The Canara Bank Ltd vs Anant Narayan Surkund And Others

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

Court: Supreme Court of India

Case Number: Civil Appeals Nos. 787 and 731-752 of 1962

Decision Date: 22 April 1963

Coram: Wanchoo J

In the matter titled The Canara Bank Ltd versus Anant Narayan Surkund and Others, decided on 22 April 1963, the Supreme Court of India considered applications filed by the respondents, who were employees of the appellant bank, under section 33C(2) of the Industrial Disputes Act 1947. The respondents sought a special allowance that was permitted for cashiers who were in charge of cash, as prescribed in paragraph 164(b)(7) of the Sastry Award. Their claim rested on the assertion that each of them performed the functions of a cashier in charge of cash within the particular branch of the bank where they were employed. The Central Government Labour Court at Delhi had allowed the respondents’ claims. The appellant, Canara Bank Ltd, appealed to this Court by way of special leave. The appellant raised three principal contentions: first, that applications under section 330(2) of the Industrial Disputes Act were not maintainable and that the Labour Court therefore lacked jurisdiction; second, that the respondents worked in branches rather than in a pay office and consequently could not invoke paragraph 164(b)(7) of the Sastry Award; and third, that the respondents could not be described as cashiers in charge of cash at the branches because none of them exercised exclusive control over the cash, and each performed merely routine clerk duties despite handling cash.

The Court examined each contention and concluded that the applications filed under section 33C(2) were indeed maintainable, and that the Labour Court possessed the requisite jurisdiction to adjudicate them. The Court held that the respondents were entitled to the special allowance because they satisfied the criteria of being cashiers in charge of cash at the branches where they were posted. Paragraph 164(b)(7) of the Sastry Award, the Court observed, was applicable not only to pay offices but also to the branches of banks. The Court further clarified that the respondents were not merely routine clerks; their duties and responsibilities were of a higher order. Each respondent was solely responsible for the cash department of the respective branch, performing both receiving and paying functions. They assumed charge of the single lock‑box at the start of each working day and relinquished control of the lock‑box at the close of business. While routine clerks in a cash department might be designated as paying clerks, receiving clerks, or combined paying‑and‑receiving clerks, such personnel would not qualify for the allowance unless it could be demonstrated that they alone controlled the cash in the single lock‑box of that branch. The Court explained that such exclusive control could arise only where a single clerk performed both receiving and paying duties within the cash department of a branch. Consequently, the Court affirmed the Labour Court’s decision, recognizing the respondents as cashiers in charge of cash and granting them the special allowance under the Sastry Award.

When a cash department consisted of more than one employee, the allowance was granted only to the individual who was in sole charge of the cash, regardless of whether his title was Head Cashier or Assistant Cashier. The other clerks who performed either receiving duties, paying duties, or both, did not qualify for the allowance. This principle was affirmed in the decision of Central Bank of India v. P. S. Rajagopalan, Civil Appeal No. 823‑826 of 1962, dated 19 April 1963. The judgment was delivered by the Civil Appellate Jurisdiction of the Supreme Court and concerned Civil Appeals Nos. 787 and 731‑752 of 1962. The appeals were taken by special leave from orders dated 16 March 1962 and 14 February 1962 of the Central Government Labour Court at Delhi, arising in Labour Court As. Nos. 212 of 1962 and 869‑88 and 937‑945 of 1961 respectively. Counsel for the appellant in Civil Appeal No. 787 of 1962 comprised N. V. Phadke, S. N. Andley, Rameshwar Nath and P. L. Vohra, while counsel for the appellant in Civil Appeals Nos. 731‑752 of 1962 was S. N. Andley. For the respondent in Civil Appeal No. 787, the representatives were V. K. Krishna Menon, M. K. Ramamurthi, R. K. Garg, D. P. Singh and S. C. Agarwal. For the respondents in Civil Appeals Nos. 731‑752 of 1962, the advocates were A. V. Viswanatha Sastri, V. K. Krishna Menon, M. K. Ramamurthi, R. K. Garg, D. P. Singh and S. O. Agarwal. The judgment was pronounced on 22 April 1963 by Justice Wanchoo.

