1. This petition under Article 226 of the Constitution has been filed by the Reserve Bank of India and its Deputy Chief Officer, Mr. Tek Chand Vaswani in the following circumstances.
2. A dispute between the Punjab National Bank, Ltd., respondent 2, and its workmen as presented by the All India Punjab National Bank Employees' Federation, respondent 3, arising out of the absorption by the bank of a number of employees of the Bharat Bank, Ltd., on the Punjab National Bank's taking over the banking buainess of the Bharat Bank, was referred by the Government under the provisions of the Industrial Disputes Act for adjudication by an industrial tribunal in the person of Mr. Ram Kanwar.
3. On 22 November 1954, a letter was addressed by the tribunal to the Manager, Reserve Bank of India, Delhi, requesting him to attend the tribunal on 3 December 1954, and to bring with him the inspection report of the Bharat Bank, Ltd., for the year 1950-51. An officer of the bank was duly sent with the letter dated 8 December 1954, in which it was stated that the officer was bringing a copy of the inspection report in question together with its appendices, and it was stated that the inspection report was intended for the confidential information of the tribunal, and a request was made for its return as soon as possible as no spare copy was available. It is not disputed that the copy of the report which was thus furnished to the tribunal was enclosed in a sealed cover which still remains unopened.
4. This was followed by a further request by the tribunal (vide its letter dated 22 December 1954, to the Manager, Reserve Bank of India), in which it was stated that certain documents of which a list was attached were required on behalf of the Employees' Federation and it was requested that the documents should be sent to the tribunal either by post or through some official on or before 14 January 1955. The documents mentioned in the list included inspection reports of the Punjab National Bank, Ltd., by the Reserve Bank of India for the years 1950,1951,1952, 1953 and 1954, all the letters addressed to the Reserve Bank and the Bharat Bank in February and March 1951, relating to the assets and liabilities of the Bharat Bank,. Ltd., to the Punjab National Bank, Ltd., and copies of the letters addressed by the Reserve Bank to the managements of the two banks in question on the same subject. By another letter dated 22 December 1954, the Governor of the Reserve Bank of India, Bombay, was requested to send certain documents to the tribunal including two letters addressed by the Employees' Federation of the Bharat Bank to the Governor of the Reserve Bank and letters sent by the managements of the Punjab National Bank and the Bharat Bank to the Governor during February and March 1961 together with replies sent thereto by the Governor of the Reserve Bank.
5. It was after the receipt of these two letters that the Reserve Bank through Mr. TekChand Vaswani, Deputy Chief Officer in the Department of Banking Operations of the Reserve Bank of India, asserted the claim of privilege with respect to all the documents the production of which was requested with the exception of the letters addressed by the Employees Federation to the Governor of the Reserve Bank of India, of which copies could obviously be easily produced by the federationitself. Privilege was even claimed in respect of the inspection report of the Bharat Bank, Ltd., of 1950-51 which has already been sent to the tribunal in a sealed cover in consequence of the first letter of request. The grounds on which privilege was claimed are fully set up in the affidavit of Mr. Tek Chand Vaswani. His assertions that he is the head of the Department of Banking Operations which deals with the relations between the Reserve Bank and the scheduled banks and that the Reserve Bank is a Government concern are not challenged. He also stated that no inspection reports of the Punjab National Bank, Ltd., for the years 1951, 1952 and 1954 were compiled. The relevant portions of the affidavit read :
The inspecting officer's reports for the years 1950 and 1953, are however in my custody and they are part of unpublished official records relating to the affairs of State and their disclosure will be against the public interest. The said reports were prepared for the internal use of the Reserve Bank. Under the Banking Companies Act (X of 1949) the Reserve Bank of India has very wide powers over and exercised overall control over all the banking companies in the Union of India and has the statutory power to inspect all the records, account books and confidential documents and to call for such information from the management of any bank that the Reserve Bank of India may consider proper. The Reserve Bank of India can do this suo motu or when required by the Central Government, and the reports thus compiled are confidential and secret which cannot be published by the Central Government if the Central Government considers it necessary and that only after giving notice to the particular bank in respect of which the report la compiled. The scope of the enquiries on which the reports are compiled is very wide and pertains to various matters relating to the affairs of State in respect of the control and regulation of credit and banking in the country. The Reserve Bank, from time to time, under the directions of the Central Government, also issues confidential and secret instructions to various banking companies in the country for the regulation of credit and banking. The publication or disclosure of such matters can very easily lead to very serious consequences resulting in banking crisis in the country and in the economic relations with other countries and causing a serious and grave injury to the public interest.With regard to the letters required to be produced I say that the correspondence between the Punjab National Bank, Ltd., and the Bharat Bank, Ltd., on the one hand and the Reserve Bank of India on the other are parts of unpublished official records relating to the affairs of State, namely, the control and regulation of banking and credit structure in the State and their disclosure will be against the public interest....
I say I am satisfied that all or any of the documents mentioned in this affidavit cannot be produced as required by thesaid notices and any information, particulars or communications connected with them cannot be divulged without injury to public interest and I therefore withhold permission to produce the documents referred to in this affidavit or give the contents of such documents or any evidence derived from them.
6. Although the tribunal held that it was not a Court within the meaning of the Evidence Act, and that therefore itwas not bound by all the provisions of the Evidence Act, it held that since the provisions of Sections 123 and 124 of the Evidence Act were based on public policy and natural justice, it was bound to follow the principles laid down therein. In brief, the finding of the tribunal was that it was not satisfied with the allegations made in the affidavit of Mr. Vaswani and it did not consider that the documents in question could be held to refer toaffairs of State. In its decision, the tribunal was undoubtedly influenced by the fact that the inspection report of the Bharat Bank had been sent by the Reserve Bank in response to the first request without any claim of privilege being made. The tribunal held that it was entitled to look both at the inspection reports and the correspondence in order to decide whether the public interest would suffer by their disclosure. Itis this order which is challenged in the present petition.
