# SOUTH INDIAN BANK LTD v. A.R.CHACKO

- **Citation:** [1964] 5 S.C.R. 625
- **Court:** Supreme Court of India
- **Decided:** 1961-11-27
- **Case number:** Civil Appeal No. 178 of 1963
- **Bench:** P.B. Gajendragadkar, K.N. W Anchoo, K.C. Das Gupta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/south-indian-bank-ltd-v-a-r-chacko-3000
- **Pages:** 10

## Headnote

Industrial Disputes-Promotion ofworkman-Pay-ApplicationWhether lies under s. 33C(2)-Jurisdiction of Labour Court,-Sastry
Award-if benefits accrue after Award ceased to be operativeAccountant-If Workman-lndustrial Disputes Act, 1947(14of 1947)
1/S.C.l./64-40
1963
December 2
626
SUPREME COURT REPORTS
(1964]
1963
ss. 7, 19(3), 19(6), 33C(2)-Industrial Disputes (Banking Companies)
Decision Act, 1955 (41 o/1955), s. 4.
South Indian
Bank Ltd.
v.
A.R. Chacko
The respondent, a clerk in the appellant Bank, was promoted
as Accountant and his pay was fixed in the new post. The respondent filed an application under s. 33C(2) of the .Industrial
Disputes Act claiming that he was entitled from the date of his
joining as accountant (a) to the basic pay of his old grade with
annual increments due on December 1, every year, (b) special
allowance of Rs. 40 per month for the additional supervisory
duties under para 164 of the Sastry Award, and (c) dearness allowance in terms of the award, and prayed to the Labour Court for
recovery of the amount due to him. In resisting this application
the appellant contended (1) that such an application under
s. 33C(2) was incompetent, (2) that in any case the matter would
be one within the jurisdiction of an industrial tribunal and not the
Labour Court, (3) that the Sastry A ward had ceased to be operative
long before the date of the respondent's appointment as an Accountant and. so no benefits accrued to him under that Award, and
(4) that by his appointment as accountant, the respondent had
ceased to be a workman and therefore not entitled to the benefit
of the Sastry Award. The. Labour Court rejected all these objections and allowed the application. In appeal by special leave.
Held: (i) Such an application by workmen lies under
s. 33C(2) of the Industrial Disputes Act.
Central Bank of India
v.
P.S.
Rajagopalan, [1964] 3
S.C.R. 140, followed.
.
(ii) In view of the provisions ofs. 7 ands. 33C(2), the Labour
Court as specified by the Government and not the Industrial Tribunal has jurisdiction to deal with this matter.
(iii) The objection that no benefit as claimed could accrue to the
respondent after the Sastry Award had ceased to be operative,
must be rejected. The provision in s. 19(6) as regards the period
for which the award shall continue to be binding is not in any
way affected by s. 4 of the Industrial Disputes (Banking Compwies)
Decision Act.
The different provisions made by the legislature in s. 19(3)
and s. 19(6) illustrate the distinction between an award being in
operation and an award being binding on the parties. Section
19(6) makes clear that after the period of operation of an award
has expired, the award does not cease to be effective.
Though in consequence of s. 4 of the Industrial Disputes
(Banking companies) Decision Act, the Award remained in force
only until March 31, 1959, it continued to have effect as a contract
between the parties that had been made by industrial adjudication
in place of the old contract.
(iv) On consideration of the evidence in the present case, the
respondent was merely a senior clerk, doing mainly clerical duties
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5 S.C.R.
SUPREME COURT REPORTS
627
and going by the designation of accountant and was in reality
a workman as defined in the Industrial Disputes Act doing an
element of supervisory work. The Labour Court has taken proper
note of the distinction between accountants who are really officers
and accountants who are merely senior clerks with supervisory
duties as envisaged by the Sastry Award.

## Text

5 S.C.R.
SUPREME COURT REPORTS
625
~
such case of termination of service. The object in
1963
':\
making this provision appears therefore to be the same
"
as in the proviso, viz., to give the employee some State Bank of
monetary assistance. It is difhcult to see why therefore
I, dia
·
three months' pay and allowances paid under para
v.
521(2) (c) should not be held to include pay for a lesser Nanak Chand
period as provided under the proviso to s. 33(2).
Jain
In our opinion, the payment for a longer period Das Gupta J.
should be held to include payment for the shorter
period and where three months' pay and allowances
had been paid under the provisions of para 521 (2) (c)
no further payment of one month's wages under the
proviso to s. 33 (2) is required.
