Jammu & Kashmir High Court – Srinagar Bench
Aaqib Rashid Sofi vs Respondent(S) on 20 December, 2024
Author: Javed Iqbal Wani
Bench: Javed Iqbal Wani
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
SRINAGAR
Reserved on : 22.11.2024
Pronounced on: 20.12.2024
WP(C) No. 1569/2023
c/w
CCP No. 30/2024
Aaqib Rashid Sofi .....Appellant(s)/Petitioner(s)
Through: Mr. Salih Pirzada, Advocate with
Mr. Syed Mansoor, Advocate
Vs
..... Respondent(s)
Chairman, Jammu and Kashmir Grameen
Bank and others.
Through: Mr. Mudasir Bin Hassan, Advocate
Coram: HON'BLE MR. JUSTICE JAVED IQBAL WANI, JUDGE
JUDGMENT
1. The petitioner in the instant petition filed under Article 226 of the
Constitution has sought the following reliefs:
(i) Issue a writ of certiorari, and quash condition No. 09 of the order
of appointment dated 05.03.2021 issued by the respondent bank
in favour of the petitioner.
(ii) Issue a writ of mandamus, directing the respondents to return and
pay an amount of Rs. 2,00,000/- (Rupees Two Lakhs) encashed
by the respondent bank through the encashment of the indemnity
bond executed by the petitioner alongwith interest @ 12 % per
annum.
(iii) Pass any such order as this Court deems proper in the
circumstances of the case against the respondents and in favour
of the petitioner.
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CCP No. 30/2024
2. The background facts under the shade and cover of which the
aforesaid reliefs have been prayed for and as are stated in the petition are that
the Jammu and Kashmir Grameen Bank (hereinafter to be called as the
respondent bank) came in existence on 30.06.2009 after amalgamation of two
Regional Rural Banks being the Jammu Rural Bank and Kamraz Rural Bank,
which banks were sponsored by the Jammu and Kashmir Bank Limited. The
respondent bank is stated to be having a share holding of 50% by the
Government of India, 35% from the Sponsor Bank (J&K Bank) and 15%
from the Government of the Union Territory of Jammu and Kashmir. The
respondent bank is stated to have been established to strengthen availability of
basic banking facilities in the remote rural area and covers 13 districts across
two Union Territories of Jammu and Kashmir and Ladakh and is, as such,
stated to be performing and discharging the activities qua finances, thus being
a “State under Article 12 of the Constitution of India” amenable to the writ
jurisdiction of this Court.
3. It is being further stated that in the year 2020, the respondent Bank
invited applications, for filling up various posts including the post of General
Banking Officer, Scale-II through Institute of Banking and Personnnel
Selection (IBPS), from the eligible persons and the petitioner herein being
eligible in respect of the criteria fixed by the respondent bank for the post in
question also applied thereto seeking his selection and appointment thereof,
whereafter facing the selection process, the petitioner came to be selected and
appointed as General Banking Officer, Scale-II in terms of order No.
JKGB/HO/HRDD/RECT/2020-21-3948 dated 05.03.2021.
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CCP No. 30/2024
4. It is being further stated that in the appointment order dated
05.03.2021, various terms and conditions were incorporated by the respondent
bank, which were required to be fulfilled in order to join the services as
General Banking Officer, Scale-II and amongst the said terms and conditions,
the petitioner was required to join his duties at Branch Office, Duroo, District
Baramulla, which joining report was required to be attached with, educational
certificates, a cash certificate of Rs. 5000/- as security deposit, an agreement,
a surety bond, declaration of marital status, declaration of domicile, copy of
character certificate, physical fitness certificate and statement of property
owned etc etc. In addition thereto, the appointment order dated 05.03.2021 is
also stated to have contained a condition requiring the petitioner to execute an
indemnity bond of Rs. 2,00,000/- co-related to condition 9 of the appointment
order, providing that in the event of premature resignation from the post
before completion of two years of service, the said indemnity bond of Rs.
2.00 lacs shall be encashed by the respondent bank.
5. It is being next stated that in view of the fact that the petitioner secured
the appointment in question on account of a huge overweight of unemployed
educated youths, having no choice, accepted the terms and conditions
stipulated in the appointment order dated 05.03.2021.
