Supreme Court Remands Case for Fresh Hearing: Sikar Kendriya Sahkari Bank vs. Bhagirath Singh (2018)

Date of the Judgment: 24 September 2018. Citation: Not Available. Judges: Abhay Manohar Sapre, J. and Mohan M. Shantanagoudar, J. The Supreme Court of India addressed the critical issue of whether a High Court can issue an order against a party without granting them a hearing. This case involves a dispute between the Sikar Kendriya Sahkari Bank and one of its former employees, Bhagirath Singh, regarding his termination and subsequent reinstatement. The bench comprised Justice Abhay Manohar Sapre and Justice Mohan M. Shantanagoudar, with the judgment authored by Justice Abhay Manohar Sapre.

Case Background

The Sikar Kendriya Sahkari Bank, the appellant, employed Bhagirath Singh, the respondent, as a Clerk on 17 September 1975. The Bank terminated his services on 28 March 1979. Aggrieved by this termination, Bhagirath Singh approached the State Government, requesting an Industrial Reference to the Labour Court to assess the legality of his termination.

The State Government referred the matter to the Labour Court, Jaipur, on 9 April 1980, under Section 10 of the Industrial Disputes Act, 1947. The Labour Court ruled in favor of Bhagirath Singh on 21 July 1984, stating that his termination was illegal because he had worked for more than 240 days in a calendar year, no inquiry was conducted before his termination, and he was not paid retrenchment compensation as required under Section 25(F) of the Industrial Disputes Act, 1947. The Labour Court ordered his reinstatement with full back wages. The Bank allowed Bhagirath Singh to rejoin on 10 January 1985.

Bhagirath Singh then filed a civil suit in the Court of Munsif (1st class), Sikar, in 1986, seeking a declaration and mandatory injunction for seniority, regularization, and salary benefits. The Civil Judge dismissed the suit on 5 December 1989. Bhagirath Singh then filed a writ petition in the High Court, which was also dismissed on 13 February 1996. He subsequently filed an intra-court appeal before the Division Bench, which was allowed ex parte on 11 October 2007, directing the Bank to regularize his services and grant consequential benefits. The Bank’s application to set aside the ex parte order was dismissed on 23 January 2008, leading to the Bank’s appeal to the Supreme Court.

Timeline

Course of Proceedings

The Labour Court, Jaipur, ruled in favor of Bhagirath Singh on 21 July 1984, ordering his reinstatement with full back wages. Following this, Bhagirath Singh filed a civil suit seeking regularization and seniority benefits, which was dismissed by the Civil Judge on 5 December 1989. His subsequent writ petition was dismissed by a Single Judge of the High Court on 13 February 1996. However, the Division Bench of the High Court allowed his intra-court appeal ex parte on 11 October 2007, directing the Bank to regularize his services. The Bank’s application to set aside this ex parte order was dismissed on 23 January 2008, leading to the present appeal before the Supreme Court.

Legal Framework

The judgment primarily refers to Section 10 and Section 25(F) of the Industrial Disputes Act, 1947. Section 10 of the Industrial Disputes Act, 1947 deals with the power of the appropriate government to refer disputes to Boards, Courts, or Tribunals. Section 25(F) of the Industrial Disputes Act, 1947 mandates that no workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until the workman has been given one month’s notice in writing indicating the reasons for retrenchment and has been paid retrenchment compensation equivalent to fifteen days’ average pay for every completed year of continuous service or any part thereof in excess of six months.

The Supreme Court also cited the case of Sangram Singh vs. Election Tribunal, Kotah AIR 1955 SC 425, emphasizing the fundamental principle of natural justice that a litigant is entitled to be heard before any adverse order is passed against them.

Arguments

Appellant (Bank)’s Arguments:

• The Division Bench of the High Court erred in allowing the employee’s appeal without providing the Bank an opportunity to be heard.
• The Bank was not given any notice of the hearing, resulting in an ex parte order against them.
• The Bank was entitled to a hearing before any adverse order was passed against it.

Respondent (Bhagirath Singh)’s Arguments:

• The respondent’s arguments are not explicitly mentioned in the judgment. However, it can be inferred that the respondent argued for the validity of the High Court’s order which directed the bank to regularize his services and grant consequential benefits.

Submissions Table

Issues Framed by the Supreme Court

The primary issue before the Supreme Court was:

1. Whether the Division Bench of the High Court was justified in allowing the writ appeal ex parte without affording an opportunity of hearing to the appellant-Bank?

Treatment of the Issue by the Court

Authorities

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Supreme Court relied on Sangram Singh vs. Election Tribunal, Kotah AIR 1955 SC 425, emphasizing that “substantial justice demands that a litigant is entitled for a right to be heard before any order is passed against him.” The Court used this principle to justify remanding the case for a fresh hearing. The Court also referred to Section 10 and Section 25(F) of the Industrial Disputes Act, 1947 to provide the context of the dispute.

What weighed in the mind of the Court?

The primary concern of the Supreme Court was the violation of natural justice. The Court emphasized that the Division Bench of the High Court had passed an ex parte order against the Bank without giving them an opportunity to be heard. This was deemed a significant procedural lapse that necessitated the remand of the case for a fresh hearing. The Court’s reasoning was heavily influenced by the principle that every litigant has the right to be heard before an adverse order is passed against them.

Fact:Law Ratio

Logical Reasoning

Judgment

The Supreme Court allowed the appeals, set aside the impugned orders of the High Court, and remanded the case back to the Division Bench for a fresh hearing. The Court emphasized that the Bank was entitled to be heard before any adverse order was passed against it. The Court directed the High Court to decide the matter expeditiously, preferably within six months, without being influenced by any of the Supreme Court’s observations.

The Supreme Court stated, “In our opinion, having regard to the facts and circumstances arising in the case, the grounds taken and the cause shown, the Bank was entitled for a hearing before the Division Bench in the writ appeal.” The Court further noted, “Substantial justice demands that a litigant is entitled for a right to be heard before any order is passed against him.” The Court also added, “Needless to say, the appellant-Bank would be entitled to raise all pleas in their appeal before the High Court while prosecuting the appeal.”

Key Takeaways

• A litigant has the fundamental right to be heard before any adverse order is passed against them.
• Ex parte orders passed without giving a party an opportunity to be heard are liable to be set aside.
• The principle of natural justice is paramount in judicial proceedings.
• Cases may be remanded for fresh hearings if there is a violation of procedural fairness.

Directions

The Supreme Court directed the High Court to decide the writ appeal afresh on merits, in accordance with the law, and as expeditiously as possible, preferably within six months, without being influenced by any of the Supreme Court’s observations.

Development of Law

The ratio decidendi of this case is that a litigant has the right to be heard before any adverse order is passed against them. This case reinforces the principle of natural justice and highlights the importance of procedural fairness in judicial proceedings. While the principle itself is not new, this judgment serves as a reminder of its significance and application in the context of service law disputes.

Conclusion

The Supreme Court’s decision in Sikar Kendriya Sahkari Bank Limited vs. Bhagirath Singh underscores the importance of procedural fairness and the right to be heard in judicial proceedings. By remanding the case to the High Court for a fresh hearing, the Supreme Court ensured that the Bank would have an opportunity to present its case, thereby upholding the principles of natural justice.

Category

Parent Category: Service Law

Child Category: Right to be Heard

Child Category: Industrial Disputes Act, 1947

Child Category: Section 10, Industrial Disputes Act, 1947

Child Category: Section 25(F), Industrial Disputes Act, 1947

FAQ

Q: What was the main issue in this case?

A: The main issue was whether the High Court could pass an order against a party without giving them a chance to be heard.

Q: What did the Supreme Court decide?

A: The Supreme Court decided that the High Court’s order was invalid because the Bank was not given a chance to present its case. The case was sent back to the High Court for a fresh hearing.

Q: What is the principle of natural justice?

A: The principle of natural justice means that every person has the right to a fair hearing before any decision is made that affects them.

Q: What does it mean to have a case remanded?

A: When a case is remanded, it means that a higher court sends it back to a lower court to be heard again.

Q: What is the significance of this judgment?

A: This judgment reinforces the importance of procedural fairness and the right to be heard in judicial proceedings, ensuring that all parties have a fair opportunity to present their case.