Authority: Madras High Court, Madurai Bench (Justice M. Dhandapani)

Order Date: 08 July 2026

Case Overview

  • The petitioner, Tamil Nadu Mercantile Bank Limited, a scheduled private‑sector bank, filed a writ petition under Article 226 challenging an order dated 11 July 2022 issued by the Appellate Authority under the Tamil Nadu Shops and Establishments Act, Madurai (Case No. TNSE‑07/2020).
  • The second respondent, A.S. Thalapathy, was appointed Sub‑Staff at the bank’s Rasipuram Branch on 21 January 2013 and joined service on 7 February 2013.
  • On 24 August 2016 he applied for leave to travel to Chennai; the leave was approved, but he failed to report for duty and did not inform the bank of his absence.
  • The bank learned that Thalapathy, along with friends, had travelled to Munnar, Kerala, where they were taken into police custody in connection with an alleged theft of a printer; an FIR was lodged and Thalapathy was remanded to judicial custody before being released.
  • Owing to the seriousness of the allegations, the bank suspended Thalapathy on 21 October 2016 and, after disciplinary proceedings, dismissed him.
  • Thalapathy appealed the dismissal under Section 41 of the Tamil Nadu Shops and Establishments Act before the Appellate Authority, which set aside the dismissal order.
  • The bank contended that, despite the criminal case ending in acquittal by compromise, it had lost confidence in Thalapathy and was unwilling to reinstate him, but was prepared to offer a lump‑sum compensation in lieu of reinstatement.
  • Thalapathy appeared before the Court and expressed willingness to accept a lump‑sum settlement, provided the bank issued the requisite service and experience certificates to facilitate alternative employment.

Final Outcome

  • The Court, noting the fair stance of both parties, set aside the impugned order of the Appellate Authority and allowed the writ petition.
  • The bank shall pay Rs 4,00,000 (Rupees Four Lakhs only) to Thalapathy as full and final settlement of all claims arising from his employment, dismissal, and the proceedings.
  • Payment must be made by demand draft or RTGS/NEFT within two weeks of receipt of a copy of this order.
  • Upon receipt of the amount, Thalapathy shall not make any further claim against the bank regarding his employment, dismissal, or related proceedings.
  • The bank shall issue a Service Certificate to Thalapathy within the same two‑week period to enable him to secure suitable alternative employment.
  • No costs are awarded. The connected miscellaneous petition is closed.

Topics: Employment Dispute, Banking Law