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State Bank Of India, Canara Bank, … vs V. Ganesan, Jambunathan, … on 26 September, 1988

Madras High Court
State Bank Of India, Canara Bank, … vs V. Ganesan, Jambunathan, … on 26 September, 1988
Equivalent citations: (1989) ILLJ 109 Mad
Author: N Sundaram
Bench: K Thanikkachalam, S N Sundaram


JUDGMENT

Nainar Sundaram, J.

1. There are eight writ appeals and two writ petitions. The writ appeals are directed against the common order of Padmanabhan. J., the same reported in V. Ganeshan v. State Bank of India and others (1988-LLJ-64). Nationalised Banks – the employers – are the appellants in the writ appeals. The employees of Nationalised Banks are respondents in the writ appeals and in the two writ petitions, such employees, represented by their unions, are the petitioners. The controversy, both in the writ appeals and in the writ petitions, stems out of the actions taken or proposed to be taken by the Nationalised Banks against their employees. We shall first deal with the writ appeals. We have avoided delineating minute details of the facts of the cases, in view of the scope of the points argued before us. In six out of eight writ appeals, the employees went on demonstrations during working hours of the day in question and thereby absented themselves from the work spot for those hours and did not do the allocated work, during those hours. But they were allowed to work for the remaining hours. In the remaining two writ appeals, the employees declined to do the clearing house operations, even though they were present during the working hours. The Nationalised Banks, on both the counts, withheld or proposed to withhold the pay and allowances of the employees for the whole of the days in question. This has obliged the employees to come to this court under Article 226 of the Constitution of India, impeaching the actions of the nationalised banks.

2. Before Padmanabhan, J., who heard an disposed of the writ petitions, out of which the writ appeals arise, the main ground, put forth by the Nationalised Banks for sustaining their actions was that the principle ‘no work-no pay’ should be applied, so as to deny the employees the wages for the whole of the days in question, even though the employees worked for part of the days, or being present for the whole of the days did not do the allocated work. It was also contended by the Nationalised Banks before the learned by the single Judge that the controversy is one, which has got foundation in a contract of employment simpliciter between master and servant and there is no warrant for this Court under Article 226 of the Constitution of India to issue the writs prayed for. The learned single Judge held that the Nationalised Banks will come within the ambit of ‘the other authority’ under Article 12 of the Constitution of India. This view has not been questioned before us also either in the writ appeals or in the writ petitions by the learned counsel, appearing for the Nationalised Banks. The learned single Judge opined that in the absence of statutory provisions or a term in the contract of service, it is not permitted for the Nationalised Banks to deny their employees and withhold their emoluments even for those working hours in the day during which the said employees did work. With regard to the working hours during which the employees abstained from working, the learned single Judge countenanced the plea of acquiescence on the part of the Nationalised Banks in the breach committed, put forth by the learned counsel appearing for the employees. However, on a concession made by the learned counsel for the employees that his clients will be content with the emoluments only for the working hours of the day during which they actually worked, and since he did not press forth for emoluments with regard to the working hours during which the employees did not work, the learned single Judge, while allowing the writ petitions, gave liberty to the Nationalised Banks to deduct pro rata salary of employees for the period of their absence from duty. The learned single Judge made it clear that he has not considered the question as to whether the Nationalised Banks will be entitled to deduct pro rata salary for the stand of absence of an employee in view of the stand taken by the learned counsel for the employees. Hence, the plea of acquiescence, the discussion over the same and the opinion expressed thereon have become otiose. However, as already noted, the learned single Judge did not countenance the right of the Nationalised Banks to withhold emoluments of their employees for the period during which they did work. The learned single Judge, on the view that Nationalised Banks are falling within the ambit of ‘the other authority’ under Article 12 of the Constitution of India, held that the right to get salary is a right to property; and the Nationalised Banks should not act arbitrarily, and illegally, by withholding the salary of their employees for the period during which they had worked.

