Kotak Mahindra Bank Ltd., Vs the Commercial Bank Retired Employees

1 . THE COMMERCIAL BANK RETIRED EMPLOYEES ASSOCIATION (REGN. NO. 293/01) REGISTERED UNDER THE TAMIL NADU SOCIETIES REGISTRATION ACT 1975 AT CHENNAI HAVING ITS REGISTERED OFFICE AT 87, (NEW NO. 2), 4^TH MAIN ROAD, GANDHINAGAR, ADYAR, CHENNAI - 20 REPRESENTED BY ITS SECRETARY V. VASUDEVAN, S/O G.V. VENKATRAMAN,

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AGED 72 YEARS, RESIDING AT FLAT NO. 6/30, NORTON ROAD, MANDAVELI, CHENNAI – 600 028.

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2 . R. SATYANARAYANA RAJU S/O RVSSN RAJU, AGED 72 YEARS, DOOR NO. 29-13- 39, I FLOOR, OPP. KAMINENI HOSPITAL, KALESWARAO ROAD, SURYARAOPET, VIJAYAWADA – 520 002.

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G. DEVIPRASAD, S/O G SUBRAHMANYAM, (FIRST FLOOR), 44/1, KANDAPPA CHETTY STREET, CHENNAI 600 001 SINCE DECEASED REPRESENTED BY HIS LRS AS NO.3 , 4 AND 5

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3 . SMT.G. VASUNDARA MAJOR W/O G. DEVIPRASAD FIRST FLOOR, 44/1, KANDAPPA CHETTY STREET, CHENNAI – 600 001.

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4 . MR. G. RAVINDAR MAJOR S/O G. DEVIPRASAD FIRST FLOOR, 44/1, KANDAPPA CHETTY STREET, CHENNAI – 600 001.

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5 . MRS. G. JAYASHREE

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MAJOR D/O G. DEVIPRASAD FIRST FLOOR, 44/1, KANDAPPA CHETTY STREET, CHENNAI – 600 001.

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... RESPONDENTS

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(BY SRI P.S.RANGANATHAN, ADVOCATE FOR C/R-1)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DATED 15/02/2025 PASSED BY THE HON’BLE XL ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU (CCH-41) IN I.A. NO. 1/24 IN OS 8105/2004 (ANNEXURE – F) AND DISMISS I.A. NO. 1/24 FILED BY THE RESPONDENTS 1, 2, 3, 4 AND 5.

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THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 18.06.2025, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:-

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CORAM: THE HON'BLE MR JUSTICE M.NAGAPRASANNA

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CAV ORDER

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The petitioner/Kotak Mahindra Bank Limited which is the defendant in O.S.No.8105 of 2024 is at the doors of this Court calling in question an order dated 15-02-2025 passed by the XL Additional City Civil and Sessions Judge, Bengaluru City allowing I.A.No.1 of 2024 filed under Order I Rule 8 of the CPC, whereby

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permission is granted to convert the original suit into a representative suit after 21 years of its institution.

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Heard K.M.Balasubrahmanya, learned counsel appearing for the petitioner and Sri P.S. Ranganathan, learned counsel appearing for caveator/respondent No.1.

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Facts, in brief, germane are as follows: -

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The respondents/plaintiffs institute a suit in O.S.No.8105 of 2004 seeking terminal benefits obtaining under the Vysya Bank (Employees’) Pension Regulations, 1995 (‘the Regulations’ for short). The erstwhile Vysya Bank is the present petitioner. 1^st plaintiff is Commercial Banks Retired Employees Association(‘Association’ for short) registered under the Tamilnadu Societies Registration Act, 1975 at Chennai. It has instituted the suit claiming that it is voicing individual and collective grievances of pensioners or retirees of the Bank. The 1^st plaintiff/Association also claims that it has large number of members i.e., pensioners belonging to different States as members of the Association. The suit comes to be filed on a particular premise. The premise is non-

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payment or short payment of terminal benefits to the plaintiffs or members of the Association, as the case would be. The trial progressed for over 20 years. In the year 2024, the Association comes up with an application in I.A.No.1 of 2024 under Order I Rule 8 of the CPC seeking conversion of the subject suit into a representative suit, on the ground that all the pensioners who are members of the Association are persons who have voluntarily retired under the Voluntary Retirement Scheme, 2002 and have the same interest. The petitioner/Bank files its objections to the said application. The concerned Court, in terms of its order dated 15-02-2025, allows application, permits conversion of the suit O.S.No.8105 of 2004 into a representative suit under Order I Rule 8 of the CPC. The Bank is before the Court calling the said order in question.

