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KARUR VYSYA BANK LIMITED versus KARUR VYSYA BANK

High Court of Madras

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Karur Vysya Bank Limited v. Karur Vysya Bank - WRIT APPEAL No.299 of 2005 [2007] RD-TN 924 (13 March 2007)

IN THE HIGH COURT OF JUDICATURE AT MADRAS



DATED: 13.03.2007

CORAM

THE HONOURABLE MR. JUSTICE P. SATHASIVAM

AND

THE HONOURABLE MR. JUSTICE N. PAUL VASANTHAKUMAR WRIT APPEAL No.299 of 2005

and

WAMP. Nos.547 of 2005 & 940 of 2006

The Karur Vysya Bank Limited

rep. by the Asst. General Manager (Personnel)

Central Office

Karur 639 001. ..Appellant Vs

1. The Karur Vysya Bank

Employees' Union

rep. by its General Secretary

149

Thambu Chetty Street

Chennai 600 001.

2. Government of India

Ministry of Labour

New Delhi. ..Respondents Writ Appeal filed under Clause 15 of the Letters Patent against the order of the learned single Judge made in W.P.No.2287 of 2000, dated 17.01.2005. For appellant : Mr. V. Karthik

For respondents : Mr. D. Hariparanthaman for R.1 Mr. P. Wilson, Asst. Solicitor General for R.2 J U D G M E N T



(Judgment of the Court, delivered by P. SATHASIVAM,J.)

Aggrieved by the order of the learned single Judge, dated 17.01.2005, made in W.P.No.2287 of 2000, the Karur Vysya Bank Limited, Karur, has filed the above appeal.

2. The case of the appellant is briefly stated hereunder: It is a Banking Company having its Head office in Karur with Branches throughout the country. It grants various types of loan including jewel loan. In the matter of granting of jewel loan, the borrower tenders gold jewel as security and against the pledge of the jewel, loan is granted. Before granting the loan, in order to verify the genuineness of the gold, the Bank engages the services of Jewel Appraiser, who appraises the value of the jewel and gives certificate. Based on the value of the jewel as assessed by Jewel Appraisers, loan is sanctioned. These Jewel Appraisers are not required to observe any fixed working hours. However, they should make themselves available during the course of business hours. They are paid charges for their services at 30 paise per Rs.100/- of loan sanctioned. The remuneration for service is collected from the borrower and paid to the Jewel Appraisers. The Jewel Appraisers are free to carry out their avocation, the only restriction being that they should not act as Jewel Appraiser for any other Bank or financial institutions. In the letters of engagement issued to the Jewel Appraisers, it is made clear that they are not employees of the Bank. The officers of the appellant Bank do not exercise any control or supervision as to the manner in which the Jewel Appraisers should carry out their work. Their engagement is purely for rendering professional service like that of Lawyer or Engineer or Auditor.

3. The volume of work of the Jewel Appraisers will vary from Branch to Branch and from day to day. There is no scope to provide sustained work to the Jewel Appraisers for the whole of normal working hours. At the time of engagement, there was no qualification or age restriction prescribed for them. They are not required to do any work other than appraising jewel.

4. On 23.07.1997, the first respondent - Karur Vysya Bank Employees Union raised an industrial dispute seeking regularisation of the services of Jewel Appraisers. The appellant Bank sent its reply on 10.11.1997, stating that the Jewel Appraisers cannot be absorbed in the services of the Bank. On consideration of the materials placed, the Government of India, Ministry of Labour, passed an order dated 22.01.1999, declining to refer the dispute for adjudication on the ground that, as per the decision of the Supreme Court in Management of Puri Urban Co.op. Bank vs. Madhusudan Sahu [1992 (2) LLJ 6], Jewel Appraisers are not workmen and hence, no industrial dispute could be raised on their behalf.

5. The first respondent Union challenged the order of the Government of India dated 22.01.1999 in W.P.No.2287 of 2000. By the impugned order dated 17.01.2005, the learned single Judge held that the judgment of the Supreme Court reported in Management of Puri Urban Co.op. Bank vs. Madhusudan Sahu (AIR 1992 SC 1452 = 1992 (2) LLJ 6) is not attracted to the case and that only on evidence it could be decided as to the nature of the duties discharged by the Jewel Appraisers and directed the second respondent to refer the dispute raised by the first respondent Union to appropriate Court for adjudication within 30 days from the date of receipt of the order. The said order of the learned Judge is under challenge in the present appeal.

