Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.5570 OF 2014
Fed. of Bank of India Staff Unions
& Anr. ….Appellant(s)
VERSUS
Union of India & Anr. …Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1) This appeal is directed against the final
judgment and order dated 08.04.2011 passed by
the High Court of Bombay at Goa in Writ Petition
(c) No.618 of 2010 whereby the High Court
dismissed the writ petition filed by the appellants
herein.
2) The appeal involves a short point as would be
Signature Not Verified
Digitally signed by
ANITA MALHOTRA
Date: 2019.03.01
17:14:09 IST
Reason:
clear from the facts stated infra .
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3) The appellants herein are the writ petitioners
and the respondents herein are the respondents in
the writ petition filed in the High Court of Bombay
at Goa, out of which this appeal arises.
4) Appellant No.1 is an Association of various
Staff Unions of the employees working in the Bank
of India respondent No.2 herein. Appellant No.1 is
a registered Association under the Trade Unions
Act, 1926. Appellant No.2 is an employee of
Respondent No.2 Bank and at the relevant time
was working as Deputy General Secretary of
appellant No.1 Association.
5) The Banking Companies (Acquisition and
Transfer of Undertakings) Act, 1970/1980
(hereinafter referred to as “the Act”) deals with
Banking Companies and their internal affairs.
Section 9 of the Act empowers the Central
Government to make scheme after consultation with
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the Reserve Bank of India for carrying out the
provisions of the Act.
6) Section 9 (3) of the Act provides for
composition of Board of Directors and also provides
as to who can be nominated as Directors in the
Board of Directors. Clauses (a) to (i) of subsection
(3) of Section 9 of the Act sets out various categories
from which one Director from each of such
categories is nominated in the Board of Directors.
Clause(e) deals with a category of
workman/employee Director whereas clause(f) deals
with a category of officer/employee Director for their
nomination in the Board of Directors.
7) In exercise of powers conferred under Section
9(1) of the Act, the Central Government has framed
a Scheme calledThe Nationalized Banks
(Management and Miscellaneous provisions)
Scheme, 1970.
8) Chapter II of the Scheme deals with Board of
Directors. Clause 3 of the Scheme deals with the
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constitution of the Board whereas Clause 3(2)(iii)
deals with disqualification of a workman/employee
for being nominated as a Director.
9) So far as the procedure relating to the
nomination of a Director out of the officer/employee
category falling in clause(f) of Section 9(3) of the Act
is concerned, it is provided in the third schedule to
the Scheme.
10) So far as the case at hand is concerned, it
relates to the nomination of a Director from the
workman/employee category falling in clause (e) of
Section 9(3) of the Act and also relates to his
disqualification for being nominated as a Director in
that category.
11) On 28.05.2009, the Management of the Bank
(respondent No.2) called upon the appellants to
furnish a panel of three workers/employees for
being nominated as a Director in order of preference
in the category of “Workman Director” in the Board
of Directors.
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12) The appellants, in compliance with the request
made by respondent No.2, sent a panel of three
names of the workers/employees in order of
preference to the Central Government by their letter
dated 08.06.2009. These names were Mr. Dinesh
Jha “Lallan”, Mr. Ram Gopal Sharma and Mr.
Pranab Kumar Roy Chowdhary.
13) The Secretary, Government of India, by letter
dated 10.10.2009, however, informed the appellants
that since all the three workers/employees, whose
names were sent, have less than three years of
residual service before their superannuation,
therefore it is not possible to nominate any of the
workers/employees as Director in the Board of
Directors. The appellants were accordingly
requested to send a fresh panel of names to enable
the Central Government to nominate one, out of the
three new names, as Director in the Board of
Directors.
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14) The appellants instead of sending the fresh
three names submitted their representation on
21.10.2009 and requested the Central Government
to reconsider the matter afresh and nominate any
one out of the three names already sent by them
vide their letter dated 08.06.2009. The parties then
went on exchanging the letters on this subject, but
the Central Government did not accede to the
request made by the appellants and insisted on
them to send fresh names of the
workers/employees.
