Jijamata Mahila Sahakari Bank Ltd vs Mrs. S. V. Potnis
2026 Latest Caselaw 2760 Bom

Bombay High Court

Jijamata Mahila Sahakari Bank Ltd vs Mrs. S. V. Potnis on 17 March, 2026

Author: Amit Borkar

Bench: Amit Borkar

2026:BHC-AS:12852
                                                                                             wp5148-2013-J.doc


                           Sayali
                                      IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                              CIVIL APPELLATE JURISDICTION

                                                  WRIT PETITION NO. 5148 OF 2013

                           Jijamata Mahila Sahkari Bank Ltd.,
    SAYALI
    DEEPAK                 Malti Madhav, 1639 B, Sadashiv Peth,
    UPASANI
    Digitally signed by
    SAYALI DEEPAK
                           Pune - 411 030.                                          ... Petitioner
    UPASANI
    Date: 2026.03.17
    12:31:04 +0530


                                                         V/s.

                           S. V. Potnis,
                           Residing at 301, Kumar Padma,
                           1187/2, Shivaji Nagar, Pune - 411001.                    ... Respondent


                           Mr. S.R. Nargolkar i/by Aumkar Joshi for the Petitioner.
                           Mr. Nitin A. Kulkarni for the Respondent.


                                                    CORAM             : AMIT BORKAR, J.

                                                    RESERVED ON       : MARCH 6, 2026

                                                    PRONOUNCED ON : MARCH 17, 2026

                           JUDGMENT:

1. The Petitioner is a Co-operative Bank duly registered under the provisions of the Maharashtra Co-operative Societies Act, 1960. By the present petition, the Petitioner has challenged the legality and correctness of the Judgment and Order dated 03 April 2013 passed by the learned Member, Industrial Court, Pune in Revision Application (ULP) No. 30 of 2011.

2. The facts which have given rise to the present petition may be briefly stated as follows. The Petitioner Bank is governed by the

wp5148-2013-J.doc

provisions of the Bombay Industrial Relations Act, 1946, which is now known as the Maharashtra Industrial Relations Act, 1946. The Respondent was employed with the Petitioner Bank since the year 1983. At the time of her retirement, she was working on the post of Junior Officer. The Respondent attained the age of superannuation and retired with effect from 21 October 2005 upon completing 58 years of age. The retirement was effected in accordance with the policy, rules and regulations of the Bank, the resolutions passed by the Bank, and the Settlement dated 18 October 2004 executed between the Petitioner Bank and Bank Karmachari Sangh and Bank Employees Union. These Unions are the recognised and representative unions under the BIR Act. The aforesaid Settlement dated 18 October 2004 was entered into between the Petitioner Bank and the recognised Unions governing the service conditions of the employees of the Bank. The Settlement was duly registered under the provisions of the BIR Act. Clause 10 of Schedule B of the said Settlement prescribed the age of retirement of employees as 58 years.

3. The Respondent initially challenged the said Settlement by filing Complaint (ULP) No. 311 of 2004. Thereafter, the Respondent also instituted Complaint (ULP) No. 215 of 2005 on the ground that the monetary benefits arising out of the Settlement were not extended to her at the relevant time. In both the said Complaints, the applications seeking interim relief were rejected by the learned Labour Court. Subsequently, as the Petitioner Bank extended the monetary benefits under the Settlement to the Respondent, both the Complaints came to be

wp5148-2013-J.doc

disposed of. The Petitioner craves leave to rely upon and refer to the various orders passed by the Labour Court and this Court in relation to the said Complaints.

4. The Respondent ultimately stood superannuated with effect from 21 October 2005 in accordance with the policy, rules and regulations of the Bank and in terms of the Settlement dated 18 October 2004, upon completion of 58 years of age. The Petitioner Bank issued a communication dated 24 October 2005 informing the Respondent about her retirement.