6. Heard Mr. V. Karthik, learned counsel for the appellant, Mr. D. Hariparanthaman, learned counsel for the Employees Union  first respondent and Mr. P. Wilson, learned Assistant Solicitor General for the second respondent.

7. In the impugned order of the Government of India, Ministry of Labour, dated 22.01.1999, it is stated that, in view of the decision of the Supreme Court in the case of Management of Puri Urban Co.op. Bank vs. Madhusudan Sahu (AIR 1992 SC 1452), wherein it is held that Jewel Appraisers are not workmen, no industrial dispute subsists, and accordingly, the request of the workmen for reference to the appropriate Court for adjudication was rejected. In Puri Urban Co.op. Bank case, the respondent Madhusudan Sahu was engaged as an appraiser by Puri Urban Cooperative Bank, the appellant before the Supreme Court. As an appraiser, his job was to be available in the Bank, when called, for performing the services of weighing and testing the gold ornaments offered to be pledged to the Bank to secure loans. It was stipulated in the advertisement that the appraiser's commission shall be 25 paise per hundred rupees of loan but in no case, the remuneration shall be less than Rs.2/- per appraisal. Further, his services were terminable at any time. His services were terminated by the Bank on August 27, 1979. He raised a dispute which was referred to the Labour Court. The Labour Court went into the matter and by award dated March 27, 1985, set aside the order of termination terming it as illegal and unjustified, with a direction for reinstatement in service. However, his claim for backwages was rejected. The appellant Bank as well as Sahu approached the Orissa High Court challenging the award of the Labour Court in so far as it had gone against their respective interests. The Orissa High Court affirmed the view of the Labour Court, which gave cause to the appellant Bank to move the Supreme Court. The Hon'ble Supreme Court, after analysing the factual and legal position, found that Sahu was engaged to weigh the ornaments brought into the Bank for pledging and to appraise their quality, purity and value. He could be directed to do this, but not the manner in which he should do it and it was left to him exclusively, as it depended on his skill, technique and experience. Besides, he did execute a bond indemnifying and holding himself responsible to the Bank for all his acts and commissions as an appraiser and to be accountable for the loss sustained by the Bank on account of undervaluation of the gold pledged with it. These terms inhered in the Bank the power to warn him and to remind him that he was not expected to be negligent in his duty. Still there was a fair element of freedom though coupled with responsibility, for Sahu in the manner in which he could do his work. After pointing out the above factual details, the Supreme Court concluded thus, " 7. Therefore, we are of the view that though Sahu claims to be a workman as commonly understood, he was not employed as such, so as to establish a master and servant relationship, which could warrant a re-union in the event of disruption, by the intervention of the Labour Court, as well as here, that Sahu is a reputed goldsmith and has remained gainfully employed so as to disentitle him to any back wages, which appealed to the Labour Court, has remained uncontroverted before us. It also remains uncontroverted before us that the Bank has, on its approved list, other such like appraisers and it is not obligatory for the Bank to allot work to Sahu or any other, at all. Additionally in no event can he ask for work, or periodic remuneration or idling wages. These particulars, not by themselves, but in the totality of circumstance indicate lack of master and servant relationship. In view of these jurisdictional facts as gathered by us, it is difficult to uphold the view of the High Court and that of the Labour Court that any master and servant relationship stood established in engaging Sahu as an appraiser of ornaments. " It is clear from the said decision that based on the terms and conditions as found in the advertisement and totality of circumstances, the Supreme Court held that in the case of Sahu, master and servant relationship did not exist.

8. The learned counsel for the appellant Bank also relied on a recent judgment of the Supreme Court in the case of General Manager, Indian Overseas Bank vs. Workmen, All India Overseas Bank Employees Union reported in 2006 (3) SCC 729. The question in that case was as to whether the Appraisers of jewels for loans are to be treated as workers and absorbed as part time clerical staff of the Bank. The stand of the appellant  Indian Overseas Bank was that the Jewel Appraisers are not employees of the Bank and do not do any substantial work. The Hon'ble Supreme Court, after finding that the case of Jewel Appraisers for loans in Indian Overseas Bank is not governed by the decision in Indian Bank case [ 1990 (1) LLJ 50 ] and that the Jewel Appraisers are not employees of the Bank, set aside the orders of the Tribunal, single Judge and the Division Bench and ultimately, allowed the appeal of the Indian Overseas Bank.

