Calcutta HC Quashes Rs 77 Lakh Minimum Wages Award Against SBI, Finds ATM Caretakers Not Security Guards
Justice Shampa Dutt (Paul) set aside a Minimum Wages Authority order directing SBI to pay Rs 77 lakh to 69 ATM caretakers classified as watch-and-ward personnel, holding the finding lacked evidentiary basis and misread the contractual record.
The High Court at Calcutta has quashed an order passed on 9 April 2025 by the Authority under the Minimum Wages Act, 1948 and the Regional Labour Commissioner (Central), Asansol, directing State Bank of India to pay a combined sum exceeding Rs 77 lakh to 69 contract workers deployed at its ATM booths in the Asansol region. Justice Shampa Dutt (Paul), sitting singly in constitutional writ jurisdiction, allowed WPA 13625 of 2025 filed by SBI, holding that the impugned order was not based on proper evidence and rested on an incorrect appreciation of the agreements and materials on record. The judgment, delivered on 10 August 2026 after reserving it on 15 July 2026, ends a protracted dispute that had already generated one earlier round of writ proceedings before the same court.
The Dispute: Wage Classification of ATM Caretakers
SBI entered into a Comprehensive Caretaker Services Agreement with M/s Singh Intelligence Services Pvt. Ltd. on 7 March 2016 for upkeeping its ATMs in the Asansol region. The agreement designated the deployed personnel as “caretaker personnel” and supplied them with cleansing materials. Clause 4.20 fixed payment on the basis of Central Government minimum wages applicable to the caretaker category.
Despite the contractual designation, the workers were in practice paid at the higher minimum wage rate applicable to the “Watch and Ward without arms” category under the Central Government's minimum wages notification dated 19 January 2017. SBI detected this discrepancy and described it as an error. On 20 July 2018, it executed a supplementary agreement with the contractor to correct the wage structure — replacing clause 4.20 of the principal agreement and fixing payment at the rate for “sweeping and cleaning”, the category covering caretaker personnel.
The supplementary agreement recorded in its recitals that wages had been paid under the watch-and-ward classification due to a “fundamental error” that had caused audit objections and what it called “unjust enrichment for the Contractor.” From 20 July 2018, wages were paid at the lower, corrected rate.
The Labour Enforcement Officer (Central), Asansol-I, inspected the premises and submitted a report noting that employees had stated, without prior notice, their designation was changed from “security guard” to “housekeeping.” On that footing, the officer applied under Section 20(2) of the Minimum Wages Act, 1948 for recovery of shortfall wages. The claim covered the period from October 2018 to December 2019 in respect of 69 employees and was registered as MW-01 of 2025 after the earlier proceeding, M.W. 11 of 2020, became the subject of the first writ petition.
First Round: WPA 25880 of 2024
The Authority had earlier passed an order dated 6 September 2024 in Claim Case No. M.W. 11 of 2020, directing SBI to pay the wage difference along with 100 percent of the principal amount as compensation. SBI challenged that order by filing WPA 25880 of 2024. The High Court allowed that writ petition by judgment and order dated 6 November 2024, quashing the September 2024 order. The court directed the Authority to follow proper procedure at the hearing, and also observed that liability had been fixed on SBI in that first round without giving it an adequate opportunity to defend itself.
In the second phase of proceedings before the Authority, SBI filed an affidavit-in-chief and an application to produce documents and to cross-examine the relevant parties. The contractor, respondent no. 3, also filed an affidavit-in-opposition, asserting that it had executed the supplementary agreement solely on the directions and under the superintendence of SBI and had no independent benefit from the reclassification.
The Impugned Order of 9 April 2025
The Authority passed a fresh order on 9 April 2025. It concluded that SBI had “meticulously designed” the supplementary agreement to reduce wages for security personnel by relabelling them as caretakers. Comparing the 29 charter of duties in the principal and supplementary agreements, the Authority found that only four sub-clauses — sub-clause 2.2 and sub-clauses b, c, n and v of clause 2.2.2 — described sweeping and cleaning work. The remainder, it held, were security-related duties. It pointed to specific clauses: clause 2.2.2(e) required caretakers to prohibit entry of helmeted persons and those with covered faces; clause 2.2.2(h) required immediate escalation of theft, burglary, snatching and other criminal activities at or around ATM sites.
The Authority's conclusion was that the core nature of the work was security and surveillance, with sweeping and cleaning as peripheral duties. Applying the principle that the real nature of work, not the label given by the employer, governs wage classification under the Minimum Wages Act, 1948, it held that the applicable rate was that for “Watch and Ward without arms.”
The Authority directed SBI to pay a wage difference of Rs 44,23,548 to the 69 workers. It further directed SBI to pay a compensation of 50 percent of that principal amount — Rs 22,11,774 — attributing the workers' suffering to SBI's supplementary agreement. The contractor, M/s Singh Intelligence Services Pvt. Ltd., was separately directed to pay a compensation of 25 percent of the principal amount — Rs 11,05,887 — on account of its absence on 23 of 31 scheduled hearing dates, which the Authority found had contributed to the delay and the workers' continued deprivation.
