Association of Jewel Appraisers in Canara Bank along with an individual Jewel Appraiser v. Canara Bank and General Manager, Canara Bank Trivandrum Circle

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE SMT. JUSTICE P.V.ASHA** **FRIDAY ,THE 16TH DAY OF NOVEMBER 2018 / 25TH KARTHIKA, 1940** # **WP(C).No. 17437 of 2018** ## **PETITIONER/S:** |**1**|**CANARA BANK JEWEL APPRAISERS**| |---|---| ||**ASSOCIATION REG. NO. 37/2008**| ||**REGISTERED OFFICE AT NAMAKKAL, TAMILNADU,**| ||**REPRESENTED BY ITS ALL INDIA PRESIDENT,**| ||**A.AYYAPPAN ACHARI, AGED 53 YEARS,**| ||**AYYAPPA BHAVAN, MELANKODE, PAZHAKUTTY,**| ||**NEDUMANGAD, THIRUVANANTHAPURAM.**| |**2**|**VIJAYAN T K**| ||**AGED 65 YEARS, S/O. KESAVAN,THATTARUPARAMBIL HOUSE,**| ||**KARUMALLUR P O, MANAKKAPPADY**| ||**GOLD APPRAISER , CANARA BANK, KALADY BRANCH,**| ||**KALADY,ERNAKULAKM.**| **BY ADV. SMT.SURYA BINOY** ## **RESPONDENT/S:** |**1**|**CANARA BANK**| |---|---| ||**REPRESENTED BY THE GENERAL MANAGER,**| ||**PRIORITY CREDIT AND FINANCIAL INCLUSION WING,**| ||**HEAD OFFICE, BANGALORE.**| |**2**|**GENERAL MANAGER**| ||**CANARA BANK TRIVANDRUM CIRCLE, M.G.ROAD,**| ||**THIRUVANANTHAPURAM.**| ||**BY ADVS.**| ||**M.GOPIKRISHNAN NAMBIAR**| ||**SRI.JOSON MANAVALAN**| ||**SRI.K.JOHN MATHAI**| ||**SRI.KURYAN THOMAS**| ||**SRI.PAULOSE C. ABRAHAM**| ||**SRI.P.GOPINATH**| **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16.11.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No. 17437 of 2018** 2 ## **J U D G M E N T** Association of Jewel Appraisers in Canara Bank along with an individual Jewel Appraiser have filed this writ petition challenging Ext.P3 Circular by which the retirement age of Jewel Appraisers has been fixed at 60 years. 2. As per Ext.P2 Circular issued in the year 2014, the retirement age of Jewel Appraisers was fixed at 70 years. The Bank issued Ext.P3 Circular on 21.04.2018 introducing revised procedure in respect of sanctioning of agricultural loans, pledging of gold, the procedure to be followed in engaging Jewel Appraisers, etc. In this process, the age limit for appointment as well as for retirement is also provided; the qualification and experience required for such persons, the procedure for selection of Jewel Appraisers, the tenure of their appointment on contract basis, the revised form of agreement to be executed, etc are also provided in it. It further **WP(C).No. 17437 of 2018** 3 provides that existing Jewel Appraisers engaged in Branches will continue upto 60 years of his/her age and those who have already completed 60 years are to be replaced on or before 31[st] May 2018. Petitioners have produced a letter issued from the Manager of the Canara Bank to one of the Jewel Appraisers on 30.04.2018 in which the decision taken by the Bank to terminate the agreement entered into with Jewel Appraisers, who have completed the age of 60 years, was intimated, saying that the said decision has been taken on the basis of Ext.P3 Circular. Ext.P5 is a Circular forwarded to the General Manager of the Canara Bank directing to terminate the agreements with the Jewel Appraisers who have completed the age of 60 years after issuing a notice of termination as provided in Ext.P6. 3. Jewel Appraisers are appointed after executing agreements like Ext.P1 which are styled as Special Contract made between Canara Bank and the **WP(C).No. 17437 of 2018** 4 respective Jewel Appraisers. In the case of the second petitioner the agreement was executed on 10.11.2008. Clause 2 of Ext.P1 agreement provides that Jewel Appraiser is not an employee of the Bank and that none of the provisions of the Canara Bank Service Code or any other regulations governing the employees of the Bank from time to time will apply to him and that he is in no way required to subject himself to the general discipline of the bank as is applicable to an employee of the Bank. He will be governed by the terms and conditions of the agreement and of such other contracts or agreements as may be executed between him and the Bank. As per clause 3 he shall be bound to attend to the work relating to the appraising of jewels produced before the Bank for loans/advances at or during such time or hours as may from time to time be fixed or determined by the Bank and notified to him orally or in writing and during such times or hours he shall devote his attention for **WP(C).No. 17437 of 2018** 5 the said purpose. As per clause 10, Jewel Appraiser shall be remunerated for his work by way of commission only, as determined by the Bank from time to time in its absolute discretion and he shall not be entitled to any other remuneration, reimbursements and other charges whatsoever. It further provides that he shall make his own arrangement for transport or other conveyance at his own cost. As per clause 13, this contract may be terminated by either party to the contract, giving to the other one month's notice in writing of his or its intention to do so, subject to certain conditions. It also provides that in case the Jewel Appraiser has committed gross misconduct or if there is a breach by the Jewel Appraiser it shall be lawful for the Bank to put an end to this contract by giving written notice of its intention. 