Hongkong & Shanghai Banking Corp.Ltd vs Govt.Of India & Anr

"REPORTABLE"

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.1718 OF 2009 (Arising out of SLP(C) No. 29419 of 2008)

Hongkong & Shanghai Banking Corp. Ltd. .... Appellant

Versus

Government of India & Anr. .... Respondents

JUDGMENT

V.S. SIRPURKAR, J.

1. Leave granted.

2. The respondent No. 2 herein Mrs. Manju Saxena was the employee

of the appellant-Hongkong & Shanghai Banking Corporation Ltd.

(hereinafter called `the bank' for short). According to the appellant, she

drew a salary of Rs.58,330/- per month with a total annual remuneration of

Rs.7,32,736/-. In May, 2005, the Bank reviewed its working norms, staff

structure and other relevant issues governing its operations and it was

decided that the various posts and positions held by the staff were to be 2

discontinued. One such post to be discontinued was held by the second

respondent. A severance package and/or alternate employment to all such

persons whose posts were to be discontinued were offered. Accordingly

such proposal was made to the second respondent also, but she declined

to accept the package.

3. On 01.10.2005 her services were terminated after paying her six

months' salary as compensation in lieu of notice period as provided in the

contract of employment and compensation equivalent to 15 days' salary for

each completed year of service amounting to Rs.8,17,071/-. This sum was

allegedly accepted by the second respondent.

4. However, a dispute was raised regarding this termination and hence

the Government of India, the first respondent herein referred the dispute to

the Central Government Industrial Tribunal (CGIT). The reference was as

under:

"Whether the action of the Chief Executive, HSBC, India Area Management Office, 52/60, Mahatma Gandhi Road, P.O.128, Mumbai-400 001, in terminating the services of Mrs Manju Saxena, Staff Officer w.e.f. 01.10.2005 without giving her full terminal benefits is just, valid and legal? If not, to what benefits the workman is entitled for and what directions are necessary in the matter."

3 5. Thereafter, the second respondent, by her various applications

sought for interim relief along with her pleadings before the Industrial

Tribunal (hereinafter called `Tribunal'). The application came to be allowed

and vide order dated 30.06.2006, the Tribunal directed the appellant-Bank

to pay a sum of Rs.30,000/- per month to the claimant regularly till the

disposal of the said case. This was to be treated as an interim award.

6. The appellant Bank challenged the said award by way of a Writ

Petition No. 12606/2006 wherein the learned Single Judge of the Delhi

High Court stayed the interim order till further orders. The learned Single

Judge was pleased to direct vide his order dated 15.12.2006 that the

second respondent should be paid a sum of Rs.25,000/- towards the

litigation expenses. It was also ordered that the proceedings before the

Tribunal would continue, however, final award would not be passed. This

order dated 15.12.2006 was, of course, an interim order. This order was

confirmed by the Division Bench in LPA No.33/207 by order dated

25.01.2007.

7. On 08.02.2007 the second respondent filed an application under

Section 17-B of the Industrial Dispute Act. On 07.09.2007 a letters patent

appeal No.1194/2007 challenging the order of the learned Single Judge

restraining the Tribunal from pronouncing the award pending the disposal

of the writ petition was disposed of. The matter thus was pending before

the learned Single Judge when the order dated 07.09.2007 disposing of the

letters patent appeal No.1194/2007 came up before this Court by way of a 4

special leave petition. This Court dismissed the same on 07.03.2008 and

directed the High Court to dispose of the Writ Petition on merits and in

accordance with law preferably within three months from the date of

communication of the order.

8. In the meantime, the appellant also filed the rejoinder affidavit to the

counter filed by the second respondent. On 23.05.20008, the application

under Section 17-B of the Industrial Dispute Act was decided by the

learned Single Judge. In that order, no relief was granted under Section

17-B. On 24.09.2008, the Writ Petition No.12602/2006 was also disposed

of. It was held that the reference could not be challenged at that stage of

the proceedings when in fact the proceedings under reference were

pending final adjudication.

9. The learned Single Judge, however, upheld the interim industrial

award stating that there was no infirmity in the interim award of the

Industrial Adjudicator which directed the appellant to pay Rs.30,000/- per

month to the second respondent regularly till the disposal of the industrial

dispute. The said order was challenged before the Division Bench in LPA

No.684/2008 which came to be disposed of by the impugned order.

