1. This petitioner has been filed by the Ratnakar Bank, Ltd., with its head office at Kolhapur. The facts which have led to this petition are shortly the following.
2. On a dispute regarding wages and the fixation of the grades an award was given in reference (I.C.) Nos. 109 to 113 of 1963 on 25 July, 1964. Categories of the employees of the bank were then fixed in four grades.
3. The lowest grade was of the peons with a salary from Rs. 35 to 75, the next higher grade III was of clerk from Rs. 75, to 180; grade II was for sub-accountants, supervisors and/or inspector and cashiers Rs. 100 - 230 and the highest grade I was for accountants and branch managers Rs. 125 - 300. While this dispute was pending and the award had not materizlized, one A. J. Desai was appointed as a trainee at Vadgaon from 1 June, 1964.
4. On 5 January, 1965 he was appointed as a sub-accountant after his training period was over and posted at Single branch. On 1 June, 1965, he was transferred to Kolhapur in a similar capacity. However, on 31 July, 1965 he was appointed in the department of branches as officer-in-charge of the said department at the headquarters office at Kolhapur. His scale of pay was the same as fixed by the award for grade I officers.
5. A petition was filed by the bank employees, No. 222 of 1965, contending that an illegal change was brought about by the bank employers in appointing A. J. Desai as in-charge of department of branches at Kolhapur in grade I. The material allegations made in the petition were
(1) that by an order passed on 1 January, 1965 Desai was appointed as an officer on Rs. 100 from 1 January, 1965,
(2) thereafter he was transferred to Kolhapur head office and worked in the department of branches,
(3) on 31 July, 1965 the board decided to give him grade I as in-charge of department of branches and fixed him at Rs. 125.
(4) that the assignment of grade I to Desai was in contravention of the award operative between the parties, the reason being that he was neither an accountant nor a branch manger for being classified in the category of grade I.
6. It was specifically averred that it was impermissible for the opponent-bank to introduce new categories in contravention of the award or to transpose grade II category to grade I. Lastly, it was urged that the appointment disclosed favoritism shown to Desai and therefore it was an illegal change. According to the employees, the illegal change was first committed on 1 September, 1965.
7. The bank in its written statement denied the allegations that any illegal change was brought about by it. It, however, admitted that the statements made in Paras. 1 and 2 of the petition were correct and that the contentions made in Paras. 3 and 4 were substantially correct. The bank thereafter submitted that the action of the bank in designation A. J. Desai as the officer in-charge of department of branches, did not amount to any illegal change or that it was not permitted to introduce categories other than those existing in the award. The award according to them only fixed the wage-scales for the categories which were in existence at the time of the award. It was urged that if the volume of work demanded the creation of new categories, the same could be created and the bank was not precluded from appointing persons to fill those categories. Finally, it is denied that any illegal change was brought about either on 1 September, 1965 or at any time.
8. The labour court at Poona, after hearing the arguments of the parties, came to the conclusion that the action of the opponent in placing A. J. Desai in category of grade I and giving him grade I amounted to an illegal change and the bank was directed to withdraw the same. The argument that favoritism was shown to A. J. Desai was accepted by the labour court as can be seen from the following observations :
'Therefore, there is force in the plea of applicant that the opponent has shown favoritism by giving grade I to Desai.'
9. It was further observed by the labour court :
'It is apparent that in the face of the award, the opponent could not by its unilateral action create a new category with grade I, and its claim that it has such a right if the volume of work demanded cannot be sustained.'
10. Against this decision an appeal was filed to the industrial court. The industrial court agreed with the finding given by the labour court that the union was entitled to a declaration inasmuch as the change effected by the bank was an illegal change. The reasons given by the industrial court, however, were different from those given by the labour court. The learned president of the industrial court considered the provisions of Sch. II, item (2), and S. 42 of the Bombay Industrial Relations Act to come to a conclusions that the action of the bank was covered by this provision. The learned president found that there was no such office as in-charge of department of branches and such office did not fall under any of the official grades mentioned in the award.
11. The learned president further observed as follows :
'Though for the present they are creating one post, it may be open to them to create any number of posts falling in grade I if it is held that such creation of fresh categories does not amount to an illegal change. The bank hams not only created new posts falling in grade I but has proceeded to appoint A. J. Desai to that post. This would necessarily result in supersession of some of the clerks who were senior to Desai.'
12. The learned president also felt that the labour court was justified in coming to a conclusion that the appointment of A. J. Desai to grade I amounted to promotion and that thereby the claims of other senior clerks were not considered. The president finally held that the post in which Desai was appointed fell within the mischief of item 2 in Sch. II, S. 42. According to the learned president, it was open to the bank to create an additional post but after following the proper procedure laid down under S. 42. Concurring with the finding of the labour court, the industrial court dismissed the appeal. The present portion has been filed by the bank as it was arrived by the decision.