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The learned counsel appearing for the petitioner would vehemently contend that the application under Order I Rule 8 CPC, which is preferred after 20 years of institution of the suit, is now allowed after 21 years of its filing. The learned counsel would further submit that the only common factor amongst the members

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of the Association is that they have retired under the Voluntary Retirement Scheme, 2002 but the grievance of every person is different. For a suit to be converted into representative suit what is necessary is a publication, calling upon interested who share common interest to join the proceedings and assist the Court in resolving the dispute. None of these have been followed by the concerned Court. He would contend that the matter was heard completely, reserved for its judgment in the year 2018 itself, without permitting the Court to pass the judgment, repeated applications are preferred and the subject application is the one, which is an abuse of the process of law.

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Per contra, the learned counsel Sri P.S. Ranganathan appearing for the 1^st respondent/plaintiff, the beneficiaries of the order impugned in the subject petition, would defend the order on the score that every pensioner should not be driven to litigation. It is, therefore, the Association in their interest has filed the application seeking conversion of the suit into a representative suit. He would admit that it is filed after a delay of 20 years. But, would

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submit that the core issue is to be seen and not delay in filing the application. He would seek dismissal of the petition.

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I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record.

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The afore-narrated facts are not in dispute. The issue at this juncture before the Court lies in a narrow compass as to whether, the application under Order I Rule 8 CPC could be permitted. The 1^st plaintiff is the Association of retired employees. The other plaintiffs are also persons who have retired. They come forward to institute a suit in O.S.No.8105 of 2004 against the petitioner/Bank. The claim of the members of the Association of the 1^st plaintiff or other plaintiffs is that the Bank had introduced a Voluntary Retirement Scheme of 2002. The Bank would be the erstwhile Vysya Bank and not the present Kotak Mahindra Bank Limited, as the scheme was introduced prior to the petitioner/Bank taking over Vysya Bank Limited and Pension Regulations were notified for all the banking sector employees. Likewise, Vysya Bank

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Limited got its pension regulations called the Vysya Bank Limited (Employees’) Pension Regulations, 1995.

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The voluntary retirement scheme which was notified on 26-02-2002 allowed to scores and scores of employees’ of Vysya Bank ceasing to be in employment on account of voluntary retirement. The grievances of these employees are not single fold, but they are manifold. The grievances broadly brought out in the plaint are that, they are entitled to 5 years addition to qualifying service, as obtaining under Regulation 29(5) of the Regulations. The other grievance, is dearness relief under Regulation 37 has not been granted. The third grievance is, additional pension as obtaining under Regulation 35(3)(a) has not been acceded to. The average pay drawn by the retirees in the last 10 months is not reckoned for the purpose of payment of pension in several cases. The quantified special pay received for the last 10 months is not taken into consideration for calculation of average pay. The voluntary retirement permits encashment of privilege leave, that is not granted. On the aforesaid grievances the suit is instituted.

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The petitioner-Bank files its written statement. The trial progressed. During the trial, it appears that the very plaintiffs institute two more suits one in the year 2011 and the other in the year 2015 in O.S.No.3848 of 2011 and O.S.No.3988 of 2015 again espousing the cause of retirees. In the suit initially instituted i.e., the subject suit – O.S.No.8105 of 2004 – the plaintiffs after about 20 years of its institution file an application under Order I Rule 8 CPC to convert the subject suit into a representative suit, on the ground that it relates to a common cause of retirees. The concerned Court by the impugned order dated 15-02-2025 allows the said application on the following reasons:

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“….

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REASONS

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POINT NO.1: The plaintiffs have filed the present suit under Order 1 Rule 8 of C.P.C. in respect of the payment of terminal benefits to the members of plaintiffs association. The plaint shows it is filed under Order 1 Rule 8 of C.P.C. and the para No.2 of the plaint no doubt shows that the plaintiff association represents all pensioners retired from the defendant bank under the Voluntary Retirement Scheme 2002 agitating their common relief. It is apparent from the records that, the suit is filed in the year 2004 and the matter is posted for arguments and the arguments of both counsels are heard and when the matter is about to be reserved for the judgment, after 2 decades the plaintiff has come up with the present application.

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Learned counsel for plaintiff in his arguments submits that it was noticed that requisite permission under Order 1 Rule 8 of C.P.C. is not obtained and it is the procedural defect which

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names to be rectified and the said procedural defect is curable defect and there is no bar on the part of the plaintiffs to move an application to obtain permission under Order 1 Rule 8 of C.P.C. and permission may be extended even during the stage of appeal and hence, the application for permission and issuance of mandatory notice under Order 1 Rule 8 of C.P.C. needs to be allowed and this Court in exercise of discretionary power can grant permission, as the plaintiffs have satisfied the requirements of Order 1 Rule 8 of C.P.C.