6. It is being also stated that the service conditions of the officers and
employees of the respondent bank are governed under the J&K Grameen
Bank (Officers and Employees) Service Regulations, 2010 (for short, the
Regulations of 2010), however, the said Regulations of 2010 do not provide
anywhere for furnishing of an indemnity bond by a new appointee while
entering in the service of the respondent bank.
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CCP No. 30/2024
7. It is being further stated that even at the time of issuance of notification
for making selection and appointment against the post in question, the
respondent bank neither prescribed nor disclosed anything about the aforesaid
terms and conditions, in particular the condition of execution of indemnity
bond and its encashment in case of premature resignation from service of the
respondent bank.
8. It is being next stated that upon completion of all formalities provided
by the respondent bank to be fulfilled by the petitioner, the petitioner joined
as General Banking Officer Scale-II in the Branch Office, Doroo of the
respondent Bank on 19.03.2021 and started discharging his duties with
honesty and dedication.
9. It is being further stated that in the month of June, 2022, the petitioner
applied to Ellaquai Dehati Bank for the position of General Banking Officer,
Scale-II and came to be selected against the said post in the said bank in the
month of January, 2023, whereupon the petitioner informed the respondent
bank a month before joining his new post in the new bank and submitted his
resignation, which came to be accepted by the respondent bank and in the
process, the respondent bank took recourse to the encashment of the
indemnity bond of Rs. 2.00 lacs executed by the petitioner and consequently
encashed the same on 07.04.2023 without furnishing any information to the
petitioner in this regard.
10. The petitioner has maintained the instant petition in the aforesaid
backdrops for seeking the aforesaid reliefs on the following grounds:
A. BECAUSE, right to choose employment and better avenues of
employment can be read as part of the right to life and earning
5WP(C) No. 1569/2023
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CCP No. 30/2024of livelihood in terms of the propositions of the law. It is
submitted that the right of a person to choose an employment
based on the acquired qualifications is guaranteed under the
Constitution. No employer can restrict such a right as enshrined
under Constitution by invoking/prescribing conditions as like
condition No. 09 of the order of appointment dated 05.03.2021
issued by the Respondent Bank to the Petitioner. Condition No.
09 with respect to execution of indemnity bond is, therefore,
ultra vires to the scheme of Constitutionality and the scheme of
law as propounded by the Hon’ble Supreme Court. Hence,
condition No. 09 with respect to the execution of an indemnity
bond in the event of premature resignation prior to 02 years is
liable to be held as illegal & null and void and, subsequently,
merits to be quashed.
B. BECAUSE, the relationship between the Respondent Bank and
the Petitioner, as established by the appointment order dated
05.03.2021, is purely of contractual nature. According to the
provisions of the Indian Contract Act, contracts that involve
illegal conditions are deemed void ab initio. Such conditions
cannot hold force or binding nature on the parties involved. In
the present case, the impugned condition requiring the execution
of an indemnity bond was violative of not only infringed upon
the Petitioner’s rights but also violated the fundamental
principles of contract law, Therefore, on this count also the
impugned condition of the letter of appointment dated
05.03.2021 is rendered illegal and merits to be quashed.
C. BECAUSE, as per the provisions of the Indian Contract Act, the
parties must enter a contract freely and voluntarily, without any
undue influence or coercion. However, in the present case, the
inclusion of the indemnity bond as a condition of the
employment contract amounts to coercion, as the Petitioner was
compelled to execute the bond in order to secure employment.
This undermines the principle of free consent, rendering the
condition voidable under the Indian Contract Act. Therefore, the
impugned condition of the appointment letter dated 05.03.2021
fails to meet the requirements of a valid contract and should be
held as unenforceable.
D. BECAUSE, the service rules governing the service conditions of
the employees of the respondent bank, do not anywhere provide
for execution of an indemnity bond by the appointee before
joining the respondent bank. Therefore, in absence of any such
condition in the J&K Grameen Bank Employees Service Rules
as has been arbitrarily envisaged by the respondent bank in the
appointment order of the petitioner makes incorporation of such
a condition void ab initio. On this count also, the condition no
09 in the appointment order being arbitrary, merits quashment.
E. BECAUSE, the condition No. 09 impugned herein, has the
effect of putting a restraint on the Petitioner from making a
choice for better employment avenues based on the
qualifications of the Petitioner. The impugned condition
incorporated by the Respondent Bank has an effect of denying
the opportunity of competing for a better employment
opportunity to any candidate based on his choice and
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CCP No. 30/2024
qualifications. The Respondent Bank has no competence by
incorporating the impugned Condition No. 9 of the order of
appointment being in direction conflict and violation of the
provisions of Constitution of India prescribing the right to
compete for better employment opportunities. Impugned
condition would, therefore, fall in the category of the conditions
which are unconstitutional and hence is liable to be quashed.
F. BECAUSE the prescribing of a condition as prescribed as
condition No. 09 of the order of appointment of the Petitioner is
an exercise which is unconscionable, unsustainable and
unenforceable in law to the extent of the payment of Rs.
2,00,000/- in the event of leaving the post of the Respondent
Bank before the expiry of the period of 02 years. Such a
condition in law cannot be enforced as having the effect of
denying the right to choose a better employment on part of a
candidate. In the instant case, the Respondent Bank by invoking
the condition No. 09 has, therefore, violated the settled position
of law and hence the condition No. 09 of the order of
appointment of the Petitioner having been enforced by the
Respondent Bank is liable to be declared as an Act which is in
extravention of the scheme of law. Hence, the impugned
condition No. 09 and its enforcement on part of the Respondent
Bank is liable to be held illegal by this Hon’ble Court and,
subsequently, quashed.
G. BECAUSE, the Petitioner cannot be made to bind with
condition which is in violation of the principles of law of
contract and the principles of conditions of constitutionality as
contained in the Constitution of India. Hence, the illegal
condition impugned herein cannot be enforced by Respondent
Bank against the Petitioner. The impugned condition, therefore,
is liable to be declared null and void and ineffective on the
rights of Petitioner and as a result thereof is liable to be quashed.
H. BECAUSE, the Respondent Bank even in a situation of exercise
of its powers as contained in condition No. 09 was required to
seek a show cause from the Petitioner with respect to the
encashment of indemnity bond executed by the Petitioner under
the compliance of the impugned condition in the order of
appointment. In the instant case, the Respondent Bank has
neither issued notice nor invited any show cause from the
Petitioner and has, as such, directly invoked condition No. 09
and has encashed the amount of Rs. 2,00,000/- from the
Petitioner. Absence of a right of being heard to the Petitioner
has led to violation of a valid right of the Petitioner and
violation of the principles of natural justice. It is a settled
position of law that violation of the principles of natural justice
vitiates the entire process. In the instant case, the encashment of
indemnity bond on part of Respondent Bank without providing
an opportunity of being heard would, therefore, render the
decision of the Respondent Bank as illegal and would warrant
quashment by this Hon’ble Court.
I. The Petitioner craves leave of this Hon’ble Court for submission
of further factual/legal grounds at the final adjudication of the
instant Writ Petition by this Hon’ble Court.
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CCP No. 30/2024
J. That the Petitioner has no other alternative, efficacious and
speedy remedy available to him but to approach this Hon’ble
Court through the medium of a Writ petition for the redressal of
his genuine grievances and for the enforcement of his
fundamental rights.
K. That no other Writ petition dealing with the same subject matter
has been filed by the Petitioner before this Hon’ble court, nor
has the Petitioner approached the Hon’ble Supreme Court of
India.”
11. Objections to the petition have been filed by the respondents, wherein
the petition is being opposed, inter alia, on the premise that none of the rights
of the petitioner be it constitutional, fundamental or legal have been infringed,
which entitled the petitioner to invoke extra-ordinary writ jurisdiction of this
court.
12. It is being next stated that the conditions of service in the respondent
bank have been accepted without any objection by the petitioner at the time of
his appointment, while stating further that even if an employee is aggrieved of
any action of the respondent bank, a remedy of appeal is provided in the
Regulations of 2010, which has not been availed by the petitioner.
13. It is being further stated in the reply that the petitioner upon being
appointed in the respondent bank vide order dated 05.03.2021 acknowledged
and accepted the terms and conditions set out therein in the appointment order
and that the appointment of the petitioner was that of probation initially for a
period of two years extendable by one year, however, the petitioner left the
services of the respondent bank in breach of the conditions contained in the
appointment order dated 05.03.2021 as also the Regulations of 2010 making
him to liable to the respondent bank to the payment of the amount of Rs. 2.00
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CCP No. 30/2024
lacs covered under the indemnity bond, besides, a sum equal to his pay for the
period of notice of one month if not served.
