Page 15 - BANKING FINANCE JULY 2016

P. 15

LEGAL UPDATE

LEGAL CASES

Punishment only after hearing: SC Wages for no work at
Bajaj Auto unit
Imposing a major penalty like dismissal not conducted for a long time till his
on a bank manager can be done only dismissal in 2002. He moved the Some employees of Bajaj Auto Ltd in
after following the statu- Pune have been reporting for duty
tory provisions governing Uttarakhand High Court since 2003 but the management has
the disciplinary proceed- which quashed the dis- not been giving work to them. They
ings, the Supreme Court missal. have been sitting in the premises of
stated in its judgment, the company all the while. This is
Chamoli District Co-opera- The bank appealed to the because way back in 1991, they have
tive Bank vs Raghunath Singh. In this Supreme Court which been fighting a legal battle from the
case a branch manager was charge- found that the proceed- labour court to the Bombay High
sheeted for irregularities in 1992 and ings were not according to the rules Court and the Supreme Court.
1993 which he denied. and the manager was not given an op-
portunity of being heard. It allowed The high court had upheld their re-
But the disciplinary proceedings were the bank to start disciplinary proceed- trenchment and many of them had
ings afresh. accepted a voluntary retirement
package. One of them was offered Rs
Injunction against bank guarantee 20 lakh but he rejected the offer. To
end the deadlock, and considering
Though courts normally do not stop encashment of bank guarantees, in excep- their age factor, the Supreme Court
tional cases they do, like when there is fraud or irre- has asked the company to pay Rs 10
trievable harm to one party. In the case, Gangotri En- lakh each to the surviving employees
terprises Ltd vs the Union of India, the Supreme Court who are reporting for duty. The judg-
passed an injunction against invocation of bank or per- ment, Ghanshyam vs Bajaj Auto,
formance guarantee though the district judge and the clarified that it should not be treated
as a precedent, because the court
Allahabad High Court refused to pass an injunction order. was using its extraordinary powers
under Article 142 of the Constitution
The firm was given a contract in 2005 in connection with laying a railway line to settle the matter.
on North Central Railway. That project could not be completed, leading to dis-
putes and arbitration. The same firm was given another project in 2006 to de-
velop a terminal complex at Anand Vihar near New Delhi. That project was
successfully completed and the contracting firm was to be paid its due.

However, the railways stalled the payment and attempted to invoke the bank
guarantee provided in relation to the 2005 project, which was caught in litiga-
tion. The Supreme Court allowed the appeal stating that the disputes over the
2005 contract was still pending and the 2006 bank guarantee could not be in-
voked for the 2005 contract, which was separate.

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