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learned counsel for the plaintiffs in support of his arguments has relied upon the judgment of the Hon'ble High Court of Karnataka reported in ILR 2000 KAR 1511 in case of Ramachandra Laxman Doddamani and Another V/s. Tilakaraj Bhaktavarmal Mahajanshet and Others wherein which it is held as hereunder:

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Civil Procedure Code, 1908 (Central Act No.V of 1908) – Order 1 Rule 8 and Order VII Rule 4 – Plaintiffs sought for an injunction restraining the defendants from putting up any construction as the plot has been required by the Corporation for public purpose, by filing a suit in their individual capacity. At later stage fearing that their suit is likely to be dismissed, filed an application to treat the suit as suit instituted in a representated capacity. Trial Court dismissed the application. In revision the High Court Held- Person who files a suit in a representative capacity is required to obtain the permission of the Court under Order 1 Rule 8, but if no permission is obtained, it cannot be said that it is not open for the Court to entertain an application if filed during the pendency of the suit. Relying on a decision reported in M/s. Jainarayan Mandlal V/s. Shri. Agarwal Panch Mandal Khamgaon AIR 1973 BOMBAY 167, held that granting of permission during the pendency of the suit does not change the nature of suit.

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On the contrary, learned counsel for the defendant in his arguments submits that for the past 20 years the plaintiffs have agitated the grievance of only their members without making any attempt to comply with the requirements of Order 1 Rule 8 of C.P.C. and having prosecuted the case for 20 years

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and when the original plaintiff No.1 himself is not aggrieved party the suit itself is not maintainable and the reason stated in the application for not complying with the provision of Order 1 Rule 8 are not convincing. The plaintiffs stated that the present suit is filed being aggrieved by the deprival of benefits under the VRS Scheme and the plaintiffs failed to comply with the requirements of Order 1 Rule 8 of C.P.C. because, they were aware that it was a futile exercise as majority of VRS holders would not support their case. By complying with Order 1 Rule 8, if any of those employees came before this Court and gave a statement to the effect that they have no grievance with the VRS, the plaintiffs would lose their case. Hence, this tactic of not complying with Order 1 Rule 8 has been adopted by the plaintiffs. It is submitted that this belated application is as a result of their objection to the plaintiff’s application to amend the plaint from under Order 1 Rule 8 to under Order 7 Rule I which was an innocuous way to avoid the non-compliance of Order 1 Rule 8. Having neglected to comply with the requirements of Order 1 Rule 8 for 20 years, it is now a futile exercise to invoke the same and the conduct of the plaintiffs does not warrant such consideration by this Court and the application is liable to be dismissed on the grounds of deliberate latches, filing multiple suits on the same cause of action and collusion.

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The present suit is filed by the plaintiffs as against the defendant under Order 1 Rule 8 of C.P.C. in respect of the matter of payment of terminal benefits to the members of the plaintiff association seeking relief of Mandatory Injunction to the defendant to pay pension to the members of the plaintiff association by taking into account the last drawn 10 months average pay and to pay pension by taking into account the special pay and fixed personal pay as per service conditions and to pay additional pension and to pay pension by adding 5 years notional service and to pay the difference in the encashment of leave with interest at the rate of 12% p.a.

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The present suit is filed under Order 1 Rule 8 of C.P.C. by the plaintiffs association which is formed with all the retirees from service from various banks including the defendant, as its members and the plaintiffs association has on its rolls a large number of members belonging to different States and with a view to avoiding them to move different

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Courts resulting in multiplicity of litigations and petitions they have collectively filed the present suit for vindication of their rights. Now when the matter is about to be reserved for judgment the plaintiff has come up with the present application seeking leave of the Court to file the suit in representative capacity.

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Hence at this point of time, it is considered worth to take note of the provisions of Order 1 Rule 8 of C.P.C. which reads as under:

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Order I Rule 8 C.P.C.: One person may sue or defend on behalf of all in same interest-(I) where there are numerous persons having the same interest in one suit -

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a) one or more of such persons may, with the permission of the Court sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested;

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b) the Court may direct that one or more of such persons may sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested.

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(2) The Court shall, in every case where a permission or direction is given under sub-rule (1) at the plaintiff’s expense, give notice of the institution of the suit to all persons so interest, either by personal service, or, where, by reason of the number of persons or any other cause, such service is not reasonably practicable, by public advertisement, as the Court in each case may direct.

