State Bank Of Bikaner vs Balai Chander Sen on 14 August, 1963

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 516 of 1963

Decision Date: 14 August, 1963

Coram: K.N. Wanchoo, P.B. Gajendragadkar, K.C. Das Gupta

In this matter, the Supreme Court of India recorded that the case was titled State Bank of Bikaner versus Balai Chander Sen and that the judgment was delivered on 14 August 1963. The decision was authored by Justice K.N. Wanchoo, who was joined by Justices P.B. Gajendragadkar and K.C. Das Gupta. The petitioner was the State Bank of Bikaner and the respondent was Balai Chander Sen. The citation of the decision appeared as 1964 AIR 732 and 1964 SCR (4) 703. The dispute concerned an application for approval of a discharge under section 33(2)(b) of the Industrial Disputes Act, 1947, and the Court was required to examine the validity of that application when it was made before the discharge was effected.

The factual background, as set out in the headnote, showed that the respondent was employed by the bank as an assistant cashier. He received a sum of Rs 4,100 but denied the receipt of that amount and asserted that he had been paid only Rs 4,000. On the basis of his denial, the bank suspended him and prepared a charge‑sheet alleging that he had given false statements to the manager. An enquiry was subsequently conducted. The enquiry officer concluded that the charges against the respondent were proved and recommended that the bank terminate his employment. The bank accepted this recommendation and intended to issue an order of discharge. Before the actual order of discharge could be signed, the bank filed an application under section 33(2)(b) of the Industrial Disputes Act seeking approval for the proposed discharge. The respondent was, nevertheless, discharged after the application had been filed. The Central Government Labour Court at Dhanbad declined to approve the bank’s action, relying on the precedent set in Strawboard Manufacturing Co. v. Govind, which required that approval be sought only after the discharge had taken place.

The Court held three key points. First, it ruled that under section 33(2)(b) it was irrelevant whether the approval application was lodged before or after the actual discharge order; the timing did not affect the application’s validity. Second, it explained that the Strawboard Manufacturing Co. case permitted an application to be made after the employer had taken the action, provided that three conditions laid down in the proviso to section 33(2)(b) were satisfied: the employee must have been dismissed or discharged, the employee’s wages must have been paid, and the application must be part of the same transaction as the discharge. Third, the Court observed that there was no principle preventing an employer from making the approval application before the discharge, as long as the statutory conditions were fulfilled.

The judgment was rendered in a civil appellate jurisdiction as Civil Appeal No. 516 of 1963, filed by special leave against the order dated 20 September 1962 of the Central Government Labour Court at Dhanbad, which related to Application No. L.C. 113 of 1962. Counsel for the appellant included B. Sen, I. B. Dadachanji, O. C. Mathur and Ravinder Narain, while counsel for the respondent was Janardan Sharma. The judgment was delivered on 14 August 1963 by Justice Wanchoo. The Court noted that the appeal arose from the order of the Labour Court and that the respondent had been employed in the bank’s Calcutta branch as an assistant cashier. The record further indicated that on 17 June 1961, one

Shankerlal applied for a telegraphic transfer of four thousand rupees from Calcutta to Sujangarh and handed the respondent a bundle of one‑hundred‑rupee notes as payment. While the respondent was counting the notes, Shankerlal realized that he had given forty‑one notes instead of the required forty and asked the respondent to return the bundle for verification. The respondent refused to return the notes, insisting that the amount handed over was exactly four thousand rupees and not four thousand one hundred rupees. Shankerlal then returned to his shop, counted the notes himself and confirmed that he had indeed handed over one extra one‑hundred‑rupee note in connection with the transfer. He proceeded back to the bank and lodged a formal complaint with the manager, explaining the discrepancy and requesting immediate investigation. The manager instructed the chief cashier to seal the cash that the respondent possessed and to reconcile the amount with the bank’s books. Upon examination, the chief cashier discovered that the respondent indeed held one extra one‑hundred‑rupee note beyond the amount recorded. The manager then asked the respondent to surrender the surplus note, but the respondent declined, claiming ownership of the note. He further asserted that the note had been given to him by his mother as a personal gift, and therefore he considered it his own property. To verify this claim, the manager dispatched the chief cashier together with another employee to the respondent’s residence for inquiry. At the respondent’s house, both his mother and father denied having given any one‑hundred‑rupee note to him at any time. The respondent was then informed of his parents’ statements and was asked to provide an alternative explanation for the source of the extra note. He subsequently claimed that a tenant named Mondal, who lived in the same building, had given him the note. The manager again sent the same two officials to locate Mondal, but they found no individual by that name residing in the building. Consequently, the bank resolved to initiate disciplinary proceedings, issued a charge‑sheet to the respondent, and suspended him from service. An enquiry was then conducted, and the enquiry officer concluded that both charges against the respondent were proved. After carefully considering the respondent’s past service record and overall conduct, the officer recommended that the respondent be discharged from the bank’s employment. In accordance with the bank’s rules, the respondent received a notice asking him to show cause why he should not be discharged. The respondent’s explanation was taken into account by the bank, and after reviewing it the bank ultimately decided to terminate his employment. Accordingly, on 27 December 1961, the bank filed an application under section 33(2)(b) of the Industrial Disputes Act, No. 14 of 1947, seeking approval of the proposed action against the respondent. It may be added that after this the bank’s case proceeded further, although the present passage concludes at this point.