3. With regard to the proposition ‘no work no pay’ the pronouncements of this Court have consistently countenanced that the employee, if has worked for the whole day or part of the day, should not be denied the emoluments for the same. We shall presently refer to them. It could be a case where the contract of service contemplated and stipulated that if the employee should abstain even for a particular hour during the specified hours of work in a particular day or if he abstains from doing a particular work in a particular day, he will not be entitled to emoluments for the whole day. This could also be a matter of a statutory provision. In the absence of either a term in the contract of service speaking to the above effect or the statutory provision, laying down such a rule, it is not possible to clothe the employer with the power or a right to deduct or withhold the emoluments of the employee even for the hours during which he worked. The attempt on the part of the learned counsel for the Nationalised Banks before us was only to persuade us to accept a theory running contrary to the above proposition. We must say that this attempt is a futile one.

4. So far as this Court is concerned, there is a pronouncement of a Bench of this Court, to which one of us has been a party, in V. Ramachandran v. Indian Bank (1979-I-LLJ-122), which has countenanced and applied the proposition of ‘no work-no pay’ to a case, the facts of which were more or less similar to the facts of the present cases, where there was abstention from work during certain hours of the working day. It is true that in that case there was a taking notes of the provisions of the Tamil Nadu Shops and Establishments Act, which Act has now been held to be inapplicable to Nationalised Banks vide C. V. Raman and others v. Bank of India, Southern Region (1984-II-LLJ-34) and C. V. Raman, etc. v. Management of Bank of India, etc. (1988-II-LLJ-423). But the core of the principle ‘on work-on pay’, countenanced by the Bench pronouncement holds good.

5. One of us had occasion to advert to this principle in R. Rajamanickam v. Indian Bank (1981-II-LLJ-367). In that case, the employees abstained from duty for four hours on a particular day and the Nationalised Bank did not acquiesce in the breach of contract and refused to allow the employees to work for the rest of the day and as a result the employees did not, in fact, work for the whole of the day. The fact remained that the employees did not discharge any work of theirs for the whole of the day. The Nationalised Banks effected cut of the salary of the employees for the whole of the day. After referring to the case law on the subject, the principle enunciated in V. Ramachandran v. Indian Bank (supra) was applied and the salary cut for the whole of the day was upheld.

6. In K. R. Sengamalam v. The Management of Indian Bank, Madras and another (W.P. No. 1131 of 1981, Order dated 11th August 1987) one of us had to deal with a case where there was a proposal to deduct wages of the employee for the whole of the day by a Nationalised Bank on the ground that the employee refused to attend the clearing house work on that day. The employee did report for duty and performed part of his duties on that day. It was opined that it will not be proper to invoke the principle ‘no work-no pay’ and straightaway deny the employee wages for the whole of the day. However, for disobedience, if any, of the circular, allotting the employee the concerned work, the Nationalised Bank was given the liberty to proceed against the employee in disciplinary action.

7. In V. Prasad v. State Bank of India, Coimbatore (1987-I-LLJ-404) the Nationalised Bank effected cut in wages of the employees in one case for one hour for the day and in another case the wages for the whole of the day on the ground the employees did not do the allotted work. Reliance on behalf of the Nationalised Bank was placed on a circular dated 11th November 1983, same as the one, subject matter of impeachment in W.P. No. 713 of 1983. It was found there also, that the employees did turn up for work for the whole day and it was opined by one of us, who dealt with the case, that in the absence of any specific provision in the contract of employment or in the statute there is no power available to the employer to straightway cut the wages on the ground that the employee has not completed the work allotted to him even though he did not absent from duty for the whole of the day or part of the day.

