Holding

The termination of the employee’s service under Clause 17(b) of the Fifth Bipartite Settlement was valid and the 1990 clarification does not have retrospective effect.

Summary

Anita Nandrajog, an accounts clerk of Bank of Baroda, was absent without leave for more than 150 consecutive days on multiple occasions. The bank invoked Clause 17(b) of the Fifth Bipartite Settlement (dated 10‑April‑1989) and issued a notice on 26‑June‑1989 requiring her to report within 30 days, failing which she would be deemed to have voluntarily retired. She failed to report and sought relief, arguing that no inquiry was held and that the action violated natural justice. The Industrial Tribunal and the Allahabad High Court held the bank's order illegal, but the Supreme Court reversed those decisions, holding that the bank was entitled to terminate her service under the settlement clause, that the 1990 clarification was an amendment without retrospective effect, and that no inquiry was required under the clause. Consequently, the appeal was allowed and the bank's termination upheld.

Issues considered

Whether the bank could lawfully terminate the employee’s service under Clause 17(b) of the Fifth Bipartite Settlement without a disciplinary inquiry.
Whether the 1990 clarification/amendment to Clause 17(b) has retrospective effect on the termination order dated 25‑August‑1989.
Whether the employee’s right to natural justice was violated by treating her as voluntarily retired.

Legislation cited

Industrial Disputes Act, 1947s. 10

Subjects

Industrial Disputes Actvoluntary retirementunauthorized absenceClause 17(b)Fifth Bipartite Settlementnatural justiceretrospective amendmentservice lawmisconduct

Judgment

[2009] 13 (ADDL.) S.C.R. 1073

REGIONAL MANAGER, BANK OF BARODA A
.-A,.
v.
.. ANITA NANDRAJOG
(Civil Appeal No. 6898 of 2004)
SEPTEMBER 1, 2009
8
[MARKANDEY KATJU AND ASOK KUMAR
GANGULY, JJ.]
y
.• '
LABOUR LAW:
c
Industrial Disputes Act, 1947 - Fifth Bipartite Settlement
dated 10-4-1989; Clause 17(b) - Bank employee remained
absent without leave for very long period - Bank invoked
Cl.17(b) of Fifth Bipartite Settlement and issued notice to her
to report for duty within 30 days - Employee did not report for D
* duty - Bank terminated her service by treating her as having
'. voluntarily retired from service - Action of Bank challenged
- Held: Challenge not tenable - Behavior of employee was
highly improper - No establishment can function if it allows
its employees to behave in such a manner - Service Law .,...
E
- Misconduct.

Respondent was an accounts clerk in a bank. She
f- remained absent without leave for very long period.
;
Appellant-Bank invoked Cl.17(b) of Fifth Bipartite
... 4
Settlement dated 10-4-1989 and issued notice to her to
report for duty within 30 days. Respondent did not report
F

for duty. Appellant-Bank terminated her service by
treating her as having voluntarily retired from service.
The Industrial Tribunal held that the order passed by the
Bank was illegal and unjustified. The order was upheld G
by the High Court. Hence the present appeal.
,.)(
Allowing the appeal, the Court

HELD: 1.1. The management had been extremely
1073 H
1074 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R.

A lenient to the respondent by condoning her absef.lce on - ,)....
the first occasion from 4.8.1986 to 29.3.1987 that ;,s for a
period of over seven months when she was ~absent
without leave, and then again from 20.7.1987 to 10.4.1988 "
that is for a period of about seven months. Thus the
B respondent was absent for a very long period without
leave. The bank taking a lenient view condoned the
absence without leave. However, it seems {that the
y
respondent thought that she could do whatever she liked ,.
and remain absent whenever she liked for whatever
c period she liked. She again sent an application dated
22.8.1988 for leave for 60 days, which was not
sanctioned. However, she remained absent without leave
and she ~ept sending letters for extension of leave
although she was on unauthorized absence. [Paras 9 and
1O] (1079-C-F] ~
D
1.2. In the Bank's letter dated 26.6.1989, 'it is clearly . ·~

mentioned .that the respondent did not havf! any leave
. remaining to he!' credit and she had remained on
unauthorized leave for a period of more than 150 days
E continuously and it appeared that she has ino intention
of joining duty. She w?..e :.z~ed to report for duty within
30 days, failing which it would be deemed t:hat she has
taken voluntarily retirement from service. In reply she -f
wrote a letter dated 27.7.1989 that she will be joining duty ~

