- Bookmark
- Share
- CaseIQ
P. Sarathy v. State Bank Of India .
Factual and Procedural Background
The appellant joined the State Bank of India as a Clerk in 1962 and was promoted to Branch Manager in July 1977. He was suspended on 8 September 1980, charge-sheeted on 31 July 1981, and ultimately removed from service on 11 January 1983.
Sequential challenges followed:
- 21 February 1983 – Departmental appeal to the Local Board of the Bank dismissed on 18 May 1983.
- 21 July 1983 – Statutory appeal under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 to the Deputy Commissioner of Labour (Appeals), Madras. It was dismissed on 1 September 1987 on the basis of the Madras High Court decision in C.V. Raman v. Bank of India holding the Act inapplicable to nationalised banks.
- The appellant’s Special Leave Petition against that dismissal was also rejected after this Court affirmed C.V. Raman on 21 April 1988.
- 28 September 1988 – Regular Suit No. 11099 of 1988 filed in the City Civil Court, Madras seeking a declaration that his removal was illegal and for reinstatement with benefits. The trial court dismissed the suit on 20 April 1994, holding it time-barred.
- The VIII Additional Judge allowed the first appeal on 7 March 1995, holding the suit within limitation and the dismissal order invalid.
- The Madras High Court, in second appeal dated 9 August 1996, reversed that decision solely on limitation grounds, without examining merits.
- The present Supreme Court appeal challenges the High Court’s finding on limitation.
Legal Issues Presented
- Whether the civil suit filed on 28 September 1988 challenging the dismissal order of 11 January 1983 was filed within the period prescribed by the Limitation Act, 1963.
- Whether the time spent by the appellant in prosecuting the departmental appeal and the statutory appeal before the Deputy Commissioner of Labour (Appeals) can be excluded under Section 14 of the Limitation Act on the ground that those proceedings were “civil proceedings” in a “court”.
Arguments of the Parties
Appellant’s Arguments
- Invoked Section 14 of the Limitation Act, asserting that he had been diligently prosecuting “civil proceedings” before competent fora—the Bank’s Local Board and the Deputy Commissioner of Labour (Appeals).
- Contended that the Deputy Commissioner of Labour possesses the trappings of a court: power to record evidence, summon witnesses, and issue binding decisions under Section 41(3) of the Act; hence it qualifies as a “court” for Section 14.
- Therefore, exclusion of the entire period spent in those proceedings would render the suit timely.
Respondent’s Arguments
- Section 14 relief is available only for proceedings prosecuted in a “court”; the Deputy Commissioner of Labour is merely an administrative authority, not a court.
- Consequently, the period spent before that authority cannot be excluded and the suit—as held by the trial court and High Court—is time-barred.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| C.V. Raman v. Bank of India (1984) 2 LLJ 34 (Mad) & affirmed at (1988) 3 SCC 105 | Tamil Nadu Shops and Establishments Act, 1947 not applicable to nationalised banks | Explains why appellant’s statutory appeal was dismissed for lack of jurisdiction, triggering Section 14 analysis |
| Thakur Jugal Kishore Sinha v. Sitamarhi Central Coop. Bank Ltd. AIR 1967 SC 1494 | Authority with judicial powers and finality may be a “court” | Foundational authority for treating quasi-judicial tribunals as courts under Section 14 |
| Bharat Bank Ltd. v. Employees AIR 1950 SC 188 | Criterions for recognising a body as a court of law | Cited to reinforce the “trappings of a court” test |
| Maqbool Hussain v. State of Bombay AIR 1953 SC 325 | Distinction between administrative and judicial forums | Supports the requirement of authoritative and final decisions for court status |
| Brajnandan Sinha v. Jyoti Narain AIR 1956 SC 66 | Essential attributes of a court: power to deliver definitive judgments | Applied the definitional test to the Deputy Commissioner of Labour |
| Pritam Kaur v. Sher Singh AIR 1983 P&H 363 | Proceedings before Collector under mortgage-redemption law are “civil proceedings” for Section 14 | Analogous authority for extending Section 14 beyond civil courts |
| Bansi Ram v. Khazana AIR 1993 HP 20 | Followed Pritam Kaur; tribunals can be courts under Section 14 | Cited to buttress applicability of Section 14 to quasi-judicial forums |
Court's Reasoning and Analysis
1. Section 14(1) of the Limitation Act requires exclusion of time spent in “another civil proceeding … in a court” which could not be entertained due to want of jurisdiction.
