second respondent is

entitled to be reinstated in service, along with backwages and other benefits.

In view of the submissions made on behalf of the appellant Indian Bank and the second respondent, the learned single Judge had dismissed the

writ petition, with the clarification that the award of the first respondent Tribunal cannot be taken to be a direction for the regularisation of the

service of the second respondent. It had been stated that it is a mere direction for the reinstatement of the second respondent in the position in

which he had been earlier working, with full backwages and continuity of service and other benefits.

Challenging the said order of the learned single Judge of this Court, dated 28.7.2010, the appellant Indian Bank had filed the present writ

appeal, before this Court.

The learned counsel appearing on behalf of the appellant had contended that the single Judge had failed to see that the second respondent had

been engaged as a daily wager, unauthorisedly, by the Branch Manager of the Indian Bank. The second respondent had been engaged in service,

intermittently, between the months of March and October, 1990. As such, the second respondent had worked as a daily wager, only for a period

of 133 days.

The learned counsel appearing on behalf of the appellant had further contended that the learned single Judge had failed to see that the second

respondent was only a casual daily wager engaged by the erstwhile Bank of Thanjavur Limited. The second respondent had raised an industrial

dispute only at the end of the year, 1990, after the amalgamation had taken place, on 20.2.1990, even though he had been disengaged from

service, by the bank of Thanjavur limited, on 31.12.1989. There was no dispute raised by the second respondent, in respect of his disengagement

from service, by the erstwhile Bank of Thanjavur limited.

The learned counsel appearing on behalf of the appellant had further contended that the learned single Judge had erred in law in holding that the

award of the first respondent Tribunal was correct and valid in the eye of law. The learned single Judge had erred in coming to the conclusion that

the second respondent ought to be reinstated in service, with backwages, even though the second respondent had not been working after he had

been disengaged from service.

The learned counsel appearing on behalf of the appellant had further contended that the learned single Judge had failed to appreciate the true

meaning and the scope of clause 10 of the amalgamation scheme. The learned single Judge had also failed to notice that there was no dispute

pending between the Bank of Thanjavur Limited and the second respondent, on the date of the amalgamation.

The learned counsel appearing on behalf of the appellant had relied on the following decisions in support of his contentions:

18.1 In Rajkumar Mishra Vs. Jalagaon Municipal Corporation, wherein it had been held as follows:

It was held by the learned Single Judge that the Labour Court had committed serious error of law in passing the award of reinstatement.

Accordingly, the award was quashed with a direction to the Respondent Corporation to pay Rs. 10,000/- each to the appellants by way of

compensation. All the five appellants dissatisfied with the judgment and order passed by the learned Single Judge filed Letters Patent Appeals

which were numbered as 140-44 of 2007. The Division Bench noticed the undisputed facts that all the appellants were temporarily employed on

daily wages or temporary basis, and that their services were terminated after they worked for five years. It was further noticed that delay in

approaching the Conciliation Officer was totally unexplained and there is nothing on record to infer that the appellants were continuously

approaching the Corporation for their reinstatement in service. The Division Bench, therefore, while dismissing the appeals observed:

We also agree with the learned Single Judge that there is another stumbling block in the path of workers/appellants. Admittedly, they were

temporary workers doing the job on daily wages, as and when work was available. It is not their case that they were posted on any regular vacant

posts, nor it is their case that they had gone through due process of selection. In the light of ratio laid down by the Constitution Bench of the

Hon''ble the Supreme Court in State of Karnataka and others vs. Umadevi and others, reported in 2006 AIR SCW 1991, the learned Single

Judge was justified in holding that no remedy is available to the workers since they were not the workers appointed on regular vacant posts by due

process of selection.

In view of the concurrent finding recorded by both the learned Single Judge and Division Bench in appeal that the appellants were temporarily

appointed on daily wages as and when work was available and they were not posted on regular basis against sanctioned post, we do not find any

reason and justification to interfere with the orders passed by the two courts. However, we are of the view that the direction for payment of Rs.

10,000/- each to the appellants will not compensate the appellants. Hence, the appellants who approached for the conciliation after 8 to 10 years

from the date of termination are entitled to a sum of Rs. 50,000/- each whereas one of the appellants namely Rajkumar Rohitlal who has

approached the Conciliation Officer within 2 to 3 years shall be entitled to get a sum of Rs. 1,00,000/-.

