The Delhi High Court, in a Letters Patent Appeal, examined the relationship between the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the employer's service rules, holding that the service rules are not subordinate to the POSH Act and that a Voluntary Cessation of Service order cannot be used as a retaliatory measure against a complainant.
Background & Facts
The Dispute
The appellant, IDBI Bank Ltd., terminated the employment of the respondent, Sharanjeet Kaur, on the ground of unauthorised absence, while the respondent contended that her absence was a consequence of a hostile work environment and unresolved sexual harassment complaints under the POSH Act.
Key Facts
- 25 July 2011: Respondent joined IDBI Bank as Assistant Manager (Grade A) at Pitampura Branch, Delhi.
- 2016: Promotion to Manager (Grade B) and transfer to Chandigarh Zone.
- 20 February 2017 to 29 April 2017: First spell of unauthorised absence (69 days).
- 15 November 2016 to 7 February 2017: Earlier unauthorised absence (84 days).
- 22 May 2017 to 14 August 2017: Unauthorised absence (85 days).
- 3 October 2017 to 22 June 2018: Unauthorised absence (263 days).
- 8 October 2018: Respondent reported sexually coloured derogatory remarks at Chandigarh Branch.
- 11 October 2018: First workplace harassment complaint filed.
- 22 November 2018: Initial inquiry dismissed, complaint treated as ordinary business instruction.
- 11 December 2018: POSH complaint lodged before Internal Complaints Committee (ICC).
- 4 February 2019: Respondent withdrew POSH complaint after amicable settlement; ICC proceedings concluded on 26 February 2019.
- 21 June 2019: Respondent re-agitated POSH complaint; transferred to Pitampura Branch on 1 July 2019.
- 5 August 2019, 14 August 2019, 30 August 2019: Subsequent POSH complaints dismissed by ICC for lack of fresh facts.
- 16 March 2020: ICC order dismissing the complaint for no new allegations.
- 4 May 2021: Writ Petition (W.P.(C) 1841/2021) filed challenging ICC order.
- 30 August 2021: First Voluntary Cessation of Service (VCS) notice issued.
- 17 September 2021: Respondent replied, citing pendency of W.P.(C) 1841/2021 as reason for absence.
- 9 April 2024: W.P.(C) 1841/2021 dismissed.
- 22 May 2024: LPA 417/2024 dismissed, affirming the April 2024 dismissal.
- 5 June 2024: Respondent approached Appellate Tribunal under Section 18 of POSH Act.
- 30 July 2024: Second VCS notice issued.
- 26 August 2024: Respondent replied to second VCS notice; reply received on 2 September 2024.
- 2 September 2024: Final VCS order passed, deeming respondent to have voluntarily ceased service.
- 17 December 2024: Respondent filed writ petition seeking quash of VCS order and compensation.
- 21 January 2025: Single Judge stayed VCS order.
- 17 December 2025: Single Judge allowed writ petition, ordered back wages from October 2020, awarded Rs.5,00,000 compensation, and directed ICC proceedings.
- 24 August 2026: Letters Patent Appeal dismissed, upholding the Impugned Judgment.
Procedural History
- 25 July 2011: Employment commenced.
- 20 February 2017 - 29 April 2017: Disciplinary proceedings initiated for unauthorised absence.
- 11 October 2018: Workplace harassment complaint filed.
- 11 December 2018: POSH complaint lodged before ICC.
- 26 February 2019: ICC concluded POSH proceedings.
- 5 August 2019 - 4 September 2019: Multiple attempts to reopen POSH complaint rejected by ICC.
- 16 March 2020: ICC order dismissing complaint.
- 4 May 2021: Writ Petition (W.P.(C) 1841/2021) filed.
- 30 August 2021: First VCS notice issued.
- 17 September 2021: Reply to first VCS notice.
- 9 April 2024: W.P.(C) 1841/2021 dismissed.
- 22 May 2024: LPA 417/2024 dismissed.
- 5 June 2024: Appeal to Appellate Tribunal under Section 18 POSH Act.
- 30 July 2024: Second VCS notice issued.
- 2 September 2024: Final VCS order passed.
- 17 December 2024: Writ petition filed challenging VCS order.
- 21 January 2025: Stay of VCS order granted.
- 17 December 2025: Impugned Judgment granting back wages and Rs.5,00,000 compensation.
- 24 August 2026: Letters Patent Appeal dismissed.
Relief Sought
The appellant sought dismissal of the Letters Patent Appeal and confirmation that the VCS order was valid. The respondent sought quashing of the VCS order, reinstatement, back wages from October 2020, and compensation of Rs.5,00,000.