The appeals, taken together because they raised a common question, involved applications made by employees of Canara Industrial and Banking Syndicate Limited and Canara Bank Limited under section 33‑C(2) of the Industrial Disputes Act, 1947. The Labour Court had allowed those applications. The facts of Civil Appeal No. 787 were set out in detail. The respondent was a clerk employed by the bank at its Bandra branch, having been appointed in October 1953. He contended that he was entitled to a special allowance of Rs 15 per month that was payable to cashiers who were in charge of cash in pay offices, as prescribed by paragraph 164(b)(7) of the All India Industrial Tribunal (Bank Disputes) Award, commonly known as the Sastry award. The respondent asserted that he had functioned as the cashier in charge of cash at both the Worli and Bandra branches, stating that he alone handled the cash because no other employee assisted him. He performed both the receiving and paying functions and was solely responsible for the cash matters of the bank. Consequently, he claimed that the bank was required to pay him the special allowance of Rs 15 per month under the Sastry award, an amount which the bank had not disbursed. The respondent therefore prayed that the appropriate monetary benefit be calculated and that an order directing the bank to pay the said amount be issued.

In this case the respondent asked that the benefit he claimed be calculated in monetary terms and that an appropriate order be passed accordingly. The bank opposed the respondent’s claim on three principal grounds. First, it asserted that the application could not be entertained because it fell within the exclusion set out in section 33‑C (2) of the governing Act, and therefore the labour court lacked jurisdiction to hear the matter. Second, the bank contended that the respondent was employed at a branch rather than at a pay office, and consequently he was not eligible for any special allowance under paragraph 164(b)(7) of the Sastry award. Third, the bank maintained that, even assuming the respondent worked at a branch, he could not be described as a cashier in‑charge of cash at that branch, and thus he was not entitled to the allowance. The bank’s position was that none of its employees held sole responsibility for cash at any of its branches; therefore, the respondent, who was only a routine clerk despite handling cash, could not lay claim to the special allowance.

The tribunal examined the evidence concerning the duties performed by Shri A. N. Surkand, the respondent, and concluded that he performed the combined functions of receiving and paying cash. In reaching this conclusion, the tribunal relied on a decision rendered by Shri Jeejeebhoy in a reference arising out of Dev Karan Nanjee Banking Co. v. Workmen (1), which was decided under section 6 of the Industrial Disputes (Banking Companies) Decision Act, 1955. That decision held that a person who acted as the sole clerk in a branch and carried out both receipt and payment of cash was deemed to be in‑charge of the cash of that branch and, accordingly, was entitled to the special allowance provided for cashiers in‑charge of cash at pay offices. On the basis of this reasoning, the tribunal issued an order in favour of the respondent. The tribunal further noted that there was no doubt that the respondent, Anant Narayan Surkand, was the sole paying and receiving clerk at the bank’s branch and that no other clerk was employed in the cash department. The bank’s manual of instructions, which was produced as evidence, set out the precise procedure to be followed in handling cash. According to that manual, at the start of each day the bank’s strong‑room was opened by the Agent and a second key‑holder, both of whom held independent keys to a double‑lock system. An estimate of the day’s cash requirements was made and the necessary funds were withdrawn accordingly. The amount withdrawn was handed to the shroff, that is, the paying‑cum‑receiving clerk. The box containing the shroff’s overnight cash balance, which was secured by a single lock, was also removed from the strong‑room and delivered to the shroff, who was required to count the balance in the single‑lock box upon receipt in the morning. At the close of the day’s business, the Agent took over the cash held by the shroff, and the cash under the single lock was checked in the presence of the shroff. Any surplus cash was returned to the Agent, and all entries in the shroff’s cash book relating to sums taken out and placed in the double lock were initialed by the Agent. These instructions demonstrated precisely the responsibilities of the shroff, i.e., the paying‑cum‑receiving clerk, throughout the course of the day.

