Supreme Court of India
SYNDICATE BANKversusTHEGENERALSECRETARY,SYNDICATEBANKSTAFF ASSOCIATION AND ANR.
- Citation
- [2000] 3 S.C.R. 285
- Decided
- 25 April 2000
- Disposal
- Appeal(s) allowed
- Bench
- S SAGHIR AHMAD
Holding
Termination of service under Clause 16 of the Bipartite Settlement without holding an enquiry does not violate the principles of natural justice and is therefore lawful.
Summary
The case concerns D.K. Dayananda, a clerk of Syndicate Bank, who was absent from duty for more than 90 consecutive days. The Bank issued a show‑cause notice under Clause 16 of the Bipartite Settlement, which was returned as "refused"; the employee neither responded nor reported for duty, leading the Bank to deem him to have voluntarily retired and to terminate his service. An Industrial Tribunal awarded reinstatement with continuity of service, a decision upheld by the Karnataka High Court. The Bank appealed, arguing that Clause 16 incorporates the principles of natural justice and that the notice was validly served, so no enquiry was required. The Supreme Court held that the notice satisfied the requirements of natural justice, that an enquiry was unnecessary, and that the Tribunal’s order was illegal. Consequently, the Court set aside the Tribunal award and the High Court judgment, allowing the Bank’s appeal.
Issues considered
- The termination of an employee under Clause 16 of a Bipartite Settlement without a domestic enquiry violates the principles of natural justice.
- Whether a show‑cause notice returned as "refused" by registered post constitutes valid service of notice.
- Whether the principles of natural justice are incorporated into Clause 16 and standing orders, making an enquiry optional.
Legislation cited
Subjects
terminationnatural justicebipartite settlementshow cause noticevoluntary retirementindustrial tribunalreinstatementstanding orderslabour lawprocedural fairness
Judgment
SYNDICATE BANK A
v.
THEGENERALSECRETARY,SYNDICATEBANKSTAFF
ASSOCIATION AND ANR.
APRIL 25, 2000
B
(S. SAGHIRAHMAD AND D.P. WADHWA, JJ.]
Labour Law:
Termination-Principles of natural justice-Compliance of-Bank em- c
ployee-Unauthorised absence from service-Show cause notice under Clause
16 of the Bipartite Settlement-Notice sent to employee by Registered post at
the correct address-Returned with postal endorsement 'Refused'-Employee
neither submitting his explanation nor reporting for duty-Expiry of notice
period-Termination order treating absence as voluntary abandonment of
service-On Reference-Tribunal passing an Award holding that termination D
order without conducting enquiry, illegal-Directions for reinstatement with
continuity ofservice-Validity of-Held, principles ofnatural justice are inbuilt
in Clause 16 of the Bipartite Settlement-Thus, termination order following
Clause 16 of the Bipartite Settlement without enquiry not illegal and violative
ofprinciples of natural justice. E
Standing orders-Principles of natural justice-Applicability of-Held,
principles of natural justice should be read into standing orders which have
· statutory force.
F
Administrative Law:
Principles of natural justice-Scope and meaning of
Respondent No. 2 • Employee was unauthorisedly absent from duty
for a long period. Consequently appellant Bank issued a show cause notice G
under clause 16 of the Bipartite Settlement. The said notice was sent by
registered post at the correct address of the employee but it returned with
the postal endorsement 'refused'. Respondent No. 2 ·employee neither
submitted his explanation to the show cause notice nor reported for duty.
Thus, on expiry of the notice period,· Bank passed a termination order H
285
286 SUPREME COURT REPORTS [2000) 3 S.C.R.
A treating his absence as voluntary abandonment of service. On reference,
Industrial Tribunal passed an Award holding that the termination order
passed without holding any enquiry was illegal and therefore directed
reinstatement of respondent No. 2 with continuity of service. Appellant-
Bank unsuccessfully challenged the said Award before the High Court.
Hence the present appeal.
