Housing Development Fin. Corp. ... vs B.V. Radhakrishna 4 Ors.
2022 Latest Caselaw 6111 Tel

      THE HONOURABLE SMT. JUSTICE P. MADHAVI DEVI


                 WRIT PETITION NO.34908 OF 2017


                                ORDER

In this Writ Petition, the petitioner is seeking a Writ of Certiorari

calling for records in the Shops and Establishments Petition No.13 of

2012 on the file of the Authority under Section 48(1) of the A.P.

(Telangana) Shops and Establishments Act, 1988 and the Assistant

Commissioner of Labour-III, Hyderabad and to set aside the order

dt.03.10.2017 and to pass such other order or orders as this Court may

deem fit and proper in the interest of justice.

2. Brief facts leading to the filing of the present Writ Petition are

that the petitioner is a company set up with the objective of meeting the

social need of encouraging home ownership and has its Head Office at

Mumbai. It has employed the 1st respondent as an Assistant in its Legal

Department at Hyderabad in the year 1989. The 1st respondent was

promoted as a Senior Assistant in the year 1992, as an Officer in 1995

and as a Senior Officer in the year 2002 and finally as an Assistant

Manager in 2005. The 1st respondent was thereafter transferred to

Kolkata by proceedings dt.04.05.2010 giving him one month's time to W.P.No.34908 of 2017

report in the new station. The 1st respondent submitted a representation

dt.17.05.2010 requesting the petitioner herein to reconsider its decision

of transfer to Kolkata. The petitioner issued another letter dt.24.05.2010

extending the time for reporting at Kolkata to 01.07.2010. However, the

1st respondent did not join at Kolkata, but filed a suit in O.S.No.1426 of

2010 before the Court of I Senior Civil Judge, City Civil Court,

Hyderabad challenging the transfer order dt.04.05.2010. The Court

granted an ad interim injunction against relieving him from the post of

Assistant Manager (Legal) in I.A.No.533 of 2010. The petitioner

assailed the interim injunction so granted in C.M.A.No.185 of 2010

before the Court of II Additional Chief Judge, City Civil Court,

Hyderabad. The order of interim injunction was set aside and

I.A.No.533 of 2010 was dismissed and against the same, the 1st

respondent filed C.R.P.No.3024 of 2011 and this Court vide order

dt.24.01.2012 dismissed the C.R.P. It is submitted that the 1st respondent

had come to know of the notice dt.26.04.2012 issued in newspaper by

the Kolkata office of the petitioner that he was unauthorisedly absent

from duties and that the postal notices sent were returned unserved and

that since the notices were not responded to, he was finally terminated

from service by order dt.08.06.2012 stating that a final public notice was

issued in newspaper on 17.05.2012 asking the 1st respondent to report at W.P.No.34908 of 2017

Kolkata office by 21.05.2012 and since he did not join duties, he was

deemed to have abandoned the service and ceased to be an employee of

the petitioner.

3. Challenging the said order of termination, the 1st respondent filed

S.E.No.13 of 2012 before the 2nd respondent seeking salary of

Rs.65,00,000/- at the rate of Rs.12,00,000/- per annum which included

an assumed annual increment of 20%, for a total period of 5 years and 5

months, i.e., from 01.08.2012 to 30.06.2018, the period of remaining

service, and loss of benefits in terms of shares quantified at

Rs.1,80,00,000/-. Challenging the maintainability of the application

before the 2nd respondent Authority, the petitioner filed W.P.No.2175 of

2013 raising a preliminary objection about the maintainability of the

application before the Authority, on the ground that the 1st respondent

was in managerial capacity and was drawing a salary of Rs.12,00,000/-

per annum and therefore he is not amenable to the jurisdiction of the

A.P. Shops and Establishments Act. The petitioner also raised a ground

that A.P. Shops and Establishments Act is a local Act and has no

jurisdiction over an employee of Kalkota office, whose termination is

effected by the Head Office. This Court vide orders dt.12.09.2016 has

directed the officer concerned to consider the issue, on filing of a W.P.No.34908 of 2017