7. Since the tribunal, in spite of holding that it was not strictly a Court, has held that it is still bound to observe the principles of the sections of the Evidence Act regarding privilege, it seems hardly necessary to enter into any elaborate arguments as to whether the tribunal is or is not in fact a Court. It seems to me that it is certainly bound by the relevant provisions of the Evidence Act in a matter of this kind in consequence of the provisions of Section 11(3)(b) of the Industrial Disputes Act which provides that every tribunal shall have the same powers as are vested in a civil Court under the Code of Civil Procedure, 1906, in respect of the following matters, namely:-
(b) compelling the production of documents and material objects.
8. The crucial questions are whether the documents regarding which privilege has been claimed in the present case can be said to relate toaffairs of State in view of the a sections made by the head of the department in his affidavit, and whether the tribunal is entitled to look at the documents themselves in order to satisfy itself on the point. It is the contention of the learned Solicitor-General that if the affidavit of the head of the department discloses a prima facie case that a document does refer toaffairs of State, the tribunal has no power whatever to examine them in order to satisfy itself on the point. In this connexion, reliance was placed on the decision of the Full Bench consisting of Khosla, Kapur and Soni, JJ., in Governor-General in Council v. H. Peer Mohamed Khuda Bux and Ors. A.I.R. 1950 E.P. 228, in which it was held that
the Court can hold an enquiry into the validity of an objection on the ground that the document relates toaffairs of State. It is nevertheless true that once the Court comes to the conclusion that the documents relate toaffairs of State the decision of the head of the department to give or withhold permission to its production must be accepted as final.
In the course of his judgment, Khosla, J., cited with approval the observations of the Lord Chancellor in Duncan v. Cammell Laird & Co., Ltd.1942 A. C. 625, as follows:.The Minister, in deciding whether it is his duty to object, should bear those considerations in mind, for he ought not to take the responsibility of withholding production except in cases where the public interest would otherwise bedignified, e.g., where the public disclosure would be injurious to national defence, or to good diplomatic relations, or whether the practice of keeping a class of documents secret is necessary for the proper functioning of the public service.
9. The provisions of the Banking Companies Act leave no doubt regarding the key position occupied by the Reserve Bank of India in the economicaffairs of the country. It is in fact the agency through which the Central Government maintains Its control on the banking system in the country and the whole system of credit. In the circumstances, there cannot, in my opinion, be any doubt that generally the results of Inspections of the scheduled banks conducted by the Reserve Bank suo motu or under the directions of the Central Government, and the correspondence between the individual banks and the Reserve Bank regarding theiraffairs, are highly confidential matters, the dis-clsoure of which to the public might easily result in loss of confidence or even panic. The maintenance of confidence In banks and the banking system appears to me to be a matter of vital interest to the nation and I, therefore, consider that the claim of the head of the department in this case that as a whole the reports of the inspection of various banks by the Reserve Bank and the correspondence between the various banks and the Reserve Bank regarding their affairs are documents which relate to affairs of State, is justified. It is, of course, open to the Government to decide that the publication of any particular. report or information contained in any correspondence Is not likely to result in any harm being done, and In such eases the claim of privilege may be waived when the production of documents is required in a Court Once, however, a certain class of documents is held to relate to affairs of State and privilege is claimed regarding documents falling within this class by the head of the department, it is not, in my opinion, open to the Court, or In this case the tribunal, to query the claim asserted and to assert the right to examine the documents themselves for the purpose of being satisfied on the point whether they relate to the affairs of State and to what extent their disclosure will not be harmful.
10. The learned Counsel for the Employees' Federation naturally laid great stress on the fact that the Reserve Bank had to some extent weakened its own position in the case by sending the inspection report relating to the Bharat Bank,Ltd., for the year 1950-51 without claiming confidential information of the tribunal itself. It would, of course, have become useless to assert the claim of privilege if the document in Question had not remained intact in its sealed cover, but, in my opinion, there waa nothing illegal in the belated assertion of privilege regarding this document. An attempt was made to argue that by sending the document to the tribunal in the first instance the Reserve Bank was estopped from claiming privilege thereafter, but I cannot see any question of estoppel arises at all in such a case. It may be mentioned that in the case referred to above, Duncan v. Caramel Laird & Co., Ltd., the point also arose that some of the contents of the documents regarding which privilege was claimed had already been disclosed, though not publicly, in an enquiry held by a tribunal regarding the loss of one of His Majesty's ships and it was held by the House of Lords that the limited circulation of the document at the inquiry and the limited reference to them in the report was not a matter which ought to be taken into consideration in deciding the right to refuse production.
11. As a last resort the learned Counsel for the workmen relied on the provisions of Rule 18 of the rules framed under' the Industrial Disputes Act which reads :
All books, papers and other documents or things produced before a board, court or tribunal whether voluntarily or in pursuance of a summons may be inspected by the board, court or tribunal and also by such parties as the board, court or tribunal allows but the information obtained therefrom shall not, except as provided in the Act, be made public and such parts of the books, papers, documents and things as in the opinion of the board, court or tribunal do not relate to the matters at issue may be sealed up.
12. This, however, is a general provision relating to all documents, etc., produced' before a tribunal, in which confidential information regarding the affairs of a company which has a dispute with its workmen may have to be referred to without being released to public, but it has no connexion whatever with the documents referred to in the relevant provisions of the Evidence Act regarding which any claim of privilege has to be decided according to theseprovisions.
13. The result is that I would accept the petition and quash the impugned order of the tribunal. I would, however, leave the parties to bear their own costs.
A.N. Bhandari, C.J.
14. I agree.