Delhi High Court
Canara Bank vs All India Bank Deposit Collectors ... on 5 October, 2015
Author: Pradeep Nandrajog
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on : October 01, 2015
Judgment Delivered on : October 05, 2015
+ LPA 429/2015
STATE BANK OF HYDERABAD ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 432/2015
KOTAK MAHINDRA BANK LTD ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 433/2015
VIJAYA BANK ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
LPA No.429/2015 & conn.matters Page 1 of 43
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 434/2015
KARNATAKA BANK LTD ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 436/2015
SOUTH INDIAN BANK LTD ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA No.429/2015 & conn.matters Page 2 of 43
LPA 437/2015
CENTRAL BANK OF INDIA ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 441/2015
STATE BANK OF MYSORE ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 446/2015
STATE BANK OF PATIALA ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
LPA No.429/2015 & conn.matters Page 3 of 43
ALL INDIA BANK DEPOSIT & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 573/2015 & CM No.17172/2015
LAKSHMI VILAS BANK LTD ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 454/2015
FEDERAL BANK LTD ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 455/2015
LPA No.429/2015 & conn.matters Page 4 of 43
CORPORATION BANK ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 497/2015
ANDHRA BANK ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 498/2015
DENA BANK ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
LPA No.429/2015 & conn.matters Page 5 of 43
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 513/2015
CANARA BANK ..... Appellant
Represented by: Mr.Naveen R. Nath, Advocate with
Ms.Hetu Arora, Advocate
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 516/2015
SYNDICATE BANK ..... Appellant
Represented by: Mr.Naveen R. Nath, Advocate with
Ms.Hetu Arora, Advocate
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
LPA No.429/2015 & conn.matters Page 6 of 43
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 551/2015
INDIAN BANK ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 350/2015
PUNJAB NATIONAL BANK ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 351/2015
UNION BANK OF INDIA ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
LPA No.429/2015 & conn.matters Page 7 of 43
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 357/2015
UCO BANK ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
LPA 359/2015
STATE BANK OF BIKANER AND JAIPUR ..... Appellant
Represented by: Mr.Jagat Arora, Advocate with
Mr.Rajat Arora and Ms.Ritu Arora,
Advocates
versus
LPA No.429/2015 & conn.matters Page 8 of 43
ALL INDIA BANK DEPOSIT
COLLECTORS FEDERATION & ANR ..... Respondents
Represented by: Mr.Inderjit Singh, Advocate for R-1
Dr.K.B.S.Rajan, Advocate with
Ms.Rashmi B.Singh, Mr.Sudarshan
Rajan, Mr.Vijay Sharma and
Mr.Arjun, Advocates for R-2
CORAM:
HON'BLE MR. JUSTICE PRADEEP NANDRAJOG
HON'BLE MS. JUSTICE MUKTA GUPTA
PRADEEP NANDRAJOG, J.
1. Syndicate Bank was the original pioneer of a movement to penetrate
banking in small muffasil towns when it introduced a Pigmy Deposit
Scheme. By virtue of the deposits Syndicate Bank grew from a pigmy to a
giant. Others followed, giving it names such as Honey Bees Scheme, Small
Depositors Scheme, Mini Deposit Salap Sanchey, Pragati Deposit Scheme,
Nityha Laxmi Deposit Scheme, Timely Deposit Collection Scheme, Honey
Deposit Collection Scheme, Janta Deposit Scheme etc. As per the scheme,
the banks appointed Deposit Collectors who would go to the house or the
work place of the customers and collect a daily deposit which was credited
to the account of the customer. The customer would earn interest on the
deposit and the bank would augment its resources. It was a win-win
situation for the bank as well as the customer. The daily Deposit Collector
would earn a commission on the deposit collected.
2. The daily Deposit Collectors called Commission Agents by some
banks, formed associations which marched under the banner of a Federation.
Through the Unions as also the Federation these Commission
Agents/Deposit Collectors made a demand to be given regular employment.
Conciliation proceedings resulted in a failure, leading ultimately to a
reference being made by the Government of India to the Industrial Tribunal
on October 03, 1980, which reads as under:-
"Whether the demands of the Commission Agents or as the case
may be Deposit Collectors Employed in the Bank listed in the
Annexure that they are entitled to pay scales, allowances and
other service conditions available to regular clerical employees
of those banks is justified? If not, to what relief are the
workmen concerned entitled and from which date?"
3. Another reference was made to the Industrial Tribunal by the Central
Government (date not known), but resulting in registration of ID No.108/84,
which reads as under:-
"Whether the demand of the Commission Agent or as the case
may be Deposit Collector employed in the Bank listed in the
Annexure that they are entitled to pay scales, allowances and
other service conditions available to regular clerical employees
of these Banks is justified? If not, to what relief are the
workmen concern entitled and form which date?"
4. Succinctly stated, case pleaded by the Deposit Collectors/Commission
Agents was that to fulfil its objective the banks appointed them as workmen
to go to the houses or work place of the customers and collect a deposit
daily. The money collected was remitted to the bank(s) concerned on the
very next day, as per the terms of the employment. The Deposit Collectors
performed canvassing of all types of deposits such as Saving Bank Account,
Fixed Deposit, Recurring Deposits without any remuneration, this they did
in addition to their normal duty of daily collection of money from the
customers at the door steps of the customers. For these additional duties
performed by them they were not paid any commission. They used to attend
the bank every day in the early hours and made entries in the collection
register(s) maintained by the bank(s). In some branches they used to prepare
the ledgers as well. They prepared cards in which particulars of the amount
received by them from the depositors during the seven days of the week
were recorded. Some of the banks maintain pass book instead of cards. In
such cases, entries were made by the Deposit Collectors in the pass book.
They used to go to the depositors as and when the depositors wanted,
irrespective of the timings. In short, the work performed by the Deposit
Collectors was equivalent to the work performed by the cashiers in the
banks as well as the clerical staff. They claimed that the work done by them
was an integral part of the banking industry. They claimed to be working
under the direct control and supervision of the bank management, and that
the management of the bank was their pay master. Thus, they claimed that
there was a relationship of employer and employee between the
management and them. As per them the benefit of the services rendered by
them was for the bank. The livelihood of the Deposit Collectors
substantially depended on the labour rendered by them, to produce services
for the benefit and satisfaction of the banking enterprises. Considering the
overall position and the circumstances in which these Deposit Collectors
rendered service and labour to the banks, and taking into consideration the
remuneration paid to them, they claimed that the agreement taken by the
management of the banks was nothing but deceptive devices invented for the
purpose of denying them the scales, allowances and other conditions
available to regular clerical employees of the banks.
5. The banks denied the case pleaded by the daily Deposit Collectors
and urged that their status was that of Commission Agents. As per the banks
the Deposit Collectors were free to chose their working hours and the
number of customers they would contact. Relevant would it be to note that
the banks admitted the averments in the statement of claim regarding nature
of duties performed by the Deposit Collectors.