We have therefore come to the conclusion that
the Labour Court erred in dismissing the Bank's
application under s. 33 \2) on the ground that
the requirement or payment of one month's wages
had not been complied with.
Accordingly, we allow the appeal, set aside the
order of the Labour Court and direct that the application under s. 33 (2) (b) be disposed of on merits.
There will be no order as to costs.
Appeal allowed.
SOUTH INDIAN BANK LTD.
v.
A.R.CHACKO
(P.B. GAJENDRAGADKAR, K.N. W ANCHOO AND
K.C. DAS GUPTA JJ.)
Industrial Disputes-Promotion ofworkman-Pay-ApplicationWhether lies under s. 33C(2)-Jurisdiction of Labour Court,-Sastry
Award-if benefits accrue after Award ceased to be operativeAccountant-If Workman-lndustrial Disputes Act, 1947(14of 1947)
1/S.C.l./64-40
1963
December 2
626
SUPREME COURT REPORTS
(1964]
1963
ss. 7, 19(3), 19(6), 33C(2)-Industrial Disputes (Banking Companies)
Decision Act, 1955 (41 o/1955), s. 4.
South Indian
Bank Ltd.
v.
A.R. Chacko
The respondent, a clerk in the appellant Bank, was promoted
as Accountant and his pay was fixed in the new post. The respondent filed an application under s. 33C(2) of the .Industrial
Disputes Act claiming that he was entitled from the date of his
joining as accountant (a) to the basic pay of his old grade with
annual increments due on December 1, every year, (b) special
allowance of Rs. 40 per month for the additional supervisory
duties under para 164 of the Sastry Award, and (c) dearness allowance in terms of the award, and prayed to the Labour Court for
recovery of the amount due to him. In resisting this application
the appellant contended (1) that such an application under
s. 33C(2) was incompetent, (2) that in any case the matter would
be one within the jurisdiction of an industrial tribunal and not the
Labour Court, (3) that the Sastry A ward had ceased to be operative
long before the date of the respondent's appointment as an Accountant and. so no benefits accrued to him under that Award, and
(4) that by his appointment as accountant, the respondent had
ceased to be a workman and therefore not entitled to the benefit
of the Sastry Award. The. Labour Court rejected all these objections and allowed the application. In appeal by special leave.
Held: (i) Such an application by workmen lies under
s. 33C(2) of the Industrial Disputes Act.
Central Bank of India
v.
P.S.
Rajagopalan, [1964] 3
S.C.R. 140, followed.
.
(ii) In view of the provisions ofs. 7 ands. 33C(2), the Labour
Court as specified by the Government and not the Industrial Tribunal has jurisdiction to deal with this matter.
(iii) The objection that no benefit as claimed could accrue to the
respondent after the Sastry Award had ceased to be operative,
must be rejected. The provision in s. 19(6) as regards the period
for which the award shall continue to be binding is not in any
way affected by s. 4 of the Industrial Disputes (Banking Compwies)
Decision Act.
The different provisions made by the legislature in s. 19(3)
and s. 19(6) illustrate the distinction between an award being in
operation and an award being binding on the parties. Section
19(6) makes clear that after the period of operation of an award
has expired, the award does not cease to be effective.
Though in consequence of s. 4 of the Industrial Disputes
(Banking companies) Decision Act, the Award remained in force
only until March 31, 1959, it continued to have effect as a contract
between the parties that had been made by industrial adjudication
in place of the old contract.
(iv) On consideration of the evidence in the present case, the
respondent was merely a senior clerk, doing mainly clerical duties
\
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5 S.C.R.
SUPREME COURT REPORTS
627
and going by the designation of accountant and was in reality
a workman as defined in the Industrial Disputes Act doing an
element of supervisory work. The Labour Court has taken proper
note of the distinction between accountants who are really officers
and accountants who are merely senior clerks with supervisory
duties as envisaged by the Sastry Award.
CIVIL APPELLATE JURISDICTION:
Civil Appeal No.
178 of 1963.
Appeal by special leave from the order dated
November 27, 1961 of the Central Government
Labour Court, Delhi Camp at Madras in LC.A.
No. 564 of 1961.
M.C. Setalvad, J.N. Hazarika and K.P. Gupta
for the appellant.
M.K. Ramamurthi, R.K. Garg, S.C. Agarwal and
D.P. Singh for the respondent.
December 2, 1963. The Judgment of the Court
was delivered by
1963
South Indian
Bank Ltd.
V.
