2000 (4) TMI 796 - SC - Indian Laws

Supreme Court held that the requirements of the principles of natural justice which are required to be observed are - Workman should know the nature of the complaint or accusation. The management should act in good faith which means that the action of the management should be fair, reasonable and just

Issues Involved:
1. Justification of the Bank's action in terminating the services of the workman under Clause 16 of the Bipartite Settlement.
2. Adherence to principles of natural justice by the Bank.
3. Validity of the Tribunal's and High Court's orders for reinstatement and continuity of service without back wages.
4. Applicability of the precedent set by D.K. Yadav v. J.M.A. Industries Ltd.

Issue-wise Detailed Analysis:

1. Justification of the Bank's action in terminating the services of the workman under Clause 16 of the Bipartite Settlement:
The Bank terminated the services of the workman, Dayananda, under Clause 16 of the Bipartite Settlement due to his unauthorised absence for more than 90 consecutive days. The Bank sent notices to Dayananda, which were returned with postal endorsements "refused" and "not found during delivery time." The Tribunal and High Court questioned the validity of these notices due to the absence of the postman's testimony. However, the Supreme Court found that the Bank had fulfilled the requirements of Clause 16 by sending notices to the correct address and that Dayananda's claim of non-receipt was not credible. The Supreme Court concluded that the Bank's action was justified and that Dayananda had voluntarily retired from service.

2. Adherence to principles of natural justice by the Bank:
The Supreme Court emphasized that the principles of natural justice, which include the right to know the nature of the complaint, the opportunity to state one's case, and the requirement for the management to act in good faith, were inbuilt in Clause 16 of the Bipartite Settlement. The Bank had met these criteria by sending notices to Dayananda and providing him the opportunity to explain his absence. The Supreme Court held that the Tribunal and High Court had unduly relied on the principles of natural justice without understanding their scope, leading to a miscarriage of justice against the Bank.

3. Validity of the Tribunal's and High Court's orders for reinstatement and continuity of service without back wages:
The Tribunal ordered the reinstatement of Dayananda with continuity of service but without back wages, citing his unauthorised absence and lack of convincing evidence for his claimed illness. The High Court modified this order, denying Dayananda continuity of service and back wages. The Supreme Court found that the Tribunal's and High Court's reliance on the principles of natural justice was misplaced and that the Bank's action under Clause 16 was justified. Consequently, the Supreme Court set aside the orders of the Tribunal and High Court, ruling that there was no basis for reinstating Dayananda.

4. Applicability of the precedent set by D.K. Yadav v. J.M.A. Industries Ltd.:
The Tribunal and High Court relied on the precedent set by D.K. Yadav v. J.M.A. Industries Ltd., which required adherence to principles of natural justice in termination cases. However, the Supreme Court distinguished the present case from D.K. Yadav, noting that in D.K. Yadav, the workman had been prevented from joining duty and had not been given a fair opportunity to explain his absence. In contrast, Dayananda had been given notices and the opportunity to respond, which he failed to do. Therefore, the Supreme Court concluded that the principles of natural justice had been adequately observed by the Bank, and the precedent set by D.K. Yadav was not directly applicable.

Conclusion:
The Supreme Court allowed the appeal, set aside the judgments of the High Court and the Tribunal, and ruled that Dayananda had voluntarily retired from the Bank's service under Clause 16 of the Bipartite Settlement. The wages paid to Dayananda under Section 17-B of the Industrial Disputes Act, 1947, were not to be recovered or adjusted by the Bank. No order as to costs was made.

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