Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1955 Supreme(SC) 24

SUPREME COURT OF INDIA
15th March 1955
BOSE, JAGANNADHA DAS AND SINHA JJ.
Shivnandan Sharma, Appellant
Versus
The Punjab National Bank Ltd., Respondent.
Civil Appeal NO. 207 of 1954.
Advocates appeared
Mr. A. S. R. Chari, Senior Advocate (Bawa Shiv Charan Singh and Mr. M. R. Krishna Pillai, Advocates, with him), for Appellant; Mr. Achhru Ram, Senior Advocate (Mr. Naunit Lal, Advocate, with him), for Respondent.

Advocates:
A.S.R.CHARI, ACHHRU RAM, BAVA SHIV CHARAN SINGH, M.R.Krishna Pillai, NAUNIT LAL

The relationship between the Bank, the Treasurers, and the appellant was that of master and servant.

Headnote:
INDUSTRIAL DISPUTES ACT - JURISDICTION OF TRIBUNAL - DETERMINATION OF RELATIONSHIP OF EMPLOYER AND EMPLOYEE - AGREEMENT BETWEEN BANK AND TREASURERS - TREASURERS APPOINTING CASHIERS - CASHIERS DISMISSED BY TREASURERS - TRIBUNAL HOLDING CASHIERS WERE EMPLOYEES OF BANK AND REINSTATING THEM - APPELLATE TRIBUNAL HOLDING CASHIERS WERE EMPLOYEES OF TREASURERS AND SETTING ASIDE AWARD OF TRIBUNAL - HELD, CASHIERS WERE EMPLOYEES OF BANK AND TRIBUNAL HAD JURISDICTION.
Fact of the Case:

The appellant, a head cashier in the Una branch of the Punjab National Bank, was dismissed by the Treasurers, who were appointed by the Bank to manage the Cash Department. The appellant challenged his dismissal before the Industrial Tribunal, which held that he was an employee of the Bank and reinstated him. The Appellate Tribunal, however, held that the appellant was an employee of the Treasurers and set aside the award of the Tribunal.
Finding of the Court:

The Supreme Court held that the appellant was an employee of the Bank and that the Tribunal had jurisdiction to make the directions it did in respect of him. The Court found that the Treasurers were the servants of the Bank and that their nominees, including the appellant, were also employees of the Bank.
Issues: Whether the appellant was an employee of the Bank or of the Treasurers.
Ratio Decidendi: The Court held that the appellant was an employee of the Bank because: * The Treasurers were the servants of the Bank. * The appellant was appointed and dismissed by the Treasurers with the approval of the Bank. * The appellant's salary was paid by the Treasurers out of money provided by the Bank. * The appellant was subject to the control and direction of the Bank's manager.
Final Decision: The appeal was allowed and the orders of the Tribunal were upheld.

Judgement

SINHA J.: This is an appeal by special leave against the orders of the Lucknow Bench of the Labour Appellate Tribunal of India (hereinafter to be referred to as "The Appellate Tribunal") dated 31-8-1953, setting aside the award dated 13-10-1952 made by the Chairman, Central Government Industrial Tribunal, Calcutta (hereinafter to be referred to as "The Tribunal") reinstating the appellant as the head cashier with back salary under the Punjab National Bank (hereinafter called "The Bank").

2. The facts leading up to this appeal may shortly be stated. The appellant started his service as the head cashier in the Una branch of the Bank on 18-6-1949. The Cash Department of the Bank is in charge of Treasurers. The relation between the Bank and the Treasurers is evidenced by an agreement dated 1-5-1944 (Ex. 1) which will be noticed in detail hereinafter. That was an agreement between the Bank and "Messrs. Rai Bahadur Karam Chand Puri & Bros." That firm was appointed the Treasurers at the head office of the Bank and other places in and outside the Punjab.

On 28-9-1951 the District Manager of the Northern Circle of the Bank wrote a letter (Ex. 4) to the Treasurers informing them that it had been decided to close the Una office of the Bank with effect from the close of business on 3-11-1951. In pursuance of that letter the Treasurers intimated by a letter dated 2-10-1951 enclosing a copy of Ex. 4 to the appellant that the Una Branch of the Bank will cease to function from the close of business on 3-11-1951 and that his services will not be required after that date.

The Punjab National Bank Employees Union (Punjab) took up the cause of the appellant as also that of other employees and made representations to the Government of India. The Government of India by a notification No. SRO-432 dated 8-3-1952 published in the Gazette of India, Part II - S. 3, in exercise of its powers under S. 10, Industrial Disputes Act 14 of 1947 (hereinafter called the Act) referred the industrial dispute between the Bank and its workmen named in Sch. 2 (concerning workers dismissed) and Sch. 3 (relating is workers transferred) for adjudication to the Industrial Tribunal at Calcutta constituted under S. 7 of the Act. Schedule 1 in so far as it is necessary for purposes of this case contains the following points of dispute between the employer and the workmen :

"1. Wrongful dismissal of the workmen mentioned in Sch. II and their reinstatement.

2. In the event of any order for reinstatement payment of wages and other allowances from the date of dismissal to the date of reinstatement".

The appellant is No. 5 in Sch. 2 aforesaid. The Tribunal gave its award on 13-10-1952 in respect of a number of employees whose cases were actually in controversy before it. It is only necessary to refer to the award in so far as it concerned the appellant. After overruling the preliminary objection of the Bank that the Union had no locus standi to represent the appellant. The Tribunal formulated the following point for its decision:

"On merits the main point involved is as to whether the services of an employee of the Cash Department can be terminated on a change made in the services of the Contractor Cashier."

It answered this point in these words :

"This point has been agitated in more than one case and I have also held in Reference No. 3 of 1951 as Chairman of Industrial Tribunal (P. N. Bank dispute) relating to 5 cashiers that the employees of the Cash Department are the employees of the Bank and not the nominees of the Contractor Cashiers so far service conditions are concerned, and I think it will serve no useful purpose to discuss all the legal precedents cited, more especially when the point has been set at rest by their Lordships of the SC in - United Commercial Bank Ltd. v. Secretary, U. P. Bank Employees Union , AIR 1953 SC 437 (A).

I am of the opinion that the dismissal of Shri Sharma was wrongful and liable to be set aside. Now the normal remedy is reinstatement an

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