Employee’s right of withholding salary during the period of suspension.

The Bhavani Kudal Co-operative Urban Bank which was the defendant in O.S. No. 159 of 1947 on the file of the District Munsif’s Court, Erode, is the appellant in this Second Appeal. The plaintiff-respondent was the Secretary of the defendant Bank and had been dismissed from the defendant’s service by an order dated 21st May, 1944. The suit out of which this appeal arises was pled for the recovery of damages for wrongful dismissal, salary during the period of Suspension, the Provident Fund amount standing to the plaintiff’s credit, and interest on these sums, etc.

The facts giving rise to these proceedings were shortly these. The plaintiff had been secretary of the defendant Bank for nearly 15 years and as Secretary was under bye-law 23(a)(ii) responsible for the executive administration of the Bank. While so a notice dated 15th October, 1943, was received from the Registrar of Co-operative Societies setting out a number of irregularities committed by the management of the Bank and threatening the supersession of the Board of management and asking them to show cause why this should not be done. On receipt of this communication which is marked as Exhibit B-1, the President of the Bank forwarded this to the plaintiff and directed him to explain certain of the irrgularities. His explanation (Exhibit B-3) was submitted on 25th October, 1943. The plaintiff also despatched confidential communications to the Registrar of Co-operative Societies alleging several irregularities against the President and complaining that the latter was coercing the writer to create false records, the last of such communications being on 13th November, 1943. The President suspended the Secretary by order dated 24th November, 1943 and also served on the latter, further charges of misconduct which he was called on to explain. The Secretary submitted his further explanations which consisted in large part of attacks on the President. After an enquiry by the President, it was placed before the Board of Directors and they ordered on 21st May, 1944, that the plaintiff “be dismissed and removed from office as Secretary of the Bank.”

The plaintiff thereupon filed O.S. No. 257 of 1944 against the President and the Board of Directors personally for damages, for wrongful suspension and removal and this was dismissed on the ground that the plaintiff’s remedy, if any, was against the Bank. He then filed O.S. No. 159 of 1947 from which this Second Appeal arises. The main point alleged as the basis of the plaintiff’s suit is to be found in paragraphs 12 and 13 of the plaint which run thus:

“12. The plaintiff submits that the order of suspension and later order of dismissal from service passed against the plaintiff are arbitrary, malicious and wrongful. The charges alleged against him are unfounded. The charges were not also enquired into and the plaintiff was not even given an opportunity of meeting them or establishing their falsehood. The appropriate rules, regulations and statutory provisions bearing on the matter have also been violated. Even the principle of natural justice against dismissal without giving an opportunity of being heard has been violated by the defendant. Moreover, suspension and dismissal have been brought about maliciously and out of spite.

13. For the above and other reasons, the suspension and dismissal of the plaintiff by the defendant is wrongful. The said wrongful dismissal has caused to the plaintiff heavy damages to the extent of Rs. 2,189-11-3 as mentioned hereunder. The defendant is bound to pay the same to the plaintiff. In spite of repeated demands the defendant has failed to pay the said damages to the plaintiff.”

The details of the sums which make the figure of Rs. 2,189-11-3 are given in paragraph 16 which are these:

Rs. A. P.

(1) Staff Provident Fund standing to his credit ... 1,369 7 4

(2) Interest on this at 5 per cent. per annum from 1st July, 1943 to 31st March, 1947 ... 255 0 0

(3) Salary for six months from 24th November, 1943