SBI's Challenge Before the High Court
Before Justice Shampa Dutt (Paul), Mr. Soumya Majumder, learned senior counsel for SBI, advanced several arguments. The central submission was that the caretaker services agreement from its inception concerned upkeep of ATMs, with housekeeping as the primary scope. Extension orders issued by SBI, he argued, were primarily for housekeeping services. The supplementary agreement of 20 July 2018 made explicit what the principal agreement already contemplated: that the employees were deployed for cleaning and maintenance, not security.
A critical procedural ground was also pressed. SBI's application to produce documents and to cross-examine necessary parties — filed after the Coordinate Bench's direction to afford SBI a proper opportunity — was neither disposed of nor addressed before the Authority concluded its adjudication on 9 April 2025. Mr. Majumder relied on Section 20(3) of the Minimum Wages Act, 1948, which confers on the Authority the powers of a Civil Court under the Code of Civil Procedure for taking evidence, enforcing attendance of witnesses, and compelling production of documents. The Authority, he submitted, had refused to exercise those statutory powers.
He also relied on the judgment of the Supreme Court in Radha Sundar Dutta v. Mohd. Jahadur Rahim & Ors., reported in 1958 SCC OnLine SC 38.
The contractor supported SBI's position before the High Court. Its counsel additionally argued that the imposition of compensation on the contractor for non-appearance was unsustainable because no adverse finding had been recorded against it and no proof of loss suffered by the workers, or any obligation of mitigation, had been assessed before directing payment.
The Union of India did not file written notes but supported the impugned order.
How the Court Reasoned
Justice Shampa Dutt (Paul) examined the agreements and the record independently. Several findings emerged from that examination.
The court observed that the principal agreement of 7 March 2016 was, from the outset, a “Comprehensive Caretaker Services Agreement” and the deployed personnel were always designated “caretaker personnel.” Clause 4.20 had fixed wages on the basis of Central Government minimum wage rates applicable at that time to the caretaker category. Clause 1.1 permitted the bank to add or amend the agreement in writing. Clause 4.3 pegged the rates to minimum wages as notified by the Ministry of Labour from time to time.
The court found that the supplementary agreement of 20 July 2018 did not change the designation of the employees. What it corrected was the wage rate, which had erroneously been paid at the watch-and-ward (unarmed) rate rather than the caretaker/sweeping-and-cleaning rate that the agreement had always contemplated.
On the nature of the caretakers' duties, the court took a different view from the Authority. It accepted that the ATM caretakers were unarmed throughout. The court held that the first requirement of a security guard is being armed, and a person without arms can do no more than inform the authorities at an appropriate time in the course of supervising the ATMs. The job description, the court found, did not include the ingredients required of a security person. Being alert, notifying the bank of disturbances, and keeping an overall watch of the ATM were part of the caretaking function, not a distinct security and surveillance role.
On the evidentiary question, the court's concern was direct. The inspection report had noted at clause 18 that employees stated their designation was changed from security guard to housekeeping without prior notice. Yet none of those employees were examined before the Authority, and no evidence was adduced to substantiate that statement. The court held that without verification of the enforcement officer's recorded statement, the Authority had proceeded on presumption rather than proof.
The court also referred to an order dated 20 February 2020 passed in claim application no. 47/04/L-Union/2019.E.I., in which the Regional Labour Commissioner (Central), Kolkata — an officer of the same rank as the Asansol Authority — had, in a materially similar case involving SBI and contract workers at ATMs, found no corroborating evidence for the watch-and-ward classification and dismissed the claim. A similarly worded order had been passed in a second claim application, no. 47/03/L-Union/2019.E.I., on the same date.
The court further referred to the judgment of a Division Bench of the Madhya Pradesh High Court in Virendar Kabra v. State Bank of India, W.P. No. 1761/2017, decided on 26 July 2017, which had examined an identical set of facts involving caretakers at SBI ATMs being paid sweeping-and-cleaning wages. That bench had found no merit in the argument that caretaker services amounted to security guard work, holding that since the job profile was the maintenance and cleanliness of ATM sites and the caretaker was unarmed with a duty only to call the branch manager or channel manager in an emergency, classifying the wages under sweeping and cleaning could not be said to be illegal or arbitrary.
Taking all these threads together, the court concluded that the impugned order of 9 April 2025 was not based on proper evidence, did not properly appreciate the documents and materials on record, and suffered from inherent illegality.
Outcome
Justice Shampa Dutt (Paul) quashed and set aside the order dated 9 April 2025 passed in claim application MW-01 of 2025 by the Authority under the Minimum Wages Act, 1948 and the Regional Labour Commissioner (Central), Asansol. WPA 13625 of 2025 was allowed. All connected applications were disposed of consequently and any interim order that had been operating stood vacated. Certified copies of the judgment were directed to be provided to the parties on a priority basis.