Bombay High Court

The Jain Sahakari Bank Ltd vs Smt. Bharti Joshi on 27 November, 2012

Bench: A.A. Sayed

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    CPM




                                                                            
            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                 ORDINARY ORIGINAL CIVIL JURISDICTION




                                                    
                      WRIT PETITION NO. 75 OF 2009

    1.     The Jain Sahakari Bank Ltd.,
           a multi State Co-operative Bank,
           registered under the Multi State




                                                   
           Co-operative Societies Act,
           having its Head Office at Hira Baug,
           Khattaralli Lane, C.P. Tank,
           Mumbai-400 004.




                                             
       2. Madhav Balkrishna Jambhekar,
                            
          The Chief Executive Officer,
          The Jain Sahakari Bank Ltd.
          Hira Baug, Khattaralli Lane, C.P. Tank
                           
          Mumbai 400-004.                           ...Petitioners.
          Vs.
    Smt. Bharti Joshi,
    8/208, Kapasi Nivasi Co-operative
    Housing Soceity, Ltd., Liliya Nagar,
           


    Goregaon (West), Mumbai-400 062.                ...Respondent.
        



    Mr. P.M. Palshikar for the Petitioners.

    Mr. A.S. Peerzada for the Respondent.





                             CORAM :      A.A. SAYED, J.





                             DATE       : 27TH NOVEMBER,, 2012.


    JUDGMENT

1. This Petition impugns an order dated 14-10-2008 passed by the

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Labour Court, on an Application filed by the Respondent-employee

under Section 33C(2) of the Industrial Dispute Act, 1947. By the

impugned order, the Application was partly allowed and the

Petitioner-Bank was directed to pay the Respondent-employee an

amount of Rs.1,28,623/- towards difference in salary, leave travel

allowance, medical allowance, encashment of casual leave, etc, for

the suspension period from 23-11-2001 to 17-08-2004 as against the

claim of Rs. 1,68,323/-.

2. The Respondent-employee (hereinafter referred to as 'the

employee') joined the Petitioner-Bank (hereinafter referred to as the

'Bank') in 1986 as a Junior Clerk. On 23 rd November, 2001, a

charge-sheet was issued to her and she was suspended pending

inquiry for allegedly committing serious acts of misconduct.

3. A Show Cause Notice was issued to the employee by the Bank after

the inquiry officer submitted his Report holding her guilty of charges

levelled against her. The employee thereupon filed Complaint (ULP)

No. 214 of 2003 apprehending that she may be dismissed. On 25-

4-2003, the Labour Court directed status quo to be maintained with

regard to the services of the employee. During the pendency of the

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Complaint, by letter dated 17th August, 2004, the Bank informed the

employee that they will not take any action against her for dismissal

or discharge and that they are only going to stop her increment. By

the said letter, the suspension order of employee was also revoked

and she was advised to report for work. In these circumstances, the

Labour Court by its order dated 25 th February, 2005, disposed of the

Complaint, since the apprehension of the employee of being

dismissed no longer survived.

4. On 6th May 2005 the order of punishment was passed by the Bank.

The relevant portion of the order of punishment as recorded in letter

dated 6th May 2005 reads as follows :

"This has further reference to our letter no. JSB/289/04-05 dt. 17-08-2004 wherein we had informed you about our decision to stop your few increments by way of punishment.

It is now decided to stop five annual increments to you, with cumulative effect which will come into effect from the date of your next increment falling due, i.e. on 1st July, 2005 and your next increment will be on 1st July, 2010." You are eligible for revised D.A., C.C.A., & H.R.A. from the

effective date of Memorandum of Settlement and for the reimbursement of medical reimbursement and leave travel allowance from the date of revoking your suspension order i.e. 17-08-2004 and your suspension from 23-11-2001 to 16-8- 2004 is confirmed."

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5. Mr. Palshikar, learned Counsel on behalf of the Bank, made

following submissions:

(i) that the Application under section 33C (2) is not maintainable as

there is no existing right in favour of the employee in respect of the

amount claimed by her;

(ii) that the proceedings under section 33C(2) is in the nature of

execution proceedings and there is no adjudication in favour of the

employee in respect of her claim;

(iii) that the disciplinary authority has taken a decision to confirm the

suspension period from 23.11.2011 to 16.08.2004 of the employee

and specifically held that the employee shall be eligible for the

allowances prospectively from the date of revoking the suspension

order i.e. 17.8.2004 and therefore the employee is not entitled to

the amount claimed for the suspension period;

(iv) that the employee has not challenged the order of punishment

dated 6th May, 2005, which order has attained finality.

