Case: Shivnandan Sharma Vs. The Punjab National Bank Ltd

The appellant started his service as the head cashier in the Una Branch of the Bank on the 18th June 1949. The Cash Department of the Bank is in charge of Treasurers. The relation between the Bank and the Treasurers is evidenced by an agreement dated the 1st May 1944 (Ex. 1) which will be noticed in detail hereinafter. That was an agreement between the Bank and "Messrs Rai Bahadur Karam Chand Puri & Bros". That firm was appointed the Treasurers at the head office of the Bank and other places in and outside the Punjab. On the 28th September 1951 the District Manager of the Northern Circle of the Bank wrote a letter (Ex. 4) to the Treasurers informing them that it had been decided to close the Una office of the Bank with effect from the close of business on the 3rd NovemberIn pursuance of that letter the Treasurers intimated by a letter dated 2nd October 1951 enclosing a copy of Ex. 4 to the appellant that the Una Branch of the Bank will cease to function from the close of business on the 3rd November 1951 and that his services will not be required after that date. The Punjab National Bank Employees Union (Punjab) took up the cause of the appellant as also that of other employees and made representations to the Government of India. The Government of India by a notification No. SRO-432 dated the 8th March 1952 published in the Gazette of India, Part II - Sec. 3, in exercise of its powers under section 10 of the Industrial Disputes Act XIV of 1947 (hereinafter called the Act) referred the industrial dispute between the Bank and its workmen named in schedule 2 (concerning workers dismissed) and schedule 3 (relating to workers transferred) for adjudication to the Industrial Tribunal at Calcutta constituted under section 7 of the Act. Schedule 1 in so far as it is necessary for purposes of this case contains the following points of dispute between the employer and the workmenWrongful dismissal of the workmen mentioned in schedule II and their reinstatement.In the event of any order for reinstatement payment of wages and other allowances from the date of dismissal to the date ofappellant is No. 5 in schedule 2 aforesaid. The Tribunal gave its award on the 13th October 1952 in respect of a number of employees whose cases were actually in controversy before it. It is only necessary to refer to the award in so far as it concerned the appellant. After overruling the preliminary objection of the Bank that the Union had no locus standi to represent the appellant the Tribunal formulated the following point for its decisionmerits the main point involved is as to whether the services of an employee of the Cash Department can be terminated on a change made in the services of the Contractoranswered this point in these wordspoint has been agitated in more than one case and I have also held in Reference No. 3 of 1951 as Chairman of Industrial Tribunal (P. N. Bank dispute) relating to 5 cashiers that the employees of the Cash Department are the employees of the Bank and not the nominees of the Contractor Cashiers so far service conditions are concerned, and I think it will serve no useful purpose to discuss all the legal precedents cited, more especially when the point has been set at rest by their Lordships of the Supreme Court in Civil Appeal No. 66 of 1952 in the matter of United Commercial Bank Ltd. v. Secretary, U.P. Bank Employees Union and Others. I am of the opinion that the dismissal of Shri Sharma was wrongful and liable to be set aside. Now the normal remedy is reinstatement and I have no hesitation in allowing the same. He will also be paid his back salary and allowance from the date of dismissal to the date of reinstatement".Whatever may be the merits of the answer given to the question propounded by the Tribunal, there is no doubt that the question posed had been wrongly framed. The discharge or dismissal of the appellant had nothing to do with the change in the personnel of the Treasurers. The appellants services were dispensed with on the ground that the Una Branch where he was employed as head cashier being an uneconomic unit had to be closed and that therefore the appellants services were no more required. The respondents case appears to have been that the the firm known as Messrs. R. B. Karam Chand Puri & Bros. have been contractors for the Cash Department of the Bank at the head office and some of the other offices in the Punjab and beyond; that from time to time agreements were executed between the Bank and the aforesaid firm; that the last agreement was executed on the 1st May 1954 (Ex. 1); that the appellant according to the respondent-Bank was the nominee of the said firm, and that his services had been dispensed with by the said firm whose employee he was and not by the Bank which had nothing directly to do with the employment of cashiers and other workers in the Cash Department which was in charge of the Treasurers described as "Contractor Treasurers".Hence the main question in controversy between the parties was whether the appellant was an employee of the Bank or of the said "Contractor Treasurers", whom we shall call the "Treasurers" for the sake of brevity. The Tribunal did not address itself to the determination of that question. This Court also did not discuss and decide the matter in Civil Appeal No. 66 of 1952, but assumed that cashiers of the Bank were its employees. If that question had been decided by this Court, as the Tribunal erroneously thought this Court had, in Civil Appeal No. 66 of 1952, the controversy would have been at an end. Therefore when the respondent preferred an appeal to the Appellate Tribunal, the Bank at the forefront of its attack against the award of the Tribunal raised the ground that the Tribunal had not determined the basic question which could have given jurisdiction to the Tribunal to decide the dispute whether the head cashier was an employee of the Bank or was a nominee of the "Treasurer" as contended on behalf of the Bank. The Bank relied very strongly before the Appellate Tribunal on the memorandum of agreement (Ex. 1) and the correspondence that passed between the Bank and the "Treasurers" on the one hand and the latter and the appellant before us on the other (Exs. 2, 3, 4 and 5).The Appellate Tribunal rightly remarked that the Tribunal had recorded no finding on that basic question and had assumed that the respondent before it was an employee of the Bank. The Appellate Tribunal took the view that the agreement (Ex. 1) was decisive of that question. After referring in great detail to the terms of the agreement the Appellate Tribunal came to the conclusion that the cashier was not an employee of the Bank but of the Treasurers and that therefore the Tribunal had no jurisdiction to give any relief to the complainant before it. The award by the Tribunal was, in the result, set aside and the Banks appeal allowed.