9. Mr. V. Karthik, learned counsel for the appellant - Bank, heavily relied on the decisions of the Supreme Court in Puri Urban Co.operative Bank case and Indian Overseas Bank case (cited supra) and submitted that inasmuch as the Jewel Appraisers in Karur Vysya Bank are not employees of the Bank, the Central Government is fully justified in declining their request for reference and the learned single Judge committed an error in directing the Government of India, Ministry of Labour, to refer the dispute, viz., whether the Jewel Appraisers of the Union of the Karur Vysya Bank have a right to be regularised or not, to the appropriate Court for adjudication.

10. Before going into the terms and conditions applicable to the Jewel Appraisers for gold loan, it is useful to refer to the Division Bench decision of this Court reported in 1988 I LLJ 177 (M/s. Shaw Wallace & Co. Ltd., vs. State of Tamil Nadu rep. by the Commissioner and Secretary, Labour Department and others), wherein, the Division Bench, after analysing various decisions of the Supreme Court, formulated the following principles on the question as to whether the appropriate Government has the discretion to decide whether a reference should be made or not even in the cases where industrial dispute exists or is apprehended. "(1) The Government would normally refer the dispute for adjudication. (2)The Government may refuse to make reference, if (a) the claim is very stale;

(b) the claim is opposed to the provisions of the Act; (c) the claim is inconsistent with any agreement between the parties; (d) the claim is patently frivolous;

(e) the impact of the claim on the general relations between the employer and the employees in the region is likely to be adverse; (f) the person concerned is not a workman as defined by the Act; (3) The Government should not act on irrelevant and extraneous considerations; (4)The Government should act honestly and bona fide; (5)The Government should not embark on adjudication of the dispute; and (6)The Government should not refuse reference on the ground that domestic enquiry was fairly and properly held and punishment awarded was appropriate."

11. Mr. D.Hariparanthaman, learned counsel for the first respondent - Union, took us through various details as to the nature of duties and responsibilities being performed by the Jewel Appraisers employed by the appellant Bank. Those details are available in the affidavit filed in support of the writ petition, and the main prayer is to quash the order of the Central Government declining to refer the dispute for adjudication. It is pointed out that the nature of duties performed by the Jewel Appraisers would clearly establish that they are workmen within the meaning of Section 2 (s) of the Industrial Disputes Act, 1947 (in short "I.D. Act"). As rightly pointed out, the second respondent, Government of India, Ministry of Labour, failed to see, whether a person is a workman or not is a question of fact and it has to be decided by the Labour Court or Industrial Tribunal, based on oral evidence. Further, whether the judgment of the Apex Court rendered in Puri Co.operative Bank (cited supra) is applicable to the case on hand or not (Karur Vysya Bank) could be decided only after ascertaining whether the nature of duties performed by the Jewel Appraisers in both the cases is one and the same based on oral and documentary evidence by way of adjudication. The learned Judge has rightly held that the applicability of the said judgment could be found out on the basis of evidence as to the nature of duties performed by the Jewel Appraisers employed by the appellant Bank. It is also relevant to note that since the nature of duties performed by the Jewel Appraisers is disputed by the appellant and inasmuch as the disputed questions of fact cannot be decided by the second respondent while exercising administrative powers, the same can be decided only by competent Industrial Tribunal or Labour Court as the decision on such disputed question would amount to adjudication. As rightly pointed out, there is no error or infirmity in the order of the learned single Judge in setting aside the order of the second respondent.

12. It is also brought to our notice that, while declining reference in the case on hand, the very same second respondent has referred the dispute raised by another Union demanding absorption of Jewel Appraisers in the same appellant Bank. Mr. D. Hariparanthaman has placed reliance on the copy of order of the second respondent dated 29.04.2003, wherein the dispute "whether the demand of the All India Bank Appraisers Federation, Tamil Nadu to regularize the services of Jewel Appraisers in the Karur Vysya Bank Ltd., is legal and justified? If so, what relief the workmen are entitled to?" The said order shows that the Central Government, after satisfying itself, referred the said dispute for adjudication to the Industrial Tribunal cum Labour Court, Chennai, and further directed that the Tribunal shall give its award within a period of three months. It is clear that, at the instance of another Union, an identical dispute was referred for adjudication by the Central Government. Mr. D. Hariparanthaman has also pointed out that the second respondent issued reference in the case of Jewel Appraisers employed by various Central Government, private and grameen Banks and that all the references are pending adjudication before the Central Government Industrial Tribunal, Chennai, vide I.D.No.102 of 2003.

13. In Hindustan Steel Works Construction Ltd., vs. Employees Union (2005 (6) SCC 725), the Hon'ble Supreme Court has held that, whether any particular practice, allowance or concession had become a condition of service under Section 9-A of the Industrial Disputes Act would always depend upon the facts and circumstances of each case and no general rule can be laid down.

