WP/20606/2003 of M.S. Rajasekhar Vs The Chair Person AND Managing Director, on 30 December 2013

Order:

The petitioner seeks for a Writ of mandamusdeclaring the action of the respondents-Bank in notrefunding Rs.3,00,000/- as illegal and for consequentialreliefs.

2. The petitioner is an unfortunate employee of theIndian Bank. He joined the services of the Bank on 11-12-1995 as a Probationary Officer. In the appointmentorders, para 6 provided that the petitioner shall serve theBank for a period of 4 years from the date of joining andthat if he resigned in the meanwhile, he should be liable to pay liquidated damages ofRs.5,000/- to the Bank. The petitioner executed a Bondaccordingly.

3. The petitioner was initially posted to SirnapallyBranch, which was a Rural Branch. He worked there fromDecember, 1996 till January, 1999. In February, 1999,the petitioner was transferred to Mahabubabad Branch,Warangal District. However, he was sent on deputation toKothaguda Rural Branch, Warangal District. Whileworking at Kothaguda Rural Branch, on 21-01-2000, while the petitioner was on duty, he metwith an accident. He was in possession of cash ofRs.2,00,000/- belonging to the Bank at that time.

The petitioner took pains to somehow go to the Branchand deposit the cash in his possession although hesustained fracture of his right hand in the accident.

4. In 1997, there was a move in the banks to go forcomputerization. The respondents-Bank also went forcomputerization. The petitioner opted out to undergotraining in computers. The petitioner was called for aninterview by the Bank and was subjected to examinationand interview. The petitioner was ultimately selected towork in Regional Electronic Data Processing (REDP),Chittoor Branch. The petitioner joined in REDP, ChittoorBranch on 26-02-2001. He was later sent to Chennai fortraining in UNIX from 18-6-2001 till 23-6-2001 and was also sent for training in Windows NT from 10-9-2001 till 15-9-2001.

5. Subsequently, on account of the acute ill health ofhis wife and also in view of the health condition of hisparents, the petitioner wanted to resign his position withthe Bank. He accordingly submitted a letter on 06-7-2002 to the Chairperson and Managing Director ofthe Bank informing that he was resigning with effect fromthe same day and that he was not able to serve 3 months’Notice as required by Regulation 20(2) of the Indian Bank(Officers) Service Regulations, 1979 (the Regulations, forshort). The petitioner subsequently executed a Bond on09-7-2002 that he was to be given training and that inview of the heavy expenditure for imparting specializedtraining to the petitioner for gaining knowledge andexpertise in indulging electronics and computerappliances, he was undertaking to work in theorganization for a period of 3 years after training failingwhich, he would be liable to pay liquidated damages ofRs.3,00,000/-.

6. When the petitioner resigned, the AssistantGeneral Manager (Operations) issued a letter on 09-7-2002 recommending the acceptance of theresignation of the petitioner, subject to the Bond dated 09-7-2002. Accordingly, the monies due to the petitioner to atune of Rs.3,20,210/- were deducted from the account of the petitioner in the Bank. The resignation was lateraccepted.

7. Aggrieved by the fact that Rs.3,00,000/- wasdeducted from the amounts of the petitioners towardsliquidated damages, the petitioner submitted a representation to the Bank on 27-7-2002 that he wasnot able to pay the amount for the unserved portion of theterm mentioned in the Bond and that the terms of theBond be waived for him. The same has not been done. Questioning the same, the present writ petition is laid.

8. The learned Standing Counsel for therespondents 1 and 2-Bank drew my attention to anotherfactor. On 20[th] August, 2002, the petitioner issued a letter to the Assistant General Manager permitting theBank to withdraw Rs.3,20,310/- from his account. It is to be now examined whether the writ petitioner isentitled to relief in this backdrop.

9. It is contended by the learned counsel for thepetitioner that there is no justification for the bank to insistupon implementation of a bond executed by the petitionerthree days after he tendered his resignation.

It may be recalled that the petitioner submitted hisresignation on 06.07.2002 whereas he executed the bondfor Rs.3,00,000/- on 09.07.2002. It is the case of thelearned counsel for the petitioner that the bond was obtained from him by coercion. The petitioner submitted arepresentation on 27.07.2002 seeking for the waiving ofthe terms of the bond. Even at that time, the petitioner didnot contend that bond dated 09.07.2002 was obtainedfrom him by force. Indeed, in his subsequent notice dated04.08.2003, a stand was taken by the petitioner that bonddated 09.07.2002 was obtained from him by force.