8. Mr B. R. Dolia, learned counsel appearing for the employees, would also draw our attention to a pronouncement of a Bench of the High Court of Bombay in The Bank of India, Bombay and another v. T. S. Kelawala, Bombay and others (1988-II-LLJ-264), where withholding by the Nationalised Bank of full day’s wages of its employees, who participated in a four hour strike on the day in question was not countenanced and it was emphasised that the power exercised by the Nationalised Bank does not flow from any statute or a specific term in the regulations, awards and settlements governing the services under the Nationalised Bank, and hence it cannot be countenanced.

9. The wages of employees stand fixed in the case of officers by the statutory regulations and in the case of award staff by settlements. There terms and conditions could not be disturbed, abrogated, abridged or mutilated unilaterally by actions on the part of the Nationalised Banks. This is first and foremost principle which must be kept in mind and only on the background or rather on the axis of this principle, the proposition ‘on work-no pay’ could be applied and worked. If there is a statutory provision or if there is a term adumbrated in any of the settlements, governing the service conditions stipulating for deduction of wages of the employees for the whole day, either on the ground they absented themselves for the part of the day or even though they were present for the whole day, they did not do the allotted work, certainly that must stand implemented and there could not be any demur over such implementation. Our attention has not been drawn to any such statutory provision or a term in any settlement governing the service conditions making a stipulation to the above effect. Learned counsel for the Nationalised Banks would contend that in the absence of regulations as such, administrative circulars and notices could be issued, as done in the present cases, and they must be held to be efficacious and binding. Reliance in this behalf was placed on the pronouncement of the Supreme Court in V. T. Khanzode and others v. Reserve Bank of India and another (1982-I-LLJ-465). It is true that in that pronouncement, the Supreme Court countenanced that so long as regulations are not framed under Section 58(1) of the Reserve Bank of India Act, it is open to the Central Board to issue administrative circulars, regulating the service conditions of the staff. But the circulars and notices in the present cases cannot by any stretch of imagination be equated to and have the legal character of the Administrative Circulars, contemplated in the said pronouncement. That is obvious. Under these circumstances, we are convinced that an employee who has worked must certainly be compensated for the work which he did. Most likely, keeping in mind the relevant proposition, the concession was made by the learned counsel appearing for the employees before the learned single Judge that the employees will be content to receive emoluments only for the work done by them and there was no argument pursued before the learned single Judge for emoluments for the period during which the employees did not work.

10. However, Mr. M. R. Narayanaswami, learned counsel appearing for the Nationalised Banks, in seven out of the eight writ appeals, supported by Mr. S. Sampath Kumar, learned counsel appearing for the Nationalised Bank in the eight writ appeal, chose to place reliance on the following pronouncements of other High Courts in this country. The first is that of a Bench of the High Court of Punjab and Haryana in Dharam Singh Rajput and others v. Bank of India, Bombay (1979) Lab. I.C. 1079. There are observations in the said pronouncement to indicate that the Bench was countenancing a discretion for the Nationalised Bank to prescribe as to when the working hours will start and to what hours of the day the work will be carried on, leaving no manner of doubt that for the purpose of banking business, the working hours of each day should be considered as one single unit which could not be spilt up into further sub-units, and that it is for the management of the Nationalised Banks to decide what kind of business will be transacted during a particular part of the day and the employees have not been left with any discretion in this matter. The Bench upheld the deduction of pay for the full day for the absence of a portion of the day. Apart from our reservations over the observations of the Bench, the pronouncement on facts has to be distinguished. It is found that though the employees went on strike for the first four hours on the particular day, they were not allowed to resume duty after the expiry of the four hours.

11. The second prouncement relied on by the learned counsel appearing for the Nationalised Banks is that of a Bench of the High Court of Kerala in R. N. Shenoy and another v. Central Bank of India and others (1984) Lab I.C. 1493. The learned Judges of the Bench of the High Court of Kerala were conscious that the relationship between an employer and an employee is normally governed by the terms of the contract between them; the employer can always stipulate the conditions of service and when the employee agrees to such conditions, he will be bound by them. After discussing the available case law, the learned Judges of the Bench of the High Court of Kerala, however, struck a stringent note by saying that an employee cannot be side to earn his salary by hours or minutes; the minimum unit for the purpose of remuneration of an employee should be taken as a day, the day should be deemed to be the unit of the contract of employment and the order deducting a day’s salary, even though the employees did not absent from the work for the whole of the day, was upheld.

