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1975 DIGILAW 156 (CAL)

Secretary and Treasurer, State Bank of India v. K. M. Mukherjee

1975-06-13

SISIR KUMAR MUKHERJEA, SUDHAMAY BASU

body1975
JUDGMENT Basu J. 1. This appeal is from the Judgment and order passed by D. Basu, J. dated the 8th of February, 1967 in Civil Revision No. 199 (W) of 1963 by which His Lordship made the Rule absolute and directed the appellants to cancel the impugned order contained in annexure (A) to the petition. 2. The respondent petitioner, K.M. Mukherjee, was appointed a clerk of the Imperial Bank in March, 1948 by virtue of Section 7 of the State Bank of India Act, 1955. The respondent's service was transferred from the Imperial Bank to the State Bank of India. On the 18th of December, 1961 he was served with a notice to show cause on several charges while he was working in the pay office of the Dinhata Branch of the Bank at Coochbehar. After a departmental enquiry the petitioner was asked to show cause why he should not be dismissed from service. Eventually, on the 31st of December 1962 the petitioner was dismissed from service by the Staff Superintendent of the State Bank who was empowered to take disciplinary action in terms of paragraph 521 (12) of an Award given by All India Industrial Tribunal presided over by P. Sastry and popularly known as Sastry Award. The said paragraph 521 (12) of the Sastry Award, to which the Imperial Bank of India was a party, required that the Bank should decide which officer shall be empowered to take disciplinary action in case of each office. The Bank was also, required to make provisions for appeals against the orders passed in disciplinary matters. It was directed further by the said Award that the names of the officers or the body who were empowered to pass original orders or hear appeals should from time to time be published on the Bank's Notice Board. In the instant case the name of the Staff Superintendent with the status of a manager was notified in terms of the said provision. The order of dismissal was, however, challenged by the petitioner in a writ petition before this High Court. It was disposed of in his favour by D. Basu, J. as noted above. 3. In the instant case the name of the Staff Superintendent with the status of a manager was notified in terms of the said provision. The order of dismissal was, however, challenged by the petitioner in a writ petition before this High Court. It was disposed of in his favour by D. Basu, J. as noted above. 3. The contentions of the petitioner before the Court below were first that the authority who appointed the petitioner was the Chief Accountant but the dismissal was by the Staff Superintendent who was an officer below the rank of the appointing authority; Secondly, that the enquiry was held in contravention of the principles of natural justice. The Court below held that the petitioner could not establish that he was appointed by the Chief Accountant. It, also, saw no merit in the second contention as the terms of the Award could not be enforced by a prerogative writ of Mandamus. There were again adequate alternative remedies available. The third submission was also negatived because the learned Judge thought that the rules of natural justice were not available unless the authority had quasi-judicial obligation. As the Bank was not under any duty to proceed judicially there was no quasi Judicial obligation. 4. Nevertheless, the learned Court below held that the petitioner was entitled to succeed as there was violation of the statutory provision with regard to the officer who was empowered to dismiss. This point apparently was not taken in the petition. The learned Judge came to the conclusion that the petitioner could be dismissed only by the Local Board or a Committee thereof as required by Regulation 55 (1) of the State Bank or in any event, by the Central Board. The learned Judge held that the provision of paragraph 521 (12) of the Sastry Award could not override the statutory provisions of the State Bank of India Act, 1955. According to the learned Judge the order of dismissal was ultravires for non-compliance with the statutory requirements. 5. The learned Judge held that the provision of paragraph 521 (12) of the Sastry Award could not override the statutory provisions of the State Bank of India Act, 1955. According to the learned Judge the order of dismissal was ultravires for non-compliance with the statutory requirements. 5. In the light of the Judgment, the memorandum of appeal and the submissions made on behalf of the appellant and the respondent it appears that three points need really be considered in this appeal: (i) whether the Sastry Award including paragraph 521 thereof was binding on the Bank and the petitioner; (ii) whether the dismissal in the instant case was effected in terms of the said Award; (iii) whether there was violation of the principles of natural justice in the departmental enquiry. Mr. Subrata Roy Chowdhury, learned counsel appearing for the appellant submitted that the Sastry Award was binding on the Imperial Bank of India of which the respondent was an employee. The Sastry Award was later on modified by another Award on the Industrial disputes between certain banking companies including the State Bank of India and their workmen, given by the' national industrial tribunal, presided over by K.P. Desai on the 7th of June 1962. The latter Award, however, did not modify paragraph 521 of the Sastry Award which related to the procedure for taking disciplinary action dealing with dismissal, suspension etc. The terms of the Sastry Award in general, as modified by the Desai Award was in force for one year at the relevant time under the Industrial Disputes Act, 1947. He submitted that the Award including paragraph 521 was binding on the parties. It could not be said that the Award was merely directory or by way of instruction. He cited some Supreme Court cases in which the Sastry Award as to dismissal, suspension and other conditions of service were accepted as binding by the Supreme Court. 