5. Being aggrieved by the said communication dated 24 October 2005, the Respondent filed Complaint (ULP) No. 4 of 2006 before the Labour Court at Pune under Section 28(1) read with Item 1(a), (b), (d) and (f) of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. By the said Complaint, the Respondent prayed for a declaration that the Petitioner had engaged in unfair labour practices and for a direction restraining the Petitioner from continuing such practices. The Respondent also sought a declaration that the Retirement Order dated 20 October 2005, in fact dated 24 October 2005, was illegal and liable to be quashed and set aside. A further prayer was made for reinstatement in service on the original post with continuity of service. Along with the Complaint, the Respondent also filed an application seeking interim relief. The Petitioner filed its written statement to the said Complaint and denied each of the allegations and contentions raised by the Respondent. The Petitioner contended that the Complaint itself was not maintainable. It was further contended

wp5148-2013-J.doc

that the Respondent did not fall within the category of an employee entitled to claim the benefit of Model Standing Orders under the provisions of the BIR Act. The Petitioner therefore prayed that a preliminary issue be framed as to whether the Respondent was an employee within the meaning of the relevant provisions, and sought dismissal of the Complaint with costs. Upon completion of pleadings, the learned Labour Court framed the necessary issues for determination. Both parties placed documentary material on record in support of their respective cases. The Petitioner examined Shri Sunil Bhimaji Khedkar as its witness. The Respondent also led evidence in support of her case. After considering the pleadings, evidence and submissions of the parties, the learned Judge of the Second Labour Court, Pune, by Judgment and Order dated 20 December 2010, dismissed Complaint (ULP) No. 4 of 2006 filed by the Respondent. However, while dismissing the Complaint, the learned Labour Court recorded a finding that the Respondent would fall within the definition of an employee under the provisions of the BIR Act.

6. Being aggrieved by the Judgment and Order dated 20 December 2010 passed by the learned Judge, Second Labour Court, Pune in Complaint (ULP) No. 4 of 2006, whereby the Complaint was dismissed, the Respondent preferred Revision Application (ULP) No. 30 of 2011 before the Member, Industrial Court, Pune under Section 44 of the said Act. The learned Member, Industrial Court, Pune, after hearing the parties, by Judgment and Order dated 03 April 2013 allowed Revision Application (ULP) No. 30 of 2011. The learned Industrial Court held that the action of

wp5148-2013-J.doc

the Petitioner in terminating the services of the Respondent under the guise of superannuation constituted an unfair labour practice within the meaning of Item 1 of Schedule IV of the Act. The Petitioner was accordingly directed to cease and desist from engaging in such unfair labour practice and was further directed to reinstate the Respondent in service with continuity and full back wages.

7. Mr. Nargolkar, learned counsel appearing on behalf of the petitioner, invited my attention to the settlement entered into between the petitioner and its representative union under the provisions of the Bombay Industrial Relations Act, 1946. According to him, the said settlement expressly provided that the age of superannuation of the employees of the petitioner bank shall be 58 years. He submitted that the settlement was duly executed and sanctioned by the office bearers of the recognised union, including the General Secretary, and therefore the terms of the settlement are binding upon all employees governed by the said enactment. It is further submitted that the respondent had earlier instituted Complaint (ULP) No. 341 of 2004 under Item Nos. 4 and 5 of Schedule II and Item Nos. 9 and 10 of Schedule IV of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. In the said complaint, the respondent sought a declaration that the settlement entered into by the petitioner with the recognised union regarding revision of wages and other service conditions was illegal and liable to be quashed and set aside. The respondent had also prayed that the petitioner be restrained from disbursing the union contribution deducted

wp5148-2013-J.doc

from employees to Respondent No. 2. However, the said complaint was subsequently withdrawn by the respondent.