6. In view of the evidence led, vide award dated December 22, 1988, ID
No.14 of 1980 and connected Industrial Disputes in which references were
made were disposed of by the Industrial Tribunal giving the following
directions:-
"1) All those Deposit Collectors and Agents who are below
the age of 45 years on 3-10-1980 (the date of the first reference
of this industrial dispute) shall be considered for regular
absorption for the post of Clerks and Cashiers if they are
matriculates and above including qualified Graduates and Post
Graduates. They may be taken to Banks service as regular
employees if they pass the qualifying examinations conducted
by the Banks. Those who are absorbed shall be treated on par
with regular clerical employees of the Bank. Those who are
qualified with 8th Class and below Matriculations shall be
considered for absorption as Sub-Staff by conducting qualifying
examinations.
2) As regards the Deposit Collectors and Agents who are
above 45 years of age on the date 3-10-1980 and also those
who are unwilling to the absorbed in Regular Banks service
they shall be paid the fall back wage of `750.00 per months
linked with minimum deposit of `7,500.00 per month and they
should be paid incentive remuneration at 2% for collection of
over and above `7,500.00 per month and they should also pay
uniform conveyance allowance of `50.00 per month for
deposits of less than `10,000.00 and `100.00 per month for
deposits of more than `10,000.00 upto or above `30,000.00 per
month. They should be paid Gratuity of 15 days commission
for each year of service rendered."
7. Needless to state, the Industrial Tribunal accorded status of a
workman to the daily Deposit Collectors and as a consequence of said status
accorded, issued the directions in the award above-noted in paragraph 6.
Pithily put the Deposit Collectors were held entitled to a minimum fall back
wage of `750/- per month linked with minimum deposit of `7,500/- per
month to be collected by them and above `7,500/- a commission of 2%.
Besides a conveyance allowance of `50/- per month for deposits up to
`10,000/- and `100/- per month for deposits above `10,000/- per month.
8. Aggrieved by the award dated December 22, 1988, the Indian Banks
Association filed a writ petition before the High Court of Andhra Pradesh
which was disposed of on March 28, 1997. The decision is reported as
(1998) I LLJ 23 (AP) Indian Banks Association Vs. Workmen of Syndicate
Bank & Ors.
9. Upholding the award in so far it accorded status of workmen to the
Deposit Collectors, the High Court set aside the first direction in the award
concerning regular absorption of the deposit collectors who were below the
age of 45 years if they possessed the educational qualifications prescribed in
the award. The second direction concerning fall back wages and
conveyance allowance was upheld.
10. The onward march took the parties to the Supreme Court. Petitions
seeking Special Leave to Appeal filed by the Indian Banks Association and
the Association of the Daily Deposit Collectors against the decision dated
March 28, 1997 of the Andhra Pradesh High Court were allowed. Leave to
Appeal was granted. The resultant civil appeals were decided on February
13, 2001; and the decision is reported as 2001 SCC (L&S) 504 Indian Banks
Association Vs. Workmen of Syndicate Bank & Ors. Dismissing the appeals
filed by the workers and upholding the decision of the Andhra Pradesh High
Court that the daily Deposit Collectors could not be regularized and
directions issued to said extent in the award were rightly set aside by the
Andhra Pradesh High Court, the Supreme Court upheld the view taken in the
award and upheld by the High Court that the daily Deposit Collectors were
workmen; albeit part time workmen. Noting the definition of wages in
Section 2(rr) of the Industrial Disputes Act, 1947 the Supreme Court held
that the commission received by the daily depositors was a wage which was
dependant on the productivity. (Para 25)
11. The journey which was commenced by the daily Deposit Collectors in
the year 1980 came to an end in the year 2001. The second round of
litigation commenced immediately. As per the Deposit Collectors the fall
back wages determined vide award dated December 22, 1988, was with
reference to the cost of living reckoned on the consumer price index of 100
with base year 1960. The daily Deposit Collectors took the stand that
inflation and rise in the cost of living warranted an upward revision in the
fall back wages. The demand for increase in fall back wages was raised by
the various unions of the bank employees as also the federation of the unions
upon the Indian Banks Association. The conciliation proceedings failed and
a reference was made by the Central Government to the Industrial Tribunal
of a dispute on August 06, 2003, which reads as under:-
"Whether the demand of All India Banks Deposit Collectors‟
Federation for linkage of fall back wages of `750.00 as
determined by award dated 22.12.1988 by Industrial Tribunal,
Hyderabad, which is based on Consumer Price Index at 500
points (Base 1960 = 100) to the present Consumer Price Index
and their upward revision is justified? Whether the demand of
All India Banks Deposit : Collectors‟ Federation for
reimbursement of conveyance expenses at revised and
enhanced rate is justified? If so, what relief the aid deposit
collectors, employed by various banks represented by the
Indian Banks‟ Association, are entitled to and from which
date?"
12. The Indian Banks Association raised an objection to the reference on
the plea that the daily Deposit Collectors were not its employees.
13. On the pleadings of the parties three issues were settled by the
Industrial Tribunal as under:-
"(i) As per terms of reference sent by Government of India.
(ii) Was there any privity of contract between the concerned
workman and the IBA? If not, what are consequences?
(iii) Relief."
14. Not wanting to take any chance, the All India Bank Deposit
Collectors Federation and the All India Bank Deposit Workmen Union, who
were espousing the cause of the daily Deposit Collectors before the
Industrial Tribunal filed an application on January 31, 2005 praying to
implead 48 banks as respondents. The said application was allowed on July
19, 2005. 40 banks were impleaded as respondents for the reason 8 out of
the 48 banks sought to be impleaded had ceased to exist and summons were
served upon these banks, being : (1) Syndicate Bank, (2) State Bank of
Hyderabad, (3) Indian Bank, (4) Vijaya Bank Ltd., (5) Vysya Bank Ltd., (6)
Corporation Bank Ltd., (7) State Bank of India, (8) Central Bank of India,
(9) Andhra Bank Ltd., (10) Canara Bank, (11) Tamil Nadu Bank, (12)
Allahabad Bank, (13) Bank of Baroda, (14) Bank of India, (15) Bank of
Maharashtra, (16) Bank of Rajasthan Ltd., (17) Catholic Syrian Bank Ltd.,
(18) Dena Bank, (19) Dhana Lakshmi Bank Ltd., (20) Federal Bank Ltd.,
(21) Indian Overseas Bank Ltd., (22) Karnataka Bank, (23) Karur Vysya
Bank Ltd, (24) Lakshmi Vilas Bank Ltd., (25) Lord Krishna Bank Ltd., (26)
Oriental Bank of Commerce Ltd., (27) Punjab & Sind Bank, (28) Punjab
National Bank, (29) Sangli Bank Ltd., (30) The South India Bank Ltd., (31)
State Bank of Bikaner & Jaipur, (32) State Bank of Indore, (33) State Bank
of Mysore, (34) State Bank of Patiala, (35) State Bank of Saurashtra, (36)
State Bank of Travancore, (37) Syndicate Bank, (38) Union Bank of India,
(39) United Bank of India, and (40) United Commercial Bank.
15. The impleaded banks filed a statement of defence; and the distillate of
the mixture of the pleadings of the banks was that the Deposit Collectors
were called Commission Agents and hence were not the employees of the
bank. The banks pleaded that taking into account the payments made to the
Commission Agents in terms of the Award dated December 22, 1988 and
interest paid to the depositors; after defraying the administrative costs and
staff costs, the banks were incurring a loss pertaining to the deposits in
question. Thus, as per the banks, any revision in the fall back wages would
make the scheme unviable, and that the claim to enhance the fall back
wages, linked to the consumer price index, would be suicidal for the scheme.
