http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7

CASE NO.:

Appeal (civil) 9676 of 2003

PETITIONER:

Viveka Nand Sethi

RESPONDENT:

Chairman, J & K Bank Ltd. & Ors.

DATE OF JUDGMENT: 03/05/2005

BENCH:

N. Santosh Hegde & S.B. Sinha

JUDGMENT:

J U D G M E N T

W I T H

CIVIL APPEAL NO.9678 OF 2003

S.B. SINHA, J :

These two appeals arising out of a common judgment and order dated

10.2.2003 passed by the High Court of Jammu & Kashmir at Jammu were

taken up for hearing together and are being disposed of by this common

judgment.

Interpretation of a bipartite settlement dated 8.9.1983 is in question in

these appeals which arise out of the aforementioned judgment and order

passed by a Division Bench of the said court dismissing an appeal preferred

by the Jammu & Kashmir Bank Ltd. (hereinafter referred to as 'the Bank),

affirming a judgment and order dated 15.12.1999 passed by a learned Single

Judge of the said court whereby and whereunder an award dated 4.10.1995

passed by the Central Government Industrial Tribunal-cum-Labour Court,

Chandigarh, directing the workman to be reinstated in service with the

benefit of past service without any back wages had not been interfered with.

The workman was working as a Cashier-cum-Clerk with the Bank.

He was transferred to Kolkata on or about 2.4.1981; but he did not join the

said office or before 14.4.1981, when he was supposed to do so. On his

failure to report to Kolkata office by 14.4.1981, a notice was issued by the

Bank on 22.6.1981 asking him to show cause as to why disciplinary

proceedings should not be initiated against him. Taking however a lenient

view, he was transferred to Amritsar on 6.8.1981 and then to Samba on a

representation having been made in this behalf. He later on was transferred

to Amritsar again. He joined Amritsar Branch on 29.7.1982. A leave for a

period of 28 days was sought for and sanctioned in favour of the workman

on an application made therefor by him on or about 9.10.1982. A further

leave of 9 days was sanctioned by an order dated 17.11.1982. Yet again he

filed an application seeking leave for one month on 19.5.1983; although he

had only 25 days accumulated leave to his credit and his leave account had

already been deducted by 50 days' medical leave.

A bipartite settlement was entered into by and between the

management of 58 Banks including the Appellant-Bank herein and their

workmen; clause 2 whereof is as under :

"2. Voluntary Cessation of employment by the

employees.

Whereas an employee has not submitted any

application for leave and absents himself from work for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7

a period of 90 or more consecutive days without or

beyond any leave to his credit or absents himself for 90

or more consecutive days beyond the period of leave

originally sanctioned or subsequently extended and

where there is satisfactory evidence that he has taken up

employment in India and the management is satisfied that

he has no present intention of joining duties, the

management may at any time thereafter give a notice, to

the employee's last known address calling upon the

employee to report for duty within 30 days of the notice

stating, inter alia, the grounds for the management

coming to the conclusion that the employee has no

intention of joining duties and furnishing necessary

evidence, where available. Unless the employee reports

for duty within 30 days or unless he gives an explanation

for his absence satisfying the management that he has not

taken up another employment or avocation and that he

has no intention of not joining duties, the employee will

be deemed to have voluntarily retired from the bank's

service on the expiry of the said notice. In the event of

the employee submitting a satisfactory reply, he shall be

permitted to report for duty thereafter within 30 days

from the date of the expiry of the aforesaid notice

without prejudice to the Bank's right to take any action

under the law or rules of service."

Despite the expiry of the period of leave in June 1983, the workman

did not report back for duties, whereupon the Branch Manager, Amritsar,

informed him by a letter dated 2.11.1983 that he should rejoin his duties,

which was not complied with. An explanation was sought for from him by

Memorandum dated 2.11.1983 whereby and whereunder he was asked to

show cause as to why he had been on unauthorized leave for such a long

period. Such an explanation was to be filed by 10.11.1983. He had further

been asked to join duties. Despite service of the said memo., the workman

failed to join his duties by 31.12.1983. Consequently, a show cause notice

dated 31.12.1983 served on him whereby and whereunder he was intimated

that in the event of his failure to resume his duties by 15.1.1984 he would be

deemed to have been discharged from the services of the Bank. In reply

thereto, a telegram from one Krishan Chand Sethi was received stating that

the workman being unwell could not join his duties by 15.1.1984. He again

applied for grant of leave on medical ground on 15.2.1984. As by reason of

the aforementioned act on the part of the workman, the Bank felt a great

deal of inconvenience, a memorandum was served on 20.2.1984, pursuant

whereto again he requested for sanctioning of leave. His services were

dispensed with by invoking clause (2) of the bipartite settlement stating :