B
On behalf of appellant-Bank it was contended that the principles of
natural justice were inbuilt in clause 16 of Bipartite Settlement and there-
fore the action of the Bank in terminating the service of respondent No. 2
under the said clause was not illegal.
c
Allowing the appeal, the Court
HELD : 1. Termination of service of respondent No. 2 - employed by
following the requirements of clause 16 of the Bipartite Settlement, without
holding any enquiry is not illegal a,nd violative of principles of natural
D justice. An enquiry would have been necessary if the employee had submit-
ted his explanation which was not acceptable to the Bank or if he had
reported for duty but was not allowed to join. Undue reliance on the
principles of natural justice by the Tribunal and High Court has led to
miscarriage of justice for the Bank. [300-A-D]
E
2. Principles of natural justice are inbuilt in Clause 16 of the Bipartite
Settlement. The requirements of principles of natural justice that (1) work-
man should know the nature of the complaint or accusation; (2) an oppor-
tunity to state his case; and (3) the management should act in fair, reason-
able and just manner, have been fully met in the instant case. When
F evidence was led before the Tribunal, Bank produced the registered covers,
which had been received back with the endorsement "refused" and the
addressee "not found during delivery time". The notice was sent to the
correct address of employee and it was received back with the postal
endorsement ''refused". Thus, a clear presumption arose in favour of the
G Bank and against the employee. [299-A-D]
3. Principles of natural justice and duty to act in just,· fair and Y
reasonable manner have to be read in Certified Standing Orders which
have statutory force. These can be applied by Labour Court and Industrial
Tribunal even to relations between Management and workman though
H based on contractual obligations. Further where domestic inquiry was not
SYNDICATE BANK v. GENERAL SECY., SYNDICATE BANK STAFF ASSN. [D.P. WADHWA, J.) 287
~ held or it was vitiated for some reason the Tribunal or Court adjudicating A
.... an industrial dispute can itself go into the question raised before it on the
basis of the evidence and other material on record. [298-E-F]
- D.K Yadav v. !.M.A. Industries Ltd., [1993) 3 SCC 259; Hindustan
Paper Corporation v. Pumendu Chakrobarty and Others, [1996) 11 SCC 404;
Uptron India Ltd. v. Shemmi Bhan and Another, [1998) 6 SCC 538 and Bharat B
Forge Co. Ltd. v. A.P. Z.Odge and Another, [1996] 4 SCC 374, relied on.
--1
4. It is no point laying stress on the principles of natural justice
without understanding their scope or real meaning. There are two essential
elements of natural justice which ai:e; (a) no man shall be Judge in his own
cause; and (b) no man shall be condemned, either civilly or criminally,
c
without being afforded an opportunity of being heard in answer to the
charge made against him. In course of time by various judicial pronounce-
ments these two principles of natural justice have been expanded, e.g., a
party must have due notice when the Tribunal will proceed; Tribunal
should not act on irrelevant evidence or shut out relevant evidence; if the D
Tribunal consists of several members they all must sit together at all times;
Tribunal should act independently and should not be biased against any
party; its action should be based on good faith and order and should act in
just, fair and reasonable manner. [299-F-H]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4263 of 1999. E
From the Judgment and Order dated 11.9.98 of the Karnataka High
Court in W.A. No. 4200 of 1998.
V.R. Reddy, Ms. Sumathi, A.B. Dial, Sunil Murarikar and Ghan Shyam
Vasisht for the Appellant.
F
,
K. Subba Rao, N.R. Nath, S. Ravindra Bhat and Ms. Hetu Arora for the
Respondent.
The Judgment of the Court was delivered by
G
.,. D.P. WADHWA, J. Appellant Bank was granted leave to appeal under
... Article 136 of the .Constitution against judgment dated September 11, 1998 of
the Division Bench of the Karnataka High Court in writ appeal upholding the
order of the learned single Judge dismissing the writ petition. In the writ
petition the Bank had challenged the Award of the Central Government H
288 SUPREME COURT REPORTS [2000] 3 S.C.R.
A , Industrial Tr_ibunru ('Tribunal' for short) dated September 26, 1994. By the ... ,..
Award the Tribunal had directed the Bank to reinstate D.K. Dayananda, a clerk
-
working in the Cottonpet Branch of the Bank. This is what the Tribunal
directed by the Award :
"The order of II party (Bank) as per Ex. M. 16 is set aside. The II
B party (Bank) is directed to reinstate the I party (Dayananda) forthwith
·with continuity of service. No back wages. Calculated upto the date
of reinstatement, the I party (Dayananda) is not entitled to earn
increments for the period during which he had not worked. Reference
accepted in part ~ccordingly."
c
Cause of Dayananda, the workman was taken by the first respondent.
The Award arose out of following question; which was referred to the Tribunal
for adjudication :
· "Whether the action of the management of Syndicate Bank in
D terminajng the services of Sri D.K. Dayananda, Clerk Cottonpet
Branch of Syndicate is justified? If not, to what relief the workman
is entitled to?"
We may now narrate the circumstances which led the Central Govern-
ment to make the reference of the industrial dispute aforesaid.