Some banks raised the plea that they were not having any such scheme. The
banks which were impleaded as parties and claimed not to have any such
deposit scheme are: (i) Bank of India, (ii) Punjab & Sind Bank (iii) Oriental
Bank of Commerce, (iv) Bank of Baroda, (v) ICICI Bank (after the merger
of Sangli Bank Ltd.), and (vi) Allahabad Bank. Two banks: (i) State Bank
of Hyderabad, and (ii) State Bank of Patiala closed the daily deposit
schemes on February 20, 2010 and September 01, 2008 respectively.
16. Shri I.P.Ponnusamy, Shri Ashwani Vijh and Shri Ashish Bilala were
examined by the All India Bank Deposit Collectors Federation to
substantiate the claim. Shri Ashok Kumar and Shri A.N.Sivanand Babu
were examined by the All India Bank Deposit Collectors Workmen Union to
substantiate the claim. Shri K.Ganesan, Vice President of the Indian Banks
Association was examined to establish its defence. Shri Neeraj Gupta
(Assistant General Manager, Punjab National Bank), Shri Satheesh Kumar
(AGM, South Indian Bank), Shri JNS Murali (Senior Manager Vijaya
Bank), Shri Kusal Pal (Senior Manager, Central Bank of India), Shri
L.Makkad (Manager (P), State Bank of Bikaner and Jaipur), Shri Shyamal
Kumar Singh (Chief Manager, Indian Bank), Shri C.M.Duggal, (AGM,
Federal Bank), Shri Ajit Kumar Srivastava, (Manager (Law) Canara Bank),
Shri Sunil Prakash (Assistant Manager (Law) Union Bank of India), Shri
Arun Kumar Tyagi (Deputy General Manager, Syndicate Bank), Shri
Sudershan D.Sheth, (Chief Manager, Karnataka Bank), Shri Joginder Pal
Bhagat (Chief Manager, UCO Bank), Shri Anil Kumar V (Chief Manager,
State Bank of Travancore), Shri R.Venkatesh (Chief Manager, State Bank of
Hyderabad) and Shri P.Venugopal (State Bank of Hyderabad) were
examined by the banks to sustain their defence.
17. Vide Award dated October 07, 2013, with reference to Issue No.2
settled by the learned Industrial Tribunal, which has been noted by us in
paragraph 13 above, the learned Presiding Officer of the Industrial Tribunal
held that in view of the fact that the individual banks likely to be affected by
the award were impleaded as parties on July 19, 2005, the said issue became
a non-issue i.e. what was the consequence of there being no privity of
contract between the concerned workmen and the Indian Banks Association.
18. Referring to the definition of an industrial dispute as per Section 2 (k)
of the Industrial Disputes Act, 1947 and the definition of a workman as per
Section 2(s) of the said Act; noting various judgments of various courts on
the scope of what would be an industrial dispute and who would be a
workman, the Industrial Tribunal held that the Deposit Collectors were
workmen and the dispute which they had raised concerned their wages and
hence was an industrial dispute. The Industrial Tribunal discussed res-
judicata, and with reference to the earlier litigation terminating in the
opinion of the Supreme Court in which it was held that the daily Deposit
Collectors are workmen and the remuneration received by them, called
commission, would qualify to be a wage; the Tribunal reinforced its decision
that these Deposit Collectors/Commission Agents were workmen.
19. The Industrial Tribunal thereafter noted various decisions concerning
the power of an Industrial Adjudicator and concluded that an Industrial
Adjudicator had very wide powers, to even vary the terms agreed to between
the management and the workmen while settling the wages payable and
conditions of employment.
20. Proceeding to note the evidence and the contention of the Union and
the Federation in para 119 of the award and terminating the discussion in
paragraph 166, succinctly noted by us the Tribunal highlighted that
minimum wages were increased from time to time and that the concept of a
minimum wage was by taking into account that the family of a workman
would comprise three units, the husband and the wife as one unit each and
two children constituting one unit. Daily calorie intake of 2700 calories for
an average adult, clothing requiring 72 yards of cloth per family. Minimum
rent for housing and miscellaneous expenses for fuel etc. Wages of regular
employees of the bank increased during this period which was `1,228/- per
clerk in the year 1980 having gone up to `12,064/- per month as of the year
2001. Consumer price index, with base 100 as of the year 1960 which was
500 points as of the year 1980 having crossed 4400 points. The profits
earned by the banks during the year 2005-06 and 2006-07. The Tribunal
noted that a fair wage had to relate to the work load and a minimum
remuneration so that a workman living in a modernized civilized society had
sufficient means to sustain himself and the family. The Tribunal tabulated
in para 150 of the award minimum wages notified on April 01, 2003 for
unskilled, semi-skilled, skilled and highly skilled workmen in the fields of
agriculture, stone crushing, sweeping and cleaning, watch and ward, loading
and unloading, mining and construction activities. The Tribunal also noted
minimum wages notified by the Government of Delhi as on April 01, 2013
for various scheduled employments. The Tribunal noted that areas were
classified into category 'A' 'B' and 'C'.
21. The Industrial Tribunal recognized that the point of view of the banks
had to be kept in mind, and for which we may highlight para 126 of the
Award, in which the Tribunal recognized that the following counter
balancing circumstances have to be taken into account:-
(i) Unreasonable inroads into the profit of the employer may
have the tendency to drive the capital away from the
fruitful improvement and may prejudicially affect the
capital formation.
(ii) Wage-structure, which is beyond the financial capacity of
the employer, may lead to the closure of the industry itself.
(iii) Wage structure, being a long range plan, a long range
view of the financial capacity of the industry should be
taken into consideration.
(iv) For considering increase in the wage, increase should be
correlated to minimum wage, in relation to financial
capacity of the industry to bear the burden.
(v) Effect of increase on other similar industries in the region,
should be taken into consideration, i.e. a wage structure
should take into consideration on industry cum region
basis, after giving careful consideration to the ability of
the industry to pay.
(vi) Total pay packet of the workmen, including dearness
allowance, other allowance and other benefits enjoyed by
them.
(vii) Effect of rise in prices, resulting from the rise in wages,
which may affect other members of the community and
even prejudicially affect living conditions of the workmen
themselves.
(viii) The effect of the rise in process on the international trade
of the country.
22. Thereafter in paragraphs 155 to 179 the Tribunal discussed the
concept of a permanent employee, a temporary employee and a part time
employee and that on April 27, 2010, the 9 th Bipartite Settlement was
arrived at between the association of the banks and the various unions, as
per which a part time employee was one who worked for three hours a day;
fixing wage of such employee at 1/3rd of the scale of pay in which a regular
employee was to be paid wages. The Tribunal thereafter noted the pay
scales of clerical staff and subordinate staff to bring home the point that as
per the bipartite settlement a clerical staff who had put in 20 years' service
would receive basic pay in sum of `19,300/- and a subordinate staff would
receive basic pay in sum of `11,350/-. On this standard the Tribunal held in
para 158 that the fall back wage would therefore come to `2,400/- per
month, being 1/3rd of what would be received by a regular employee
performing clerical duties. This being the basic pay, the Tribunal noted that
other allowances (not mentioned in the award, but obviously would be house
rent allowance, city compensatory allowance and travelling allowance)
would also be payable. The Tribunal thereafter noted the financial capacity
of the banks and tabulated the same in paragraphs 175 to 180 of the award.