15) It is with these background facts, the
appellants felt aggrieved and filed a writ petition in
the High Court of Bombay at Goa. In that writ
petition, the appellants (writ petitioners) sought
quashing of the communication of respondent No.1
dated 10.10.2009 by which respondent No.1 had
rejected the panel of three names sent by them vide
their letter dated 08.06.2009. A writ of mandamus
was also prayed commending the respondents to
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consider the nomination penal sent by the
appellants vide their letter dated 08.06.2009 and
nominate one worker/employee as Director out of
the three names sent by them in the Board of
Directors.
16) In the alternative, the appellants also sought a
declaration that clause 3 (2) (iii) of the Scheme,
1970 be struck down as being ultra vires the
Constitution.
17) The respondents opposed the writ petition by
filing their counter affidavit. The respondents
placed reliance on the provisions of the Act and the
Scheme framed thereunder and contended inter alia
that the challenge made in the writ petition has no
factual or/and legal basis.
18) By the impugned order, the High Court
dismissed the writ petition finding no merit therein,
which has given rise to filing of this appeal by way
of special leave by the unsuccessful writ petitioners
Union of workers/employees in this Court.
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19) Heard Mr. Sidharth Bhatnagar, leaned counsel
for the appellants and Mr.Pranab Kumar Mullick &
Ms. Bhakti Pasrija, learned counsel for the
respondents.
20) Having heard the learned counsel for the
parties at length and on perusal of the record of the
case, we find no merit in this appeal.
21) At the outset, we find that so far as the
challenge to the impugned communication dated
10.10.2009 and enforcement of the appellants’
letter dated 08.06.2009, i.e. (Relief Nos.(a) and (b) in
the writ petition) is concerned, both the reliefs have
been rendered infructuous.
22) It is for the reason that the employees/workers
whose names were recommended by appellant No.1
in their letter dated 08.06.2009 have retired long
back. Not only that, on their retirement, many other
persons were nominated as Director out of the
category of worker/employee in the Board of
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Directors of the Bank. This relief, therefore, no
longer survives for consideration.
23) Now the only question, which survives for
consideration in this appeal, is regarding the legality
of Clause 3(2)(iii) of the Scheme, 1970 whether
Clause 3(2)(iii) of the Scheme is legal or ultra vires
the Constitution. The High Court, in the impugned
order, has held that the Clause 3(2)(iii) of the
Scheme is legal and valid.
24) The challenge to the Clause 3(2)(iii) of the
Scheme is essentially based on one argument.
According to the appellants, there does not appear
to be any rational or basis in providing two different
types of disqualificationsone for
workers/employees and the other for the
officers/employees while considering their cases for
nomination as Director from their respective
categories.
25) In other words, the submission is that the
disqualification provided in Clause 3(2)(iii)(b) of the
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Scheme for the worker/employee category is only
confined to their category. No such similar
disqualification is made applicable to the
officer/employee category.
26) This, according to the appellants, has created
discrimination between the two categories of the
Directors without any reasonable basis and,
therefore, Clause 3(2)(iii) of the Scheme and
especially clause (b) thereof violates the principle
underlined in Article 14 of the Constitution of India.
27) We find no merit in this submission for more
than one reason.
28) Section 9(3)(e) and (f) of the Act and Clauses
3(2)(i),(ii) and (iii) of the Scheme are relevant for the
disposal of this appeal which read as under:
“Section 9(3)(e) and (f) of the Act
9. Power of Central Government to make
scheme(1) The Central Government may,
after consultation with the Reserve Bank,
make a scheme for carrying out the
provisions of this Act.
(2) ……….
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(3) Every Board of Directors of a
corresponding new bank, constituted under
any scheme made under subsection (1), shall
include
(a) ………
(b) ………
(c) ……….
(e) one director, from among such of the
employees of the corresponding new
bank who are workmen under clause (s)
of section 2 of the Industrial Disputes
Act, 1947 (14 of 1947), to be nominated
by the Central Government in such
manner as may be specified in a
scheme made under this section;
(f) one director, from among the
employees of the corresponding new
bank who are not workmen under
clause (s) of section 2 of the Industrial
Disputes Act, 1947 (14 of 1947), to be
nominated by the Central Government
after consultation with the Reserve
Bank;
Clause 3(2)(i),(ii) and (iii) of the Scheme
3. Constitution of the Board(1) The
Central Government shall by notification in
the Official Gazette, constitute the Board of a
Nationalised Bank.