E
In 1975 Dayananda was appointed as Clerk-cum-Typist on probation in
the Bank. Subsequently he was confirmed. In November, 1983 he was
transferred to Cottonpet Branch of the Bank where he was to joint his duty
on or before April 3, 1984. He was relieved from the Branch where he was
F working, on March 31, 1984 on his transfer to Cottonpet Branch. From April
1, 1984 to December, 1985 out of 628 working days Dayananda work~d only
for 46 days. Dayananda did not report for duty on April 3, 1984. On June 4,
1984 Bank sent him a registered notice advising him to report for duty within
three days and also requiring him to submit his explanation for his unauthor-
ised absence. Dayananda sent a leave letter requesting to treat his absence as
G
leave on health grounds and he assured he would report for duty on July 11,
1984. He did not do so. On July 9, 1984 Dayananda sent his resignation from -..,J
the Bank. His resignation was accepted on August 27, 1984. Subsequently
Da,yananda withdrew his resignation and requested the Bank to allow him to
-•
continue in the service on humanitarian grounds. This was accepted by the
H Bank by letter dated December 3, 1984 subject to certain conditions with
SYNDICATE BANK v. GENERAL SECY., SYNDICATE BANK STAFF ASSN. [D.P. WADHWA, I.] 289
which presently we are not concerned. Dayananda then joined the Cottonpet A
... -~
Branch of the Bank. He attended duty up to December 22, 1984 and thereafter
he absented. Afterwards he applied for leave from December 23, 1984 to
January 5, 1985. Bank sent Dayananda a notice to attend his duty. In reply he
--- requested for grant of further leave. Dayananda attended duty from April 1,
1985 to April 6, 1985 and then again absented himself. He applied for leave B
up to May 27, 1985. The leave was not sanctioned by the Bank and he was
- .,,,, communicated of the decision. Still Dayananda did not rep01t for duty. On
May 16, 1985 Bank sent a notice to Dayananda about his unauthorised
absence. On November 19, 1985 the Bank invoked Clause 16 of the IV
Bipartite Settlement between the Management of the Bank and the employees.
Now the Bank called upon Dayananda to show cause for his continued
c
absence and to report back for work by December 19, 1985 failing which he
would be deemed to have been voluntarily retired from the services of the
•• Bank for his continued absence from April 8, 1985. This notice was sent by
registered post to Dayananda but it was returned with the report of the postal
authority that he refused to receive the same. This Clause 16 of the Bipartite D
Settlement we reproduce:
"Where an employee has not submitted any application for leave and
absents himself from work for a period of 90 or more consecutive
days without or beyond any leave to his credit or absents himself for
E
90 or more consecutive days beyond the period of leave originally
sanctioned or subsequently extended or where there is satisfactory
evidence that he has taken up employment in India or the management
is satisfied that he has no present intention of joining duties, the
management may at any time thereafter give a no~ce to the employ-
ee' s last known address calling upon the employee to report for duty F
\.·
within 30 days of the notice, stating inter alia, the grounds for the
management coming to the conclusion that the employee has no
intention of joining duties and furnishing necessary evidence, where
available. Unless the employee reports for duty within 30 days or
unless he gives an explanation for his absence satisfying the manage- G
.. ""' ment that he has not taken up another employment or avocation and
that he has no intention. of not joining duties, the employee will be
deemed to have voluntarily retired from the Bank's service on the
expiry of the said notice. In the event of the employee submitting a
satisfactory reply, he shall be permitted to report for duty thereafter H
290 SUPREME COURT REPORTS [2000] 3 S.C.R.
A within 30 days from the date of the expiry of the aforesaid notice
without prejudice to the Bank's right to take any action under the law
or rules of service".
By order dated December 19, 1985 by virtue of Clause 16 of the
Bipartite Settlement as aforesaid the Bank treated Dayananda as having
B voluntarily abandoned his services. This order of the Bank was similarly sent
to Dayananda under r"egistered cover but was returned with the endorsement
of the postal authority "not found during delivery time". Matter rested at that
for three years. In September, 1988 Dayananda gave representation to the
Bank for joining duty. He was told that he had abandoned his services with
C effect from April 8, 1985 and there was no question of his now joining the
duty. Industrial dispute was raised by the first respondent which led the Central
Government to make the reference to the Tribunal for adjudication.
Both the parties filed their respective statements of claims before the
T1ibunal. While Bank examined its Manager as its witness, Dayananda
D appeared for himself. During the course of evidence of the Manager of the
Bru¥c relevant registered covers and the notices sent to Dayananda were
brought on record. In his statement Dayananda, however, said that he did not
receive the first notice which was returned with the endorsement "refused".
