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Piara Lal Anand, Vs. the State Bank of India (National Bank of Lahore and ors.) - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtDelhi High Court
Decided On
Judge
Reported in(1972)IILLJ495Del
AppellantPiara Lal Anand, ;A.P. Rishi, ;m.L. Arora and Guranditta Mal Kapoor
RespondentThe State Bank of India (National Bank of Lahore and ors.)
Cases ReferredJalan Trading Co. (P.) Ltd. v. Mill Mazdoor Sabha
Excerpt:
- - 2, that if there is good reason so to do it may apply to the central government for an order of moratorium in respect of a banking company. the transferor-bank was placed under moratorium on 10-1-1970. section 45(4) of the act provides that during the period of moratorium, if the reserve bank is satisfied that on the conditions mentioned therein it is necessary so to do it may prepare a scheme for the amalgamation of the banking company with any other banking institution. 1 on 20-1-1970, it is clearly stated in para 4 that so far as employees who are not workmen, within the meaning of the industrial disputes act, 1947 (hereinafter called the act of 1947), are concerned, the scheme of amalgamation may provide that such of them as may be specifically mentioned in the relevant clause.....rajindar sachar, j.1. this judgment will dispose of writ petitions 1413/to 1416 of 1970. it was agreed that the facts in all the writ petitions are more or less similar and that the decision in writ petition 1413 of 1970 will govern the decision in other writ petitions. the arguments as such were heard in c.w. 1413 of 1970.2. the petitioner joined the service of the national bank of lahore, limited, (hereinafter called the transferor-bank) in 1946. the banking regulation act, 1949, (hereinafter called the act) gives power to the reserve bank of india, respondent no. 2, that if there is good reason so to do it may apply to the central government for an order of moratorium in respect of a banking company. the transferor-bank was placed under moratorium on 10-1-1970. section 45(4) of the act.....
Judgment:

Rajindar Sachar, J.

1. This judgment will dispose of Writ Petitions 1413/to 1416 of 1970. It was agreed that the facts in all the writ petitions are more or less similar and that the decision in Writ Petition 1413 of 1970 will govern the decision in other writ petitions. The arguments as such were heard in C.W. 1413 of 1970.

2. The petitioner joined the service of the National Bank of Lahore, Limited, (hereinafter called the transferor-bank) in 1946. The Banking Regulation Act, 1949, (hereinafter called the Act) gives power to the Reserve Bank of India, respondent No. 2, that if there is good reason so to do it may apply to the Central Government for an order of moratorium in respect of a banking company. The transferor-bank was placed under moratorium on 10-1-1970. Section 45(4) of the Act provides that during the period of moratorium, if the Reserve Bank is satisfied that on the conditions mentioned therein it is necessary so to do it may prepare a scheme for the amalgamation of the banking company with any other banking institution. A scheme was accordingly framed by respondent No. 2 and the same was sanctioned by the Central Government respondent No. 3 as provided by Sub-section (7) of Section 45 by means of a notification, dated 20-2-1970, published in the Gazette of India, Part II, Section 3(ii) dated 28-2-1970. Paragraph 14 of the scheme (a copy of which has been filed as Annexure P1 to the petition) states that the persons specified in the schedule annexed to this scheme shall, on the prescribed date, cease to be the employees of the transferor-bank and notwithstanding anything contained in any law for the time being in force or any agreement or contract the persons so specified shall cease to be employees of the transferor-bank subject to their rights to get pension, gratuity, provident fund and other retirement benefits as may be ordinarily admissible to them under the rules. The name of the petitioner is to be found in the schedule of the scheme. Intimation of this was sent to the petitioner by the transferor-bank by its letter dated 20-2-1970, informing him that he will cease to be an employee of the transferor-bank with effect from February 23, 1970. The petitioner apparently took up the matter by writing to the Government of India, Ministry of Finance and the Reserve Bank of India against hiscease of employment with the transferor-bank. He was, however, informed by respondent No. 1 by its letter dated 22-4-1970, that pursuant to the provisions of the scheme of amalgamation sanctioned by the Central Government, he had ceased to be an employee of the transferor-bank. The petitioner also appears to have asked for being re-employed but the State Bank of India, respondent No. 1, expressed its inability to do so and this was communicated to the petitioner by respondent No. 2 by its letter dated 21-7-1970. This petition was thereafter filed in This Court challenging the scheme by which the petitioner's service with the transferor-bank had been terminated.

3. It may be mentioned that respondent No. 1 by its earlier letter dated 20-1-1970 written to the employees of the transferor-bank including the petitioner informed them that as per draft scheme of amalgamation of transferor-bank with respondent No. 1, the employees of the transferor-bank shall continue to be in service and be deemed to have been appointed by respondent No. 1 on the same terms and conditions of service as were applicable to them immediately before the 11th January, 1970 and an option was, thereforee, sought from the employees whether they were agreeable to become or not to become the employees of respondent No. 1 when the scheme comes into force. It is not disputed that the petitioner had intimated his option to become an employee of respondent No. 1 when the scheme came into force. The grievance of the petitioner thus is that he having intimated his option in terms of the letter dated 20-1-1970, the respondents have acted illegally in terminating his services. It is, however, to be noticed that in this letter written by respondent No. 1 on 20-1-1970, it is clearly stated in para 4 that so far as employees who are not workmen, within the meaning of the Industrial Disputes Act, 1947 (hereinafter called the Act of 1947), are concerned, the scheme of amalgamation may provide that such of them as may be specifically mentioned in the relevant clause of the scheme shall not be absorbed in the transferee-bank notwithstanding the fact that they may intimate their intention of becoming the employees of that bank. This letter thus clearly told the petitioner that the exercise of option even will be of no consequence concerning the employees who are not workmen within the meaning of the Act of 1947 if the names of those persons have not been mentioned in the scheme. The name of the petitioner does find mention in the scheme. There is thus no question of any estoppel against the respondents by the writing of the said letter.

4. The next question is whether by including the name of the petitioner in the schedule of the scheme there has been any violation of the provisions of the Act so as to make the inclusion of his name beyond the authority of law.

5. Section 45(5) of the Act provides that the scheme aforesaid may contain provisions for all or any of the matters mentioned therein including as per Clause (i) the continuance of the services of all the employees of the banking company (excepting such of them as not being workmen within the meaning of the Industrial Disputes Act, 1947, are specifically mentioned in the scheme) in the banking company itself on its reconstruction or, as the case may be, in the transferee-bank at the same remuneration and on the same terms and conditions of service, which they were getting or, as the case may be, by which they were being governed immediately before the date of the order of moratorium. It was contended that Section 45(5) is a mandate to the Reserve Bank of India that the scheme framed by it must contain all the provisions mentioned in this sub-section in the scheme. Clause (i) of Sub-section (5) of Section 45 of the Act according to the learned Counsel for the petitioner casts an obligation that the scheme must provide for the continuance of the service of all those employees who are workmen within the meaning of the Act of 1947 though it was conceded that there was no such obligation with respect to the employees who are not workmen within the meaning of the Act of 1947, The learned Attorney-General, appearing on behalf of respondent No. 1, however, maintained that Sub-section (5) of Section 45 of the Act is only an enabling provision and gives discretion to the Reserve Bank to provide for all or any of the matters it deems fit, but it was not mandatory that the scheme must contain all the matters mentioned in Sub-section (5) of Section 45. As, even according to the learned Counsel for the petitioner, the mandate in the scheme arises only with regard to the continuance of services of the employees who are workmen within the meaning of the Act of 1947, it is necessary first to determine whether the petitioner is a workman. If the petitioner is held not to be a workman within the meaning of the Act of 1947 it will not be necessary to consider the question whether Sub-section (5) of Section 45 of the Act is mandatory or discretionary as in either case the petitioner will not have any grievance, because in that eventuality his name could be and has been specifically mentioned in the scheme as provided by Clause (i) of Sub-section (5) of Section 45 of the Act.

