“REPORTABLE”

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOs. 11766­11767 OF 2018

(Arising out of SLP (Civil) Nos. 30205­30206 of 2017)

Manju Saxena          …Appellant

Versus

Union of India & Anr.                    …Respondent(s)

J U D G M E N T  

INDU MALHOTRA, J.

Leave granted.

1. The present S.L.P.s arise out of the impugned

Judgment dated 14.07.2017 passed  in L.P.A.  No.

467/2017, and Order dated 13.09.2017 passed in

R.P. No. 380/2017 of the Delhi High Court,

wherein the High Court dismissed the L.P.A filed by

1

the Appellant against the 2nd  Respondent ­ HSBC

Bank.  

2. Briefly stated, the factual matrix in which the

present  S.L.P.  has  been  filed  are  summarized  as

under:

2.1 The Appellant was appointed on 01.04.1986 as

a “Lady Confidential Secretary” by the 2nd

Respondent­ HSBC Bank, (hereinafter referred

to as “the R2­Bank”).

Subsequently, on 23.04.1992 the Appellant

came to be promoted as a “Senior Confidential

Secretary” to the Senior Manager (North India)

of HSBC.  

2.2 In May 2005, the post of “Senior Confidential

Secretary” became redundant, as the Officer

with whom the Appellant was attached, left the

services of the R2­Bank. Her services were

utilized by giving her some other duties for the

time being, till alternate jobs could be offered to

her.

The Management admittedly offered her four

alternate jobs of (i) Business Development

2

Officer, (ii) Customer Service Officer, (iii)

Clearing Officer, and (iv) Banking Services

Officer. Each of these jobs were in the same pay

scale.  

The Appellant has admitted in her Statement

of Claim dated 20.03.2006, that she declined to

accept  any  of these jobs  on the  ground that

such jobs were either temporary in nature, or

the claimant did not possess the experience or

work­knowledge to take up such jobs.  

2.3 On 01.10.2005, the Bank issued a Letter

terminating the services of the Appellant on the

ground that her current job had become

redundant.  The Appellant  was  offered several

job opportunities, however, she did not choose

any of these offers. The  Bank  had offered a

generous severance package, which she  was

not prepared to accept.  The Bank terminated

her service, and paid 6 months’ compensation

in lieu of Notice as per the contract of

employment. In addition, as a special case, the

Bank paid Compensation, which was

3

equivalent to 15 days’ salary for every

completed year of service. The total amount

paid to the Appellant was Rs. 8,17,071/­.

2.4 The Appellant raised an Industrial Dispute

before the Regional Labour Commissioner

under the Industrial Disputes Act, 1947

(hereinafter referred to as the I.D. Act) on

03.10.2005, and sought enhancement of the

severance package paid to her. It is relevant to

note that the Appellant did not raise any claim

for re­instatement to the R2­Bank.

Conciliation proceedings were commenced

between the  Appellant  and R2­Bank,  wherein

the Appellant made the following claims:

HEADS AMOUNT (INR)

Severance  69,99,600.00

Provident Fund 8,90,111.60

Gratuity  3,81,209.00

Leave Encashment 86,541.40

Compensation + Notice Pay 8,17,071.00

TOTAL 91,74,533.00

4

The Bank, in response,  offered the  following

package:

HEADS AMOUNT (INR)

Severance  32,79,600.00

Provident Fund 8,90,111.60

Gratuity  3,81,209.00

Leave Encashment 86,541.40

Compensation + Notice Pay 8,17,071.00

TOTAL 57,29,533.00

The  only  difference  between the two  parties

was with respect to the amount of  Severance

payable to the Appellant. Since the parties were

unable to arrive at a settlement, the

conciliation proceedings failed.  

2.5 The Appellant filed her Statement of Claim

dated 20.03.2006, before the Central

Government Industrial Tribunal (referred to as

“the CGIT”) claiming  inter alia  an enhanced

severance package, waiver of outstanding

Housing Loan, and full pension. The Claim was

opposed by the R2­Bank. The R2­Bank filed its

5

Written Statement and contested the claim of

the  Appellant,  stating that the  Appellant  was

not a “workman” under the I.D. Act, 1947. The

Bank further stated that they had followed the

procedure outlined  under the I.D.  Act,  while

terminating the services of the Appellant.

The Ld. CGIT passed an Award dated

01.06.2009,  and directed the  R2­Bank  to re­

instate the Appellant, with full terminal

benefits.  

