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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Ms. N.D Buck
  • Mrs. Meena Doshi
Judges
  • R.J Kochar, J.
Acts
  • Bombay Industrial Relations Act, 1946. Its clause 22(7)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
  • Ms. N.D Buck
  • Mrs. Meena Doshi
Judges
  • R.J Kochar, J.
Acts
  • Bombay Industrial Relations Act, 1946. Its clause 22(7)
See more information ...
Smart Summary

Structured Summary of the Provided Legal Opinion

Factual and Procedural Background

The petitioner was employed by Respondent No.2 (the Bank) as a clerk for about 34 years. The employer-employee relationship was governed by certified standing orders framed under the Bombay Industrial Relations Act, 1946; clause 22(7) of those standing orders determined the age of superannuation as 55 years and provided for possible extensions.

By letter dated 13 January 1990, the bank informed the petitioner that on reaching the age of 55 years (the opinion records the date of reaching 55 years as 27th April 1999 but states the effective superannuation date as 30-4-1990) he would stand superannuated from 30-4-1990. The petitioner, asserting good health, produced a medical certificate from the Civil Surgeon and requested extension in employment under standing order No. 22(7). By letter dated 26 February 1990 the bank notified the petitioner that he would stand superannuated from 30-4-1990 and did not grant any extension.

Aggrieved, the petitioner filed a complaint of unfair labour practice under Section 28 read with Item No. 9 of Schedule IV of the M.R.T.U. and P.U.L.P. Act, 1971 (the complaint alleged "Failure to implement award settlement or agreement" and also invoked items 3(a) and 1(b) of the schedule). The Industrial Court, on 11 June 1990, passed an ad-interim order directing that the complainant continue in service for six months from that order or until final disposal, whichever was earlier.

The Industrial Court later framed issues on the evidence and concluded there was no unfair labour practice within the meaning of Item No. 9 of Schedule IV and that the petitioner had no vested right to an extension beyond age 55; it ultimately dismissed the complaint.

Respondent No.2 (the Bank) contended the process to consider extension had been started by a D.O. letter dated 28 January 1990 from the Manager to the Chief Officer, which referred to unproved past allegations from the petitioner's earlier employment at Ratnagiri Urban Co-operative Bank and asserted that the petitioner was of no "special use" and had unsatisfactory day-to-day performance; the Chief Officer, by order dated 5 February 1990, reproduced the Manager's letter and refused extension.

Legal Issues Presented

  1. Whether the Bank's refusal to grant extension under Standing Order No. 22(7) and the manner of its decision amounted to an unfair labour practice under Item No. 9 (and related items) of Schedule IV of the M.R.T.U. and P.U.L.P. Act, 1971.
  2. Whether an employee who attains the age of superannuation (55 years) has a vested right to extension, or at least a legitimate expectation that the request for extension will be objectively and properly considered by management.
  3. Whether the Manager and Chief Officer exercised the discretion conferred by Standing Order No. 22(7) in a bona fide, objective and reasoned manner (i.e., whether the decision was arbitrary or supported by material and reasons).

Arguments of the Parties

Petitioner's Arguments

  • The certified standing orders operate in the nature of an agreement between employer and employees; clause 22(7) contemplates extensions beyond age 55 and thus the Bank's refusal to grant extension violated that provision.
  • The Bank's refusal amounted to unfair labour practice under Item No. 9 of Schedule IV and also under items 3(a) and 1(b).
  • The petitioner had about 34 years of satisfactory service and submitted a medical certificate from the Civil Surgeon confirming good health; he requested objective consideration for extension.

