BENGALURU: The Karnataka High Court said that public sector guidelines issued by the Ministry of Heavy Industries and Public Enterprises on employment terms and conditions are not applicable to public sector banks, as they are neither a government department nor a public sector enterprise.
A division bench of Chief Justice N V Anjaria and Justice K V Aravind passed the order while setting aside a single judge's order to Vijaya Bank. The single judge bench directed Vijaya Bank to refund an indemnity bond of Rs 3 lakh paid by an employee. The employee had left for another job before completing the minimum service period stipulated in the agreement.
Vijaya Bank filed the appeal in the high court against the single judge's order dated April 19, 2023. The single judge directed the bank to refund Rs 3 lakh to petitioner Abhimanyu Kumar, who had paid it to the bank as a precondition of employment as mentioned in the agreement dated November 2, 2011, executed with the bank.
Noting that the single judge committed an evident error in allowing the petition filed by Kumar, the division bench said, "Public sector banks, which are nationalised banks, are guided by instructions issued by the parent Ministry, which is the Department of Finances and Services and the Department of Economic Affairs (Banking Division), Ministry of Finance."
"The guidelines issued by the Department of Public Enterprises or Bureau of Public Enterprises, Ministry of Heavy Industries and Public Enterprises, do not apply to public sector banks. They are applicable only to public sector enterprises that have different service condition packages and lateral movement of public officials," the division bench further added.
Abhimanyu Kumar, a chartered accountant, was selected for the post of Probationary Manager (Generalist) at Vijaya Bank and joined the service on November 2, 2011.
As per Clause 11(k) of the selection letter, he was required to serve the bank for a minimum period of three years and was further required to execute the indemnity bond for Rs 3 lakh if he quit the job before the stipulated time.
In 2012, he got a job at the Steel Authority of India Ltd (SAIL). He resigned from the bank and paid Rs 3 lakh as the bank did not waive the indemnity bond.
Later, he approached the high court against the indemnity bond on the grounds that he was made to sign the selection letter by coercion and claimed a Rs 3 lakh refund while citing the Department of Public Enterprises guidelines. The single judge allowed his plea and directed the bank to refund the amount.