In the bank’s operating manual, every entry in the shroff’s cash book that recorded sums removed from or placed into the double‑lock box had to be initialed by the Agent. The same manual set out the precise duties of the shroff, who was also described as the paying‑cum‑receiving clerk, for the entire business day. According to those instructions, the clerk received at the start of the day the cash contained in the single‑lock box together with any additional amounts that might be withdrawn from the double‑lock box. Using this cash, the clerk performed both receipt and payment transactions throughout the day. At the close of business, the clerk was required to give a full account to the Agent. If, after completing the day’s transactions, the Agent considered that there was surplus cash, the Agent was authorized to remove that surplus from the single‑lock box and place it back into the double‑lock box. Consequently, for the duration of the day the paying‑cum‑receiving clerk remained in charge of the cash held in the single‑lock box and was obligated to render an account for it at day‑end. The record for appeal No. 787 did not contain any evidence indicating who possessed the key to the single‑lock box. However, in another group of appeals with similar facts, evidence showed that the key to the single‑lock box was kept by the paying‑cum‑receiving clerk, whose duties corresponded exactly to those of the shroff in appeal No. 787. The Court examined this evidence to decide whether the Central Government Labour Court had reached a correct conclusion on the matter. The question of whether an application under section 33C (2) of the relevant Act could be entertained by the labour court, and whether that court possessed jurisdiction to decide the application, had previously been addressed by this Court in Central Bank of India Limited v. P. S. Rajgopalan (1). In that precedent, the Court held that such an application was maintainable, thereby rejecting the banks’ contention that the labour court lacked jurisdiction. The Court further observed that the banks’ second contention also lacked merit. While paragraph 164 (b) (7) of the Sastry award referred to cashiers who were in charge of cash at pay offices, the Court recognised that a bank branch is not, strictly speaking, a pay office. The applicability of paragraph 164 (b) (7) to a branch was referred to Shri Jeejeebhoy for clarification under section 6 of the Industrial Disputes (Banking Companies) Decision Act, 1955 (XLI of 1955). In 1959, Shri Jeejeebhoy, then Chairman of the tribunal that heard the appeals from the Sastry award, held that the expression “pay office” was not intended to be limited solely to units formally designated as pay offices; it could also apply to a branch where the circumstances warranted. This clarification, having remained unchallenged since 1959, was deemed authoritative. Accordingly, the banks’ argument that paragraph 164 (b) (7) could not apply because the disputes involved branches rather than pay offices was dismissed.

The Labour Appellate Tribunal gave the decision that is commonly referred to as the Labour Appellate Tribunal Decision (Bank Disputes). In the present circumstances the Court held that a clarification issued by such a tribunal should be accepted, especially because it has remained unchallenged since its issuance in 1959. Consequently the banks’ argument that paragraph 164 (I‑)) (7) could not apply because the matters involved concerned branches rather than pay offices was rejected. The Court then turned to examine the substantive issues that formed the core of the dispute in this case. The principal controversy identified concerned whether the cashiers whose conduct was under scrutiny could be described as cashiers in‑charge of cash. The banks argued that no single individual exercised overall charge of cash in a branch, and therefore the workmen in question could not be regarded as cashiers in‑charge. The Court found that argument to be disingenuous and lacking genuine substance in light of the operational realities of the branches. According to the banks’ position, only the Agent and the second key‑holder could be regarded as the person in‑charge of cash in a branch, and no other employee could hold that responsibility. While it is undisputed that the Agent together with the second key‑holder bear overall responsibility for cash, securities, jewellery and all other items stored in the double lock. The Court held that this fact alone does not settle the question of whether a cashier can be an in‑charge of cash. The Court could not accept the banks’ contention that a cashier must possess one of the double‑lock keys in order to be considered in‑charge of cash in the branch. In practice, no cashier ordinarily holds the second key of the double lock, which is normally retained by an officer subordinate to the Agent, except in small branches where the Agent is the sole officer. If Shri Jeejeebhoy’s earlier clarification that the term “pay offices” in clause (7) of paragraph 164(b) also includes branches were given effect, it would become practically meaningless. The reason is that the clarification would then apply only to very small branches that do not have a second officer to serve as the second key‑holder. Consequently the Court concluded that when clause (7) of paragraph 164(b) refers to “cashiers in‑charge”, it is speaking of responsibility for cash in the single lock rather than responsibility for cash in the double lock. Accordingly, the inquiry must focus on whether the workmen appealed against were in‑charge of cash in the single lock. The Court observed that, given the facts, there could be only a single correct answer to that question. The Court had already described the procedure used in the branches under consideration, demonstrating that the sole receiving‑cum‑paying clerk functions as the person in‑charge of the single lock throughout the day.

