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2001 DIGILAW 1010 (PAT)

State Bank Of India v. Union Of India

2001-11-06

AFTAB ALAM

body2001
Judgment Aftab Alam, J. 1. This writ petition is filed at the instance of the State Bank of India (hereinafter referred to as the Bank) seeking to challenge an award, dated May 15, 1997 (Annexure-1) given by the Central Government Industrial Tribunal No. 1 at Dhanbad on a reference made to it u/s. 10(1)(d) of the Industrial Disputes Act, 1947. The dispute under reference was regarding the validity of the banks action in terminating the services of thirteen individual workmen and the reference was made in the following terms: "Whether the management of State Bank of India was justified in terminating the services of the under mentioned workmen with effect from March 5, 1986? If not, to what relief the workmen were entitled to (sic)?" The reference then gave a list of the thirteen concerned workmen. 2 The Tribunal in its award found and held that: "The action of the management of State Bank of India was not justified in terminating the services of the concerned workmen as mentioned in the Annexure to the Schedule of reference with effect from March 5, 1986. Consequently the concerned workmen are entitled for their reinstatement and regularisation with effect from March 5, 1986." 3. The Tribunal then went on to direct as follows: "The management is directed to reinstate and regularise their services with effect from March 5, 1986 and fix up the pay and seniority from this very date. But the management is directed to pay 40% of full back wages with effect from November 1, 1999 within two months from the date of publication of the award in the Gazette of India." 4. The rival contentions of the parties giving rise to the dispute may be briefly stated as follows, in the written statement of the Union, sponsoring the case of the concerned workmen, it was stated that those workmen were engaged by the bank from different dates between the years 1979 to 1984. They were employed to work as full time messengers against permanent posts in the Patna Branch of the Bank. They were, however, paid their wages on daily basis and at very low rates. Initially they were paid Rs. 5.00 per day and from October, 1981, Rs. 7.00 per day. Apart from this when they went out in connection with the Banks work, they were paid conveyance charges. They were, however, paid their wages on daily basis and at very low rates. Initially they were paid Rs. 5.00 per day and from October, 1981, Rs. 7.00 per day. Apart from this when they went out in connection with the Banks work, they were paid conveyance charges. They were paid wages only for working days and not for Sundays and holidays. It was further stated that each of the concerned workmen was engaged to do the banks work, under the direct supervision and control of the officials of the bank. It was also stated that till September, 1993, the concerned workmen were paid their wages directly but later on with a view to deny their lawful claims against the bank a paper arrangement was made in which the concerned workmen were shown as workers of a contractor, namely, Project Engineering and Construction Company. After the introduction of this arrangement the concerned workmen were shown to be paid their wages through the contractor at the rate of Rs. 10.50 per day and the contractor was paid Re. 1.00 per person, per day as commission. It was the case of the workmen that it was a sham arrangement with a fake contractor. No such contract firm was registered under the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and in reality the concerned workmen continued to work directly for the bank. 5. In January, 1986 the Union made a demand for regularisation of the concerned workmen in the service of the bank but the management responded by terminating their services without any notice or notice pay etc. The resulting dispute then became the subject of a proceeding before the Conciliation Officer but the conciliation proceeding failed due to the unreasonable stand taken by the management. 6. According to the workmen after removing the concerned workmen from employment the bank brought their replacements from other branches and the workers brought as replacement for the concerned workmen were later regularised in the banks service. 7. The management of the bank, on the other hand, completely denied any relationship of employer and employee between the bank and the concerned workmen. It was the case of the bank that the management had engaged one contractor, namely, Project Engineering and Construction Company for doing some odd jobs in the Patna main branch. 7. The management of the bank, on the other hand, completely denied any relationship of employer and employee between the bank and the concerned workmen. It was the case of the bank that the management had engaged one contractor, namely, Project Engineering and Construction Company for doing some odd jobs in the Patna main branch. The contract was for such sundry jobs as cleaning of walls, fans, tube-lights etc., removal of cobwebs, lifting of stationery boxes and other maintenance works like white-washing, painting, polishing etc., apart from other works like addition/alteration in the building with a view to ease the space problem. In the year, 1986, when it came to the notice of the management that the contractors bills were highly inflated, the contractor was asked to submit corrected bills, having regard to the work actually done by him. Thereupon the contractor abruptly stopped the work and withdrew from the contract. According to the bank, the concerned workmen were the employees of the contractor and the bank had no manner of concern with them. This much was, however, admitted that occasionally, at times of acute water crises, the concerned workmen were employed for fetching drinking water and serving it to the employees of the bank. It was also an admitted position that in course of the conciliation proceedings the bank had offered to consider atleast ten out of the thirteen concerned workmen for absorption in service. According to the bank, those ten workmen had worked in the bank from 1979 to 1982 and the bank was, therefore, agreeable to consider them for absorption in terms of circular Per No. 77/1984, dated May 17, 1984 (Ext. M/4). From the records of the case it is not clear under what circumstance this offer was made and why was it not pursued further. 