13. Sri Nariman who appears for the petitioner contends that the labour court as well as the industrial court proceeded on the basis that certain facts were established whereas no evidence having been given in this matter, facts were at all established. It was pointed out by Sri Nariman that the labour court was of the opinion that favouritism was shown to A. J. Desai while appointing him to a post in grade I. It was then urged by Sri Nariman that this finding of favoritism if really not supported by any evidence. Although the employees' union started the petition on the basis that favoritism was shown to A. J. Desai, no material was placed by the employees in order to enable either the labour court or the industrial court to come to a finding fact that favoritism was in fact shown. Nothing was placed by the employees such as any relationship or any other consideration for which extra salary should have been given to A. J. Desai. It was Sri Nariman's contention that the bank had the right to appoint a proper man for a post which according to the officials of the bank the person deserved. There was nothing in the award which prevented the bank form appointing persons if the workload demanded that a person should be appointed. Unfortunately in this case there is no material which is placed even by the bank which would lead to an inference that additional work required the creation of a post in which the appointment of A. J. Desai was the most suitable.
14. Sri Nariman also urged that before coming to a conclusion that the appointment was covered by item 2 in Sch. II, the industrial court did not consider the case whether there was material to hold that the post in which A. J. Desai was appointed was either permanent or semi-permanent. It was argued by Sri Nariman that unless and until a permanent or a semi-permanent post was created, the provisions of item 2 in Sch. II would not apply. It would be possible to construe that the expression 'number of persons' used in item 2 of Sch. II would refer to a number of posts. There is no direct decision on the point, but there is a decision of the Supreme Court in Chaganlal Textile Mills (Private), Ltd. v. Chalisgaon Girni Kamgar Union 1959 II L.L.J. 1 wherein the same expression 'number of persons' used in Sch, II, item 1, was construed as meaning the number of posts. On the analogy of that decision Sri Nariman was not in a position to dispute the fact that the appointment of a new incumbent might mean the creation of a new post. But the primary objection is that there was no material laid by the employees to show that the post that was created in which A. J. Desai was appointed was either a permanent or a semi-permanent one.
15. Sri Nariman's further contention was that neither of the two Courts, the labour court or the industrial court, had decided the issues upon facts which were laid before them. His argument was that a speculation was brought to bear upon stated facts to lead to an inference which could not have been supported except by evidence to that effect. In regard to favoritism, according to Sri Nariman there was no evidence except the fact that one A. J. Desai was appointed for some time as trainee, thereafter for a short while he was put in grade II and after that he was placed in grade I. The short time after which the incumbent was promoted form a trainee's post to a grade 1 post was, according to the labour court and the industrial court, sufficient to lead to an inference that favoritism must have been the consideration for such appointment. Sri Nariman's contention was that the person considered for such promotion might have been the only person who could be considered for such promotion in the whole of the bank. It was Sri Nariman's contention that that person had special qualifications which none else in the bank had. But on this point also we could not hear Sri Nariman because there was no material placed by the bank to show that there were special qualifications held by A. J. Desai which were not held by the other employees in the bank. In this matter we find that it is necessary to get more material on facts before a finding could be given whether any favoritism was brought to bear or whether a permanent or semi-permanent post was created so as to lead to an inference that the creation of that post was an illegal change either for one reason as held by the labour court or for another reasons as held by the industrial court.
16. Sri Kulkarni's contention on the point was that it was not necessary for the employees to lead any evidence for the simple reason that the written statement put in by the bank admitted several facts which established them. It was pointed out by Sri Kulkarni that an allegation of favouritism was made in Para. 5 of the original application and in the reply in the written statement to this paragraph there was no denial of favoritism. Secondly, it was pointed out by Sri Kulkarni that although a direct reference was made in Para. 4 of the original application that the board decided to give A. J. Desai, grade I, as in-charge of department of branches, this fact was not denied by the bank. In fact it was urged that the written statement stated that the contentions of the applicant-union in Paras. 3 and 4 of the statement were substantially correct. In view of the fact that there was no denial of favoritism and that there was admission that grade I was given to A. J. Desai, Sri Kulkarni urged that there was no need for the union to prove the fact that any favoritism was brought to bear in respect of the appointment of A. J. Desai. Sri Nariman's contention on the point was that although a general statement was made that 'the facts stated are substantially correct.' still the bank had stated all facts in detail. The written statement denied the contention regarding the creation of new category as the union urged in the application that the certain of a new category could not be done under the provisions of the award. According to Sri Nariman, the reply in the written statement was directed to that point and no other points were seriously considered. We, however, find that both the Courts have proceeded on the sole basis of admissions made regarding the appointment of A. J. Desai.
17. We, therefore, hold that it is necessary to get additional facts on record on the contentions raised by the parties before a finding can be given whether the appointment of A. J. Desai smacked of favoritism or whether additional work in the bank necessitated the appointment of an additional person or whether the most suitable person to hold that post was A. J. Desai and whether a contravention of item 2 of Sch. II was made by the bank by appointment of A. J. Desai. In the events that have happened it is only fair to allow the union to amend its application by giving additional facts if they so desire so that the point may be finally decided. Liberty is also given to the bank to amend its written statement and to make its position clear in regard to the arguments which were advanced before us.
18. In the view that we are taking it is necessary to set aside the orders passed by the labour court and the industrial court. We accordingly make the rule absolute and set aside the orders passed by the labour court and industrial court. The application should be amended by the union, if they so desire, within seven days from the date the record reaches the labour court, Kolhapur. The written statement should be amended within a week thereafter. The labour court, Poona, is directed to hear this application and dispose it of within a period of two months after the written statement as amended is filed. If the appeal is filed against that decision, the industrial court should dispose of the appeal within a period of two months from the filing of the appeal. No order as to costs.
19. The record to be sent to the labour court, Poona, for disposal according to the directions given above.