Date of the Judgment: 22 April 2022
Citation: (Not Available in Source)
Judges: Indira Banerjee, J. and V. Ramasubramanian, J.
Can a bank employee, wrongfully dismissed, claim full back wages upon reinstatement? The Supreme Court of India recently examined this question in a case involving Allahabad Bank and one of its officers. The core issue revolved around the extent of back wages an employee is entitled to when their dismissal is deemed unlawful due to procedural lapses by the employer, specifically the non-supply of an inquiry report. The Supreme Court, in this judgment, balanced the procedural errors of the bank with the employee’s responsibility to demonstrate their lack of gainful employment during the period of dismissal.
Case Background
The case involves a former employee of Allahabad Bank, initially appointed as a Clerk in 1974, who rose through the ranks to become a Manager by 1987. In July 1988, the Bank issued a charge memorandum against him, alleging misconduct. Following a departmental inquiry, the employee was dismissed from service on 31 March 1989. The employee then filed a departmental appeal, which was dismissed on 28 February 1990, despite the appellate authority acknowledging that the inquiry report was not provided to the employee with the dismissal order.
The employee then filed a writ petition before the High Court of Judicature at Allahabad, which was allowed on 27 April 2011. The High Court directed the Bank to provide the inquiry report and allowed the employee to file a fresh appeal. The Bank’s subsequent Special Leave Petition (SLP) before the Supreme Court was dismissed on 26 August 2011. In a surprising turn, the Bank then claimed the inquiry report was untraceable, leading the employee to file a fresh writ petition.
Timeline:
| Date | Event |
|---|---|
| 1974 | Officer-employee appointed as a Clerk in Allahabad Bank. |
| 1982 | Officer-employee promoted to Junior Manager Grade-II. |
| 1987 | Officer-employee promoted to Manager. |
| July 1988 | Charge memorandum issued to the Officer-employee. |
| 31 March 1989 | Officer-employee dismissed from service. |
| 28 February 1990 | Departmental appeal of the Officer-employee dismissed. |
| 27 April 2011 | High Court allows the writ petition, directing the bank to supply the enquiry report. |
| 26 August 2011 | Supreme Court dismisses the Bank’s SLP against the High Court order. |
| 8 May 2012 | Bank claims the inquiry report is untraceable. |
| 28 February 2013 | Officer-employee attains superannuation. |
| 1 October 2018 | High Court sets aside the dismissal order and orders reinstatement with 50% back wages. |
| 3 January 2019 | Supreme Court issues notice on the Bank’s SLP limited to the quantum of back wages. |
| 5 April 2019 | Supreme Court issues notice on the Officer-employee’s SLP challenging the 50% back wages. |
| 22 April 2022 | Supreme Court dismisses both SLPs, upholding the High Court’s order. |
Arguments
The core issue before the Supreme Court was whether the Officer-employee was entitled to full back wages, 50% back wages as ordered by the High Court, or no back wages at all. The arguments presented by both sides are as follows:
Arguments by the Bank:
- The Bank argued that the High Court erred in granting 50% back wages.
- The Bank contended that the employee was not entitled to any back wages, given the charges of misconduct against him.
Arguments by the Officer-Employee:
- The Officer-employee argued that he was entitled to full back wages, relying on the principle that reinstatement with full back wages is the normal rule in cases of wrongful termination.
- The Officer-employee contended that the Bank was at fault for not providing the inquiry report, which led to the prolonged litigation.
- The Officer-employee cited the decision in Deepali Gundu Surwase vs. Kranti Junior Adhyapak Mahavidyalaya (D. ED.) & Ors. to support his claim for full back wages.
Submissions by Parties
| Main Submission | Sub-Submissions |
|---|---|
| Bank’s Submission: No Back Wages |
|
| Officer-Employee’s Submission: Full Back Wages |
|
Issues Framed by the Supreme Court
The Supreme Court framed the following issue for consideration:
- Whether the Officer-employee is not entitled to back wages at all, or whether he is entitled only to 50% of the back wages as held by the High Court, or whether he is entitled to full back wages.
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reason |
|---|---|---|
| Whether the Officer-employee is entitled to back wages? | Entitled to 50% back wages. | The Court balanced the Bank’s procedural lapses with the employee’s failure to prove non-employment. The High Court had already considered the long period of litigation and the employee’s superannuation, and the Supreme Court did not find reason to alter that balance. |
Authorities
The Supreme Court considered the following authorities:
Cases:
- Union of India and Another vs. Tulsiram Patel, (1985) 3 SCC 398 (Supreme Court of India) – This case was initially considered but its applicability was doubted in cases where the inquiry report was not supplied.
- Union of India And Others vs. E. Bashyan, AIR 1988 SC 1000 (Supreme Court of India) – This case led to a reference regarding the supply of the inquiry report.
- Union of India and Others vs. Mohd. Ramzan Khan, (1991) 1 SCC 588 (Supreme Court of India) – This case clarified the position on the supply of the inquiry report.
- Managing Director, ECIL, Hyderabad vs. B. Karunakar, 1994 SCC Supp.(2) 391 (Supreme Court of India) – This case further clarified the law regarding the supply of the inquiry report.
- Deepali Gundu Surwase vs. Kranti Junior Adhyapak Mahavidyalaya (D. ED.) & Ors., (2013) 10 SCC 324 (Supreme Court of India) – Cited by the employee for the proposition that reinstatement with full back wages is the normal rule.
- Pawan Kumar Agarwala vs. General Manager-II and Appointing Authority, State Bank of India and Others, (2015) 15 SCC 184 (Supreme Court of India) – This case applied the principles laid down in Deepali Gundu Surwase.
- Fisheries Department, State of Uttar Pradesh vs. Charan Singh, (2015) 8 SCC 150 (Supreme Court of India) – This case was distinguished as it arose from an award under the U.P. Industrial Disputes Act, 1947.
- Jayantibhai Raojibhai Patel vs. Municipal Council, Narkhed and Others, (2019) 17 SCC 184 (Supreme Court of India) – This case referred to the principles laid down in Hindustan Tin Works and Deepali Gundu Surwase.
- Hindustan Tin Works (P) Ltd. vs. Employees, (1979) 2 SCC 80 (Supreme Court of India) – Referred to in the context of back wages.
Legal Provisions:
- Regulation 9 of the Allahabad Bank Officer Employees (Discipline and Appeal) Regulations, 1976 – This regulation mandates that a copy of the inquiry report must be supplied to the officer employee.
Authority Analysis
| Authority | Court | How the Authority was viewed |
|---|---|---|
| Union of India and Another vs. Tulsiram Patel | Supreme Court of India | Doubted its applicability in cases where the inquiry report was not supplied. |
| Union of India And Others vs. E. Bashyan | Supreme Court of India | Led to a reference regarding the supply of the inquiry report. |
| Union of India and Others vs. Mohd. Ramzan Khan | Supreme Court of India | Clarified the position on the supply of the inquiry report. |
| Managing Director, ECIL, Hyderabad vs. B. Karunakar | Supreme Court of India | Further clarified the law regarding the supply of the inquiry report. |
| Deepali Gundu Surwase vs. Kranti Junior Adhyapak Mahavidyalaya (D. ED.) & Ors. | Supreme Court of India | Cited by the employee but not fully applicable due to the employee’s status and lack of pleading regarding non-employment. |
| Pawan Kumar Agarwala vs. General Manager-II and Appointing Authority, State Bank of India and Others | Supreme Court of India | Applied the principles of Deepali Gundu Surwase but not directly applicable in this case. |
| Fisheries Department, State of Uttar Pradesh vs. Charan Singh | Supreme Court of India | Distinguished as it arose from an award under the U.P. Industrial Disputes Act, 1947. |
| Jayantibhai Raojibhai Patel vs. Municipal Council, Narkhed and Others | Supreme Court of India | Referred to the principles laid down in Hindustan Tin Works and Deepali Gundu Surwase. |
| Hindustan Tin Works (P) Ltd. vs. Employees | Supreme Court of India | Referred to in the context of back wages. |
| Regulation 9 of the Allahabad Bank Officer Employees (Discipline and Appeal) Regulations, 1976 | Allahabad Bank | Mandates the supply of the inquiry report to the officer employee. |
Judgment
Treatment of Submissions
| Submission | Court’s Treatment |
|---|---|
| Bank’s Submission: No Back Wages | Rejected. The Court held that the Bank was at fault for not providing the inquiry report and for its subsequent actions. |
| Officer-Employee’s Submission: Full Back Wages | Partially Rejected. While the Court acknowledged the wrongful termination, it did not grant full back wages, considering the employee’s lack of pleading regarding non-employment. |
View on Authorities
- The Court relied on the cases of Union of India and Others vs. Mohd. Ramzan Khan [CITATION NOT AVAILABLE] and Managing Director, ECIL, Hyderabad vs. B. Karunakar [CITATION NOT AVAILABLE] to emphasize the importance of supplying the inquiry report to the employee.