8. Before proceeding to examine the findings of the Tribunal, it is to be noted that there are atleast two circumstances which tend to put a question mark on the stand of the bank denying any direct relationship of employer and employee with the concerned workmen; one, according to the bank the concerned workmen were the employees of the contractor Project Engineering and Construction Company which was given the contract for doing various kinds of odd jobs for the bank. Before the Tribunal the bank did not produce any written agreement executed between the bank and the contractor and all that was produced in support of the banks case were certain vouchers showing payment to the alleged contractor. I find it a little surprising that the bank should enter into a contract, subsisting over a period of several years, with a private party not on the basis of a written agreement but only on verbal understandings. For me it is difficult to comprehend that the details of works to be performed, rates of payment etc., were not clearly specified and reduced to writing but were all left in the realm of some oral agreement. In my view, the best way to prove that there was in fact such an arrangement as stated on behalf of the bank was to produce the written agreement between the bank and the contractor and the non-production of the agreement seems to cast a shadow of doubt on the stand taken by the bank. 9. The other circumstance is the banks offer, in course of the conciliation proceeding, to consider ten out of the thirteen concerned workmen for absorption, in service in terms of the circular regarding absorption of purely temporary employees. If the concerned workmen were the employees of the contractor and had no direct or immediate relationship with the bank, they were not covered by the banks circular and there was no occasion for the bank to consider them for absorption in service. 10. Proceeding now to examine the award, it may be noted that the bank examined six witnesses in support of its case and submitted four documents as exhibits (Exts. M/1 to M/4). The workmen similarly examined nine witnesses some of them being the concerned workmen, apart from producing a large number of documents in support of their case. 11. On a consideration of the entire materials the Tribunal came to hold and find as follows: (1) The plea of the management that the concerned workmen were the employees of the contractor was not correct. (2) The concerned workmen were working against permanent posts in the bank and on their removal from service other persons were engaged on transfer from other branches and they were subsequently regularised in service. (3) Each of the concerned workmen had worked for more than 240 days in several calendar years. (2) The concerned workmen were working against permanent posts in the bank and on their removal from service other persons were engaged on transfer from other branches and they were subsequently regularised in service. (3) Each of the concerned workmen had worked for more than 240 days in several calendar years. (4) The workmen were never given any intimation about their entitlement for regularisation in terms of the banks circular (Ext. M/4). (5) The removal of the concerned workmen from service was, therefore, bad and violative of the provisions as contained in sec. 25-F of the Industrial Disputes Act, apart from the fact that the concerned workmen were entitled to regularisation in service in terms of the banks scheme of absorption of purely temporary employees. 12. The Tribunal accordingly directed the management of the bank to reinstate and regularise the services of the concerned workmen with effect from March 5, 1986 and to pay them 40% of their back wages with effect from November 1, 1991. 13. Mr. Ram Balak Mahto, learned senior counsel appearing on behalf of the bank did not seriously question the findings arrived at by the Tribunal. He, however, strongly assailed the Tribunals direction for regularisation of the services of the concerned workmen with effect from March 5, 1986. Mr. Mahto submitted that on the basis of the findings arrived at the Tribunal might have been justified in directing for the reinstatement of the concerned workmen but reinstatement means restoring the previous position and in the case of the concerned workmen it would, therefore, mean putting them back in employment on daily wages as it was the admitted case of the workmen that at the time of their dis-engagement they were working on daily wages. Mr. Mahto submitted that the Tribunal in giving the direction for the regularisation of the workmen clearly exceeded its jurisdiction because in terms of the banks circular, absorption was not automatic or as a matter of course but subject to a selection process held by the bank. 14. In support of his submissions, Mr. Mahto relied upon certain decisions of the Supreme Court and this Court. On a careful consideration of Mr. Mahtos submissions, I am of the view that the decisions relied upon by him have no application to the facts of this case. 15. 