Thereafter, the pith and substance of the reasoning of the Tribunal was
recorded in paragraphs 183 to 190 of the award, which read as under:-
"183. With above standards in mind, the Tribunal thinks it
expedient to fix minima limit of collection, to which a deposit
collector should adhere in all circumstances. For ascertaining
that limit of collection, it is to be taken note of as to what
amount of money is being collected by the deposit collector in
a month. Shri Ponnusamy unfolds that in the year 1978, he
used to collect a sum of about `3 lac per month. As on date
(he entered the witness box in May 2011), he is collecting a
sum of `12 lacs approximately in a month. Shri Ashish Bilala
declared that he is earning a sum of `12000.00 to `13000.00
per month, as fall back wages and incentive remuneration. He
deposed in bold words that he is collecting a sum of
`6,50,000.00 from the account holders per month. According
to Shri Ashok Kumar, he collects a sum of `1,50,000.00 to `2
lac per month from the account holders. Shri A.K.Shivanand
Babu deposed that he collects a sum of `3,50,000.00 to
`3,75,000.00 per month from the account holders. Shri
Ponnusamy operates in Chennai, which is „A‟ area city while
all other witnesses except Shri Bilala operates in „B‟ area
cities. Shri Bilala operates in „C‟ area city. Facts detailed by
above witnesses, relating to quantum of collection made by
them, make me to conclude that a deposit collector in „C‟ area
city would be able to collect at least a sum of `3 lacs per
month from the account holders. A deposit collector from „B‟
area city can collect a sum of `4 lac, while a deposit collector
from „A‟ area city would be able to collect a sum of `5 lacs per
month from the account holders. Resultantly, a minima ceiling
of collection of `3 lac for „C‟ area city, `4 lac for „B‟ area
city and `5 lac per month for „A‟ area city is to be fixed for the
deposit collectors. On a collection of `3 lac per month, the
bank is required to retain roughly an amount of `90,000.00
towards cash reserve ratio and statutory liquidity ratio. A sum
of `2,10,000.00 would be available with the bank for
investment through advances to the general public. On this
amount, the bank had to spend 5% as its cost. The bank may
advance that amount at an interest rate of 14% per annum.
When cost ratio of the bank is deducted, the bank earns 9%
interest approximately per annum on the amount referred
above. Cost ratio of the bank on the amount kept for CRR and
SLR would be neutralized by the earnings of the bank on
statutory liquidity ratio. Thus, an amount of `2,10,000.00 per
month, so collected by the deposit collector for a year, would
fetch an earning of `1,22,885.00 to the bank. Out of this
earning, a sum of `8000.00 per month would be awarded as
fall back wages to the deposit collectors working in „C‟ area
cities. In a year, he will get `4000.00 as gratuity. Thus, in a
„C‟ area city, the bank had to spend on fall back wages and
gratuity, a sum of ` 1 lac out of the earning of `1,22,850.00.
184. On collection over and above `3 lac, but upto `5 lac, a
deposit collector would get an incentive remuneration of 3%
and on collection over and above `5 lac per month, he will get
incentive remuneration of 2% only. Therefore, a deposit
collector of „B‟ area city who had to collect a minima of `4 lac
per month, will get fall back wages of `8000.00 besides
incentive remuneration of `3000.00 a month. His pay packet
would come to `11000.00 in a month, besides a gratuity of
`4000.00 a year.
185. A deposit collector in „A‟ area city shall collect a sum of
`5 lac per month. His pay packet would be `8000.00 as fall
back wages and `6000.00 as incentive remuneration, besides a
gratuity of `4000.00 in a year. If deposit collectors of any
area collects over and above `5 lac in a month, he will get
incentive of 2% on that amount. Thus, by collecting more than
`5 lacs in a month, the deposit collectors may earn more. The
amount, which will come to them towards fall back wages and
incentive remuneration, would be over and above the minimum
wages, so notified. By making that payment to the deposit
collectors, the banks would not be strained financially at all.
The fall back wages and incentive remuneration, as referred
above, can well be compared to the wages earned by a deemed
part time clerical staff, employed in the bank and the minimum
wages fixed for skilled clerical staff in scheduled employments.
186. One may advance argument that fixation of minima
amount to be collected by the deposit collections of „C‟ area,
„B‟ area and „A‟ area city is a concept not prevalent in the
banking industry or any comparable industry. However, that
proposition is not factually correct. The insurance industry
employs development officers on its role, who are paid wages
and incentive on the basis of their performance. Life
Insurance Corporation of India Development Officers
(Revision of Certain Terms and Conditions of Service) Rules,
1989 and General Insurance (Rationalization of Pay Scales
and Other Conditions of Service of Development Staff)
Amendment Scheme, 1987 provide an example in that regard.
When these rules and schemes are scanned, it emerges over
the record that the development officers, employed in
insurance industry, are paid wages and incentive in
accordance with the performance made by them. In case they
fail to meet required standard of collection, incentive paid to
them is deducted or stopped and decrements are made out of
their wages. When a development officer continues not to
attain the criteria fixed for him, his services are dispensed
with. Therefore, it is evident that minima of collection as fixed
for the deposit collectors for respective areas cannot be said to
be a new concept. Minima of `3 lac in a month for „C‟ area,
`4 lac for „B‟ area and `5 lac for „A‟ area is the standard
requirement of performance, expected of a deposit collector to
sustain himself in the industry. He can meet that standard by
collection of that amount in every month or by way of
collection of `9 lac, `12 lac and `15 lac respectively, as the
case may be for area-wise, at the end of the quarter ending
31st March, 30th June, 30th September and 31st December every
year. In case a deposit collector is unable to collect the
minima amount consecutively for two quarters, he would be
bade farewell by the bank by terminating his contract of
service. An inefficient person has no place in the industry. In
case of failure of a deposit collector to meet the required
standards, he would not be able to serve the bank, since his
retention at the cost of loss to the bank is unwarranted.
187. Conveyance allowance is being paid to the deposit
collectors at `50.00 per month for deposit of less than
`10,000.00 and at `100.00 per month for deposits of
`10,000.00 or above upto `30,000.00 per month. This
quantum of conveyance allowance was demanded by the
Federation, when it filed its claim before the Industrial
Tribunal, Hyderabad in the year 1981. The Industrial
Tribunal granted that relief in toto and fixed conveyance
allowance for the deposit collectors at the above rates. Since
1981 till date, prices of petrol has rolled many a times. It is a
matter of common knowledge that the deposit collectors had to
reach persons of lower and middle income group, small
traders, businessman, artisans, self-employed persons and
housewives to collect money from them. A green grocery
vendor sitting in subzi-mandi would like to give money to a
deposit collector in early hours of the day, housewives would
give their money during noon hours, when they are free from
daily chores, a small trader or businessmen would give money
in the evening, while persons employed in business centres and
courts etc. may like to deposit their money during day hours.
These facts bring it to light that a deposit collector has to
reach his customer, according to the convenience of the latter.
