MANJU SAXENA vs. UNION OF INDIA REP. BY ITS SECRETARY MINISTRY OF LABOUR

“REPORTABLE” IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOs. 11766­11767 OF 2018 (Arising out of SLP (Civil) Nos. 30205­30206 of 2017) Manju Saxena          …Appellant Versus Union of India & Anr.                    …Respondent(s) J U D G M E N T  INDU MALHOTRA, J. Leave granted. 1. The   present   S.L.P.s   arise   out   of   the   impugned Judgment dated 14.07.2017 passed in L.P.A. No. 467/2017, and Order dated 13.09.2017 passed in Signature Not Verified Digitally signed by ANITA MALHOTRA Date: 2018.12.03 17:00:42 IST Reason: R.P.   No.   380/2017   of   the   Delhi   High   Court, wherein the High Court dismissed the L.P.A filed by 1 nd the Appellant against the 2   Respondent ­ HSBC Bank.  2. Briefly   stated,   the   factual   matrix   in   which   the present S.L.P. has been filed are summarized as under: 2.1 The Appellant was appointed on 01.04.1986 as nd a   “Lady   Confidential   Secretary”   by   the   2 Respondent­ HSBC Bank, (hereinafter referred to as “the R2­Bank”). Subsequently,   on   23.04.1992   the   Appellant came to be promoted as a “Senior Confidential Secretary” to the Senior Manager (North India) of HSBC.  2.2 In May 2005, the post of “Senior Confidential Secretary”   became   redundant,   as   the   Officer with whom the Appellant was attached, left the services   of   the   R2­Bank.   Her   services   were utilized by giving her some other duties for the time being, till alternate jobs could be offered to her. The Management admittedly offered her four alternate   jobs   of   (i)   Business   Development 2 Officer,   (ii)   Customer   Service   Officer,   (iii) Clearing   Officer,   and   (iv)   Banking   Services Officer. Each of these jobs were in the same pay scale.  The Appellant has admitted in her Statement of Claim dated 20.03.2006, that she declined to accept any of these jobs on the ground that such jobs were either temporary in nature, or the claimant did not possess the experience or work­knowledge to take up such jobs.  2.3   On   01.10.2005,   the   Bank   issued   a   Letter terminating the services of the Appellant on the ground   that   her   current   job   had   become redundant. The Appellant was offered several job opportunities, however, she did not choose any   of   these   offers.   The   Bank   had   offered   a generous   severance   package,   which   she   was not prepared to accept. The Bank terminated her service, and paid 6 months’ compensation in   lieu   of   Notice   as   per   the   contract   of employment. In addition, as a special case, the Bank   paid   Compensation,   which   was 3 equivalent   to   15   days’   salary   for   every completed   year   of   service.   The   total   amount paid to the Appellant was Rs. 8,17,071/­. 2.4   The   Appellant   raised   an   Industrial   Dispute before   the   Regional   Labour   Commissioner under   the   Industrial   Disputes   Act,   1947 (hereinafter   referred   to   as   the   I.D.   Act)   on 03.10.2005,   and   sought   enhancement   of   the severance package paid to her. It is relevant to note that the Appellant did not raise any claim for re­instatement to the R2­Bank. Conciliation   proceedings   were   commenced between the Appellant and R2­Bank, wherein the Appellant made the following claims:

4 The Bank, in response, offered the following package:

The only difference between the two parties was with respect to the amount of Severance payable to the Appellant. Since the parties were unable   to   arrive   at   a   settlement,   the conciliation proceedings failed.  2.5   The   Appellant   filed   her   Statement   of   Claim dated   20.03.2006,   before   the   Central Government Industrial Tribunal (referred to as “the   CGIT”)   claiming   inter   alia   an   enhanced severance   package,   waiver   of   outstanding Housing Loan, and full pension. The Claim was opposed by the R2­Bank. The R2­Bank filed its 5 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 the procedure   outlined   under   the   I.D.   Act,   while terminating the services of the Appellant. The   Ld.   CGIT   passed   an   Award   dated 01.06.2009, and directed the R2­Bank to re­ instate   the   Appellant,   with   full   terminal benefits.  2.6   The   R2­Bank   filed   Writ   Petition   bearing   No. W.P.   (C)   11344/2009   before   the   Delhi   High Court, to challenge the Award passed by the CGIT. The High Court vide Interim Order dated 22.03.2013 remanded the matter to the CGIT for fresh consideration on the point whether the Appellant   could   be   considered   to   be   a “Workman” as per the Industrial Disputes Act, 1947.     