Court's reasoning:
The argument was that the award of the Tribunal was based on considerations of facts and circumstances disclosed in those earlier awards to which the Bank and its cashiers and other employees employed in the cash Department were parties. It was thus a final finding of fact which was not open to appeal before the Appellate Tribunal. It was therefore contended that the Appellate Tribunal had no jurisdiction to entertain the appeal and to reverse the award of the Tribunal.On behalf of the respondent-Bank it was contended that no specific grounds had been taken either before the Appellate Tribunal or in the memorandum of appeal to this Court that the Appellate Tribunal had no jurisdiction on the ground now taken by the appellant in this Court, nor was that ground taken in the statement of case. On merits it was contended by the respondents counsel that the Tribunal is as much bound by the rules of evidence and procedure as any other Tribunal and as the Tribunal had not addressed itself to the question whether the cashier-appellant was an employee of the Bank, the question was open before the Appellate Tribunal which was competent to pronounce on that basic question. Finally it was argued that on a true construction of the provisions of the agreement (Ex. 1) this Court should accept the finding of the Appellate Tribunal that the appellant was not an employee of the Bank and that on that account the Tribunal had no jurisdiction to grant any relief to thethe terms of the agreement aforesaid set out above almost verbatim omitting such clauses and words as are not relevant to this case, it will appear that the Treasurers are under the employment of the Bank on a monthly basis for an indefinite term, that is to say, until such time as either party to the agreement terminated it in accordance with the terms quoted above. They are under the complete control and direction of the Bank through its manager or other functionaries. The Treasurers have to take their orders from day to day as regards the cash balance or other cognate matters relating to the safe custody of cash, valuable documents, etc. belonging to the Bank or its constituents. The treasurers receive in respect of each office under their charge a certain named sum out of which they have to pay the salary of a stated number of their assistants who may be head cashiers or cashiers or assistant cashiers and other such functionaries. They are entitled to receive bonus on the net amount secured to them as their remuneration, being the lump sum fixed in respect of each office, minus the salary of the assistants. It is true that these Treasurers are not and cannot be expected to be personally present to discharge their onerous duties at each one of the large number of offices spread over the Punjab and outside. Naturally they had to be authorized to engage head cashiers, cashiers, or assistant cashiers in respect of each of the offices placed in their charge. They had to guarantee the fidelity of the persons so employed as their assistants. Those assistants had to be persons in whose reliability, honesty and efficiency both the Bank and the Treasurers had confidence. The Treasurers have the right to nominate those assistants but the Bank had the final words in the choice. The Bank Manager has complete control over such nominees in the matter of leave of absence, discipline and conduct in the discharge of their duties as assistants managing the cash and other valuables in the custody of the Band. From the very nature of things it had to be a dual control in the sense that the Treasurers had to nominate the assistants who are to discharge those responsible functions in connection with cash and other valuables of the Bank and the Bank could not abdicate its powers of full control over the day to day working of the cash Department. The nominees of the Treasurers are treated on the same footing as the other servants of the Bank in the matter of bonus, travelling allowance and provident fund, etc. It is true those nominees are to be paid by the Treasurers but it is out of the money provided by the Bank.It is not always easy to determine whether the relation between two parties, in the present case of the Treasurers vis-a-vis the Bank, is that of servants to a master or of independent contractors who have undertaken to do a particular job for their employer. The question has generally arisen in connection with the determination of vicarious liability of an employer in respect of acts done by his agent (using a neutral word which includes an independent contractor as also a servant). The distinction between a servant and an independent contractor has been the subject matter of a large volume of case-law from which the text-book writers on torts have attempted to lay down some generalindicated above, in the present case the direction and control of the appellant and of the ministerial staff in charge of the Cash Department of the Bank was entirely vested in the Bank through its manager or other superior officer. We have therefore no hesitation in differing from the conclusion arrived at by the Appellate Tribunal and in holding that the appellant was an employee of the Bank. That being so, the Tribunal had the jurisdiction to make the direction it did in respect of the appellant. The respondent did not at any stage of the proceedings challenge the orders of the Tribunal on its merits. That conclusion being reached, there is no difficulty in upholding the orders of the Tribunal in respect of the appellant.