F by the last week of August, 1989, but again she wrote
another letter dated 22.8.1989 for extension of leave till
April, 1990 on account of domestic problem!;. Such a
behavior on the part of an employee is clearly unfortunate
•
_,.
and highly improper. [Para 11] (1079-F-H; 1080-A]
G
2. Under clause 17(b) ofthe Fifth Bipartite Settlement
dated 10-4-1989, it is clear that if an employee is absent '!<..
without leave for more than 150 days and has no more
leave to his/her credit then the Bank can validly order
voluntary cessation of employment. Also, under clause
H
REGIONAL MANAGER, BANK OF BARODA v. ANITA1075
NANDRAJOG

.. ~-
17(b), when the management is reasonably satisfied that
the employee has no intention of joining duty, it may call
upon the employee to report for duty within 30 days
A

.,. failing which action could be taken under clause 17(b).
In the present case such a notice was given by the Bank
on 26.6.1989 but the respondent wanted leave till April, B
1990 i.e. for another eight months. It is thus clear that she
had no intention of resuming duty within 30 days. Hence
'¥
.,. . the action of the Bank in terminating her service on the
ground of voluntary cessation of employment was valid.
[Para 12] [1080-A-D) c
3. The subsequent clarification of the Fifth Bipartite
Settlement in 1990 is in fact an amendment to the earlier
clause 17(b) and hence will have no retrospective effect
in the absence of any express intention to that effect. The
~ termination order was passed on 25.8.1989 whereas the D
.. above clarification was made in 1990 when the service
of the respondent had already come to an end. A
clarification may in reality be an amendment, while an
amendment may in reality be a clarification. It is not the
nomenclature which matters but the real nature of the E
rule. The so-called clarification of January 1990 was in
fact an amendment to clause 17(b) because it makes a
t major change to clause 17(b). Hence it has no
retrospective effect [Paras 13, 14 and 15] [1080-E-H; 1081-

. > A-C]

4. The behaviour of the respondent remaining absent
F

without leave for such long periods was clearly
regrettable and unfortunate. No establishment can
function if it allows its employees to behave in such a
manner. Therefore, the order of the appellant-Bank dated G
25.8.1989 terminating the service of .the respondent as a
,.:l(
voluntary cessation of her job is upheld. [Para 16] [1081-
0-Fl
Syndicate Bank v. General Secretary, Syndicate Bank H
1076 SUPREME COURT REPORTS (2009] 13 (ADDL.) S.C.R.

A Staff Association 2000(5) SCC 65 and P1,mjab & Sind Bank •. ,#.....

& Ors. v. Sakattar Singh 2001(1) sec 214, relied on.
._
.,
Case Law Reference:

2000(5) sec 65 relied on Para 16
B
2001(1) sec 214 relied on Para 16

CIVIL APPELLATE JURISDICTION : Civil Appeal No. V'
6898 of 2004. ~ ..
c CourtFrom the Judgment & Order dated 22.9.2003 of the High
of Judicature at Allahabad in C.W.P. No. 36619of1996.

Ramji Srinivasan, Pramod Gupta, Vartika Sahay and
Rajesh Srivastava for the Appellant.

Dinesh Dwivedi, Prateek Dwivedi, Manish Shankar, -...\..
D
Mukesh Verma, Pawan Shukla and Yash Pal Dhingra for the ~

Respondent.

The Judgment of the Court was delivered by

E MARKANDEY KATJU, J. 1. This appeal has been filed
against the impugned judgment of the Allahabad High Court
dated 22.9.2003 in Civil Writ Petition No.36619 of 1996.
-f
2. Heard learned counsel for the parties and perused the
t.
record.
F r'

23. The _brief background of the case as mentioned in the ""
writ petition, is that respondent no.2 was employed in the office
of petitioner-Bank on 21. 7.1980 as accounts clerk. Her husband
was employed at Libya. She on two occasions i.e. from
G 4.8.1986 to 29.3.1987 and again from 20.7.1987 to 10.4.1988
i.e. more than 266 days, remained absent from duty, but the
petitioner-Bank condoned the aforesaid acts of absence of
)',
leaving the country without permission. Respondent no.2 again
left for Libya with effect from 22.8.1988 without permission and
·H without any sanction of leave. She did not tum up to join her
_j

REGIONAL MANAGER, BANK OF BARODA v. ANITA 1077
NANDRAJOG [MARKANDEY KATJU, J.]