The   Writ   Petition   was   kept   pending during the pendency of the remand. The CGIT passed a fresh Award dated 15.07.2015 holding 6 the Appellant to be a “workman” under the I.D. Act, 1947.  The   Ld.   CGIT   directed   the   R2­Bank   to   re­ instate the Appellant with continuity of service, full back wages, and all consequential benefits.  2.7 During the pendency of the Writ Petition, the Appellant had filed an Application under S. 17B of   the   I.D.   Act,   1947   before   the   Delhi   High Court seeking interim maintenance. The High Court   vide   Interim   Order   dated   27.07.2012 directed   payment   of   a   monthly   sum   of   Rs. 75,000/­   to   the   Appellant,   towards   Interim Maintenance u/S. 17B of the I.D. Act, 1947. 2.8 Aggrieved by the Order dated 27.07.2012, the R2 Bank filed an L.P.A. before the Delhi High Court to challenge the amount awarded to the Appellant u/S. 17B. The Division Bench vide Order dated 24.08.2012, reduced the monthly sum payable to Rs. 58,330/­ per month which was as per her last drawn salary.  7 The S.L.P. filed by the Appellant being S.L.P. (C) No. 36513/2012 to challenge the Order dated 24.08.2012, came to be dismissed vide Order dated 07.01.2013. The Appellant accordingly has been paid back wages u/S. 17B at Rs. 58,330/­ per month.  2.9 The Appellant also raised a claim for waiver of the   outstanding   amount   of   a   Housing   Loan availed by her during the course of her service, which   was   outstanding   on   the   date   of   her termination. The total amount of outstanding loan was approximately Rs. 22,16,702/­. The   Appellant   challenged   proceedings   for recovery   initiated   by   the   R2­Bank   before   the Delhi High Court in W.P. (C) No. 19451/2006. A Consent Order dated 18.03.2010 came to be passed whereby the outstanding amount of Rs. 22,16,702/­ towards the Housing Loan, was to be adjusted from her back wages, subject to the final outcome of the W.P. (C) No. 13344/2009.  8 2.10 The Writ Petition filed by the R2­Bank was allowed   by   the   learned   Single   Judge   vide Judgment   and   Order   dated   12.04.2017,   and the Award passed by the CGIT came to be set aside.  The   High   Court   accepted   the   R2­Bank’s submissions,   and   held   that   the   Appellant’s refusal   to   accept   any   of   the   four   alternate positions   offered   to   her,   amounted   to “abandonment” of her job. Hence there was no question of her services having been illegally terminated.   The   Appellant   had   received monetary   compensation   under   several  heads, to   the   tune   of   Rs.   1,07,73,736/­   during   the pendency   of   the   Writ   Petition,   which   was almost   13   times   her   legal   entitlement.   This included   payments   made   under   the   various heads   such   as   Compensation   paid   during termination, Gratuity, Payment towards Interim Award,   Payments   under   S.   17B,   Payment towards   legal   expenses.   The   Appellant   was 9 directed to refund the entire amount except the sum   of   Rs.   8,17,071/­,   which   was   the compensation paid at the time of termination.  2.11   Aggrieved   by   the   Judgment   &   Order   dated 12.04.2017   in   W.P.   (C)   11334/2018,   the Appellant filed L.P.A. No. 467/2017 before the Division   Bench.   The   Division   Bench   vide Judgment & Order dated 14.07.2017 dismissed the   L.P.A.,   and   upheld   the   Judgment   of   the learned Single Judge holding that the Appellant had abandoned her job.  The   Division   Bench   however   modified   the operative   direction   passed   by   the   Ld.   Single Judge for restitution of the amounts paid. The Division Bench ordered that the Appellant shall not be required to restitute the amount of Rs. 8,17,071/­ paid at the time of termination, the litigation   expenses,   and   the   amounts   paid under S. 17B of the I.D. Act, 1947.  10 2.12   The   Appellant   filed   Review   Petition   No. 380/2017   which   was   dismissed   vide   Order dated 13.09.2017.  2.13   The   Appellant   has   assailed   the   Judgment dated 14.07.2017 and Order dated 13.09.2017 passed by the Division Bench in the L.P.A. and the Review Petition, by the present S.L.P.s.  3.   The   Appellant   was   appearing   in   Person.   Even though the Court had made a suggestion that a Counsel   be   appointed   to   represent   her,   she declined the same. The submissions made by the Appellants are: 3.1 The Appellant submitted that she is entitled to a Severance Package of Rs. 69.99 lakhs, which is equivalent to her last drawn salary of Rs. 58,330/­ per month for a period of 10 years, i.e. 120 months.  