14. In Telco Convoy Drivers Mazdoor Sangh and another vs. State of Bihar and others (1989 (II) LLJ 558), the Hon'ble Supreme Court made it clear that appropriate Government cannot adjudicate the dispute on merits and held that the question whether the Convoy Drivers are workmen or not is an issue to be referred for adjudication. The Supreme Court further held that the Government should be very slow to attempt an examination of the demand with a view to declining reference and Courts will always be vigilant whenever the Government attempts to usurp the powers of the Tribunal for adjudication of valid disputes, and to allow the Government to do so would be to render Section 10 and 12 (5) of the Act nugatory.

15. In Sharad Kumar vs. Government of NCT of Delhi and others (2002 (4) SCC 490), the Supreme Court has observed that in order to come within the meaning of the expression "workman" in Section 2(s) of Industrial Disputes Act, the person has to be discharging any one of the types of works enumerated in the first portion of the section. It has further held that the question whether the person concerned comes within the first part of the section depends upon the nature of duties assigned to him and/or discharged by him. Ultimately, in para-31, Their Lordships have held that the determination of such question requires examination of factual matters for which materials including oral evidence will have to be considered. In such a matter, the State Government could not arrogate on to itself the power to adjudicate on the question and hold that the respondent was not a workman within the meaning of Section 2 (s) of the Industrial Disputes Act, thereby terminating the proceedings prematurely. Such a matter should be decided by the Industrial Tribunal or the Labour Court on the basis of materials to be placed before it by the parties. After finding so, the Supreme Court concluded that the rejection order passed by the State Government is clearly erroneous and the order passed by the High Court maintaining the same is unsustainable.

16. In Air India Ltd. vs. Vishal Capper (2005 (13) SCC 42), after accepting the stand of the workmen, the Hon'ble Supreme Court formulated the disputes and directed the appropriate Government to refer the questions framed by them for adjudication by appropriate Tribunal.

17. In Cheran Transport Employees Union, Coimbatore vs. Government of Tamil Nadu (1999 (3) LLN 294), one of us (P.Sathasivam, J.), after considering the relevant provisions of the Industrial Disputes Act, various decisions of the Supreme Court including TELCO Convoy Driver case (1989 (2) LLN 718) and the principles laid down in Shaw Wallace Company Ltd., vs. State of Tamil Nadu (1988 (1) LLN 172) and after finding that whether the appraiser is a workman or not cannot be decided by the Government and it has to be decided only by the Industrial Tribunal by way of adjudication, allowed all the writ petitions filed by Cheran Transport Employees Union, Coimbatore.

18. In Sudalai Andi M. vs. Government of India (2006 (3) LLJ 679), one of us (N. Paul Vasanthakumar, J.), taking note of the principles laid down in TELCO Convoy Driver case (1989 (2) LLN 718) and Shaw Wallace Company Ltd., vs. State of Tamil Nadu (1988 (1) LLN 172) has concluded that the Government of India is bound to refer the dispute raised by the respective petitioners/workmen as the disputes cannot be adjudicated by the Government on merits. It was further held that whether the petitioners are entitled to adjudication of disputes in their favour or not is to be decided only by the Industrial Tribunal and not by the Government of India. Both the above mentioned decisions in Cheran Transport Employees Union, Coimbatore vs. Government of Tamil Nadu and Sudalai Andi M. vs. Government of India ( by P. Sathasivam,J. and N. Paul Vasanthakumar,J.) are in consonance with the principles laid down by the Supreme Court and the Division Bench of this Court.