10. I am not able to accept the contention of thepetitioner that the bond was obtained from him bycoercion. Till he issued legal notice dated 09.07.2003, thepetitioner never contended that the bond was obtainedfrom him by coercion. Added to it, the petitioner was aneducated person and fairly conversant with computers. Itis hard to believe that such a person could be coerced toexecute a bond against his consent. If it were true, thepetitioner would have reported the matter to police on thevery next day. The petitioner has taken no steps at allregarding the execution of the bond if the same wasobtained from him by force. I, therefore, consider thatthere was no proof that the bond was obtained from himby force.

11. The learned counsel for the petitioner alsoattacked the bond as being against public policy. CentralInland Water Transport Corporation Ltd. V. Brojo Nath Ganguly[[1]]was a land mark decision relating to servicecontracts. The Supreme Court held that the rule empowering the Government Corporation to terminate theservices of its permanent employees by giving notice orpay in lieu of notice period was opposed to public policyand violative of Article 14 of the Constitution of India.

12. The Supreme Court referred to “inequality ofbargaining power” theory of Lord Denning enunciated inLloyds Bank Ltd. v. Bundy[[2]] a n d Gillespie Brothers and Company Ltd v. Roy Bowles Transport Ltd.[[3]]and referred tothe tacit approval of the Doctrine by Lord Diplock in A. Schroeder Music Publishing Co. Ltd. v. Macaulay (Formerly Instone)[[4]]. The Supreme Court noticed in this case (inpara 76) that in view of Section 19 of the Contract Act,when consent to an agreement was obtained by coercion,fraud or misrepresentation, the same would be void. Finally, the Supreme Court held that contracts againstpublic policy would not be recognized. It may, however,be noticed that the whole exercise by the Supreme Courtwas regarding the service contracts which allow theemployer to terminate the services of the employees withnotice or with salary in lieu of notice dispensing withformer enquiry.

The decision of the Supreme Court perhaps is notauthority for the principle that a bond executed by anemployee after he submitted the resignation letter isunenforceable.

13. Certainly, it is stranger that while the petitionersubmitted his resignation on 06.07.2002, he executed abond on 09.07.2002 undertaking to pay Rs.3,00,000/-. Itis the contention of the learned counsel for therespondents that as soon as the petitioner obtainedtraining in computers, he was expected to execute thebond and that the petitioner postponed the execution ofthe bond from time to time and having realized that hisresignation might not be accepted unless he executed thebond in compliance of the rules and norms, he hasexecuted the bond. In any event, it is not as though thepetitioner was not aware as to the terms of the bond whenhe executed the bond.

The petitioner who wanted to quit the organization of therespondents executed the bond. I am afraid that thepetitioner cannot now turn round and claim that the bondwas obtained by coercion.

14. For the reasons already stated, such as thepetitioner not approaching police and not protesting aboutthe bond it is not difficult to gather that the petitionervoluntarily executed the bond being aware of theconsequences thereto. Added to it, the petitioner hasissued a letter on 20.08.2002 to the bank authorizing thebank to debit his account for a sum of Rs.3,20,210/- andto send a credit advice to the respondents towardsliquidating damages and towards salary for 46 daysconstituting part of the notice period. In the backdrop of this letter, I opine that the petitioner was thoroughly awareof the consequences of the bond and has executed thesame. I am also satisfied from these circumstances thatthe petitioner voluntarily submitted to the consequences ofthe bond when he tendered his resignation. Havingchosen to do so, it is not open for the petitioner now toquestion that the bond is violative of principles of naturaljustice or is hit by undue influence and coercion and claimthat the same is against the public policy and cannot beimplemented. I, therefore, see no merits in this writpetition.

15. The writ petition is accordingly dismissed. No costs. Miscellaneous Petitions, if any pending in thiswrit petition, shall stand closed.

30[th] December, 2013.

_____________________

Dr. K.G.SHANKAR, J.

Note: L.R. Copy to be marked. (B/o.) Ak/Isn

30[th] December, 2013.(Ak/Isn)

[1]AIR 1986 SC 1571 (1)AIR 1986 SC 1571 (1)

[2](1974) 3 All ER 757(1974) 3 All ER 757

[3](1973) 1 QB 400(1973) 1 QB 400

[4](1974) 1 W.L.R. 1308(1974) 1 W.L.R. 1308