Dismissed

Malabar Cancer v. T.M. Dinesh Kumar

Kerala HC11 Jan 2018WA/1282/2017

Case brief

AI extract

What is this about?

WX Appeal filed by Malabar Cancer Centre Society challenging a writ order that quashed a directive forcing employees to open IDBI accounts for salary disbursement. A two-judge bench found no judicial interference warranted as the employer lacks the right to compel employees to use their specific banker.

What did the court decide?

Writ appeal dismissed; impugned judgment upholding salary disbursement to petitioners' accounts of their choice is affirmed.

Malabar Cancer Vs T.M. Dinesh Kumar — Service and Employment | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN &

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THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI

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THURSDAY, THE 11TH DAY OF JANUARY 2018 / 21 ST POUSHA, 1939

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WA.No. 1282 of 2017 IN WPC. 37894/2016

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AGAINST THE ORDER/JUDGMENT IN WP(C) 37894/2016 of HIGH COURT OF KERALA dt.14.3.2017

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APPELLANT(S)/RESPONDENTS:

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1 MALABAR CANCER CENTRE SOCIETY,

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REPRESENTED BY ITS SECRETARY TO GOVERNING BODY, MALABAR

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CANCER CENTRE, THALASSERY, MOOZHIKKARA P.O., KANNUR

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DISTRICT, KERALA, INDIA-670103.

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2 THE DIRECTOR,

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MALABAR CANCER CENTRE, THALASSERY, MOOZHIKKARA P.O.,

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KANNUR DISTRICT, KERALA, INDIA-670103.

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3 THE ADMINISTRATIVE OFFICER,

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MALABAR CANCER CENTRE, THALASSERY, MOOZHIKKARA P.O.,

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KANNUR DISTRICT, KERALA, INDIA-670103.

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BY ADVS.SRI.N.NANDAKUMARA MENON (SR.)

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SRI.V.BINOY RAM

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SMT.SMITHA S.PILLAI

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SRI.P.K.MANOJKUMAR

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SMT.ALICE THOMAS

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RESPONDENT(S):PETITIONERS

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T.M. DINESH KUMAR,

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CLERK/CASHIER/TYPIST, MALABAR CANCER CENTRE, MOOZHIKKARA P.O., KANNUR-670103.

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P.PRAMOD,

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ATTENDER, MALABAR CANCER CENTRE, MOOZHIKKARA P.O., KANNUR-670103.

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BINDU T.K.,

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CLERK/CASHIER/TYPIST, MALABAR CANCER CENTRE,

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MOOZHIKKARA P.O., KANNUR-670103.

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SUREKHA M.C., CLERK/CASHIER/TYPIST, MALABAR CANCER CENTRE, MOOZHIKKARA P.O., KANNUR-670103.

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W.A.1282/2017

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R.P.SHAJITH,

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ATTENDER, MALABAR CANCER CENTRE, MOOZHIKKARA P.O., KANNUR-670103.

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MAHIJA P.M.,

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HOSPITAL ASSISTANT, MALABAR CANCER CENTRE, MOOZHIKKARA P.O., KANNUR-670103.

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P.P.PRASOONAN,

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CLERK/CASHIER/TYPIST, MALABAR CANCER CENTRE, MOOZHIKKARA P.O., KANNUR-670103.

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RAJEEVAN U.,

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TELEPHONE OPERATOR, MALABAR CANCER CENTRE,

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MOOZHIKKARA P.O., KANNUR-670103.

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R1 -R 8 BY ADV. SRI.KALEESWARAM RAJ

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R1 -R 8 BY ADV. KUM.A.ARUNA

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THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 11-01-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: KAV/

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“C.R.”

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P.N.RAVINDRAN & R.NARAYANA PISHARADI, JJ.

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W.A.No.1282 of 2017

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Dated this the 11^th day of January, 2018

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JUDGMENT

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P.N.Ravindran, J.

