The High Court of Orissa at Cuttack Bench, in this fact-specific case, has clarified that although the appellants were not entitled to automatic regularization on the strength of the earlier court orders, and although their claims were partly constrained by res judicata, the Court could still mould relief to do complete justice by granting substantial lump sum compensation in lieu of regularization and continuation of service. The Court balanced the appellants’ nearly 30 years of service, their socio-economic vulnerability and the inadequacy of ordinary retrenchment compensation against the practical and financial implications of ordering regularization, and therefore held that compensatory relief would be the just course.
The Court also made it clear that this decision was rendered in a fact-specific scenario and was not intended to operate as a binding precedent or a rule of parity. Accordingly, the High Court granted secondary relief instead of regularization. It directed the State Bank of India to pay each appellant a lump sum compensation of Rs. 20 lakhs within eight weeks, making a total of Rs. 40 lakhs for both appellants. The Court further directed that if there was any delay in payment, the Bank would be liable to pay interest at 1% per mensem for the first month of delay and 2% for the period thereafter. It also ordered that the interest component, if arising due to delayed payment, could be recovered personally from the erring Bank officials after the amount was first paid to the appellants.
The Division Bench comprising Justice Krishna S. Dixit and Justice Chittaranjan Dash observed that the earlier orders dated July 24, 2007 and Dec 05, 2008 did not grant regularization or unconditional appointment against future vacancies. Although two vacancies arose later, the Bank took a policy decision to outsource such work in view of IT development in banking business, and that policy decision had not been challenged. The Bench also noted that the appellants had already been paid minimum wages in terms of the earlier orders, and that the earlier direction allowing them to continue was expressly subject to availability of work.
The Bench further recorded that it had attempted a settlement and had asked the parties to explore an amicable resolution on issues including regularization, financial benefits and bonus. In those discussions, the Bank offered Rs. 5 lakhs to each appellant as lump sum compensation, but the appellants refused the offer as inadequate and said they would accept Rs. 25 lakhs each. The Bench also noted that the present appellants had put in about 30 years of spotless service.
The Bench said the appellants had been fighting legal battles for nearly three decades and that complete justice had eluded them for one reason or another. At the same time, it observed that if regularization were to be granted retrospectively after ten years of service, the Bank would face a substantial financial burden, while the appellants’ earlier writ proceedings had yielded only limited relief and the later claims were affected to an extent by res judicata.
The Bench also took into account that they had about ten years of service left before superannuation, belonged to Scheduled Castes, were working in menial posts, had limited education and social status, and were unlikely at their age to find gainful employment elsewhere. It found the Bank’s offer of Rs.5 lakh “too frugal” and also held that even Rs. 10 lakh awarded in another banking case was not a solid yardstick on these facts.
Briefly, the appeals arose from a long-running dispute between two daily-wage sweepers/ cleaners, Mayadhar Nayak and Baina Nayak, and the State Bank of India. The appellants had been working in the Bank’s Government Treasury Branch, Bhubaneswar, since about 1994–1995 and had earlier approached the High Court in 1999 and 2007 seeking regularization and remuneration on par with temporary employees. In the earlier round, the Court had directed that their cases be considered if appointments to sweeper posts were made in future, and had also clarified that if work was available, they should be allowed to continue and not be substituted by fresh hands, while being paid remuneration applicable under the Minimum Wages Act. The Bank later paid them arrears of minimum wages for the period April 2017 to June 2021.
Thereafter, the appellants claimed temporary pay, bonus, arrears and related benefits. During the pendency of that matter, the Bank sought permission to retrench them as surplus workers, and eventually retrenched them under Section 25F of the Industrial Disputes Act, 1947, paying each appellant Rs. 3.30 lakhs as retrenchment compensation and payment in lieu of notice.