12. We must straightaway say that the prouncements of this Court, being consistent in their views, that there could not be a denial of wages for the employee for the work which he turned out, we are not able to persuade ourselves to fall in line with the thinking of the learned Judges in the above two pronouncements. Criticisms, in fact, were levelled against the last two pronouncements of this Court, namely, K. R. Sengamalam v. The Management of Indian Bank, Madras and another (supra) and V. Prasad v. State Bank of India, Coimbatore (supra) on the ground of their brevity. The complaint was that there was dearth of elaborate arguments which resulted in brief discussion of the aspect. But, we find that the relevant principle as such has not been lost sight of and even in these cases we have not been persuaded to accept any other principle that ought to have been countenanced and which has not been taken note of in the above two pronouncements. We also understand that the writ appeals preferred against the pronouncement in V. Prasad v. State Bank of India, Coimbatore (supra) have been dismissed by a Bench of this Court.

13. Mr. M. R. Narayanaswami, learned counsel appearing for the Nationalised Banks, placed also heavy reliance on the pronouncement of the House of Lords in Miles v. Wakefield Metropolitan District Council (1987) 2 W.L.R. 795 in support of the proposition advanced by him to sustain the action taken by the Nationalised Banks withholding the emoluments for the whole of the days of their employees, who abstained from work during particular hours on the days in question or who did not do the work allocated to them, even though they were very much present for the whole of the days. In the above case, the plaintiff was a Superintendent Registrar of Births, Deaths and Marriages for the District of Wakefield. The plaintiff was paid salary by the Wakefield District Council and the salary was paid for a working week of 37 hours. One of the most important functions of the plaintiff as Superintendent Registrar was to conduct civil wedding ceremonies and the most popular time for such wedding was Saturday morning when the Registry Office provided by the Council was open for three hours between 9 o’clock and midday. On instructions, from his trade union, the plaintiff by way of industrial action, refused to conduct weddings on Saturday morning. The Council treated him as working only for thirty-four hours. In refusing to conduct weddings on Saturday, the plaintiff, as conceded by him, acted in breach of his duties, as Superintendent Registrar. The Council deducted 3/37th of the salary of the plaintiff, while he refrained from conducting weddings on Saturday between August, 1981 and October, 1982, when the salary dispute was settled. The plaintiff sought payment of the sums deducted. The decision in the first Court went against the plaintiff. The Court of Appeal, by a majority, held that the plaintiff was entitled to be paid his full salary unless and until he was dismissed. The Council appealed, with the leave of the House of Lords. From the facts of the case and the discussion found in the speeches of the Lords of the House of Lords, it is found that what has been kept in the forefront was that the employee would be entitled to so much remuneration as represents the value of the work he has done; that is quantum meruit. We are not able to spell out any proposition from the above pronouncements that even for the work done by an employee there can be a denial of emoluments. Even if such a construction is to be put upon the pronouncement as the learned counsel for the Nationalised Banks would covet, we could not appreciate and follow the same, in view of our discussion of the principles in the preceding paragraphs.