It is; not disputed that on both the registered covers correct address of ..It
E Dayananda was given. However, Tribunal was of the view that since the Bank
did not examine the postman that Dayananda in fact refused to receive the
notic~, it could not be said that there was service of notice to Dayananda. From
.this Tribunal was of the view that the Bank could not under these circum-
stances invoke the provisions of Clause 16 of the Bipartite Settlement and on
F that score along reinstatement of Dayananda had to be ordered. Then relying
on a decision of this Court in D.K. Yadav v. J.M.A. Industries Ltd., [1993] 3
SCC 259 the Tribunal took the view that since no inquiry was held by the Bank
before terminating the services of Dayananda the action of the Bank was
illegal. By this Award Tribunal though directed reinstatement of Dayananda
with continuity iii service, it declined to grant him further relief like back
G
wages. Why the Tribunal did so can gather from paras 13 and 14 of the Award,
which we reproduce :
"13. The Ld. Counsel for the I party (Dayananda) stressed that I party
(Dayananda) is entitled to back wages. Once the I party submitted his
H resignation which was accepted by the II party (Bank). Resignation
SYNDICATE BANK v. GENERAL SECY., SYNDICATE BANK STAFF ASSN. [D.P. WADHWA, J.] 291
letter Ex. M.4 shows that he wanted to take up self employment and A
start departmental stores. In view of the representation made by the
I party, the II party rec~lled him to duty on humanitarian grounds. It
... . is clear from the material on record that the I party has worked only
for46 days from 1.4.84 to 19.12.85. He was continuously absent from
8.4.85 without obtaining leave, though his leave was refused. This B
notice Ex. M.10 intimating the I party that his leave was rejected has
been served on the I party. The I party stated that he met with an
accident and he was continuously ill. He has not placed any convinc-
ing material to prove this.
14. The Nationalised Banks have been working under loss. The C
unsatisfactory conduct of I party cannot lose sight off. Against the
background of Ex. M.4 it is highly probable that I party workman was
not without any employment all these days. If the first party is granted
back wages, in my opinion. it will amount to repairing penurious Peter
to pay prosperous Paul." D
Now the Bank was aggrieved. It filed a writ petition under Article 226
of the Constitution in the High Court of Karnataka which, as noted above,
was dismissed by the learned single Juctge by order dated June 25, 1998.
- Learned single Judge observed it was not in dispute that the worker had
absented and within a span of 620 days he had worked only for 46 days and
further the worker had not been able to establish that he had any justifiable
cause for his unauthorised absence. Dayananda had not even pleaded that he
E
had sought any leave for his absence. Also relying on the decision of this
Court in D.K. Yadav's case learned single Judge held that since no inquiry
was held before terminating the services of the workman Award of the p
Tribunal could not be interfered. Learned single Judge deprived the workman
of continuity of service, which had been granted by the Tribunal. What weight
learned single Judge can be seen from paras 5 and 6 of his judgment, which
we quote:
"5. The question looms large in this case is that the worker did not G
attend the office. But it was incumbent on the Management in such
cases to have issued a notice to the worker and conducted an enquiry.
Merely on the assumption that the notice was refused by the worker,
they cannot forgo the requirement of the enquiry, as held in the
decision referred to supra. Likewise, at the same time, one cannot H
292 SUPREME COURT REPORTS [2000] 3 S.C.R.
A forget that there are certain circumstances which indicate that the
worker has indicated that he was not interested in the job. The
application he submitted for availing of loan is one such circum-
stance. If, as a matter of fact, he had applied for loan and that was
granted, it means that the worker bad impliedly expressed his
intention not to continue his job. One does not know what exactly
B
happened to his application and whether his loan was granted to start
a Departmental Store. But we find that thereafter he tendered his
resignation which was allowed to be withdrawn conditionally. That
means, the employer has tacitly condoned the absence of the worker:
This is also circumstance to be kept in while examining the .scope of
c the plea of unauthorised absence. All these facts should have been
brought out in evidence by conforming the witness by the employer
either before the Tribunal or at the domestic enquiry. In the absence
of such materials one cannot infer that there was an intention express
or implied expressed by the employee to abandon the employment.
D In these circumstances, the Tribunal was justified in holding that the
termination of services is not justified.
6. This takes us to the qu~tion as to what should be the relief to be
granted. The worker was awarded the relief of reinstatement besides
continuous service. Certainly this part of the award call for modifi-
E
cation. If the worker is to be reinstated with continuous service,
practicality he loses nothing. Back-wages cannot be awarded, as there
is some evidence that he would have been otherwise employed. It is
a case where the reinstatement should be ordered without back-
wages. There is no gain saying that the absence was unauthorised.
F laking into account all the circumstances, I feel the proper order
would be to direct the Management to reinstate the worker. The
worker will not be entitled to any wages for the period from the last
date of absence i.e., from 3.4.1984 till the date of the award. Besides
he will not be entitled to continuity of service for the period from
'
G 1.4.1984 till the date of award of the Industrial Tribunal. While fixing
the wages on reinstatement he will not be entitled to cowt any
increments or wages earned for the period from 1.4. 1984 till the date
of the award, i.e., 26.9.1994. He will earn the increment only from
26.9.1994 the previous increment being awarded to him on or before
1.4.1984." .
H
I
SYNDICATE BANK v. QE]\j~RALSECY., SYNDICATE BANK STAFF ASSN. [D.P. WADHWA, J.) 293
Learned single Judge noticed that Dayananda was being paid wages from A
September 26, 1994 under Section 17-B of the Industrial Dispute Act, 1947
and that that amount may be set off against the wages payable to him as if he
was reinstated on September 26, 1994. To this extent the Award of the Tribunal
was modified.
B
Still dissatisfied the Bank went in appeal before the Division Bench of
the High Court. The Division Bench did not go into the merits of the case and
just by referring to the judgment of the learned single Judge dismissed the
appeal. That is how the matter is now before us.
Mr. V.R. Reddy, learned senior advocate for the Bank, submitted that it C
could not be said that action of the Bank under clause 16 of the Bipartite
Settlement was in any way wrong. He said rules of natural justice were inbuilt
in clause 15 of Bipartite Settlement and law laid by this Court in D.K. Yadav's
case was not applicable. In D.K. Yadav v. J.MA Industries l1d., [199~] 3 SCC
259 the workman was intimated that he had willfully absented from duty D
contnrnously for more than eight days without leave or prior information or
intimation or previous permission from the management and, therefore,
"deemed to have left the service of the company on your own account and lost
-
your lien and the appointment with effect from December 3, 1980". This was
based on Clause 13(2)(iv)2 of the Certified Standing Order of the company.
It was contended by the workman that despite his reporting to duty on E
December 3, 1980 and everyday continuously thereafter he was prevented
entry at the gate and he was not allowed to sign the attendance register. His
plea was that he was not permitted to joint duty without assigning any reason.
Labour Court found that the workman had failed to prove his case and that
the action of the management was in accordance with the Standing Orders and F
it was not a termination nor retrenchment under the Act and that in terms of
2. Clause 13(2)(iv) Standing Order read thus :
"if a workman remains absent without sanctioned leave or beyond the period of leave
originally granted or subsequently extended, he shall lose his lien on his appointment
~~: G
(a) he returns within 8 calendar days of the commencement of the absence of the expiry of
leave originally granted or subsequently extended as the cases may be; and
(b) explains to the satisfaction of the manager/management the reason of his absence or his
inability to return on the expiry of the leave, as the case· may be. The workman not
reporting for duty within 8 calendar days as mentioned above, shall be deemed to have
automatically abandoned the services and lost his lien on his appointment. His name shall
be struck off from the muster-rolls in such an eventuality. H
294 SUPREME COURT REPORTS [2000] 3 S.C.R.
A the Standing Orders workman lost his lien on his appointment and he was not
entitled to reinstatement. From the Award of the Labour Court matter came to
this Court under Article 136 of the Constitution. There could not be automatic
termination under the Certified Standing Orders on absence without or beyond
the period of sanctioned leave for more than eight days. This Court said that
the principle of natur~ justice and duty to act in just, fair and reasonable
B
manner must be read into the Standing Orders. So the termination under the
Standing Orders without holding any domestic enquiry or offering any
opportunity to the workman was held to be violative of the principles of
natural justice. This Court observed :
c "12. Therefore, fair play in action requires that the procedure adopted
must be just, fair and reasonable. The manner of exercise of the power
and its impact on the rights of the person affected would be in
conformity with the principles of natural justice. Article 21 clubs life
with liberty, dignity of person with means of livelihood without which
the glorious content of dignity of person would be reduced to animal
D
existence. When it is interpreted that the colour and content of
procedure established by law must be in conformity with the mini-
mum fairness and processual justice, it would relieve legislative
callousness despising opportunity of being heard and fair opportuni-
ties of defence. Article 14 has a pervasive processual potency and
E versatile quality, equalitarian in its soul and allergic to discriminatory
dictates. Equality is the antithesis of arbitrariness. It is thereby,
conclusively held by this Court that the principles of natural justice
are part of Article 14 and the procedure prescribed by law must be
just, fair and reasonable."
