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Indian Bank, New Delhi Vs. R.K. Baweja and anr. - Court Judgment

LegalCrystal Citation
SubjectService
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 1222 of 1970
Judge
Reported in10(1974)DLT240; [1975(30)FLR48]
ActsIndian Contract Act, 1872 - Sections 197
AppellantIndian Bank, New Delhi
RespondentR.K. Baweja and anr.
Advocates: M.S.K. Shastri,; Ambrish Kumar and; Madan Mohan, Advs
Cases ReferredBasir Ali v. Hafiz Naiir All. Reference
Excerpt:
.....appointment of respondent by agent of bank undoubtedly on behalf of bank - no objection raised by head office for over period of one year - tribunal could come to conclusion that said action justified and must have been ratified - writ petition dismissed. - - accountant to act in their name and for them and on their behalf effectively to exercise all the powers specified therein. in some of the letters like the head office has -written to the new delhi office asking it to appoint a bill collector and in some has related the usual qualification for appointing bill collector on a reference to new delhi office. 2 was oppointed on probation was endorsed to head office, madras. rama murthy is in his evidence stated that though the letter was endorsed in fact it was not sent and he also..........of supporting its case that the appointment power did not vest with the agent but only with-the head office. a reference to those letters however, does not support the contention of mr. shastri. in some of the letters like the head office has -written to the new delhi office asking it to appoint a bill collector and in some has related the usual qualification for appointing bill collector on a reference to new delhi office. but in 'e' when the relaxation was sought from the head office delhi branch was writing that on receipt of a reply from head office 'we will select the candidate' in none of these appointments the head office ever exercised the power of appointing individual. .the said power was specifically left to be dealt with by the branch office. as a matter of fact, in.....
Judgment:

Rajindar Sachar, J.

(1) This is a petition nuder Article 226 of the Constitution of India seeking to quash-the Award dated 7th August, 1970 of the Central Government Industrial Tribunal, respondent No. 1 by which he has directed the reinstatement of the workman respondent No. 2, with full back wages and continuity ' of service.

(2) On 1st January, 1968, then- Agent, Mr. Ramamurthy of Delhi Branch of the petitioner bank issued an appointment letter as a peon to respondent No. 2 on the terms mentioned therein. Clause 3 of this letter read as under :- - Clause (3)

'You will be on probation with salary for a period of six months. If during or at the end of the period of probation, your work is found to be not satisfactory, your services maybe terminated on a month's notice or on payment of a month's salary and allowance.'

(3) Respondent 2, in pursuance of the above joined the Delhi Branch, Respondent No. 2 not having been confirmed after a period of six months the bank union took up the matter with the Regional Labour Commissioner, Government of India. .Thereafter services of respondent No. 2, were terminated by the petitioner bank by its order dated 28th of March, 1969. Anindustrial dispute was raised and the Central Government referred to respondent No. 1 for adjudication the dispute between the petitioner and respondent No. 2 in respect of the matter specified in the schedule given below;-

'Whether the actions of the management of the Indian Bank Limited, New Delhi, in not confirming Shri Satish Chandra Gupta, peon with effect from 1st January, 1968 and in the terminat'ing his services with effect from the 28th March, 1969 were justified? If not, to what relief is the workman entitled ?'

(4) The claim of the respondent No. 2 was that he had been appointed on probation for a period of six months, and should have been confirmed after that date but he had not been confirmed, and the order terminating his services was illegal. The petitioner-bank, however, in reply maintained that respondent No. 2 was not appointed on probation and it was so wrongly mentioned in the letter of appointment and also that the Agent of the Bank, at Delhi had no authority to appoint apeon, and as such respondent No. 2 could not take benefit of the appointment letter, and was a casual workman and his services had been validly terminated. The Tribunal however has held that the respondent No. 2 was appointed on probation and that the agent had authority to appoint a peon and the termination of services of respondent No 2 was, thereforee, illegal in view of Sastri and Desai Award. He, thereforee, by the impungned award set aside the termination and directed the reinstatement of respondent No. 2 with full back wages and continuity in services.

