An employer's termination of an employee's service under a provision allowing termination without assigning a reason is subject to scrutiny by an industrial tribunal to ensure that it is not a colourable exercise of power or a result of victimisation or unfair labour practice.

Judgment

WANCHOO, J. : This is an appeal by special leave in an industrial matter. The appellant is The Chartered Bank, Bombay, (hereinafter called the Bank). There was a dispute between the Bank and its workmen regarding the termination of the service of one Colsavala (hereinafter called the respondent) who was working as an assistant cashier in the Bank. The system of working in the cash department of the Bank is that there is a chief cashier and under him are about thirty assistant cashiers. The Chief Cashier has to give security for the work of the cash department. Consequently all assistant cashier are employed upon the introduction of the Chief Cashier who guarantees each such employee. By virtue of this guarantee the Chief Cashier alone is unconditionally responsible to the bank for any shortage which might occur in the cash department and no security is taken from the assistant cashiers working therein. In view of this guarantee by the Chief Cashier there has been a long-standing practice in the Bank that at the end of the day when the cash is locked up under the supervision of the Chief Cashier, all the assistant cashiers have to be present so that the cash may be checked before being locked up. Assistant cashiers therefore can only leave the Bank before the locking up of the cash after obtaining permission of the Chief Cashier.

2. On January 4, 1957, the Chief Cashier reported to the management that the respondent had been leaving the Bank without his permission for some time past before the cash was checked and locked up in spite of the issue of a departmental circular in that behalf on December 24, 1956, by which all assistant cashiers (including the respondent) were reminded of the longstanding practice that no assistant cashier should leave the Bank without the permission of the Chief Cashier before the cash was checked and locked up. The Chief Cashier therefore stated that he was unable to continue to guarantee the respondent and that unless the respondent s service was dispensed with his conduct will affect the security of the cash department. As the Bank was not prepared to change the system in force in the cash department, the management decided to dispense with the service of the respondent in accordance with the mode of termination prescribed by paragraph 522 (1) of the All India Industrial Tribunal (Bank Disputes) Award of March 1953 (hereinafter referred to as the Bank Award). The Bank was also unable to employ the respondent in any other department. It therefore informed the respondent on March 29, 1957, that as the guarantee covering his employment had been withdrawn by the Chief Cashier the Bank was unable to continue to employ him. The notice required under paragraph 522 (1) was given and the amount due to the respondent including retrenchment compensation was paid to him and his service was terminated. Thereupon a dispute was raised by the workmen of the Bank and a reference was made by the Central Government to the Industrial Tribunal with respect to the "alleged wrongful termination of the services of Shri. N. D. Colsavala by the Chartered Bank, Bombay, and the relief, if any, to which he is entitled".

3. The case on behalf of the respondent was that he had been working in the Bank since September 1, 1937, honestly and efficiently as an assistant cashier in the cash department. The previous Chief Cashier who was the father of the present Chief Cashier however became hostile to him since 1943, because he claimed his legitimate dues for over-time work and leave which the then Chief Cashier was not prepared to allow. Further the respondent s letter of appointment did not oblige him to give any security or to procure any guarantee and if the Chief Cahier had given any guarantee to the Bank, the respondent was not concerned with it and had even no knowledge of it. He was given no opportunity to contest the reasons for the withdrawal of the guarantee by the Chief Cashier; nor was he asked to furnish securit