18.2. In Senior Superintendent Telegraph (Traffic) Bhopal Vs. Santosh Kumar Seal and Others, the Supreme Court had held as follows:

In last few years it has been consistently held by this Court that relief by way of reinstatement with back wages is not automatic even if

termination of an employee is found to be illegal or is in contravention of the prescribed procedure and that monetary compensation in lieu of

reinstatement and back wages in cases of such nature may be appropriate, (See U.P. State Brassware Corpn. Ltd. & another v. Uday Narain

Pandey; Uttaranchal Forest Development Corpn. v. M.C. Joshi; U.P. State Brassware Corpn. Ltd. and Another Vs. Udai Narain Pandey, Sita

Ram and Others Vs. Moti Lal Nehru Farmers Training Institute, Ashok Kumar & Anr. and Mahboob Deepak v. Nagar Panchayat, Gajraula

In a recent judgment authored by one of us (R.M. Lodha, J.) in the case of Jagbir Singh v. Haryana State Agriculture Marketing Board and

Anr., the aforesaid decisions were noticed and it was stated:

It is true that the earlier view of this Court articulated in many decisions reflected the legal position that if the termination of an employee was found

to be illegal, the relief of reinstatement with full back wages would ordinarily follow. However, in recent past, there has been a shift in the legal

position and in a long line of cases, this Court has consistently taken the view that relief by way of reinstatement with back wages is not automatic

and may be wholly inappropriate in a given fact situation even though the termination of an employee is in contravention of the prescribed

procedure. Compensation instead of reinstatement has been held to meet the ends of justice.

It would be, thus, seen that by a catena of decisions in recent time, this Court has clearly laid down that an order of retrenchment passed in

violation of Section 25-F although may be set aside but an award of reinstatement should not, however, be automatically passed. The award of

reinstatement with full back wages in a case where the workman has completed 240 days of work in a year preceding the date of termination,

particularly, daily wagers has not been found to be proper by this Court and instead compensation has been awarded. This Court has distinguished

between a daily wager who does not hold a post and a permanent employee.

In view of the aforesaid legal position and the fact that the workmen were engaged as daily wagers about 25 years back and they worked

hardly for 2 or 3 years, relief of reinstatement and back wages to them cannot be said to be justified and instead monetary compensation would

subserve the ends of justice. In our considered view, the compensation of Rs. 40,000/- to each of the workmen (respondent nos. 1 to 14) shall

meet the ends of justice. We order accordingly. Such payment shall be made within 6 weeks from today failing which the same shall carry interest

at the rate of 9 per cent per annum.

18.3. In Jagbir Singh Vs. Haryana State Agriculture Marketing Board and Another, ), the Supreme Court had held that the relief of reinstatement

with backwages is not automatic in every case of illegal termination. An award of compensation may be just and proper. The Supreme Court had

quoted with approval the decision of the Supreme Court, in Mahboob Deepak Vs. Nagar Panchayat Gajraula and Another, , wherein, it had been

held that an award of reinstatement should not be passed, automatically, when it has been noticed that an order of retrenchment had been passed

in violation of the relevant provisions of law. In the said case it had been noted that certain factors were relevant while arriving at a decision. They

include the following:

(i) Whether in making the appointment, the statutory rules, if any, had been complied with;

(ii) the period he had worked;

(iii) whether there existed any vacancy; and

(iv) whether he obtained some other employment on the date of termination or passing of the award.

18.4. In the decision of the Supreme Court, Incharge Officer and Another Vs. Shankar Shetty, it had been held as follows:

The respondent challenged the award passed by the Labour Court by filing a writ petition before the Karnataka High Court. The Single Judge

of the High Court overturned the finding of the Labour Court about non-applicability of Section 25-F and held that Section 25-F of the ID Act

was attracted and the procedure provided therein having not been followed, the termination of the respondent (petitioner therein) was illegal. The

Single Judge, accordingly, vide his judgment and order dated August 13, 2001 directed reinstatement of the respondent into service but without

back wages and continuity of service. The present appellants challenged the judgment and order of the Single Judge in writ appeal before Division

Bench but without any success. On December 9, 2004, the writ appeal preferred by the present appellants was dismissed by the Division Bench.