(5) It was not disputed that if the finding of the respondent No. 1 that respondent No. 2 was appointed as a probationer is upheld then the termination of his services by notice of 28th March, 1969 would be illegal as being against Shastri and Desai Awards. It was, however, contended by Mr. .Shastri the counsel for the petitioner that the respondent No. 2 could not be held to have been appointed on probation the sole argument in justification of this plea being that the Agent of the Bank had no such authority to appoint a peon given to him by power of attorney and, thereforee respondent No. 2 could not find his right on the appointment letter. In this connection Mr. Shastri referred me to the power.of-attorney issued to the Agent. Mr.Ramamurthy when he was appointed as Accountant at Poona in 1959. The Agent appeared the witness-box and had stated that that was the only attorney issued to -him and none else was issued subsequently. The said power-of-attorney appointed Mr- Rama Murthy.to be lawful attorney of the bank at Poona or at any other place or places where be may from time to time or at any time be appointed by the said Bank as Agent, Sub-Agent. Accountant to act in their name and for them and on their behalf effectively to exercise all the powers specified therein.^ The Agent was authorised to receive money or deposits and to draw, sign endorse, purchase, sell discount or accept cheques, to give .effectual discharge of on behalf of bank, advances, claims due to the bank. There is no authorisation given by this power-of-attorney to appoint a peon, it is thereforee contended that appointment on probation made by Mr. Rama Murthy in favor of respondent No. 2 being in excess of authority could give no right to respondent No. 2 and he thereforee must be treated as casual workman. Reliance was placed on Bryant Powis, and Bryant Limited v. La Banque Du Peuple:

'......... That where an act purporting to be done under a power of attorney is chalanged as being in excess of the authority conferred by the power, it is necessary to show that on a fair construction of the whole instrument the authority in Question is to be found within the four corners of the instrument either in express terms or by necessary implication.'

