MANJU SAXENA versus UNION OF INDIA & ANR. on 3 December 2018

1. The present S.L.P.s arise out of the impugned Judgment dated14.07.2017 passed in L.P.A. No. 467/2017, and Order dated 13.09.2017passed in R.P. No. 380/2017 of the Delhi High Court, wherein the HighCourt dismissed the L.P.A filed by the Appellant against the 2[nd]Respondent - HSBC Bank.

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2. Briefly stated, the factual matrix in which the present S.L.P.has been filed are summarized as under:

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2.1 The Appellant was appointed on 01.04.1986 as a “LadyConfidential Secretary” by the 2[nd] Respondent- HSBC Bank,(hereinafter referred to as “the R2-Bank”).

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Subsequently, on 23.04.1992 the Appellant came to be promotedas a “Senior Confidential Secretary” to the Senior Manager (NorthIndia) of HSBC.

2.2 In May 2005, the post of “Senior Confidential Secretary”became redundant, as the Officer with whom the Appellant wasattached, left the services of the R2-Bank. Her services wereutilized by giving her some other duties for the time being, tillalternate jobs could be offered to her.

The Management admittedly offered her four alternate jobs of(i) Business Development Officer, (ii) Customer Service Officer,(iii) Clearing Officer, and (iv) Banking Services Officer. Each ofthese jobs were in the same pay scale.

The Appellant has admitted in her Statement of Claim dated20.03.2006, that she declined to accept any of these jobs on theground that such jobs were either temporary in nature, or theclaimant did not possess the experience or work-knowledge totake up such jobs.

2.3 On 01.10.2005, the Bank issued a Letter terminating theservices of the Appellant on the ground that her current job hadbecome redundant. The Appellant was offered several jobopportunities, however, she did not choose any of these offers.The Bank had offered a generous severance package, which shewas not prepared to accept. The Bank terminated her service,and paid 6 months’ compensation in lieu of Notice as per thecontract of employment. In addition, as a special case, the Bankpaid Compensation, which was equivalent to 15 days’ salary forevery completed year of service. The total amount paid to theAppellant was Rs. 8,17,071/-.

2.4 The Appellant raised an Industrial Dispute before theRegional Labour Commissioner under the Industrial Disputes Act,1947 (hereinafter referred to as the I.D. Act) on 03.10.2005, andsought enhancement of the severance package paid to her. It isrelevant to note that the Appellant did not raise any claim for re-instatement to the R2-Bank.

Conciliation proceedings were commenced between theAppellant and R2-Bank, wherein the Appellant made the followingclaims:

The only difference between the two parties was with respectto the amount of Severance payable to the Appellant. Since theparties were unable to arrive at a settlement, the conciliationproceedings failed.

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2.5 The Appellant filed her Statement of Claim dated20.03.2006, before the Central Government Industrial Tribunal(referred to as “the CGIT”) claiming inter alia an enhancedseverance package, waiver of outstanding Housing Loan, and fullpension. The Claim was opposed by the R2-Bank. The R2-Bankfiled its Written Statement and contested the claim of the Appellant,stating that the Appellant was not a “workman” under the I.D.Act, 1947. The Bank further stated that they had followed theprocedure outlined under the I.D. Act, while terminating the servicesof the Appellant.

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The Ld. CGIT passed an Award dated 01.06.2009, and directedthe R2-Bank to re-instate the Appellant, with full terminal benefits.

2.6 The R2-Bank filed Writ Petition bearing No. W.P. (C)11344/2009 before the Delhi High Court, to challenge the Awardpassed by the CGIT. The High Court vide Interim Order dated22.03.2013 remanded the matter to the CGIT for fresh H

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consideration on the point whether the Appellant could beconsidered to be a “Workman” as per the Industrial Disputes Act,1947. The Writ Petition was kept pending during the pendency ofthe remand. The CGIT passed a fresh Award dated 15.07.2015holding the Appellant to be a “workman” under the I.D. Act, 1947.