4. Learned counsel for the petitioners submits that petitioners were sought to be terminated merely on the basis of the Circular Ext.P3 and not in terms **WP(C).No. 17437 of 2018** 6 of the conditions stipulated in Ext.P1 agreement. According to the learned counsel for the petitioners, the petitioners were under the legitimate expectation that they would be able to continue upto 70 years in the light of Ext.P2 Circular and that they had been planning their life accordingly, availing loans, etc, It is stated that Ext.P3 Circular is issued arbitrarily without even consulting the representatives of the Jewel Appraisers abruptly terminating their services at the age of 60 years. It is stated that in view of Ext.P3 Circular they are unable even to approach any other forum challenging the termination of their services. It is also pointed out that before Ext.P2 Circular was issued there was no age limit and they could continue even after they attained 70 years. 5. It is argued out that the respondent Bank, which is an instrumentality of State under Article 12 of the Constitution of India, cannot be permitted to **WP(C).No. 17437 of 2018** 7 take such arbitrary action like drastic reduction of age of retirement of the contract employees like Jewel Appraisers by issuing circulars like Ext P3, without following any fair procedure. 6. The respondents have filed counter affidavit stating that the writ petition itself is not maintainable since the persons like 2[nd] petitioner were engaged purely on contract basis and the contract arrangement has been terminated in the case of those who crossed the age of 60 years. It is also stated that they do not come under the definition of workmen under Section 2(s) of the Industrial Disputes Act and there is no employer-employee relationship between the Bank and the Jewel Appraisers as is made clear in the agreement especially in Clauses 2, 3, 10, 12 and 13 of Ext.P1. It is further stated that the engagement of Jewel Appraisers is as per the terms and conditions stipulated in the respective agreements between them and the appointments can be terminated in accordance **WP(C).No. 17437 of 2018** 8 with the terms and conditions therein. It is also stated that they are bound by the terms and conditions prescribed by the Bank which can be changed from time to time due to various operational and risk reasons and merely because they are engaged they do not have any right of work or employment or for continuation in the panel. It is further stated that due to various administrative reasons like increase in pledge of spurious gold to avoid development of vested interest by way of continuous allotment of work to the same appraiser, it was decided to revise the guidelines based on which Ext.P3 Circular was issued. According to them, under Clause 13 of the agreement the contract may be terminated by either party to the contract by one month's notice in writing. It is also stated that in case the persons like petitioners are not available they are free to engage other competent persons to certify with the task entrusted to them. According to the respondents, petitioners were given prior notice **WP(C).No. 17437 of 2018** 9 intimating that those who have already completed 60 years of age will not be continued to be engaged on or after 31.05.2018. It is further stated that engagement of petitioners were not made prescribing any qualification or age and there are no working hours for them and there is no guarantee for payment unlike in the case of regular employees. The gold appraisers are allowed to work elsewhere and they need to come to the Bank when they are called upon. According to them there is no question of retirement as long as the petitioners are not employees of the Bank and there is no violation of legitimate expectation. 