REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 2242  OF 2009 (Arising out of SLP (C) No.2369 of 2007)

The Regional Manager, Central Bank of India … Appellant

Versus

Vijay Krishna Neema & Ors. … Respondents

J U D G M E N T

S.B. Sinha, J.

1. Leave granted.

2. Application of Clause 16 of the Shastri Award is in question in this

appeal which arises out of a judgment and order dated 16.10.2006 passed by

a Division Bench of the High Court of Madhya Pradesh at Indore in Writ

Appeal  No.322  of  2006  whereby and  whereunder  a  judgment  and  order

dated 29.10.2004 passed by a learned Single Judge of the said Court in writ

petition No.521 of 2004 was affirmed.

3. Respondent has admittedly been in employment of the appellant bank

since 1973.   On or  about  22.7.1986, he had taken four  days’ leave upto

25.7.1986. He extended his leave from 26.7.1986 to 1.8.1986.  He neither

joined his services nor filed any further application for extension of leave.

Two memos dated 4/5.8.1986 and 18.8.1986 were issued.  A letter

dated 13.10.1986 was thereafter issued which was returned to the bank with

an endorsement ‘Refused’.  The said letter reads as under :

“With  Reference  to  our  office  letters  dated 5.8.1986,  18.8.1986  requesting  to  submit  proper leave application and reasons of remaining absent from the Bank.

Mr. V.K. Neema has not submitted any application after 2.8.1986 and reasons of his remaining absent from the duties.

Mr.  V.K. Neema is  hereby advised  to  report  for duties immediately and submit the reasons of his absence from the bank.  Within three days, failing which  disciplinary  action  will  be  taken  against him.”

4. As he did not join his duties, a show-cause notice dated 9.2.1987 was

issued as to why a disciplinary proceeding shall not be initiated against him,

stating :

“Attention of Shri V.K. Neema Clerk is drawn that he  applied  for  4  days  leave  from  22.7.86  to

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25.7.86  and  thereafter  extended  the  leave  for 26.7.86 to 1.8.86.  After expiry of the said period Shri  V.K.  Neema,  neither  reported  for  duty  nor submitted  any  leave  application  for  any  reason whatsoever.

Vide our letters dated 5.8.86, 18.8.86 and 13.10.86 Mr.  Neema  was  advised  to  report  for  duty immediately  and  to  submit  the  reasons  of  his absence  from  the  bank  within  days  Mr.  V.K. Neema did not comply with the instruction and he refused  to  accept  our  letter  dated  13.10.1986 which was sent at his residence address by Regd. Post.

In the circumstances, Bank has reason to believe that  he  has  no  intention  of  continuing  in  the services of the Bank.  However, he is once again called upon to report for duty at our Branch within 30 days of this letter and submit  his explanation for his  unauthorized  absence from 2.8.86.   If  he fails to report for duty within the period stipulated above,  it  will  be deemed that  he has  voluntarily retires from the service of the Bank on the expiry of  said  period  of  30  days  and his  name will  be struck off from the Rolls of the Bank, and the bank will take suitable action to recover its dues.”

5. Respondent filed a representation upon receipt of the said notice.  

6. By reason of an order dated 6.4.1987, respondent was informed that

he had ceased to be in the bank’s employment with effect from 9.3.1987

having voluntarily abandoned the service.   

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Indisputably, respondent had taken some loan from the bank, he had

shifted from 192, Jawahar Marg, Indore to 62, Vandana Nagar, Indore.  A

recovery suit was filed by the bank wherein the address of the respondent

was stated as 62, Vandana Nagar, Indore.

7. Respondent  also  preferred  an  appeal  on  2.5.1987  against  the  said

order dated 6.4.1987.  He thereafter filed a writ  petition before the High

Court  of  Madhya  Pradesh,  Indore  Bench,  Indore  which  was  marked  as

W.P.586 of  1988.   By reason  of  an order  dated  22.4.1997,  the  said writ

petition was disposed of by the High Court, observing :

“However, it has not been disputed before me, that Annexure-G, an appeal has not been disposed of by the Respondents in accordance with law.  It has further  not  been  disputed  that  against  the  Order passed  by  Respondents  (Annexure-A and  E),  an appeal  would  lie  to  Zonal  Manager  in  terms  of clause 19.14 of the Bi-partite Settlement.”