6. 'Workman' is defined in Section 2(5) of the Act of 1947. But it does not include any person who is employed mainly in a managerial or administrative capacity, or who being employed in a supervisory capacity draws wages exceeding five hundred rupees per mensem or exercises either by the nature of the duties attached to the office or by reason of the powers vested in him functions mainly of a managerial nature. The petitioner admittedly was drawing remuneration exceeding Rs. 500 per mensem. The only question, thereforee, is whether the petitioner was employed in a supervisory capacity. If the answer is in the affirmative the petitioner will not be a workman as defined in the Act of 1947.

7. The petitioner worked as a manager of Karol Bagh branch in December, 1959, but soon thereafter in June, 1960, he was appointed as accountant at the head office. The fact of the petitioner having worked as a manager is, however, irrelevant as the question of the status and whether the petitioner was employed in a supervisory capacity has to be determined in 1970. The petitioner was at that time working as accountant in the head office. The only allegation made by the petitioner in the original writ petition in support of his allegation that he was a workman was of a general nature and all that was stated was that taking into consideration the nature of the duties performed by him he was only doing clerical duties having no element of supervisory, managerial and/or administrative control over any clerk and no clerk was working under him and it was mandatory on respondent No. 1 to let the petitioner continue in the employ of respondent No. 1. In the counter-affidavit filed by respondent No. 1 it was denied that the petitioner was a workman. It is pointed out that in the middle of 1966 a conference of the accountants of the bank was held and pursuant to certain suggestions made there, a letter dated 30-8-1966, copy of which has been attached as Annexure 'F' to the return, was addressed to the petitioner in which he was asked to give his consent to be treated as an officer. It was stated in that letter that he will be governed by the conditions of service applicable from time to time to the officers of the bank and shall in no way be governed by the service conditions that may be applicable to workman staff in any manner whatsoever. The petitioner duly gave his consent on 30-8-1966, to be treated as an officer of the bank on terms and conditions mentioned in the letter and also specifically stated that acceptance of the offer was irrevocable and final. Respondent No. 1 has also detailed the duties which were being performed by the petitioner when he was posted at the head office as an accountant. It is averred that while he was posted at the head office, the petitioner was exercising independent and responsible supervisory charge of the administrative matters entrusted to him. The petitioner was responsible for scrutinising inspection reports received from the branches, checking various audit statements and looking after the share-capital work, and he was also sometimes deputed to the branches in relief arrangements and at other times deputed to carry out inspection of the branches of the bank. Another circumstance averred by respondent No. 1 to show that the petitioner was not a workman is that the petitioner was given a power of attorney by the bank authorising him to act jointly with another attorney holder and also severally in respect of his duties and on behalf of the bank. A copy of the power of attorney has been attached as Annexure 'D' to the return affidavit. A perusal of this power of attorney shows that the petitioner had been acting on behalf of the transferor-bank as its authorised attorney by virtue of the power of attorney given to him under the authority of the board of directors on 29-11-1946 and as the original power of attorney had become worn and torn by use and is no longer fit for purpose of registration with bank and other institutions this power of attorney is granted to the petitioner and it is reaffirmed that the grant of the power of attorney would be deemed to be exercising the powers described hereunder as if it is power of attorney was executed on which the original power of attorney dated 29-11-1946 was granted to him (sic). This power of attorney was executed on 13-8-1968. It was not disputed by the counsel for the petitioner that this power of attorney was in force and has not been revoked in any manner even up to the time when the petitioner's name was included in the scheme and he ceased to be in the employ of transferor-bank. It is, however, suggested that no occasion had arisen for the petitioner to exercise powers given to him by this power of attorney as he had not been asked by the bank to do so. But the factum of power of attorney having never been revoked was not being disputed.