18.5. In Devinder Singh Vs. Municipal Council, Sanaur, the Supreme Court had held that neither the method of recruitment nor the conditions of

employment were relevant for deciding the status of a person as a workman u/s 2(s) of the Industrial Disputes Act, 1947. Therefore, the

termination of a person engaged in clerical work was declared as illegal, as the termination from service of the said person was without following

the procedures prescribed u/s 25-F of the Industrial Disputes Act, 1947.

18.6. In State Bank of Bikaner and Jaipur Vs. Om Prakash Sharma, , the Supreme Court had held that the provisions of Articles 226 and 227 of

the Constitution of India would be attracted if the inferior Tribunal had, inter alia, committed a jurisdictional error.

18.7. In Ramesh Kumar Vs. State of Haryana, , the Supreme Court had held that in the case of termination of a casual employee what is required

to be seen is whether he had completed 240 days of service in the preceding 12 months. If he had completed the required number of days, his

service cannot be terminated without giving a notice or compensation in lieu of it, in terms of Section 25-F of the Industrial Disputes Act, 1947. In

addition to the factual conclusion by the Labour Court that the appellant, in the case on hand had worked for 240 days, it had also been shown

that persons similarly situated had been reinstated and regularised. In such circumstances, the Supreme Court had upheld the labour courts

direction for reinstatement of the employee, with continuity of service, but without backwages, as conceded by the appellant.

18.8. The learned counsel had also relied on the decision of the Supreme Court, in Assistant Engineer Vs. Gitam Singh, Civil Appeal No. 8415 of

2009, dated 31.1.2013, wherein it had been held as follows:

From the long line of cases indicated above, it can be said without any fear of contradiction that this Court has not held as an absolute proposition

that in cases of wrongful dismissal, the dismissed employee is entitled to reinstatement in all situations. It has always been the view of this Court that

there could be circumstances(s) in a case which may make it inexpedient to order reinstatement. Therefore, the normal rule that dismissed

employee is entitled to reinstatement in cases of wrongful dismissal has been held to be not without exception. Insofar as wrongful termination of

daily-rated workers is concerned, this Court has laid down that consequential relief would depend on host of factors, namely, manner and method

of appointment, nature of employment and length of service. Where the length of engagement as daily wager has not been long, award of

reinstatement should not follow and rather compensation should be directed to be paid. A distinction has been drawn between a daily wager and

an employee holding the regular post for the purposes of consequential relief.

Per contra, the learned counsel appearing on behalf the second respondent had contended that the award of the first respondent Industrial

Tribunal cannot be said to be bad in law. In fact, the first respondent Tribunal had passed the award, dated 29.10.1997, in I.D. No. 68 of 1992,

taking into account the facts of the case. The said award had been confirmed by the order of the learned single Judge of this Court, dated

28.7.2010, made in W.P. No. 11467 of 1998, with the clarification that the award of the first respondent Industrial Tribunal ought not to be

understood to be a direction to regularise the service of the second respondent, as it is a mere direction for a reinstatement of the second

respondent in the same position in which he was working, earlier, with full backwages and continuity of service and other benefits.

The learned counsel appearing on behalf of the second respondent had further contended that the claim of the appellant Bank that the award of

the first respondent Tribunal, dated 29.10.1997, as confirmed by the learned single Judge of this Court, dated 28.7.2010, is not correct, cannot be

accepted.

The learned counsel appearing on behalf the second respondent had also submitted that it is an admitted fact that the second respondent had

been terminated from service, by the management of the erstwhile Bank of Thanjavur Limited, which had been taken over by the appellant bank,

by way of a scheme of amalgamation. Thereafter, the second respondent had raised an industrial dispute challenging his termination from service.

As per the scheme of amalgamation, the appellant Bank had taken over the assets and the liabilities of the erstwhile bank of Thanjavur Limited. As

per Clause 10 of the scheme of amalgamation, the dispute which had been raised by the second respondent would be continued against the

appellant Bank.

It had been further stated that it is an admitted fact that the petitioner had been in service for a period of more than 1000 days, in the erstwhile

bank of Thanjavur Limited. As such, he should have been regularised in service, as per the provisions of the Tamil Nadu Industrial Establishments

(Conferment of Permanent Status to Workmen) Act, 1981.