For that purpose, possibility of going for collection twice or
thrice a day cannot be ruled out. One cannot dispute hat in
„C‟ area as well as „B‟ area cities, the deposit collectors may
have to travel in a radius of 10 kms daily. In „A‟ area cities,
he may travel a little bit longer. One cannot be oblivious of
the fact that these days such bikes are in the market which are
fuel efficient. Manufacturers claim that such bikes have fuel
efficiency of running generally 60 kilometers per litre. A
deposit collector in „C‟ and „B‟ area cities may have to travel
roughly 500 kms in a month. For „A‟ area city, a deposit
collector may avail public transport also. Conspectus of all
these facts makes me to comment that atleast 8 to 10 litres of
petrol in a month is to be spent by a deposit collector.
Keeping all these facts in mind, I am of the view that
conveyance allowance of `750.00 per month at flat rate should
be granted to all deposit collectors of all areas.
188. On above standard, a deposit collector would get a sum
of `9000.00 in a year towards conveyance allowance. Adding
that amount to the cost incurred on a deposit collector for
collection of `3, lac, the bank had to spend only a sum of
`96,000.00 on fall back wages + `4000.00 on gratuity +
`9000.00 as conveyance allowance. In all, banks have to
spend a sum of `1,09,000.00 out of the earning of
`1,22,850.00. This arithmetic projects that by payment of that
much of amount, the bank would earn something on a
collection of `3 lac per month by a deposit collector of „C‟
area city. Earning of the bank would be more on collection of
deposit collectors of „B‟ area and „A‟ area cities. When
deposit collectors would collect more than the minima
prescribed for them, the income of the bank would grow more.
Arguments of the bank relating to economic viability of the
scheme would have an answer from the above reasoning.
189. The Tribunal has power to give retrospective effect to its
award, as held by the Apex Court in New Edgeson Woollen
Mills (1969(2) LLJ 782) and Sarva Shramik Sangh, Bombay
(1993 Lab.I.C.870). It is a well established proposition of law
that an industrial adjudicator can treat the date of demand and
the date on which he award comes into forces as two extreme
points to give effect to the award. The date from which this
award would be effective, should be decided by the Tribunal
on consideration of facts and circumstances projected herein.
As award Ex.WW1/3 highlights, fixation of fall back wages
and incentive remuneration was based on the circumstances
prevalent in the year 1981. The fall back wages and incentive
remuneration fixed by award dated 22.12.1988, remained
static till date. The present dispute was raised by the
Federation in the year 2003. After raising of the disputes and
during the course of adjudication a few of the banks closed
their small deposit schemes. In case this award is not given
any retrospective effect, then the deposit collectors of the
banks, who had closed the scheme, would not be eligible to get
any relief out of it. Therefore, I am of the considered opinion
that this Tribunal should give retrospective effect to the award
so that the deposit collectors, whose case was projected before
the Tribunal, may also avail their rights so adjudicated herein.
In view of the above discussion, it is concluded that the
demand of the Federation/Union for enhancement of fall back
wages and incentive remuneration, besides conveyance
allowance is justified. The issue is answered, accordingly.
Relief
190. In view of the findings recorded on issue No.1, it is
ordered that deposit collectors operating in „A‟ area, „B‟ area
and „C‟ area cities would collect at least `3 lac, `4 lac and `5
lac per month respectively. They can meet the target every
month or may collect a sum of `9 lac, `12 lac and `15 lac
respectively on 31st March, 30th June, 30th September and 31st
December every year. On a collection of `3 lac, a deposit
collector would get fall back wages of `8000.00 per month,
besides conveyance allowance of `750.00 per month. He will
also get gratuity of `4000.00 every year. On a collection of
over and above `3 lac and upto `5 lac, all deposit collectors,
irrespective of their areas of operation, will earn incentive
remuneration of 3%. Thus, a deposit collector of „B‟ area and
„A‟ area city would get `3000.00 and `6000.00 respectively
per month as incentive remuneration on minima limit of their
collection. On collection of over and above `5 lac, a deposit
collector would get incentive remuneration of 2%. All deposit
collectors, irrespective of areas of their operation, would get
conveyance allowance at flat rate of `750.00 per month."
23. As per the direction in para 192 of the award, the same has been made
operative retrospectively from July 19, 2005 i.e. the date when the 40 banks
were impleaded as respondents.
24. A correction was thereafter made by the Tribunal to its award by an
order dated June 02, 2014; recording therein that instead of Collectors
operating in areas 'A', 'B' and 'C' collecting `3,00,000/-, `4,00,000/- and
`5,00,000/- respectively per month as per the award, it should read
Collectors operating in areas 'C', 'B' and 'A' respectively. The reason is
obvious. The Tribunal inverted the reference to the category of the area and
the minimum deposit in the award.
25. The direction in the award concerning payment of gratuity to the daily
Deposit Collectors having been set aside by the learned Single Judge vide
impugned order dated April 20, 2015, by which order a batch of writ
petitions filed by various banks have been disposed of. Rest of the award
has been upheld by the learned Single Judge.
26. In the appeals we are thus concerned with the impugned award as
upheld by the learned Single Judge concerning fall back wages.
27. We could terminate our discussion, and perhaps would have been
justified in recording said aspect of the matter in the very first paragraph of
our opinion, and dismiss the appeals, by noting one simple fact. The same
would be that on a minimum deposit collected by a Deposit Collector of
`3,00,000/- per month, as per the award dated December 22, 1988, which
had attained finality when the seal of approval was accorded thereto by the
Supreme Court on February 13, 2001, the daily depositor would receive a
sum of `750/- per month as the fall back commission on the deposit up to
`7,500/- per month and on the remaining sum of `2,92,500/- (calculated @
2% of the deposit as per the award), would receive a commission of `5,850/-
and thus the total amount received would be `6,600/-. As per the impugned
award dated October 07, 2013, the fall back wage would be `8,000/- for a
deposit of `3,00,000/- per month. The difference is `1,400/-. On the base
`6,600/-, the percentage increase in the fall back wages is only 21.22%. It
would be perhaps ridiculous, and we use the expression with an apology, to
argue that an award rendered in the year 1988 determining fall back wages
by taking into account cost of living as of the said year should continue to
operate indefinitely in the future, ignoring the rise in the cost of living and
hence updation of the wages to be received on the concept of a fair wage to
be receivable by a workman for the work done; benefit of which work would
be to the employer. Surely, since the year 1988 the cost of living has
increased by 21.22% over 17 years. This should be reason enough to
dismiss the appeals.
28. Be that as it may we proceed to note that in the appeals learned
counsel for the appellants did not dispute that the status of the daily Deposit
Collectors as workmen has attained finality in view of the decision of the
Supreme Court reported as (1998) I LLJ 23 (AP) Indian Banks Association
Vs. Workmen of Syndicate Bank & Ors. Further, learned counsel had to
concede that the payment received by the daily Deposit Collectors has to be
treated as a wage in view of the said decision. Though a subtle attempt was
made to urge that in view of the said decision of the Supreme Court the daily
Deposit Collectors were accorded status of a workman only for the purposes
of giving them a locus to collectively bargain, but the argument was taken
no further except for raising it as a point, sans any justification for the point.