The calculations put forth by the Appellant is as follows: 11 [Severance   Package   =   Last   drawn   monthly Salary x 120 months];  [Rs. (58,330 x 120) = Rs. 69,99,600/­]  3.2 The Appellant submitted that she had been in “continuous service” for over 20 years with the R2­bank. Consequently, she was eligible for all benefits payable to a ‘workman’ under the I.D. Act.  3.3 The Appellant further submitted that the terms of the Housing Loan taken by her during the course   of   service,   provided   for   782certain relaxations and benefits to the employees. The Appellant submitted that her outstanding loan amount should be waived by the R2­Bank.   3.4 The Appellant submitted that the R2­bank had been   deducting   T.D.S.   on   all   the   payments made to her during the pendency of the legal proceedings. The  Appellant  submits that  this deduction   is   illegal,   and   she   is   entitled   to   a refund of a sum of Rs. 13,69,083/­ deducted towards T.D.S. 12 4. The R2­Bank was represented by Mr. Dhruv Mehta, Sr.   Adv,   alongwith   Mr.   Gagan   Gupta,   Adv,   the Counsel for the R2­bank  inter alia  submitted: 4.1 It is the admitted position that the Appellant’s post had become redundant when her boss left the   Bank.   The   Appellant   was   offered   four alternate positions of (i) Business Development Officer,   (ii)   Customer   Service   Officer,   (iii) Clearing   Officer,   and   (iv)   Banking   Services Officer in the same pay scale. The Appellant however declined each of these offers. In these circumstances,   her   services   came   to   be terminated.   As   a   special   case,   a   severance amount of Rs. 8,17,071/­ was paid apart from the other benefits. 4.2   It   was   further   submitted   that   the   Bank complied with all the mandatory requirements specified in S. 25F (a) and (b) of the I.D. Act. The compensation of Rs. 8,17,071/­ granted to the   Appellant,   was   computed   in   accordance with S. 25F (b) i.e. compensation equivalent to 13 15 days’ salary multiplied by the   number of years of employment. The   High   Court   had   recorded   that   the Appellant   had   already   received   monetary benefits in excess of the compensation she was entitled   to   under   the   law.   Therefore,   the Appellant   was   not   entitled   to   any   additional amount.  4.3   The   R2­Bank   submitted   that   during Conciliation   proceedings,   they   had   offered   a Severance Package of Rs. 32.79 lacs which was worked out on the basis of the last drawn Basic Salary + Monthly Allowances, for past 10 years (equal to 120 months). The Basic Salary was Rs. 19,280/­ and Monthly Allowances [H.R.A. + Medical + L.T.A. of Rs. 8,050/­]. The total 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/­  14 5.   We   have   perused   the   pleadings   and   Written Submissions made by the parties. 5.1 It is the admitted position that the Bank had offered   four   alternative   positions   such   as “Business   Development   Officer”,   “Customs Service   Officer”,   which   were   at   par   with   her existing   pay   scale   and   emoluments.   The Appellant was however not willing to accept any of   the   alternate  positions   offered  to  her.  Nor was   she   willing   to   accept   the   redundancy package offered to her. In the  circumstances the R2­Bank was justified in terminating the services of the Appellant, vide termination letter dated 01.10.2005. 5.2 The   Bank   has   complied   with   the   statutory requirements   under   S.   25F   of   the   I.D.   Act which   lays   down   the   conditions   that   an employer must comply, on the retrenchment of a workman.  In the present case, the High Court has held that the Appellant had “abandoned” her job, on 15 her   refusal   to   accept   any   of   the   alternative positions with the bank, on the same pay scale.   5.3 The   concept   of   “abandonment”   has   been discussed at length in a Judgment delivered by a 3­Judge Bench of the Supreme Court in  The v Buckingham & Carnatic Co. Ltd.   Venkatiah & 1 Ors.   wherein it was held that abandonment of service can be inferred from the existing facts and   circumstances   which   prove   that   the employee   intended   to   abandon   service.   This case   was   followed   by   a   two   judge   bench   in 2 Vijay S Sathaye  v  Indian Airlines Ltd. & Ors.  .  