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2002 Supreme(Kar) 509
Karnataka High Court
State Bank of India, Zonal Office, Region I - Appellant
Versus
D.K.Seetharam - Respondent
Decided On : 08-16-02
W.A. : 3402 of 1999
K.S.RAMDAS, R.PADMANABHAM, SEETHARAMA RAO
Headnote:Removal for unauthorised absence
Termination - Employee transferred -absented from service -every opportunity given to the employee to tender explanation-failure to -management and employees entering into a settlement under Sections 2(P) & 18(1) of the Industrial Disputes Act, 1947 regarding transfer etc. -binding on both the parties -transfer an incidence of service -mere hardship not enough explanation.
[Kumar Rajaratnam & K. Bhakthavatsala, JJ.] - The close reading of Clause XVI would indicate that the Management is at liberty to terminate the services of an employee if he continuously absents himself for 90 days after notice without a proper explanation. This clause was not incorporated in the service regulation of the Bank. This clause was not incorporated in the service regulation of the Bank. This clause is there by virtue of memorandum of settlement entered in to between the Management of 55A class Banks as represented by the Indian Banks Association and their workmen as represented by All India Bank Employees Association and National Confederation of Bank Employees. This settlement between the Management and the employees of the Banks is a binding settlement entered into under Section 2(P) and Section 18(1) of the Industrial Disputes Act. It cannot be by any stretch of imagination be called a regulation. A settlement entered into between the Management and the employees is binding equally on the employees as well as the Management. Thus, the settlement is on a slightly higher footing than the regulations, however with a rider that any settlement must be in conformity with the principles of natural justice.
Cases Referred:
AIR 1998 SC 1681; AIR 1996 SC 1669.
Removal for unauthorised absence
NATURAL JUSTICE - Employee transferred -absented from service -Every opportunity given to the employee to tender explanation-failure to -management and employees entering into a settlement under Sections 2(P) & 18(1) of the Industrial Disputes Act, 1947 regarding transfer etc. -binding on both the parties -transfer an incidence of service -mere hardship not enough explanation.
[Kumar Rajaratnam & K. Bhakthavatsala, JJ.] - The close reading of Clause XVI would indicate that the Management is at liberty to terminate the services of an employee if he continuously absents himself for 90 days after notice without a proper explanation. This clause was not incorporated in the service regulation of the Bank. This clause was not incorporated in the service regulation of the Bank. This clause is there by virtue of memorandum of settlement entered in to between the Management of 55A class Banks as represented by the Indian Banks Association and their workmen as represented by All India Bank Employees Association and National Confederation of Bank Employees. This settlement between the Management and the employees of the Banks is a binding settlement entered into under Section 2(P) and Section 18(1) of the Industrial Disputes Act. It cannot be by any stretch of imagination be called a regulation. A settlement entered into between the Management and the employees is binding equally on the employees as well as the Management. Thus, the settlement is on a slightly higher footing than the regulations, however with a rider that any settlement must be in conformity with the principles of natural justice.
Cases Referred: AIR 1998 SC 1681; AIR 1996 SC 1669.
( 2 ) THE facts very briefly are: the respondent was working as a clerk with the appellant-Bank. He remained absent continuously from March 28, 1994. The respondent was served with a notice on november 22, 1994 giving him time of 30 days to report for duty and explain the cause for his unauthorised absence. This notice was given to the respondent under the terms of the Bipartite settlement governing the service conditions of the staff. In spite of service of notice the respondent failed to report for duty within the stipulated time. He also did not submit any explanation for his unauthorised absence. Accordingly, the appellants removed him from the rolls.
( 3 ) AGGRIEVED by his removal from service the respondent challenged the endorsement issued to him by the Bank treating him as having abandoned the service with the Bank in w. P. No. 15896 of 1996.
( 4 ) THE learned single Judge allowed the writ petition and directed the Bank to reinstate the respondent in service with all consequential benefits. This is how the Bank is before us.
( 5 ) THE learned single Judge placed heavy reliance on the judgment of the Supreme Court in the case of Uptron India Limited v. Shammi bhan and Another AIR 1998 SC 1681 : 1998 (6) SCC 538 : 1998-I-LLJ-1165. The Supreme court while interpreting Clause 17 (g) of the certified Standing Orders of the company which gave a similar right held that where the standing order states that the services of the employee are liable to be automatically terminated implies that there is a discretion to the management to terminate or not to terminate the services of an employee who ever stays without leave. This discretion by the management cannot be exercised or permitted to be exercised capriciously. The discretion has to be based on an objective consideration of all the circumstances and material which may be available on record. Ultimately, the Supreme court in Uptron's case, (supra), held as follows at p. 1170 of LLJ:"25. In view of the above, we are of the positive opinion that any clause in the certified Standing Orders providing for automatic termination of service of a permanent employee, not directly related to "production" in a factory or Industrial establishment, would be bad if it does not purport to provide an opportunity of hearing to the employee whose services are treated to have come to an end automatically".
( 6 ) THE question that arises for consideration in this writ appeal is whether the respondent-employee was given enough opportunity to obey the transfer orders and if enough opportunity was given to the respondent-employee whether the management would be entitled to remove the respondent from the rolls for unauthorised absence without an enquiry on the basis of the binding settlement entered into between the management and the association.
( 7 ) BEFORE we deal with the memorandum of settlement we must be understood to state that the memorandum of settlement cannot create a situation where the employee is liable to be terminated arbitrarily and without following the principles of natural justice. Equally every act of the management will have to be seen in the context of fairness, equity and justice. However binding a settlement may be between the management and the employee, the principles of natural justice will have to be complied with while understanding the memorandum of settlement.
( 8 ) A memorandum of settlement dated september 17, 1984 was entered into between the management of 55 A class Banks as represented by the Indian Banks' Association and their workmen as represented by All India bank Employees Association and National confederation of Bank Employees was arrived at under Sections 2 (p) and 18 (1) of the industrial Disputes Act, 1947 read with Rule 58 (4) of the Industrial Disputes (Central) rules, 1957.
( 9 ) THE