The Ld. CGIT directed the R2-Bank to re-instate the Appellantwith continuity of service, full back wages, and all consequentialbenefits.

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2.7 During the pendency of the Writ Petition, the Appellanthad filed an Application under S. 17B of the I.D. Act, 1947 beforethe Delhi High Court seeking interim maintenance. The High Courtvide Interim Order dated 27.07.2012 directed payment of amonthly sum of Rs. 75,000/- to the Appellant, towards InterimMaintenance u/S. 17B of the I.D. Act, 1947.

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2.8 Aggrieved by the Order dated 27.07.2012, the R2 Bankfiled an L.P.A. before the Delhi High Court to challenge the amountawarded to the Appellant u/S. 17B. The Division Bench vide Orderdated 24.08.2012, reduced the monthly sum payable to Rs. 58,330/- per month which was as per her last drawn salary.

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The S.L.P. filed by the Appellant being S.L.P. (C) No. 36513/E2012 to challenge the Order dated 24.08.2012, came to bedismissed vide Order dated 07.01.2013.

The Appellant accordingly has been paid back wages u/S. 17Bat Rs. 58,330/- per month.

2.9 The Appellant also raised a claim for waiver of theoutstanding amount of a Housing Loan availed by her during thecourse of her service, which was outstanding on the date of hertermination. The total amount of outstanding loan wasapproximately Rs. 22,16,702/-.

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The Appellant challenged proceedings for recovery initiatedby the R2-Bank before the Delhi High Court in W.P. (C) No.19451/2006. A Consent Order dated 18.03.2010 came to be passedwhereby the outstanding amount of Rs. 22,16,702/- towards theHousing Loan, was to be adjusted from her back wages, subjectto the final outcome of the W.P. (C) No. 13344/2009.

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2.10 The Writ Petition filed by the R2-Bank was allowed bythe learned Single Judge vide Judgment and Order dated12.04.2017, and the Award passed by the CGIT came to be setaside.

The High Court accepted the R2-Bank’s submissions, and heldthat the Appellant’s refusal to accept any of the four alternatepositions offered to her, amounted to “abandonment” of her job.Hence there was no question of her services having been illegallyterminated. The Appellant had received monetary compensationunder several heads, to the tune of Rs. 1,07,73,736/- during thependency of the Writ Petition, which was almost 13 times herlegal entitlement. This included payments made under the variousheads such as Compensation paid during termination, Gratuity,Payment towards Interim Award, Payments under S. 17B,Payment towards legal expenses. The Appellant was directed torefund the entire amount except the sum of Rs. 8,17,071/-, whichwas the compensation paid at the time of termination.

2.11 Aggrieved by the Judgment & Order dated 12.04.2017 inW.P. (C) 11334/2018, the Appellant filed L.P.A. No. 467/2017before the Division Bench. The Division Bench vide Judgment &Order dated 14.07.2017 dismissed the L.P.A., and upheld theJudgment of the learned Single Judge holding that the Appellanthad abandoned her job.

The Division Bench however modified the operative directionpassed by the Ld. Single Judge for restitution of the amounts paid.The Division Bench ordered that the Appellant shall not be requiredto restitute the amount of Rs. 8,17,071/- paid at the time oftermination, the litigation expenses, and the amounts paid underS. 17B of the I.D. Act, 1947.

2.12 The Appellant filed Review Petition No. 380/2017 whichwas dismissed vide Order dated 13.09.2017.

2.13 The Appellant has assailed the Judgment dated 14.07.2017and Order dated 13.09.2017 passed by the Division Bench in theL.P.A. and the Review Petition, by the present S.L.P.s.

3. The Appellant was appearing in Person. Even though the Courthad made a suggestion that a Counsel be appointed to represent her, shedeclined the same. The submissions made by the Appellants are:

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A3.1 The Appellant submitted that she is entitled to a SeverancePackage of Rs. 69.99 lakhs, which is equivalent to her last drawnsalary of Rs. 58,330/- per month for a period of 10 years, i.e. 120months.