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The appellants are respondents 1 to 3 in W.P.(C)No.37894 of 2016, a writ petition filed by respondents 1 to 8 herein inter alia seeking a declaration that the insistence by the appellants on their employees opening savings bank accounts with the Industrial Development Bank of India (“IDBI” for short) for the purpose of disbursement of salary is unjust and illegal and violative of their fundamental rights. The brief facts of the case are as follows:

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The writ petitioners, 8 in number, are employees of the Malabar Cancer Centre Society, Thalassery. Initially, the Malabar Cancer Centre Society was maintaining an account with Corporation Bank. Later, it opened an account with State Bank of India. When it felt that the State Bank of India was not offering services as expected by them, they opened an account with IDBI which started an extension counter and also provided an ATM facility in the campus. Later, on 12.6.2013, the managing committee of Malabar Cancer Centre Society requested its employees to open bank accounts with IDBI to facilitate

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W.A.No.1282 of 2017

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payment of salary. It appears all employees except the petitioners opened bank accounts with IDBI. The petitioners refused to open an account with IDBI. All of them are however having accounts with State

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Bank of India, Thalassery Branch. This led to denial of salary and allowances to them with effect from August 2016. They thereupon filed W.P.(C)No. 37894 of 2016 in this court on 8.11.2016 seeking the following reliefs:

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“i. To declare that the insistence for changing the bank accounts to the Thalassery Branch or any other Branch Industrial Development Bank of India (IDBI) for disbursing salary, is, unjust, illegal, arbitrary and violative of the Fundamental Rights of the petitioners.

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ii. To issue a writ of certiorari quashing Exts P3 to P10 as unjust, illegal, arbitrary and violative of the Fundamental Rights of the petitioners.

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iii. To declare that circular No.3900/Circular/13/MCC dated 03.06.2013 is unjust, illegal and arbitrary.

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v. To issue a writ of mandamus directing the respondents to disburse the pay and allowances including the festival allowances and leave surrender allowances from 1^st August 2016 to the petitioners with immediate effect together with the interest at the rate of 12% per annum in either to respective State Bank of India, Thalassery Branch Accounts of the petitioners or in liquid cash directly to them.”

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It is their contention that the employer cannot insist that they should

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open a bank account in a bank of the employer's choice to facilitate payment of salary and that they have the freedom to choose the bank in which they should open an account.

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The appellants resisted the writ petition by filing a counter affidavit wherein the reasons which weighed with them to open a bank

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W.A.No.1282 of 2017

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account with IDBI and to request the employees to open a salary account with IDBI are set out. The reasons thus set out in paragraph 6(A) to (E) of the counter affidavit are extracted below:

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“ (A) Inspite of repeated requests having been made by the Institute to the SBI Branch, the Bank refused to consider the proposal of the Institute to start an Extension Counter and an ATM in the Institute premises, even though all Official transactions of Malabar Cancer Centre (MCC) were being handled by the SBI. It is submitted that an Extension Counter of the Bank in the Institute was suggested because every day one staff from the Malabar Cancer Centre (MCC) had to carry huge amount of Cash to the Bank which is located 6 Kilometers from the Malabar Cancer Centre (MCC), for remittance. The above procedure involves a lot of risk and additional expenditure. It is submitted that an extension counter would have helped the staff to avoid to go to the State Bank of India for every transaction which lead to loss of manpower, and the same would adversely affect the smooth functioning of the Institution which is a Cancer Hospital.

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(B) The request of the Institute to the SBI to waive the Demand Draft Commission was never considered by the Bank.

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(C) For opening a letter of credit for purchase of major equipments, the Senior Officials of the Bank including the Director, had to travel nearly 30 Kilometers to reach the Kannur Branch of SBI wherein the transactions has to take place. The Director of the Institute who is the Chief Surgeon in the Institute found it extremely difficult to make frequent visits to the SBI Bank at Kannur, at the risk of his function as the Surgeon.

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(D) The proposal of the Institute for improving the facilities in the Clinical Laboratory by submitting a project to the SBI for consideration under the Corporate Social Responsibility Scheme did not receive any positive response from the Bank.

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(E) The request made by the Institute for starting an ATM Counter in the Campus of Malabar Cancer Centre (MCC) to cater to the needs of the patients and staff for availing basic banking services did not receive any positive response from the Bank. ”

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The appellants also contended that they had not asked their

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W.A.No.1282 of 2017

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employees to close their bank accounts with State Bank of India, Thalassery Branch, and that they had only requested the employees to open a zero balance account with IDBI to facilitate payment of salary and that opening an account with IDBI would in no way affect their freedom to maintain accounts and continue banking operations with State Bank of India, Thalassery Branch. The appellants had also set out in paragraph 12 of the counter affidavit, the benefits accruing to the employees who open an account with IDBI. They are as follows:

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“ (a) There are attractive benefits extended to the staff members of the Institute for taking Home loan, and Vehicle loan from the Bank (with maximum 0.5% reduction) this is a Special benefit extended to the employees of the Institute alone by the IDBI extension counter, which is not available in the other Branches of the Bank.