"3. Consequent upon receipt of these applications from

Mr. V. Sethi, the bank had no alternative but to make

confidential enquiries about the state of his health in

pursuance of which it was revealed that Mr. V. Sethi was

keeping a good health and even attended to his family

business. This convinced the bank that Mr. Sethi was not

at all interested in the services of the bank, which

prompted it to issue an order vide No. Per/Disp/84-448

dated 17.5.1984 in accordance with the provisions

contained in Memorandum of Settlements dated 8.9.1983

and Mr. Sethi was deemed to have voluntarily retired

from the services of the bank w.e.f.8.2.1984."

A legal notice was served upon the Bank herein after a long time

demanding the reinstatement of the workman on or about 6.4.1989, to

which it was replied that he had been engaged in some business at Samba

and thus it was clear that he had no interest in continuing in the services of

the Bank. Sometime in June 1989, a conciliation proceeding was initiated

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7

by him under the Industrial Disputes Act resulting in a reference made by

the Central Government in terms of a Notification dated 7.8.1990.

Inter alia, on the ground that the bank allegedly did not place on

records the settlement dated 8.9.1983, the impugned award was passed.

In the writ petition filed thereagainst by the Bank it was specifically

averred :

"\005It is important to point out here that the relevant

Bipartite Settlement is applicable to the Management of

the Bank and the Staff Union of the Workmen is just in

the form of Book and the petitioner-bank while perusing

its case has placed that book of Bi-Partite Settlement

before the respondent No.2 but the respondent No.2

without considering that settlement has remained under

this impression that Bi-Partite Settlement is just a form of

some document consisting of some leaves and has not

placed on record which is not true. The order passed by

the respondent No.2 is totally in contravention of Bi-

partite Settlement and deserves to be quashed on this

score only.

A writ petition was also filed by the workman questioning non-grant

of back wages. Both the writ petitions were heard together. In the said

proceedings, the workman filed an application purported to be under Section

17-B of the Industrial Disputes Act, which was not supported by an affidavit

as is required in law. The learned Single Judge although noticed the

contentions raised in both the writ petitions, but dealt with the one filed by

the workman only. An appeal preferred thereagainst was also dismissed.

Mr. Rohit M. Alex, the learned counsel appearing on behalf of the

Bank, would submit that the Central Government Industrial Tribunal-cum-

Labour Court as also both the learned Single Judge and the Division Bench

of the High Court proceeded on a wrong premise that it was obligatory on

the part of the Bank to conduct a full fledged departmental proceeding.

According to the learned counsel the Industrial Tribunal as also the High

Court erred in law insofar as they failed to take into consideration that the

principles of natural justice had been complied with as repeated

opportunities had been given to the workman to explain his position as also

report for duties. Strong reliance, in this behalf, has been placed on

Syndicate Bank vs. General Secretary, Syndicate Bank Staff Association and

Another [(2000) 5 SCC 65] and Punjab & Sind Bank and Others vs. Sakattar

Singh [(2001) 1 SCC 214].

Mr. Ashok Mathur, the learned counsel appearing on behalf of the

workman, on the other hand, would contend that as a plea for extension of

leave was raised by the workman, if the same had not been proved to be

satisfactory to the management, it was obligatory on its part to conduct a

departmental proceeding against him. In any event, the learned counsel

would contend that the applicability of the bipartite settlement having not

been gone into by the Industrial Tribunal as also by the High Court, the

matter should be remitted to the Tribunal.

Before the Industrial Tribunal, the workman did not deny or dispute

the existence of the bipartite settlement. He merely raised a plea that the

same was not applicable. The plea of the Bank, on the other hand, was that

the stipulations contained in the bipartite settlement were attracted if the

employer arrives at a satisfaction that that there were sufficient grounds for

it to arrive at a conclusion that the employee was no longer interested to

continue in the service.

The fact that there exists a bipartite settlement entered into by and

between the Banks and their workmen is not in dispute. The workman was

all along aware about the said legal position inasmuch as, at all stages, viz.,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7

issuance of notices and memorandums, passing of the order of termination,

the said settlement had been referred to.

