Supreme Court Remands Case for Fresh Hearing on Employment Regularization and Seniority Dispute

The case of Sikar Kendriya Sahkari Bank Limited v. Bhagirath Singh (Dead) by L.Rs. revolves around a dispute between the appellant, Sikar Kendriya Sahkari Bank Limited, and the respondent, Bhagirath Singh (represented by legal representatives after his death), concerning his termination, reinstatement, and subsequent claim for regularization of his services and seniority after the termination order was overturned by a Labour Court. The Supreme Court was asked to resolve whether the employee was entitled to regularization and seniority, and whether the Bank had been denied the opportunity to present its case.

Background of the Case

The appellant, Sikar Kendriya Sahkari Bank Limited, terminated Bhagirath Singh from his position as Clerk on 28.03.1979. Bhagirath Singh, aggrieved by the termination, filed an application with the State Government seeking the referral of the matter to the Labour Court under the Industrial Disputes Act, 1947. The State Government referred the dispute to the Labour Court, and after a full hearing, the Labour Court ruled in favour of Bhagirath Singh, declaring his termination to be illegal and directing his reinstatement with full back wages. The Bank subsequently allowed Bhagirath Singh to rejoin the service in January 1985.

In addition to reinstatement, Bhagirath Singh filed a civil suit seeking regularization of his services, seniority, and full payment of salary after his reinstatement. The trial court dismissed the suit, and the respondent appealed to the High Court. The High Court, in a decision in 2007, allowed the appeal, ordering the regularization of Bhagirath Singh’s services and granting him seniority. The Bank, feeling aggrieved by the High Court’s order, filed appeals before the Supreme Court.

Legal Issues Raised

Whether the High Court erred in granting regularization and seniority to Bhagirath Singh despite the earlier proceedings.
Whether the Bank had been denied the opportunity to fully present its case before the High Court.
Whether Bhagirath Singh’s reinstatement, without the proper process of regularization, entitled him to seniority and further service benefits.

Arguments by the Appellant (Sikar Kendriya Sahkari Bank)

The appellant, Sikar Kendriya Sahkari Bank, contended that:

Bhagirath Singh’s services could not be regularized automatically as he was not employed in a permanent capacity.
The Bank had not been given a fair opportunity to be heard before the High Court, which resulted in the wrong decision.
There was no evidence to support the claim for seniority, as Bhagirath Singh had not been in service continuously during the period following his termination.

Arguments by the Respondent (Bhagirath Singh)

The respondent, Bhagirath Singh, argued that:

His termination had been found to be illegal by the Labour Court, and as a result, he was entitled to be reinstated with all benefits, including seniority.
After his reinstatement, he had been performing the duties assigned to him and was entitled to regularization based on his continuous service.
The High Court’s decision was justified, as the appellant had not provided any valid reason for the denial of regularization and seniority.

Supreme Court’s Observations

The Supreme Court carefully considered the facts of the case and the legal arguments made by both parties. The Court noted:

The Labour Court had determined that Bhagirath Singh’s termination was unlawful and had ordered his reinstatement with full back wages. However, the Labour Court had not addressed the issue of regularization and seniority.
While the High Court granted regularization and seniority, this was done without a proper hearing of the appellant. The Court observed that the Bank had not been provided a fair opportunity to present its case.
The Court emphasized that regularization is a policy decision that must be made in accordance with the law and cannot be granted automatically after reinstatement.

Regarding the right to be heard, the Court referred to Sangram Singh v. Election Tribunal, where the right to a fair hearing was recognized as a fundamental aspect of justice. The Court quoted:

“Substantial justice demands that a litigant is entitled to a right to be heard before any order is passed against him.”

Final Judgment

The Supreme Court ruled as follows:

The appeals were allowed, and the impugned order of the High Court was set aside.
The case was remanded to the Division Bench of the High Court for a fresh hearing on the merits of the appeal, with the Bank being given the opportunity to present its case.
The appellant was allowed to raise all issues regarding the regularization, seniority, and other benefits before the High Court.

The Court concluded:

“The case is remanded to the High Court for deciding the writ appeal afresh, providing both parties an opportunity to be heard.”

Conclusion

This case highlights the importance of ensuring a fair hearing for both parties in legal proceedings, particularly in cases concerning employment disputes and the regularization of services. The Supreme Court’s ruling emphasizes that regularization of service and the granting of seniority should not be automatic but must be decided according to law. The judgment also underscores the principle of fair procedure, where both parties must be given the opportunity to present their case before any adverse decision is made. As a result, the case was remanded to the High Court for a more thorough examination, allowing the appellant to defend its position regarding the regularization of the respondent’s service.

Petitioner Name: Sikar Kendriya Sahkari Bank.
Respondent Name: Bhagirath Singh (dead) by L.Rs..
Judgment By: Justice Abhay Manohar Sapre, Justice Mohan M. Shantanagoudar.
Place Of Incident: Sikar, Rajasthan.
Judgment Date: 24-09-2018.

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