Kerala High Court
Union Bank Of India vs Sreekumar V.D on 7 July, 2025
2025:KER:49109
W.A No.1822 of 2018
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
MONDAY, THE 7TH DAY OF JULY 2025 / 16TH ASHADHA, 1947
WA NO. 1822 OF 2018
AGAINST THE JUDGMENT DATED 26.06.2018 IN WP(C) NO.6452
OF 2015 OF HIGH COURT OF KERALA
APPELLANTS/RESPONDENTS:
1 UNION BANK OF INDIA
REGIONAL OFFICE, KOZHIKODE- 673001 REP. BY ITS GENERAL
MANAGER
2 GENERAL MANAGER (PO & HR)
DEPARTMENT OF PERSONNEL, MANPOWER PLANNING AND
RECRUITMENT DIVISION CENTRAL OFFICE, UNION BANK OF
INDIA, UNION BANK BHAVAN, 239, VIDHAN BHAVAN MARG
NARIMAN POINT, MUMBAI-400021.
3 UNION BANK OF INDIA
UNION LOAN POINT BRANCH, KOZHIKKODE REPRESENTED BY THE
MANGER, COLOMBO COMPLEX, M M ALI ROAD PALAYAM,
KOZHIKKODE-673001.
BY ADV SHRI.A.S.P.KURUP, SC, UBI
2025:KER:49109
W.A No.1822 of 2018
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RESPONDENT/PETITIONER:
SREEKUMAR V.D
AISWARYA EANGAPUZHA, PUTHUPPADI P. O, KOZHIKODE KERALA
673566 EARLIER WORKING AS ASSISTANT MANAGER, MARKETING
IN UNION BANK OF INDIA, LOAN POINT BRANCH, KOZHIKODE
BY ADVS.
SRI.S.PRASANTH (AYYAPPANKAVU)
SMT.VARSHA BHASKAR
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
26.05.2025, THE COURT ON 07.07.2025 DELIVERED THE FOLLOWING:
2025:KER:49109
W.A No.1822 of 2018
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JUDGMENT
Sushrut Arvind Dharmadhikari, J.
The present intra-court appeal filed under Section 5 of the Kerala High Court Act, 1958 assails the judgment dated 26.06.2018 passed in W.P.(C) No.6452 of 2015 whereby the learned Single Judge disposed the writ petition with certain direction. The appellants herein are the respondents in the writ petition whereas the respondent is the petitioner.
2. The brief facts of the case are that the respondent/petitioner was appointed as Assistant Manager in the Union Bank of India vide Ext.P1 order dated 19.09.2011. As per the terms of the appointment, the respondent was required to execute a service indemnity bond undertaking to serve the Bank for a minimum period of three years or else a sum of Rs.2.5 lakh shall be required to be paid to the Bank in case he resigned from the services of the Bank before completing the stipulated minimum service period of three years. Accordingly, the respondent executed Ext.P2 indemnity bond. While working as 2025:KER:49109 W.A No.1822 of 2018 4 Assistant Manager with Union Bank of India, the respondent got selected in the Corporation Bank as Probationary Manager. The respondent remitted Rs.2.5 lakh and was relieved to join the Corporation Bank. Subsequently, he filed Ext.P5 representation before the Regional Manager, Union Bank of India requesting him to refund the amount on the ground that the Bank has not suffered any loss or incurred any liability on account of his relieving. The respondent submitted that the bond shall not be enforced in case the employee is joining another public sector undertaking. In view of this exemption, he is liable to get the amount refunded.
3. Learned counsel for the appellants-Bank submitted that after enjoying the benefit of Ext.P1 order and executing an undertaking before the Bank by furnishing indemnity bond, the respondent is obliged to obey the terms and conditions. As such enforcement of the bond is neither violative of Article 19 of the Constitution of India or contrary to any public policy. Learned 2025:KER:49109 W.A No.1822 of 2018 5 Single Judge erred in disposing the writ petition with a direction to the appellants to refund Rs.2.5 lakh realised from the respondent.
4. The Hon'ble Apex Court, in the case of Central Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly [(1986) 3 SCC 156], dealt with interpretation of standard form of employment contracts in the backdrop of unequal bargaining power of employees. The Bench opined that if such contracts are unconscionable, unfair, unreasonable and injurious to public interest, they shall be deemed void in law being opposed to public policy. The Bench elucidated the proposition in the following words:-
"91..................the majority of such contracts are in a standard or prescribed form or consist of a set of rules. They are not contracts between individuals containing terms meant for those individuals alone. Contracts in prescribed or standard forms or which embody a set of rules as part of the contract are entered into by the party with superior bargaining power with a large number of persons who have far less bargaining power or no bargaining power at all. Such contracts which affect a large number of persons or a group or groups of persons, if they are unconscionable, unfair and unreasonable, are injurious to the public interest. To say that such a contract is only voidable would be to compel each person with whom the 2025:KER:49109 W.A No.1822 of 2018 6 party with superior bargaining power had contracted to go to court to have the contract adjudged voidable. This would only result in multiplicity of litigation which no court should encourage and would also not be in the public interest. Such a contract or such a clause in a contract ought, therefore, to be adjudged void. While the law of contracts in England is mostly judge-made, the law of contracts in India is enacted in a statute, namely, the Indian Contract Act, 1872. In order that such a contract should be void, it must fall under one of the relevant sections of the Indian Contract Act. The only relevant provision in the Indian Contract Act which can apply is Section 23 when it states that "The consideration or object of an agreement is lawful, unless ... the court regards it as ... opposed to public policy."
5. The Hon'ble Apex Court had expressed a similar view earlier in the case of Superintendence Co. of India v. Krishan Murgai [(1981) 2 SCC 246] wherein it was held thus:
"59. It is well settled that employee covenants should be carefully scrutinised because there is inequality of bargaining power between the parties; indeed no bargaining power may occur because the employee is presented with a standard form of contract to accept or reject. At the time of the agreement, the employee may have given little thought to the restriction because of his eagerness for a job; such contracts "tempt improvident persons, for the sake of present gain, to deprive themselves of the power to make future acquisitions, and expose them to imposition and oppression".
2025:KER:49109 W.A No.1822 of 2018 7 6. In view of the aforesaid judgments, such unconscionable contracts are unenforceable and void. Learned Single Judge has rightly disposed of the writ petition directing the appellants-Bank to refund a sum of Rs.2.5 lakh realised from the respondent within three months.
7. We are of the considered opinion that the learned Single Judge has correctly arrived at the conclusion in accordance with the law laid down in the case of Brojo Nath Ganguly (supra) and as such, no interference is called for.
The writ appeal being bereft of merit and substance, is liable to be dismissed and accordingly, the same is dismissed. No order as to costs.
Sd/-
SUSHRUT ARVIND DHARMADHIKARI
JUDGE
Sd/-
SYAM KUMAR V.M
JUDGE
smp