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K.L. Tripathi Vs. State Bank of India and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAllahabad High Court
Decided On
Judge
Reported in(1978)IILLJ457All
AppellantK.L. Tripathi
RespondentState Bank of India and ors.
Cases ReferredSukhdev Singh v. Bhagatram
Excerpt:
.....made, unless satisfied that all the conditions precedent to the validity of the rules have been fulfilled (see craies on statute law p. since the petitioner has failed to establish that the service rules are statutory the petitioner is not entitled to any relief by means of the present petition......the service rules, the petitioner submitted his reply to the chargesheet. the managing director, state bank of india, central office, bombay, by his letter dated 6th october ,1976 informed the petitioner that the executive committee of the central board at its meeting held on 6th october, 1966 had resolved to dismiss the petitioner with immediate effect in terms of rule 49(f) of the state bank of india (supervising staff) service rules. a copy of this letter was issued to the petitioner on the 19th of october, 1976. the petitioner has challenged the order dated 6th october, 1976 issued by the kanpur local head office on the 19th of october, 1976.2. the petitioner has challenged the resolution dated 6th october, 1976 on various grounds relating to violation of rule 50 of the state bank.....
Judgment:

S.D. Agarwal, J.

1. The petitioner Sri K.L. Tripathi was an employee of the State Bank of India. He joined the service of the Slate Bank of India in the year 1955 as an assistant clerk. He was promoted subsequently and at the relevant time, he was working as Branch Manager in the State of India Branch at Deoria. On 19th June, 1975 a chargesheet was issued by the General Manager (Operations) levelling certain charges against the petition and he was required to submit his written statement in defence in terms of Rule 50 of the Service Rules, The petitioner submitted his reply to the chargesheet. The Managing Director, State Bank of India, Central Office, Bombay, by his letter dated 6th October ,1976 informed the petitioner that the Executive Committee of the Central Board at its meeting held on 6th October, 1966 had resolved to dismiss the petitioner with immediate effect in terms of Rule 49(f) of the State Bank of India (Supervising Staff) Service Rules. A copy of this letter was issued to the petitioner on the 19th of October, 1976. The petitioner has challenged the order dated 6th October, 1976 issued by the Kanpur Local Head Office on the 19th of October, 1976.

2. The petitioner has challenged the resolution dated 6th October, 1976 on various grounds relating to violation of Rule 50 of the State Bank of India (Supervising Staff) Service Rules. The contention of the petitioner is that the procedure as prescribed by Rule 50 of the above mentioned rules were not followed in the petitioner's case and as such the dismissal order is null and void and he is entitled to a declaration of continuous service in the State Bank of India.

3. In U.P. State Wareshousing Corporation Ltd. v. Tyagi : (1970)ILLJ32SC , the Supreme Court after examining a number of decisions laid down that there are only three well recognised exceptions to the general law under- the law of master and servant where a declaration to the effect that the termination was invalid and void on the ground of non-compliance of the relevant rules could be granted by the Court. The three exceptions are (1) cases of Public servants falling under Article 311(2) of the Constitution of India, (2) cases falling under the Industrial Disputes Law and (3) cases where acts of statutory body are in breach of a mandatory obligation imposed by a statute.

4. The petitioner is an employee of the State Bank of India and is not a civil servant and as such Article 311 of the Constitution does not apply. The petitioner's case also does not fall under the industrial law. The petitioner is an employee of a statutory body, namely, the State Bank of India which has been constituted under the State Bank of India Act, 1955, The petitioner's case could, therefore, fall under third exception only if the State Bank of India has acted in breach of any statutory provision. Unless the petitioner is able to establish that the State Bank of India has committed a breach of any mandatory obligation imposed by a statute he will not be entitled to any declaration which he seeks in this petition. Therefore, we have to examine the question as to whether the State Bank of India (Supervising Staff) Service Rules have statutory character as the sole ground of the petitioner's challenge to the validity of the dismissal order in violation of Rule 50 of the above mentioned Rules.

