Muttiah v. Commissioner for National Housing (Ismail, J.)
BANK OF CEYLON
P. S. DE SILVA, C.J.,
S.C.APPEAL NO. 77/93
C. APPEAL 107/91L.T. CASE NO. 1/34/86JUNE 9 AND JULY 5, 1995
Industrial Disputes Act. – Termination – Labour Tribunal – Application dismissed -High Court Reversed Order – Failure to consider evidence as a whole -Confidence reposed in an Employee – Factors to be taken into consideration.
The Applicant Respondent made an application to the Labour Tribunal allegingthat the termination of his services by the appellant was illegal and unjustified.The application was dismissed after inquiry.
The case for the Bank was that there was a loss of confidence in the applicant byreasons of the part he played in an attempt made by certain persons tofraudulently transfer a very large sum of money from Sri Lanka to accounts whichhad been opened in a Swiss Bank.
The High Court on appeal reversed the Order of the Labour Tribunal.
Sri Lanka Law Reports
 2 Sri L.R.
The High Court had failed to consider the evidence as a whole and addressits mind to a significant fact, namely the kind of institution in which the applicantwas employed.
Utmost confidence is expected of any officer employed in a Bank. There is aduty both to the Bank to preserve its fair name and integrity and to the customerwhose money lies in deposit with the Bank.
In the circumstances of this case, it is apparent that he has clearly forfeitedthe confidence reposed in him as an employee of the Bank .
Case referred to:
Sithamparanathan v. Peoples Bank 1986 -1 SLR at p. 414-415.
AN APPEAL from the High Court of Colombo.
N. S. A. Goonetileke, P.C., with M. E. Wickremasinghe for the Employer-Appellant.
R. E. Thambiratnam for the Applicant-Respondent.
Cur. adv. Vult.
P. S. DE SILVA, C.J.
The applicant made an application to the Labour Tribunal allegingthat the termination of his services by his employer, the Bank ofCeylon, was illegal and unjustified; he sought reinstatement andback-wages. After inquiry, the Labour Tribunal dismissed theapplication. Thereupon the applicant preferred an appeal to the HighCourt which allowed the appeal and directed that the applicant be re-instated with back-wages. The employer has now appealed to thiscourt against the judgment of the High Court.
The applicant was a Clerk Grade II in the Personnel andAdministration Division of the Bank of Ceylon at the time of thetermination of his services. He had served in the Bank from 1.3.74 to11.12.85. The case for the Bank was that there was a loss ofconfidence in the applicant by reason of the part he played in an
Bank of Ceylon v. Manivasagasivam (G. P. S. de Silva C.J.)
attempt made by certain persons to fraudulently transfer a very largesum of money from Sri Lanka to accounts which had been opened ina Swiss Bank.
It is in evidence that in or about August 1984 two persons namedRanjan and Pathmanathan along with one Imtiaz had met theapplicant at his office. The applicant had previously known Ranjanand Pathmanathan but not Imtiaz. Ranjan had told the applicant thatImtiaz was a friend of his who had come from abroad and that Imtiazhad to clear some goods from the customs. For this purpose Ranjanhad wanted him to certify the signature of Imtiaz. He had told Ranjanthat he had no “signing powers.” He had then introduced Ranjan andPathmanathan to his superior officer Nadesalingam. ThereafterNadesalingam has had a discussion with these 3 persons and had"certified” the signature of Imtiaz as evidenced by the document R2.It is to be noted that there is nothing in R2 to suggest that it was to beused to clear goods from the Customs. R2 is addressed “to whom itmay concern” and it confirms the authenticity of the signature ofImtiaz. Nadesalingam has signed R2 as the District Manager, Bank ofCeylon, Colombo. It is not disputed that R2 was not used for thepurpose of clearing goods from the Customs. In fact it was used foran entirely different purpose, namely to fraudulently open accounts ina Swiss Bank. The use to which R2 was put would seriously affect thereputation of the Bank. Mr. L. Jayasuriya, the Deputy GeneralManager of the Bank stated in the course of his evidence that “ itwould have demolished the image of the Bank internationally.n Theevidence led on behalf of the Bank clearly shows that thecertification of the signature of the person intending to open anaccount in a foreign Bank by an “approved Bank” is an essentialrequirement; the Bank of Ceylon is one such “approved Bank.”