6. There is substance in Mr. Roychowdhury's contention. It seems that the binding character of the Sastry Award was never challenged by the petitioner. On the contrary, there are allegations in the petition that the enquiry was held in contravention of the requirements of paragraph 521 (12) of the Sastry Award. 6. There is substance in Mr. Roychowdhury's contention. It seems that the binding character of the Sastry Award was never challenged by the petitioner. On the contrary, there are allegations in the petition that the enquiry was held in contravention of the requirements of paragraph 521 (12) of the Sastry Award. By a notification dated the 5th of January, 1952 the Central Government constituted an Industrial Tribunal under Section 7 of the Industrial Disputes Act with Sri S.P. Sastry, as the Chairman popularly known as Sastry Tribunal. Under Section 10 of the Indian Industrial Disputes Act, 1947 it also referred to the said Tribunal for adjudication disputes relating to numerous banks including the Imperial Bank of India. It was a comprehensive reference relating, inter alia, to methods of recruitment, conditions of service, termination of employment disciplinary actions etc. Schedule I of the notification contains a list of banks including the Imperial Bank of India the employers and workmen of which were parties to the adjudication. The Tribunal gave an Award in March 1953 which was known as the Sastry Award. It appears that the parties to the award felt aggrieved and there was an appeal to the Labour Appellate Tribunal. Thereafter, the Sastry Award was modified from time to time, inter alia, by another Award by a Tribunal presided over by K.P. Desai, known as Desai Award. The said modification, however, did not alter paragraph 521 of the Sastry Award. The Desai Award was published in June, 1962. The dismissal of the petitioner took place on the 31st of December, 1962 when the Sastry Award was binding on him. We thus find substance in the contention that the provision of the Sastry Award were binding on the petitioner who was a workman firstly of the Imperial Bank of India and then of the State Bank which was a party to the adjudication of disputes which resulted in the Desai Award. There is nothing moreover to indicate that the provisions of the Award, specially those contained in paragraph 521, were by way of instructions and not mandatory. Paragraph 521 (II) of the Sastry Award clearly lays down that in case of conflict between the terms given in the Award and the procedure or rules in force in any bank regarding disciplinary action the former shall prevail over the latter. Paragraph 521 (II) of the Sastry Award clearly lays down that in case of conflict between the terms given in the Award and the procedure or rules in force in any bank regarding disciplinary action the former shall prevail over the latter. Again validity of the Sastry and the Desai Awards seem to be assumed in several decisions of the Supreme Court which enforced these Awards. In the case of (1) State Bank of Hyderabad v. V. A. Bhide, reported in AIR 1970 S.C. 196 the short question which was to be decided was whether the Labour Court was right in holding that the three respondents could claim the status of supervisors entitled to the supervisory allowance under the Sastry and Desai Awards. The Court considered the relevant provisions of the two Awards for grant of special allowance as supervisors. Similarly, in the case of (2) State Bank of India v. Nanak Chand. reported in AIR 1965 S.C. 122 the Court considered the Sastry Award and held that where three months pay and allowance, were paid in terms of provisions of paragraph 521 (2c) of the Sastry Award no further payment of one month's wages under proviso to section 33(2) of the Industrial Disputes Act, 1947 was required. It is not necessary to refer to some' other cases which were cited at the Bar. What has been noted above clearly shows that the Sastry Award was given effect to and disputes on the basis of the validity of the Awards were determined by the Supreme Court. We hold that the Sastry Award, as modified by the Desai Award, are binding upon the petitioner. 7. On the next question viz., who was competent to order dismissal, it was submitted on behalf of the appellant that the point was not taken in the petition and therefore proper materials could not be placed before the Court by the Bank. The appellant felt aggrieved that the learned Court below while considering this aspect of the matter on his own, did not give the Bank an opportunity to place proper materials before him. Absence of adequate materials on record is a handicap to this Court as well. The available records show that the Staff Superintendent, Sri. S.K. Dutta with the rank of a manager was appointed as the authority empowered to take disciplinary action. Absence of adequate materials on record is a handicap to this Court as well. The available records show that the Staff Superintendent, Sri. S.K. Dutta with the rank of a manager was appointed as the authority empowered to take disciplinary action. The concerned notice was issued "By Order" under the signature of Sri B.K. Kancker, Secretary and Treasurer, Mr. Subrata Roychowdhury contended with some force that the nomination of the officer as disciplinary authority was a function which was not normally expected to be exercised by the Central Board or the local Board. It pertained to the managerial function which properly belong to the Secretary. The validity of the nomination was never challenged. It was further contended that in the absence of any specific provision in the State Bank Act there was no bar to the Secretary and Treasurer in making the nomination. Reference was made to a decision (3) Panaroms Development (Grilford) Limited vs. F.F. Fabrics Limited, reported in 1971(3) All ER 18 in which Lord Denning observed that the Secretary’s position was one of great importance. Referring to earlier decisions such as~ Bernett Roareateso v. S.L.T. Co. (1887) 18 O.B.D. 815, George White Church Ltd. v. Garanagh, (1902) A.C. 117 and Ruben v. Grest Fingall Consolidated, (1906) A.C. 439 it was observed that a Company Secretary is a much more important person now-a-days than he was in 1887. He is so longer a mere clerk. He regularly makes representation on behalf of the Company and enters into contracts on its behalf which come within the day to day running of the company's business. Being a chief administrative authority, it was urged, the Secretary was competent to act on behalf of the company specially in sphere which were purely managerial in nature. Moreover the word "My order" in the notice itself indicates an authority of the Bank. It is possible that the Secretary was authorised by the Local Board or the Central Board. 