5. The State Bank of India was constituted under the State Bank of India Act, 1955. Act 25 of 1955, to carry on the business of banking and other businesses in accordance with the provisions of the Act and for the purposes of taking over the undertaking of the Imperial Bank of India. Under Section 3 of the said Act the State Bank of India is a body corporate with perpetual succession and a common seal in the name of State Bank of India. It has power to acquire and hold properly whether movable or immovable for the purposes for which it is constituted and to dispose of the same. Under Section 17 of the general superintendence and direction of the affairs and business of the State Bank has been entrusted to the Central Board which may exercise all powers and do all such things and acts as may be exercised and done by the State Bank and are not by the Act expressly directed or required to be done by the State Bank in general meetings. Section 43 of the Act authorises the State Bank to appoint such number of officers, advisers and employees as it considers necessary or desirable for the efficient performance of its functions and determine the terms and conditions of their appointment and service. It has been further provided that the officers, advisors and employees of the State Bank shall exercise such powers and perform such duties as may be entrusted or delegated to them by the Central Board. Section 50 provides the manner in which the Central Board can make regulations. It has been provided in Sub-clause (1) of Section 50 that the Central Board may, after consultation with the Reserve Bank and with the previous sanction of the Central Government, make regulations not inconsistent with the Act and the rules made thereunder to provide for all matters for which provision is expedient for the purposes of giving effect to the provisions of this Act. Sub-clause (2) of Section 502 of the Act is illustrative and specifies the particular matters in respect of which regulations can be made. In any case Section 50, sub-$. (1), is a general clause and it confers powers ton the Central Board to frame regulations on any of the matters for which provision may be expedient for the purposes of giving effect to the provisions of the Act.

6. In the counter affidavit of Sri K. P. Rau, Officer Grade I, in the Local Head Office of the State Bank of India, Kanpur, filed on behalf of the respondent State Bank of India it has been categorically stated that the State Bank of India has not framed the State Bank of India (Supervisory Staff) Service Rules, hereinafter referred to as the Rules, under the State Bank of India Act, 1955. The reserve Bank of India was not consulted before framing the said Rules and no previous sanction of the Central Government was obtained for the framing of the service rules. It has further been stated that these service rules do not have any statutory force and that these rules contain terms of contract or agreement of service between the Bank and its officers. It has been framed under Section 50 of the Act. During the course of arguments, we afforded opportunity to the parties to find out the correct position as to whether the procedure under Section 50 of the Act had been followed before making the service rules. Sri K. P. Rau filed a supplementary affidavit on the 19th of December, 1977 categorically stating therein again that the said service rules have not been framed after obtaining approval either of the Central Government or in consultation with the Reserve Bank of India. No further material has been brought on record to controvert this allegation made in the supplementary counter affidavit and as such we find that the impugned service rules have not been made after consultation with the Reserve Bank or with the previous sanction of the Central Government. Learned Counsel for the petitioner, however, contended that since the service rules are referable to Section 43 of the Act they have statutory character and it was not necessary for the Central Board to have followed the procedure as laid down under Section 50 of the Act. On the other hand it was contended on behalf of the State Bank of India that the service rules made under Section 43 of the Act are purely in the nature of administrative instructions, which contain terms of agreement between the officers and the Bank and unless the Central Board framed the rules in the manner as laid down under Section 50 of the Act those Rules could not have statutory force.

7. In Writ Petition No. 1396 of 1976, Ganga Prasad Pandey v. The Reserve Sank of India and Ors., a question arose as to whether the regulations framed under the Reserve Bank of India Act, namely, Reserve Bank of India Staff Regulations, 1948, were statutory. The provisions of the Reserve Bank of India Act are pan materia with the provisions of the State Bank of India Act. Section 7, Sub-clause (2) of the Reserve Bank of India Act confers power of general superintendence and direction of the affairs of the business of the Bank on the Central Board of Directors which may exercise all powers and do all acts and things which may be exercised or done by the Bank. Section 58 of the said Act lays down that the Central Board may with the previous sanction of the Central Government make regulations consistent with the Act to provide for all matters which provision is necessary or convenient for the purposes of giving effect to the said Act. The said petition came up for hearing before a Bench consisting of K. N. Singh, J., was of the opinion that the staff regulations were not statutory whereas Mufti, J. was of the opinion that the regulations appeared to have framed by the Central Board in exercise of its statutory powers. K. N. Singh, J. held that the Central Board could not frame statutory regulations in exercise of its general power of superintendence under Section 7 of the Act without following the procedure laid down in Section 58 of the Act. If statutory regulations are necessary to be framed they must be framed in accordance with the procedure laid down in Section 58 of the Act and the Central Board had no power to frame statutory regulations in violation of the mandate of the Legislature. The matter was thereafter considered by N.D. Ojha, J., who agreed with the view of K. N. Singh, J. and held that the regulations having been framed without the previous sanction of the Central Government as contemplated by Section 58 of the Act could not be validly framed under the said section and consequently those did not have statutory force. The view of the majority, therefore, was that the regulations framed under the Reserve Bank of India Act could not become statutory unless they were framed as contemplated by Section 58 of the Act.

