1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 4105 OF 2009 Aarati Shrikant Deshpande .. Petitioner Vs Vidyanand Co­operative Bank Ltd & Ors .. Respondents K.S. Bapat i/b A.H. Fatangare for the petitioner Nitin Jamdar for respondent no. 1 Sameer A. Kulkarni for respondent no. 2. CORAM : Smt. V.K. TAHILRAMANI, J. DATE : 28th August, 2009 P.C.: 1. Heard the learned counsel for the petitioner ­ original complainant, the learned counsel for the Vidyanand Co­operative Bank Ltd ­ respondent no. 1 and the learned counsel for respondent no. 2 who is also working as a junior officer in the Natepute branch of respondent no. 1. 2. Rule. By consent rule is made returnable forthwith and the RMA wp4105­09.sxw 2 matter is heard finally. 3. The petitioner ­ original complainant is working as a junior officer in respondent no. 1 bank. Respondent no. 2 is also an employee of the said bank. The petitioner was appointed on 2nd December, 1997 in the bank which was then situated at Solapur. It may be stated here that respondent no. 1 started its operation in the year 1997. Thereafter in 2002, a new branch came to be opened at Natepute. On 16th June, 2008, the petitioner came to be transferred from Solapur branch to Natepute branch. Hence, she filed complaint under item nos. 3, 5, 9 and 10 of Schedule IV of the MRTU & PULP Act, 1970. The said complaint came to be dismissed on 30th March, 2009 by the Industrial Court, Solapur. Being aggrieved by the said judgment and order, this petition has been preferred. 4. It may be stated here that this court by order dated 26th November, 2008 directed the parties to maintain status quo till the decision of the complaint. After the complaint came to be dismissed by order dated 30th March, 2009 by the Industrial Court, interim order RMA wp4105­09.sxw 3 was passed by the Industrial Court granting status quo which was continued by this court by order dated 28th April, 2009. Hence, due to the interim order passed in favour of the petitioner, the petitioner is still working in the bank at Solapur. 5. The case of the petitioner ­ complainant is that there was no clause relating to transfer in her appointment order. It was submitted that there was contract of service between the petitioner and the bank and it does not provide for transfer. Before the Industrial Court, it was submitted by the respondent ­ bank that in view of condition no. 4 mentioned in the appointment order dated 2nd December, 1997, the petitioner could be transferred to the Natepute Banch. It was contended by the bank that condition no. 4 states that the decision of managing director pertaining to the workers or their working and tenure will be binding. Hence, the order of transfer is binding on the petitioner. It was submitted by the learned counsel for the respondent that as there was no condition in the appointment order that the petitioner would never be transferred or her appointment was not transferable, hence, she could be transferred to Natepute. It was RMA wp4105­09.sxw 4 further submitted that the complainant is not transferred to any new establishment but she was transferred to the branch of the existing establishment. Moreover, there is no change in the service condition due to the transfer. It was also submitted that another officer i.e Bharatesh J. Shah (Respondent NO. 2) had been transferred to the Natepute branch and he has been working there since last about six years in spite of his problems and hence, the complainant was required to be transferred in his place so that Mr. Bharatesh J. Shah can return back to the Solapur branch. Lastly, it was submitted that the transfer is natural incident of service and hence, it was prayed that the complaint be dismissed. 6. As far as the contention that there was no clause relating to the transfer in the appointment order nor there were any service rules providing for transfer, the Industrial Court observed that when the complainant was appointed in the bank at Solapur, there was only one branch at Solapur and as such, it was not expected that there would be any clause of transfer. Moreover, in the appointment order, it is no where mentioned that the job of the complainant will be non­ RMA wp4105­09.sxw 5 transferable. The complainant has accepted condition no. 4 mentioned in the appointment order dated 2nd December,1997 which lays down that the decisions of Managing Director pertaining to working and tenure is binding on her. Therefore, the order of transfer is binding on her. There is no condition in the appointment order that the complainant would never be transferred or her appointment was not transferable. In the appointment order or in the service conditions, even though there is no term regarding transfer, it does not mean that the employer bank was not entitled to transfer the complainant only on that ground. In such, situation when the new branch was opened at Natepute in 2002, some of the staff and officers were transferred to Natepute from Solapur, it appears that nobody had ever raised any grievance about such transfer except the complainant. The Industrial Court relied on the fact that two colleagues of the complainant had already served in the Natepute branch and thereafter it was the turn of the complainant and the complainant is not transferred to any new establishment and there is no change in the service condition due to transfer. In view of these facts and circumstances, Industrial Court found that there was no merit in this ground raised by the RMA wp4105­09.sxw 6 complainant. 