The Legal Issue
The central questions were: (i) Whether the provisions of the POSH Act are subordinate to the employer's service rules; (ii) Whether the respondent's prolonged absence from duty during the pendency of the POSH proceedings was justified; and (iii) Whether the employer was justified in treating the respondent's absence as a voluntary cessation of service.
Arguments Presented
For the Appellant
- The appellant contended that the service rules operate independently of the POSH Act and that the respondent's unauthorised absences justified the VCS order.
- It relied on Debjani Sengupta v. Institute of Cost Accountants and XXX v. Abraham Mathai to argue that grievances relating to hostile treatment fall within the ambit of a labour dispute, not sexual harassment.
- The appellant argued that the respondent had not invoked Section 12 of the POSH Act for interim leave and therefore could not claim protection.
- It maintained that the VCS notice and subsequent order were issued after a substantial lapse and were unrelated to the POSH proceedings.
For the Respondent
- The respondent argued that the ICC was not duly constituted, violating Section 4 of the POSH Act, and that the ICC order was set aside by the Appellate Tribunal.
- She relied on the Appellate Tribunal’s finding that the ICC failed to afford natural justice and that the employer’s failure to conduct a proper inquiry forced her prolonged absence.
- The respondent invoked Section 12 of the POSH Act, asserting that she was entitled to leave during the pendency of a proper inquiry, which never materialised.
- She cited X v. Akademi & Ors. to demonstrate that termination during pendency of a harassment complaint is vitiated by mala fides.
The Court's Analysis
The Court began by interpreting Section 28 of the POSH Act, emphasizing that the provision states the Act operates “in addition to” and “not in derogation of” any other law. > "Section 28 of the POSH Act is clear and unambiguous in its import." It held that this plain reading precludes any suggestion that the POSH Act overrides service rules; rather, both regimes coexist. The Court distinguished Debjani Sengupta by noting that the present case involved a failure to constitute a valid ICC, not a bona-fide disciplinary inquiry. The Court then examined the respondent’s absence. It observed that the ICC was never properly constituted, the Appellate Tribunal had set aside the ICC order, and consequently the respondent could not invoke Section 12 for interim leave. Nonetheless, the Court recognised that the respondent’s absence was directly attributable to the employer’s failure to provide a safe workplace, rendering the “no work, no pay” principle inapplicable. Regarding the VCS order, the Court noted that the employer kept the VCS proceedings in abeyance during the pendency of W.P.(C) 1841/2021, thereby acknowledging a connection between the two matters. The issuance of the second VCS notice after a three-year gap, and the subsequent order on the same day the reply was received, demonstrated a retaliatory motive. The Court therefore concluded that the VCS order could not be treated as an independent disciplinary action. Finally, the Court affirmed the Impugned Judgment’s award of back wages from October 2020 and compensation of Rs.5,00,000, while waiving the costs imposed by the Single Judge. It clarified that any future action under the service rules during the pendency of POSH proceedings must be bona fide, independently justified, and not punitive.
The Verdict
The Letters Patent Appeal is dismissed. The directions of the Impugned Judgment dated 17 December 2025 are upheld, including payment of full back wages to the respondent from October 2020 and compensation of Rs.5,00,000. The costs imposed by the Single Judge are waived. The Court clarifies that service rules are not subordinate to the POSH Act, but any action under them during POSH proceedings must be bona fide and cannot be retaliatory.
What This Means For Similar Cases
Service Rules Co-exist with POSH Act
- Employers must continue to apply service rules even when a POSH complaint is pending.
- Any disciplinary action must be independently justified and not motivated by the harassment complaint.
Absence Attributable to Hostile Environment Is Not Penalised
- Employees absent due to an unresolved hostile work environment cannot be punished under the “no work, no pay” rule.
- Courts will look for a causal link between the employer’s failure to conduct a proper ICC inquiry and the employee’s absence.
VCS Orders Require Strict Procedural Compliance
- VCS notices must be issued within the timelines prescribed in the service rules.
- A delayed second VCS notice, especially after acknowledging the pendency of POSH proceedings, may be deemed retaliatory and set aside.
Practical Takeaways for Practitioners
- Ensure a duly constituted ICC as per Section 4 of the POSH Act before any disciplinary action.
- Advise clients to document attempts to obtain interim relief under Section 12 of the POSH Act.
- When invoking service rules, maintain a clear evidentiary record that the action is unrelated to any POSH complaint.