8. A rejoinder was filed to this counter-affidavit by the petitioner and it is relevant to note that there was no denial that the power of attorney continued to exist, nor was any denial of the averment made in the counter-affidavit that the petitioner was at times deputed to carry out inspection of the branches of the bank and to scrutinise the inspection reports received from the branches. In these circumstances the question arises whether it can be said that the petitioner was not employed in a supervisory capacity and, thereforee, was a workman. In my view the following circumstances clearly show that the petitioner cannot be considered to be a workman within the meaning of the Act of 1947:

(a) the petitioner was scrutinising the inspection reports of the branches,

(b) the petitioner was deputed to carry out inspection of the branches of the bank,

(c) the petitioner had himself accepted on 30-8-1966 and had become an officer of the bank on terms offered by the bank which clearly stated that the conditions of service applicable from time to time to the officers of the bank will govern his case and shall in no way be governed by the service conditions that may be applicable to workmen staff in any mannerwhatsoever.

9. Thus the petitioner since 1966 had himself accepted his position as being that of an officer and not of workman he is clearly approbating and re-probating. It is well settled that a person cannot be allowed to blow hot and cold at the same time.

10. One of the very important circumstances, in my opinion, in holding that the petitioner is not a workman, is the power of attorney given to him since 1946 and reiterated in 1968 and which was still in force up to 1970. This power of attorney constituted the petitioner to be a true and lawful attorney of the bank at head office or at any other place or places in India and Pakistan where the said bank may have or establish branches or agencies and to which he may from time to time or at any time be appointed by the said bank as manager, sub-manager, accountant, sub-accountant or in any capacity whatever for, in the name of, and on behalf of the said bank and transact jointly with any other manager, sub-manager, accountant, sub-accountant or other employee of the said bank holding similar authority from the bank at such place and to act on various matters like drawing, accepting and endorsing negotiable bills and hundies, to open accounts with other banks and to operate on all existing and future accounts whatsoever and to buy, sell, hypothecate, pledge, mortgage, endorse and transfer Government securities, etc. It also authorises the petitioner singly and without joining with any other person to commence, prosecute, endorse, defend, answer and oppose any suit or other legal proceedings and demands touching any matters in which the bank may or may hereafter be interested or concerned and to appoint advocates, solicitors and pleaders as occasions shall require. These powers undoubtedly gave very wide powers to the petitioner and could only be described as supervisory in nature and unless there was a direction to the contrary or unless his power of attorney is cancelled his authority to work would subsist. Importance of power of attorney giving such wide powers, as in the present case, came up for consideration before their Lordships of the Supreme Court in State Bank of Bikaner and Jaipur v. Hari Har Nath Bhargava : (1971)IILLJ331SC ), wherein their Lordships observed:

The power of attorney was operative at any branch of the bank irrespective of the capacity which might be occupied by the respondent at a particular point of time. It may be that at Jaipur there was any number of officers superior to the respondent who were empowered to discharge duties mentioned in the power of attorney, but this does not necessarily lead to the inference that the respondent lost his responsibility or was denuded of the powers while he was at Jaipur. If he discharged any of the duties mentioned in the power of attorney the same would be lawful and would be binding on the bank. The fact that he was not actually called upon to discharge such functions did not take away from his responsibility or status of a person competent to discharge functions of a supervisory character....

11. Thus the argument that the petitioner was not called upon to exercise this power is not determinative of the question. The power of attorney having continued to subsist the only reasonable inference is that the petitioner was working in a supervisory capacity and, thereforee, cannot be held to be a workman. The counsel for the petitioner referred to me Lloyds Bank Ltd. v. Panna Lal Gupta and Ors. : (1961)ILLJ18SC In that case, however, all that was held was that a clerk who was doing the duty of checking the entries of the balance sheet could not be held to be doing the duties of a supervisory nature.

12. I was referred to South Indian Bank Ltd. v. Chacko : (1964)ILLJ19SC . In that case Labour Court had after a consideration of the evidence come to the conclusion that the employee was merely a senior clerk mainly doing the clerical duties and was, thereforee, a clerk within the Act of 1947. It is, however, relevant to note that in that case there was a finding by the Labour Court that no power of attorney was granted to the employee even though he was appointed as accountant. Both these cases were referred to in the latest case of State Bank of Bikaner and Jaipur supra and their Lordships held that the grant of power of attorney is a very important circumstance showing that the employee is discharging the functions of a supervisory nature.