2. The statute deliberately uses the word “court” rather than “civil court”; hence, the term is broader.
3. Applying the tests articulated in Thakur Jugal Kishore Sinha and related cases, a body is a court if it:
- possesses judicial powers comparable to civil courts (e.g., summoning witnesses, recording evidence), and
- renders decisions that are final and binding on the parties.
4. Under Sections 41(2) & (3) of the Tamil Nadu Shops and Establishments Act and Rules 9 & 9-A of the 1948 Rules, the Deputy Commissioner of Labour (Appeals):
- hears appeals involving termination of employment,
- follows a summary yet judicial procedure,
- records evidence and gives reasoned, binding decisions.
5. Consequently, although not a civil court under the Code of Civil Procedure, the Deputy Commissioner is a “court” within the meaning of Section 14; proceedings before him are “civil proceedings”.
6. The appellant prosecuted the departmental and statutory appeals with due diligence and good faith; the statutory appeal failed solely due to a jurisdictional defect established by C.V. Raman.
7. Therefore, the entire period from the filing of the departmental appeal until dismissal of the statutory appeal must be excluded. Once excluded, the suit filed on 28 September 1988 falls within the three-year limitation prescribed by Articles 58/113 of the Limitation Act.
Holding and Implications
Appeal Allowed – The civil suit was filed within limitation.
Immediate effect: The High Court’s judgment dismissing the suit as time-barred is set aside, and the appellant’s suit is revived in accordance with the first appellate court’s decision on merits. Broader implication: The judgment affirms that quasi-judicial authorities possessing the essential attributes of a court qualify as “courts” for purposes of Section 14 of the Limitation Act, potentially enlarging remedial avenues for litigants who first pursue statutory forums in good faith.
S. Saghir Ahmad, J.— The appellant was appointed as a Clerk in State Bank of India (for short “the respondent”) in 1962. In July 1977, he was promoted to the post of Branch Manager but on 8-9-1980, he was placed under suspension. On 31-7-1981, a charge-sheet was issued to him which was followed by a regular departmental proceedings and ultimately on 11-1-1983, the appellant was removed from service. This order was challenged by the appellant in an appeal filed before the Local Board of the Bank on 21-2-1983 but by order dated 18-5-1983, the appeal was dismissed. The appellant, thereafter, filed an appeal under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (for short “the Act”) on 21-7-1983. The appeal was filed with the Deputy Commissioner of Labour (Appeals), Madras. This appeal was dismissed on 1-9-1987 on the ground that the provisions of the Tamil Nadu Shops and Establishments Act, 1947 were not applicable to the nationalised banks as held by the Madras High Court in C.V Raman v. Bank of India (1984) 2 LLJ 34 (Mad). This judgment was upheld by this Court on 21-4-1988 and is since reported in C.V Raman v. Bank of India (1988) 3 SCC 105. It was because of this decision that the appellant's SLP (C) No. 14963 of 1987 against the order of 1-9-1987 by which the appeal was rejected by the Deputy Commissioner of Labour (Appeals) was dismissed. It was at this stage that the appellant instituted Regular Suit No. 11099 of 1988 in the City Civil Court, Madras for a declaration that the removal of the appellant was illegal, ultra vires and invalid. He prayed for a decree for reinstatement with consequential benefits. This suit was dismissed by the trial court by its judgment dated 20-4-1994. The trial court further held that the suit was not within limitation. The first appeal filed, thereafter, by the appellant was allowed on 7-3-1995 by the VIII Additional Judge, Madras with the finding that the suit was not barred by limitation and that the order of dismissal passed against the appellant was bad. The respondent, thereafter, filed a second appeal which was allowed by the Madras High Court on 9-8-1996 with the finding that the suit was instituted in the civil court beyond the period of limitation prescribed under the Limitation Act. The High Court did not go into the merits of the case. It is in these circumstances that the present appeal has been filed.