29. In view of the decision reported as (1981) 1 SCC 315 LIC Vs.
D.J.Bahadur wherein the Supreme Court observed that the Industrial
Disputes Act, 1947 is a benign measure which seeks to pre-empt industrial
tension, provide the mechanics of dispute resolutions and set up the
necessary infrastructure so that the energies of the partners in production
may not be dissipated in counter-productive battles and the assurance of the
industrial justice may create a climate of goodwill, as also the earlier
decision of the Supreme Court reported as AIR 1950 SC 188 Bharat Bank
Ltd. Vs. The Employees of Bharat Bank Ltd., in which the Supreme Court
observed that in settling the disputes between the employers and the
workman, the function of the Tribunal is not confined to administration of
justice in accordance with law and that the Tribunal can confer rights and
privileges on either party which it considers reasonable and proper, though
they may not be within the terms of any existing agreement, learned counsel
for the appellants did not even make an attempt to urge, a point which they
had urged before the learned Industrial Tribunal and the learned Single
Judge, that the Tribunal did not have the power to adjudicate the reference.
30. Four contentions were urged by learned counsel for the appellants in
the appeals. The first contention urged was that the very reference of the
industrial dispute to the Industrial Tribunal was vitiated in law because the
unions of the daily Deposit Collectors and the Federation of the unions had
raised the demand on the Indian Banks Association and for said reason,
before the Conciliation Officer, the banks were denied a right to put forward
their case. The argument was that it is possible that the Conciliation Officer,
after taking note of the case presented by the banks may have persuaded the
unions and the Federation not to press the claim. The second contention
urged was that the Industrial Tribunal was bound by the terms of the
reference and could not traverse beyond the same in view of the law
declared by the Supreme Court in the decisions reported as (1968) 1 SCR
515 Sindhu Resettlement Corporation Ltd. Vs. Industrial Tribunal and 1972
(25) FLR 26 Jaipur Udyog Ltd. Vs. Cement Work Karamchari Sangh. The
third contention urged was that the award has rendered the daily Deposit
Collection Scheme unviable, and for which argument it was agreed between
learned counsel for the parties that the data provided by all the banks
concerning cost benefit analysis of the schemes as was discussed in the
award need not be captured; it being restricted to only two banks : (i) Indian
Bank, and (ii) United Commercial Bank. Referring to the testimony of
Sh.K.Ganesh MW-1 and the cost benefit analysis MW-1/1 to MW-1/9 of the
daily Deposit Scheme (which we note comprises the data concerning 9
banks, including Indian Bank and United Commercial Bank, with the one
concerning Indian Bank being MW-1/1 and United Commercial Bank being
MW-1/9) proved by the witness, it was urged that notwithstanding the
Tribunal noting in para 126 of the award the perspective from which the
Tribunal had to approach the issue, and conceding it to be a correct
perspective, the error committed by the Tribunal was to overlook the
financial stress beyond the capacity of the banks, and for which the decision
of the Supreme Court reported as (2003) II LLJ 1078 A.K.Bindal Vs. UOI
was relied upon. Fourthly and lastly, it was urged that notwithstanding the
Tribunal having the power to give retrospective operation to the award, it
fell into error in the instant case to give retrospective operation to the award
with effect from July 19, 2005. The argument was premised on the
reasoning that as per the award the requirement of minimum monthly
deposits in category 'C', 'B' and 'A' areas was increased to `3,00,000/-,
`4,00,000/- and `5,00,000/- respectively with a further conditions that if
targets were not achieved by the daily Deposit Collectors in two consecutive
quarters, the banks would be justified in terminating their contract of
service. The contention advanced was that since the banks had continued to
avail the services of the daily Deposit Collectors and had paid them fall back
wages as also commission in terms of the earlier award dated December 22,
1988, it was not possible for the banks while implementing the instant award
to retrospectively terminate the services retrospectively and make
recoveries.
31. As per Section 4 of the Industrial Disputes Act, 1947, Conciliation
Officers have to be appointed by the appropriate Government, charged with
the duty of mediating in and promoting the settlement of industrial disputes
and as per Section 5 of the Act if an occasion arises the appropriate
Government may constitute a Board of Conciliation for promoting the
settlement of an industrial dispute. As per Section 10 of the Act, before
referring an industrial dispute to a Labour Court or an Industrial Tribunal,
the appropriate Government may refer the dispute to the Board of
Conciliation for settlement. The concept of espousal of causes in
representative capacities is recognized by the Industrial Disputes Act, 1947.
The Indian Banks Association is admittedly a federal body of all the banks.
When summoned by the Conciliation Officer the said Association did not
take a stand that it was not the body competent to represent and put forth the
point of view of the banks. Had the Association taken said stand before the
Conciliation Officer, the Conciliation Officer could have summoned the
individual banks for purposes of trying out a settlement during conciliation.
The first argument is thus sans any legal foundation; additionally for the
reason an irregularity in the conciliation proceedings is of no consequences
because the issue between the parties ultimately got resolved before an
Industrial Tribunal after evidence was led and before that all banks were
permitted to file their written statement of defence to the statement of claim
filed by the Unions of the workmen and the Federation of the Unions.
32. Pertaining to the second contention advanced i.e. the Industrial
Tribunal has exceeded its brief by going beyond the terms of the reference,
we begin our discussion by referring to paragraph 11 of our opinion wherein
we have reproduced the reference made to the Industrial Tribunal on August
06, 2003. The reference inter-alia is whether the demand of the daily
Deposit Collectors Federation, based on linkage of fall back wages of `750/-
per month determined by the award dated December 22, 1988 to the
consumer price index at 500 points (base 1960 = 100) to the present
consumer price index and upward revision is justified. Learned counsel
urged that in para 165 of the award, the learned Labour Court has returned a
categoric finding to the effect that the award dated December 22, 1988 was
not premised on the consumer price index. Thus, it was urged that the
Industrial Tribunal ought to have answered the reference by opining that
since the award dated December 22, 1988 was not linked to the consumer
price index as urged by the workmen, their Union and the Federation of the
Union, the demand was unjustified.
33. The argument is too tenuous since it is based upon a play of words.
We could do no better other than to reproduce the reasoning of the Tribunal
for the conclusion arrived at by the Tribunal (on which conclusion the
argument was premised) and the further reasoning of the Tribunal as a take
off point towards its destination in para 166 of the award. The two
paragraphs read as under:-
"165. Except the above treatment to alternative reliefs of
the Federation, the Tribunal nowhere linked relief of fall
back wages and incentive remuneration to All India
Consumer Price Index. As detailed above, the Tribunal
had not linked fall back wages and incentive
remuneration to be paid to the deposit collectors to All
India Consumer Price Index. When High Court of
Andhra Pradesh exercised powers of judicial review,
none of the parties raised the issues to the effect that fall
back wages and incentive remuneration were linked to
All India Consumer Price Index. Therefore, there was
no occasion for the High Court to consider as to whether
fall back wages and incentive remuneration were linked
with All India Consumer Price Index or not. The Apex
Court too was not invited to delve the issue that fall back
wages and incentive remuneration, awarded in favour of
the deposit collectors, were linked to All India Consumer
Price Index. In the reference order, the appropriate
Government tried to project that the fall back wages and
incentive remuneration, granted in favour of the deposit
collectors, have linkage with All India Consumer Price
Index. However, the mist created therein in the
reference order melts away when award dated
22.12.1988 and findings of the Andhra Pradesh High
Curt and the Apex Court, while making judicial review,
are noted. Resultantly, it is concluded that fall back
wages and incentive remuneration awarded to the
deposit collectors, have no linkage with All India
Consumer Price Index.