7. The learned counsel for the petitioner has placed reliance on the decision of Supreme Court in the case of Kundan Sugar Mills Vs Ziya Uddin and Others, I LLJ SC 1960. He submitted that the said decision though cited before the Industrial Court, has not been properly considered by it. The Industrial Court was of the opinion that the facts in the case of Kundan Sugar Mills and the facts in the present case are totally different. It observed that as a new branch at Natepute was opened way back in 2000­2001, some of the employees from Solapur branch were transferred. Though, there were no any service rules but due to transfer of two colleagues of the petitioner at Natepute without raising any dispute, it means they impliedly accepted the policy of transfer effected by the bank on account of opening of its new branch. As the service conditions in both the branches were same, the Industrial Court held that the decision in the case of Kundan Sugar Mills would not apply to the case of the petitioner. Before, I proceed to consider whether the decision has been properly considered or not by the learned judge, it would be necessary to refer to the RMA wp4105­09.sxw 7 appointment letter of the petitioner and the service rules. 8. Admittedly, in the letter of appointment or in the service rules, there is no condition relating to transfer. The question of law which has been raised must be considered in relation to the facts of this case. The arguments of the learned counsel for the respondents that the right to transfer is implicit in every contract of service is too wide. Apart from any statutory provision, the rights of an employer and an employee are governed by the terms of contract between them or by the terms necessarily implied therefrom. It is conceded that there is no express agreement between the petitioner and the respondent bank by which the respondent has a right to transfer the petitioner to any of its concerns in any place and the petitioner's duty to join the concerns to which she may be transferred. If so, can it be said that such a term has to be necessarily implied between the parties? At the time, the respondent bank started, its operation was only at Solapur. There is nothing on record to indicate at that time, it intended to start another branch or to extend its activities at a different place. It is also not suggested that even if the bank had any such intention at the time RMA wp4105­09.sxw 8 when it started its operation at Solapur, the petitioner had knowledge of any such intention. Under such circumstances, without more, it would not be right to imply any such term between the contracting parties when the idea of starting a new branch at a difference place was not in contemplation. Ordinarily any employee would agree only to serve in the branch then in existence. In the present case, the bank started its operation at Solapur in the year 1997 and thereafter it started another branch in the year 2002 at Natepute. Both these places are situated at different places with a distance of about 135 kilometers between them. 9. In the case of Kundan Sugar Mills, the workmen were employed in the year 1946. At that time, the Kundan Sugar Mills was a partnership concern which owned a sugar mill at Amroha. In 1951, the partners purchased the building, machinery and equipment of a sugar mill at Kiccha in the district of Nainital. They closed the mill at Kiccha and started it at Bulandshar. In January 1955, the General Manager of the Kundan Sugar Mills ordered the transfer of the workmen to the new mill at Bulandshar. The transfer was resisted. RMA wp4105­09.sxw 9 The workmen were subjected to an enquiry and they were dismissed from service. The contention that was raised before the Supreme Court was that the right to transfer an employee by an employer from one of his concerns to another was implicit in every contract of service and also that, the State Industrial Tribunal having held that both the mills at Bulandshr formed one unit, the Appellate Tribunal had no jurisdiction to set aside such finding. In relation to the first submission, the Supreme Court observed that the argument that the right to transfer was implicit in every contract of service was too wide of the mark. Apart from any statutory provision, the rights of an employer and an employee were governed by the terms of the contract between them or by the terms necessarily implied therefrom. It was conceded that there was no express agreement between the Kundan Sugar Mills and the workmen where under the former had the right to transfer the latter to any of its concern in any place and the latter the duty to join the concern to which they might be transferred. Could it then be said that such a term had to be necessarily implied? When the workmen were employed by Kundan Sugar Mils, it was running only one factory at Amroha. There was nothing on record to indicate that RMA wp4105­09.sxw 10 at that time, it intended to extend its activities in the same line at different places. It was also not suggested that, even it if had such an intention, the workmen had knowledge of the same. Under such circumstances, without more, it would not be right to imply any such term between the contracting parties. Ordinarily, the workmen would have agreed only to serve in the factory then in existence and the employer would have employed them only in respect of that factory. The Supreme Court went on to observe that the matter did not stop there. In the case before it, the two factories were distinct entities situated at different places and to import a term conferring a right on the employer to transfer the workmen to a different concern was really to make a new contract between them. The Supreme Court, therefore, held that it was not a condition of service of employment of the workmen, either express or implied, that the employer had the right to transfer them to a new concern started by him subsequent to the date of their employment. 