2. The only question which falls for our consideration in this appeal is whether the suit instituted by the appellant in the City Civil Court, Madras on 28-9-1988 was within time. This suit was filed for the declaration that the order dated 11-1-1983, by which he was removed from service, was bad in law. The normal period of limitation within which the suit could have been filed is three years under Article 58 of the Limitation Act, 1963. There is another article, namely, Article 113 which is a residuary article which provides a period of limitation of three years for filing a suit for which no period of limitation is provided elsewhere.
3. In order to bring a suit within the period of limitation, the appellant claimed benefit of Section 14 of the Limitation Act on the ground that he had represented to the Local Board and, thereafter, filed an appeal under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 and was, therefore, prosecuting “civil proceedings” in a court with due diligence. It is claimed that the entire period during which those proceedings were pending has to be excluded and if this is done, the suit will be well within limitation.
4. Learned counsel for the respondent has, on the contrary, contended that the benefit of Section 14 can be given only if the proceedings were “civil proceedings” and were pending in a court. It is contended that the appellate authority under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 is not a court and, therefore, the benefit under Section 14 could not be legally given to the appellant whose suit had been rightly held to be beyond time by the trial court as also by the High Court.
5. Section 41 of the Act provides as under:
“41. Notice of dismissal.—(1) No employer shall dispense with the services of a person employed continuously for a period of not less than six months, except for a reasonable cause and without giving such person at least one month's notice or wages in lieu of such notice, provided however, that such notice shall not be necessary where the services of such person are dispensed with on a charge of misconduct supported by satisfactory evidence recorded at an inquiry held for the purpose.
(2) The person employed shall have a right to appeal to such authority and within such time as may be prescribed either on the ground that there was no reasonable cause for dispensing with his services or on the ground that he had not been guilty of misconduct as held by the employer.
(3) The decision of the appellate authority shall be final and binding on both the employer and the person employed.”
6. A perusal of the above provision will show that when a person is dismissed from service, he has a right of appeal to such authority and within such time as is prescribed under the Act.
7. Rules 9 and 9-A of the Tamil Nadu Shops and Establishment Rules, 1948 are quoted below to indicate the manner in which the appeal has to be heard and the powers of the appellate authority which are exercisable by him in disposing of the appeal:
“9. Appeals under Section 41(1).—(1) The Deputy Commissioners of Labour in their respective areas assigned to them by the Commissioner of Labour shall be the authorities for the purposes of hearing appeals under sub-section (2) of Section 41 of the said Act:
Provided that the Commissioner of Labour may, by order in writing, on the representation made by either of the parties in this behalf or on his own accord, withdraw any case under this Act, pending before an authority and transfer the same to another authority for disposal. Such authority to whom the case is so transferred may, subject to the special direction in the order of transfer proceed either de novo or from the stage at which it was so transferred.
(2) Any appeal under sub-section (2) of Section 41 shall be preferred by the person employed within thirty days from the date of service of the order terminating the service with the employer, such service to be deemed effective if carried out either personally or if that be not practicable, by prepaid registered post to the last known address when the date of such service shall be deemed to be the date when the letter would arrive in ordinary course of post:
Provided that an appeal may be admitted after the said period of thirty days if the appellant satisfies the appellate authority that he had sufficient cause for not preferring the appeal within that period.
(3) The procedure to be followed by the appellate authority (Deputy Commissioner of Labour), when hearing appeals preferred to him under sub-section (2) of Section 41 shall be summary. He shall record briefly the evidence adduced before him and then pass orders giving his reasons therefor. The result of the appeal shall be communicated to the parties as soon as possible. Copies of the orders shall also be furnished to the parties, if required by them.
9-A. Rehearing of appeals.—(1) In any appeal preferred under the Act, if the employer or his representative fails to appear on the specified date, the appellate authority may proceed to hear and determine the appeal ex parte.
(2) In any appeal preferred under the Act, if the appellant fails to appear on the specified date, the appellate authority may dismiss the appeal.
(3) Notwithstanding anything contained in sub-rules (1) and (2), an order passed under either of those sub-rules may be set aside and the appeal reheard on good cause being shown within one month of the date of the said order, notice being served on the opposite party of the date fixed for such rehearing.”
