Sri Ravi Shankar Malani vs State Bank Of India & Ors
2022 Latest Caselaw 2004 Cal

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Item no. 04


              IN THE HIGH COURT AT CALCUTTA
                           CIVIL APPELLATE JURISDICTION
                                  APPELLATE SIDE

Present:
The Hon'ble Justice T.S. Sivagnanam
              And
The Hon'ble Justice Hiranmay Bhattacharyya


                           MAT 451 OF 2022
                                 +
                         IA NO.CAN 1 OF 2022

                     SRI RAVI SHANKAR MALANI
                                VS.
                    STATE BANK OF INDIA & ORS.


For the Appellant    :   Mr. Soumya Majumder
                         Ms. Shagun Baid


For the Respondents :    Mr. Susanta Pal

Heard on             : 18.04.2022

Judgment on          : 18.04.2022


T.S. Sivagnanam J.:

Affidavit-of-service filed in Court today be kept on record.

This intra-Court appeal at the instance of the first respondent in

the writ petition is directed against the order dated 02.03.2022 passed

in WPA 16222 of 2021 filed by the State Bank of India. The undisput-

ed facts are that State Bank of India challenged the order dated

31.07.2018 passed by the Controlling Authority under the provisions

of Payment of Gratuity Act, 1972 (in short "the Act") computing the

gratuity payable to the appellant at Rs.4,66,444/- which includes sim-

ple interest at the rate of 10% on the total amount of gratuity so com-

puted. The State Bank of India filed an appeal before the Appellate

Authority under the provisions of the said Act. The Appellate Authori-

ty by order dated 31.07.2019 dismissed the appeal and affirming the

order passed by the Controlling Authority. Challenging the said order,

the State Bank of India preferred the writ petition.

The first contention raised before the learned writ Court is that

the appointment of the appellant was purely contractual and he was

appointed as a contractual Chartered Accountant and that his con-

tract though was for eight years, it was on yearly basis or renewable

once in two years. The appellant having accepted the terms and con-

ditions of the contract, not covered under the State Bank of India Em-

ployees Gratuity Fund, was not entitled to file an application before

the Controlling Authority for computation of gratuity. The appellant

contended that for all purposes he was treated as an employee of State

Bank of India and was extended all benefits though the appellant

would state that his service was contractual. Further, it was contend-

ed that under the relevant regulation there is a bar for the appellant to

become a member of State Bank of India Gratuity Fund. But that will

not disentitle him from being entitled to gratuity in terms of the provi-

sions of the Act. Further, the appellant has rendered good service for

the bank and every time he was recognized for his good service and

enhanced emolument was also given to him. Further, the bank has

issued a work experience certificate dated 30.06.2017 certifying that

the appellant, who has been engaged in the State Bank of India from

14.11.2008 to 30.06.2017. He joined the bank as Credit Analyst on

14.11.2008 on contractual basis and at the time of relieving his desig-

nation was Vice-President (Chartered Accountant : Credit Analyst) in

the Commercial Branch. Further, the certificate states that the con-

duct/performance of the appellant has been satisfactory during his

employment in the bank.

Further, the appellant referred to the definition of employee as

defined under Section 2(e) of the Act and the definition of wages as de-

fined under Section 2(s) of the Act. The appellant places reliance on

the decision of Hon'ble Supreme Court in Allahabad Bank & Anr. Vs.

All India Allahabad Bank Retired Employees' Association reported

in (2010) 2 SCC 44 which dealt with Section 5 of the Act of 1972

which gives power to the government to exempt the provisions of the

Act in respect of certain establishment. In the said judgment the

Hon'ble Supreme Court had held that there is no escape from payment

of gratuity under the provisions of the Act until and unless the estab-

lishment has been exempted by the appropriate government. Further,

it was held that the gratuity, being a statutory right, cannot be taken

away except in accordance with the provisions of the Act.

The appellant also places reliance on the decision of Hon'ble Di-

vision Bench of this Court in a judgment delivered on 29 th September,

2016 in MAT 1298 of 2012. The learned single Bench by the im-

pugned order has allowed writ petition and set aside the order passed

by the authorities under the Act.

On reading of the impugned order, particularly, paragraph 7

thereof, we find that substantial portion of the contention raised by

the appellant has found favour of the learned writ Court. The only as-

pect on which the learned writ Court did not agree with the appellant

was on the ground that the engagement of the appellant was contrac-

tual. Taking note of the contract, on this ground the learned single

Judge has sought to distinguish the decision relied on by the appel-

lant before the writ Court. We, thus, test the correctness of the order

passed by the learned single Judge on this aspect.