counter by the petitioners in the writ petition as a preliminary issue, i.e.,

with regard to maintainability of the application filed by the 3rd

respondent therein within a period of 12 weeks thereof. The petitioner in

the writ petition, i.e., the petitioner herein filed counter before the

Authority within the time allowed stating that the 1st respondent herein

was not only promoted to the level of Assistant Manager in the year

2005, but he was allotted work in relation to the said position and he

worked as such till 2010 before the transfer order was given by the

petitioner. It was further submitted that in addition to giving the

designation of Assistant Manager, he was also paid the scale of the post

and that he was in-charge of the internal and external aspects of the

position. It was also stated that the 1st respondent was transferred to

Kolkata vide orders dt.04.05.2010 and was issued notices for reporting

to duty at Kolkata, but since the 1st respondent did not comply with the

said notice nor did he respond to the same, the services of the 1st

respondent were terminated on 08.06.2012 for unauthorised absence

from duties from 27.01.2012. The Authority under the A.P. Shops and

Establishments Act vide order dt.03.10.2017 in S.E.No.13 of 2012

rejected the preliminary objections raised by the petitioner herein and

listed the matter for hearing on 31.10.2017. Challenging the said order

of the Authority dt.03.10.2017, the present Writ Petition is filed.

W.P.No.34908 of 2017

4. Learned counsel for the petitioner, Sri Srinivasa Rao Bodduluri,

submits that the objections of the petitioner are three fold--

(i) about the maintainability of the application before the

Authority on the ground that the 1st respondent is working in

managerial capacity and is drawing a salary exceeding

Rs.1,600/- per month and therefore, he is not amenable to the

jurisdiction of the Authority under the A.P. Shops and

Establishments Act;

(ii) since the 1st respondent has already been transferred to Kolkata

and notices for reporting to duty have also been issued by

Kolkata office and termination order has been passed by the

Head Office at Mumbai, the Courts at Hyderabad have no

territorial jurisdiction to entertain the application; and

(iii) A.P. Shops and Establishments Act is a local Act and therefore

unless the 1st respondent is working in A.P., he is not

amenable to the jurisdiction to the A.P. Shops and

Establishments Act.

5. Learned counsel for the 1st respondent, Sri T. Anil Kumar,

however, submits that though the 1st respondent has been given the W.P.No.34908 of 2017

nomenclature as Assistant Manager, he was not performing the duties of

a Manager and therefore even if he was drawing a salary exceeding

Rs.1,600/- per month, he is amenable to the jurisdiction of the A.P.

Shops and Establishments Act. As regards the territorial jurisdiction, he

submitted that the petitioner herein has not raised such a ground before

the Authority in the counter filed by it and therefore, it is a fresh ground

being raised by the petitioner before this Court.

6. The learned counsel for the petitioner, however, refutes this

contention by drawing the attention of this Court to the submissions

made by the petitioner in the Writ Petition filed before this Court,

wherein an objection was taken with regard to the territorial jurisdiction

of the Authority. Therefore, he submitted that when the matter was

remitted to the file of the Authority under the A.P. Shops and

Establishments Act, the Authority ought to have considered all the

contentions raised by the petitioner herein.

7. The learned counsel for the 1st respondent has also pointed out

that the termination order has been issued to the 1st respondent at his

Hyderabad address and therefore he is deemed to be working at

Hyderabad and therefore the Authority also has territorial jurisdiction to

entertain the petition.

W.P.No.34908 of 2017

8. Having regard to the rival contentions and the material on record,

this Court finds that the transfer order dt.04.05.2010 of the 1st

respondent to Kolkata had been challenged by him and the said order

has been upheld by this Court in C.R.P.No.3024 of 2011. The 1st

respondent has not challenged the said order and therefore, it has

become final. Thereafter, the 1st respondent ought to have joined at

Kolkata, but since he remained absent, notices were given to him and

due to his continued unauthorised absence, his services were terminated

by the Head Office at Mumbai. The 1st respondent has been appointed

by the Head Office and therefore, the termination orders issued by the

Head Office are also valid. The question before this Court is whether the

Authority under the A.P. Shops and Establishments Act could pass the

order about the maintainability of the application. The Authority in its

order dt.03.10.2017 has gone into the duties and obligations of the 1st

respondent herein in the petitioner company and has observed that he

was working as Legal Assistant in the Legal Department and his duty is

of in-house legal support in apprising the veracity of the documents

submitted by the customers and submitting reports to the sanctioning

committee, based on whose recommendations, loans were sanctioned

and that neither respondent No.1 nor the Legal Department had any say W.P.No.34908 of 2017

