Case: State Bank of India Vs. Nanak Chand Jain

1. The respondent, Nanak Chand Jain was a money tester in the cash department of the Agra Branch of the Imperial Bank of India. On December, 10, 1962 it was detected that a packet containing 10 pieces of 100 rupee notes shroffed by another employee of the Bank and handed over by him to the respondent were missing. In connection with this the respondent and four other employees of the Bank were prosecuted; the trial in the Sessions Court ending with their acquittal - the respondent having been given the benefit of doubt. Thereafter on December 10, 1954 the Bank served on the respondent a charge-sheet alleging carelessness and dereliction of duty. An enquiry was held and the Enquiry Officer found the charge against the respondent established. On a consideration of the report of the Enquiry officer the Bank decided to terminate his services with effect from May 16, 1935 by paying him three months pay and allowances. The respondent was given further hearing as regards the nature of the proposed punishment and thereafter his services were terminated as from the close of business on May 16, 1955. The validity of the enquiry proceedings was challenged by the respondent on the ground that he had not been given adequate facility for being represented by a Union official of his choice and ultimately after a decision of the Labour Appellate Tribunal that the employee had an unqualified option in regard to the selection of persons who would represent him at the departmental enquiry a fresh enquiry was held after withdrawing the order of termination of his services. This fresh enquiry was held on the 21st and 22nd of November, 1956. On this occasion also the enquiry officer found the charges against the respondent proved. After consideration of the report and after giving the respondent an opportunity to show cause why the proposed punishment of termination of his services on payment of three months salary in lieu of notice should not be imposed on him the bank decided in November 1960 to terminate his services by giving him three months salary in lieu of notice in terms of para 521(2)(c) of the Sastry Award.2. As an industrial dispute between the Bank and its employees was pending before the National Industrial Tribunal at this time, the Bank made an application on November 21, 1960 to that Tribunal under S. 33 (2) of the Industrial Disputes Act for approval of its action in terminating the services of the respondent. Before making this application the Bank had informed the respondent by its letter dated November 4, 1960 of its decision to terminate his services and tendered a payment order for Rs. 450.71 being his pay and allowances for three months. The National Industrial Tribunal transferred this application to the Central Government Labour Court at Delhi, for disposal. Resisting this application the respondent contended inter alia that he had not been paid wages for one month as required under the proviso to S. 33(2) and so the application should be dismissed. An application under S. 33A of the industrial Disputes Act was also filed by the respondent before the Central Government Labour Court at Delhi, complaining that the Bank had contravened the provisions of S. 33 by not paying him the one months pay as required under the proviso. This application was resisted by the Bank which contended that the application was not maintainable and the action taken by it was legal and justified. It was urged by the Bank that there had not been any contravention of S. 33(2) as alleged by the employee as three months pay and allowances had been paid. The Labour Court held that payment of three months salary in terms of para 521 (2)(c) of the Sastry Award did not amount to compliance with the requirement of payment of one months wages under the proviso to S. 33 (2). It held accordingly that the application under S. 33A was maintainable and fixed the application for further hearing on other issues on the later date.3. When the application under S. 33(2)(b) of the Industrial Disputes Act that had been filed by the Bank came up for hearing before the Court the Presiding Officer, Mr. Vyas, held himself bound by the decision of his predecessor Mr. Krishnamurthy in the application under S. 33A that there had been contravention of this requirement of payment of one months pay under the proviso. Accordingly, he rejected the Banks application for approval to terminate the services of the respondent. It is against this order that the present appeal has been filed by the Bank by special leave.

Court's reasoning:
It appears to us that the words "in lieu of notice" in para. 521(2)(c) have not the significance which the learned Counsel attributes to them. We do not think that the Sastry Award intended that the services of such an employee could be terminated by giving him three months notice without paying him three months pay and allowances. Though the words "in lieu of notice" have been used it is clear that three months pay and allowances have to be paid in every such case of termination of service. The object in making this provision appears therefore to be the same as in the proviso viz., to give the employee some monetary assistance. It is difficult to see why therefore three months pay and allowances paid under para. 521 (2)(c) should not be held to include pay for a lesser period as provided under the proviso to S. 33(2).5. In our opinion, the payment for a longer period should be held to include payment for the shorter period and where three months pay and allowances had been paid under the provisions of para. 521(2)(c) no further payment of one months wages under the proviso to S. 33(2) is required.6. We have therefore come to the conclusion that the Labour Court erred in dismissing the Banks application under S. 33(2) on the ground that the requirement for payment of one months wages had not been complied with.