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(b) Personal loan and salary over draft of 3 months net salary for salary account holders with additional discount or normal rates with a maximum of 0.5% reduction. Personal loan and overdraft facility without security is extended to the Malabar Cancer Centre (MCC) staff only.

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(c) Quick processing of such loans is carried out in the extension counter for the convenience of the staff.

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(d) Employees are permitted to start zero balance salary account.

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(e) The Bank Account can be opened through the Malabar Cancer Centre (MCC) extension counter.

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(f) No commission is charged for demand draft for the staff.

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(g) All the Banking Services are rendered to the employees through the extension counter.

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(h) No charge is levied for unlimited withdrawals from IDBI ATM Counter in the Malabar Cancer Centre (MCC).

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(i) There Telephonic service is rendered by the Bank 24 hours by extending Banking Service to the Employees.

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(j) The IDBI Bank is extending a Special facility to the staff of the Malabar Cancer Centre (MCC) to withdraw a total amount of Rs.75,000/- per day from the ATM Counter and an amount of Rs.15,000/- at a time. There is

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W.A.No.1282 of 2017

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also a Special facility extended to the Malabar Cancer Centre (MCC) employees to spend an amount of Rs.75,000/- per day by online for making purchases. ”

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They had also averred that except the petitioners, 8 in number, all other employees have opened zero balance account with IDBI.

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The learned single Judge considered the rival contentions and held that it is a dispute which should not have reached this court. Such an opinion was formed for the reason that before the appellants called upon the employees to open a bank account with IDBI, no discussions were held with the employees. The learned single Judge thereafter proceeded to hold that for the purpose of payment of salary to the employees, it is not necessary that the employee should open an account with IDBI and that the employer's bank can transfer the salary to the employees' account based on standing instructions and that for effecting such payments the employer need not compel the employees to open an account with IDBI, if they do not want to have any transaction with IDBI. The learned single Judge also took note of the fact that the audit objection raised was only against payment of salary in cash and that objection can be overcome by paying salary to the employees, by transferring money from the employer's bank account to the employees' bank account. The learned single Judge accordingly disposed of the writ petition with a direction to the appellants to take appropriate action to disburse salary and allowances to the petitioners

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W.A.No.1282 of 2017

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by crediting money to the accounts maintained by them in State Bank of India, Thalassery Branch. The said judgment is under challenge in this appeal.

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After hearing Sri.N.Nandakumara Menon, learned Senior Counsel appearing for the appellants and Sri.Kaleeswaram Raj, learned counsel appearing for the respondents, we find no reason or justification to interfere with the impugned judgment. Sri.N.Nandakumara Menon however brought to our notice that if the writ petitioners also open accounts with IDBI, without incurring any expense, the employer can transfer money from their account with IDBI to the account maintained by the employee with IDBI, but if salary is to be credited to the account maintained by the employees in other banks, the employer will have to bear the expenses for such transfer whether it be by RTGS/Electronic Fund Transfer. Such a contention was however not raised in the counter affidavit. In any case, as the appellants have not been able to trace their right to insist that the employee should open a bank account with the very same bank in which the employer has an account, we are of the opinion that the appellants cannot insist that all their employees should open bank accounts with the same banker to facilitate payment of salary. Even Section 6 of Payment of Wages Act, 1936, as amended by Act 1 of 2017 with retrospective effect from 28.12.2016, does not stipulate that the employee should open a bank account in the bank in

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which the employer has a bank account. In the absence of any right in the employer to insist that the employee should open a bank account with their bankers, we are of the opinion that the employer cannot insist that the employee should also open an account with the same banker. All that the auditors of the appellants had insisted was that the salary should not be disbursed in cash but only through bank accounts. That can be achieved irrespective of whether the bank account is in the same bank as the bank in which the appellants have an account or the account maintained by the employee is in some other bank.

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We therefore find no good grounds to interfere with the impugned judgment. The writ appeal fails and is accordingly dismissed.

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Sd/-

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P.N.RAVINDRAN JUDGE

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Sd/-

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R.NARAYANA PISHARADI JUDGE

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/true copy/

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P.A. To Judge

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vpv

Malabar Cancer v. T.M. Dinesh Kumar

Case brief

What is this about?

What did the court decide?

Malabar Cancer v. T.M. Dinesh Kumar

Case brief

What is this about?

What did the court decide?

What the court decided

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Statutes considered

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