In the case before us, the intentions of the Appellant can be inferred from her refusal to accept any of the 4 alternative positions offered by the R2­Bank. It is an admitted position that the alternative positions were on the same pay scale, and did not involve any special training or technical knowhow. In   any   event,   the   claims   raised   by   the Appellant   before   various   forums   were   with 1  (1964) 4 SCR 265 2  (2013) 10 SCC 253 16 respect   to   enhancement   of   compensation, which are monetary in nature. The Appellant’s conduct   would   constitute   a   voluntary abandonment   of   service,   since   the   Appellant herself had declined to accept the various offers of   service   in   the   Bank.   Furthermore,   even during   conciliation   proceedings   she   has   only asked for an enhanced severance package, and not reinstatement. Once it is established that the Appellant had voluntarily   abandoned   her   service,   she   could not   have   been   in   “continuous   service”   as defined under S. 2(oo) the I.D. Act, 1947.  S. 25F of the I.D. Act, 1947 lays down the conditions that are required to be fulfilled by an employer, while terminating the services of an employee, who has been in “continuous service” of the employer. Hence, S. 25F of the I.D. Act, would cease to apply on her.  The condition precedent for Retrenchment of an employee, as provided in S. 25F of the I.D. Act,   1947   was   discussed   by   a   Constitution 17 Bench   of   this   Court   in   Hathisingh 3 Manufacturing   Ltd.   v   Union   of   India ,   while deciding the constitutional validity of S. 25FFF. The Constitution Bench held,  “9.   …Under   Section   25­F,   no workman   employed   in   an industrial   undertaking   can   be retrenched   by   the   employer until (a) the workman has been given   one   month’s   notice   in writing   indicating   the   reasons for   retrenchment   and   the period   has   expired   or   the workman has been paid salary in   lieu   of   such   notice,   (b)   the workman   has   been   paid retrenchment   compensation equivalent to 15 days’ average salary for every completed year of service and (c) notice in the prescribed manner is served on the   appropriate Government….By   S.   25F   a prohibition   against retrenchment,   until   the conditions   prescribed   by   that Section   are   fulfilled   in imposed.”  S. 25F of the I.D. Act, 1947 is extracted herein below: “25F.   Conditions   precedent   to retrenchment   of   workmen.­   No 3   AIR 1960 SC 923 18 workman   employed   in   any industry   who   has   been   in continuous   service   for   not   less than   one   year   under   an employer shall be retrenched by that employer until— (a) The workman has been given one   month's   notice   in   writing indicating   the   reasons   for retrenchment and the period of notice   has   expired,   or   the workman has been paid in lieu of   such   notice,   wages   for   the period of the notice;  (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   continuous   service]   or any part thereof in excess of six months; and  (c)   notice   in   the   prescribed manner   is   served   on   the appropriate Government [or such authority as may be specified by the   appropriate   Government   by notification   in   the   Official Gazette].” In the present case, the R2­Bank has paid the Appellant   a   sum   of   Rs.   8,17,071/­,   which included 6 months’ pay in lieu of Notice under S. 25F(a) and an additional amount calculated 19 on the basis of 15 days’ salary multiplied by the number of years of service, in compliance with S. 25F(b).   However,   no   Notice   was   sent   to   the Appropriate Government or authority notified, in compliance with S. 25F(c) of the I.D. Act.  A three Judge Bench of this Court in  Gurmail 4 Singh & Ors.  v  State of Punjab & Ors.  Held that the requirement of clause (c) of S. 25F can be treated only as directory and not mandatory. This was followed in  Pramod Jha & ors.  v  State 5 of   Bihar   &   Ors.   wherein   it   was   held   that compliance   with   S.   25F(c)   is   not   mandatory. 5.4 The   Appellant   has   admittedly   received   an amount   of   Rs.   1,07,73,736/­   under   various heads:

4  (1991) 1 SCC 189 5  (2003) 4 SCC 619 20

The Appellant has claimed an amount of Rs. 69.99   lakhs.   The   Appellant   has   already received almost double the amount claimed by her.  6. In   light   of   the   discussions   above,   the   afore­said amounts received by her may be treated as a final settlement   of   all   her   claims.   The   impugned Judgment of the Division Bench dated 14.07.2017, is modified to this extent.            The Civil Appeals stand dismissed, with no order as to costs. All applications stand disposed of accordingly. …………...........................J. (ABHAY MANOHAR SAPRE) .……………………J. (INDU MALHOTRA) New Delhi, December 3rd 2018 21 22