Case: Management of The Indian Overseas Bank Limited Vs. Their Workmen

1. The management of the Indian Overseas Bank Ltd., Chandni Chowk, Delhi, appeals by special leave against the award, dated October 6, 1964, of the Industrial Tribunal (Central), Lucknow. The respondents are the Delhi State Bank Employees Association representing the the case of one Om Prakash Gupta, head cashier at the Chandni Chowk branch of the bank. Om Prakash Gupta was in receipt of Rs.0 per month which went under the name of "Key Allowance". This allowance was paid to other cashiers of the bank also. The allowance was started in this bank on September 15, 1958, after the Award by Mr. Sastry but not as a consequence of that Award. Om Prakash Gupta received the allowance till November 30, 1962 but it was stopped from December 1, 1962, on the ground that it had lapsed as it was not included in the Bank Award given by Mr. K. T. Desai. The decision of the bank was communicated to all its branches on December 21, 1962, by exhibit. The circular mentioned the special allowances admissible under the Award to the cashiers of different categories at A class banks stating at the same time that the head cashiers, being officers, were not eligible for the special allowances prescribed therein. The circular stated that no recovery of the back "Key Allowance" paid between January and November, 1962, need be made but its payment in future should be discontinued from December 1, 1962. The "Key Allowance" paid till this date was ordered to be deducted from special allowances

Court's reasoning:
Since none of those allowances can be said to cover the "Key Allowance" it is quite obvious that the matter of "Key Allowance" was at large. It rested therefore with the bank to continue or to discontinue it. But since this allowance came into existence in the Indian Overseas Bank after the matter was raised by the Indian Overseas Bank Employees Union before the Regional Labour Commissioner at Madras and was accepted by the bank as a gesture of goodwill it must be treated as a term and condition of the service of Om Prakash Gupta to whom it was admissible. Once we reach this position it is clear that under section 9A of the Industrial Disputes Act, read with rule 34 of the Industrial Disputes (Central) Rules, 1957, a notice of change in the conditions of service applicable to Om Prakash Gupta had to be given in Form E appended to the Rules. Section 9A says that no employer who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule shall effect such change without giving to the workman a notice in the prescribed manner of the nature of the change proposed to be effected. Schedule IV includes item 3, which is "compensatory and other allowances". It would therefore appear that section 9A applied to the case. Rule 34 then lays down that the notice must be in Form E and should be displayed conspicuously by the employer on a notice board and where a registered trade union of workmen exist, a copy of the notice must be served by registered post on the secretary of the union. The bank has not proved that this was done. It has relied upon a notice which has issued to the employees of the bank conveying to them the option which the Desai Award had given in the matter of selecting the existing pays and emoluments or the benefits under the Award. That cannot take the place of the notice required under section 9A because the "Key Allowance" was never part of the Desai Award but was left completely out of it and to the discretion of the managementIn our judgment, therefore, the Tribunal was right in deciding that the "Key Allowance" was payable even after the Desai Award and that Om Prakash Gupta was entitled to receive it till it was stopped in accordance with law. As the correct procedure was not followed the Tribunal was right in holding that the "Key Allowance" was Payable to Om Prakash Gupta