In this case the bank had discharged the respondent on 15 January 1962 and had earlier filed an application under section 33(2)(b) of the Industrial Disputes Act, No 14 of 1947, seeking approval of the proposed discharge. The application was placed before the labour court. The labour court, relying on the decision of this Court in Strawboard Manufacturing Co. v. Gobind (1) [1962] SUPP. 3 S.C.R. 618, held that because the application was made for approval of a proposed discharge before the discharge actually occurred, the application was not maintainable and therefore dismissed the bank’s request for approval. The bank appealed that order by special leave. The principal argument of the appellant was that the labour court erred in holding the application non‑maintainable on the ground that it had been filed before the discharge was effected. The appellant contended that the labour court misunderstood the Strawboard Manufacturing Co. case and that this Court had never ruled that an application under section 33(2)(b) could not be filed after the employer had concluded an enquiry and decided on a punishment but before the punishment was actually imposed. The Court expressed the view that the appellant’s contention should prevail. The Court explained that the reasoning in Strawboard Manufacturing Co. (1) was that the requirement for approval had to be satisfied before the employer took action, and that this view had been rejected. In Strawboard Manufacturing Co., the employer had conducted an enquiry, decided to dismiss the employee, issued the dismissal order on 1 February 1960, and on the same day filed an application for approval. The tribunal held that the application had been filed after the dismissal and ought to have been filed before the dismissal; this Court later held that view to be incorrect. The Court clarified that section 33(2)(b) obliges the employer to accomplish three steps—dismissal or discharge, payment of wages, and filing of the application—as parts of a single transaction, but it did not say that an application filed after the enquiry but before actual discharge would be invalid. The Court observed that the provision does not prescribe that an application may be made only after the action has been taken. Consequently, the Court found no principle that barred an employer from applying for approval of a proposed action before that action is executed, and considered such a step to be more favorable to the employee.

In this case the Court observed that an employer may submit an application for approval of a proposed action before actually carrying out that action, and that such a step would actually be more advantageous to the employee and would not contravene the provisions of section 33(2)(b). Accordingly, the Court held that the labour court was incorrect in deciding that an employer’s application under section 33(2)(b) must be made after the contemplated action has been taken and that a pre‑emptive application is not maintainable. The Court explained that the decision in Strawboard Manufacturing Co. merely establishes that when an application is filed after the action, the three conditions enumerated in the proviso to section 33(2)(b) must be shown to form part of the same transaction. However, the Court emphasized that nothing in section 33(2)(b) prohibits an employer from applying for approval before the action is executed, and that such an application remains maintainable and consistent with the statute and its proviso. Consequently, the labour court’s view that the appellant’s application was not maintainable was rejected.

The Court then considered whether approval should be granted for the action proposed by the appellant bank. It was noted that the respondent was unable to appear before the labour court on the scheduled date because of illness, and that a medical certificate was submitted to substantiate this claim. Despite the respondent’s absence, the labour court proceeded with the hearing and dismissed the application on the ground of non‑maintainability. Counsel for the respondent prayed that the matter be remanded to the labour court so that the respondent could be given an opportunity to appear. The Court observed that the respondent had already filed a written statement in response to the bank’s application, in which he contested the factual basis of the order of discharge. Given that the dispute had been ongoing since 1961, the Court found no justification for a remand.

The appellant relied on the enquiry proceedings, copies of which were annexed to the application. The Court explained that, in assessing an application under section 33(2)(b), the tribunal’s task is to determine whether the employer conducted the enquiry properly and whether the action taken or proposed is genuine, not motivated by victimisation or an unfair labour practice. After reviewing the enquiry documents, the Court expressed the opinion that there was nothing in those papers to demonstrate that the

The Court examined the material presented and found no indication that the enquiry conducted by the employer had been improperly carried out. The Court also found no evidence to suggest that the respondent had been victimised or that the action proposed by the employer resulted from any unfair labour practice. The respondent, in his written statement, asserted that the enquiry amounted only to a pretence, that it had been conducted with a complete disregard for the rules of natural justice, and that he had suffered victimisation. However, beyond these broad allegations, the written statement failed to specify the particular ways in which the enquiry was unjust or to explain the manner in which the respondent claimed to have been victimised. After reviewing the enquiry documents and the submissions of the parties, the Court concluded that the enquiry was conducted in a fair and proper manner, adhering to the principles of natural justice, and that the respondent had been given a full opportunity to defend himself. Consequently, the Court was satisfied that there was no question of victimisation or any unfair labour practice having taken place. In light of these findings, the Court held that the approval sought by the appellant‑bank should be granted. Accordingly, the appeal was allowed, the order of the labour court was set aside, and the application of the appellant‑bank dated 27 December 1961 was approved, authorising the proposed action. The Court made no order as to costs, and the appeal was consequently allowed.