14. In support of his submissions, Mr. Mahto relied upon certain decisions of the Supreme Court and this Court. On a careful consideration of Mr. Mahtos submissions, I am of the view that the decisions relied upon by him have no application to the facts of this case. 15. In Madhyamik Shiksha Parishad, U.P. V/s. Anil Kumar Mishra and Ors., AIR 1994 SC 1638 : 1994-II-LLJ-977 the case arose not from a reference under the Industrial Disputes Act but from a writ petition filed directly before the High Court in which the High Court in exercise of its writ jurisdiction gave a direction for regularisation of the concerned employees. The Supreme Court found that the concerned persons were working against posts which were not sanctioned and there was no right of regularisation for such employees. 16. In State of U.P. and Ors. V/s. Ajay Kumar, 1997 (4) SCC 88 : 1997-I-LLJ-1204, once again the case arose from a writ petition filed directly in the High Court. A single Judge of the Court declined to issue any direction for regularisation on the ground that there was no statutory rule under which the concerned employees could be regularised. The Division Bench of the High Court reversed the decision of the single Judge and gave direction for regularisation of the concerned employees. The Supreme Court held as follows at p. 1205 of LLJ: "It is now settled legal position that there should exist a post and other administrative instructions or statutory rules must be in operation to appoint a person to the post. Daily wage appointment will obviously be in relation to contingent establishment in which there cannot exist any post and it continues so long such work exists. Under these circumstances the Division Bench was clearly in error in directing the appellant to regularise the services of the respondents to the post as and when the vacancy arises and to continue him until then. The direction in the back drop of the above facts is obviously illegal". 17. In Sanjay Kumar Tiwary and Ors. V/s. State of Bihar and Ors., 2000 (4) PLJR 771 , a learned single Judge of this Court indeed set aside a direction for regularisation in service given by the Tribunal. The direction in the back drop of the above facts is obviously illegal". 17. In Sanjay Kumar Tiwary and Ors. V/s. State of Bihar and Ors., 2000 (4) PLJR 771 , a learned single Judge of this Court indeed set aside a direction for regularisation in service given by the Tribunal. But that was a case in which the State Government was a party and in the State Government there was no similar circular for absorption of purely temporary employees as in the case of the bank in the present case. 18. None of the three decisions, therefore, seem to have any application to the facts and circumstances of the case in hand. But Mr. Mahto submitted that under the absorption circular, the discretion still lay in the hands of the bank and a purely temporary employee could be absorbed only subject to a selection process in which he would be considered along with others. Mr. Mahto further submitted that in view of the circular, the Tribunal ought not to have given a direction for regularisation. The Tribunal should have simply directed reinstatement and from that stage the matter should have been allowed to proceed in accordance with the terms of the circular under which the workmen could have got themselves registered/empanelled for regularisation for being considered for absorption in their turn. 19. I am unable to accept this submission either. What Mr. Mahto contends means, in practical terms, that even after going through the conciliation proceedings and the long-drawn adjudication before the Tribunal in which it was found that the removal of the concerned workmen was unjustified, their fate should have been once again left in the hands of the management. An award simply putting back the concerned workmen on daily wages would leave them completely at the mercy of the management which could once again terminate their services, this time complying with the provisions of sec. 25-F of the Act and thus rendering the earlier round of adjudication as nugatory. It is true that absorption under the circular, under normal circumstances, is subject to a selection process and the management has certain discretion in the matter but here the matter did not proceed normally. 25-F of the Act and thus rendering the earlier round of adjudication as nugatory. It is true that absorption under the circular, under normal circumstances, is subject to a selection process and the management has certain discretion in the matter but here the matter did not proceed normally. First, the Tribunal found that the action of the management in terminating the services of the concerned workmen from March 5, 1986 was unjustified and invalid; secondly the Tribunal found that even at that stage the workmen were entitled to be considered for absorption in terms of the bank circular; thirdly and more importantly even before the Tribunal the management resisted the case of the workmen on grounds which, on a consideration of the evidences were found to be incorrect and untenable. These circumstances fully off set the banks discretion under the absorption circular and if in these circumstances the Tribunal gave a direction, overriding the banks discretion and cutting short the selection process, this Court is unable to find any fault with the Tribunals direction. It is well-settled that unlike ordinary Courts the Tribunal and the Labour Courts undertaking industrial adjudication have the authority and the jurisdiction to create rights and obligations between the parties beyond those existing under the subsisting contract. 20. For the reasons discussed above, I see no infirmity in the Tribunals award coming under challenge in this writ petition. This writ petition is accordingly dismissed but with no order as to costs.