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(3) Any person on whose behalf, or for whose benefit, a suit is instituted, or defended, under sub-rule (1), may apply to the Court to be made a party to such suit.

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(4) No part of the claim in any such suit shall be abandoned under sub-rule (1), and no such suit shall be withdrawn under sub-rule (3), of Rule 1 of Order XXIII,

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and no agreement, compromise or satisfaction shall be recorded in any such suit under Rule 3 of that Order, unless the Court has given, at the plaintiff’s expense, notice to all persons so interested in the manner specified in sub-rule (2).

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(5) Where any person suing or defending in any such suit does not proceed with due diligence in the suit or defence, the Court may substitute in his place any other person having the same interest in the suit.

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(6) A decree passed in a suit under this rule shall be binding on all persons on whose behalf, or for whose benefit, the suit is instituted, or defended, as the case may be.

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A bare reading of the said provision makes it clear that the condition necessary for the maintainability of a representative suit is that the persons on whose behalf the suit is instituted must have the same interest. The interest must be common to them all or they must have a common grievance, which they seek to get redressed. Community of interest is therefore essential and it is a condition precedent for bringing a representative suit. In order to bind a decree passed in a representative suit, procedure laid down under Order I, Rule 8 of C.P.C. has to be followed. A decree obtained in a suit instituted in accordance with the provisions of Order I Rule 8 C.P.C. will be binding as resjudicata on all members that belong to the class who are sought to be represented.

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So looking to above provisions makes it clear that before filing the suit the plaintiffs should take permission from the Court and no doubt the plaintiffs have not taken any permission from this Court before filing the suit and they have not given any public notice before institution of suit to all the persons so interested. According to the plaintiff, it is only procedural defect which is curable in nature and the Court in exercise of its discretionary power can cure the defect and permit the plaintiff to overcome the procedural defect. As per the judgment referred supra, there is no bar for the plaintiffs to move an application at any stage during the pendency of the suit and such permission may be extended even during the period of appeal. To invoke the provisions of Order 1 Rule 8 of

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C.P.C. the necessary conditions to be complied is that there are numerous interested parties and they have common interest and necessary permission of the Court is obtained and public notice is issued. The power to grant permission to the parties to sue in a representative capacity is conferred on the Court and the Court is bound to exercise its power after being satisfied as to whether the subject matter of the suit involves interest of numerous persons or not. In the instant suit, the plaint averments make it clear that interest of numerous persons are involved in the suit and as such the procedure contemplated under Order 1 Rule 8 of C.P.C. is a matter of procedure for giving intimation to all concerned and by making a publication affording opportunity to those who are interested and to those who share common interest to join the proceeding and to assist the Court in resolving the dispute. So, when the present suit obtains the character of representative suit, for the purpose of adjudication of the dispute it is considered proper to allow the application. So, this Court is of opinion that the suit filed without complying with the procedure required to file a representative suit being a procedure defect, is a curable defect and hence the application deserves to be allowed. Accordingly, this Court proceeds to answer aforesaid point for consideration in the Affirmative.

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POINT NO.2: In view of finding given on Point No.1, this Court proceeds to pass the following:

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ORDER

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I.A. No.1/24 is filed by the plaintiffs under Order 1 Rule 8 R/w. Sec.151 of Code of Civil Procedure, 1908 is allowed on cost of Rs. 2,000/-.”

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The reasons rendered though lengthy, cannot be said to be in tune with law. Since the application under Order I Rule 8 CPC is allowed, I deem it appropriate to notice Order I Rule 8 of the CPC. It reads as follows:

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“ ORDER-I

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8. One person may sue or defend on behalf of all in same interest .—(1) Where there are numerous persons having the same interest in one suit,—

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( a ) one or more of such persons may, with the permission of the Court, sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested;

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( b ) the Court may direct that one or more of such persons may sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested.

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(2) The Court shall, in every case where a permission or direction is given under sub-rule (1), at the plaintiff's expense, give notice of the institution of the suit to all persons so interested, either by personal service, or, where, by reason of the number of persons or any other cause, such service is not reasonably practicable, by public advertisement, as the Court in each case may direct.

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(3) Any person on whose behalf, or for whose benefit, a suit is instituted, or defended, under sub-rule (1), may apply to the Court to be made a party to such suit.