F
This, Court held :
"Therefore, we hold that the principles of natural justice must be read
into the Standing Order No. 13(2)(iv). Otherwise it would become
arbitrary, unjust and unfair violating Article 14. When so read the
G impugned action is violative of the principles of natural justice."
At this we may as well refer to other judgments cited at the Bar.
In Hindustan Paper Corporation v. Purnendu Chakrobarty and Others,
H [1996] 11 SCC 404, respondent workman was an employee of Hindustan
SYNDICATE BANK v. GENERAL SECY., SYNDICATE BANK STAFF ASSN. [D.P. WADHWA, J.] 295
Paper Corporation on January 5, 1989 passed an order invoking the Rule A
23(vi)(E)4 of its relevant Rules, Y(hich was to the effect that the workman
deemed to have lost his lien on his appointment with the Corporation.
Workman on May 27, 1988 applied for causal leave. Next day an FIR was
lodged against him and others under Section 302/201 read with Section 34
IPC. On June 3, 1988 workman after expiry of the casual leave sent an B
application for earned leave for 11 days giving reason "personal affair" and
_ _.. mentioning his leave address other than what was with the Corporation. On
June 6, 1988 Senior Manager of the Corporation received a message from the
police to direct the workman to report to the police station. Police was
informed about the application of the workman for grant of earned leave.
Thereafter the workman sent series of leave applications up to November, c
1988 without caring to find out whether his previous applications for leave had
been sanctioned or not. Initially the workman did not disclose any reason for
his absence and subsequently he mentioned "on medical grounds". He did not
send any medical certificate and did not disclose his leave address. All this
time Corporation was being approached by the police to inform them the D
whereabouts of the workman as he was an accused in a murder case. On
November 30, 1988 Corporation informed the workman that his leave on
medical ground was not sanctioned as his applications were not supported by
medical certificates and that he was liable to be treated as an unauthorised
absentee. The workman was, therefore, called upon to submitt his explanation, E
if any, within 15 days of receipt of the letter. In reply thereto workman stated
"baldly" that he was suffering from chest plain for quite some time and that
he had consulted a specialist outside HPC for personal reasons and that
medical certificate would be produced at the time of this joining. Under these
circumstances Corporation passed order date January 5, 1989. Workman
approached the Gauhati High Court, which set aside the order of the Corpo-
F
ration and directed reinstatement of the workman with 50 per cent back wages.
This led the Corporation to come to this Court. This Court said that from the
record that the inference had to be drawn that either the medical certificates
· 4. 23. Penalties -
G
(vi) Termination of Service
(E) loss of lien on his appointment by an employee;
(1) Proceeding on leave without prior sanction and remaining unauthorisedly absent for
more than 8 consecutive days
and/or
(2) Overstaying his sanctioned leave beyond originally granted or subsequently extended
for more than 8 consecutive days .. H
\
296 SUPREME COURT REPORTS [2000] 3 S.C.R.
A were not genuine in the sense that they were not obtained then and there or
the workman deliberately did not disclose them along with the leave applica-
tions and that even before this Court no proper explanation was forthcoming
from the workman on that aspect. It was, however, conceded by the Corpo-
ration that Rule 23(vi)(E) had to be construed by reading into it the principles ·
B ofnarural justice. This Court then did not hold the Rule to be ultra vires Article
14 of the Constitution and said :
"12. We consider that in view of this concession made by the learned
counsel on behalf of the appellant-Corporation that the said Rule must
be read and given effect to, subject to the compliance of the principles
c on natural justice, it cannot be said that the Rule is arbitrary or
unreasonable or ultra vires Article 14 of the Constitution. In other
words, before taking action under the said clause, an opportunity
should be given to the employee to show cause against the action
proposed and if the cause shown by the employees is good and
D acceptable, it follows that no action in terms of the said clause will
be taken. Understood in this sense, it cannot be said that the said
clause is either unreasonable or violative of "Article 16 of the
Constitution."