10. The argument of Mr. Jamdar that an employer has an inherent power to transfer an employee is, to use the words of the Supreme RMA wp4105­09.sxw 11 Court too wide of the mark. It is relevant to note that at the time when the workmen were employed by the appellant, the appellant had only one office at Solapur and no other branch. It is nobody's case that at the time when the petitioner was employed, the respondent intended to branch out or that, in any event, the petitioner was told that there was a possibility of such branching out and of her transfer in such contingency. The petitioner when employed, would to use the words of the Supreme Court again, have agreed to serve only in the Solapur office then in existence and the respondent would have employed them only in respect of the office at Solapur. There is, here, no contract of service that contains an express clause relating to power to transfer. Upon the facts stated and having regard to the decision in Kundan Sugar Mills, in my opinion, the decision would very much apply to this case. In view thereof, no such power can be implied in this case. 11. My attention was drawn by the learned counsel for respondent no. 2 to the judgment of the Supreme Court in B. Varadha Rao Vs State of Karnataka & Ors 1986 II CLR 277. It was held therein that "it RMA wp4105­09.sxw 12 is well understood that transfer of a Government servant who is appointed to a particular cadre of transferable posts from one place to another is an ordinary incident of service and therefore does not result in any alteration of any of the conditions of service to his disadvantage. That a Government servant is liable to be transferred to a similar post in the same cadre is a normal feature and an incident of government service and no government servant can claim to remain in a particular place or in a particular post unless, of course, his appointment itself is to a specified non­transferable post". This Judgment can have no application to the facts of the case before me because it relates to a Government Servant appointed to a cadre of transferable posts and it is well settled that transfer is a normal incident of such government service. 12. None of these decisions deals with a case similar to that presented in this petition, namely, whether a person employed in an establishment can be transferred to some other independent concern started by the same employer at a stage subsequent to the date of his employment. In none of these cases, it is held, as it is suggested by the RMA wp4105­09.sxw 13 learned counsel for the respondent that every employer has the inherent right to transfer his employee to another place where he chooses to start a business subsequent to the date of the employment. I, therefore, hold that it was not a condition of service of employment of the respondents, either express or implied, that the employer has the right to transfer the employee to a new concern started subsequent to the date of employment. 13. Reliance was also placed by the learned counsel for the petitioner on the decision in the case of Management of M/s. Nippani Urban Co­operative Bank Ltd Vs Workmen. 1992 I CLR 854. In the said case, the complainants ­ workmen were employed by the bank as clerks. The bank was functioning only at Nippani, it had no branch whatsoever. Subsequently, a branch opened at Benadi on 29th December, 1978 and thereafter the said workmen were transferred to work in the Benadi Branch with effect from 1st January, 1979. The workmen did not join duty at the Benadi branch in the absence of any agreement which permitted a transfer. The Labour Court rejected the contention. The decision of the Labour Court was impugned by the RMA wp4105­09.sxw 14 trade union of the workmen in Writ Petition. In this case, the HIgh Court held that as the contract of service did not contain an express power of transfer and from the facts, no such power can be implied, hence, the High Court declined to interfere in the order granting the transfer order. 14. Reliance is also placed by the learned counsel for the petitioner on the decision of this court in case of Crest Communication Ltd & Ors Vs Ms. Sheetal Shenoy reported in 2001 II CLR 1036. In the said case, no appointment order was issued and reliance was placed on the standing orders to show that the employee could be transferred. In the said case, it was observed that since there was no express agreement between the parties in relation to transfer of employees nor any mention thereof in the standing orders, there is lack of authority to transfer the employee, therefore transfer suffers from malafides in law. The Industrial Court also proceeded to hold that since there was no appointment order when the respondent joined services of the petitioner company in 1993; and the Delhi office was also not in existence, but was established only in November,1995; and that the RMA wp4105­09.sxw 15 respondent was not made known about the intentions of the petitioner company to expand the business or of opening a branch at Delhi; and in the absence of such knowledge; and also in the absence of express terms of transfer while joining the service, there was no inherent power in the petitioner company to transfer the respondent and that the rules and regulations framed posterior to the joining of service by the respondent would be of no avail to the petitioner company. To support this view, the Industrial Court relied upon the decision of the Karnataka High Court in the case of Management of Nippani Urban Co­Op Bank Ltd.