The High Court opined :

“Thus,  on  totality  of  the  circumstances,  as mentioned  above,  I  deem  it  fit  to  direct  the Respondents  to  treat  Annexure-G/dt.2.5.1987,  as an  appeal,  addressed  to  Zonal  Manager  of Respondent  No.1,  in  terms  of  Clause  19.14  of Bipartite  Settlement,  and  direct  the  Respondent No.1  to  place  it  before  the  Zonal  Manager  for deciding  the  same  in  accordance  with  law  on

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merits, as expeditiously as may be possible.  It is expected to the Respondents to consider all points raised by Petitioner in Memo of Appeal and that the same would be decided by a reasoned Order.

In  case  Petitioner  makes  a  prayer  for  personal hearing, then, the same be also considered in the light  of  Rules  and  Regulations  applicable  the service condition of Petitioner and also in the light of peculiar facts and circumstances of the case.”

8. Pursuant  thereto  or  in  furtherance  thereof,  the  appellate  authority

treated  the  appeal  preferred  before  the  Deputy  General  Manager,  Zonal

Office, Bhopal as a departmental appeal.  He was given an opportunity of

hearing.  The Appellate Authority by an order dated 24.10.1997 dismissed

the said appeal, opining :

“The  contention  of  the  applicant  that  all  written communications  were  determinately  (sic)  to  the where he was not residing is not acceptable.  From the fact that the appellant has availed housing loan facility from the Bank, it cannot be construed that he started residing there, unless there was specific information  to  Bank  about  the  usage  of  house. Besides, the fact and reason of the letters were not accepted  by  him  he  was  aware  of  various communication intimation from the Branch.

The undersigned further observe that issuance of show  cause  notice  dated  9.2.87  by  the  Branch Manager was in order having been issued in the capacity  of  administrative  need.   It  does  not therefore, amount to violation whatsoever.

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The  termination  of  the  petitioner’s  service,  it  is observed,  was  in accordance with  the provisions of Bi-partite settlement.  As such, non-conduct of departmental authority does not vitiate the action taken thereto.”

9. A second writ petition was filed by the respondent questioning the

legality and/or validity of the said order.  By reason of a judgment and order

dated 29.10.2004, a learned Single Judge of the said Court allowed the writ

application, inter alia, opinining :

“From the above factual  position,  it  is  clear that there  was  a  236  days  leave  in  the  credit  of  the petitioner,  it  cannot   be  inferred  safely  that  the notice  was  served  to  the  petitioner  and  he  was afforded an opportunity of hearing or submitting any explanation.  It is further clear from the facts that  the  petitioner  had  an  explanation  about  his absence on account of his ailment he had 236 days leave in his credit.  In such circumstances the rule of natural justice cannot be by-passed.”

It was furthermore held :

“From  the  above  discussion  it  is  clear  that  the petitioner  has  in  his  credit  236  days  leave.   He further has an explanation to put forth before the management with regard to his ailment which was supported by the medical certificate.  He has also submitted an application for his change of address 62,  Vandana Nagar,  Indore.   Admittedly, on this address the notice was not sent by the Bank.  The Bank has not tried to serve the notice personally to

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the petitioner.  In such circumstances the rule of natural justice cannot be ruled out and it cannot be said and the decision of the Bank with regard to abandonment  of  service  voluntarily  has  rightly been taken after compliance of the rule of natural justice.”

The writ petition was allowed, directing :

“The  impugned  order  Annexure  –  P/5  dated 6.4.1987  by  which  it  is  held  that  the  petitioner ceased to be in Bank employment with effect from 9.3.1987  and  the  appellate  order  Annexure  P/16 dated 24.10.1997 are hereby quashed.

In consequence the petitioner be deemed to be in service with the Bank.  It is further made clear that the respondent Bank is free to hold a departmental regular  enquiry  and  pass  appropriate  order  if  it wishes so.  The petitioner will not be entitled for backwages  in the  facts  and circumstances  of  the case at present but will be entitled for continuity of service.  However, the respondent is free to decide the question of backwages after the outcome of the departmental enquiry.”

