Supreme Court on External Member of IC

Supreme Court on ‘External Member’ of IC and Transfer of Complainant

Recently, in the case of Punjab Sind Bank & Ors (“Bank”) vs. Durgesh Kunwar (“Respondent”), decided by the Supreme Court of India on External Member (“SC”) on 25th February 2020, the Respondent was appointed as a Probationary Officer (Scale I) in 1998. By September 2016, she was promoted to the post of Chief Manager (Scale IV). During this time, she inquired into the concentration of accounts maintained by liquor contractors at the branch and detected certain irregularities that could be hazardous to the interest of the bank. She reported this. The Respondent alleged that a transfer order was issued against her after this. She made several representations against the transfer order She further stated that after her representation, her next higher authority i.e. the zonal manager started harassing her personally and professionally including calling her at untimely hours to discuss unimportant issues and insisting her to meet him unofficially in Indore or Bhopal. The further grievance was made by the Respondent that she was transferred to a branch where she would be working as an officer of Scale I when she had already been promoted to Scale-IV.

With regards to the sexual harassment allegations, an Internal Committee (“IC”) wherein the Respondent objected to the presence of three members of the IC on grounds that they would be biased. On such objection, the two members of IC were replaced however the external member, who was a lawyer but was also a panel advocate of the bank and was regularly contesting cases in court involving the bank, was not replaced. Therefore, the Respondent moved the Local Committee (LC) as per section 6 of the Act. The bank did not participate in the proceedings of the LC and the Respondent did not participate in the proceedings of the IC of the bank. IC eventually filed a report dated 26th February 2020 dismissing the allegations of the Respondent while the LC filed a report stating that there was substance in the allegations.

While the SC did not specifically make any observations on the sexual harassment allegations levied by the Respondent, it held:

  • With regards to the composition of the IC and its independent member, “Clause (c) of Section 4(2) (of the act) indicates that one member of the ICC has to be drawn from amongst a non-governmental organization or association committed to the cause of women or a person familiar with issues relating to Sexual Harassment The purpose of having such a member is to ensure the presence of an independent person who can aid, advise and assist the Committee. It obviates an institutional bias. During the course of hearing, we have received a confirmation from the learned senior Counsel appearing on behalf of the bank that Ms. Seema Gupta was, in fact, a panel lawyer of the bank at the material time. This being the position, we see no reason or justification on the part of the bank not to accede to the request of the Respondent for replacing Ms. Seema Gupta with a truly independent third party having regard to the provisions of Section 4(2)(c) of the Act. This is a significant facet which goes to the root of the constitution of the ICC which was set up to enquire into the allegations which were levelled by the Respondent.”
  • With regards to LC’s jurisdiction, SC said that since the Zonal Manager against whom the Complaint of sexual harassment was levied was not the employer, the LC did not have jurisdiction.

With regards to transfer, SC, while observing the facts and materials on record, upheld the order of the Madhya Pradesh High Court and quashed the order of transfer. SC was of the view that there was no doubt that the Respondent had been victimized. The Court observed that, “Her reports of irregularities in the Branch met with a reprisal. She was transferred out and sent to a branch which was expected to be occupied by a Scale I officer. This is symptomatic of a carrot and stick policy adopted to suborn the dignity of a woman who is aggrieved by unfair treatment at her workplace. The law cannot countenance this. The order of transfer was an act of unfair treatment and is vitiated by malafides.” The Court ordered reposting of the Respondent in the Indore Branch as a Scale IV officer for a period of one year and upon expiry of such time, if any administrative exigency arises the competent authority of the bank would be at liberty to take an appropriate decision in regard to her place of posting independently in accordance with law keeping in view the relevant Rules and Regulations of the bank, in the interest of fair treatment to the officer. The Court also awarded to the Respondent cost of INR 50,000.

On transfer, SC also observed that, “transfer is an exigency of service. An employee cannot have a choice of postings. Administrative circulars and guidelines are indicators of the manner in which the transfer policy has to be implemented. However, an administrative circular may not in itself confer a vested right which can be enforceable by a writ of mandamus. Unless an order of transfer is established to be malafide or contrary to a statutory provision or has been issued by an authority not competent to order transfer, the Court in exercise of judicial review would not be inclined to interfere.”

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