14. It is being lastly reiterated that that the relationship between the
petitioner and respondent bank was governed by the appointment order dated
05.03.2021 and the terms and conditions set out therein and as per the
Regulations of 2010 and once the petitioner accepted the said terms and
conditions contained in the appointment order, he is not entitled to any
equitable or any other relief by this Court.
Heard learned counsel for the parties and perused the record.
15. Having regard to the respective pleadings of the parties and the case set
up therein, the core issue that falls for consideration of this Court is as to
whether the petitioner is entitled to the reliefs prayed in the instant petition.
16. In order to address the said core issue, it is pertinent and significant to
mention here that the respondent bank in terms of Section 30 of the Regional
Rural Banks Act, 1976 has framed the Regulations of 2010 and in regard to
the nature and character of the said Regulations, the Apex Court in the case
titled as Chairman, Ganga Jamuna Grameen Bank and others vs. Devi
Sahai reported as 2009 (11) SCC 266 has held that the Regulations framed
under the Regional Rural Banking Act, 1976 are statutory in character and has
held as follows:
“17. Indisputably, Appellant has been constituted under the
Act. It has a regulation making power. Regulations framed
by it subject to the compliance of the statutory mandate
contained in Section 30 of the Act have statutory force. The
provisions of the Act and the Service Regulations made by
the appellant, therefore, form self-contained Code.”
9
WP(C) No. 1569/2023
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CCP No. 30/2024
17. Having regard to the said statutory nature of the Regulations of 2010, a
bare perusal of the said Regulations of 2010 reveal that no condition or
requirement of execution of an indemnity bond by a new appointee in service
of the respondent bank pledged in the name of the respondent bank and its
encashment by respondent bank in the event of abandonment of the services
by an employee is contained therein. However, under Regulation 30 of
Regional Rural Banks Act, the condition of one month’s prior notice in case
of resignation is provided to be submitted by an employee before the Bank
and in the event of default of serving such a notice, the employee is liable to
pay by way of compensation an amount equal to pay of such notice period,
which in the instant case is one month. Thus, the condition incorporated in the
appointment order dated 05.03.2021 qua execution of indemnity bond is
beyond the realm of Regulation 2010, rendering the said condition legally
untenable and unenforceable, otherwise also in presence of Section 23 of the
Contract Act of 1872, which for convenience and ready reference is extracted
and reproduced as under:
23. What considerations and objects are lawful, and what
not.–The consideration or object of an agreement is lawful,
unless–
(i) it is forbidden by law ; or
(ii) is of such a nature that if permitted, it would defeat the
provisions of any law; or
(iii) is fraudulent ; or
(iv) involves or implies injury to the person or property of
another; or
(v) the Court regards it as immoral, or opposed to public
policy.
In each of these cases, the consideration or object of an
agreement is said to be unlawful. Every agreement of which
the object or consideration is unlawful is void.
A reference in regard to above, to the judgment of the Apex Court
passed in case titled as Central Inland Water Transport Corporation
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CCP No. 30/2024
limited and another vs. Tarun Kanti Sengupta and another reported as
(1986) 3 SCC 156 would be advantageous, wherein it has been held as under:
“The normal rule of Common Law has been that a party
who seeks to enforce an agreement which is opposed to
public policy will be non-suited. The case of A. Schroeder
Music Publishing Co. Ltd. v. Macaulay, however,
establishes that where a contract is vitiated as being
contrary to public policy, the party adversely affected by it
can sue to have it declared void. The case may be different
where the purpose of the contract is illegal or
immoral. In Kedar Nath Motani and others v. Prahlad Rai
and others, [1960] 1 S.C.R. 861 reversing the High Court
and restoring the decree passed by the trial court declaring
the appellants’ title to the lands in suit and directing the
respondents who were the appellants’ benamidars to restore
possession, this Court, after discussing the English and
Indian law on the subject, said (at page 873):
“The correct position in law, in our opinion, is that
what one has to see is whether the illegality goes so
much to the root of the matter that the plaintiff cannot
bring his action without relying upon the illegal
transaction into which he had entered. If the illegality
be trivial or venial, as stated by Willistone and the
plaintiff is not required to rest his case upon that
illegality, then public policy demands that the
defendant should not be allowed to take advantage of
the position. A strict view, of course, must be taken of
the plaintiff’s conduct, and he should not be allowed to
circumvent the illegality by restoring to some
subterfuge or by mis-stating the facts. If, however, the
matter is clear and the illegality is not required to be
pleaded or proved as part of the cause of action and the
plaintiff recanted before the illegal purpose was
achieved, then, unless it be of such a gross nature as to
outrage the conscience of the Court, the plea of the
defendant should not prevail.”