A.R. Chacko
DAS GUPTA J.--This appeal arises out of an appliDas GuptaJ.
cation under s. 33C(2) of the Industrial Disputes Act.
The respondent A.R. Chacko was working as a clerk
in the Coimbatore Branch of the appellant-Bank
' when by an order dated June 19, 1959, he was promoted
as Accountant and was transferred to the Alleppy
Branch of the Bank. The appellant's pay in the new
post was fixed by an order on July 16, 1960. By
this order he was allowed Rs. 120 as basic pay in the
new grade of Rs. 120-10-160 from January 1, 1960.
From August 1, 1960 and thereafter he was allowed
to draw Rs. 10 per month as CAIIB allowance. The
petitioner's case in the application under s. 33C(2)
is based on the contention that after his promotion
to the post of accountant with additional supervisory
duties he was entitled to the special allowance of Rs.
40 under Para 164 of the Sastry Award.
His case
is that he was entitled from the date of his joining
as accountant; i.e., from July 13, 1959 (a) to a basic
pay of Rs. 95 of his old grade with annual increments
due on December I, every year i.e., at the rate of
Rs. 95 in the month of August, September, October
and November 1959 and thereafter at the rate of
1963
South Indian
Bank Ltd.
v.
A.R. Chacko
Das Gupta J.
628
SUPREME COURT REPORTS
[1964]
Rs. 100 from December 1959 to November 1960,
and thereafter at the rate of Rs. 106 from December
1960; (b) special allowance of Rs. 40 per month for
the additional supervisory duties and tc) dearness
allowance in terms of the award. The total amount
to which he would be entitled thus would be Rs.
4,495.22. The amount
actually paid to him for
the period July 13, 1959 to the end of March 1961
for which the application was brought was Rs. 3637.73.
He claimed to be entitled to the additional amount
of Rs. 855.49 and prayed that the Labour Court be
pleased to issue a certificate for this amount to the'
Collector authorising the Collector to recover the
amount in accordance with law.
In resisting this application the Bank contended
(1) that such an application under s. 33C(2) of the
Industrial Disputes Act, 1947 was incompetent, (2)
that in any case the matter would be one within the
jurisdiction of an industrial tribunal and not the
.Labour Court, {3) that the Sastry Award had ceased
to be operative from March 31, 1959 long before
the date of the respondent's appointment as an accountant and so no benefits accrued to him under that •
award and (4) by his appointment as accountant the
respondent had ceased to be a workman and was therefore not entitled to the benefits of the Sastry Award.
The Labour Court rejected all these objections and
allowing the application, computed the amount due
to the respondent from the Bank to be Rs. 855.49.
Against this decision the present appeal has been
filed by special leave.
The first objection raised by the Bank is now
concluded by the decision of this Court in the Central
Bank of India v. P. S. Rajagopalan (') where it has been
held that such an application by workmen lies under
s. 33C(2) of the Act.
In support of the second objection Mr. Setalvad
drew our attention to the second schedule to the
Industrial Disputes Act, which sets out the matters
within the jurisdiction of the Labour Court, but
(I) [1964] 3 S.C.R. 140.
(
5 S.C.R.
SUPREME COURT REPORTS
629
does not include any which could be said to cover
an application under s. 33C(2). The contention is
clearly misconceived. The schedule refers specifically
to s. 7 of the Act. That section lays down that the
appropriate government . may, by notification in the
official gazette, constitute one or more Labour Courts
for the adjudication of industrial disputes relating
to any matter specified in the second Schedule and
for performing such other functions as may be assigned
to them under this Act. Section 33C(2) in terms
assigns the determination of the amount of benefit
to which the workman is entitled to receive from the
employer and which is capable of being computed
in terms of money to such Labour Court . as may be
specified in this behalf by the appropriate Government.
Clearly, therefore, the
Labour Court as specified·
by the government and not the Industrial Tribunal
has jurisdiction to deal with this matter.
·
In support of the third objection raised· by the
Bank Mr. Setalvad drew our attention to s. 4 of the
Industrial Disputes (Banking Companies) Decision Act,
1955, and argued that in yiew of this provision the
respondent was not entitled to any benefit of the
Sastry Award in July 1959 when he was asked to
perform the additional· supervisory .duties. Section
4 runs thus:-
·
"N~twithstanding anything contained · in the
Industrial Disputes Act, 1947, or the Industrial
Disputes (Appellate Tribunal) Act, 1950 the
award as now modified by the decision of the
Labour Appellate Tribunal in the manner referred
to in s. 3 shall remain in force until March 31,
1959." •.