He had further submitted that the termination of the service of the second respondent, by the erstwhile Bank of the Thanjavur Limited, is

arbitrary and illegal, as it is contrary to the provisions of the Industrial Disputes Act, 1947. It is not in dispute that the second respondent had been

terminated, by the erstwhile Bank, without following the procedures prescribed, u/s 25-F of the Industrial Disputes Act, 1947.

The learned counsel appearing for the second respondent had relied on the following decisions in support of his contentions:

24.1. In Harjinder Singh Vs. Punjab State Warehousing Corporation, wherein the Supreme Court had observed that, while exercising the

jurisdiction under Article 226 and 227 of the Constitution of India, in matters relating to social welfare legislations, the High courts are duty bound

to keep in mind that such legislations are to be interpreted keeping in view the goal set out in the preamble of the Constitution and the provisions

contained in Part IV therein, which mandates that the State should secure a social order for the promotion of the welfare of the people, ensure

equality between men and women and equal distribution of material resources of the community to subserve the common good and also to ensure

that the workers get their dues. They had quoted with approval the observation of made in The State of Mysore Vs. The Workers of Gold Mines,

that the concept of social and economic justice is a living concept of revolutionary import: It gives sustenance to the rule of law and meaning and

significance to the ideal of welfare state.

24.2. In R. Lakshmi Vs. Chief Engineer (Personnel), Tamilnadu Electricity Board, Chennai and Another, , a Division Bench of this Court had held

that a workman who had rendered continuous service of 480 days, in a period of 24 calendar months, would become a permanent employee,

automatically, as per the provisions of the Tamilnadu Industrial Establishments, (Conferment of Permanent Status to Workmen) Act, 1991.

In view of the submissions made by the learned counsels appearing on behalf of the appellant, as well as the second respondent, and on a

perusal of the records available and on considering the decisions cited supra, it is noted that the second respondent had been employed as a daily

wager, in the erstwhile bank of Thanjavur Limited.

When the second respondent had been terminated from service, by the erstwhile bank of Thanjavur Limited, he had raised an industrial dispute

challenging the said order. However, before the dispute had been referred, by the Central Government, for adjudication, the erstwhile bank of

Thanjavur Limited had been amalgamated with the Indian Bank, based on a scheme of amalgamation, as per the provisions of the Banking

Regulation Act, 1949, with effect from 20.2.1990. Thereafter, the industrial dispute raised by the second respondent had been taken on file, by the

first respondent industrial Tribunal, as I.D. No. 68 of 1992.

It is further noted that the claim of the second respondent was, substantially, against the erstwhile Bank of Thanjavur Limited, which is said to

have terminated the service of the second respondent, who had been working as a temporary sub-staff in the said Bank. The first respondent

Industrial Tribunal had passed an award, dated 29.10.1997, in I.D. No. 68 of 1992, holding that the action of the management of the Indian Bank

(erstwhile bank of Thanjavur Limited), in terminating the service of the second respondent, with effect from 31.12.1989, was not justified and

therefore, he was entitled to reinstatement in service, with full backwages and continuity of service and other benefits.

The appellant in the present writ appeal had challenged the said award of the first respondent Tribunal, dated 29.10.1997, made in I.D. No.

68 of 1992, by way of a writ petition filed under Article 226 of the Constitution of India.

The learned single Judge of this Court, by his order, dated 28.7.2010, made in W.P. No. 11467 of 1998, had dismissed the writ petition filed

by the appellant with the clarification that the award of the Industrial Tribunal shall not be understood as though it was a direction for regularisation

of the service of the second respondent. The learned single Judge had clarified that it should be understood to be a mere direction to reinstate the

second respondent in the position in which he was working earlier, with full backwages and continuity of service and other benefits. Aggrieved by

the said order of the learned single Judge of this Court, dated 28.7.2010, made in W.P. No. 11467 of 1998, the appellant had preferred the

present writ appeal, before this Court.

