Case: Indian Bank, Limited Vs. Ramanathan S. M

2. The application was filed by the respondent against the two orders, Ex. M. 5, dated October 8, 1954, and Ex. M. 8, dated June 19, 1957, whereby in disciplinary action taken by the management against him for gross misconduct two increments in his salary for a period of two years each were stopped. It appears that on February 12, 1954 the board of directors of thek passed a resolution, Ex. M. 16, which stated that there was trouble between the respondent and another employee, one Arunachalam, that the secretary of the bank, who is the executive head of the bank, had suggested disciplinary action against both the employeesn the board decided that the two employees should "be warned" and "their salaries be reduced by two increments and they should be transferred to different places." In pursuance of this resolution, the secretary passed the impugned order, Ex. M. 5, whereby he directed that "two increments have been stopped by the board in view of breach of discipline by him and his indecent behaviour at our Devakottai office. Accordingly he cannot draw any increment from 12 August, 1954 and for the next year."

Court's reasoning:
4. The labour court accepted both these contentions and held the order, Ex. M. 5, a nullity. In our view, the labour court was in error, because the order which was communicated to the respondent and actually implemented was the order, Ex. M. 5. As aforesaid, the secretary is the executive head of the bank and to whom the bank had delegated disciplinary powers. What the secretary did by passing order. Ex. M. 5, was to translate the action proposed by the board. There can be no doubt that the board had resolved to stop two increments. Though the word "reduced" was used in the resolution, it was used in the context of depriving the respondent of two increments. The stoppage of two increments would, in fact, reduce the salary which he would have drawn if the increments had not been stopped. The secretary by his order put into effect that which the board intended by its resolution7. Lastly, the construction placed by the Court on the order, Ex. M. 8, is not correct. The order in express words was "to stop your increments for two years." It seems that the learned Judge misunderstood the words "for two years" as meaning postponing the enjoyment of the benefit of the two increments for two years and restoring them at the end of two years. That is not so, because the order clearly was to stop two increments. This is clear from the last sentence in the order which expressly states that the respondent was not to draw increments for the years 1958 and 1959. If it was intended otherwise and the increments were only postponed and were to be restored at the end of that period, the order would have said so. That not having been done, the construction placed on the said order by the Court cannot be supported. The respondent also understood the order as having stopped and not as having postponed or delayed the two increments. That is manifest from the fact that after the expiry of the two years, i.e. 1958 and 1959, he did not ask for restoration of the two increments in his salary for 1960. It was only for the first time when he filed the present application in July 1962 that he challenged its validity. The construction placed on the order by the labour court was thus not correct. In this view it is not necessary to consider the question raised by Sri Sastri as to they of S. 33C(2) to the facts of the cas