Then this Court held :
E
"15. We have extracted Rule.23 in full. The explanation to the Rule
specifically states that certain items enumerated thereunder shall not
be treated as a penalty at all within the meaning of Rule 23. For our
case the relevant sub-clause is (vi)(E) which says that proceeding on
leave without prior sanction and remaining unauthorisedly absent for
F
more than 8 consecutive days; and/or overstaying his sanctioned leave
beyond the period originally granted or subsequently extended for
more than 8 consecutive day would result in loss of lien of the
appointment of the employees. In this case we have seen that the first
respondent had proceeded on leave without prior sanction and
G remained unauthorisedly absent for more than 6 months consecutively
which obliged the appellant-Corporation to issue communication to
the first respondent calling upon him to explain. Unfortunately, the
first respondent, for reasons best known to him, has not avajled
himself of the opportunity as seen earlier but replied in a half-hearted
H way which resulted in the impugned order. Therefore, under the
l
SYNDICA'1'E BANK v. GENERAL SECY., SYNDICATE BANK STAFF ASSN. [D.P. WADHWA, J.] 297
circumstances, it cannot be said that the principles of natural justice A
have not been complied with or the circumstances require any enquiry
as contemplated under Rule 25."
This Court was thus of the view that there "was no good reason for the High
Court to interfere with the impugned order of the appellant-Corporation dated
January 5, 1989". B
In Uptron India Ltd. v. Shammi Bhan and Another; [1998] 6 SCC 538,
workman was permanent employee of the appellant. On November, 7, 1984
she proceeded and remained till January 29, 1985 on maternity leave.
Thereafter she allegedly remained absent with effect frm;n January 30, 1985
till April 12, 1985 without any application for leave and consequently by order
c
dated April 12, 1985 appellant informed the workman that her services stood
automatically terminated in terms of Clause 17(g)6 of the Certified Standing
Orders. This Court, where one of us (Saghir Ahmad, J.) was a party, said :
"Clause 17(g), which has been extracted above, Significantly does not D
say that the services of a workman who overstays the leave for more
than seven days shall stand automatically terminated. What it says is
that "the services are liable to automatic termination". This provision,
therefore, confers a discretion upon the management to terminate or
not to terminate the services of an employee who overstays the leave.
It is obvious that this discretion cannot be exercised, or permitted to
E
be exercised capriciously. The discretion has to be based on an
objective consideration of all the circumstances and material which
may be available on record. What are the circumstances which
compelled the employee to proceed on leave; why he overstayed the
leave; was there any just and reasonable cause for overstaying the F
leave; whether he gave any further application for extension for leave;
whether any medical certificate was sent if he had, in the meantime,
fallen ill? These are questions which would naturally arise while
deciding to terminate the services of the employee for overstaying the
leave. Who would answer these questions and who would furnish the
G
material to enable the management to decide whether to terminate or
not to terminate the services are against questions which have an
answer inherent in the provision itself, namely, that the employee
6. l 7(g) The services of a workman are liable to automatic termination if he overstays on
leave without permission for more than seven days. In case of sickness, the medical
certificate must be submitted within a week. H
\
298 SUPREME COURT REPORTS [2000) 3 S.C.R.
_...
A against whom action on the basis of this provision is proposed to be
taken must be given an opportunity of hearing. The principles of
natural justice, which have to be read into the offending clause, must
be complied with and the employee must be informed of the grounds
for which action was proposed to be taken against him for overstaying
the leave."
B
In Bharat Forge Co. Ltd. v. A.B. Z.Odge and Another; [1996) 4 SCC 374, ~-
the management was denied to by the Industrial Tribunal to lead evidence in
support of the impugned order of dismissal. It was not disputed that the request
I
was made before the closure of the proceedings before the Tribunal.. This I-
c Court held:
"A domestic inquiry may be vitiated either for non-compliance of
rules of natural justice or for perversity. Disciplinary action taken on .,,
the basis of a vitiated enquiry does not stand on a better footing than
D a disciplinary action with no enquiry. The right of the employer to
adduce evidence in both the situations is well recognised. So the
employer is entitled to adduce evidences, for the first time, before the
Tribunal even if the employer had held no inquiry or the inquiry held
by the employer is found to be perverse." _...,,
E Two principles emerge from the decision (1) principles of natural justice
and duty to act in just, fair and reasonable manner have to be read in Certified
Standing Orders which have statutory force. These can be applied by Labour
Court and Industrial Tribunal even to relations between management and
workman though based on contractual obligation; and (2) where domestic
F inquiry was not held or it was vitiated or some reason the Tribunal or Court 1
adjudicating an industrial dispute can itself go into the question raised before
it on the basis of the evidence and other material on record.
In the present case action was taken by the Bank under Clause 16 of the
Bipartite Settlement. It is not disputed that Dayananda absented himself from
G the work for a period of 90 or more consecutive days. It was thereafter that
the Bank served a notice on him calling upon to report for duty within 30 days
of the notice stating therein the grounds for the Bank to come to be conclusion
that Dayananda had no intention of joining duties. Dayananda did not respond
to the notice at all. On the expiry of the notice period Bank passed orders that
H Dayananda had voluntarily retired from the service of the Bank.