10. Mr. Jaideep Gupta, learned senior counsel appearing on behalf of the

appellant, would submit :

1)  The learned Single Judge committed a serious error in so for as it

failed to take into consideration that for invoking clause 16 of the

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Shastri Award, personal service of notice was not imperative as the

same could be effected by registered post with acknowledgment due.

2) As the respondent did not join his services despite service of notice, it

was  not  necessary  for  the  appellant  to  initiate  any  departmental

proceedings.

3) Validity  of  clause  16  having  been  upheld  in  a  large  number  of

decisions of this Court, the High Court committed a serious error in

passing the impugned judgment.

4) In any event, respondent having started his own business, the High

Court committed a serious error in directing his reinstatement in his

service.

11. Mr.  Niraj  Sharma,  learned  counsel  appearing  on  behalf  of  the

respondent, on the other hand, would urge :

(i) In view of the concurrent finding of fact arrived at by two courts that

236  days’  leave  was  due  to  the  respondent,  clause  16  of  Shastri

Award was not  attracted and,  thus,,  this Court  should not  interfere

with the impugned judgment.   

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(ii) Service of notice upon the respondent asking him to join his services

having not been proved, as has been held by the learned Single Judge,

the impugned judgment does not warrant interference.

(iii) In any view of the matter as the learned Single Judge had given an

opportunity  for  initiating  a  departmental  proceeding  against  the

respondent to the appellant and having regard to the fact that since

2004, the respondent had been working in the bank and furthermore

as  during  the  said  period,  no  departmental  proceeding  has  been

initiated,  this  Court  may not  exercise  its  discretionary  jurisdiction

under Article 136 of the Constitution of India.

12. Clause 16 of the Shastri Award reads as under :

“Where  an  employee  has  not  submitted  any application  for  leave  and  absented  himself  from work for a period of 90 or more consecutive days without  or  beyond  any  leave  to  his  credit  or absents  himself  for 90 days or more consecutive days  beyond  the  period  of  leave  originally sanctioned  or  subsequently  extended  or  where there  is  satisfactory  evidence  that  he  has  taken unemployment  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 notice to the employee’s last known address calling  upon  the  employee  to  report  for  duty within thirty days of the notice, stating inter alia the  grounds  for  the  management  coming  to  the conclusion that the employee has no intention of

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joining duties and furnishing necessary evidence, where available.  Unless the employees reports for duty  within  thirty  days  or  unless  he  gives  an explanation  for  his  absence  satisfying  the management  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  within thirty 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 services.”

13. The said award provides for the mode and manner in which service of

notice shall be effected in the following terms :

“Issue of notices and orders :- Notices which are required to be given shall  be served individually on  the  employees  affected  and  their acknowledgments  taken,  and  shall  also  be exhibited on the notice boards of the bank at the offices or establishments concerned.  Such notices as are so exhibited shall be in English and also in the principal language of the district or locality in which  each  such  office  or  establishment  is situated.  Any  notice,  order,  charge-sheet, communication  or  intimation  which is  meant  for an  individual  employee  shall  be  in  a  language understood  by  the  employee  concerned.   In  the case of an absent employee notice shall be sent to him  by  registered  post,  with  acknowledgment due.”

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14. The question as regards validity of Clause 16 of Shastri Award and/or

provisions akin thereto is no longer res integra.   

An employee may, in certain situations, abandon or deemed to have

abandoned his job.  What constitutes abandonment may be a matter of a

statutory  provision  or  agreement  between  the  employer  and  the  Union.

Although  absence  without  leave  for  a  long  time may constitute  a  grave

misconduct on the part of the employee concerned, in a case of this nature,

in view of clause 16 of the Shastri Award, an employee can be treated to

have ceased from employment.