Besides R2, there is another document R3 dated 29.8.84 whereinthe signature of the aforementioned Pathmanathan was certified byThiagarajapillai, a Manager of the Bank of Ceylon. R3 is a letteraddressed to a Swiss Bank by Pathmanathan seeking to open anaccount in that bank. It is relevant to note that in this instance too, itwas the applicant who had introduced Pathmanathan toThiagarajapillai.
Sri Lanka Law Reports
 2 Sri LR.
Subsequently Imtiaz and Pathmanathan together with two otherswere indicted for offenses relating to an attempt to fraudulentlytransfer large sums of money to a bank account in Switzerland. Imtiazpleaded guilty to the charges while the other three were acquittedafter trial.
Mr. Thambiratnam, counsel for the applicant strongly urged, (i) thatthere was no evidence at all that the applicant knew or had reason tobelieve that Imtiaz and Pathmanathan intended to use R2 and R3 fora fraudulent purpose; (ii) that in authenticating the signatures ofImtiaz and Pathmanathan, both Nadesalingam and Thiagarajapillaiwere exercising their independent judgment; (iii) that the applicantwas only a clerk working under Nadesalingam; (iv) that the acts ofthe applicant relied on by the Bank for the termination of his servicesdo not amount to acts of misconduct. On the other hand, Mr. NehruGoonetilaka for the Bank contended (a) that the evidence revealedthat the certification of signatures by authorised officers of the Bankhad to be done according to specified procedure; (b) that R2 and R3had in fact been used for fraudulent purposes, causing a serious lossof reputation in so far as the Bank is concerned; (c) that the applicantplayed a pivotal role in obtaining the certification of the signatures ofImtiaz and Pathmanathan; (d) that the applicant failed to testifybefore the Labour Tribunal.
On a consideration of the evidence, it is clear that it was by reasonof the intervention of the applicant that Imtiaz and Pathmanathanwere able to secure the certification of their signatures by an“approved Bank" in Sri Lanka. It is not disputed that such“certification" was essential in order to open an account in the Bankin Switzerland. The applicant himself, though a clerk, had been in theservice of the Bank for eleven years. The evidence of E. T. Fernando,the Deputy General Manager of the Bank of Ceylon is that theapplicant should have known the accepted procedure in regard tocertification of signatures by officers of the Bank. Admittedly, Imtiazwas a person unknown to the applicant. Nevertheless, he though it fitto introduce Imtiaz to Nadesalingam for a purpose which he shouldhave known could have grave consequences to the Bank. Witness L.Jayasuriya, the Deputy General Manager (Credit) of the Bank ofCeylon in his evidence stated that the purpose for which R2 and R3
Bank of Ceylon v. Manivasagasivam (G. P. S. de Silva C.J.)
were used “would have demolished the image of the Bankinternationally, because these documents were used for the purposeof fraudulent transfer of funds.”
In reversing the order of the Labour Tribunal, the High Court was inerror inasmuch as the High Court had failed to consider theevidence as a whole. The High Court has failed to address its mindto a significant fact, namely, the kind of institution in which theapplicant was employed. As observed by Siva Selliah, J. inSithamparanathan v. Peoples Bankm, “It is needless to emphasizethat the utmost confidence is expected of any officer employed in aBank … he owes a duty both to the Bank to preserve its fair nameand integrity and to the customer whose money lies in deposit withthe Bank. Integrity and confidence thus are indispensable and wherean officer has forfeited such confidence has been shown up as beinginvolved in any fraudulent or questionable transaction, both publicinterest and the interest of the bank demand that he should beremoved from such confidence."
It seems to be that by reason of the part played by the applicant intwo transactions which, to say the least, were questionable, he hasclearly forfeited the confidence reposed in him as an employee of theBank. In these circumstances, the Bank should not and cannotcontinue to employ him.
The appeal is accordingly allowed, the judgment of the High Courtis set aside and the order of the Labour Tribunal is restored. In all thecircumstances, there will be no order for costs of appeal.
KULATUNGA, J. -1 agree.RAMANATHAN, J. -1 agree.
BANK OF CEYLON V. MANIVASAGASIVAM