8. It is not disputed that the appeal filed before the Deputy Commissioner of Labour (Appeals), Madras was within time.
9. The Deputy Commissioner of Labour (Appeals), Madras, which is the authority constituted under the Tamil Nadu Shops and Establishments Act, 1947 has the jurisdiction to adjudicate upon an order by which the services of an employee are terminated. He has the jurisdiction to decide whether the order of dismissal, passed by the employer, was valid or it was passed in violation of any statutory rule or principles of natural justice. Under Section 41(3), the order passed by him is binding on the employer as also on the employee. Thus, the Deputy Commissioner of Labour (Appeals) may not be a “civil court” within the meaning of the Code of Civil Procedure but it is definitely a “court”.
10. This appeal was dismissed on 1-9-1987 on the ground that the provisions of the Tamil Nadu Shops and Establishments Act, 1947 were not applicable to nationalised banks as held by the Madras High Court in the judgment since reported in C.V Raman (1984) 2 LLJ 34 (Mad). This judgment was rendered during the pendency of the appeal before the Deputy Commissioner of Labour (Appeals), Madras.
11. Sub-section (1) of Section 14, Limitation Act, provides as under:
“14. (1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.”
12. It will be noticed that Section 14 of the Limitation Act does not speak of a “civil court” but speaks only of a “court”. It is not necessary that the court spoken of in Section 14 should be a “civil court”. Any authority or tribunal having the trappings of a court would be a “court” within the meaning of this section.
13. In Thakur Jugal Kishore Sinha v. Sitamarhi Central Coop. Bank Ltd. AIR 1967 SC 1494, 1967 Cri LJ 1380 this Court, while considering the question under the Contempt of Courts Act, held that the Registrar under the Bihar and Orissa Cooperative Societies Act was a court. It was held that the Registrar had not merely the trappings of a court but in many respects he was given the same powers as was given to an ordinary civil court by the Code of Civil Procedure including the powers to summon and examine witnesses on oath, the power to order inspection of documents and to hear the parties. The Court referred to the earlier decisions in Bharat Bank Ltd. v. Employees AIR 1950 SC 188, 1950 SCR 459; Maqbool Hussain v. State of Bombay AIR 1953 SC 325, 1953 SCR 730 and Brajnandan Sinha v. Jyoti Narain AIR 1956 SC 66, (1955) 2 SCR 955. The Court approved the rule laid down in these cases that in order to constitute a court in the strict sense of the term, an essential condition is that the court should have, apart from having some of the trappings of a judicial tribunal, power to give a decision or a definitive judgment which has finality and authoritativeness which are the essential tests of a judicial pronouncement.
14. In Pritam Kaur v. Sher Singh AIR 1983 P&H 363 the proceedings before the Collector under the Redemption of Mortgages (Punjab) Act (2 of 1913) were held to be civil proceedings. It was held that the “court”, contemplated under Section 14 of the Limitation Act, does not necessarily mean the “civil court” under the Code of Civil Procedure. It was further held that any tribunal or authority, deciding the rights of parties, will be treated to be a “court”. Consequently, benefit of Section 14 of the Limitation Act was allowed in that case. This decision was followed by the Himachal Pradesh High Court in Bansi Ram v. Khazana AIR 1993 HP 20.
15. Applying the above principles in the instant case, we are of the opinion that the Deputy Commissioner of Labour (Appeals), which was an authority constituted under Section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 to hear and decide appeals, was a “court” within the meaning of Section 14 of the Limitation Act and the proceedings pending before him were civil proceedings. It is not disputed that the appellant could file an appeal before the Local Board of the Bank, which was purely a departmental appeal. In this view of the matter, the entire period of time from the date of institution of the departmental appeal as also the period from the date of institution of the appeal under Section 41(2) before the Deputy Commissioner of Labour (Appeals) till it was dismissed will, therefore, have to be excluded for computing the period of limitation for filing the suit in question. If the entire period is excluded, the suit, it is not disputed, would be within time.
16. It was for these reasons that we have allowed this appeal by our short order dated 28-7-1998 for which the reasons are recorded by us in detail.
Alert