The terms and conditions of the service of the appellant are gov-

erned by State Bank of India Chartered Accountants Appointed on

Contract Service and Conduct Rules 2004. In Rule 8 thereof grades,

emoluments and categorization of posts have been mentioned. It

states that contractual appointment as Chartered Accountants will be

on a consolidated emolument on cost to Bank basis as decided by

Central Office Human Resources Committee and the remuneration on

Cost to Bank basis as also eligibility criteria for appointment is subject

to review by the Central Office Human Resources Committee of the

Bank from time to time as per market conditions and shall consists of

the components mainly, pay, house rent, conveyance, leave travel con-

veyance, medical expenses, subsidy on loans, supplementary al-

lowance, variable pay. The remuneration payable has been catego-

rized as pay or as wages had the appointment been classified under

the workman category. Further, the contract entered into between the

respondent bank clearly shows that the process of recruitment has

been undertaken by the first respondent bank. Further, the terms of

engagement of the appellant was to be governed by the rules and regu-

lations of the bank including the power to initiate action for any mis-

conduct or breach of any terms and conditions or stipulations men-

tioned in the contractual rules of the bank. The remuneration payable

was referred to as salary. Apart from that the basic pay for various

contractual employee based on certain parameters as mentioned un-

der the rules. In the present facts and circumstances, it may be too

late for the bank to take a stand that the appellant would have fallen

within the definition of the term 'employee' as defined under Section

2(e) of the Act. Admittedly, the appellant was employed on wages and

wages as defined under Section 2(s) of the Act means all emoluments

which have earned by an employee while on duty and leave in accor-

dance with the terms and conditions of his employment which are

payable to him in cash and includes dearness allowance but does not

include any bonus, commission, house rent allowance, overtime wages

and other allowances. Thus, under Section 2(s) wages has been de-

fined in the widest possible term and the 'pay' will definitely fall within

the definition of 'wages' as for all purposes to be treated as emolu-

ments. If that be the case, then the appellant would fall within the

definition of 'employee' as defined under Section 2(e) of the Act for the

purpose of application of the provisions of Payment of Gratuity Act

and not for other purposes. So far as the contract of employment is

concerned, we find that though the contract of service is extended

from time to time, these are all purely matters within the realm and

control of the bank. Undoubtedly the service of the appellant was

found to be good. Consequently, the contract was renewed from year

to year or once in two years and the fact remains that the bank has al-

ways considered the appellant, who have been in continuous employ-

ment since 2008 till he resigned in the year 2017. The Controlling Au-

thority under the provisions of the Act has taken note of the factual

matrix and interpreted in the manner in which the service condition of

the appellant has been couched and thereafter computed the quantum

of gratuity payable. Thus, the order passed by the Controlling Author-

ity dated 31.07.2018 was tested for its correctness by the appellate

authority and after re-examining the fact the appellate authority by or-

der dated 31.07.2019 has affirmed the order. Until and unless there

was perversity in the approach of the authorities, the writ Court sel-

dom interferes with the orders passed by the authorities exercising ju-

risdiction under labour social-welfare legislation. Further, on going

through the offer of appointment dated 19.07.2008 we find that the

rule of reservation has been adopted by the respondent bank, the ap-

pellant has been subjected to medical examination, his antecedents

have been verified, non-compete agreement has been directed to be ex-

ecuted and more importantly the appellant was placed under proba-

tion for a period of six months. An employee, who has been recruited

in an organization, is initially employed on temporary basis and placed

under probation and upon successful completion he was absorbed

into service. Thus, by placing the appellant under probation, for the

purpose of considering the appellant as an employee as defined under

Section 2(e) of the Act, the bank has treated him as an employee.

Therefore, we find that the orders passed by the Controlling Authority

as well as the Appellate Authority was just and proper and ought not

to have been interfered by the learned writ Court especially in the ab-

sence of perversity.

Thus, for the aforesaid reasons, we are of the considered view

that the order passed in the writ petition calls for interference. In the

result, the appeal and the connected application are allowed and the

order passed in the writ petition is set aside. Consequently the orders

passed by the Controlling Authority as affirmed by the Appellate Au-

thority are restored and the appellant shall be entitled to withdraw the

entire amount of gratuity together with interest which is lying in the

deposit before the Controlling Authority on production of a server copy

of this judgment.

MAT 451 of 2022 and the connected application being CAN 1 of

2022 are disposed of.

Urgent photostat certified copy of this judgment, if applied for,

be delivered to the learned advocates for the parties, upon compliance

of all legal formalities.

(T. S. Sivagnanam, J.)

I agree.

(Hiranmay Bhattacharyya, J.)

RP/SB