Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3
PETITIONER:
GENERAL MANAGER (OPERATIONS), STATE BANK OF INDIA & ORS.
Vs.
RESPONDENT:
STATE BANK OF INDIA STAFF UNION & ANR.
DATE OF JUDGMENT: 20/03/1998
BENCH:
SUJATA V.MANOHAR, D.P. WADHWA
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
Mrs. Sujata V. Manohar, J.
The appellants, representing the state Bank of India
have challenged a decision of the Andhra Pradesh High Court
setting aside a Circular issued by the State Bank of India
dated 28.1.1987 as also a Circular in the same terms dated
7.3.1987, as violating Section 9-A of the Industrial
disputes Act, 1947 read with the Fourth Schedule. The
respondents to the present appeal are the State Bank of
India Staff Union, Hyderabad Circle and the second
respondent who is a person aggrieved by the Circulars.
The Rules of Conduct of the Award staff of the State
Bank of India which were in force at all material times,
provide, inter alia, that "an employee of the bank may not
take active part in politics or in any political
demonstration, nor may an employee accept office on a
Municipal Council or other public body without the prior
sanction of the bank". In respect of officers of the
appellant-Bank, prior to 28th of January, 1987, under the
State Bank of India Supervising Staff Service Rules, and
officer who wanted to contest an election to Parliament,
State assemblies, Municipal council etc. had to resign from
the bank’s service before doing so. In the case of the Award
staff, however, permission to contest such an election could
be considered by the General Manager on certain conditions
and on the employee giving an undertaking that he was not
and he would not become a member of a political party, that
he was not being nominated by a political party and that he
would not be required to be present in the Council/Body
during office hours. He also would not receive any
remuneration and would not plead his membership of such a
body as a bar to his transfer. If he violated any condition
of his undertaking, it would be open to the bank to call
upon him not to continue in his office in the above
mentioned public or civic body.
According to the appellants-bank, cases came to their
notice where employees who had been elected to public/civic
office had not been performing their normal day’s work,
causing inconvenience to the bank and its customers. There
were also some cases of employees indulging in restrictive
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3
practices or favouring certain political parties for
obtaining benefits from the appellant-bank. The appellant-
bank, therefore, issued a Circular on 28.1.1987 to the
effect that the local head offices will, in future, while
considering the request of an Award employee to seek
election to any public/civic body, first thoroughly examine
whether his contesting the election will interfere or would
be likely to interfere with his duties in the bank. The
local Head offices were also directed to obtain an
undertaking from the employee indicating that (1) his
contesting election will not interfere with his duties in
the bank and he will not take any undue advantage of his
position in the bank and (2) in case he gets elected, he
will immediately resign from the bank’s service, failing
which he will be liable to be discharged or he bank would be
free to treat his letter seeking permission as a letter of
resignation from the day he is declared elected. The
Circular of 7.3.1987 gives a capsule of previous
instructions and repeats the Circular of 28.1.1987.
The Second respondent, who was a Clerk in the
appellant-bank, Hyderabad Circle, on 18.2.1987 sought
permission of the appellant-bank for contesting elections to
the Municipal Council of Rtsepalle. Although he did not
receive permission, he filed his nomination. He was
thereafter informed by the bank on 5.3.1987 that his
application for permission to contest the election could not
be granted unless he gave an undertaking that he would
resign from the bank’s service on his getting elected.
Thereupon the respondents filed a writ petition before the
Andhra Pradesh High Court challenging the two Circulars of
28.1.1987 and 7.3.1987. The High Court has held that these
two circulars amount to a change in the conditions of
service of workmen and are violative of Section 9-A of the
Industrial Disputes Act, 1947.
We fail to see how these circulars can be said to
violate Section 9-A of the Industrial Disputes act, 1947.
Under Section 9-A no employer, who proposes to effect any
change in the conditions of service applicable to any
workman in respect of any matter specified in the Fourth
Schedule, shall effect such change without notice as
prescribed in that Section. Schedule Four sets out the
conditions of services for change of which notice is
required to be given under Section 9-A. The conditions of
service prescribed in the Fourth Schedule include, inter
alia, wages, contribution to any provident fund or pension
fund, compensatory and other allowances, hours of work,
leave etc. Condition 8 is: "Withdrawal of any customary
concessions or privileges clearly relate to conditions of
service or work. Participating in an election to a Municipal
Council or local body is not a customary privilege connected
with conditions of service of work. The Circulars of
28.1.1987 and 7.3.1987, therefore, do not bring about any
change in the conditions of service of a workman. the Rules
of Conduct of the Award staff have always included a Rule to
the effect that the employee of the bank may not accept
office on Municipal Council or other public body without
prior sanction of the bank. The Circulars, therefore, do not
bring about nay change in this Policy. The appellants have
explained that the appellant-bank is a public sector
undertaking set up for carrying out a public purpose. As an
employer, the appellant-bank is a public sector undertaking
set up for carrying out a public purpose. As an employer,
the appellant-bank has to ensure that the employees carry
out their functions without being influenced in any manner
and their behaviour does not give rise to any talk of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3
favouritism in granting loans, credit facilities or other
facilities of the bank. When a person contests elections to
a municipal or public body he naturally seeks support from
political parties or various other persons in his
constituency. Without their support it is not possible for a
person a get elected. In turn, the elected person will be
under an obligation to those persons who are responsible for
his election. Such an elected person, if he is an employee
of a public sector bank which deals with sanction of loans,
advances, overdrafts etc., may be in a position to use his
influence with officers regarding granting of these
facilities. In order, therefore, that the functioning of the
bank if free from political influences and favouritism, and
in order to ensure that the employees attend to their duties
during office hours, the Circulars have been issued.
The same Circulars were challenged before the Delhi
High Court by an employee of the appellant-bank at
Saharanpur branch in Uttar Pradesh. The petitioner before
the Delhi High Court also desired to contest elections to
the local Municipal council. The Delhi High Court upheld the
decision of the management that the petitioner’s continuance
as Municipal Counsellor does affect his work in the bank and
that there was no question of any violation of Article
19(1)(a), (b) and (c) of the Constitution. This decision of
the Delhi High Court was upheld by this Court by a Bench of
three judges by its short speaking order dated 5.4.1991
dismissing the special leave petition from the judgment of
the Delhi High Court.
Before the Delhi High Court the Provisions of the
Industrial Disputes Act, 1947 were not invoked in respect of
these Circulars, as has been done in the present case. There
is, however, no merit in the challenge to these Circulars
under Section 9- A of the Industrial Disputes Act, 1947 for
reasons which we have set out above.
The appeal is, therefore, allowed and the impugned
judgment and order of the Andhra Pradesh High Court is set
aside. There will, however, be no order as to costs.
IN THE MATTER OF: