PUNJAB NATIONAL BANK LTD. vs. EMPLOYEES OF THE BANK

Case Analysis

PUNJAB NATIONAL BANK LTD. vs. EMPLOYEES OF THE BANK

April 20, 2025

A) ABSTRACT / HEADNOTE

The Supreme Court in Punjab National Bank Ltd. v. Employees of the Bank, [1953] SCR 686, dealt with the legality of employee dismissals during the pendency of industrial dispute proceedings under Section 33 of the Industrial Disputes Act, 1947. The pivotal issue revolved around a large-scale strike initiated by bank employees during an ongoing tribunal proceeding concerning a separate dispute. The Bank had dismissed over a thousand employees who went on strike. While a Tribunal initially ruled the strike illegal and upheld the dismissals, the Labour Appellate Tribunal reversed this, holding that the Bank condoned the strike, and ordered reinstatement. The Supreme Court held that regardless of the strike’s legality or condonation, the Bank’s failure to obtain prior written permission from the Tribunal as mandated by Section 33 rendered the dismissals illegal. Therefore, it upheld the reinstatement order. The case stands as a seminal interpretation of Section 33, emphasizing procedural compliance over the substantive illegality of a strike. The judgment illustrates a protectionist approach towards labour rights and reiterates the supremacy of statutory procedural safeguards over employer discretion in matters of industrial discipline during adjudication.

Keywords: Section 33, Industrial Disputes Act, illegal strike, employee dismissal, tribunal permission, reinstatement, condonation, industrial law, labour jurisprudence, procedural violation.

B) CASE DETAILS

i) Judgement Cause Title
Punjab National Bank Ltd. v. Employees of the Bank

ii) Case Number
Civil Appeal No. 181 of 1952

iii) Judgement Date
10 April 1953

iv) Court
Supreme Court of India

v) Quorum
Patnjali Sastri C.J., Mukherjea, S.R. Das, Ghulam Hasan, and Bhagwati JJ.

vi) Author
Patnjali Sastri C.J.

vii) Citation
Punjab National Bank Ltd. v. Employees of the Bank, [1953] SCR 686

viii) Legal Provisions Involved

Section 33 of the Industrial Disputes Act, 1947
Section 23(b) of the Industrial Disputes Act, 1947

ix) Judgments overruled by the Case (if any)
None reported

x) Case is Related to which Law Subjects
Labour Law, Constitutional Law (Articles relating to Industrial Adjudication), Industrial Law, Administrative Law

C) INTRODUCTION AND BACKGROUND OF JUDGEMENT

The present case emerged from an intricate industrial dispute scenario involving Punjab National Bank Ltd. (PNB) and a substantial segment of its workforce. At the heart of the matter lay the interpretation of Section 33 of the Industrial Disputes Act, 1947, particularly concerning the legality of disciplinary actions—dismissals—carried out by an employer during the pendency of industrial dispute proceedings. The case is notable for its broader implications on employer conduct during such proceedings, and its significance in safeguarding the statutory rights of workmen from procedural violations, even in instances where their conduct may be objectively culpable. The Bank had, during a pending industrial adjudication before Sri K.S. Campbell-Puri, terminated more than a thousand employees for launching a strike related to a fresh dispute. This termination led to multiple layers of adjudication, ultimately culminating in this appeal before the Supreme Court.

D) FACTS OF THE CASE

The facts commenced with an existing industrial dispute that was already referred for adjudication to an Industrial Tribunal chaired by Sri K.S. Campbell-Puri on February 21, 1950. While this matter was sub judice, over 1,000 employees of the PNB initiated a general strike on April 18, 1951, related to a fresh dispute, thereby exacerbating the employer–employee tensions. The Bank issued a notice warning employees to return by April 24, 1951, failing which their services would be deemed terminated. Non-compliance prompted the Bank to issue a second notice dated April 27, 1951, formally terminating the services of the strikers.

Intervention by the Government of India led to a partial reconciliation, with the Bank reinstating most employees but withholding reinstatement of 150 workmen, alleging their participation in subversive activities. The government referred this matter to a separate tribunal on July 2, 1951, which denied reinstatement and instead awarded half-salary compensation till publication of the award. However, the employees appealed to the Labour Appellate Tribunal, which held the dismissals illegal on the basis that the Bank had condoned the strike and also failed to prove charges of misconduct. The Supreme Court, however, narrowed the focal issue to the procedural mandate of Section 33, regardless of condonation.

E) LEGAL ISSUES RAISED

i) Whether the strike undertaken by the employees during pendency of an industrial dispute was illegal under Section 23(b) of the Industrial Disputes Act, 1947.
ii) Whether the Bank’s dismissal of employees without prior written permission of the Tribunal violated Section 33 of the Industrial Disputes Act.
iii) Whether condonation of an illegal strike could preclude the employer from later terminating employees on grounds of such participation.
iv) Whether reinstatement by the Labour Appellate Tribunal was permissible in law despite the alleged illegality of the strike.

F) PETITIONER/ APPELLANT’S ARGUMENTS

i) The counsels for Petitioner / Appellant submitted that the strike initiated by the employees was undoubtedly illegal as it violated Section 23(b) of the Industrial Disputes Act, 1947, which bars strikes during the pendency of any proceedings before a Tribunal[1]. Therefore, the Bank was justified in dismissing the employees without further procedural formalities. They further contended that the Labour Appellate Tribunal erred in presuming condonation when the Bank had explicitly excluded 150 employees from reinstatement.

The appellant argued that allowing reinstatement would amount to compelling the Bank to offer fresh employment to the dismissed workers, which was beyond the jurisdiction of the Tribunal, citing the principle that reinstatement cannot be a substitute for new employment in cases of justified dismissal[2]. The appellant also questioned the Labour Appellate Tribunal’s finding that no specific charges were framed or explanations sought, asserting that the nature of the collective action—strike—was itself sufficient cause for mass termination under industrial discipline doctrines. The counsel pressed that the Tribunal’s inquiry lacked procedural rigor, particularly when the misconduct pertained to a breach of statutory prohibition.

G) RESPONDENT’S ARGUMENTS

i) The counsels for Respondent submitted that even if the strike was illegal, the Bank had, by readmitting most workers, waived its right to penalize those remaining employees, thereby establishing condonation. Further, the Bank neither issued individual charge-sheets nor followed principles of natural justice like affording an opportunity to explain, thereby rendering the dismissals arbitrary and vitiated[3]. They emphasized that the Labour Appellate Tribunal’s discretion to evaluate facts and order reinstatement is recognized under the scheme of the Industrial Disputes Act, which prioritizes industrial harmony and procedural fairness.

Moreover, the respondents emphasized that the failure to obtain written permission under Section 33 vitiated the entire process of dismissal. The Tribunal had jurisdiction to undo any such dismissal as ultra vires, citing Caltex (India) Ltd. v. Second Industrial Tribunal, AIR 1959 Cal 570, where action without Section 33 approval was held void ab initio. They stressed that Section 33 acts as a check on unilateral employer action during ongoing adjudication and that procedural safeguards cannot be undermined even where the act (strike) was deemed illegal.

H) RELATED LEGAL PROVISIONS

i) Section 33, Industrial Disputes Act, 1947: Prohibits dismissal or punitive action against a workman during the pendency of proceedings without prior tribunal approval.
ii) Section 23(b), Industrial Disputes Act, 1947: Bars strikes during pendency of adjudication proceedings.
iii) Act XLVIII of 1950 (Amendment): Removed exceptions from Section 33 to further broaden its applicability, strengthening worker protections during litigation.

I) JUDGEMENT

a. RATIO DECIDENDI

i) The Court held that the Bank’s failure to obtain prior written permission under Section 33 of the Industrial Disputes Act, 1947, rendered the dismissals illegal, regardless of the illegality of the strike or whether the Bank had condoned the conduct[4]. The Court clarified that procedural compliance under Section 33 is mandatory and independent of the substantive reasons for dismissal. This ratio fortified workers’ rights and ensured that employers could not bypass statutory protections during pending disputes.

b. OBITER DICTA

i) The Court observed that the placement of Section 33 in the Miscellaneous Chapter (Chapter VII) does not dilute its wide applicability. It categorically extended the provision’s scope beyond only cases involving misconduct directly linked to pending disputes. This clarification reinforced the universal application of Section 33 across all forms of employer action during adjudication.

c. GUIDELINES

Employers must seek written permission from the adjudicating Tribunal before initiating any disciplinary action during pendency.
Strike illegality does not nullify procedural protections available under Section 33.
Condonation or waiver arguments must not eclipse statutory compliance obligations.
Placement of statutory provisions in different chapters does not restrict their operational breadth.
Tribunals have authority to order reinstatement when dismissals breach procedural mandates.

J) CONCLUSION & COMMENTS

The Supreme Court in this case reaffirmed the primacy of procedural law in labour adjudication. It carved out a clear doctrine that even an objectively illegal strike cannot justify a dismissal without following Section 33 procedures. The judgment ensures that employers cannot use substantive misconduct as a shield to circumvent statutory processes. This case has since served as a cornerstone in labour law, ensuring a balanced industrial jurisprudence, respecting both employer prerogative and worker protections.

K) REFERENCES

a. Important Cases Referred

[1] Punjab National Bank Ltd. v. Employees of the Bank, [1953] SCR 686
[2] Caltex (India) Ltd. v. Second Industrial Tribunal, AIR 1959 Cal 570
[3] Macleod & Co. Ltd. v. Their Employees, AIR 1953 SC 513
[4] Bharat Bank Ltd. v. Employees, AIR 1950 SC 188

b. Important Statutes Referred