Andhra Pradesh High Court - Amravati

Sri Yadavalli Sarath Chandra vs M/S Axis Bank Ltd., on 5 September, 2022

           THE HON'BLE MS JUSTICE B.S.BHANUMATHI

                          A.S.No.149 of 2016

JUDGMENT:

This appeal is filed against the judgment and decree dated

23.12.2015 in O.S.No.275 of 2011 on the file of XII Additional

District and Sessions Judge, Krishna at Vijayawada.

The plaintiff filed the suit for declaration that the action

taken by the first defendant-bank in terminating his services is

illegal, arbitrary, capricious and against the principles of natural

justice and for consequential relief of re-instatement the 4 th

defendant's branch office with all back wages and benefits and for

costs of the suit.

The case of the plaintiff is briefly as follows:

The plaintiff joined the services of the first defendant in

Guntur branch on 20.03.2006 and worked there for three years

and subsequently on 02.09.2022, he was transferred to the

Business Banking Regional Desk with headquarters at Vijayawada

where he worked till 24.01.2010, but, on 01.02.2010, he received

an order vide reference No.AXIFF/Dis/1780/2009/2010 dated

25.01.2010 that he was suspended from the services by the third

defendant, without giving any prior notice or show-cause notice to

him. The bank authorities stated that the plaintiff had

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recommended 74 borrowers of Guntur and Bapatla branches who

availed agricultural loans by playing fraud on the bank. Resulting

in heavy loss to the bank and thus he committed serious

irregularities. The plaintiff preferred appeal on 06.02.2010, but the

same was rejected. On 09.06.2010, a show-cause notice was

received by the plaintiff, for which he gave a reply on 21.06.2010.

On 06.07.2010, the plaintiff appeared before the third defendant

and made his submissions. On 03.09.2010, the plaintiff received a

letter from the third defendant informing him that he was removed

from his service. As such, the plaintiff preferred the appeal on

17.09.2010 and the same was dismissed on 27.04,.2011 without

giving any opportunity to him. The plaintiff is no way concerned

with the sanction of the loans as his job is only supervisory in

nature and he had never recommended any person to grant loan.

Moreover, those 74 borrowers already repaid the amounts. The

plaintiff was removed from service due to collusion and for no fault

of him. His service was terminated against bye-laws. Thus, the

suit is filed.

The 4th defendant filed written statement which was adopted

by defendant nos.1 to 3 is briefly as follows:

In item No.5 in the appointment letter dated 16.05.2016, it is

made clear that the plaintiff would be governed by the staff rules of

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the defendant bank as to conduct and discipline etc. and that 74

borrowers at branches of Guntur and Bapatla of the defendant

bank availed agricultural loans by adopting fraudulent means and

the enquiries revealed that the plaintiff had recommended sanction

of those loans and thus he committed serious irregularities in

disbursement and inspection and he failed to ensure proper end

use of the loans causing financial loss to the bank and thus as per

para 11.4 of the bank staff rules, the plaintiff was suspended

without issuing show cause notice as it is not mandatory. It is

further pleaded that it was necessary to place him under

suspension in order to conduct impartial and unbiased enquiry

against the plaintiff. The plaintiff formed an unlawful group with

unscrupulous people and opened several accounts against the

norms under PYC and RBI guidelines. Charges against the plaintiff

were proved and therefore, under clause 10.3 of the staff rules, the

plaintiff was dismissed from the service under a speaking order.

The allegations made by the plaintiff are all false. The defendants

requested to dismissed the suit with costs.

The trial Court framed issues 1 to 4 which are as follows:

1. Whether this court got jurisdiction to entertain this suit?

2. Whether plaintiff is entitled to the relief of declaration as prayed for?

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3. Whether the plaintiff is entitled to the relief of mandatory injunction as prayed for?

4. To what relief?"

The plaintiff got himself examined as PW.1 and filed Exs.A.1

to A.11 documentary evidence on his behalf. The then 4th

defendant was examined as D.W.1 and the then third defendant

was examined as D.W.2 and Exs.B.1 and B.2 documents are filed

on behalf of the defendants.

After hearing both parties, the trial Court held issue nos.1 to

3 against the plaintiff and dismissed the suit. Having aggrieved by

the same, the present appeal is preferred by the plaintiff on the

ground that the declaration of termination of contract of

employment as illegal is maintainable by way of a suit, but the trial

Court went wrong in holding this issue against the plaintiff and

that the suit was dismissed against the evidence on record without

properly appreciating the evidence that the internal enquiry

conducted by the bank authorities was arbitrary and perfunctorily

and also failed to decide the allegation of the defendants that the

plaintiff is not responsible for disbursement of loans nor was he

responsible for any loans. It is also contended that there is a long

delay of four months in serving show cause notice to the plaintiff

and that too it was issued after his suspension, by violating the

principles of natural justice and against the rules of service. It is

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also contended that the defendant bank has conducted pre-judged

enquiry and further that the defendants could not establish any

fraud of the plaintiff, but he was made a scapegoat. It is also

contended that the borrowers paid all the loans without initiating

any criminal prosecution and the defendants have not proved the

allegations against the plaintiff with documentary or oral evidence

and the trial Court erred in appreciating the misleading concocted

story of the defendants.

Heard the learned counsels for both parties. The learned

counsel for the appellant submitted that the suit for the relief of

declaration that the termination of service is illegal is maintainable.

On the other hand, the learned counsel for the respondents

submitted that the trial Court has rightly held that such remedy is

not maintainable before Civil Court. The learned counsel for the

appellant further submitted that the trial Court has not paid due

attention in dealing with issues no.2 and 3, while not exhaustively

dealing with evidence of both parties and thus abruptly decided.

Since issue No.1 deals with the maintainability of the suit, it

is necessary to examine the same at the threshold.

As per the decision of the Supreme Court in Vaish Degree

College v Lakshmi Narain1, it is held that the contract of personal

AIR 1976 SC 888

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service cannot ordinarily be specifically enforced and a court

normally would not give a declaration that the contract subsists

and the employee, even after having been removed from service can

be deemed to be in service against the will and consent of the

employer and that this rule, however, is subject to three well

recognized exceptions - i) where a public servant is sought to be

removed from service in contravention of the provisions of Article

311 of the Constitution of India; ii) where a worker is sought to be

reinstated on being dismissed under the Industrial Law; and iii)

where a statutory body acts in breach or violation of the mandatory

provisions of the statute.

It is further held therein at para 26 as follows:

"26. ...... It is manifestly clear from the authorities discussed above that the relief of declaration and injunction under the provisions of the Specific Relief Act is purely discretionary and the plaintiff cannot claim it as of right. The relief has to be granted by the court according to sound legal principles and ex debit justitiae. The court has to administer justice between the parties and cannot convert itself into an instrument of injustice or an engine of oppression. In these circumstances, while exercising its discretionary powers the court must keep in mind the well settled principles of justice and fair play and should exercise the discretion only if then ends of justice require it, for justice is not an object which can be administered in vacuum."

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It is rightly observed by the trial Court that a suit regarding

personal service is not maintainable in view of the above proposition,

since none of the exceptions comes in aid to the appellant because the

appellant/plaintiff failed to show which statutory provision has been

breached, except averring that their rules and bye-laws were violated.

Even with regard to merits of the case, otherwise in relation to

issues 2 & 3, since the service of the plaintiff is terminable as per Rule

3.5 of the Axis Bank Staff Rules under exhibit B2, the termination of

service is found to be proper, that too, as it was affected after due

enquiry was held against the plaintiff and the order in the enquiry has

not been set aside. Though the trial Court has not dealt with the