2.6 The  R2­Bank filed  Writ Petition bearing  No.

W.P. (C) 11344/2009 before the Delhi High

Court, to  challenge the  Award passed by the

CGIT. The High Court vide Interim Order dated

22.03.2013 remanded the matter to the CGIT

for fresh consideration on the point whether the

Appellant could be considered to be a

“Workman” as per the Industrial Disputes Act,

1947.   The  Writ Petition was kept pending

during the pendency of the remand. The CGIT

passed a fresh Award dated 15.07.2015 holding

6

the Appellant to be a “workman” under the I.D.

Act, 1947.  

The Ld. CGIT directed the R2­Bank to re­

instate the Appellant with continuity of service,

full back wages, and all consequential benefits.  

2.7 During the pendency of the Writ Petition, the

Appellant had filed an Application under S. 17B

of the I.D. Act, 1947 before the Delhi High

Court seeking interim maintenance.  The High

Court vide Interim Order dated 27.07.2012

directed payment of a monthly sum of Rs.

75,000/­ to the Appellant, towards Interim

Maintenance u/S. 17B of the I.D. Act, 1947.

2.8 Aggrieved by the Order dated 27.07.2012, the

R2 Bank filed an L.P.A. before the Delhi High

Court to challenge the amount awarded to the

Appellant  u/S.  17B.  The Division Bench vide

Order dated 24.08.2012, reduced the monthly

sum payable to Rs. 58,330/­ per month which

was as per her last drawn salary.  

7

The S.L.P. filed by the Appellant being S.L.P. (C)

No. 36513/2012 to challenge the Order dated

24.08.2012, came to be dismissed vide Order

dated 07.01.2013.

The Appellant accordingly has been paid back

wages u/S. 17B at Rs. 58,330/­ per month.  

2.9 The Appellant also raised a claim for waiver of

the outstanding amount of a Housing Loan

availed by her during the course of her service,

which was outstanding on the date of her

termination.  The  total  amount  of  outstanding

loan was approximately Rs. 22,16,702/­.

The Appellant challenged proceedings for

recovery initiated  by the  R2­Bank  before the

Delhi High Court in W.P. (C) No. 19451/2006.

A Consent Order dated 18.03.2010 came to be

passed whereby the outstanding amount of Rs.

22,16,702/­ towards the Housing Loan, was to

be adjusted from her back wages, subject to the

final outcome of the W.P. (C) No. 13344/2009.  

8

2.10  The  Writ  Petition filed  by the  R2­Bank was

allowed by the learned Single Judge vide

Judgment and  Order dated 12.04.2017, and

the Award passed by the CGIT came to be set

aside.  

The High Court accepted the R2­Bank’s

submissions, and held that the Appellant’s

refusal to accept any of the four alternate

positions offered to her, amounted to

“abandonment” of her job. Hence there was no

question  of  her services  having  been illegally

terminated. The Appellant had received

monetary compensation  under several  heads,

to the tune of Rs. 1,07,73,736/­ during the

pendency of the Writ Petition, which was

almost 13 times her legal entitlement. This

included payments made under the various

heads such as Compensation paid during

termination, Gratuity, Payment towards Interim

Award, Payments under S. 17B, Payment

towards legal expenses. The Appellant was

9

directed to refund the entire amount except the

sum of Rs. 8,17,071/­, which was the

compensation paid at the time of termination.  

2.11  Aggrieved by the Judgment  &  Order dated

12.04.2017 in W.P. (C) 11334/2018, the

Appellant filed L.P.A. No. 467/2017 before the

Division Bench. The Division Bench vide

Judgment & Order dated 14.07.2017 dismissed

the L.P.A., and  upheld the Judgment of the

learned Single Judge holding that the Appellant

had abandoned her job.  

The Division Bench however modified the

operative direction passed by the Ld. Single

Judge for restitution of the amounts paid. The

Division Bench ordered that the Appellant shall

not be required to restitute the amount of Rs.

8,17,071/­ paid at the time of termination, the

litigation expenses, and the amounts paid

under S. 17B of the I.D. Act, 1947.  

10

2.12 The Appellant filed Review Petition No.

380/2017 which was dismissed vide Order

dated 13.09.2017.  

2.13 The Appellant has assailed the Judgment

dated 14.07.2017 and Order dated 13.09.2017

passed by the Division Bench in the L.P.A. and

the Review Petition, by the present S.L.P.s.  