Respondent No.2 (Bank)'s Arguments

  • The Bank initiated consideration of extension by a D.O. letter dated 28 January 1990 from its Manager to the Chief Officer, which set out concerns: unproved allegations from the petitioner's prior employment at Ratnagiri Urban Co-operative Bank, that the petitioner was of no "special use" to the Bank's development, unsatisfactory day-to-day performance, and that he had committed or might commit mistakes that could be serious in future.
  • The Chief Officer, by order dated 5 February 1990, considered the Manager's D.O. letter and refused to grant extension, effectively relying on the Manager's stated concerns.
  • The Bank contested the petitioner's complaint to the Industrial Court and maintained its decision to refuse extension.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court analyzed the standing order and the material placed before the Industrial Court and proceeded as follows:

  1. Interpretation of the standing order: The court reproduced Standing Order No. 22(7): "Every employee shall retire from the service on attaining the age of 55 years. Extension not exceeding one year at a time or 3 years in all may be given at the discretion of the Manager." The court emphasized that while the standing order does not create a vested right to extension, it creates a legitimate expectation that requests for extension will be objectively and seriously considered.
  2. Standard for exercise of discretion: The court held that the Manager's discretion must be exercised bona fide, objectively and on the basis of material honestly and properly placed on record. The exercise of discretion must not be a mere formality or mechanical reproduction of assertions; cogent reasons must be recorded if extension is refused.
  3. Assessment of the Bank's material: The D.O. letter of the Manager was characterized as "classically vague"—it did not specify how the petitioner's services were of no use, what mistakes were committed, or what future mistakes were anticipated. The Chief Officer merely reproduced the Manager's letter without additional material or any evident application of mind.
  4. Evidence before the Industrial Court: The court noted absence of the petitioner's complete service record and absence of testimony from the Manager or Chief Officer to justify the refusal. There was no documentary or oral evidence explaining the asserted shortcomings. By contrast, the petitioner produced a medical certificate asserting good health and stated he was capable of working.
  5. Legal consequence of the evidentiary gap: In the absence of any substantive material justifying the refusal, the court found that the Bank failed to show that it had exercised the discretion required by the standing order in a sound, reasonable and reasoned manner. Mere ipse dixit of the Manager, without evidentiary support, did not amount to a lawful exercise of discretion.
  6. Remedial conclusion: Because the Bank failed to justify denial of extension in the manner required by the standing order and the industrial relations regime, the court quashed the Industrial Court's dismissal of the complaint and quashed the Bank's order refusing extension.

Holding and Implications

Holding: The court quashed the Industrial Court's order dismissing the complaint and quashed the respondent Bank's order refusing to grant the petitioner an extension. The court ordered that the petitioner shall be deemed to have continued in service for a period of three years from the date of his superannuation (deemed date: 30th April 1990) and shall be entitled to wages for that period, subject to deduction of the period during which he was actually continued in service under the Industrial Court's interim order (the opinion records the petitioner was in service till 30th April 1991 under the interim order and directs deduction of that period).

Direct consequences and directions:

  • The petitioner is to be paid the aggregate wages he would have earned during the deemed three-year continuation, less wages for the relevant one-year period during which he was actually in service pursuant to the interim order. The Bank is directed to pay the wages (after the stated deduction) within eight weeks from the date of the order.
  • The petition was made absolute in the terms set out above, with no orders as to costs. The court directed expedited issuance of the certified copy and that parties act on a duly authenticated copy of the order.

Broader implications: The opinion emphasizes the managerial obligation under a standing order to exercise discretion in a reasoned, objective and evidentiary manner when considering post-superannuation extensions. The opinion does not purport to set a new legal precedent beyond the facts and reasoning applied in this case; it focuses on the required standards of decision-making under the specific standing order and the record before the court.

Show full summary ...

    Prabhakar Rajaram Gangan v. C.B Asmar, Member, Industrial Court, Pune And Others

    1. The petitioner was in employment of the respondent No. 2, Bank as a clerk for a total period of about 34 years. According to the petitioner his record was satisfactory and had rendered service without any blemish. The employee-employer relations between the bank and the employees are governed by the Certified Standing Orders framed under the Bombay Industrial Relations Act, 1946. Its clause 22(7) determines the age of superannuation as 55 years. The bank had informed the petitioner by its letter dated 13th January 1990 that on reaching the age of 55 years on 27th April 1999, he would stand superannuated i.e from 30-4-1990. According to the petitioner, he was having good health and has also produced a certificate from the Civil Surgeon to that effect with a request to grant him further extension in employment as provided under the said standing order No. 22(7). It is the case of the petitioner that the bank did not grant him extension and intimated by its letter dated 26th February, 1990 that he would stand superannuated from 30-4-1990. The petitioner was aggrieved by the said order of the bank and therefore filed a complaint of unfair labour practice after making his last approach by his letter dated 17th April 1990. Under section 28 read with mainly Item No. 9 of Schedule IV of the M.R.T.U and PULP Act, 1971, which reads as under:—

    “Failure to implement award settlement or agreement”.