In Viveka Nand Sethi v. Chairman, J & K Bank Ltd. [(2005) 5 SCC

337], this Court, inter alia, relying upon the decision of this Court in Punjab

& Sind Bank & Ors. v. Sakattar Singh [(2001 (1) SCC 214] and Syndicate

Bank v.  General  Secretary,  Syndicate  Bank  Staff  Association  and  Anr.

[(2000) 5 SCC 65], held as under :

“15. The  bipartite  settlement  is  clear  and unambiguous. It should be given a literal meaning. A bare perusal of the said settlement would show that  on  receipt  of  a  notice  contemplated thereunder,  the  workman  must  either:  (1)  report for  duties  within  thirty  days;  (2)  give  his explanation  for  his  absence  satisfying  the management  that  he  has  not  taken  any employment  or  avocation;  and  (3)  show that  he has  no  intention  of  not  joining  the  duties.  It  is,

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thus, only when the workman concerned does not join his duties within thirty days or fails to file a satisfactory  explanation,  as  referred  to hereinbefore, that the legal fiction shall come into force.  In  the  instant  case  except  for  asking  for grant  of  medical  leave,  he  did  not  submit  any explanation  for  his  absence  satisfying  the management  that  he  has  not  taken  up  any other employment  or  avocation  and  that  he  had  no intention of not joining his duties.

XXX XXX XXX

20. It may be true that in a case of this nature, the principles  of  natural  justice  were  required  to  be complied with but the same would not mean that a full-fledged departmental proceeding was required to be initiated. A limited enquiry as to whether the employee concerned had sufficient explanation for not reporting to duties after the period of leave had expired or failure on his part on being asked so to do, in our considered view, amounts to sufficient compliance with the requirements of the principles of natural justice.”

The same view was reiterated by this Court in New India Assurance

Co. Ltd. v. Vipin Behari Lal Srivastava [(2008) 3 SCC 446].

15. Principle of natural justice, it is trite, does not operate irrespective of

the statutory provisions.

It was not a case where like  Uptron India Ltd. v.  Shammi Bhan &

Anr. [(1998)  6  SCC  538]  and  Scooters  India  Ltd. v.  M.  Mohd.  Yaqub

[(2001) 1 SCC 61], no notice was required to be issued.   

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Clause 16 of the Shastri Award provides for issuance of such notice.

If  despite  service  of  notice  the  employee  did  not  report  for  duty,  the

consequences therefor would ensue.   

In  V.C.,  Banaras  Hindu  University  & Ors.  v.  Shrikant [(2006)  11

SCC 42], upon referring to  D.K. Yadav v.  JMA Industries Ltd. [(1993) 3

SCC 259,  Uptron India Limited (supra) and  Scooters India Ltd. (supra), it

was opined :

“57. The matter  may, however,  be different  in a case  where  despite  having  been  given  an opportunity of hearing, explanation regarding his unauthorised absence is not forthcoming or despite giving him an opportunity to join his duty, he fails to do so, as was the case in Punjab & Sind Bank v. Sakattar Singh.”

This Court upon considering Vivek Sethi (supra), held as under :

“60. A  provision  relating  to  abandonment  of service  came  up  for  consideration  yet  again  in Viveka Nand Sethi v.  Chairman,  J&K Bank Ltd. before a Division Bench of this Court. This Court opined  that  although  in  a  case  of  that  nature, principles  of  natural  justice  were  required  to  be complied with, a full-fledged departmental enquiry may not be necessary, holding:  

“A  limited  enquiry  as  to  whether  the employee  concerned  had  sufficient explanation for not reporting to duties after

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the period of leave had expired or failure on his  part  on  being  asked  so  to  do,  in  our considered  view,  amounts  to  sufficient compliance  with  the  requirements  of  the principles of natural justice.”

61. Mr Dwivedi  placed strong reliance upon the decision  of  this  Court  in  Aligarh  Muslim University v.  Mansoor  Ali  Khan.  In  that  case, interpretation  of  Rule  5(8)(ii)  came  up  for consideration which is in the following terms:

“5(8)(ii) An officer or other employee who absents  himself  without  leave  or  remains absent without leave after the expiry of the leave granted to him, shall, if he is permitted to  rejoin  duty,  be  entitled  to  no  leave allowance  or  salary for  the period of  such absence  and  such  period  will  be  debited against  his  leave account  as  leave  without pay  unless  his  leave  is  extended  by  the authority  empowered  to  grant  the  leave. Wilful absence from duty after the expiry of leave may be treated as misconduct for the purpose of clause 12 of Chapter IV of the Executive Ordinances of AMU and para 10 of  Chapter  IX  of  Regulations  of  the Executive Council.”