3. The Appellant was appearing in Person. Even

though  the  Court  had  made  a  suggestion  that  a

Counsel be appointed to represent her, she

declined the same. The submissions made by the

Appellants are:

3.1 The Appellant submitted that she is entitled to

a Severance Package of Rs. 69.99 lakhs, which

is  equivalent to  her last  drawn salary  of  Rs.

58,330/­ per month for a period of 10 years,

i.e. 120 months.  

The calculations put forth by the Appellant is

as follows:

11

[Severance Package = Last drawn monthly

Salary x 120 months];  

[Rs. (58,330 x 120) = Rs. 69,99,600/­]  

3.2 The Appellant submitted that she had been in

“continuous service” for over 20 years with the

R2­bank. Consequently, she was eligible for all

benefits payable to a ‘workman’ under the I.D.

Act.  

3.3 The Appellant further submitted that the terms

of the Housing Loan taken by her during the

course of service, provided for 782certain

relaxations and benefits to the employees. The

Appellant submitted that her outstanding loan

amount should be waived by the R2­Bank.   

3.4 The Appellant submitted that the R2­bank had

been deducting T.D.S. on all the payments

made to her during the pendency of the legal

proceedings.  The  Appellant submits that this

deduction is illegal, and she is entitled to a

refund of a sum of Rs. 13,69,083/­ deducted

towards T.D.S.

12

4. The R2­Bank was represented by Mr. Dhruv Mehta,

Sr. Adv, alongwith Mr. Gagan Gupta, Adv, the

Counsel for the R2­bank inter alia submitted:

4.1 It is the admitted position that the Appellant’s

post had become redundant when her boss left

the Bank. The Appellant was offered four

alternate positions of (i) Business Development

Officer, (ii) Customer Service Officer, (iii)

Clearing Officer, and (iv) Banking Services

Officer in the same pay  scale.  The  Appellant

however declined each of these offers. In these

circumstances, her services came to be

terminated. As a special case, a severance

amount of Rs. 8,17,071/­ was paid apart from

the other benefits.

4.2 It was further submitted that the Bank

complied with all the mandatory requirements

specified in S. 25F (a) and (b) of the I.D. Act.

The compensation of Rs. 8,17,071/­ granted to

the Appellant, was computed in accordance

with S. 25F (b) i.e. compensation equivalent to

13

15 days’  salary multiplied by the   number of

years of employment.

The High Court had recorded that the

Appellant had already received monetary

benefits in excess of the compensation she was

entitled to under the law. Therefore, the

Appellant was not entitled to any additional

amount.  

4.3 The R2­Bank submitted that during

Conciliation proceedings, they had offered a

Severance Package of Rs. 32.79 lacs which was

worked out on the basis of the last drawn Basic

Salary + Monthly Allowances, for past 10 years

(equal to 120 months).  The Basic Salary was

Rs. 19,280/­ and Monthly Allowances [H.R.A. +

Medical + L.T.A. of Rs. 8,050/­]. The total basic

component was Rs. 27,330/­ (19,280 + 8,050).

The severance package by the Bank was

computed as follows: Severance Package = (Monthly basic

component x 120 months) = Rs. 27,330 x 120  = Rs. 32,79,600/­  

14

5. We have perused the pleadings and Written

Submissions made by the parties.

5.1 It is the admitted position that the Bank had

offered four alternative positions such as

“Business Development Officer”, “Customs

Service  Officer”,  which  were at par  with her

existing pay scale and emoluments. The

Appellant was however not willing to accept any

of the alternate  positions offered to  her.  Nor

was she willing to accept the redundancy

package  offered to  her. In the  circumstances

the  R2­Bank was justified in terminating the

services of the Appellant, vide termination letter

dated 01.10.2005.

5.2 The Bank has complied with the statutory

requirements under S. 25F of the I.D. Act

which lays down the conditions that an

employer must comply, on the retrenchment of

a workman.  

In the present case, the High Court has held

that the Appellant had “abandoned” her job, on

15

her refusal to accept any of the alternative

positions with the bank, on the same pay scale.   

5.3 The concept of “abandonment” has been

discussed at length in a Judgment delivered by

a 3­Judge Bench of the Supreme Court in The

Buckingham & Carnatic Co. Ltd. v Venkatiah &

Ors.1 wherein it was held that abandonment of

service can be inferred from the existing facts

and circumstances which prove that the

employee intended to abandon service. This

case  was followed by a two judge bench in

Vijay S Sathaye v Indian Airlines Ltd. & Ors.2 .  

In the  case  before  us, the intentions  of the

Appellant can be  inferred  from her  refusal to

accept any of the 4 alternative positions offered

by the R2­Bank. It is an admitted position that

the alternative positions were on the same pay

scale, and did not involve any special training

or technical knowhow.