The types of contracts to which the principle formulated by
us above applies are not contracts which are tainted with
illegality but are contracts which contain terms which are so
unfair and unreasonable that they shock the conscience of
the court. They are opposed to public policy and require to
be adjudged void.”
A further reference is made to the judgment of the Apex Court passed
in the case titled as Rattan Chand Hira Chand vs. Askar Nawaz Jung
(Dead) by Lrs and others, reported as (1991) 3 SCC 67, wherein it has
been held as under:
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CCP No. 30/2024“17. ……It cannot be disputed that a contract which has a
tendency to injure public interests or public welfare is one
against public policy. What constitutes an injury to public
interests or welfare would depend upon the times and
climes. The social milieu in which the contract is sought to
be enforced would decide the factum, the nature and the
degree of the injury. It is contrary to the concept of public
policy to contend that it is immatable, since it must vary
with the varying needs of the society. What those needs are
would depend upon the consensus value-judgments of the
enlightened section of the society. These values may
sometimes get incorporated in the legislation, but
sometimes they may not. The legislature often fails to keep
pace with the changing needs and values nor is it realistic to
expect that it will have provided for all contingencies and
eventualities. It is, therefore, not only necessary but
obligatory on the courts to step in to fill the lacuna. When
courts perform this function undoubtedly they legislate
judicially. But that is a kind of legislation which stands
implicitly delegated to them to further the object of the
legislation and to promote the goals of the society. Or to put
it negatively, to prevent the frustration of the legislation or
perversion of the goals and values of the society. So long as
the courts keep themselves tethered to the ethos of the
society and do not travel off its course, so long as they
attempt to furnish the felt necessities of the time and do not
refurbish them, their role in this respect has to be
welcomed.”
18. The petitioner’s contention that the respondent bank imposed the
impugned condition in the appointment order in breach of the provisions of
Regulations of 2010 and that the petitioner at that relevant point of time have
had no option but to accept the same being not in equal in bargaining power
with the respondent bank, cannot be over looked and discarded in view of the
aforesaid position and principles of law.
19. Having regard to the aforesaid position obtaining in the matter, the
respondent bank in the first instance ought not to have incorporated impugned
condition in the appointment order qua execution of indemnity bond by the
petitioner, in that, imposing of such a condition is found to be alien/foreign to
the Regulations of 2010 and the manner in which the said amount covered
under the said indemnity bond has been recovered by the respondent bank
12WP(C) No. 1569/2023
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CCP No. 30/2024without any intimation to the petitioner, cannot also said to be having any
sanction of law.
20. Viewed thus, for what has been observed, considered and analysed
hereinabove, the instant petition deserves to be allowed and is, accordingly,
allowed and disposed of as below:
L. (i) By issuance of writ of certiorari, impugned section 9
incorporated in the appointment order dated 05.03.2021, insofar it provide for
execution of indemnity bond of Rs. 2,00,000/- by the petitioner in favour of
the respondent bank is quashed; and
M. (ii) Consequently, by issuance of writ of mandamus, the respondent
bank is commanded to return back the said amount of Rs. 2,00,000/- to the
petitioner alongwith interest at the current bank rates till the date of its actual
payment.
Whether the order is speaking: Yes/No
Whether the order is reportable: Yes/No
CCP No. 30/2024
N. In view of the disposal of the main petition as above, the interim order
stands merged into the final order, necessitating closure of the instant
contempt petition. Accordingly, contempt notice issued against the
contemnors/respondents is recalled and the contempt proceedings are closed.
(Javed Iqbal Wani)
Judge
Jammu
20.12.2024
Karam Chand Secy.
KARAM CHAND
2024.12.23 13:46
I attest to the accuracy and
integrity of this document
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