13. For similar reason Anand Bazar Patrika (Private) Ltd. v. Its Workmen : (1969)IILLJ670SC , is of no assistance to the petitioner. In that case the employee being a senior-most clerk was doing the work of maintaining and writing the cash book and preparing the various returns. In these circumstances it was held that the mere fact that he could have permitted certain clerks to leave during office hours and to recommend their leave applications were minor duties of a supervisory nature and could not convert his office of senior clerk-in-charge into that of a supervisor. In the present case, however, the work of the petitioner was to carry out the inspections and that, coupled with the fact of his having a power of attorney, it cannot but be held that the petitioner was employed in a supervisory capacity and thus would not be a workman within the meaning of the Act of 1947. In view of this finding he cannot claim that he had right to the continuance of his service with respondent No. 1 even on the assumption that Sub-section (5) of Section 45 of the Act cast a mandatory obligation when framing a scheme to provide for the continuance of the employees' service of the transferor-bank who were workmen within the meaning of Act of 1947. As the petitioner is not a workman he has no grievance, in that view of the matter I consider it unnecessary to decide whether Sub-section (5) of Section 45 is mandatory as contended for by the counsel for the petitioner or is only discretionary as contended for by the learned Attorney-General. There is another reason why it is unnecessary to decide whether Section 45(5)(i) of the Act is mandatory or discretionary. The reason is that the scheme has provided in para 13 about the continuance of the services of the employees who are not workmen within the meaning of Act of 1947 and are mentioned in the scheme. Thus whether it was mandatory or discretionary, the scheme has provided for the continuance of the service of the employees who are workmen within the meaning of Act of 1947. If, thereforee, the petitioner, was a workman but had not been continued in service he could have a grievance. But as already found, since he is not held to be a workman, there is no grievance and the point about Section 45(5) is, thereforee, merely academic and need not be decided.

14. The next contention was that the inclusion of the petitioner's name in the schedule to the scheme is vocative of Articles 14 and 16 of the Constitution as he has been discriminated against. This argument proceeds on the assumption that all other workmen within the meaning of Act of 1947 have been allowed to continue to be employees of respondent No. 1 while the petitioner has been deprived of the same. I have already held that the petitioner is not a workman within the meaning of Act of 1947 and, thereforee, there can be no question of the petitioner being similarly situated and in the same circumstances as those employees of the transferor-bank who were workmen within the meaning of Act of 1947. The petitioner, thereforee, cannot make a grievance that because workmen have been allowed to continue in the employ of respondent No. 1, he even though a non-workman has not been continued.

15. The allegation of discrimination in the writ petition was of general nature and only baldly stated that other employees have been continued in the transferee-bank while the petitioner has not been. Inthe counter-affidavit of respondent No. I, it has been explained that the normal age of retirement of officers like the petitioner was 58 years with the transferor-bank. The petitioner's date of birth being 10th April, 1912, he was due for retirement from the service of the transferor-bank in April, 1970. The Rules applicable to supervisory staff provide that the employees on attaining the age of 58 years will retire and that this rule was kept in view in recommending the names of the persons to be included in the scheme of amalgamation. The facts taken into consideration for including the petitioner's name in the schedule was that the petitioner's services were terminable by one month's notice and that he was due in any case to retire within two months in April, 1970.

16. The names of the employees whose names are included in the schedule are those who had attained the age of 58 years or who were shortly going to do so. It was specifically stated that the petitioner was not similarly placed with the employees whose names had been included in the scheme. In the rejoinder filed by the petitioner he mentioned names of certain persons who had prior to the amalgamation been allowed to continue in the transferor-bank on attaining the age of 58 years. It may be noted that all these names are included in the schedule like the petitioner. Thus no assistance can be sought by the petitioner from this. The petitioner has not given any instance of a non-workman who even though of same age as the petitioner has not been included in the schedule. In my view, thereforee, the grievance of the petitioner that there has been discrimination against the petitioner and Articles 14 and 16 have been violated has no substance.