(2) (i) The director referred to in clause (e)
of subsection (3) of section 9 of the Act,
shall be nominated by the Central
Government from out of a panel of three such
employees furnished to it by the
representative union, within a date to be
specified by the Central Government, which
date shall not be more than six weeks from
the date of communication made by the
Central Government, requiring the
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representative union to furnish the panel of
names:
Provided that where the Central
Government is of the opinion that owing to
the delay which is likely to occur in the
verification and certification of any union or
federation as a representative union it is
necessary in the interest of the Nationalised
Bank so to do, it may nominate any employee
of the Nationalised Bannk, who is a workman,
to be a director of that Bank.
(ii) (a)Where there is no representative
union, to represent the workman of a
Nationalised Bank, or
(b) where such representative union being
in existence omits or fails to furnish
any panel of names within the specified
date, or
(c) where all the persons specified in the
panel furnished by the representative
union are disqualified whether under
item (iii) of this subclause or under
clause 10, the Central Government
may, at its discretion appoint such
workman of the Nationalised Bank, as it
may think fit, to be a director of such
bank.
(iii) A workman of a Nationalised Bank shall
be disqualified for being nominated as a
director unless
(a) he is and has been, serving for a
continuous period of not less than
five years in the Nationalised Bank,
and
(b) he is of such age that there is no
likelihood of his attaining the age of
superannuation during his terms of
office as director.”
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29) It would be clear from a perusal of clauses (e)
and (f) of Section 9(3) of the Act that both the
categories of employees are different one is
worker/employee category as defined under Section
9(3)(e) and the other is officer/employee category as
defined under Section 9(3)(f) of the Act. Second, it is
for the legislature to decide as to what qualifications
and disqualifications should be prescribed for
various categories of the employees for their
nomination on the post of Director. Third, there lies
a distinction between the worker and the officer.
The former, i.e., worker is defined under Section 2(s)
of the Industrial Disputes Act, 1947 and is governed
by that Act whereas the latter, i.e., officer is not
governed by the Industrial Disputes Act but is
governed by separate service rules. Both these
categories of employees, therefore, cannot be
equated with each other and nor can be placed at
par for providing equal qualification or/and
disqualification for their nomination as a Director in
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the Board of Directors. Fourth, Article 14 of the
Constitution applies inter se two equals and not
inter se unequals. The case at hand falls under the
latter category and, therefore, reliance placed on the
principle enshrined under Article 14 of the
Constitution by the appellants is wholly misplaced.
Fifth, the nominee worker/employee has only a
right under the Act to be appointed as Director from
the category of worker/employee in terms of Section
9 (3)(e) of the Act provided the concerned nominee
whose name is recommended by the Union fulfills
the qualifications laid down in Clause 3(2)(iii) of the
Scheme but not beyond it.
30) Learned counsel for the appellants then
submitted that once the employee is nominated to
the Board of Directorsmay be from different
categories specified under Section 9, then no
distinction should be made between them while
prescribing the qualification and disqualification.
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31) This submission has also no merit. A mere
reading of Section 9(3) clause (a) to (i) would go to
show that the Board of Directors consists of persons
coming from different fields. There cannot,
therefore, be a uniform qualification or/and
disqualification for such persons. Indeed, the
qualifications and disqualifications are bound to
vary from category to category and would depend on
the post, experience and the stream from where a
person is being nominated as a Director. Moreover,
the qualification and disqualification has to be seen
prior to his/her becoming a Director and not after
his/her appointment as a Director.
32) In view of the foregoing discussion, we find no
good ground to interfere with the reasoning and the
conclusion arrived at by the High Court, which
rightly dismissed the appellants’ writ petition, and
upheld Clause 3(2)(iii) of the Scheme as being legal.
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33) The appeal is thus found to be devoid of any
merit. It fails and is accordingly dismissed.
………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[INDU MALHOTRA]
New Delhi;
March 01, 2019
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