(6) To similar effect is Basir Ali v. Hafiz Naiir All. Reference is also made to B. Stocking V. Tata Iron and Steel Co. for the proposition that if the agent exceeds the limits of his authority, and the person so dealing with him incurs Lesser damage by reason of the agent exceeding his authority, then such a person cannot hold the principal liable for the acts of the agent done outside arid beyond the scope of his authority, and also to B. K. Banerj v.L. J. Simonds to the effect that a Statement by a person, who has acted outside ha authority, that he was acting within it, does not give an authorisation to his unauthorised acts. A number of letters were placed before the Tribunal by the petitioner apparently for the .purpose of supporting its case that the appointment power did not vest with the agent but only with-the head office. A reference to those letters however, does not support the contention of Mr. Shastri. In some of the letters like the head office has -written to the New Delhi office asking it to appoint a Bill Collector and in some has related the usual qualification for appointing Bill Collector on a reference to New Delhi Office. But in 'E' when the relaxation was sought from the head office Delhi Branch was writing that on receipt of a reply from head office 'we will select the candidate' In none of these appointments the Head office ever exercised the power of appointing individual. .The said power was specifically left to be dealt with by the Branch office. As a matter of fact, in annexure G on 23rd August, 1965 New Delhi office wrote to the head office .informing them that they had appointed a person and hoped that the appointment order issued by it had reached the head office. Farther the head office itself never understood that the agent had no power to appoint will be clear if a reference is made to Annexures (C) (D) (H)(M) where in the head office asked the Branch Office, Delhi 'that a copy of the appointment letter together with the original application of the candidate may be sent to it for its files when the appointment is made. Again in Annexire K the Delhi Branch has sent to head office appointment tenets of person who have been appointed by it. This correspondence would show that where some relaxation was sought a reference was made by Branch to head office. But so far as .the appointment of any particular peerson was concerned it was .always 'done by the branch. The letters do not show that appointments were subject to any approval by the head office. It may be that if after appointment had been , made an objection was raised by the head office, the branch would naturally act in accordance with the directions received from the hsad office. But that is a very different situation from' what is now being urged by Mr. Shastri, that the agent of the bank in the branch had no, power at all initially to issue appointment letter to respondent- No.2. I could understand the argument that if before the period of six months had expired on objection had been taken by the head office and action had been initiated by the agent against respondent No. 2, the appointment letter issued by the Branch, may not have awaited,it because normally the directions by the head office would have to be carried out. But in the present case complication has arisen because six months had expired and a right vested, in respondent 2 because of the Shastri and Desai Awards. It is true that the power of attorney deals only with the financial powers of the agent. It does not even give him routine administrative authority to call for Explanationn from any of the employees of the bank or to allocate the duties, or to sanction casual leave. Even Mr. Shastri was not prepared to go to this length and suggested that this power to carry on the day-to-day administration would be deemed to bs inherent and incidental to the duties of an agent and must be implied even if not specifically given by the power of attorney. But it was strongly maintained that unlimited power could not be said. to be vested in the agent because to do so would mean that an agent would be free to appoint any number of persons without any justification and even against the interest of the bank. I do not think it is necessary to read that unlimited power in the agent for the purpose of upholding the impugnsd order of tribunal. The practice followed by the branches show that the appointment letters were always issued by the branches. Nothing has been shown that any prior approval of the head office was necessary for making appointments of peon by the Branch. In the present case, I find that the letter of appointment by the agent at Delhi by which respondent No. 2 was oppointed on probation was endorsed to Head office, Madras. It is true that Mr. Rama Murthy is in his evidence stated that though the letter was endorsed in fact it was not sent and he also stated that the appointment was done by mistake. The tribunal has not accepted the statement of this witness, and has held that copy was in fact endorsed to the head office. Under Article 226 it is not for me to reassess the evidence. I must, thereforee, accept the correctness of this finding by the Tribunal, and proceed .on this basis. I may note that Mr. Shastri wanted to refer to certain annexures filed along with the rejoinder. It was conceded that none of those documents had been placed before the Tribunal. In that situation it was impermissible for the petitioner to attempt to refer to any material not placed before the Tribunal and I thereforee did not permit him to do so. Now Mr. Rama Murthy, the Agent who had appointed respondent No. 2 Was also transferred from New Delhi-branch on 11th April, 1968. No material was placed-before the Tribunal to show. that the Branch of Delhi took the position that a mistake had been committed in. appointing respondent No. 2 on probation,. or that a copy of it had not been sent to the head office. On the finding of the Tribunal, thereforee, that a copy of the appointment letter was sent to the head office it is not understood why if the head office was objecting to the appointment of respondent No. 2 it did not take immediate action thereby. The respondent No. 2 continued in service right till Manch, 1969 when his services were terminated and it does seem curious and in explicable that appointment made on 1st of January,1968 should now bechallenged by the petitioner management on the gr^aQ^tir^ the appointment by its own agent was unauthorised in spite of the fact that no action had been taken by it to object to this in the coarse of over a period of one year. It is sufficient for the present performance that even if thereforee the appointments made by the agent was to be approved by the head office that approval must bs deemed to have been given by the conduct of the head office. Section 197 of the Contract Act provides that ratification may be expressed or may be implied in the conduct of the person on whose behalf the acts are done. In the present case, the appointment of respondent No. 2 by the agent of the bank was undoubtedly on behalf of the bank. From the surrounding circumstances and from the fact that no objection was raised by the head office for over a period of one year, the Tribunal could come to a conclusion that the said action was justified, and in any ease must have been ratified. Aprincipal is liable for an act done by the agent without authority but subsequently ratified by the principal. .The Tribunal on appraisal of evidence both documentary and oral came to the conclusion that the agent had the authority to appoint respondent No. 2 and that the said. act was not unauthorised. This is a ending which it was competent for the Tribunal to give and was also within his jurisdiction. It was n6t suggested that the order of the Tribunal was in any way without jurisdiction. It was however sought to be urged that the order was without any. evidence. I do not agree. There was evidence both oral as well as documentary, and the only question was of drawing inference and conclusion. This cannot be said to be a finding without evidence. Whether this court would have come to the same conclusion as the tribunal is not the test for interference under Article 226 of the Constitution. Before this court under Article 226 can interfere with the order of the tribunal passed within its jurisdiction it must be shown that on the material placed before the tribunal' no reasonable person could have come to the conclusion to which the tribunal arrived. That is not the position here. It is not thferefore possible to interefere with the impugned order of the tribunal respondent No. 1,

(7) The result is that I find no merit in the petition and would dismiss the same with costs.


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