7. According to the learned counsel for the petitioner even though as per the agreement they are not expected to be in the Bank whole time, in effect all of them are present in the Bank and they are engaged in other works entrusted by the Officers. It is also stated that even though there is no duty time they are expected to be available in the Bank as and **WP(C).No. 17437 of 2018** 10 when their services are necessary. According to them, it is also not correct to say that they can work anywhere else. 8. Learned counsel for the petitioner relied on the judgment of the Apex Court in **Delhi Development Authority** , **N.D. And Another v. Joint Action Committee, Allottee of SFS Flats and Others** [2008 (2) SCC 672] in support of her contention that there cannot be any unilateral alteration of conditions in a contract. There Apex Court was considering a case relating to the contract entered into between the Delhi Development Authority where the Apex Court found that when a plea was raised challenging a policy decision the superior court would not be without jurisdiction as such decisions are subject to judicial review. Referring to the contract entered into between DDA and between the parties therein, it was found that though the terms and conditions could be altered that cannot be done unless there is a provision either in the **WP(C).No. 17437 of 2018** 11 contract for unilateral alteration. It was found that DDA which was a contracting party had to bring the same to the notice of the parties before altering the conditions. 9. The judgment of the Patna High Court in **Scorpion Express Pvt. Ltd. v. Union of India and Others** [2009 KHC 7007: AIR 2009 Pat.106] was also relied on in which High Court held that unilateral alteration of the conditions by the Railways was violative of Article 14 of the Constitution of India. 10. On the other hand, the learned Standing Counsel relied on the Full Bench judgment of this Court in ILR 1981 II LLJ 189 where Canara Bank was a party. It was a case, in respect of Jewel Appraisers itself. After referring to the duties and responsibilities attached to the Jewel Appraisers, as per the contract entered into by them, the absence of disciplinary control over them, absence of any requirement for them to mark any attendance, for the **WP(C).No. 17437 of 2018** 12 Bank to pay any wages, to remit PF contribution, inapplicability of service code, etc, it was held that the Jewel Appraisers are not employees and that there is no employer employee relationship between the Jewel Appraisers and the Bank. Learned counsel also relied on the judgment of the Apex Court in Management of **- M/s.Puri Urban Co operative Bank v. Madhusudan Sahu and Another** [AIR 1992 SCC 1452] in which it was held that there is no master and servant relationship between the Bank and a Jewel Appraiser. It was found that they are required to weigh the ornaments brought in the Bank for pledging and to appraise their quality, purity and value; the manner in which he shall do it, was left to him exclusively, as it depended on his skill, technique and experience. He has executed a bond indemnifying and holding himself responsible to the Bank for all his acts and commissions as an appraiser, and be accountable for the loss sustained by the Bank on account of under **WP(C).No. 17437 of 2018** **==> picture [12 x 8] intentionally omitted <==** valuation of the gold pledged with it. It was held that there was a fair element of freedom for the jewel Appraiser though coupled with responsibility,in the manner in which he could do his work. 11. Further in **Indian Overseas Bank v. Workmen** [2006 KHC 473] also this question was considered. After a comparative analysis of the characteristics of Jewel Appraisers and regular employees it was held that Jewel Appraisers are not employees of the Bank. 12. However, Smt. Soorya, the learned counsel for the petitioner points out that when the Supreme Court considered various conditions in respect of regular employees and Jewel Appraisers, it was observed that there is no retirement age for the Jewel Appraisers and there is no fixed working hours whereas as at present by way of Exts.P2 and P3 Circulars, retirement age has been fixed. 13. Learned counsel for the petitioners submits that in view of Ext.P3 Circular, any proceedings which **WP(C).No. 17437 of 2018** 14 they move challenging the termination would not be successful unless and until the Circular is not held arbitrary. 14. On consideration of the rival contentions, it is seen that Ext.P1 agreement does not provide for a retirement age. It does not provide for any minimum age limit also for the purpose of engagement of Jewel Appraiser. In fact the duties to be performed by the Jewel Appraisers are stipulated in the agreement. Clause 13 provides for termination at any time with one month's notice for which no reason is required . It is seen that prior to Ext.P2 there was no maximum age limit and it was in the year 2014 that 70 years was stipulated for availing services of the Jewel Appraisers and proof of date of birth was stipulated for the existing Jewel Appraisers. It could appear that none of the Jewel Appraisers did have any complaint. At any rate when Ext.P3 Circular is issued with revised guidelines in respect of the Agricultural **WP(C).No. 17437 of 2018** 15 Gold Loans, modifying the Scheme itself, it provides for formation of panel of Jewel Appraisers prescribing a minimum age limit for their engagement and modifying the age upto which such engagement can be continued. Even in the absence of any such Circular the Bank could have issued a notice for termination of the services of the Jewel Appraisers. The issuance of Ext.P3 Circular cannot be said to be an alteration in the conditions of the contract. 