It  was  held  that  a  show-cause  notice  and  reply would be necessary. If no show-cause notice had been given, this Court held that the principles of natural  justice  would  be  held  to  be  complied with.”

Yet again in U.P. State Bridge Corpn. Ltd. v. U.P. Rajya Setu Nigam

S. Karamchari Sangh [(2004) 4 SCC 268], it was held as under :

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“23. D.K. Yadav is an authority for the proposition that the principles of natural justice would have to be  read  in  the  standing  orders.  That  was  a  case where there was a standing order similar to CSO L-2.12  except  that  8  days’  margin  was  granted within which the workman was required to return and  satisfactorily  explain  the  reasons  for  his absence or  inability  to  return  after  the  expiry of leave.  This  view  was  reiterated  in  the  later decision  of  this  Court  in  Lakshmi  Precision Screws Ltd. v. Ram Bahagat where it was held that the  element  of  natural  justice  was  an  inbuilt requirement of the standing orders.

24. In  this  case,  the  appellant  Corporation  had issued  two  notices  calling  upon  the  workmen represented  by the  respondent  to  return  to  duty. The  workmen  did  not  respond  to  either  of  the notices. As we have noted it was not pleaded that the advertisement did not sufficiently comply with the  principles  of  natural  justice.  The  notice  was issued giving an opportunity to the respondent to show cause  why the  presumption  should  not  be drawn under CSO L-2.12. The respondent did not show cause. In the circumstances, the management drew the presumption in terms of the CSO.”

16. The  question  which,  however,  arises  for  consideration  is  as  to

whether  the  appellant  has  been able  to  prove that  the  notice  was served

upon the respondent.   The High Court,  it  must  be  noticed at  the  outset,

committed  a  serious  error  in  holding  that  personal  service  of  notice  was

imperative inasmuch as in case of an absent employee notice was required

to  be  served  by registered  post  with  acknowledgment  due.   The learned

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Single Judge has arrived at a finding of fact that notice, in fact, has not been

served upon him.  Appellant has merely produced a photostat copy of the

envelop.   There  was  nothing  to  show  that  the  notice  was  sent  under

registered cover with acknowledgment due.   

Furthermore, there is nothing to show that the fact that the respondent

has changed his address was not known to the officers of the bank.  The

shifting of the residence by the respondent has not been denied.  In fact, the

subsequent event, namely, filing of a suit for recovery of amount of loan

from the  respondent  clearly  suggests  that  officers  of  the  appellant  were

aware of the respondent’s changed address.  Moreover, a concurrent finding

of fact in regard to the non-service of notice has been arrived at.   

Learned Single Judge had furthermore given liberty to the appellant

to give an opportunity of hearing to the respondent.  It is also not in dispute

that  the  respondent  has  been  working  in  the  bank  since  2004.   In  the

aforementioned facts and circumstances of this case, we are of the opinion

that  it  is  not a fit  case where this Court should exercise its  discretionary

jurisdiction under Article 136 of the Constitution of India.

17. It may be true that a contention has been raised by the appellant that

the respondent had started business in the name of Builders and Brokers.

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The  said  fact  was  sought  to  prove  from the  greeting  cards  sent  to  the

officers of the bank on the occasion of Diwali.  Although the said plea was

required to be taken into consideration by the High Court, in our opinion, it

is not necessary to go into the said question as in view of the fact that the

respondent  has  already  been  reinstated  in  service.   Appellant  would,

however, be at liberty to avail the remedies given to it by the High Court.

18. The appeal is dismissed.  However, there shall be no order as to costs.

……………………………….J. [S.B. Sinha]

..…………………………..…J. [Dr. Mukundakam Sharma]

New Delhi; April 8, 2009

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