6. In support of his submissions, the learned Counsel has placed

reliance on the following two Judgments :

(a) Sakharam Parab vs.Kadamba Transport Corporation, Panaji

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1999 LAB IC 2881,

(b) H.P. State Electricity Board vs Ranjeet Singh 2008 (4) SCC

241.

7. Mr. Peerzada, learned Counsel for the employee, on the other

hand, supported the impugned order and submitted as follows:

(i) that the Petitioner has an existing right to make a claim under

section 33C (2);

(ii) that sub-clause (5A) of the Model Standing Order 22 clearly

stipulates that if as a result of the inquiry held or explanation

tendered, it is decided not to take action against the employee under

sub-clause (I) the employee is deemed to be on duty and is entitled

to full wages and all other privileges during the full suspension

period;

(iii) that there is no adjudication necessary and at best, it is a

question of only interpretation of the Model Standing Orders which

govern the parties.

8. I have considered the rival contentions of the parties and

perused the material on record.

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9. From the facts narrated earlier, it would be noticed that:

(1) the employee was under suspension from 23-11-2001 to 16-08-

2004,

(2) the suspension was revoked on 17th August, 2004,

(3) the order of punishment was passed on 6th May, 2005 whereby

the suspension was confirmed from 23-03-2001 to 16-08-2004, and

(4) the punishment inflicted on the employee was that of

withholding increments of 5 years.

10. There is no dispute about the fact that the parties are

governed by the Model Standing Orders for the Banking Industry

notified by the State of Maharashtra in exercise of powers conferred

by Section 35(5) of Bombay Industrial Relations Act, 1943. To

appreciate the controversy it would be necessary to extract the

relevant Standing Orders. Standing Order 22 deals with punishment

for misconduct, sub-clauses (1), (5) (as amended) and (5A) (as

amended) read as follows :

"22. Punishment for misconduct:

(1) An employee guilty of misconduct may be-

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         (a) warned or censured, or
         (b) fined, or

............

(5) An employee against whom any action is proposed to be taken under sub-clause (c) of clause (1) of this Standing Order may be suspended for a period, reasonable in the

circumstances of the case, pending the holding and completion of an enquiry or for the period if any, allowed to him for giving his explanation. The order of suspension may take effect immediately on its communication to the employee.

(5-A) Subject to the provisions of the Payment of Wages Act,

1936, an employee who is placed under suspension under sub- clause (5) shall, during the period of such suspension, be paid a subsistence allowance at the following rates, namely:

(i) For the first ninety days of the suspension period, subsistence allowance to be paid per month shall be equal to one half of basic wages, dearness allowance and other compensatory allowances to which the employee would have

been entitled if he were on leave with wages.

(ii) If the inquiry gets prolonged and the employee

continues to be under suspension for a period exceeding ninety days the subsistence allowance to be paid per month for a further period of ninety days shall be equal to three fourths of such basic wages, dearness allowance and other

compensatory allowance.

(iii) If the inquiry is not completed within a period of 180 days the employee shall be paid wages, dearness allowance and other compensatory allowances in full as subsistence allowance to be paid per month until the inquiry is finally

conducted.

Provided that, where the finding of the inquiry officer shows that such inquiry is prolonged beyond a period of 90 days or as the case may be 180 days, for reasons directly attributable to the employee the subsistence allowance to be paid per month shall for the period exceeding 90 days or, as the case may be, 180 days, shall be reduced to one-half of such basic wages, dearness allowance and other compensatory

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allowances.

(iv) If as a result of the inquiry held or explanation tendered, it

is decided not to take any action against the employee under clause (1), the employee shall be deemed to have been on

duty and shall be entitled to full wages minus such subsistence allowance as he may have already drawn and to all other privileges for the full period of suspension." (emphasis supplied)

11. Learned Counsel on behalf of the Bank has not disputed or

questioned the calculations of the amount awarded by the Labour

Court and the only argument canvassed before the Court is that

the Application under Section 33C (2) filed by the employee is not

maintainable since there is no existing right to the amount claimed

by the employee. It is an admitted position that the inquiry in

respect of the misconduct alleged, was not completed within 180

days. Indubitably, the punishment imposed of withholding annual

increments of 5 years by the order of punishment dated 6-05-2005,

does not figure in the punishments enumerated in sub-clause (1) of

Standing Order 22 extracted above. In other words, no action falling

under sub clause (I) of Standing Order 22 was taken by the Bank

against the employee. The case of the employee would thus

squarely fall under sub-clause (5A) of Standing Order 22 reproduced

above and the employee would therefore be deemed to have been

on duty and would be entitled to full wages minus such subsistence

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allowance as she may have already drawn and all other privileges

for the full period of suspension. The fact that the punishment order

dated 6th May, 2005 has not been subjected to challenge by the

employee would in no manner enure to the benefit of the Bank in

the facts and circumstance of the present case.