14. Mr. M. R. Narayanaswami, learned counsel appearing for the Nationalised Banks, would also stress, referring to the provisions of the Indian Contract Act, that the contract of employment consists of reciprocal terms and when the employee has not performed his part of the contract, the employee cannot claim performance of the reciprocal promise of payment of emoluments from the employer. First of all, it must be pointed out that it will be inappropriate to apply the general law of master and servant as between individuals to the services under the Nationalised Banks which is a State, within the meaning of Article 12 of the Constitution of India. The parties are to be governed by regulations, awards and settlements, and when none of them or any other efficacious and binding proceeding empower the Nationalised Banks to make deductions, as now resorted to by them, it is not possible to countenance the deductions on the general law of contract. The Nationalised Banks, as found by the learned single Judge, did accept performance from the employees for the rest of the day and in that view they are bound to compensate the employees to that extent for the rest of the day. In the case of employees who have not done the clearing house work, that could be the subject matter of disciplinary action if a case therefore exists and certainly in the absence of a statutory provision or a term in the contract of service there could not be straightaway withholding of the wages for the whole of the days in question.

15. Mr. M. R. Narayanaswami, learned counsel appearing for the Nationalised Banks, would also submit that the plea that was specifically advanced was the one based on the provisions of the Tamil Nadu Shops and Establishments Act and when that plea could not successfully be advanced, in view of the pronouncements holding the said enactment to be inapplicable to Nationalised Banks (Vide C. V. Raman and others v. The Management of Bank of India, Madras and others (supra) and C. V. Raman v. Management of Bank of India (supra) no other plea should be allowed to be put forth in support of the case of the employees. We find that all the relevant contentions were thrashed out before the learned single Judge and there was and even before us there has been no dearth of arguments on the ground of lack of any plea and as rightly held by the learned single Judge, we also do not find a justification to deny reliefs to the employees, on this technical ground.

16. Coming to the two writ petitions, in W.P. No. 713 of 1984, the impeachment is of the circular dated 11th November 1983 and of the action proposed to be taken on the basis of the said circular. The said circular has been frowned upon in V. Prasad v. State Bank of India, Coimbatore (supra). We have already found that the principle taken note of in that pronouncement holds good and no other principle that could be acted upon by this Court, has been advanced to bring conviction to our mind to accept the same. In W.P. No. 875 of 1984 action is being taken by the Nationalised Banks against the employees for not signing the attendance register for the days in question. This action on the part of the Nationalised Bank is being put in issue in this writ petition. The employees would assert that they did attend the offices and discharge the works and they did not absent themselves, and there should not be any wage-cut. The case advanced by the employees also come within the ratio countenanced by us as per our preceding discussion. However, Mr. T. R. Mani, learned counsel appearing for the Nationalised Bank in this writ petition, would submit that when the employees have not signed the attendance register and when they have chosen to do work on their own accord, it could not be equated to attending to work and discharging the allocated work. In the counter-affidavit filed, we do not find a specific, assertive and categoric stand taken that the employees were totally absent for the days in question. What all has been stated, in substance, is work, if any, performed by the employees cannot be taken as work required of them in terms of their employment, which alone will entitle them for remuneration in wages. In our view, this case also cannot escape the application of the principle countenanced by us.

17. We also heard a contention raised by the learned counsel for the Nationalised Banks that the controversy being in the field of contract of employment between Master and Servant, prayers for issue of writs of Mandamus would not lie. Once it is held that the Nationalised Banks have the character of ‘the other Authority’, within the meaning of Article 12 of the Constitution of India, certainly they cannot be allowed to act arbitrarily and illegally by cutting of the wages of their employees, which actions have no basis or backing of statutory provisions or terms of employment. While striking down the actions of the Nationalised Banks, this Court can certainly give the resultant appropriate directions.

18. For all the above reasons, we are obliged to dismiss the writ appeals and accordingly they stand dismissed. With regard to the writ petitions, we direct that the Nationalised Bank concerned in those two writ petitions, shall not effect cut in the wages/salary for the whole of the days in question, payable to the employees concerned, either on the basis of the Circular dated 11th November 1983 or on the ground that the employees did not sign the attendance registers. This shall not preclude the Nationalised Banks from resorting to any other process that may be available to them with regard to the conduct of the employees in accordance with law. Directions are issued in the two writ petitions, as above. Both in the batch of writ appeals and in the writ petitions, we make no order as to costs.

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