-- ...._ . duties for more than 150 consecutive days. The petitioner-Bank
invoked the provisions of Clause 17(b) of Fifth Bipartite
Settlement dated 10.4.1989 and issued notice to respondent
no.2 on 26.6.1989 to report for duty within 30 days, failing which
A

it would be presumed that she has voluntarily retired from the
service of the Bank. Pursuant to the said letter dated 26.6.1989, B
it has been alleged that respondent no.2 failed to report for duty
and instead she sent two letters to the Senior Manager of the
)'
.. ) Bank at Bareilly, the first letter dated 27.7.1989 in which she
stated that she would be resuming her duty in the last week of
August, 1989, and the second letter dated 22.8.1989 c
requesting for extension of leave without pay upto April, 1990
on the ground of her domestic problems. Despite her letter
dated 27.7.1989 she did not resume duty in the last week of
(

• August 1989. By means of communication dated 25.8.1989,
""""" )r the petitioner-Bank treated the contesting respondent as having
D
I ~.
voluntarily terminated her employment, and asked her to
approach the authority concerned for claiming terminal benefits
(
in the prescribed format.

4. Aggrieved against the same the respondent
approached the Central Government, Ministry of Labour, who E
vide Notification under Section 10 of the Industrial Disputes Act
referred the following dispute to the Labour Court for
t adjudication :

-
--f

1--··
~

'Whether the action of the management of Bank of Baroda
in treating Smt. Anita Nandrajog as deemed to have
voluntarily retired from the services w.e.f. 25.8.1989 is legal"
and justified; if not what relief she is entitled to?"
F

5. Before the Tribunal both the parties led their respective
evidence, documentary as well as oral, and thereafter the G
Industrial Tribunal passed an award holding the order dated
25.8.1989 passed by the Bank of Baroda as illegal and
unjustified.

6. Against the award of the Tribunal the respondent before H
l_
t,
\

1078 SUPREME COURT REPORTS [2009] 13 {ADDL.) S.C.R.

A us filed a writ petition in the Allahabad High Court which was
dismissed by the High Court and hen~e this appear by the
Bank by special leave.
. )._

- ;

7. The main contention on behalf of the respondent ~

employee before the Tribunal and High Court was that she was
B
not given any charge stieet nor was any inquiry held regarding
her misconduct of being absent without leave, and hence the ...,,
order dated 25.8.1989 was illegal being against the principles j _.
of natural justice. On the other hand,. the contention on behalf
of the Bank was that no inquiry was necessary since clause
c 17(b) of the Fifth Bipartite Settlement dated 10.4.1989 was
~

being invoked.

8. Clause 17(b) of the Fifth Bipartite Settlement is as
follows :-
--i.,
D
"17. Voluntary Cessation of Employment by the •
Employee The earlier provision relating to the voluntary
cessation of employment by the employee in the earlier
settlement shall stand substituted by the following : ·
E (a) .....................

(b) When an employee goes abroad and (1) absents
himself for a period of 150 days or more consecutive days -f
without submitting any application for leave, or for its
extension or (2) without any leave to his·credit or beyond "' ......
F
the period of leave sanctioned originally/subsequently or
when there is a satisfactory evidence that he has taken up
employment outside India or when the management is
reasonably satisfied that he has no intention of joining
G duties, the manag_ement may at any time thereafter give a
notice to the em"ployee at his la~t known address calling
+ upon him to report for duty within 30 days of the date of ~ L
notice, stating, inter alia the grounds for coming to the
conclusion that the employee has no intention of joining
duties and furnishing necessary evidence, where available.
H
'
REGIONAL MANAGER, BANK OF BARODA v. ANITA 1079
NANDRAJOG [MARKANDEY KATJU, J.]
j_·
Unless the employee reports for duty within 30 days of the A
notice or gives an explanation for his absence within the
~
said period of 30 days satisfying the management that he
has no intention of not joining duties, the employee will be
deemed1o have voluntarily retired from the bank's service
on the expiry of the said notice. ln the even of employee B
submitting a satisfactory reply, he shall be permitted to
.,.
. .,
report of duty thereafter within 30 days from the date of the
expiry of the aforesaid notice without prejudice to the bank's
right to take any action under the law or rules of service."