    2. According to the petitioner, the certified standing orders were in the form of an agreement between the employer and the employees and since the bank had not acted in accordance with clause 22(7) of the standing orders by refusing to grant the petitioner extension after the age of 55 years, engaged in an unfair labour practice under item 3(a) and 1(b) and 9 of the Act. The bank contested the complaint filed by the petitioner. The Industrial Court, however, had passed the following ad-interim order on 11th June, 1990 which reads as follows:—

    “The Application is partly granted. The Complainant shall continue in service for a period of six months from the date of this order or till the final disposal of the Complaint whichever is earlier.”

    3. The Industrial Court framed issues on the basis of the evidence, oral and documentary. It came to a positive conclusion that there was no unfair labour practice within the meaning of item No. 9 of Schedule IV of the Act. It also recorded a finding that the petitioner had no vested right to get any extension in service after attaining 55 years of age of superannuation in the respondent No. 2, bank. The Industrial Court on the basis of its discussion on the said issues finally dismissed the complaint.

    4. It is the case of the respondent No. 2, bank that before the petitioner reached the age of superannuation i.e 55 years, the process to consider his case for extension was started in the form of a D.O letter dated 28th January 1990 addressed by the manager to the Chief Officer of the Bank. In the said letter it was mentioned that the petitioner had some unproved allegations against him in the erstwhile bank i.e Ratnagiri Urban Co-operative Bank, which was merged with the present respondent No. 2-Bank. It is further vaguely stated by the Manager of the respondent No. 2 bank that the petitioner was of no “special use” for development of the bank and that even during day to day work his performance was not satisfactory. It is further stated in the said letter that he committed one or the other mistake, which could be serious, in future. The Manager further summarises that on the whole he should not be given any extension in service. By the order dated 5th February 1990, it appears that the Chief Officer considered the D.O Letter of the Manager and refused to grant extension to the petitioner. The Chief Officer has merely reproduced the letter of the Manager and without any additional material and without his own application of mind, refused to grant extension to the petitioner.

    5. 4-A. According to me, the D.O letter of the Manager of the respondent No. 2-bank was classically vague and no particulars were given as to in what way the petitioner was of no use for the development of the bank and what mistakes were committed by him, specially what other mistakes, which would become serious in future, if he is allowed extension for another period of one year. It is pertinent to note that the petitioner had put in 34 years of service. It is further significant to note that his entire service record is not placed before the industrial Court and was not even made available to me.

    6. The question of giving extension to an employee who has attained 55 years of age has to be considered seriously and such decision will have to be taken after considering the entire past record and other material. To appreciate the powers of the respondent No. 2 bank in this respect, I reproduce the relevant standing order herein below:—

    7. Standing Order No. 22(7):—

    “Every employee shall retire from the service on attaining the age of 55 years. Extension not exceeding one year at a time or 3 years in all may be given at the discretion of the Manager.”

    (emphasis supplied).