in the decision of sanctioning loans to the customers. After perusing

these contentions of the 1st respondent herein, the Authority has held

that the 1st respondent herein did not have the powers of supervision and

control over the subordinate employees and he has no independent

decision making power while discharging the duties and did not have

the power to operate the bank accounts or to transfer or take disciplinary

proceedings against any employee of the respondent company. In view

of the same and also after going through the judgment of the Hon'ble

Apex court in the case of Premsagar Vs. Standard Vaccum Oil Co.1,

the Authority has held that the 1st respondent herein is not discharging

the duties of a Manager and therefore, he is amenable to the jurisdiction

of the A.P. Shops and Establishments Act and he does not fall under the

exempted category under Section 73(1)(a) of the Andhra Pradesh Shops

and Establishments Act.

9. The petitioner company has filed a Note on the role and

responsibilities of Legal Officer in HDFC Limited, which are as under:

"(1) The Legal Officer shall report directly to the Branch Head / Operations Head and assist in the performance of the branch in disbursement of loans;

AIR 1965 SC 111 W.P.No.34908 of 2017

(2) He will be officer in charge of handling compliance issues with company regulator and also various statutory authorities;

(3) He is required to approve Builder project files;

(4) He is responsible for scrutiny of title deeds pertaining to individual customers and ensuring loan disbursement;

(5) He will be responsible for loan documentation for corporate as well as Individual home loans;

(6) He is responsible for co-ordination and monitoring operations team which include technical and disbursement team and ensure smooth loan disbursements;

(7) He is responsible for sending all the reports on compliance and Legal to Head office (Monthly/Quarterly/Annual);

(8) He is required to represent the company as authorised signatory before Court of Law for filing suits against defaulters, fraudsters and also defend the company against the suits/complaints filed against the company;

(9) He is responsible for all court matters of the company;

(10) He is required to appoint Advocates as and when necessary into the panel of the Company;

(11) He is required to provide necessary training to all staff members on various laws / procedures for smooth loan disbursements;

(12) Responsible for security creation and disbursement of Loan;

(13) Any other job assigned by Manager / Management."

On going through the same, it appears that though the 1st respondent is

not the final sanctioning authority of the company, he is conferred with

responsibilities and duties of scrutiny of title deeds and making W.P.No.34908 of 2017

recommendations for sanctioning of loans. Such responsibilities are

certainly of managerial in nature.

10. Hon'ble Supreme Court in the case of Premsagar Vs. Standard

Vaccum Oil Co. (1 supra) has held that it is difficult to lay down

exhaustively all the tests which can be reasonably applied in deciding

the question as to when a person can be said to be employed by the

respondent in the position of management. In the said case, the Hon'ble

Supreme Court was considering the case of an appellant who had no

power of appointment of labour, had no power to take disciplinary

action against them, had no power to grant leave to persons subordinate

to him, had no discretion in the matter of incurring expenditure of his

own accord as the expenditure had to be sanctioned by the General

Manager and had no power of attorney to enter into agreements with

third parties on behalf of the company and his work was subject to the

overall supervision of the Operations Manager and he had no power to

bind the company by his acts. In these circumstances, the Hon'ble

Supreme Court in the said case has held that the appellant therein was

not working in managerial capacity. However, in the case before this

Court, it can be seen that the 1st defendant was discharging certain

functions of managerial nature with full power and responsibility and W.P.No.34908 of 2017

therefore it cannot be said that he was not functioning in managerial

capacity. In the opinion of this court, the reliance of the Authority under

the A.P. Shops and Establishments Act, in following the decision of the

Hon'ble Supreme Court in the case of Premsagar Vs. Standard

Vaccum Oil Co. (1 supra) for allowing the petition of the respondent

No.1 is misplaced.

11. In view of the same, this Court is of the opinion that the order of

the Authority under Section 48(1) of the A.P. Shops and Establishments

Act, 1988, dt.03.10.2017 in S.E.No.13 of 2012 needs to be set aside and

it is accordingly set aside.

12. This Writ Petition is accordingly allowed. No order as to costs.

13. Pending miscellaneous petitions, if any, in this Writ Petition shall

stand closed.

___________________________ JUSTICE P. MADHAVI DEVI

Date: 23.11.2022 Svv