166. As noted above, a deposit collector is paid fall
back wages of `750.00 on a collection of `7500.00 per
month, besides incentive remuneration of 2% on
collection over and above `7500.00 per month. In case
a deposit collector collects a sum of `3 lacs per month,
he gets only a sum of `6600.00 (`750.00 as fall back
wages plus `5850.00 as incentive remuneration).
Collection of a sum of `3 lacs per month is moderate
amount but fall back wages and incentive
remuneration, which would come in the hands of a
deposit collector would be less than minimum rates of
wages, notified for a matriculate clerk. Evidently, fall
back wages and incentive remuneration are not part of
wage structure in technical sense, but nomenclature of
fall back wages and incentive remuneration, given to
wage packet of a deposit collector, would not denude
this Tribunal of its obligation to fix a pay packet co-
relative to minimum wages, notified from time to time.
Therefore, the Tribunal would proceed ahead to devise a
wage structure in the form of fall back wages and
incentive remuneration for the deposit collectors, which
should not be less than the minimum wages, so notified
from time to time."
34. Claims have to be read meaningfully and not pedantically.
References made to the Labour Court or Industrial Tribunals have likewise
to be read meaningfully and not pedantically. At base was the demand for a
revision of the fall back wages. While raising the demand, the justification
given was the increase in the consumer price index and the linkage was to
the fact that in the award dated December 22, 1988, while fixing the fall
back wages, the consumer price index at 500 points with base year 1960 at
100 points was the basis for the award. The Industrial Tribunal, while
considering the demand for increase in fall back wages was therefore
entitled to decide on the justification of the demand, and merely because the
factor justifying the demand was found to be wrong, did not result in the
Tribunal being without any power left in it to look at some other factor
justifying the demand. The two decisions relied upon by learned counsel for
the appellants which we have noted while noting the contentions of the
counsel for the appellants in para 30 above, merely hold that being the
creature of the reference an Industrial Tribunal cannot travel beyond the
reference. The proposition of law stated therein has not been breached by
the Tribunal in the instant case. The second contention advanced is rejected.
35. Concerning the third contention advanced, as we have noted above, in
para 126 of the award the Tribunal recognized the principles to be kept in
mind from the perspective of the employer while fixing a fair wage and to
said extent the principle of law laid down by the Supreme Court in
A.K.Bindal's case (supra) has been kept in mind by the Tribunal, a fact
conceded to by learned counsel for the appellant. The argument was that the
evidence on said aspect of the matter was ignored by the Tribunal or
alternatively the finding returned by the Tribunal is perverse.
36. We have already noted herienabove that the Tribunal has discussed
the relevant evidence in paragraphs 129 onwards till paragraph 154 of the
award, and we find that the Tribunal has discussed the evidence led by the
Indian Banks Association and the individual banks. While noting the
contention advanced by learned counsel for the appellant on the financial
stress, in para 30 of our opinion we have already noted that it was agreed by
learned counsel for the parties that cost benefit analysis of the daily deposit
schemes may be looked into by us with reference to two banks : (i) Indian
Bank, and (ii) United Commercial Bank, with reference to the testimony of
Sh.K.Ganesh MW-1 and the cost benefit analysis MW-1/1 and MW-1/9 of
the two banks.
37. In his affidavit by way of evidence, Sh.K.Ganesh has simply deposed
: 'The deponent annexes herewith the copies of the cost benefit analysis
studies conducted by the various banks which would show that the deposit
schemes are not remunerative for the banks and as such it is becoming
difficult for the banks to continue the same'. The cost analysis benefit of
various banks have been filed along with the affidavit. Concerning Indian
Bank, the cost analysis benefit is Ex.MW-1/1. It is tabulated as under:-
Cost-Benefit analysis of the Tiny Deposit Scheme
(As on 31st March 2011)
Particulars (Amount in Lakhs)
a Aggregate deposits under the scheme 3913.00
b No. of Deposit accounts 33,400
c Commission paid to deposit collectors 118.03
d Interest paid on deposits under the 26.48
scheme
COST BENEFIT STUDY
Particulars Total per Per `100/- of
year Avg.Deposit `
(` in lakhs)
BENEFITS
a Income from CRR
b Income from SLR 73.76 1.88
c Yield on Advances 286.47 7.32
Total Benefits 360.23 9.20
COSTS
a Interest paid 26.48 0.67
b Commission paid to 118.03 3.01
Deposit Collectors
c Staff Cost 321.71 8.22
d Other operating cost 70.64 1.80
Total Costs 536.86 13.71
NET BENEFIT (-) 176.63 (-) 4.51
The cost analysis benefit Ex.MW-1/9 concerning United Commercial
Bank reads as under:-
Cost Benefit Analysis of Laghu Bachat Yojna
(based on figures for the year 2004-05)
If the deposit Collectors federation demands are accepted
BASIC DATA
Particulars (Amount in `
Lacs)
a. Average deposits under the 21502.00
scheme
b. Commission paid to deposit 886.47
collectors
c. Interest paid on deposits under 1039.50
the scheme
COST BENEFIT STUDY
PARTICULARS Total per year Per `100/-
of
Avg.Deposit
Benefits ` `
a. Income from CRR 15.05 0.07
b. Income from SLR 448.32 2.09
c. Yield on Advance 1194.99 5.56
d. Yield on investment of - -
Surplus Deposits
Total Benefits 1658.36 7.72
Costs
a. Interest paid 1039.50 4.83
b. Commission paid to 886.47 4.13
deposit collectors
c. Conveyance paid to 56.45 0.26
Deposit Collectors
d. Gratuity paid payable to 36.93 0.17
deposit Collectors
Cost of LBY Deposit 2019.35 9.39
e. Operating Cost i.e. staff 645.06 3.00
cost and other cost 3%
Total Cost 2665.41 12.39
38. When cross-examined, Sh.K.Ganesh, who had exhibited his affidavit
by way of evidence as MW-1/A, deposed:-
"Ex.MW-1/A is based on my personal knowledge as well as
information gathered from other sources. Contents of para
VIII, IX and X of my affidavit are based on information
gathered from the documents in possession of Indian Banks
Association. Those documents are not placed in record of this
Tribunal. I have not brought those documents along with me
today. It is incorrect that no documents are in possession of
Indian Bank Association and I have made a false statement in
contents of the above referred paragraphs. It is incorrect that
Ex.MW-1/1 to Ex.MW-1/9 are prepared only with a view to file
the same before this Tribunal. As per information collected
10274 deposit collectors were working in the year 2007 with
various Banks. I have no information as to how much amount
was being collected by them. From the contents of Ex.MW-1/1
to Ex.MW-1/9 I sway that deposit collectors schemes are not
remunerative."