19. As mentioned earlier, the particulars furnished in the affidavit filed in support of the writ petition before the learned Judge show that the jewel loan is granted to the customers everyday except Sundays and holidays. Thus, the jewel loan is given throughout the year and on all working days. The Jewel Appraisers will have to report for duty every day and they will have to be present throughout the banking hours. They cannot take leave without prior permission of the Bank. Before sanctioning/granting of every jewel loan, the quality and weight of the jewel to be pledged will be necessarily assessed and weighed by the Jewel Appraisers. The Jewel Appraisers alone are ensuring the quality of jewels and protecting the interest of the Bank from being cheated, resulting in loss. The appraisal work, viz., assessment and weighment, have to be done in the Bank premises in the presence of the Bank officials. Apart from this, the appraisers have to fill up the jewel loan application, write the name and address of the customers, description, quality and weighment of jewel and they also have to get the signatures of the customers in the loan application. After sanctioning of jewel loan, the Jewel Appraiser will open ledger for each customer and will make necessary entries of loan. The Jewel Appraisers have to prepare monthly statement/figures relating to jewel loan. Further, they have to calculate the interest of jewel loan for each customer and record the same in the ledger. Similarly, on repayment of jewel loan together with interest, the Jewel Appraisers will make entries in the ledger. They have to prepare a defaulters' list and after preparation of such list they will make arrangements to send individual auction notice to defaulting customers. They will prepare details of jewel loan verification report mentioning several details. It is their claim that they are workmen doing appraisal, clerical and other banking activities directly under the control and supervision of the Bank. Further, the Bank collects Rs.10,000/- as security deposit from each Jewel Appraiser and they are paid salary at the end of the month and if they are absent, the salary is deducted proportionately. By pointing out those averments it is asserted that the work being done by the Jewel Appraisers is continuous, permanent and perennial throughout the day and throughout the year without which the advancing of jewel loan is not possible. Though the Bank filed a counter affidavit disputing the claim of the appraisers, as pointed out in the above mentioned decisions, these details cannot be gone into by the Government as an adjudicating authority and it is for the appropriate Industrial Tribunal/Labour Court to arrive at such conclusion based on the materials.

20. It is brought to our notice that in Indian Bank, a Scheme of service conditions for Jewel Appraisers was framed. When similar dispute was raised by the appraisers of the Indian Bank, the same was referred to Industrial Tribunal, Madras, as I.D.No.25 of 1977 and the Tribunal by award dated 03.12.1979, held that the appraisers employed by the management-Bank (Indian Bank) are entitled to wages and other conditions of service applicable to regular clerical "Award Staff" as part-time employees of the Bank and they are entitled to such proportionate wages and benefits as enjoyed by the clerical staff with effect from 01.04.1977. When the said award was challenged by the Bank, learned single Judge of this court in W.P.No.9206 of 1983 by order dated 14.12.1986 upheld the award and dismissed writ petition filed by the Bank. The said order was confirmed by the Division Bench in W.A.Nos.330 and 350 of 1986 on 03.05.1990. The said order of the Division Bench was confirmed by the Supreme Court in Special Leave Petition No.10054 (s) of 1990 by order dated 10.10.1990. It was brought to our notice that in the minutes of discussion between all Banks Appraisers Federation and the management of Karur Vysya Bank with regard to subject 17, viz., 'regular employment to all the appraisers', it was agreed that "the case in respect of the issue filed by the Indian Bank is pending in the High Court of Madras. The matter will be discussed after the judgment of the High Court". The above conclusion was arrived at in the joint discussion held between Karur Vysya Bank Management and Karur Vysya Bank Employees Union on 15.05.1985 and 16.05.1985. We have already referred to the decision of the High Court and the Supreme Court, confirming the award of the Industrial Tribunal and dismissing the stand taken by the Indian Bank. In those circumstances and in the light of the abundant factual details, we are of the view that the conclusion arrived at by the Supreme Court in Puri Co.operative Bank and Indian overseas Bank (cited supra) is not applicable to the case on hand. We make it clear that we have not expressed any definite conclusion as to the claim of the employees Union or the stand taken by the Bank. However, as pointed out earlier, all the above mentioned factual details have to be agitated before appropriate Industrial Tribunal or Labour Court, whereupon, a final decision is to be arrived at by the Tribunal/Court. We make it clear that only by proper adjudication by the concerned Tribunal or Labour Court, it could be ascertained as to what is the duty of appraisers herein and its nature, and whether the duties discharged by them are similar to that of Jewel Appraisers concerned in Puri Urban Co.operative Bank (cited supra) as relied on by the Central Government. Though the order of the learned single Judge is very brief, we are satisfied that his ultimate conclusion cannot be faulted with and we are in entire agreement with the same.

21. Under these circumstance, we do not find any merit in the appeal filed by the Bank and consequently, the same is dismissed. In view of the dismissal of the appeal of the Bank, the second respondent - Government of India, Ministry of Labour, New Delhi, is directed to refer the dispute, viz., whether the Jewel Appraisers of the appellant Bank have a right to be regularised or not, to the appropriate Court for adjudication within a period of 30 days from the date of receipt of a copy of this order. The writ appeal is dismissed with the above direction. No costs. Consequently, connected miscellaneous petitions are also dismissed. kh

To

Government of India

Ministry of Labour

New Delhi.

[PRV/9873]


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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