8. Mr. S.P. Roychowdhury, appearing for the respondent, however, referred to Regulation 50 of Schedule II and section 22 of the Imperial Bank of India (Act XIVII of 1920) Act by which dismissal could be ordered only by Central Board of by a local Board. 8. Mr. S.P. Roychowdhury, appearing for the respondent, however, referred to Regulation 50 of Schedule II and section 22 of the Imperial Bank of India (Act XIVII of 1920) Act by which dismissal could be ordered only by Central Board of by a local Board. According to him, amending Act 33 of 1955 retained the said Regulation 50 of the Imperial Bank Act in the State Bank Act itself but apparently he was not aware that the next amending Act 58 of 1960 by section 2 and the schedule, repealed, amongst others things the 5th schedule that retained Regulation 50, in the absence of proper materials and averments in the pleadings there is nothing before this Court to show that the nomination was not done by the Central or the local Board even assuming that it is required so to be done. We hold that the dismissal in the instant case was effected in terms of the Sastry Award. In view of some contentions raised at the Bar it seems necessary to state that the Sastry Award was binding on the State Bank and that its provisions could not be modified by any thing contained in the State Bank Act. The efficacy of an award which is like a decree in a civil suit can hardly be effected by the internal regulations of an institution upon which the award is binding. 9. As to the third contention a preliminary objection was raised on behalf of the appellant that it was not open to the respondent to argue against the decision of the Court below as no cross objection was filed. The objection is of no substance and we overrule the same. It is only a person who is aggrieved by the operative part of the judgment who can file cross objection which are really substitutes for cross appeals. 10. The petitioner's grievance on the score of violation of the principles of natural justice rests on alleged denial of inspection of certain documents and non-supply of a copy of the report of enquiry. A further grievance was that he was not allowed to engage a lawyer. It appears that the documents of which inspection was sought were not specified. The Inquiry Officer made it clear that only those documents which were produced at the enquiry would be shown to the defendant. The Sastry report or any other document. A further grievance was that he was not allowed to engage a lawyer. It appears that the documents of which inspection was sought were not specified. The Inquiry Officer made it clear that only those documents which were produced at the enquiry would be shown to the defendant. The Sastry report or any other document. Again a document which was not relied on by the Inquiry Officer is not required to be shown to the petitioner. Relying on two earlier decisions viz., (4) State of Mysore v. S. S. Makapur, reported in AIR 1963 S.C. 375 and (5) Collector of Central Excise v. Sanawarmal Purohit, reported in 1969 Assam LR (SC) 11, the Supreme Court laid down in the case of (6) State of Assam v. M.K. Das, reported in AIR 1970 SC 1255 (1260). "...... rules of natural justice can be considered to have been violated only if the authority concerned acts upon information collected by it and the said information has not been disclosed to the party against whom the material has been used." Learned Counsel appearing for the appellant referred to pages 82, 83, 93 and 100 of the Paper Book and pointed out that cross-examination of witnesses proceeded on the basis of documents which were relied on by the Inquiry Officer and which were obviously shown to the petitioner. The main charge related to deflacation of Rs. 2000/- on the basis of a draft of Hundi. No cross-examination was, however, made in respect of the same. The petitioner examined six witnesses. 11. As regards the representation by a lawyer, paragraph 521(10) of the Sastry Award provides that the ... petitioner should be permitted to defend by a representative of a registered union or with the bank's permission by a lawyer. There is nothing to show that any application was made to the bank for permission to engage lawyer. At the same time the Inquiry Officer's report at page 59 does not indicate that he was aware that a lawyer with the permission of the bank could represent an employee. However, in the absence of anything to indicate that the petitioner applied for bank's permission, the fact that the petitioner was not represented by a lawyer would not vitiate the proceedings. However, in the absence of anything to indicate that the petitioner applied for bank's permission, the fact that the petitioner was not represented by a lawyer would not vitiate the proceedings. Absence of a lawyer does not necessarily violate the principle of natural justice (See (7) Karuppa Uddayay v. The State of Madras, AIR 1956 Mad 460 ). We are, therefore, constrained to negative the submissions made on behalf' of the respondent. 12. The appeal is allowed. The Judgment and Order of the Court below is set aside. The Rule is discharged. There will be no order as to costs. Mukherjee, J.: I agree.