39. Relevant would it be to highlight that the primary documents on
which Ex.MW-1/1 and Ex.MW-1/9 were tabulated were neither filed nor
produced by the witness of the banks. The banks are thus guilty of
withholding the best evidence and in our opinion we would be justified in
drawing a presumption against the bank keeping in view clause (g) to
Section 114 of the Indian Evidence Act, 1872. That apart, let us highlight
MW-1/1, the cost benefit analysis concerning Indian Bank, which we have
noted in paragraph 37 above. As per the same, as of March 31, 2011 a total
sum of `39.13 crores was lying in deposit with Indian Bank under its Tiny
Deposit Scheme. The outgoing reflected is commission paid to the Deposit
Collectors in sum of `1.1803 crores and interest to be paid to the depositors
under the scheme in sum of `0.2648 crores. As per the statement, interest
which the bank would earn from the SLR to be maintained and advances to
the customers of the bank would be `3.6023 crores. As per the bank the
staff cost to the bank would be `3.2171 crores and other operating costs
would be `0.7064 crores. The net loss shown is `1.7663 crores. We had
repeatedly put it to the learned counsel for the appellant as to on what basis
the bank had allocated `3.2171 crores as the staff cost relatable to the
scheme and `0.7064 crores as the operating cost. There was no reply. It has
to be kept in mind that the Deposit Collectors not only make entry in the
pass book of the customers when they collect the daily amounts but also
make entries in the corresponding ledger account of the customer
maintained by the bank. Ex-facie the figure of `3.2171 crores as staff cost
to the bank for the scheme is highly exaggerated, not only for said reason of
it being ex-facie exaggerated, for the primary reason that the banks did not
produce the primary documents nor gave justification for said apportionment
vis-a-vis the total staff cost and the quantum of works performed by the staff
for the other operations of the bank, we are of the opinion that the view
taken by the Tribunal that the scheme would not become inoperative if for
back wages are increased is correct. There is no perversity in the
appreciation of evidence nor is there any oversight of any relevant evidence.
40. The last contention urged merits acceptance. The reason being that
under the award the Tribunal has, within its power reworked the financial
package i.e. the fair wage to be received by the daily Deposit Collectors as a
fair wage simultaneously link in the same to the quantum of work to be
performed, in the form of minimum targets to be achieved. Whilst it may be
true that the Tribunal had the power to make its award operative from a
retrospective date and has found a rational in the day being the one on which
all banks were impleaded as respondents i.e. July 19, 2005, but has
overlooked the fact that the repackaged remuneration was linked to higher
targets to be achieved with right conferred upon the banks to terminate the
contract of service if targets were not achieved in two successive quarters.
Now, the banks cannot terminate the contract of service from a retrospective
date and make recoveries. Further, the award is silent on the aspect of :
What would be the consequence if the minimum target is not achieved in a
month? Would it mean that the daily Deposit Collector would be entitled to
a pro rata payment? The answer has to be in the negative for the reason the
fall back wages has been determined by the Tribunal with reference to the
minimum fair wage to be received by the daily Deposit Collectors and for
which the underlying reasoning of the Tribunal is that keeping in view the
nature of work performed by the daily Deposit Collectors, to achieve the
targets set by the Tribunal they would have to work for about 3 hours a day.
The Tribunal has taken note of the Bipartite Settlement under which part
time workers of the bank who worked for three hours a day would receive
1/3rd of the basic wage payable to a full time employee of corresponding
status + other emoluments such as house rent allowance, city compensatory
allowance and travelling allowance. Thus, a daily Deposit Collector who
does not meet the target would presumably not be working for three hours a
day. The linkage to the fall back wage increase with productivity cannot be
snapped. Just as an employee who works for one hour a day cannot claim
proportionate wages, the daily Deposit Collectors cannot claim pro-rata
reduced fall back wages if they don't meet the target. And we emphasize
that as per the Tribunal the banks would be entitled to terminate the contract
of such daily Deposit Collectors, a termination which the banks cannot
enforce retrospectively and make recoveries. The retrospective operation of
the award would imperil the daily Deposit Collectors as well because they
would be under a threat of recoveries. Till the award was pronounced these
daily depositors were not working on the assumption that they have to
achieve the targets of `3,00,000/-, `4,00,000/- and `5,00,000/- in category
'C', 'B' and 'A' areas respectively. Thus, on the facts of the instant case the
rule of the game could not be changed retrospectively.
41. A contention not emanating from the award was sought to be urged.
With reference to an additional affidavit permitted to be filed by the learned
Single Judge and a statement annexed therewith it was sought to be urged
that post the award the daily Deposit Collectors had started misusing the
award by rotating the same amount in the name of a customer. The
argument was that the scheme worked out under the award as the basis of
linking productivity to minimum fall back wages had a serious loophole by
permitting the daily Deposit Collectors to attain productivity by circulating
the deposits. On facts reference could be made to one M.A.Shemeer, an
account holder with Federal Bank Ltd. The data provided would evince that
said Sh.M.A.Shemeer opened account No.10030600087410 with the Federal
Bank on November 08, 2013 and through a daily Deposit Collector
deposited `26,400/- with the bank which he withdrew on December 03,
2013. The account remained operative for 25 days. Thereafter another
account No. 10030600087600 was opened in his name on December 03,
2013 in which `24,000/- was deposited and after 28 days the account was
closed on December 31, 2013. On same day account No. 10030600088111
was opened in his name in which `36,000/- was deposited and after 34 days
on February 03, 2014 the account was closed. The very next day i.e. on
February 04, 2014 another account No. 10030600088343 was opened in his
name in which `21,600/- was deposited and after 27 days the account was
closed on March 03, 2014. The very next day i.e. on March 04, 2014
account No. 10030600088467 was opened in his name in which `28,800/-
was deposited. After 27 days the account was closed on March 31, 2014.
On April 04, 2014 another account No. 10030600088855 was opened in his
name in which `26,400/- was deposited and after 25 days on April 29, 2014
the account was closed. This gentleman opened account No.
10030600089358 on July 04, 2014 which remained operative for a month.
And so on. Many such instances can be found in the tabular statement filed.
42. We find that the learned Single Judge has noted said aspect of the
matter but has not dealt with the same.
43. The answer lies in the fact that when said rotation of money came to
the notice of the bank they immediately took corrective action by issuing
circulars fixing minimum duration of an account with penal consequence of
premature closure or withdrawal resulting in commission paid to the daily
depositor being deducted from the account and we find that in anticipation
of rotation of the money, and probably some smart officer in the bank, as
many intelligent litigants do from the queries being put by the Industrial
Adjudicator to the counsel when arguments were being advanced before the
Industrial Tribunal, anticipated the award and in the case of Syndicate Bank
issued a circular to said effect on June 01, 2013. (The award in question is
dated October 07, 2013). We find that post, award Andhra Bank had issued
a circular on November 27, 2013 fixing minimum duration of the deposit
under its Bhagya Laxmi Deposit Scheme. Other banks have followed, and
we need not note the dates on which the banks have issued circulars
concerning minimum period of the deposit to be maintained.
44. We only have to highlight that the possible mischief from the award
would not render the award liable to be set aside. The mischief is of a kind
which could be prevented, and as a matter of fact has been prevented.
45. The appeals are accordingly disposed of modifying the impugned
award dated October 07, 2013, in that, the award is made prospective in its
operation. Rest of the award as modified by the learned Single Judge is
upheld.
46. Parties shall bear their own costs all throughout.
(PRADEEP NANDRAJOG)
JUDGE
(MUKTA GUPTA)
JUDGE
OCTOBER 05, 2015
mamta