The calculations put forth by the Appellant is as follows:B[Severance Package = Last drawn monthly Salary x 120months]; [Rs. (58,330 x 120) = Rs. 69,99,600/-]

3.2 The Appellant submitted that she had been in “continuousCservice” for over 20 years with the R2-bank. Consequently, shewas eligible for all benefits payable to a ‘workman’ under theI.D. Act.

3.3 The Appellant further submitted that the terms of theHousing Loan taken by her during the course of service, providedDfor 782certain relaxations and benefits to the employees. TheAppellant submitted that her outstanding loan amount should bewaived by the R2-Bank.

3.4 The Appellant submitted that the R2-bank had beendeducting T.D.S. on all the payments made to her during thependency of the legal proceedings. The Appellant submits thatEthis deduction is illegal, and she is entitled to a refund of a sum ofRs. 13,69,083/- deducted towards T.D.S.

4. The R2-Bank was represented by Mr. Dhruv Mehta, Sr. Adv,alongwith Mr. Gagan Gupta, Adv, the Counsel for the R2-bank interalia submitted:F

4.1 It is the admitted position that the Appellant’s post hadbecome redundant when her boss left the Bank. The Appellantwas offered four alternate positions of (i) Business DevelopmentOfficer, (ii) Customer Service Officer, (iii) Clearing Officer, and(iv) Banking Services Officer in the same pay scale. The AppellantGhowever declined each of these offers. In these circumstances,her services came to be terminated. As a special case, a severanceamount of Rs. 8,17,071/- was paid apart from the other benefits.

4.2 It was further submitted that the Bank complied with allthe mandatory requirements specified in S. 25F (a) and (b) of the H

I.D. Act. The compensation of Rs. 8,17,071/- granted to theAppellant, was computed in accordance with S. 25F (b) i.e.compensation equivalent to 15 days’ salary multiplied by thenumber of years of employment.

The High Court had recorded that the Appellant had alreadyreceived monetary benefits in excess of the compensation shewas entitled to under the law. Therefore, the Appellant was notentitled to any additional amount.

4.3 The R2-Bank submitted that during Conciliationproceedings, they had offered a Severance Package of Rs. 32.79lacs which was worked out on the basis of the last drawn BasicSalary + Monthly Allowances, for past 10 years (equal to 120months). The Basic Salary was Rs. 19,280/- and MonthlyAllowances [H.R.A. + Medical + L.T.A. of Rs. 8,050/-]. Thetotal basic component was Rs. 27,330/- (19,280 + 8,050).

The severance package by the Bank was computed as follows:Severance Package = (Monthly basic component x 120 months)= Rs. 27,330 x 120 = Rs. 32,79,600/-

5. We have perused the pleadings and Written Submissions madeby the parties.

5.1 It is the admitted position that the Bank had offered fouralternative positions such as “Business Development Officer”,“Customs Service Officer”, which were at par with her existingpay scale and emoluments. The Appellant was however not willingto accept any of the alternate positions offered to her. Nor wasshe willing to accept the redundancy package offered to her. Inthe circumstances the R2-Bank was justified in terminating theservices of the Appellant, vide termination letter dated 01.10.2005.

5.2 The Bank has complied with the statutory requirementsunder S. 25F of the I.D. Act which lays down the conditions thatan employer must comply, on the retrenchment of a workman.

In the present case, the High Court has held that the Appellanthad “abandoned” her job, on her refusal to accept any of thealternative positions with the bank, on the same pay scale.

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5.3 The concept of “abandonment” has been discussed at lengthin a Judgment delivered by a 3-Judge Bench of the Supreme Courtin The Buckingham & Carnatic Co. Ltd. v Venkatiah & Ors.[1]wherein it was held that abandonment of service can be inferredfrom the existing facts and circumstances which prove that theemployee intended to abandon service. This case was followedby a two judge bench in Vijay S Sathaye v Indian Airlines Ltd.& Ors.[2] .