10. In the impugned order the Division Bench observed in paragraph 5

as under:

"We are informed that the case before the Tribunal is at the stage of arguments. We request the Tribunal to pronounce its final order in the matter within a period of six weeks from 5

today, uninfluenced by any observation on merits that may have been made in the impugned judgment dated 24th September, 2008, passed by the learned Single Judge or in the order dated 30.06.2006 of the Tribunal."

The Division Bench however dismissed the matter as also other

pending applications. It is against this that the present appeal has been

filed.

11. Learned senior counsel Shri Ashok H. Desai urged before us that he

had no difficulty with the direction of the Division Bench to the Tribunal for

disposing of the matter. He, however, raised a serious dispute regarding

the direction passed by the Tribunal by way of an interim award whereby a

direction was given to pay Rs.30,000/- per month to the second

respondent. The learned senior counsel also pointed out that an employee

earning Rs.58,330/- per month could not be called a `workman' within the

definition of the term in Industrial Disputes Act, 1947. The learned senior

counsel further pointed out that as per the contract of service the second

respondent was already paid full compensation amounting to almost Rs.9

lakhs which she had accepted without demur and, thus, there was no

justification in passing an interim award directing payment of Rs.30,000/-

per month to her. Learned counsel also argued on merits that the learned

Single Judge erred in holding that the Bank could not question the propriety

of the Reference made by the first respondent. As against this Smt.

Manju Saxena who appeared in person argued that there would be no 6

question of denying the reinstatement to her, particularly, in view of the

interim award passed and if the Bank was not in a position to reinstate her,

the Bank was bound to pay Rs.30,000/- per month as ordered by the

Tribunal in lieu of reinstatement. Smt. Saxena further argued that the Bank

was deliberately depriving her of legal dues.

12. On a careful consideration of the contentions raised herein we are of

the clear opinion that it will be futile at this stage to go into the question

regarding the status of the employee as the same is pending before the

Tribunal and the trial in the Tribunal is complete. We would not therefore

go, at this stage, into the question as to whether the learned Single Judge

and the Division Bench were right in continuing the proceedings before the

Tribunal. We must note, at this juncture, that the appellant Bank is taking

part in the trial before the Tribunal. Everything would, therefore, depend

upon the verdict of the Tribunal. The question is, however, of the interim

award and the directions given thereunder.

13. We do not see any reason to stay the interim award, particularly

because of the detailed reasons given in support thereof by the Tribunal.

However, learned senior counsel expressed his apprehension that in case

the verdict goes against the second respondent regarding her status as a

workman then it would be very difficult for the appellant to recover the

amounts paid by way of the interim award. There can be no dispute that

the payment of Rs.30,000/- per month as ordered by the Tribunal would

amount to almost Rs.9 lakhs. The apprehension of the learned counsel is 7

not altogether unjustified. However, the fact remains that in the interim

award itself, the Tribunal has secured the interests of the appellant by

ordering that in case the final award goes against the second respondent

still the amount paid to her by way of interim award could be adjusted

against the retiral benefits which she is entitled to receive. We have

specifically put this to the learned senior counsel Shri Ashok H. Desai,

appearing on behalf of the appellant as to how much amount would be

receiveable by the respondent by way of her retiral benefits. The learned

counsel very frankly put the whole account before us.

14. Considering the overall situation, we are of the opinion that the

amount of Rs.8 lakhs should be payable to the second respondent by way

of arrears. She would also continue to get the amount of Rs.30,000/- per

month till the award is finally decided by the Tribunal. This amount shall be

adjustable against the amount receivable by her by way of retiral benefits in

case the award goes against her. We also request the Tribunal to dispose

of the proceedings, if not already disposed of by now, within two months

from the date when the orders reach the Tribunal. We make it clear that

we have not expressed anything in respect of the merits of the award or the

status of the second respondent. The Tribunal shall decide the question

regarding status on merits without being influenced by this judgment or for

that matter any other judgment including the interim award. 8

15. With these directions we dispose of this appeal. The payment shall

be made within six weeks from the date of judgment.

...................................J. [TARUN CHATTERJEE]

...................................J. [V.S. SIRPURKAR]

NEW DELHI MARCH 18, 2009 9