It is said that the non-obstante clause "Notwithstanding anything contained in the Industrial Disputes·
Act, 1947" makes the provisions ofs.19(6) inapplicable
to the Sastry Award and so the provision there that·
the award shall continue to be binding on the parties
until a period of two months had elapsed from·
the date on which notice is given by any party bound
by the award to the other party or parties intimating
1963
South Indian
Bank Ltd.
v.
A.R. Chacko
Das GuptaJ.
630
SUPREME COURT REPORTS
[1964]
1963
its intention to terminate the award, ·does not come
into operation.. To this
, objection two answers
South Indian are• available. The first is that, there is difference
Bank Ltd.
between an award· being in operation and an award
v.
being binding on the parties. The different provisions
.4.R. Chacko· made by the legislature ins. 19(3) ands. 19(6) illustrate
D G .i:-' this distinction. 'Under s .. 19(3)' the award remains
as upta · in operation- for a· period of ·one year. (The words
·
"from the date on which the.award becomes enforceable under ·· s .. 17 A" were inserted after the . words
"period of one year" by the amending Act of 1956).
Section 19(6) is in thesewords:-
,·
.
"Notwithstanding the expiry of the period of
operation. under sub-section (3), the award shall
· continue to be binding on the parties until a period
of two months has elapsed from the date on which
notice is given by any party bound by the award to
the other party or parties intimating its intention to
terminate the award." - -
· This makes it clear that after the period of operation of· an award has expired, the award does not
cease to be effective. For, it continues to be binding
thereafter on the parties until notice has been given
by one of the parties of the intention to terminate
·- it and two months have elapsed from the date of
such notice. The effect of s. 4 of the Industrial
·Disputes (Banking Gompanies) Decision Act is that
the award ceased to be in force after March 31, 1959.
That however has nothing 1to do with the question
as to the period for which it will remain binding on
the parties thereafter. The provision in s .. 19(6)
as regards the period for _which the award shall
continue to be binding on the parties is not in any way
affected by s. 4 of the Industrial Dispute (Banking
Companies) Decision Act, 1955 ..
Quite apart from this, however, it appears· to us.
that even if an award has ceased to be in operation
· · or in force and has ceased to be binding on the parties
· under the provisions of s. 19(6) it will continue to
have its effect as a contract between the parties that
has been made by indust_rial adjudication in place
1.
·,
-.
5 S.C.R.
SUPREME COURT REPORTS
631
of the old contract. So long as the award remains
1963
in operation under s. 19(3), s. 23(c) stands in the way
of any strike by the workmen and lock-out by the empSouth Indian
loyer in respect of any matter covered by the award.
Bank Ltd.
Again, so Jong as the award is binding on a party,
v.
breach of any of its terms will make the party liable
A.R. Chacko
to penalty under s. 29 of the Act, to imprisonment
which may extend to six months or with fine or with Das Gupta J.
both. After the period of its operation and also the
period for which the award is binding have elapsed
s. 23 ands. 29
can have no operation. We can however see nothing in the scheme of the Industrial
Disputes Act to justify a conclusion that merely
because these special provisions as regards prohibition of strikes and lock-outs and of penalties for
breach of award cease to be effective the new contract
as embodied in the award should also cease to be
effective. On the contrary, the very purpose for
which industrial adjudication has been given the peculiar
authority and right of making new contracts between
employers and workmen makes it reasonable to ·
think that even though the period of operation of the
award and the period for which it remains binding
on the parties may elapse-in respect of both of which
special provisions have been made under ss. 23 and
29 respectively-may expire, the new contract would
continue to govern the relations between the parties
till it is displaced by another contract. The objection
that no such benefit as claimed could accrue to the
respondent after March 31, 1959 must therefore be
rejected.
This brings us to the last objection that on appoint·
ment as accountant, the respondent Chacko ceased to
be a workman. Admittedly, the mere fact that he
was designated as accountant would not take him
out of the category of workman. This was recognised
in para 332 of the Sastry Award when it was said:-
"The categories of workmen known as Head
Clerks, Accountants, Head Cashiers should prima
facie be taken as workmen wherever they desire
to be so treated but with this important proviso
1963
South Indian
Bank Ltd.
v.
A.R. Chacko
Das Gupta J.
632
SUPREME COURT REPORTS
[1964]
that the banks are at liberty to raise an industrial
dispute about such classification wherever they
feel that with reference to a particular branch
and a particular office a person so designated
is really entrusted with work of a directional and
controlling nature and perhaps even supervision
of a higher type over ordinary supervisory agencies."