In the case before us, the intentions of the Appellant can beinferred from her refusal to accept any of the 4 alternative positionsoffered by the R2-Bank. It is an admitted position that thealternative positions were on the same pay scale, and did not involveany special training or technical knowhow.

In any event, the claims raised by the Appellant before variousforums were with respect to enhancement of compensation, whichare monetary in nature. The Appellant’s conduct would constitutea voluntary abandonment of service, since the Appellant herselfhad declined to accept the various offers of service in the Bank.Furthermore, even during conciliation proceedings she has onlyasked for an enhanced severance package, and not reinstatement.

Once it is established that the Appellant had voluntarilyabandoned her service, she could not have been in “continuousservice” as defined under S. 2(oo) the I.D. Act, 1947.

S. 25F of the I.D. Act, 1947 lays down the conditions that arerequired to be fulfilled by an employer, while terminating theservices of an employee, who has been in “continuous service”of the employer. Hence, S. 25F of the I.D. Act, would cease toapply on her.

The condition precedent for Retrenchment of an employee, asprovided in S. 25F of the I.D. Act, 1947 was discussed by aConstitution Bench of this Court in Hathisingh ManufacturingLtd. v Union of India[3], while deciding the constitutional validityof S. 25FFF. The Constitution Bench held, 1(1964) 4 SCR 265

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“9. …Under Section 25-F, no workman employed in anindustrial undertaking can be retrenched by the employeruntil (a) the workman has been given one month’s noticein writing indicating the reasons for retrenchment and theperiod has expired or the workman has been paid salaryin lieu of such notice, (b) the workman has been paidretrenchment compensation equivalent to 15 days’ averagesalary for every completed year of service and (c) noticein the prescribed manner is served on the appropriateGovernment….By S. 25F a prohibition againstretrenchment, until the conditions prescribed by that Sectionare fulfilled in imposed.”

S. 25F of the I.D. Act, 1947 is extracted herein below:

“25F. Conditions precedent to retrenchment of workmen.-No workman employed in any industry who has been incontinuous service for not less than one year under anemployer shall be retrenched by that employer until—

(a) The workman has been given one month’s notice inwriting indicating the reasons for retrenchment and theperiod of notice has expired, or the workman has beenpaid in lieu of such notice, wages for the period of thenotice; (b) the workman has been paid, at the time of retrenchment,compensation which shall be equivalent to fifteen days’average pay [for every completed year of continuousservice] or any part thereof in excess of six months; and

(c) notice in the prescribed manner is served on theappropriate Government [or such authority as may bespecified by the appropriate Government by notificationin the Official Gazette].”

In the present case, the R2-Bank has paid the Appellant a sumof Rs. 8,17,071/-, which included 6 months’ pay in lieu of Noticeunder S. 25F(a) and an additional amount calculated on the basisof 15 days’ salary multiplied by the number of years of service, incompliance with S. 25F(b).

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AHowever, no Notice was sent to the Appropriate Governmentor authority notified, in compliance with S. 25F(c) of the I.D. Act.

A three Judge Bench of this Court in Gurmail Singh & Ors.v State of Punjab & Ors.[4] Held that the requirement of clause(c) of S. 25F can be treated only as directory and not mandatory.BThis was followed in Pramod Jha & ors. v State of Bihar &Ors.[5] wherein it was held that compliance with S. 25F(c) is notmandatory.

5.4 The Appellant has admittedly received an amount of Rs.1,07,73,736/- under various heads:

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The Appellant has claimed an amount of Rs. 69.99 lakhs. TheAppellant has already received almost double the amount claimedby her.

6. In light of the discussions above, the afore-said amounts receivedFby her may be treated as a final settlement of all her claims. The impugnedJudgment of the Division Bench dated 14.07.2017, is modified to thisextent.

The Civil Appeals stand dismissed, with no order as to costs. Allapplications stand disposed of accordingly.

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Kalpana K. Tripathy

Appeals dismissed.

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