STATE BANK OF INDIA versus WORKMEN OF STATE BANK OF INDIA AND ANR.

Citation: [1990] SUPP. 1 S.C.R. 11 · Decided: 24-08-1990 · Supreme Court of India · Bench: P.B. SAWANT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

STATE BANK OF INDIA 
v. 
WORKMEN OF STATE BANK OF INDIA AND ANR. 
AUGUST 24, 1990 
[P.B. SAWANT AND K. RAMASWAMY, JJ.] 
Industrial Disputes Act, 1947: Sections 2(oo) and 25F-Bank 
clerk-Charged with misconduct-Issued notice and enquiry held-
Para 52I(IO)(a) Shastri Award-Discharged on payment of one 
month's pay in lieu of notice-Held discharge-Punitive in character-
Not amounting to 'retrenchment'. 
All India Tribunal (Bank Disputes) Award-Shastri Award-
Paragraphs 52 I(5)(c) and 52 I ( IO)(c)-Punitive discharge a11d dis-
charge simpliciter-Distinction between-Predominant object of the 
Award-To protect employees. 
The appellant Bank instituted a departmental inquiry against one 
of its employees, a clerk in one of its branches. The departmental 
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inquiry was held for four acts of misconduct and the inquiry officer 
came to the conclusion that two of the charges were fully proved, while 
one charge was proved to a limited extent, and the fonrth charge was 
A 
B 
c 
D 
not established. On the basis of tl!e report of the inquiry officer, !he 
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competent authority decided to dismiss the employee from service, and 
issued a notice to him under paragraph 52I(IO)(a) of the Award of the 
All India Industrial Tribunal popularly known as the Shastri Award, 
requiring him to show-cause as to why the said punishment should not 
be imposed on him. He was also given a hearing as required by the said 
provision, and thereafter an order was passed to the effect: that the 
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established charges viz. uttering indecent words, threatening the 
agent, and failure to do the work allotted are quite serious and would 
warrant dismissal, though he may not be dismissed, in view of the 
extenuating circumstances, but that at the same time it would not be 
desirable to retain him in the Bank's service, and that as such, "he be 
discharged on payment of one month's pay and allowances in lieu of 
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notice. In terms of para 52l(IO)(c) of the Shastri Award this would not 
amount to disciplinary action." 
An industrial dispute was raised by the first respondent-Union, 
and it was referred to the Central Government Labour Court, for 
" 
adjudication and by its award the Labour Court upheld the order of 
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dismissal. 
II 
A 
b 
E 
H 
12 
SUPREME COURT REPORTS 
[1990] Supp. l S.C.R. 
The first respondent-Union preferred a writ petition to the High 
Cotirt arid raised several contentions, but the High Court confined its 
decision only to oiie point, viz. whether the termination of the serVice 
Was retrefichment, and whether it was made in accordance with the 
provisions of Section 25F of the Industrial Disputes Act, 1947; held that 
the termination of the service of the second respondent was retrench-
ment within the meaning of section 2(00), and was made in breach of the 
statutory provision contained in Section 25F in as much as no retrench-
ment compensation was paid to the employee, and set aside, the order of 
termination of service. 
In the appeal by the Bank to this Court, the question for consid-
eration was: whether the order of termination of service served on the 
employee, llmoonts to punishment or not. 
Allowing the appeal, this Court, 
HELD: I. It is not possible to sustain the view taken by the High 
Court since it proceeds on too literal an interpretation of the provisions 
of paragraphs 521(-S)(e) and 52J(JO)(c) of the Award and ignoring their 
context. [17BJ 
2. The termination of service of the employee in the instant case 
under paragraph 521(10)(c) of the Award is as a result of the discip-
linary proceedings, and is punitive. It is, therefore, not "retrench-
ment" within the meaning of Section 2(oo) of the Industrial Disputes 
Act, 1947. Hence, there was no questiou of complyiug with the provi-
sions of Section 25F of the Act. The decision of the High Court has, 
therefore, to be set aside. [25G-H; 26A) 
3. It is clear from the context in which sub-clause (e) of sub-para 
(5) occurs that the entite expression, namely, "have his misconduct 
condoned and be merely discharged" has nothing but penal implica-
tions, and the measure mentioned therein is a sequal to the disciplinary 
action taken for one of the gross misconducts mentioned in sub-para 
(4). His not possible to arrive at any other conclusion on a reading of 
the sub-paragraph as a whole. The discharge spoken of there is nothing 
but a punishment for a gross misconduct. This is so not only because it 
is enumerated as· one of the punishments along with others but al
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