15. The petitioners do not have any case that any of them have been terminated from service without issuing any notice. The general guidelines are issued in Ext.P3 circular in respect of sanctioning of Agricultural loans after pledging gold, in order to protect the interest of all concerned, considering large number of instances involving spurious gold. Introduction of such revised guidelines issued in public interest cannot be said to be illegal or arbitrary, even in respect of the question of upper **WP(C).No. 17437 of 2018** 16 age limit or retirement age or minimum age limit for engagement of Jewel Appraisers, introduced or revised in it. 16. There is no Clause in Ext.P1 which provides that the Jewel Appraisers would be allowed to continue till the age of 70 years or 60 years. Even the age of retirement in the case of regular employees can be reduced without giving notice to the employees as has been held by the Apex Court in **K. Nagaraj v. State of A.P.** [(1985) 1 SCC 523]. Therefore it cannot be said that such reduction cannot be brought about in the case of others even in the absence of the provision in the contract. The respondent Bank while issuing general policy guidelines with respect to pledging of gold for disbursal of gold loan decided to revise the guidelines with respect to the same in public interest and in this process it decided that the Jewel Appraisers can be continued only till they attain 60 years. Though, the Jewel Appraisers might have been **WP(C).No. 17437 of 2018** 17 under the legitimate expectation that they could continue till the age of 70 years, that by itself cannot be a reason to conclude that fixing an upper age limit as 60 years for their continuance is arbitrary or illegal. 17. The judgments relied on by the learned counsel for the petitioner are with respect to cases where specific terms in the agreement entered into between the parties have been altered. As long as Ext.P1 agreement does not contain any clause with respect to the retirement age it cannot be said that there is any unilateral alteration of the conditions also. 18. In this context it is relevant to note that the apex court in the judgment in **State of U.P. v. Hirendra Pal Singh** [(2011) 5 SCC 305] while considering the challenge against the termination of service of a Government Counsel on attaining the age of 60 years consequent to reduction in retirement age **WP(C).No. 17437 of 2018** 18 from 62 to 60, after discussing the judgments in **K. Nagaraj's case (supra), Bishun Narain Misra v. State** **of U.P** [AIR 1965 SC 1567], etc., held as follows: - “12.In view of the above, it is evident that even in government services where the terms and conditions of service are governed by the statutory provisions, the legislature is competent to enhance or reduce the age of superannuation. In view of the above, it is beyond our imagination as to why such a course is not permissible for the appellant State while fixing the age of working of the District Government Advocates.” Therefore, I do not find any reason to interfere with Ext.P3 Circular. Accordingly, writ petition is dismissed, this shall not stand in the way of the petitioners in approaching any appropriate forum against the termination of service in case they have got any statutory remedy. Sd/- **P.V.ASHA, JUDGE.** AS **WP(C).No. 17437 of 2018** 19 ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 TRUE COPY OF ONE OF THE AGREEMENT DATED 10.11.2008 ENTERED INTO BY THE BANK WITH THE 2ND PETITIONER.** - **EXHIBIT P2 TRUE COPY OF THE CIRCULAR NO.185/2014 DATED 02.04.2014 ISSUED BY CANARA BANK.** **EXHIBIT P3 TRUE COPY OF THE CIRCULAR NO.244/2018 DATED 21.04.2018 ISSUED BY CANARA BANK.** - **EXHIBIT P4 TRUE COPY OF THE DETAILS OF THE LOANS AVAILED BY THE 2ND RESPONDENT.** **EXHIBIT P4(A) TRUE COPY OF THE NOTICE DATED 30.04.2018 ISSUED TO ONE MR.MOHANDAS K.K.(OLAVANNA BRANCH) CITING EXHIBIT P3 CIRCULAR.** - **EXHIBIT P5 TRUE COPY OF THE LETTER DATED 14.5.2018 ISSUED BY THE AGRICULTURE POLICY AND INFORMATION SECTION TO THE GENERAL MANAGER, CANARA BANK.** **EXHIBIT P6 TRUE COPY OF THE ENCLOSED DRAFT NOTICE OF TERMINATION SENT ALONG WITH EXHIBIT P5** **EXHIBIT P7 TRUE COPY OF THE REPRESENTATION FILED BY THE ALL INDIA ASSOCIATION OF THE IST PETITIONER DATED 30.04.2018.**