9. It may be noted that the management had been
c
extremely lenient to the respondent by condoning her absence
on the first occasion from 4.8.1986 to 29.3.1987 that is for a
...
period of over seven months when she was absent without
> leave, and then again from 20.7.1987 to 10.4.1988 that is for
a period of about seven months. Thus the respondent v1as D
c=t•, ' absent for a very long period without leave. The bank taking a
lenient view condoned the absence without leave. However, it
seems that the respondent thought that she could do whatever
she liked and remain absent whenever se liked· for whatever
period she liked. E

10. She again sent an application dated 22.8.1988 for
t leave for 60 days, which was not sanctioned. However, she
J re.mained absent without leave and she kept sending letters for
---j
extension of leave although she was on unauthorized absence. F
11. In the Bank's letter dated 26.6.1989 copy of which is
as-annexure P-1 to the appeal, it is clearly mentioned in clause
4 that the respondent did not have any leave remaining to her

,, credit and she had remained on unauthorized leave for a period
of more than 150 days continuously and it appeared that she
has no intention of joining duty. She was asked to report for
duty within. 30 days, failing which it would be deemed.that she
G

has taken voluntarily retirement from service. In reply she wrote
a letter dated 27.7.1989 that she will be joining duty by the last
week of August, 1989, but again she wrote another letter dated H
1080 SUPREME COURT REPORTS [2009) 13 (ADDL.) S.C.R.

A 22.8.1989 ftfr e>e1~~sion of leave till April, 1990 on account of . )._
domestic probrGms. In our opinion such a behavior on the part
of an employee is clearly unfortunate and highly improper.
12. Under clause 17(b) of the Bipartite Settlement it is clear
.that if an employee is absent without leave for more than 150
B
days and has no more leave to his/her credit then the Bank can
validly order voluntary cessation of employment. Also, under
clause 17(b), when the management is reasonably satisfie<fthat ~
the employee has no intention of joining duty, it may call upon r~

c the employee to report for duty within 30 days failing which
action could be taken under clause 17(b). In the present case
such a notice was given by the Bank on 26.6.1989 but the
respondent wanted leave till April, ·1990 i.e.· for another eight
months. It is thus clear that she had no intention of resuming
duty within 30 days. Hence we are of the opinion that the action
D of the Bank in terminating her service on the ground of voluntary ~
cessation of employment vide order dated 26.8.1989, annexure ~

P-4 to this appeal, was valid.
13. Learned counsel for the appellant has relied on the
E subsequent clarification of the Fifth Bipartite Settlement which
states:
'Voluntary Cessation of Service :
...
1(1) Clause 17 of the settlement will apply only in cases
F of desertion i.e. where there is abser.~ from duty without •
any intimation. If there is-an intimation from the employees.
but the absence is unauthorized otherwise, the Bank
should take act!on in terms of disciplinary procedure laid
down in previous settlements and· not in terms of clause
G 17 of the Fifth Bipartite Settlement."
14. In our opinion the above clarification is in fact an
amendment to the earlier clause 17(b) and hence will·have no
retrospective effect in the absence of any express ·intention to
"-
that effect. The termination order was· passed on 25.8.1989
H
REGIONAL MANAGER, BANK OF BARODA v. ANITA 1081
NANDRAJOG [MARKANDEY KATJU, J.]
-..!. . whereas the above clarification was made in 1990 when the A
_. service of the respondent has already come to an end.

15. Learned counsel for the respondent submitted that the
clarification is retrospective in nature. We do not agree. In our
' opinion, we should not go by the nomenclature and we should 91
see the substance of the matter. A clarification may in reality
be an amendment, while an amendment may in reality be a
'? clarification. It is not the nomenclature which matters but the real
., \

nature of the rule. In our opinion, the so-called clarification of
January 1990 was in fact an amendment to clause 17(b)
because it makes a major change to clause 17 (b). Hence in
c
our opinion it has no retrospective effect.

16. The behaviour of the respondent remaining absent
without leave for such long periods was clearly regrettable and
~
unfortunate. We are fortified by the view we are taking by the D
~ decision of this Court in Syndicate Bank v. General Secretary,
Syndicate Bank Staff Association 2000(5) SCC 65 as well as
the decision in Punjab & Sind Bank & Ors. v. Sakattar Singh
2001(1) SCC 214. No establishment can function if it allows
its employees to behave in such a manner. We, therefore, E
uphold the order of the appellant-Bank dated 25.8.1989
terminating the service of the respondent as a voluntary
+ cessation of her job, and we set aside the award of the Tribunal
,, dated 5.6.1996 and the impugned judgment of the High Court
dated 22.9.2003. Appeal allowed. No order as to costs. F
B.B.B. Appeal allowed.

-·i '