8. It is then submitted that the respondent thereafter filed another complaint being Complaint (ULP) No. 225 of 2006. In the said proceedings, the petitioner specifically contended that under the scheme of the BIR Act, any settlement entered into with the representative union is binding upon all employees. It was also the stand of the petitioner that the respondent had expressed readiness to pay the agreed contribution of 15 percent to the union in terms of the settlement. In the said complaint, the appointment of Mr. Bhide was also challenged. The respondent prayed for a direction to the petitioner to extend all benefits arising under the settlement dated 18 October 2004 and to pay the arrears in accordance with the terms of the said settlement.

9. It is further submitted that during the pendency of the said complaint the parties arrived at a compromise. Under the said compromise, the respondent accepted an amount of Rs. 75,434 towards full and final settlement of her claim relating to the benefits under the settlement. According to the learned counsel, the expression "full and final settlement" assumes significance in the context of the present proceedings, as the respondent had already attained the age of superannuation and stood retired on 21 October 2005 upon completion of 58 years of age in terms of the policy of the Bank and the settlement dated 18 October 2004. On the basis of the aforesaid circumstances, Mr. Nargolkar submits that once the respondent had accepted the amount of Rs. 75,434 towards full and final settlement of her retiral dues, and the

wp5148-2013-J.doc

cheques issued by the petitioner were duly accepted by her, the complaint was disposed of on the basis of such compromise. According to him, after accepting such settlement, it was not open for the respondent to again initiate proceedings by filing ULP Complaint No. 215 of 2005 raising similar grievances. Inviting my attention to the cross examination of the respondent, the learned counsel submitted that the respondent herself admitted that no employee in the petitioner bank is permitted to continue in service beyond the age of 58 years. It is pointed out that the respondent had attained the age of 58 years on 20 October 2005. He also relied upon a communication addressed by the respondent to the Chief Executive Officer of the petitioner bank dated 10 January 2009. In the said communication the respondent clearly stated that she had superannuated on 20 October 2005 upon attaining the age of 58 years. She also acknowledged receipt of provident fund benefits and made a claim for gratuity amounting to Rs. 1,52,702. According to the learned counsel, the said communication demonstrates that the respondent herself accepted the factum of her retirement upon reaching the prescribed age. The learned counsel further invited my attention to the relevant extract of the bank account which indicates that the respondent had received an amount of Rs. 1,52,701 towards retiral benefits. On the strength of these documents, it is submitted that the Industrial Court committed a serious error in allowing the revisional application and in holding that the provisions of the Model Standing Orders or Certified Standing Orders would prevail over the terms of the settlement. According to him, the finding that the age of

wp5148-2013-J.doc

superannuation fixed under the settlement would not bind the employees of the petitioner bank unless the Model Standing Orders or Certified Standing Orders are amended is contrary to the statutory scheme.

10. Per contra, Mr. Kulkarni, learned counsel appearing for the respondent, supported the impugned order passed by the Industrial Court. He submitted that the Industrial Court, upon appreciation of the material placed on record, has rightly concluded that the action of the petitioner bank in retiring the respondent upon completion of 58 years of age on 20 October 2005 was illegal. On that basis, the Industrial Court directed reinstatement of the respondent in service on her original post with full back wages. Elaborating his submissions, the learned counsel submitted that the respondent had specifically contended before the Labour Court that the appointment order issued to her did not prescribe any age of retirement. It was further contended that the Model Standing Orders framed under the Maharashtra Industrial Relations Act do not provide for any age of retirement in respect of employees of the petitioner bank. According to him, there are admittedly no Certified Standing Orders applicable to the bank and its employees. In the absence of such statutory provisions, the petitioner bank had no authority in law to retire the respondent at the age of 58 years. It was also contended that the bank had no independent policy or rule prescribing the age of retirement, and therefore the action of retiring the respondent was illegal. The learned counsel further submitted that in the written statement filed before the Labour Court, the petitioner bank had

wp5148-2013-J.doc

taken a stand that the respondent was not an employee within the meaning of the provisions of the MIR Act and therefore the age of retirement was fixed at 58 years by way of resolutions passed from time to time by the management. According to him, the petitioner bank did not specifically plead in the written statement that the age of retirement was fixed at 58 years by virtue of the settlement dated 18 October 2004 entered into with the Bank Karmachari Sangh under Clause 10 of Annexure B.

