Kerala High Court
Union Bank Of India vs Sreekumar V.D on 7 July, 2025
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W.A No.1822 of 2018
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
MONDAY, THE 7TH DAY OF JULY 2025 / 16TH ASHADHA, 1947
WA NO. 1822 OF 2018
AGAINST THE JUDGMENT DATED 26.06.2018 IN WP(C) NO.6452
OF 2015 OF HIGH COURT OF KERALA
APPELLANTS/RESPONDENTS:
1 UNION BANK OF INDIA
REGIONAL OFFICE, KOZHIKODE- 673001 REP. BY ITS GENERAL
MANAGER
2 GENERAL MANAGER (PO & HR)
DEPARTMENT OF PERSONNEL, MANPOWER PLANNING AND
RECRUITMENT DIVISION CENTRAL OFFICE, UNION BANK OF
INDIA, UNION BANK BHAVAN, 239, VIDHAN BHAVAN MARG
NARIMAN POINT, MUMBAI-400021.
3 UNION BANK OF INDIA
UNION LOAN POINT BRANCH, KOZHIKKODE REPRESENTED BY THE
MANGER, COLOMBO COMPLEX, M M ALI ROAD PALAYAM,
KOZHIKKODE-673001.
BY ADV SHRI.A.S.P.KURUP, SC, UBI
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RESPONDENT/PETITIONER:
SREEKUMAR V.D
AISWARYA EANGAPUZHA, PUTHUPPADI P. O, KOZHIKODE KERALA
673566 EARLIER WORKING AS ASSISTANT MANAGER, MARKETING
IN UNION BANK OF INDIA, LOAN POINT BRANCH, KOZHIKODE
BY ADVS.
SRI.S.PRASANTH (AYYAPPANKAVU)
SMT.VARSHA BHASKAR
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
26.05.2025, THE COURT ON 07.07.2025 DELIVERED THE FOLLOWING:
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JUDGMENT
Sushrut Arvind Dharmadhikari, J.
The present intra-court appeal filed under Section 5 of the
Kerala High Court Act, 1958 assails the judgment dated
26.06.2018 passed in W.P.(C) No.6452 of 2015 whereby the
learned Single Judge disposed the writ petition with certain
direction. The appellants herein are the respondents in the writ
petition whereas the respondent is the petitioner.
2. The brief facts of the case are that the
respondent/petitioner was appointed as Assistant Manager in the
Union Bank of India vide Ext.P1 order dated 19.09.2011. As per
the terms of the appointment, the respondent was required to
execute a service indemnity bond undertaking to serve the Bank
for a minimum period of three years or else a sum of Rs.2.5 lakh
shall be required to be paid to the Bank in case he resigned from
the services of the Bank before completing the stipulated
minimum service period of three years. Accordingly, the
respondent executed Ext.P2 indemnity bond. While working as
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Assistant Manager with Union Bank of India, the respondent got
selected in the Corporation Bank as Probationary Manager. The
respondent remitted Rs.2.5 lakh and was relieved to join the
Corporation Bank. Subsequently, he filed Ext.P5 representation
before the Regional Manager, Union Bank of India requesting him
to refund the amount on the ground that the Bank has not
suffered any loss or incurred any liability on account of his
relieving. The respondent submitted that the bond shall not be
enforced in case the employee is joining another public sector
undertaking. In view of this exemption, he is liable to get the
amount refunded.
3. Learned counsel for the appellants-Bank submitted that
after enjoying the benefit of Ext.P1 order and executing an
undertaking before the Bank by furnishing indemnity bond, the
respondent is obliged to obey the terms and conditions. As such
enforcement of the bond is neither violative of Article 19 of the
Constitution of India or contrary to any public policy. Learned
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Single Judge erred in disposing the writ petition with a direction to
the appellants to refund Rs.2.5 lakh realised from the respondent.
4. The Hon'ble Apex Court, in the case of Central Inland
Water Transport Corporation Ltd. v. Brojo Nath Ganguly
[(1986) 3 SCC 156], dealt with interpretation of standard form of
employment contracts in the backdrop of unequal bargaining
power of employees. The Bench opined that if such contracts are
unconscionable, unfair, unreasonable and injurious to public
interest, they shall be deemed void in law being opposed to public
policy. The Bench elucidated the proposition in the following
words:-
"91..................the majority of such contracts are in a
standard or prescribed form or consist of a set of rules.
They are not contracts between individuals containing
terms meant for those individuals alone. Contracts in
prescribed or standard forms or which embody a set of
rules as part of the contract are entered into by the party
with superior bargaining power with a large number of
persons who have far less bargaining power or no
bargaining power at all. Such contracts which affect a large
number of persons or a group or groups of persons, if they
are unconscionable, unfair and unreasonable, are injurious
to the public interest. To say that such a contract is only
voidable would be to compel each person with whom the
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party with superior bargaining power had contracted to go
to court to have the contract adjudged voidable. This
would only result in multiplicity of litigation which no court
should encourage and would also not be in the public
interest. Such a contract or such a clause in a contract
ought, therefore, to be adjudged void. While the law of
contracts in England is mostly judge-made, the law of
contracts in India is enacted in a statute, namely, the
Indian Contract Act, 1872. In order that such a contract
should be void, it must fall under one of the relevant
sections of the Indian Contract Act. The only relevant
provision in the Indian Contract Act which can apply is
Section 23 when it states that "The consideration or object
of an agreement is lawful, unless ... the court regards it as
... opposed to public policy."
5. The Hon'ble Apex Court had expressed a similar view
earlier in the case of Superintendence Co. of India v. Krishan
Murgai [(1981) 2 SCC 246] wherein it was held thus:
"59. It is well settled that employee covenants should be
carefully scrutinised because there is inequality of
bargaining power between the parties; indeed no
bargaining power may occur because the employee is
presented with a standard form of contract to accept or
reject. At the time of the agreement, the employee may
have given little thought to the restriction because of his
eagerness for a job; such contracts "tempt improvident
persons, for the sake of present gain, to deprive
themselves of the power to make future acquisitions, and
expose them to imposition and oppression".
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6. In view of the aforesaid judgments, such unconscionable
contracts are unenforceable and void. Learned Single Judge has
rightly disposed of the writ petition directing the appellants-Bank
to refund a sum of Rs.2.5 lakh realised from the respondent
within three months.
7. We are of the considered opinion that the learned Single
Judge has correctly arrived at the conclusion in accordance with
the law laid down in the case of Brojo Nath Ganguly (supra) and
as such, no interference is called for.
The writ appeal being bereft of merit and substance, is liable
to be dismissed and accordingly, the same is dismissed. No order
as to costs.
Sd/-
SUSHRUT ARVIND DHARMADHIKARI
JUDGE
Sd/-
SYAM KUMAR V.M
JUDGE
smp