8. We have examined the entire scheme of the State Bank of India Act, 1955. As stated above Section 43 authorises the State Bank to appoint officers and other employees. The Central Board under Section 17 may exercise all powers which may be exercised by the State Bank but in case ''statutory regulations' are intended to be made they have to be made in accordance with the procedure laid down in Section 50. The Central Board has no power to frame statutory regulations in violation of the mandate of the Legislature. It is open to the Central Board to issue administrative instructions under Section 43 which though binding on the staff of the Bank cannot be enforced in a court of law much less under Article 226 of the Constitution of India.

9. The Central Board while framing regulations under Section 50 of the Act acts in the exercise of delegated legislative power. The power to make subordinate legislation is derived from the enabling Act and it is fundamental that the delegate on whom the power is conferred has to act within the limits of authority conferred by the Act. Further the delegate has to exercise the power of making subordinate legislation in accordance with the procedure prescribed, if any. The requirement under Section 50 of the consultation with Reserve Bank and ' previous section ' of the Central Government, is mandatory and as such the regulations to become effective must have the consultation with the Reserve Bank and the ' previous sanctions' of the Central Government.

10. In Hukum Chand v. Union of India : [1973]1SCR896 , the Supreme Court laid down the following principles :

The underlying principle is that unlike sovereign Legislature which has power to enact laws with retrospective operation, authority vested with the power of making subordinate lagislation has to act within the same. The initial difference between subordinate legislation and the statute law lies in the fact that a subordinate law making body is bound by the terms of its delegated or derived authority and the Court of law will not give effect to the rules, thus made, unless satisfied that all the conditions precedent to the validity of the rules have been fulfilled (see Craies on Statute Law P. 297 Sixth Edition).

11. In Ram Chandra Keshav Adke v. Ravind Jati Chavru : [1975]3SCR839 the Supreme Court accepted the rule laid down in Taylor v. Taylor [1873] Ch. D. 426, Jerral M.R., viz.

Where the power is given to do a certain thing in a certain way, the thing must be.

done in that way or not at all and that other method of performance are necessarily forbidden.

12. In view of the principles laid down above we are of the opinion that the Central Board cannot frame ' statutory regulations' in the exercise of its general power of superintendence under Section 17 of the Act without following the procedure laid down in Section 50 of the Act.

13. In this view of the matter the impugned service rules cannot be held to be statutory unless they were framed after following the procedure prescribed by Section 50 of the State Bank of India Act, 1955. As stated above, the service rules in question have not been framed by the Central Board after consultation within the Reserve Bank and with the previous sanction of the Central Government and hence in our opinion they have no statutory character. Since the petitioner has failed to establish that the service rules are statutory the petitioner is not entitled to any relief by means of the present petition. In view of our findings that the service rules in question are not statutory we do not consider it necessary to go into the merit of the other submission made by the learned Counsel for the petitioner challenging the validity of the dismissal order.

14. Learned Counsel for the petitioner has relied upon the observations of Supreme Court in Sukhdev Singh v. Bhagatram : (1975)ILLJ399SC , as contained in paragraphs 22, 23, 32, 100, 116, 121 and 122. We have carefully considered the observations . of the judgment of the Supreme Court but we find nothing therein which may in any way advance the argument made on behalf of the petitioner. In fact the Supreme Court had examined the provisions of the Oil and Natural Gas Commission Act, 1969, Industrial Finance Corporation Act, 1956 and thereafter held that various regulations framed under the respective Acts were statutory as the procedure which was required to be followed in framing the said regulations had been followed in these cases. In the instant case the legislative mandate as laid down in Section 50 has not been followed in framing the Service Rules.

15. Learned Counsel for the petitioner has also relied upon Regulation 55 of the State Bank of India General Regulations, 1955. The contention is that by service rules were framed under Regulation 55 of the said Regulations. The State Bank of India General Regulation, 1955 have been made in exercise of the power conferred by Sub-section (3) of Section 50 of the State Bank of India Act. These regulations have been framed by the Reserve Bank of India with the previous sanction of the Central Government. Sub-clause (1) if Regulation 55 which is relevant for the purposes of this case provides as follows :

Save as provided in Sub-regulation (2), and as may be directed by the Central Board, a Local Board may exercise all the powers of the State Bank in respect of the staff serving in the areas in its jurisdiction.

16. From a reading of this clause it is clear that this authorises the Local Board to exercise all powers of the State Bank in respect of the staff serving in the areas in its jurisdiction. By virtue of this regulation no authority has been conferred upon the Central Board to frame regulations. The service rules in question have been framed by the Central Board and not by the Local Board and as such the argument of the learned Counsel on the basis of Regulation 55 is wholly misconceived.

17. In view of the above discussion we are of the opinion that the petitioner is not entitled to any declaration to the effect that the dismissal order dated 6th October, 1976 is null and void. The petition fails and is accordingly dismissed with costs.


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