12. It is trite that suspension is not a termination of services and

there is no cessation of master and servant relationship during the

period of suspension and employee continues to be in employment

and the employee is paid subsistence allowance instead of salary.

Once the Bank has taken a decision only to withhold increments of

5 years, in view of the provisions of the Model Standing Orders as

discussed above, the employee is deemed to be on duty and would

be entitled to full wages minus subsistence allowance already drawn

and other privileges for the full suspension period.

13. In Central Bank of India Ltd. Vs. P.S. Rajgopalan, 1964 SCR

3-140, a Constitution Bench of the Hon'ble Supreme Court held as

follows :

" ...... In our opinion, on fair and reasonable construction of sub- section (2) it is clear that if a workman's right to receive the benefit is disputed, that may have to be determined by the Labour Court. Before proceeding to compute the benefit in terms of money the

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Labour Court inevitably has to deal with the question as to whether the workman has a right to receive the benefit. If the said right is not

disputed, nothing more needs to be done and the Labour Court can proceed to compute the value of the benefit in terms of money; but if

the said right is disputed, the Labour Court must deal with the question and decide whether the workman has the right to receive the benefit as alleged by him and it is only if the Labour Court answers this point in favour of the workman that the next question of making the necessary computation can arise.

.......The claim under S.33C(2) clearly postulates that the determination of the question about computing the benefit in terms of money may, in some cases, have to be proceeded by an enquiry

into the existence of the right and such an enquiry must be held to be incidental to the main determination which has been assigned to

the Labour Court by sub-section (2) .......We must accordingly hold that S. 33(2) takes within is purview cases of workmen who claimed that the benefit to which they are entitled should be computed in

terms of money, even though the right to the benefit on which their claim is based is disputed by their employees.

........ like the executing Court, the Labour Court would also be competent to interpret the award or settlement on which a workman

bases his claim under S. 33 C (2). Therefore, we feel no difficulty in holding that for the purpose of making necessary determination

under S. 33C(2), it would, in appropriate cases, be open to the Labour Court to interpret the award or settlement on which the workman's right rests. (emphasis supplied)

14. In the present case, the entitlement of the employee is based

on the relevant provisions of the Standing Orders as indicated

above, which are explicit and there is no adjudication necessary in

respect thereof. Pertinently it is not even suggested on behalf of the

Bank that the said provisions of the Standing Orders would not be

applicable to the employee or that they could be interpreted

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otherwise. The Bank cannot extricate itself from its liability to pay

the dues of the employee on the plea that the punishment order was

not subjected to challenge by the employee. In any event, the

punishment order dated 06-05-2005 does not deny the employee of

the allowances for the suspension period. The employee's claim is

on the basis of an existing right and even otherwise, only an

incidental issue. The Application of the employee would thus fall

within the scope of section 33C(2), and therefore, maintainable.

15. H.P. State Electricity Board Vs. Ranjeet Singh, (supra)

relied upon by the learned Counsel for the Bank was a case

concerning 'bonus' and the matter was ultimately remanded back to

the High Court by the Hon'ble Supreme Court, since the Hon'ble

Supreme Court was of the view that 'bonus' is not covered by the

Second Schedule and that it appears in Item 5 of Third Schedule

and the Labour Court under the Act could decide only the matters

specified in the Second Schedule and therefore the question of

entitlement to bonus could not have been decided by the Labour

Court. In the case in hand, there is such no dispute about the

jurisdiction of the Labour Court. This case would therefore be of no

assistance to the Bank.

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     16.      In Sakharam Parab Vs. M/s              Kadamba Transport

Corporation Ltd., Panaji, (supra) cited by the learned Counsel for

the Bank, the Division Bench of this Court was concerned with sub-

clause (F) and (G) of Clause 29 of the relevant Standing Orders

and the Division Bench held that the Standing Orders were silent

on the issue involved therein leaving it to the discretion of the

authorities who would be required to pass a separate order and it

was not a mere interpretation of the award or settlement. In the

present case the provisions of Standing Orders are clear and do not

admit of any ambiguity, and the said case therefore, would have no

application to the facts of the present case.

17. In view of the aforesaid discussion, I find no fault or infirmity in

the impugned order of the Labour Court to warrant interference in