Canara Bank vs Canara Bank Employees Union (Aibea)

Mohan M. Shantanagoudar, Ag. C.J. - This appeal is filed questioning the judgment dated 14.3.2016 in W.P(C) No.22938 of 2004 by which learned Single Judge has concluded that no recovery shall be effected from the deposit collectors based only on the award of the Tribunal. Consequently the learned Single Judge has set aside the recovery notices, Exts.P4, P5 and P5(a).

The records reveal that the petitioner/respondent Union is of Deposit Collectors (Pygmy Agents) attached to Canara Bank. The deposit collectors used to collect amounts from the customers on daily basis and remit the same to the Bank on the very next day. The deposit collectors were paid a commission by the Canara Bank. Aggrieved by the fact that they were not paid fixed scales of pay, they approached the Central Government, who ultimately referred the issue to the Industrial Tribunal. Consequently an award came to be passed by the Tribunal on 22.12.1988 for regularisation of deposit collectors and for payment of wages in the form of incentive remuneration.

As against the order of the Tribunal, the Bank as well as the deposit collectors approached the High Court. The High Court vacated the order of regularisation passed by the Tribunal, however, affirmed the award passed by the Industrial Tribunal with regard to payment of wages. Ultimately, the matter reached the Supreme Court in Civil Appeal No.3355 of 1998, which came to be disposed of, on 13.2.2001 and the Supreme Court concluded that the pygmy collectors cannot be regularised and hence the order of the High Court was sustained on the said point. However, the award as to the payment of wages in the form of incentive remuneration ie., based on percentage of collection made by each of the deposit collectors granted by the Tribunal was upheld. On the basis of award as affirmed by the Hon''ble Supreme Court, the recovery notices are issued to the members of the respondent Union on the ground that the bank has made excess payment of commission to the members of the respondent Union.

It is undisputed by the parties that the members of respondent Union were paid amounts based on the then existing norms fixed by the Banks. After the award coming into effect, there were certain persons who were paid excess commission than that was granted by the award. However, the Bank does not have a contention that the employees were paid over and above the terms of employment. But the fact remains that all pygmy collectors were paid in terms of employment conditions. Thus it is clear that the deposit collectors/pygmy collectors did not in any way manipulate to get the higher commission. On the other hand, commission was paid based on the existing regulation of the Bank. There cannot be any dispute that the pygmy collectors were not permanent employees of the Bank. Undoubtedly, the excess amount allegedly paid to the members of the respondent Union was not because of any misrepresentation or fraud on their part. So also they had no knowledge that the amount that was being paid was more than that they were entitled to. The Bank started recovery only after the award of the Tribunal is affirmed by the judgment of the Supreme Court. By then, the deposit collectors/pygmy agents must have spent the amount for their day to day life.

The question is as to whether, in such circumstances, the bank is entitled to recover the amount from the erstwhile pygmy collectors, who were allegedly paid excess commission than what is ordered by the Tribunal.

In this context, it would be relevant to note the dictum laid down by the Apex Court in State of Punjab and Others v. Rafiq Masih (White Washer) etc. [2015 AIR SCW 501], wherein the Apex Court has concluded thus :

"12. It is not possible to postulate all situations of hardship, which would govern employees on the issue of recovery, where payments have mistakenly been made by the employer, in excess of their entitlement. Be that as it may, based on the decisions referred to herein above, we may, as a ready reference, summarise the following few situations, wherein recoveries by the employers, would be impermissible in law :

(i) Recovery from employees belonging to Class-III and Class-IV service (or Group ''C'' and Group ''D'' service).

(ii) Recovery from retired employees, or employees who are due to retire within one year, of the order of recovery.

(iii) Recovery from employees, when the excess payment has been made for a period of excess of the years, before the order of recovery is issued.

(iv) Recovery in cases where an employee has wrongfully been required to discharge duties of a higher post, and has been paid accordingly, even though he should have rightfully been required to work against an inferior post.

(v) In any other case, where the Court arrives at the conclusion, that recovery if made from the employee, would be iniquitous or harsh or arbitrary to such an extent, as would far outweigh the equitable balance of the employer''s right to recover."

The aforementioned conclusion was reached by the Apex Court after considering the observations and dictum laid down by various judgments passed by the Supreme Court earlier.

Since the Pygmy collectors were not regular employees of the Bank, at the most they can be treated as Class IV or Class III servants for the purpose of deciding this case. In the aforementioned judgment, the recovery from the employees belonging to Group-C and Group-D is impermissible in law, in case, if the payment is made mistakenly by the employer.

We also found from the records and on facts that if this Court arrives at a conclusion that recovery is to be made from the employees, the same would be iniquitous and harsh as would far out way the equitable balance of the employer''s right of recovery. Since the pygmy collectors who were all unemployed persons and as they must have already spent the amount of commission received by them for their day to day livelihood, it would be too harsh on the part of this Court to order recovery from such persons. Since the question to be decided is fully covered by the judgment of the Apex Court in State of Punjab and Others v. Rafiq Masih (White Washer) etc. (cited supra) no interference is called for.

We also note that there is no declaration in the award passed by the Tribunal or in the order passed by the Apex Court for recovery of amounts which are already paid in favour of the collection agents. The award of the Tribunal cannot have retrospective effect for the purpose of recovery of amounts. It has got prospective effect. The amounts already paid shall not be recovered in view of the judgment delivered by the Apex Court in State of Punjab and Others v. Rafiq Masih (White Washer) etc. [2015 AIR SCW 501].

The appeal fails and the same is dismissed.