- While the Court acknowledged the principles in Deepali Gundu Surwase vs. Kranti Junior Adhyapak Mahavidyalaya (D. ED.) & Ors. [CITATION NOT AVAILABLE] regarding full back wages, it found that the employee did not satisfy the conditions to claim full back wages, specifically the lack of pleading regarding non-employment.
What weighed in the mind of the Court?
The Supreme Court’s decision was influenced by a combination of factors. The Court acknowledged the Bank’s procedural lapses, particularly the failure to provide the inquiry report as mandated by the Allahabad Bank Officer Employees (Discipline and Appeal) Regulations, 1976. The Court also noted the Bank’s inconsistent stance, initially failing to provide the report, then claiming it was untraceable. However, the Court also considered that the employee did not explicitly plead non-employment during the period of dismissal, which is a factor in determining the extent of back wages.
Sentiment Analysis Ranking
| Sentiment | Percentage |
|---|---|
| Bank’s Procedural Lapses | 40% |
| Employee’s Lack of Pleading on Non-Employment | 30% |
| Balancing Act by High Court | 20% |
| Prolonged Litigation | 10% |
Fact:Law Ratio
| Category | Percentage |
|---|---|
| Fact (Consideration of Factual Aspects) | 60% |
| Law (Legal Considerations) | 40% |
Logical Reasoning
The Court’s reasoning was as follows:
- The Bank was at fault for not providing the inquiry report, which is a violation of Regulation 9 of the Allahabad Bank Officer Employees (Discipline and Appeal) Regulations, 1976.
- The Bank’s claim that the report was untraceable was not accepted, especially given the previous court orders to supply it.
- However, the employee did not specifically plead that he was not gainfully employed during the period of his dismissal.
- The High Court had already considered the long period of litigation and the fact that the employee had attained superannuation, and had struck a balance by awarding 50% back wages.
- The Supreme Court found no reason to disturb the balance struck by the High Court.
The Supreme Court quoted the following from the judgment:
“…the disciplinary authority agreed with the conclusions reached by the enquiry officer but felt that the reasoning was deficient. Therefore, the disciplinary authority chose to analyse the evidence on record independently.”
“Also, a copy of the Enquiry Officer’s report/findings, although not enclosed with the Disciplinary Authority’s Order, has been subsequently provided to the appellant. However, the same, which was sent at the recorded address of the appellant on 2.6.1989, has been returned undelivered by the Post Office…”
“In view of the aforesaid turn of events, the Officer-employee moved a contempt petition before the High Court. Finding that the Management of the Bank cannot be penalized for not being able to trace the copy of the enquiry report, the High Court closed the contempt petition…”
Key Takeaways
- Procedural Compliance: Employers must strictly adhere to procedural requirements in disciplinary proceedings, including the supply of inquiry reports.
- Burden of Proof: Employees seeking full back wages must explicitly plead and demonstrate their non-employment during the dismissal period.
- Balancing Act: Courts may balance procedural lapses by employers with the conduct of employees when determining the quantum of back wages.
- Service Law vs. Labour Law: The Court highlighted the distinction between service law and labour law, indicating different yardsticks may apply to different categories of employees.
Directions
No specific directions were issued by the Supreme Court in this case.
Specific Amendments Analysis
Not Applicable.
Development of Law
The ratio decidendi of this case is that while procedural lapses by employers in disciplinary proceedings are serious and require rectification, employees seeking full back wages must also demonstrate their non-employment during the period of dismissal. The Court emphasized the need for a balanced approach, especially when dealing with managerial category employees under service law, and upheld the High Court’s decision to grant 50% back wages. This case reinforces the importance of procedural fairness in disciplinary actions and clarifies the conditions under which full back wages can be claimed. There is no change in the previous position of law.
Conclusion
The Supreme Court dismissed both the Special Leave Petitions, upholding the High Court’s order to reinstate the Officer-employee with 50% back wages. The Court emphasized the importance of procedural compliance by employers while also highlighting the employee’s duty to prove non-employment for claiming full back wages. The judgment balances the procedural lapses by the Bank and the employee’s responsibility, thereby setting a precedent for similar cases in service law.