In para 167, where the case of accountants
was specially dealt with it was again said:-
In several cases they will indisputably be officers. It is difficult to lay down a hard and fast
rule in respect of them. An Accountant oftentimes is the second officer-in-charge of branches,
particularly where the branches are comparatively small. In big banks where there is a hierarchy of officers there may be a chief accountant,
accountants, and sub-accountants. In most of
these cases the "accountants" will probably be
officers. There will however be incumbents of
such posts, though going under the dignified
designation of accountants who are in reality
only senior clerks doing higher type of clerical
work involving an element of supervision over
other clerk,s as part of their duties. In such
cases where they can properly be regarded
as workman the minimum allowances which we
have fixed for sub-accountants would equally
apply to them."
The Labour Court appears to have taken proper
note of this distinction between accountants who
are really officers and accountants who are merely
senior clerks with supervisory duties and on a consideration of the evidence on the record as regards the
duties actually performed by the respondent Chacko,
has come to the conclusion that he was merely a
senior clerk, doing mainly clerical duties, and going
by the designation of accountant and was in reality
a workman as defined in the Industrial Disputes Act
and doing an element of supervisory work.
r \
5 S.C.R.
SUPREME COURT REPORTS
633
~
We can find no mistake in the approach of the
1963
. .•
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,
Labour Court to the question nor can we see any
justification for interfering with its conclusion on
Southlndian
the evidence in the case. All the relevant documents
Bank Ltd.
produced have been duly considered by the Labour
v.
Court in light of the oral evidence given; and on such
A.R. Chacko
consideration it has come to the conclusion that though
on paper certain rights and powers were assigned Das Gupta J.
to him and occasionally he acted in the place of the
Agent when the Agent was absent, such duties did
not form part of his principal and main duties .
Mr. Setalvad drew our attention to a copy of the
resolution passed by the Board of Directors under
which the respondent as Accountant was authorised
"to make, draw, sign, endorse, purchase, sell, discount and negotiate Bills of Exchange, Hundies,
Drafts, Cheques, Promissory Notes and other Negotiable instruments in the name of and on behalf of
the Bank and also to operate upon all banking account
maintained by this Bank with banks, bankers, and
others in India for and on behalf of the South Indian
Bank Limited."
This resolution was dated July
18, 1959 and on the same date a circular-letter was
issued to all branches sen.ding a binder containing
specimen signatures of all the officers of the Bank
and the respondent's name was also included in this
list. In spite of this however, as pointed out by the
Labour Court, it does not appear from the evidence
that generally Mr. Chacko had occasion to exercise
the several powers said to have been granted to him.
A truer picture of his actual functions appears from a
document dated August 28, 1961 signed by the Agent
which was put in evidence as Ex. W 1 and the correctness of which does not appear to have been challenged
on behalf of the Bank authorities. The list of duties
mentioned in this document clearly shows that these
are almost wholly clerical-the only exception being
Item 14, viz., "and other work entrusted to him by
the Agent from time to time." The Labour Court
has also pointed out that no power of attorney was
granted to Mr. Chacko. When on a consideration
/963
South Indian
Bank Ltd.
v.
A.R. Chacko
Das Gupta J.
634
SUPREME COURT REPORTS
[1964]
of all the relevant evidence the Labour Court has
come to the conclusion that the duties performed
by the respondent consisted of clerical work with
supervisory functions and were certainly not managerial
or administrative as contended for by the Bank, we
find no reason to interfere with that conclusion.
It is pertinent to notice that on the Bank's case
a workman in the position of Chacko would on promotion to the rank of an officer from that of a workman
be financially a loser by being deprived of the special
allowance which he would have got as a workman
with supervisory duties without obtaining sufficient
recompense for the same because of the performance
of the so-called managerial and administrative duties.
It is not unreasonable to think that this so-called
promotion to officer's grade was really intended
to undo the effect of the recommendations of the
Sastry Award for this supervisory allowance.
It is
difficult to understand otherwise that persons with
higher responsibilities and managerial duties to perform would in_ fact be getting less in rupees and annas
than what they would be getting as workmen. In
the circumstances, the finding of the Labour Court
that the respondent was a workman entitled to the
benefits of the Sastry Award cannot be successfully
challenged.
All the points taken in the appeal therefore
fail. The appeal is dismissed with costs.
Appeal dismissed.
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