IN THE HIGH COURT OF JUDICATURE AT MADRAS
The Honourable Mr. Justice K.P. SIVASUBRAMANIAM
Writ Petition No.3923 of 1997
All India Overseas Bank
rep., by its
764, Anna Salai,
Madras - 600 002. .. Petitioner
1. Indian Overseas Bank,
rep. by its Chairman
and Managing Director,
763, Anna Salai,
Madras - 600 002.
2. The Presiding Officer,
High Court Buildings,
Madras - 600 104. .. Respondents
Petition filed under Article 226 of the Constitution of India
praying for the issue of a Writ of Certiorarified Mandamus as stated therein.
For petitioner: Mr. C.R. Chandrasekaran
For respondents: Mr. S. Kanniah for R1
The petitioner is the All India Overseas Bank Employees' Association seeking for a Writ of Certiorarified Mandamus to quash the award dated 29.3.1996 of the second respondent/Industrial Tribunal in I.D.No.81/93 and to direct the first respondent to pay subsistence allowance to the workmen under suspension as they had been paying earlier to 2 1.1.1988. All India Overseas Bank vs Indian Overseas Bank on 22 April, 2004
2. The union raised a dispute in 1991 in respect of entitlement to usual increment during the period of suspension of its members. The dispute arose as a result of the bank stopping the grant of increments to the workmen under suspension.
3. According to the petitioner/Union, they are entitled to increments in terms of para 557 of the
Sastri Award and as endorsed in para 1 7.14 of the Desai Award and the Bipartite Settlement dated 8.9.1993 entered into between the Management and the National Confederation of Bank Employees to which the petitioner/Union is affiliated.
4. The following issue was raised for adjudication before the Tribunal:
Whether the action of the Management/the Indian Overseas Bank in discontinuing the practice of including increments for the purpose of calculating the subsistence allowance during suspension period in respect of their workmen is justified? If not, to what relief they are entitled?
5. Earlier, the petitioner/Union had filed a Writ Petition No.3080 of 1998 challenging the Circular
dated 21.1.1988 depriving the benefits to the employees. The said Writ Petition was withdrawn on the legal advice on the ground that an industrial dispute has been raised. Hence, the said Writ Petition was dismissed as withdrawn. The petitioner/Union contends that in terms of the provisions as aforesaid in Sastri Award and Desai Award and the consequent Bipartite Settlement, it was clear that the workmen were entitled to be paid a particular percentage of pay and allowances during the period of suspension as subsistence allowance. The petitioner/Union contends that the provisions are unambiguous. It is also submitted that even otherwise, the long practice of the employer was to give credit to the increments falling due even during the period of suspension and it has acquired a long established practice.
6. However, the Labour Court on an erroneous assumption had denied the benefits and hence the above Writ Petition.
7. In the counter filed by the bank, it is stated that the bank received a guideline from the Indian Banks' Association (IBA) to the effect that the banks have to reckon increments which accrue during the period of suspension for the calculation of subsistence allowance keeping in view the provisions of the Awards/Bipartite Settlements. On the basis of the said decision of IBA, a circular was issued on 4.4.1998 whereunder operational instructions were given to all the branches to reckon annual increments during the period of suspension. It was also clearly stated that the above decision will operate prospectively in respect of the staff who were under suspension as on the date of the circular dated 17.2.1998.
8. It is further stated that the bank was guided earlier by a letter of IBA dated 5.2.1987 whereunder the bank was advised that if the normal date of annual increment of a suspended employee falls during the period of his suspension, then the annual increment should be reckoned for the purpose of calculation of subsistence allowance from that date. However, as stated earlier, the said circular has been modified from 17.2.1998 and hence the Writ Petition has become infructuous. It is further stated that the policy implemented during the impugned period was justified considering that an employee under suspension cannot be treated to be in service. It was a policy decision and hence, cannot be assailed in a dispute. The Industrial Tribunal, therefore, came to the correct conclusion that the employees cannot seek benefit of increments during the period of suspension as a matter of right.
9. Learned counsel for the petitioner, after referring to the relevant provisions in Sastri Award,
Desai Award and Bipartite Settlement, contends that the rights of parties were governed by such awards and settlement and that it is not open to the Management to contend that a person under suspension is deemed to be not in service, and hence not entitled to increments. Learned counsel further refers to the judgment of a Division Bench of Madhya Pradesh High Court in Madhav Anant Rao Gore and State Bank of India, Bhopal and others [1986 (II) LLJ 394]. In that case also, the effect of and interpretation of Clause 17 of Desai Award arose for consideration. The Division Bench held that the employee under suspension was entitled to increments and allowances after one year in terms of Clause 17 of Desai Award. The said judgment was directly applicable to the issue on hand. The learned counsel also refers to the counter affidavit filed in W.P. No.11799 of 1991 filed by the IBA and another. In that case also, the same issue arose for consideration. In Paragraph 8 of the counter, after extracting the provisions under the Sastri Award, the respondent had stated as follows:
"In fact the workmen/employees who are placed under suspension would be entitled for calculation of subsistence allowance reckoning the increments that would fall during the period of suspension".
10. The learned counsel for the petitioner further contends that the agreements/settlements envisaged a clear and executable right in favour of the employees and hence the Industrial Tribunal was in error in holding that the annual increment during the period of suspension cannot be reckoned for calculating subsistence allowance.
To read the full judgement, find the enclosed attachment