11. It is further submitted that the Labour Court relied upon the said settlement and proceeded to dismiss the complaint primarily on the ground that the respondent had accepted the benefits arising out of the settlement. On that basis, the Labour Court held that Clause 10 of Annexure B relating to the age of retirement was applicable to the respondent. According to the learned counsel for the respondent, the Industrial Court, while exercising revisional jurisdiction, rightly placed reliance upon the judgment reported in 2005 (3) CLR 912 in the case of Universal Transport Company, Mumbai v. Siraj Karbhari Chinna and Others. In the said judgment, it was held that in the absence of applicability of Model Standing Orders or where no age of superannuation is fixed, the workman would be entitled to continue in service so long as he or she remains physically and mentally fit. The said judgment also refers to and relies upon the decision of the Supreme Court in Workmen of Kettlewell Bullen and Company Ltd. v. Kettlewell Bullen and Company Ltd, 1964 (2) LLJ 146.

12. The learned counsel further submitted that the Industrial Court has properly appreciated the pleadings of the parties and has

wp5148-2013-J.doc

reached the conclusion that while deciding the complaint, the Labour Court had specifically recorded a finding that the respondent was an employee within the meaning of Section 3(13) of the MIR Act. According to him, the said finding was never challenged by the petitioner bank, and therefore the said finding has attained finality. It is further submitted that the Industrial Court rightly observed that under Section 35 of the MIR Act the age of retirement or superannuation of employees can be determined only through Model Standing Orders or through Certified Standing Orders certified by the appropriate authority under the said provision. It is an admitted position that no Certified Standing Orders are applicable to the petitioner bank. Equally, the Model Standing Orders framed under the MIR Act do not prescribe any age of retirement.

13. On that basis, the learned counsel submitted that the Industrial Court correctly interpreted the provisions of Section 35 read with Schedule I of the MIR Act. The said provisions indicate that the age of superannuation of employees must be regulated either through Model Standing Orders or through Certified Standing Orders. Therefore, even assuming that the settlement between the petitioner and the union provided for an age of retirement, such a provision cannot override the statutory scheme governing standing orders. The Industrial Court has therefore rightly held that it was not open to the petitioner bank to enter into a settlement on a subject matter which is required to be regulated under Section 35 read with Schedule I of the MIR Act. The Industrial Court also held that even if the policy of the bank or

wp5148-2013-J.doc

a resolution of the Board of Directors prescribed the age of retirement at 58 years, such prescription would not bind the employees unless the Model Standing Orders or Certified Standing Orders were suitably amended. In these circumstances, the Industrial Court concluded that the Labour Court had committed an apparent error on the face of the record, and therefore allowed the revision application. On the basis of the aforesaid submissions, the learned counsel for the respondent contended that the Industrial Court has correctly appreciated the settled position of law as well as the statutory provisions contained in Section 35 read with Schedule I of the MIR Act. According to him, the impugned order passed by the Industrial Court is legal, proper and in accordance with law, and therefore does not warrant interference in the supervisory jurisdiction of this Court under Article 227 of the Constitution of India. It is therefore prayed that the writ petition be dismissed with costs and the order of the Industrial Court be confirmed.

REASONS AND ANALYSIS:

14. I have heard learned counsel for the parties and read the record carefully. The narrow question is whether the Industrial Court was right in holding that the Bank's act of retiring the Respondent on completion of 58 years amounted to an unfair labour practice and in directing reinstatement with full back wages. The rival contentions and the material placed before the courts require close analysis.

wp5148-2013-J.doc

15. I will first deal with the statutory position which lies at the centre of the present controversy. The Maharashtra Industrial Relations Act creates a method for regulating service conditions of employees. Section 35 of the Act read with Schedule I makes it clear that important aspects of employment such as discipline, termination, and other service conditions are normally required to be governed through Standing Orders. The law provides two possible forms of such regulation. One is through Certified Standing Orders framed and approved for a particular establishment. The other is through Model Standing Orders framed under the statute which apply when certified ones are not available. However, there may arise situations where neither the Certified Standing Orders nor the Model Standing Orders specifically deal with a particular condition of service. In such a case, the Court has to examine the matter with some caution. This is because termination of employment or alteration of important service conditions cannot be lightly based upon unilateral decisions of the employer.