What fell for consideration before the Industrial Tribunal was the

interpretation and/or applicability of the said settlement. The Industrial

Tribunal committed an error of record insofar as it proceeded on the basis

that the said settlement had not been proved. The settlement being an

admitted document should have been considered in its proper perspective by

the Industrial Tribunal. Clause (2) of the said settlement is a complete code

by itself. It lays down a complete machinery as to how and in what manner

the employer can arrive at a satisfaction that the workman has no intention to

join his duties. A bare perusal of the said settlement clearly shows that it is

for the employee concerned to submit a proper application for leave. It is

not in dispute that after the period of leave came to an end in June 1983, the

workman did not report back for duties. He also did not submit any

application for grant of further leave on medical ground or otherwise. It is in

that situation the memorandum dated 2.11.1983 was issued and he was

asked to joint his duties. It is furthermore not in dispute that despite receipt

of the said memorandum, the workman did not join duties pursuant whereto

he was served with a notice to show cause dated 31.12.1982. He was

required to resume his duties by 15.1.1984. The Bank received a telegram

on 17.1.1984 and only about a month thereafter he filed an application for

grant of leave on medical ground. It is not the case of the workman that any

leave on medical ground or otherwise was due to him. Opportunities after

opportunities indisputably had been granted to the workman to explain his

position but he chose not to do so except filing applications for grant of

medical leave and that too without annexing proper medical certificates.

The bipartite settlement is clear and unambiguous. It should be given

a literal meaning. A bare perusal of the said settlement would show that on

receipt of a notice contemplated thereunder, the workman must either : (1)

report for duties within thirty days; (2) give his explanation for his absence

satisfying the management that he has not taken any employment or

avocation; and (3) show that he has no intention of not joining the duties. It

is, thus, only when the workman concerned does not join his duties within

thirty days or fails to file a satisfactory explanation, as referred to

hereinbefore, the legal fiction shall come into force. In the instant case

except for asking for grant of medical leave, he did not submit any

explanation for his absence satisfying the management that he has not taken

up any other employment or avocation and that he has no intention of not

joining his duties.

In the aforementioned fact situation we do not see any reason as to

why the Bank could not arrive at a satisfaction that the workman had no

intention to join his duties. It is interesting to note that though the said order

was passed on 17.5.1984, a representation to the Bank was made by the

workman to reconsider the said decision after a period of 3 years and 2

months by a letter dated 31.7.1987

Yet again a dispute was sought to be raised by issuance of a legal

notice on the Bank only on 6.4.1989.

Mere sending of an application for grant of leave much after the

period of leave was over as also the date of resuming duties cannot be said to

be a bona fide act on the part of the workman. The Bank, as noticed

hereinbefore, in response to the lawyer's notice categorically stated that the

workman had been carrying on some business elsewhere.

We cannot accept the submission of Mr. Mathur that only because on

a later date an application for grant of medical leave was filed, the same ipso

facto would put an embargo on the exercise of the jurisdiction of the Bank

from invoking clause (2 ) of the bipartite settlement.

It may be true that in a case of this nature, the principles of natural

justice were required to be complied with but the same would not mean that

a full-fledged departmental proceeding was required to be initiated. A

limited enquiry as to whether the employee concerned had sufficient

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7

explanation for not reporting to duties after the period of leave had expired

or failure on his part on being asked so to do, in our considered view,

amounts to sufficient compliance of the requirements of the principles of

natural justice.

Clause (2) of the bipartite settlement raises a legal fiction, which is of

wide import. Once the action on the part of the employer is found to be fair,

the court in view of such legal fiction would call upon the workman to prove

contra. It will bear repetition to state that the only defence which came to be

raised by the workman was non-applicability of the bipartite settlement. The

notice dated 31.12.1983 refers to the said settlement by necessary

implication, as on the failure of the workman to resume his duties by

15.1.1984, it was stated that he would be deemed to have been discharged

from the services of the Bank. Yet again in terms of the memorandum dated

20.2.1984, attention of the workman was drawn to the fact that his

application for grant of leave was neither in the prescribed form nor any

medical certificate was attached thereto. It was pointed out that the medical

certificate shows that he was under the doctor's treatment from 22.10.1983

to 22.1.1984 and as such he should have reported for duties on 23.1.1984

and as he failed to do so, it gave rise to an inference that he was not

interested to continue in Bank's services. He did not submit any satisfactory

explanation nor he filed any valid medical certificate. It was in that

situation, the order dated 17.5.1984 was issued which again referred to the

provisions contained in memorandum of settlement dated 8.9.1983. The

workman ex facie appears to have accepted the said order as for a long

period he maintained silence. Had he been interested in the Bank's services,

it was expected of him to resume his duties and/or file proper application for

grant of medical leave with a valid medical certificate.

The principle of natural justice, it is trite, is no unruly horse. When

facts are admitted, an enquiry would be an empty formality. Even the

principle of estoppel will apply. [See Dr. Gurjeewan Garewal (Mrs.) vs. Dr.