In any event, the claims raised by the

Appellant before various forums were with

1 (1964) 4 SCR 265 2 (2013) 10 SCC 253

16

respect to enhancement of compensation,

which are monetary in nature. The Appellant’s

conduct would constitute a voluntary

abandonment of service, since the Appellant

herself had declined to accept the various offers

of service in the Bank. Furthermore, even

during conciliation proceedings she has only

asked for an enhanced severance package, and

not reinstatement.

Once it is established that the Appellant had

voluntarily abandoned  her service, she could

not have been in “continuous service” as

defined under S. 2(oo) the I.D. Act, 1947.  

S.  25F  of the I.D.  Act,  1947  lays  down the

conditions that are required to be fulfilled by an

employer, while terminating the services of an

employee, who has been in “continuous service”

of the employer. Hence, S. 25F of the I.D. Act,

would cease to apply on her.  

The condition precedent for Retrenchment of

an employee, as provided in S. 25F of the I.D.

Act, 1947 was discussed by a Constitution

17

Bench of this Court in  Hathisingh

Manufacturing Ltd.  v  Union of India3, while

deciding the constitutional validity of S. 25FFF.

The Constitution Bench held,  

“9. …Under Section 25­F, no workman employed in an industrial undertaking can be retrenched by the employer until (a) the workman has been given one month’s notice in writing indicating the reasons for retrenchment and the period has expired or the workman has been paid salary in lieu of such notice, (b) the workman has been paid retrenchment compensation equivalent to 15 days’ average salary for every completed year of service and (c)  notice in the prescribed manner is served on the appropriate Government….By S. 25F a prohibition against retrenchment, until the conditions prescribed by that Section are fulfilled in imposed.”  

S. 25F of the I.D. Act, 1947 is extracted herein

below:

“25F. Conditions precedent to retrenchment of workmen.­ No

3 AIR 1960 SC 923

18

workman employed in any industry who has been in continuous service for not less than one year under an employer shall be retrenched by that employer until—

(a) The workman has been given one month's notice in writing indicating the reasons for retrenchment and the period of notice has expired, or the workman has been paid in lieu of such notice, wages for the period of the notice;  

(b) the workman has been paid, at the time of retrenchment, compensation which shall be equivalent to fifteen days' average pay [for every completed year of continuous service] or any part thereof in excess of six months; and  

(c) notice in the prescribed manner is served on the appropriate Government [or such authority as may be specified by the appropriate Government by notification in the Official Gazette].”

In the present case, the R2­Bank has paid the

Appellant a sum of Rs. 8,17,071/­, which

included 6 months’ pay in lieu of Notice under

S. 25F(a) and an additional amount calculated

19

on the basis of 15 days’ salary multiplied by the

number of years of service, in compliance with

S. 25F(b).   

However, no Notice was sent to the

Appropriate Government or authority notified,

in compliance with S. 25F(c) of the I.D. Act.  

A three Judge Bench of this Court in Gurmail

Singh & Ors. v State of Punjab & Ors.4 Held that

the requirement of clause (c) of S. 25F can be

treated only  as  directory  and not  mandatory.

This was followed in Pramod Jha & ors. v State

of Bihar & Ors.5  wherein it was held that

compliance  with  S. 25F(c) is not  mandatory.

5.4 The Appellant has admittedly received an

amount of Rs. 1,07,73,736/­ under various

heads:

HEADS AMOUNT (IN RS.)

Towards Notice Period  1,77,684/­

Severance Pay 6,39,387/­

Gratuity  3,81,209/­

Back Wages pursuant to Execution

8,00,000/­

4 (1991) 1 SCC 189 5 (2003) 4 SCC 619

20

Towards Interim Award 33,19,096/­

Payments made under S. 17B.

54,56,360/­

TOTAL 1,07,73,736/­

The Appellant has claimed an amount of Rs.

69.99 lakhs. The Appellant has already

received almost double the amount claimed by

her.  

6. In light of the discussions above, the afore­said

amounts received by her may be treated as a final

settlement of all her claims. The impugned

Judgment of the Division Bench dated 14.07.2017,

is modified to this extent.  

           The Civil Appeals stand dismissed, with no

order as to costs. All applications stand disposed

of accordingly.

…………...........................J. (ABHAY MANOHAR SAPRE)

.……………………J. (INDU MALHOTRA)

New Delhi, December 3rd 2018

21

22