16. When the above statutory position is applied to the facts of the present case, two aspects immediately become noticeable. First, it is an admitted position on record that there are no Certified Standing Orders applicable to the petitioner Bank. Both sides have proceeded on that basis. Therefore, one source through which the age of retirement could have been formally determined does not exist here. Secondly, the Model Standing Orders applicable under the law do not prescribe any age of retirement for the employees of this Bank. In other words, neither the Certified

wp5148-2013-J.doc

Standing Orders nor the Model Standing Orders provide any rule stating that employees of the petitioner Bank must retire at the age of fifty eight years or any other age.

17. In such circumstances, the petitioner Bank relies upon the settlement entered into with the recognised union to justify the retirement of the Respondent. Settlements between management and recognised unions undoubtedly play an important role in industrial relations. Through such settlements various matters such as wages, allowances and other benefits are frequently settled by mutual agreement. But a difficulty arises where the subject matter of the settlement overlaps with an area which the statute intends to regulate through standing orders. If the statutory scheme expects that a particular condition of service should be governed through standing orders, the employer cannot bypass that requirement by recording the same condition in a settlement. Otherwise, the entire statutory scheme relating to standing orders may become ineffective.

18. With this background, the reasoning adopted by the Labour Court and the Industrial Court must be examined. The Labour Court appears to have focused primarily on the compromise between the parties and the fact that the Respondent accepted certain monetary benefits arising out of the settlement. From that perspective the Labour Court dismissed the complaint. However the Industrial Court looked at the matter from a legal angle. It noticed that the Labour Court did not adequately examine the statutory framework under Section 35 read with Schedule I of the Act. The real issue was not merely whether the Respondent

wp5148-2013-J.doc

accepted benefits under the settlement. The more important question was whether the Bank possessed the legal authority to retire the Respondent at the age of fifty eight years when neither the Certified Standing Orders nor the Model Standing Orders prescribed such retirement age. The Industrial Court therefore concluded that even if the settlement contained a clause fixing retirement at fifty eight years, such a clause could not override the statutory mechanism governing service conditions. In other words, a settlement cannot substitute the statutory requirement of regulating service conditions through standing orders where the law expects such regulation. On the material placed before this Court, the reasoning of the Industrial Court appears consistent with the statutory scheme. The Industrial Court did not ignore the existence of the settlement. It only held that the settlement could not displace the statutory scheme when it comes to determining a condition like retirement.

19. The petitioner has also relied strongly upon the compromise under which the Respondent accepted a sum of Rs. 75,434 and also received provident fund and gratuity amounts. This circumstance certainly requires careful examination. Acceptance of money by an employee may sometimes indicate that the employee has settled certain claims with the employer. However, there is an important distinction between settlement of monetary claims and surrender of the right to continue in employment. In the present record there is no document showing that the Respondent executed a express agreement giving up her right to challenge the legality of her retirement. The compromise appears to relate to the

wp5148-2013-J.doc

settlement of monetary dues under the settlement. The bank account entries and cheque receipts merely show that certain amounts were paid and received. They do not show that the Respondent abandoned her right to question the termination of her service. There is a distinction between acceptance of financial benefits and waiver of the right to contest termination. Unless the employee clearly agrees that she will not challenge the termination and will treat the payment as full settlement of all claims including the right to employment, it may not be correct to assume such waiver merely from receipt of money.