The main contention of the learned counsel appearing on behalf of the appellant is that the second respondent had not been employed in the

appellant Bank. He had been terminated from service, by the erstwhile bank of Thanjavur Limited. The second respondent had been working only

as a temporary sub-staff in the erstwhile bank of Thanjavur Limited, which had been amalgamated with the Indian Bank, under the scheme of

amalgamation, as per the provisions of the Banking Regulation Act, 1949, with effect from 20.2.1990.

Even though the erstwhile bank of Thanjavur Limited had been amalgamated with the Indian Bank, as per the scheme of amalgamation, nothing

has been shown on behalf of the second respondent that the appellant Indian Bank was liable to reinstate him in service, with all the attendant

benefits. Further, it is noted that the second respondent had raised an industrial dispute against the erstwhile bank of Thanjavur Limited, which had

been referred for adjudication before the first respondent Industrial Tribunal, in I.D. No. 68 of 1992, after the amalgamation of the erstwhile bank

of Thanjavur Limited, with the Indian Bank, as per the scheme of amalgamation.

Even though the assets and the liabilities had been taken over by the Indian Bank, as per the scheme of amalgamation, it has not been shown

that an employee, terminated by erstwhile bank of Thanjavur Limited is to be re-employed in the Indian Bank, subsequent to the amalgamation of

the bank concerned.

Even otherwise, as per the decision cited by the learned counsel appearing on behalf of the appellant, it could be noted that an employee,

terminated from service without following the procedures prescribed u/s 25-F of the Industrial Disputes Act, 1947, need not be ordered to be

reinstated in service, as he could be compensated with certain monetary benefits.

The Supreme Court in its decision, reported in Rajkumar Mishra Vs. Jalagaon Municipal Corporation, had reiterated the said view.

It is also noted that the learned counsel appearing on behalf of the second respondent had contended that the second respondent should have

been regularised in service, as per the provisions of the Tamil Nadu Industrial Establishments (Conferment of Permanent Status to Workmen) Act,

1981, as the second respondent had worked for more than 1000 days in the erstwhile bank of Thanjavur Limited. However, we are of the view

that the said claim, made on behalf of the second respondent, cannot be accepted, as no such request had been made by the second respondent

until he had been terminated from service, by the erstwhile bank of Thanjavur Limited, with effect from 31.12.1989.

It is also noted, from the records available, that the second respondent had been employed, intermittently, in the leave vacancies, whenever

they had arisen. It is also noted that disengagement of the second respondent from service was effected by the Bank of Thanjavur Limited, by its

circular, dated 30.12.1989.

The appellant bank had nothing to do with the said disengagement from service of the second respondent. Therefore, the direction issued by

the first respondent Tribunal to the appellant Bank, to reinstate the second respondent in service, with backwages and continuity of service and

other benefits, as confirmed by the learned single Judge of this Court, by his order, dated 28.7.2010, made in W.P. No. 11467 of 1998, cannot

be sustained in the eye of law.

However, it is not in dispute that the second respondent had been terminated from service, by the erstwhile Bank of Thanjavur Limited,

without following the procedures prescribed u/s 25-F of the Industrial Disputes Act, 1947. As such, the termination of the service of the second

respondent, by the erstwhile Bank of Thanjavur Limited, is irregular in nature. However, it cannot be held that he is entitled to be reinstated in

service, with full backwages and continuity of service and other benefits, as held by the first respondent Tribunal, in its award, dated 29.10.1997,

made in I.D. No. 68 of 1992, and by the learned single Judge of this Court, by his order, dated 28.7.2010, made in W.P. No. 11467 of 1998.

Taking into consideration the various decisions of the Supreme Court cited supra, which had arisen in similar facts and circumstances, we are of

the considered view that the award of the first respondent Tribunal, dated 29.10.1997, made in I.D. No. 68 of 1992, and the order of the learned

single Judge, dated 28.7.2010, made in W.P. No. 11467 of 1998, ordering the reinstatement of the second respondent in service, with full

backwages and continuity of service and other benefits, are liable to be set aside. Instead, we find it appropriate to direct the appellant Bank to

pay a sum of Rs. 3,00,000/- (Rupees Three lakhs) as compensation, in addition to the amount already paid to him, within a period of eight weeks

from the date of receipt of a copy of this order. The writ appeal is ordered accordingly. No costs. Connected M.P. No. 1 of 2011 is closed.