Andhra Bank Thro Reg.Manager,Visakha. Vs.
Court & ANR  INSC 867 (9 May 2008)
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6578 OF 2002 Andhra Bank thro
Reg. Manager, Visakha .....Appellant Versus I.T.- cum- Labour Court & Anr.
HARJIT SINGH BEDI, J.
1. This appeal by special leave
arises out of the following facts.
2. The Central Government vide its
order dated 1st July, 1971 declared Vishakhapatnam as a Group "A"
city. As a consequence of the aforesaid declaration, the staff of the appellant
bank claimed certain additional benefits such as house accommodation, house
rent allowance etc. While some 2 of the other nationalized banks extended the
benefits to their employees, the Andhra Bank declined to do so on the plea,
inter alia, that it was running into huge losses and was unable to meet the
additional burden. These differences led to protracted conciliation proceedings
before the Assistant Labour Commissioner, Vishakhapatnam, but no concrete
solution was arrived at. The Central Government thereupon referred the dispute
to the Industrial Tribunal for adjudication. The respondent management i.e.
present appellant filed a written statement before the Industrial Tribunal
questioning the jurisdiction of the Tribunal to entertain the reference and
further clarifying that on account of several awards such as the Shastri Award,
the Desai Award and several bipartite settlements arrived at between the Bank
and its employees from time to time, there was no obligation on the bank to
give the benefits arising out of the declaration dated 1st July, 1971. The
Industrial Tribunal held that there were two points for consideration:
1. Whether the Tribunal had the
jurisdiction to entertain the reference? and;
2. Whether the management of
Andhra Bank was justified in denying the enhanced rate of House Rent Allowance
applicable to project area to its award staff?
3. The Tribunal held that as per
the legal position the Industrial Tribunal was competent to entertain the
On point No.2 the Court observed
that the Andhra Bank was paying house rent to different categories of employees
with a ceiling of Rs. 400/- to Rs. 550/- and as the attempts at conciliation
had failed on account of the dilatory tactics on the part of the Bank, the
employees had absolutely no remedy but to approach the Tribunal for the
redressal of their claim. The Tribunal in conclusion observed as under:
"It can be taken judicial
notice that the State Government is paying 20% HRA to the employees subject to
a maximum of Rs.1000/- When other banks are paying money towards house rent
allowance where quarters are not provided the denial of house rent allowance at
the enhanced rent by Andhra Bank to project Area Group "A" cannot be
said justified in the circumstances stated above. As seen 4 from the annexure,
the Union Bank of India of Vishakhapatnam has opted to pay or make housing
accommodation to the award staff at Vishakhapatnam w.e.f.
24.06.92. In the said
circumstances, I am of the opinion that the award staff of Andhra Bank i.e.
(Clerical, Sub-Staff) would be entitled to house rent allowance at 20% of the
basic pay as is provided in the case of the State Government employees in Group
"A" project area like Vishakhapatnam. The reference was registered as
L.D., in the month of August, 1992. In the said circumstances, the petitioner,
Andhra Bank Award Staff Employees' Union's claim is justifiable. The denial of
enhanced rate of house rent allowance applicable to project area ` A' to its
award staff by the management of Andhra Bank is not justifiable. The point is
In the result an award is passed
in favour of the petitioner, Andhra Bank Award Staff Union and against the
respondent management situated at Vishakhapatnam, Hyderabad, Head Office (I)
directed to consider payment of 20% of HRA to project area of Group `A' at
Vishakhapatnam on par with Government employees subject to a maximum of Rs.
1000/- however if housing accommodation is provided by the Andhra Bank, 10% of
the basic pay shall be deducted for the concerned individual and the HRA
calculated at 20% shall be surrendered by the concerned employee, I(a) or as is
paid by 5 the other bank's employee referred in the annexure of the claim
statement, (II) it shall be effected from December, 1992 and (III) the award
shall be implemented by the management of Andhra Bank within a month after
receipt of the award by the management".
4. The award of the Tribunal was
challenged by the Andhra Bank by way of a Writ Petition in the Andhra Pradesh
High Court. The High Court in its judgment dated 13th April, 1998 first noted
the facts of the case and observed that the reference made to the Tribunal
(i.e. on point No.1) was justified and in order and on point No.2 which was the
material question observed as under:
"Regarding point No.2, the
Tribunal took into consideration, the population of the Vishakhapatnam City,
facilities available, particularly availability of residential accommodation,
the status of "Award Staff", facilities given to the staff of the
type in other Banks and held that the denial of House Rent Allowance, as
incorrect and unjust.
The order of the Tribunal is a
well considered one and there is no illegality or irregularity in the impugned
Hence, the writ petition is liable
to be dismissed".
5. Aggrieved by the award of the
Industrial Tribunal and the judgment of the High Court, the Andhra Bank is
before us in appeal.
6. Mr. Reddy, the learned Senior
Counsel for the appellant has very fairly submitted that the conclusion drawn
by the Tribunal and the High Court on point No.1 were not being challenged in
this Court but the findings on point No.2 were clearly wrong inasmuch as that
despite the plea of the Bank that the declaration of 1st July, 1971 made by the
Central Government was inapplicable to the Bank in view of several awards as
well as bipartite settlements between the Bank and its employees yet no finding
whatsoever had been recorded on this aspect by the Tribunal and this submission
had also been brushed aside by the High Court in a very casual manner.
The learned counsel for the
respondent has, however, submitted that the two forums below having exercised
their discretion in favour of the employees who had been fighting for their
cause for almost 30 years, the orders should not be 7 interfered with more
particularly as all other banks had accepted and accorded the benefits to their
employees under the declaration dated 1st July, 1971.
7. We have considered the
arguments of the learned counsel for the parties. It is true, as has been
contended by the learned counsel for the appellant, that both the Tribunal as
well as the High Court have ignored the vital aspect of the matter i.e. the
effect of the awards and settlements arrived at between the management of the
bank and its employees and their effect thereon in determining their inter-se
rights and obligations. The Tribunal has completely ignored this basic issue
and the High Court has also given short shrift thereto.
We are of the opinion that this is
the crucial matter in the dispute raised by the employees. We accordingly allow
this appeal, set aside the judgment of the High Court and award of the
Industrial Tribunal on point No.2 and remand the case to the latter for a fresh
decision in accordance with law in the background of the awards and settlements
between the bank and its employees vis-`-vis the declaration of 1st July, 1971.
In the light of the fact that the matter has been pending in one 8 forum or the
other for the last two decades, we would request the Industrial Tribunal to
take a decision in the matter within six months from the date of supply of a
certified copy of this judgment to the Tribunal. There will be no order as to