20. The petitioner has also relied upon certain communications written by the Respondent where she stated that she had superannuated. These communications may show that the Respondent acknowledged the fact that she had been retired by the Bank. But such statements by themselves cannot automatically be treated as a waiver of rights. For waiver to arise, there must be clear intention to give up the right to challenge the action of the employer. On the material available, the communications appear to acknowledge receipt of retiral benefits rather than to abandon the claim for reinstatement.

21. Another aspect which cannot be overlooked relates to the pleadings of the petitioner before the Labour Court. In the written statement the Bank initially took the position that the Respondent was not an employee within the meaning of the statute. At the same time the Bank did not clearly rely upon Clause 10 of the settlement as the sole legal basis for fixing the age of retirement. The absence of a clear stand on this issue tends to weaken the

wp5148-2013-J.doc

petitioner's case. It suggests that the Bank did not firmly place reliance upon a statutory or contractual mechanism which conclusively determined the retirement age.

22. The next aspect which requires consideration is the reliance placed on the decision in M/s. Universal Transport Co. versus Siraj Kadarbhai China, reported in 2005 SCC OnLine Bom 1169. The Industrial Court has referred to this judgment to support the view that when no age of retirement is prescribed under the applicable service conditions, a workman may be entitled to continue in service so long as he or she remains physically and mentally fit. While arriving at that conclusion, the Court relied upon the decision of the Supreme Court in Workmen of Kettlewell Bullen & Co. Ltd. v. Kettlewell Bullen & Co. Ltd. In that case the Supreme Court had occasion to consider the issue relating to retirement age where the employer had framed certain rules fixing retirement at fifty five years. The Supreme Court noticed that those rules had been framed after some of the workmen had already joined service. The Court therefore held that such rules could not automatically apply to employees who were appointed prior to those rules unless the condition was clearly made applicable to them. The Supreme Court further observed that where there was no rule or condition of service prescribing the age of retirement, the workman could continue in employment as long as he remained fit to work. The judgment in Universal Transport also referred to another decision in M.K. Mulki v. Kemen Pvt. Ltd. 2002 (95) FLR 567 where a similar issue had arisen. In that case also it was found that no retirement age had been fixed by the employer.

wp5148-2013-J.doc

The Court observed that in principle the employee could continue beyond sixty years where no retirement age existed. However, since the employee in that case was found to be in poor health and not capable of continuing work, the Court granted compensation instead of directing continuation in service. These decisions therefore illustrate that where the service rules are silent and no retirement age is fixed, the Court may permit continuation in service subject to practical considerations. At the same time, the judgment also clarified that where the retirement age is fixed under valid Standing Orders, the employee cannot insist on continuing beyond that age. For that proposition reference was made to the decision in Krishna G. Kasar v. India United Mills No. 2 2004 II CLR 430. In that case the Standing Orders framed under the Bombay Industrial Relations Act had specifically fixed the age of superannuation. Therefore, the employee in that case could not claim continuation beyond the prescribed age. The Court distinguished that case by observing that when Standing Orders exist and regulate the retirement age, those provisions become binding upon both employer and employee.

23. Therefore, while the judgment in Universal Transport does lay down a principle that an employee cannot be retired where no retirement age is fixed, the application of that principle must depend upon the facts of each case. If there exists no rule and no recognised condition of service fixing retirement age, the employee may be entitled to continue so long as he or she remains fit.

24. Considering all these aspects together, the Industrial Court appears to have correctly appreciated the legal position and the

wp5148-2013-J.doc

material placed before it. The approach adopted by the Industrial Court respects the statutory scheme of the Maharashtra Industrial Relations Act and ensures that important service conditions are determined through proper legal procedure rather than through indirect arrangements.

25. For the reasons recorded in the foregoing discussion, the Writ Petition is dismissed .

26. The Judgment and Order dated 3 April 2013 passed by the Member, Industrial Court, Pune in Revision Application (ULP) No. 30 of 2011 is accordingly confirmed.

27. No order as to costs.

(AMIT BORKAR, J.)