When bank transactions are being carried out, the single cashier assumes responsibility for the cash that is kept in the single‑lock box at the beginning of the working day. He takes charge of that cash at the start of the morning and, after completing all receiving and paying operations during the bank’s opening hours, he transfers charge of the remaining balance in the single‑lock box at the close of business. Once the single‑lock box is placed inside the double‑lock, the cashier no longer retains charge of the cash in that box; at that point the Agent and the second key‑holder become responsible for the box as part of the contents of the double‑lock. However, clause (7) of paragraph 164 (b) refers only to the charge of cash that is effective while the bank is conducting transactions, that is, during the day. Consequently, the Court held that a branch that employs a single cashier who performs both receiving and paying functions must be regarded as having a cashier in‑charge of cash within the meaning of clause (7). The Court noted a clarification made by Shri Jeejeebhoy indicating that the cashier might also have other duties besides cash handling. The Court found that such additional duties are irrelevant because clause (7) speaks solely of charge of cash and not of securities, jewellery or other responsibilities. Therefore, any person who is the sole member of the cash department, who handles both receipt and payment of cash, who assumes charge of the single‑lock box at the start of the day and hands over that charge at the end of the day, must be classified as a cashier in‑charge of cash in a branch office. The evidence in the present cases demonstrated that each of the clerks concerned took charge of the single‑lock box at the start of the morning, acted as the only clerk in the cash department performing all receiving and paying duties while the bank was open, and transferred charge of the box at day’s end before it was placed in the double‑lock. Under these circumstances, the clerks satisfy the description of cashiers in‑charge of cash in a branch, and, because the term “Pay offices” in clause (7) has been interpreted to include a branch, those cashiers are entitled to the special allowance provided in clause (7). The Court also referred to paragraph 140 of the Labour Appellate Tribunal decision, which discusses equivalent provisions, to support this interpretation.

It was held that the decision as to payment of the appropriate allowance must be left to each bank, which should assess the allowance in view of the duties and responsibilities attached to a particular post. The purpose of the special allowance mentioned in paragraph 164(b) was therefore to provide an amount in addition to the basic pay for those clerks whose duties and responsibilities exceed those of ordinary routine clerks. The Court expressed the view that this condition was satisfied by the cashiers under consideration, because each of them was the only officer in the cash department and was therefore in charge of the single‑lock box for the entire period that the bank was open. Their duties and responsibilities were clearly of a higher order than those of a mere routine clerk. Counsel for the appellants drew the Court’s attention to another portion of paragraph 164 of the Sastry Award, which lists the categories of employees who merit special consideration and therefore qualify for the special allowance, and which expressly includes cashiers “other than routine clerks.” It was submitted that, when allowances were provided for cashiers in paragraph 164(b), the intention was to leave routine clerks in the cash department out of the scope of the benefit. Those routine clerks could be paying clerks, receiving clerks, or clerks who performed both paying and receiving functions. Even assuming that position, it did not follow that the clerks who were the cashiers in the present matters were excluded from the allowance. The rationale for granting a special allowance to cashiers was that they were in charge of cash, which, as explained, required them to have sole control over the single‑lock box. By contrast, routine clerks in the cash department, whether they were paying, receiving, or both, would not be eligible for any allowance unless it could be shown that they alone were responsible for the cash in the single‑lock box at a particular branch. Such sole responsibility could arise only where a single clerk performed both the receiving and paying functions in the cash department of a branch, because only then could it be said that he alone controlled the cash in the single‑lock box during working hours. The phrase “other than routine clerks” in paragraph 164(b) is clarified by four specific entries in that paragraph—clauses 3, 4, 5 and 6. Clause 3 provides a special allowance for head cashiers when the unit consists of five clerks or more; clause 4 does the same for head cashiers when the unit has four clerks or fewer; clause 5 provides the allowance for assistant cashiers in units of five clerks or more; and clause 6 does so for assistant cashiers in units of four clerks or fewer. These provisions demonstrate that, when the cash department contains more than one person, the allowance is granted to only one individual, whether designated as head cashier or assistant cashier, who is in charge of the cash and therefore entitled to the special allowance.