I
SYNDICATE BANK v. GENERAL SECY.• SYNDICATE BANK STAFF ASSN. [D.P. WADHWA, J.] 299
Now what are the requirements of principles of natural justice, which A
are required to be observed? These are: (1) workman sh~uld know the nature
of the complaint or accusation; (2) an opportunity to state his case; and (3)
the management should act in good faith which means that the action of the
management should be fair, reasonable and just. All these three criteria have
been fully met in the present case. Principles of natural justice are inbuilt in B
Clause 16 of the Bipartite Settlement. When. evidence was led before the
Tribunal, Bank produced the registered covers, which had been received back
with·the endorsement "refused" and the addressee "not found during delivery
time". Dayananda said he never refused to receive the notice. In these
circumstances Tribunal thought in necessary to hold that notice was not served
on Dayananda as the Bank did not examine the postman. The notice was sent c
on the correct address of Dayananda and it was received back with the postal
endorsement "refused". A clear presumption arose in favour of the Bank and
Y against Dayananda. Yet the Tribunal held that no notice was given to
Dayananda as postman was not produced by the Bank. This appears to us to
be rather an incongruous finding by the Tribunal. Unfortunately, High Court D
did not go into this question at all. Considering the conduct of Dayananda all
this period and after three years of his having voluntarily retired from the Bank
in terms of Clause 16 of the Bipartite Settlement his statement that he did not
receive the notice was a sheer lie. His whole edifice was built on falsehood
and yet the Tribunal was there to give him relief on the platter though at the E
same time criticised his conduct during his employment with the Bank.
It is no point laying stress on the principles of natural justice without
understanding their scope or real meaning. There are two essential elements
of naturaf justice which are : (a) no man shall be judge in his own cause; and
(b) no man shall be condemned, either civilly or criminally, without being F
afforded an opportunity of being heard in answer to the charge made against
him. In course of time by various judicial pronouncements these two principles
of natural justice have been expanded, e.g., a party must have due notice when
the Tribunal will proceed; Tribunal should not act on irrelevant evidence or
shut out relevant evidence; if the Tribunal consists of several members tliey G
all must sit together at all times; Tribunal should act independently and should
not be biased against any party; its action should be based on good faith and
order and should act in just, fair and reasonable manner. These in fact are the
extensions or refinements of the main principles of natural justice stated
above.
H
T
\
300 SUPREME COURT REPORTS [2000] 3 S.C.R.
A Bank has folJowed the requirements of Clause 16 of the Bipartite
Settlement. It rightly held that Dayananda had voluntarily retired from the
service of the Bank. Under these circumstances it was not necessary for the
Bank to hold any inquiry before passing the order. An inquiry would have
been necessary if Dayananda had submitted his explanation which was not
acceptable to the Bank or contended that he did report for duty but was not
B
allowed to joint by the Bank. Nothing of the like has happened here. Assuming
for a moment that inquiry was necessitated, evidence led before the Tribunal
clearly showed that notice was given to Dayananda and it is he who defaulted
and offered no explanation of his absence from duty and did not report for
duty within 30 days the notice as required in Clause 16 of the Bipartite
c Settlement.
This undue reliance on \he principles of natural justice by the Tribunal
and even by the High Court has certainly led to miscarriage of justice as far
as Bank is concerned. Conduct of Dayananda as an employee of the Bank has
been astounding. It was not a case where the Tribunal should have given any
D relief to Dayananda and yet the Bank was directed to reinstate him with
continuity of service and mercifully the latter part of the relief High Court
struck down. There was no occasion for the Tribunal to direct that Dayananda
be reinstated in service or for the High Court not to have exercised its ·
jurisdiction under Article 226 of the Constitution to set aside the Awa.id.
E
We, therefore, allow the appeal, set aside the impugned judgment of the
High Court and also t11e Award dated September 26, 1994 of the Central
Government Industrial Tribunal.
High Court had noticed that since September 26, 1994 Dayananda had
F been paid wages in terms of Section 17-B of the Industrial Disputes Act, 1947. -1
When the matter came to this Court on special leave petition, while issuing
notice on February 8, 1999 it was ordered "Statute quo regarding implemen-
tation of the order of the High Court as existing today to continue till further
orders". It is not clear how long Dayananda has been paid his wages. Even
though we have set aside the order of the Tribunal we direct that the wages
G so far paid to Dayananda be neither recorded nor adjusted by the Bank.
However, there shall be no order as to costs.
S.V.K. Appeal allowed.
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