Allahabad HC Quashes 1983 Bank Termination, Awards 50% Back-Wages After Four Decades of Litigation

A Division Bench held that Regulation 10(2) of the Gorakhpur Kshetriya Gramin Bank Service Regulations was unconstitutional and its voidness operated retrospectively, annulling a 1983 termination order and directing 50% back-wages from the date of termination to superannuation.

A Division Bench of the Allahabad High Court, comprising Justice J.J. Munir and Justice Indrajeet Shukla, has allowed a special appeal filed by Sachindra Kumar Pandey, a former clerk of the Gorakhpur Kshetriya Gramin Bank, setting aside the dismissal of his writ petition by a learned Single Judge in 2004. The judgment, delivered by Justice J.J. Munir on 10 August 2026, quashes the termination order dated 11.03.1983 passed by the Chairman of the Bank. The Bench held that the regulation under which the termination was made—Regulation 10(2) of the Gorakhpur Kshetriya Gramin Bank (Staff) Service Regulations, 1980—had been declared unconstitutional by the same court in an earlier judgment and that the declaration operated retrospectively. The appellant, now aged around 70 years, was awarded 50% back-wages from his termination date until superannuation, along with all post-retiral benefits, payable within one month.

The Clerk, the Probation, and the Termination

Sachindra Kumar Pandey was appointed as a Clerk in the service of the Gorakhpur Kshetriya Gramin Bank on 04.06.1981 and joined service on 22.07.1981. Under Regulation 8(2) of the Regulations, every employee on appointment was placed on probation for one year, extendable by up to six months. His probation was extended for six months by an order dated 20.07.1982. The Bank's case was that his service was not satisfactory. His services were terminated with immediate effect by an order dated 11.03.1983 passed under Regulation 10 of the Regulations, with one month's salary paid in lieu of notice.

The Bank itself underwent reorganisation during the long course of this litigation. It was renamed as the Purvanchal Bank and subsequently merged into the Uttar Pradesh Gramin Bank, Lucknow. The Division Bench treated all three entities as the same body corporate for the purposes of the appeal.

Four Decades of Proceedings Across Civil and Constitutional Forums

The appellant's effort to recover his employment spanned civil courts, this Court in second appeal, and ultimately the writ jurisdiction. In 1983, shortly after his termination, he filed Original Suit No. 640 of 1983 before the Munsif-XII, Gorakhpur, seeking a declaration that the termination was illegal. The Munsif decreed the suit on 28.10.1985. The Bank appealed, and the 10th Additional District Judge, Gorakhpur, reversed the decree and dismissed the suit on 25.01.1989.

The appellant then filed Second Appeal No. 1103 of 1989 before this Court. The second appeal was heard alongside Second Appeal No. 1604 of 1990, filed by one Swatantra Kumar Singh in similar circumstances. Both were disposed of together on 10.05.2000. The Court dismissed the appellant's suit on the ground that the Civil Court could not go into the vires of the Regulations. However, the appellant was expressly left free to pursue remedies under the Industrial Disputes Act or under Article 226 of the Constitution.

Acting on that liberty, the appellant filed the writ petition. The learned Single Judge, Justice R.B. Misra, dismissed it on 19.05.2004, reasoning briefly that because the appellant was on probation when his services were terminated by an order simpliciter with one month's salary in lieu of notice, there was no illegality. The Division Bench found that the learned Single Judge had made “a short shrift of the matter” despite elaborate arguments having been addressed, and held that the case called for a full examination on merits rather than a remand, given the passage of time.

Deemed Confirmation After Extended Probation

The first issue the Division Bench addressed was whether the appellant remained a probationer when his services were terminated on 11.03.1983, or whether he had, by then, been deemed confirmed in service.

Regulation 8(2) provided a one-year probation extendable by up to six months. The appellant's extended probation expired on 19.01.1983. No order of confirmation was passed. The order of termination followed on 11.03.1983, nearly two months after the maximum permissible period of probation had run out.

The Bank relied on Kazia Mohammed Muzzammil v. State of Karnataka, (2010) 8 SCC 155, for the proposition that absent an express confirmation order, no deemed confirmation could arise. The Bench distinguished that case, noting that it arose from the Higher Judicial Service of Karnataka where the rules expressly excluded the possibility of implied confirmation. Similarly, Mohd. Salman v. Committee of Management, (2011) 11 SCC 308, was held inapplicable because the regulation examined there had a different phraseology.

The Bank also invoked Kedar Nath Bahl v. State of Punjab, (1974) 3 SCC 21, which states the broad rule that expiry of a probationary period does not automatically confer confirmation unless the terms of appointment or a specific service rule clearly indicate it. The Division Bench acknowledged the force of that principle but found it displaced by a more specific authority.

The Supreme Court's decision in M.K. Agarwal v. Gurgaon Gramin Bank, 1987 Supp SCC 643, concerned a termination under Regulation 10(2)(a) of the Gurgaon Gramin Bank (Staff) Services Regulations, 1980. The Division Bench found the relevant provisions of the two sets of Regulations to be pari materia. In M.K. Agarwal, the Supreme Court held that when the maximum period of probation expires and the probationer is neither confirmed nor discharged, the limitation on the employer's power to extend probation “coupled with the further requirement that at the end of it the services of the probationer should either be confirmed or discharged render the inference inescapable” that there is implied confirmation. On that basis, the Division Bench held that the appellant stood deemed confirmed in service on 19.01.1983 and was, accordingly, a permanent employee when the termination order was passed on 11.03.1983.