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(4) No part of the claim in any such suit shall be abandoned under sub-rule (1), and no such suit shall be withdrawn under sub-rule (3), of Rule 1 of Order XXIII, and no agreement, compromise or satisfaction shall be recorded in any such suit under Rule 3 of that Order, unless the Court has given, at the plaintiff's expense, notice to all persons so interested in the manner specified in sub-rule (2).

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(5) Where any person suing or defending in any such suit does not proceed with due diligence in the suit or defence, the Court may substitute in his place any other person having the same interest in the suit.

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(6) A decree passed in a suit under this rule shall be binding on all persons on whose behalf, or for whose benefit, the suit is instituted, or defended, as the case may be.

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Explanation . - For the purpose of determining whether the persons who sue or are sued, or defend, have the same interest in one suit, it is not necessary to establish that such persons have the same cause of action as the persons on whose behalf, or for whose benefit, they sue or are sued, or defend the suit, as the case may be.”

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Order I Rule 8 CPC permits conversion of a suit to a representative suit on certain conditions. It mandates that one or more persons may, with the permission of the Court sue or be sued on behalf of or for the benefit of all persons so interested; the court may direct one or more of such persons to sue for the benefit of all the persons so interested; the Court in every case where permission or direction is given under sub-rule (1) of Rule 8, at the plaintiff’s expense, give notice of the institution of the suit to all persons so interested either by personal service or reason of number of persons, effect such service by public advertisement as the Court may in each case direct.

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The concerned Court in the order does not indicate that a public advertisement was rendered seeking all the interested to come forward. Paragraph-14 of the said order accepts the fact that before filing of the application for conversion to representative suit

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no public notice to all persons interested is given. The concerned Court which holds that it is only a procedural defect which is curable in nature and the Court can exercise discretionary power and cure the defect and permit the plaintiffs to overcome the procedural defect. The reason so rendered by the concerned Court, on the face of it, is illegal and contrary to law. The mandate of the statute cannot be given a go-bye by permitting institution of a representative suit without bringing in all the interested. The Association may have 650 members on its rolls. Another 650 members may be outside the Association. They also would be interested in settling their grievances. Therefore, this is the first flaw in the order passed by the concerned Court.

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The application is preferred 20 years after institution of the suit when the arguments were concluded and the matter was reserved for its judgment. The application was to convert the suit into a representative suit. If the 1^st plaintiff/Association is so interested, it need not have waited for 20 long years to bring an application for such conversion, that too after the matter was reserved for its judgment. The delay in filing an application in a

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pending suit could be allowed only if it would not cause grave prejudice to the other side. The delay on the part of the person filing the application would clearly indicate that he has been indolent and not diligent. Though the application is not for any amendment, any application of this kind ought not to have been entertained after 20 years of filing of the suit, that too at the time when the matter was reserved for its judgment after completion of arguments. This is the second flaw in the order.

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The concerned Court observes that there is common grievance of all the persons, therefore, the suit in the representative capacity is to be entertained, as they are pensioners. No doubt, persons who are seeking terminal benefits form a homogeneous class. That would not mean the evidence of every person or every pensioner is the same. As observed hereinabove, there are seven different grievances of each of the members of the Association. If it is permitted to become a representative suit now, the grievance could rise to ten-fold and the suit can never be taken to its logical conclusion. Except the members of the Association being retirees, there is nothing similar insofar as their grievances

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are concerned. Therefore, the concerned Court ought to have noticed whether the 1^st plaintiff was justified in filing the application on varied grievances of the members of the Association. This is the third flaw in the impugned order.

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In the light of serious flaws and the blatant violation of the mandate of the statute, the order of the concerned Court is, on the face of it, unsustainable. The unsustainability would lead to its obliteration. In that light, the petition deserves to succeed, albeit with a direction to the concerned to conclude the two decades old

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suit within 4 weeks.

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14. For the aforesaid reasons, the following:

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O R D E R

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(i) Writ Petition is allowed.

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(ii) The order dated 15-02-2025 passed by the XL Additional City Civil and Sessions Judge, Bengaluru allowing I.A.No.1 of 2024 filed under Order I Rule 8 CPC

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in O.S.No.8105 of 2004 is quashed. I.A.No.I of 2024 is dismissed.

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(iii) The concerned Court is directed to take the suit to its logical conclusion, as the matter was reserved for its judgment at the time of filing of I.A.No.I of 2024 and, render its judgement in accordance with law, within 4 weeks from the date of receipt of a copy of this order.

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SD/(M.NAGAPRASANNA) JUDGE

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bkp CT:MJ

Kotak Mahindra Bank Ltd., v. the Commercial Bank Retired Employees

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Kotak Mahindra Bank Ltd., v. the Commercial Bank Retired Employees

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