    8. It is thus clear that an employee who has completed the superannuation age of 55 years has legitimate expectation under the above standing order to get extension initially for one year and for a maximum of 3 years, at the discretion of the Manager. Though, there is no vested right in such an employee given under the said standing order to get extension, there is definitely a right to legitimately expect that his case for extension should be considered on the basis of his past service and in the context of his present health and continued efficiency. This will not be an empty formality and this cannot be done mechanically by the Manager, who is vested with a discretion to consider all such cases on the basis of material before him, and he must give cogent reasons to refuse to grant such extension. He has to exercise his discretion soundly and judiciously. He must unequivocally state and record his reasons why such extension should not be given to the concerned employee. In the present case the Manager has merely written a letter to the Chief Officer vaguely giving some grounds without stating anything in particular against the petitioner. As I have already stated that the consideration for extension of service is a serious decision which the management has to take, as that is the right given under the standing order to the employees. No doubt it is not that the right to get extension is a vested right in the employee but it is the vested right in an employee to expect that his prayer or his request for extension would be objectively and seriously considered on the basis of his service, past record, his reputation and his health and efficiency. All these factors must be found on record before such a decision is taken by the Manager. If he has considered all the aforesaid factors and has exercised his discretion then only it can be said that he has acted judiciously and not arbitrarily. In the present case apart from vague assertions, there is nothing on record to say that the petitioner had bad past record or was not efficient or had bad health to deny him the benefit of extension in service. Even in the written statement before the industrial Court no such averments are made and no such record is produced. It is further very significant to note that the manager himself or the Chief Officer who had finally passed the order did not step in the witness box to justify the order denying extension to the petitioner under the standing orders. Neither the oral nor the documentary evidence was produced before the Industrial Court to justify its decision of denying extension to the petitioner. The petitioner has submitted an application along with a medical certificate issued by the civil surgeon that he had a good health. The petitioner had also submitted that he was in a position to work in the bank. These assertions are enough for the petitioner to call upon the respondent bank to exercise its judicious discretion to consider his case objectively on the basis of the material on record. The respondent No. 2 bank ought to have justified its denial to extend the service of the petitioner under the standing orders beyond the age of superannuation on the basis of his service, rendered by him for 34 years and any other material available with it. The Manager did not even whisper in what way his services were without any utility for the development of the bank when he was found useful for 34 years. The Manager has not even produced an iota of evidence to show what mistakes or what serious mistakes the petitioner had committed to deny him the extension in service as requested by the petitioner. There was absolutely no material on record before the industrial Court in that respect. It is expected at the stage of considering the request of the employee to extend his service after the superannuation age that his entire service record should be considered and his efficiency in work is to be assessed objectively. It is expected from the management that it must record the reasons why the employee had become a dead wood not to be continued any more in service. In the absence of any such assessment based on material on record mere ipse dixit of the Manager would not amount to exercise of sound discretion expected by the law, i.e the certified standing orders which determine employer employee relations under the Act. The Clause 22(7) of the certified standing order casts obligation on the Manager to exercise his discretion while taking any decision under this standing order. His discretion must be exercised bona fide, objectively and on the basis of material honestly and properly. It is his discretion and not his mercy. The respondent No. 2 bank has miserably failed to justify its decision even before the industrial Court by placing sufficient material before it in support of its decision. I, therefore, quash and set aside the order of the Industrial Court dismissing the petitioner's complaint of unfair labour practice. I also quash and set aside the impugned order of the respondent No. 2 bank to not to grant his case for extension as contemplated under standing order No. 22(7).

    9. The impugned order of refusing to grant extension is quashed and set aside and it is ordered that the petitioner shall be deemed to have continued in service for a period of 3 years from the date of his superannuation i.e 30th April 1990.

    10. It is clarified that the petitioner shall be deemed to have been continued for a period of 3 years from the date of superannuation and he shall be entitled to wages for that period as he would have earned the same had he been continued in service. It is also therefore directed that the petitioner should be paid the total aggregate wages for the said period of 3 years. It appears that the petitioner was in service till 30th April 1991 when the Industrial Court had vacated its interim order of extension in service during the pendency of the Complaint. The said period will be deducted while computing the wages for the three years as per this order.

    11. The petition is made absolute in terms aforesaid with no orders as to costs. The Respondent No. 2 shall pay to the petitioner the wages after deducting the wages for the relevant one year's period within 8 weeks from today.

    12. Issuance of certified copy expedited.

    13. Parties to act on a copy of this order duly authenticated by Sheristedar.

    Rule made absolute.
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    Comments

    Prabhakar Rajaram Gangan v. C.B Asmar, Member, Industrial Court, Pune And Others
    (Oct 28, 1999)