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2023 Supreme(Raj) 1184

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
Arun Monga, J.
Kotak Mahindra Bank Ltd. and ors. – Petitioners
Versus
Aaraj Sharma S/o Suraj Sharma and ors. – Respondents
S.B. Civil Writ Petition No. 4729 of 2023
Decided On : 07-11-2023

Advocates:
Advocate Appeared:
For the Petitioner: Mr. Vinay Jain, Mr. Darshan Jain
For the Respondent: Mr. Siddhart Tatia

Headnote:

Termination - Employment Dispute - Rajasthan Shops and Commercial Establishment Act, 1958, Section 28-A, Rule 24-A(2) - The court discussed the termination of services of the respondent no.1 by the petitioner bank under Clause 19 of the employment terms. The court also analyzed the definition of 'employee' and 'commercial establishment' under the Act, and emphasized the importance of conducting a proper enquiry before dismissing an employee for misconduct.

Fact of the Case:

The petitioner bank terminated the services of respondent no.1 based on alleged fraudulent activities. The respondent filed a complaint, leading to the impugned order directing reinstatement.

Finding of the Court:

The court found that the termination was stigmatic and lacked proper enquiry, violating the natural principles of justice.

Issues: The issues included the legality of the termination, the jurisdiction of the competent authority, and the definition of 'employee' under the Act.

Ratio Decidendi: The court held that the termination without a proper enquiry and on stigmatic grounds violated the employee's rights and the statutory prerequisites under Section 28-A and Rule 24-A(2) of the Act.

Final Decision: The petition was dismissed, and the bank was directed to comply with the impugned order. The court declined the request for a post-decisional inquiry, citing prejudice against the employee.

ORDER :

Petition is directed against an order dated 17.11.2022 (Annexure–9) passed by the Court of Prescribed Officer Rajasthan Shops and Commercial Establishment Act, Jodhpur whereby termination of services of the respondent no.1 by petitioner bank was held illegal and it has been directed to reinstate him with consequential benefits.

2. Succinct facts first, as pleaded in the instant writ petition.

2.1 Petitioner is a duly registered banking company, with its registered office located in Mumbai. Respondent No.1 was appointed on the post of Senior Manager at the Jodhpur Branch, in M-4 grade, w.e.f. 02.07.2018.

2.2 Terms and conditions of service were conveyed vide bank letter dated 22.05.2021 to respondent No.1. Termination clause no. 19 contained therein states as under :

    “Termination.

19. Your services can be terminated by the Bank, without any notice or payment of any kind in lieu of notice, in the following cases:

19.1 Any incorrect information furnished by you or on suppression of any material information; and/or

19.2 Any act, which in the opinion of the management is an act of dishonesty, disobedience, insubordination, incivility, intemperance, irregularity in attendance or other misconduct or neglect of duty or incompetence in the discharge of duty on your part or the breach on your part of any of the terms, conditions or stipulations contained in this letter or a violation on your part of any of the Bank’s rules and policies; and/or

19.3 You being adjudged an insolvent or applying to be adjudged an insolvent or making a composition or arrangement with your creditors or being held guilty by a competent court of any offence involving moral turpitude; and/or

19.4 You being convicted of a serious criminal offence or a criminal offence which, in the Bank’s opinion compromises your ability to perform your duties; and/or

19.5 The results of any background checks or searches conducted by the bank are found to be unsatisfactory in the opinion of the Bank in its absolute discretion; and/or

19.6 Any misconduct pertaining to moral turpitude, riotous/disorderly behaviour, theft, misappropriation, conviction by any court of law.

19.7 Any act or omission which could be construed as loss of confidence in you by the Management.

19.8 Any act subversive of discipline or any conduct prejudicial to the interest and reputation of the Bank.”

2.3 It is the petitioner-bank’s case that Respondent No.1 was working against the interests of the bank and was involved in fraudulent activities, including routing direct business through DSA and was receiving commissions. The bank formed this opinion based on a purported confession letter dated 01.12.2021 of one Ravindra Singh Parihar, another employee of the bank stated to be then working under the supervision of respondent no.1. Subsequently, based on the opinion thus formed, the management decided to terminate the services of Respondent No.1 by invoking the power under Clause 19 ibid.

2.4 Accordingly, services of the respondent no.1 were summarily terminated vide bank letter dated 17.01.2022. Upon receipt of termination letter, respondent No.1 filed a complaint before respondent no.2/Labour Commissioner, Jodhpur. Pursuant thereto, a notice was issued to the petitioner bank leading to passing of the order dated 17.11.2022 impugned herein. Hence the petition herein.

3. Learned counsel for the petitioner submits that the impugned order dated 17.11.2022 is illegal and without jurisdiction. He argues that no judicial order was passed by the competent authority directing service of the complaint filed by the respondent no.1. In the premise, the competent authority could have taken cognizance of the complaint and lacked the jurisdiction to pass the final order which is assailed herein.

3.1. Furthermore, he urges that respondent No.1 was since working as Senior Manager and does not fall within the definition of a workman. He refers to Section 2(5) of the Act of 1958, and urges that Respondent No.1 does not fall within the

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