The Madras High Court reiterates that any deviation from the specific procedural requirements of Clause 33 of the Bipartite Settlement—in particular, improper notice periods—renders the purported “voluntary cessation” of employment invalid. The judgment upholds the principle that banking employers must follow the Settlement’s procedure in letter and spirit before treating service as voluntarily ceased. This ruling affirms established precedent and is binding on subordinate courts in Tamil Nadu within industrial dispute contexts involving banks.
Summary
| Category | Data |
|---|---|
| Case Name | WA/2358/2023 of INDIAN BANK Vs THE PRESIDING OFFICER |
| CNR | HCMA011304132023 |
| Date of Registration | 29-08-2023 |
| Decision Date | 28-10-2025 |
| Disposal Nature | DISMISSED |
| Judgment Author | HONOURABLE MR JUSTICE M.S. RAMESH, HONOURABLE MR. JUSTICE R. SAKTHIVEL |
| Court | Madras High Court |
| Bench | Division Bench: M.S. Ramesh, R. Sakthivel JJ. |
| Precedent Value | Binding on subordinate courts within jurisdiction |
| Overrules / Affirms | Affirms established legal position on procedural compliance for cessation under Bipartite Settlements |
| Type of Law | Labour and Industrial Law (Banking Sector) |
| Questions of Law |
|
| Ratio Decidendi |
The court held that where Bipartite Settlements prescribe specific procedures for treating extended unauthorised absence as voluntary cessation, strict adherence is required. Service of notices at correct address with full notice period (30 days as per Clause 33) is mandatory; procedural deviations invalidate the purported cessation. If such procedural safeguards are ignored, the action is treated as retrenchment requiring compliance with Section 25F of the Industrial Disputes Act. Since the Bank failed to comply with these requirements, the termination was held invalid. |
| Logic / Jurisprudence / Authorities Relied Upon by the Court | Interpretation and application of Clause 33 of 8th Bipartite Settlement and Section 25F of the Industrial Disputes Act, 1947. |
| Facts as Summarised by the Court |
Employee, a Sweeper, absented herself for over 90 days due to surgery, leading to the Bank issuing three notices under Clause 33. Notices were returned undelivered; two gave only seven days to respond versus required 30 days. Tribunal held this as procedural noncompliance, reinstated employee with partial backwages. Bank’s challenge to this was dismissed, and the appellate court upheld the reasoning. |
Practical Impact
| Category | Impact |
|---|---|
| Binding On | All subordinate courts within the jurisdiction of the Madras High Court, especially in banking sector employment disputes governed by Bipartite Settlements. |
| Persuasive For | Other High Courts and tribunals in interpreting procedural safeguards in industrial employment matters. |
| Distinguishes | Actions of voluntary cessation vs. retrenchment where procedures are not followed. |
| Follows | Applies principles of strict interpretation of service regulations and statutory protections under Industrial Disputes Act. |
What’s New / What Lawyers Should Note
- Employer must issue all three notices under Clause 33 to the employee’s last known address, allowing at least 30 days to respond each time; any less is a fatal procedural defect.
- Notices granting less than 30 days do not satisfy the requirements of the Settlement.
- Sending notices to an unverified or incorrect address, or failing to prove dispatch to the last known address, does not amount to valid service.
- Failure to strictly follow procedural requirements under Bipartite Settlement converts voluntary cessation into retrenchment, necessitating compliance with Section 25F of the ID Act.
- Employees reinstated on this ground are entitled to consequential service and pensionary benefits as per settled law.
Summary of Legal Reasoning
- The court closely interpreted Clause 33 of the 8th Bipartite Settlement, highlighting its mandatory nature: three consecutive notices to the last known address, each allowing 30 days to report back.
- Two of the Bank’s notices granted only seven days, a clear departure from the prescribed procedure.
- The court rejected the argument that non-receipt or ignorance of notice contents cured any procedural defect, holding that full compliance in letter and spirit is mandatory.
- Non-compliance with the voluntary cessation procedure renders the action as retrenchment, invoking safeguards under Section 25F of the ID Act, which were not followed.
- The CGIT and single judge’s conclusions were endorsed; procedural deviations rendered the termination null, warranting reinstatement with benefits.
- No reliance on prior precedents; the judgment rests on statutory interpretation and factual analysis.
Arguments by the Parties
Petitioner (Bank):
- Three notices were sent as required under Clause 33 of the 8th Bipartite Settlement.
- Compliance with notice-sending, not receipt, was sufficient if sent to the last known address.
- Less than 30 days’ time in the notices did not vitiate the process since the employee neither saw nor responded to them.
Respondent (Employee):
- Notices were not sent to her last known address; their non-receipt corroborated this.
- The first two notices allowed only seven days to respond, not the 30 days mandated by Clause 33.
- Mandatory compliance with the procedure for voluntary cessation is required.
- Violation of procedure converts the action into retrenchment, invoking statutory safeguards.
Factual Background
The employee, working as a Sweeper at the Bank, was absent without leave for over 90 days due to kidney surgery. The Bank treated her absence as voluntary cessation under Clause 33 of the Bipartite Settlement, issuing three notices—the first two granting only seven days to respond. All notices were returned undelivered with the endorsement “left.” The employee challenged her termination before the CGIT, which reinstated her with partial backwages, finding procedural violations. The Bank’s writ petition against this decision was dismissed, leading to this intra-court appeal—which has now also been dismissed.
Statutory Analysis
Clause 33 of the 8th Bipartite Settlement: Requires the employer to issue three consecutive notices to the employee’s last known address, each granting at least 30 days for the employee to return to duty or explain their absence, before treating the employee as having voluntarily left service.
Section 25F, Industrial Disputes Act, 1947: If the procedure for voluntary cessation is not strictly observed, the termination is treated as retrenchment, invoking protections including notice and compensation—which were not provided in this case.
Alert Indicators
- Precedent Followed – The judgment affirms and clarifies the requirement for strict procedural compliance with contractual and statutory terms for treating long absence as voluntary cessation in bank employment.