Dumitra Dash (Mrs.) and Others [(2004) 5 SCC 263]. The principles of

natural justice are required to be complied with having regard to the fact

situation obtaining therein. It cannot be put in a straitjacket formula. It

cannot be applied in a vacuum without reference to the relevant facts and

circumstances of the case. [See State of Punjab vs. Jagir Singh (2004) 8

SCC 129] and Karnataka State Road Transport Corporation & Anr. Vs. S.G.

Koturappa & Anr. 2005 (2) SCALE 493].

The contention raised at the Bar appears to be squarely covered by

two decisions of this Court relied upon by Mr. Alex. In Syndicate Bank

(supra) Wadhwa, J. speaking for the Division Bench observed :

"14. Two principles emerge from the decisions: (1)

principles of natural justice and duty to act in a just, fair

and reasonable manner have to be read in the Certified

Standing Orders which have statutory force. These can be

applied by the Labour Court and the Industrial Tribunal

even to relations between the management and workman

though based on contractual obligations; and (2) where

domestic inquiry was not held or it was vitiated for some

reason the Tribunal or Court adjudicating an industrial

dispute can itself go into the question raised before it on

the basis of the evidence and other material on record.

15. In the present case action was taken by the Bank

under clause 16 of the Bipartite Settlement. It is not

disputed that Dayananda absented himself from work for

a period of 90 or more consecutive days. It was thereafter

that the Bank served a notice on him calling upon him to

report for duty within 30 days of the notice stating

therein the grounds for the Bank to come to the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7

conclusion that Dayananda had no intention of joining

duties. Dayananda did not respond to the notice at all. On

the expiry of the notice period the Bank passed orders

that Dayananda had voluntarily retired from the service

of the Bank."

It was further held :

"18. The Bank has followed the requirements of

clause 16 of the Bipartite Settlement. It rightly held that

Dayananda has voluntarily retired from the service of the

Bank. Under these circumstances it was not necessary for

the Bank to hold any inquiry before passing the order. An

inquiry would have been necessary if Dayananda had

submitted his explanation which was not acceptable to

the Bank or contended that he did report for duty but was

not allowed to join by the Bank. Nothing of the like has

happened here. Assuming for a moment that inquiry was

necessitated, evidence led before the Tribunal clearly

showed that notice was given to Dayananda and it is he

who defaulted and offered no explanation of his absence

from duty and did not report for duty within 30 days of

the notice as required in clause 16 of the Bipartite

Settlement."

The aforementioned legal position was reaffirmed by a decision of

three-Judge Bench in Punjab & Sind Bank (supra), wherein it has been held :

"\005Under this rule the employee is given an opportunity

to rejoin duty within a stipulated time or explain his

position to the satisfaction of the management that he has

no intention of not joining duty, and a presumption will

be drawn that the employee does not require the job

anymore and will stand retired from service. Thus, there

is no punishment for misconduct but only to notice the

realities of the situation resulting from long absence of an

employee from work with no satisfactory explanation

thereto\005".

In the fact situation obtaining therein it was held that there had been

sufficient compliance for principle of natural justice.

In Syndicate Bank (supra), this Court noticed the decision of three-

Judge Bench of this Court in D.K. Yadav vs. J.M.A. Industries Ltd. [(1993)

3 SCC 259] whereupon the Industrial Tribunal had placed strong reliance.

In D.K. Yadav (supra) admittedly no opportunity was given to the workman

and no inquiry was held. In that situation, it was observed :

"8. The cardinal point that has to be borne in mind, in

every case, is whether the person concerned should have

a reasonable opportunity of presenting his case and the

authority should act fairly, justly, reasonably and

impartially. It is not so much to act judicially but is to act

fairly, namely, the procedure adopted must be just, fair

and reasonable in the particular circumstances of the

case. In other words application of the principles of

natural justice that no man should be condemned unheard

intends to prevent the authority from acting arbitrarily

affecting the rights of the concerned person."

Keeping in view the fact that we have ourselves considered the

pleadings of the parties as also the materials on records, it is not necessary to

remit the matter to the Tribunal as it would not serve any purpose. So far as

the appeal preferred by the workman is concerned, it is not necessary to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7

entertain the same as it is evident that Section 17-B of the of the Industrial

Disputes Act cannot now be applied in view of the fact that the workman did

not file an affidavit before the learned Single Judge in support of his

contentions and as required under law.

Having regard to the facts and circumstances of the case and for the

reasons stated hereinbefore, we are of the opinion that the appeal preferred

by the Bank should be allowed and that of the workman should be

dismissed. However, in the facts and circumstances of the case, there shall

be no order as to costs.