The Court observed that the special allowance was intended only for the clerk who alone performed both receiving and paying functions and who assumed responsibility for the single lock‑box from the opening of the branch until its closure. Consequently, the clerks who were the subject of the present appeals qualified for the allowance because each of them was the sole clerk in the cash department, handled both receiving and paying work, took charge of the lock‑box in the morning, remained responsible for it throughout the day, and transferred charge of the lock‑box in the evening when the bank shut. The Court held that only such sole clerks in a branch’s cash department could claim an allowance under clause (7) of paragraph 164(b). The decision of the Labour Appellate Tribunal, recorded at paragraph 130, showed that an application had been made before that Tribunal seeking a special allowance for receiving and paying cashiers, but that request had been denied. The appellants argued that, because of that denial, the workmen could not now claim that the clerks concerned in the present appeals were entitled to the allowance under paragraph 164(b)(7). Upon reviewing paragraph 130, the Court found that the Tribunal had contemplated only separate receiving clerks and separate paying clerks, not clerks who performed both functions concurrently. Therefore, the Court concluded that the Tribunal’s rejection of an allowance for receiving clerks and paying clerks did not affect the claim of receiving‑cum‑paying clerks who were in sole charge of cash. Even if the Tribunal’s wording were interpreted to include receiving‑cum‑paying clerks, that interpretation would not preclude those clerks who alone managed cash from receiving the allowance under paragraph 164(b). The Court further noted that the Tribunal’s rejection applied solely to receiving‑cum‑paying clerks who were not in charge of cash, since a bank could employ a receiving‑cum‑paying clerk together with a head cashier, and in such a situation only the head cashier would be eligible for the allowance as the person supervising the other clerks. Finally, the appellants contended that applying the Court’s interpretation to clause (7) of paragraph 164(b) would create anomalies. The Court pointed out that clause (4) provides a special allowance of Rs 11 in a B‑class bank and Rs 8 in a C‑class bank for head cashiers who supervise four or fewer clerks, whereas cashiers in charge of cash, such as the clerks in the present appeals, receive Rs 15 in a B‑class bank and Rs 12 in a C‑class bank. The Court found no inconsistency in the fact that cashiers who are directly responsible for cash in pay offices, which includes branches, receive a slightly higher allowance than head cashiers who manage a small unit of clerks.

The Court observed that the Sastry Tribunal had held that a sole cashier in‑charge of cash in a cash department who performed both receiving and paying functions could bear greater responsibility than a head‑cashier who supervised four or fewer clerks. The Court said that, in its view, this difference in responsibility and the resulting difference in the amount of special allowance did not alter the plain meaning of paragraph 164(b)(7). The Court then noted that in appeals numbered 731 to 752 the factual situation was identical, with the further circumstance that the single clerk who handled both receiving and paying duties in the bank’s branches also retained the key to the single lock‑box at all times. By contrast, in appeal number 787 there was no evidence indicating which person held the key to the single lock‑box after it had been placed in the double‑lock arrangement. The Court held that, in its opinion, this lack of evidence did not affect the assessment of responsibility, and that, regardless, the fact that the solitary clerks in the cash department in appeals 731 to 752 bore the key provided an additional justification for granting them the special allowance. Consequently, the Court dismissed the appeals, ordering each appellant to pay costs, including one set of hearing fees, and entered the order of dismissal.