Unconstitutionality of Regulation 10(2) and Retrospective Operation

The second question was whether Regulation 10(2)(a) of the Regulations, which empowered the Bank to terminate an employee's service on one month's notice or pay in lieu thereof without any procedural safeguard, was constitutional. In M.K. Agarwal, the Supreme Court had struck down the identically worded Gurgaon Gramin Bank regulation as conferring an arbitrary and unguided power violative of Article 14 of the Constitution.

The Division Bench found, however, that it was not necessary to make a fresh declaration of unconstitutionality in this case. An earlier judgment of the Allahabad High Court in Rudra Kumar Pal v. Chairman, Gorakhpur Kshetria Gramin Bank, Civil Misc. Writ Petition No. 957 of 1987, decided on 01.12.1994, had already declared Regulation 10 of the Gorakhpur Kshetriya Gramin Bank (Staff) Service Regulations, 1980 unconstitutional, following M.K. Agarwal. The Bank was a party to that proceeding.

The Bank's counsel, Mr. Aditya Kumar Singh, argued that the declaration of unconstitutionality in Rudra Kumar Pal could only operate prospectively from 01.12.1994 and could not invalidate an order passed in 1983. The Bench rejected this argument firmly. It held that a post-constitutional law declared unconstitutional for violating Part III of the Constitution is void ab initio, stillborn, and non est. The declaration is always retrospective. There is no question of the regulation surviving as valid for the period before the court's pronouncement.

The Bench drew on the Constitution Bench's exposition in Central Bureau of Investigation v. R.R. Kishore, (2023) 15 SCC 339, and the Supreme Court's three-Judge Bench judgment in State of Manipur v. Surjakumar Okram, (2022) 19 SCC 723, both of which consolidate the principle that where a post-constitutional law is declared void for infringing Part III, it is treated as never having existed. The Bench noted that the doctrine of eclipse, which allows revival of a pre-constitutional law if the relevant fundamental right is amended or reinterpreted, has no application to post-constitutional laws. Once struck down, they cannot be revived.

The Bank's counsel further submitted that the point about prospectivity had not been argued in Rudra Kumar Pal and therefore passed sub silentio, weakening its precedential value. The Bench accepted that a point passing sub silentio in a judgment may deprive it of binding force as precedent, but held that a declaration that a particular regulation is unconstitutional operates in rem. The court cannot “bring it back to life” even if the point now raised had not been addressed earlier. The declaration in Rudra Kumar Pal therefore stood, and the order of 11.03.1983 founded on Regulation 10(2) could not survive.

Relief: Back-Wages and Superannuation Benefits

With the termination order quashed, the Bench turned to the appropriate relief. Reinstatement was not possible: the appellant was approximately 70 years old and had long since crossed the age of superannuation.

The Bench reviewed the appellant's litigation conduct. He filed his suit within months of termination in 1983. The suit was decreed in 1985. He pursued the Bank's appeal, the second appeal before this Court, and then the writ petition—all without significant delay. The only lapse was a delay of 221 days in filing the present special appeal after the Single Judge dismissed the writ petition on 19.05.2004; the appeal was filed on 07.02.2005.

On back-wages, the Bench considered the Supreme Court's recent guidance in Constable Uma Shankaran v. Union of India, 2026 SCC OnLine SC 1115. That decision reaffirms that back-wages on wrongful termination are not automatic relief but that where the employer's illegal act kept the employee away from work, the employee has a legitimate claim to restoration of what was lost, subject to the question whether the employee was gainfully employed elsewhere in the interregnum.

In the present case, the Bench noted one factor cutting against full back-wages: the appellant had worked for only a short period—from 22.07.1981 to 11.03.1983—before his termination. He had then remained out of the Bank's employment for the rest of his working life, not through any fault of his own. Weighing these circumstances, the Bench awarded 50% back-wages for the entire period from the date of termination on 11.03.1983 until the date of superannuation, together with all post-retiral benefits to be computed by the Bank in accordance with applicable law and Rules.

Order

The Division Bench allowed Special Appeal No. 1639 of 2008 with costs of Rs. 10,000. The judgment and order of the learned Single Judge dated 19.05.2004 is set aside and the writ petition is allowed. The order of termination dated 11.03.1983 passed by the Chairman of the Bank is quashed.

A writ of mandamus issued to the Chairman, Uttar Pradesh Gramin Bank, Lucknow, the General Manager, Uttar Pradesh Gramin Bank, Lucknow, and the Branch Manager, Uttar Pradesh Gramin Bank, Branch Paniyara, Gorakhpur, directing payment of 50% back-wages from 11.03.1983 until the date of superannuation and all post-retiral benefits due in accordance with law. The entire payment is to be made within one month from the date of receipt of a copy of the judgment. The Registrar (Compliance) was directed to communicate the judgment to the concerned bank officials.