(supra), as well as the decision of Apex Court in the case of Kundan Sugar Mills (supra). Referring to the aforesaid decisions, the Industrial Court held that the action of the petitioner company of issuing the transfer order and introducing a new term of transfer which was not in existence when respondent had joined the services in the year 1993, amounts to unfair labour practice under item 9 of schedule IV of the Act. In these circumstances, the Industrial Court held that the petitioner company engaged in commission of unfair labour practices covered by Item Nos. 3 and 9 of Schedule IV of the Act, and therefore, restrained the petitioners from engaging into RMA wp4105­09.sxw 16 such unfair labour practices. The Industrial Court, therefore, quashed the transfer order dated 12th January, 1998 and directed the petitioners to allow the respondent to resume duty in her original post and original place at Mumbai office. The said writ petition came to be dismissed on the ground that there is no dispute that, when the respondent had joined services, there was only one office of the petitioner company that too at Mumbai. Besides this, there is nothing on record to indicate that the petitioner company has made its intention known to the respondent at the relevant time that they intend to expand business activities and / or to open offices at other places and that the respondent would be required to join such places as and when occasion arises. Hence, the plea taken by the petitioner company came to be rejected about inherent power of the company to transfer its employees from one place to another or to infer that there was also a contract between the parties permitting the company to transfer its employee to the offices outside Mumbai which would be established in future. It was observed that there is nothing on record that any such intention was so made known by the petitioner company to the respondent when the respondent joined services of the RMA wp4105­09.sxw 17 petitioner company, therefore there was no agreement either express or implied or tacitly arrived at between the parties permitting the petitioner company to transfer the services of the respondent to another place outside Bombay where she had originally joined. It was further observed that to imply a term of transferability as regards an employee who entered service of a concern with a single establishment, it must be established that the employer entertained an intention to have a proliferation of its activities. Not only that, there must be communication of such an intention to the employee also. It was further held that without knowledge on the part of the employee of such an intention as entertained by the employer, transferability could not be inferred as an implied condition. 15. Lastly, reliance was placed by the learned counsel for the petitioner on a decision of this court in the case of Group Pharmaceuticals Limited Vs Blossom Godinho and Another, 1997 II CLR 911 wherein it was held that in absence of any rules and regulations, the contractual agreement between the employer company and the employee has to be seen. This Court observed that the RMA wp4105­09.sxw 18 contractual agreement is silent about the transfer of employee as at the time the employee joined the service there was no stipulation in the contract that she was liable to be transferred from one place to the another in the employer company. It further observed that as a matter of fact at the time the employee joined the services in the employer company the entire organization was located at Mumbai and the employer company had neither any branch nor any sort of office anywhere in the country except in Mumbai. The action of the employer company and its managing director for advising the employee to join her duties at Banglore within 15 days from the receipt of the letter dated 15th May, 1995 is definitely contrary to the contract of service and is a clear violation thereof. There is neither any inherent right of transfer in the employer nor in the absence of any express provision of transfer either under the Rules and Regulations or under the conditions of service, implied right or power of transfer can be traced in the employer. After observing thus, this court declined to interfere in the order setting aside the order of transfer. 16. The facts in the above decision are identical to the facts in the RMA wp4105­09.sxw 19 present case and hence, the decision would apply on all fours to the facts of the present case. 17. The learned counsel for the respondent bank and the learned counsel for respondent no. 2 has placed reliance on condition 4 of the appointment order of the petitioner to contend that in view of this clause, the petitioner could have been transferred. I have already dealt with clause 4 of the appointment order in earlier paragraphs. Moreover, on reading the said condition in the appointment order, it does not appear to me that the decision of the management would also be in relation to transfer. The learned counsel for the respondent bank submitted that after a branch was opened at Natepute, none of the employees who were transferred raised any objection regarding their transfer. He further submitted that when the other employers were transferred, the petitioner did not take any objection to the said transfer. Obviously, the petitioner did not take any objection to the transfer of her colleagues as she was not affected by the said transfers. It is seen that though these employees were junior to the petitioner and the petitioner was senior to them, yet the said two junior persons RMA wp4105­09.sxw 20 were transferred, though, as per the policy which is relied upon by the learned counsel for the respondents, the senior most persons were to be transferred first. 18. The learned counsel for respondent nos 1 and 2 submitted that transfer is an incident of service and hence, the petitioner cannot raise any objection to her transfer. The learned counsel for respondent nos. 1 and 2 placed reliance on a decision