17. The next objection by the counsel for the petitioner is that the principles of natural justice have been violated as no opportunity has been given to him to show cause before his name was included in the schedule of the scheme. Sub-section (6) of Section 45 of the Act provides that a copy of the scheme prepared by the Reserve Bank shall be sent in draft to the banking company and also to the transferee-bank and any other banking company concerned in the amalgamation for suggestions and objections, if any, within such period as the Reserve Bank may specify for this purpose. Clause (b) of Sub-section (6) of Section 45 of the Act provides that the Reserve Bank may make such modifications, if any, in the draft scheme as it may consider necessary in the light of the suggestions and objections received from the banking company and also from the transferee-bank and any other banking company concerned in theamalgamation and from any members, depositors, or other creditors of each of those companies and the transferee-bank. Sub-section (7) of Section 45 of the Act provides that the scheme shall thereafter be placed before the Central Government for its sanction and the Central Government may sanction the scheme without any modifications or with such modifications as it may consider necessary and the scheme as sanctioned by the Central Government shall come into force on such date as the Central Government may specify in this behalf. The statute as such does not require that the notice has to be given to the employees. This is as it is because the parties concerned with the amalgamationare the transferee-bank and the transferor-bank. The fact that the employees of the transferor-bank may be affected by the amalgamation is of no consequence as it is not their rights that are being affected by the amalgamation but the rights of the banking company which is being amalgamated apart from the employees. Clause (i) of Sub-section (5) of Section 45 provides that the scheme may contain provisions regarding the employees specifically mentioned in the schedule, for payment of compensation and other benefits to which they were admissible under the rules before the date of order of moratorium. Apparently, thereforee, the statute has considered a sufficient safeguard to the employees by providing that if the scheme does not continue the service of any employees certain compensation or benefit will be payable to them as mentioned in the scheme and in the Act. I do not, thereforee, see on what principles is it possible to spell out that an employee has a right to be heard before the scheme is sanctioned. The complaint of the petitioner is that his name was not included in the schedule to the draft scheme and, thereforee, he should have been given an opportunity when his name was included at the time of sanctioning the scheme. But this is begging the question. If the petitioner has no right of hearing, the fact whether the petitioner's name finds mention in the draft scheme or is included subsequently is of no relevance. His rights, if any, will be governed by the statute and the provisions in the scheme. It was, however, contended that even if statute does not require a notice to be given to an employee, the nature of the duty cast on the Central Government is such that it should be implied that it had a duty to give a hearing to the petitioner. I was in this connection referred to State of Bihar v. Karam Chand Thapar & Brothers Ltd. A.I.R. 1962 S.C. 11, and A.K. Kraipak and Ors. v. Union of India and Ors. : [1970]1SCR457 . I do not think that any of these cases has any applicability to the present case. In A.K. Kraipak's case it has been clearly stated that these rules can operate only in areas not covered by any law validly made, and in other words they do not supplant the law of the land but supplement it. In Union of India v. J.N. Sinha and Anr. : (1970)IILLJ284SC , it was observed as under:

But if, on the other hand, a statutory provision either specifically or by necessary implication excludes the application of any or all the principles of natural justice then the Court cannot ignore the mandate of the Legislature or the statutory authority and read into the concerned provision the principles of natural justice. Whether the exercise of a power conferred should be made in accordance with any of the principles of natural justice or not depends upon the express words of the provision conferring the power, the nature of the power conferred, the purpose for which it is conferred and the effect of the exercise of that power.

18. Applying the test laid down in Sinha's case it will be seen that the purpose of the section is either reconstruction or the amalgamation of the banking company. In that view I do not think that the petitioner as an employee has any right of being heard and, thereforee, no question of violation of rules of natural justice arises.

19. The next objection was that the order including the petitioner's name in the schedule was non-speaking one. I do not see any merit in this contention. It is not understood on what basis it is urged that before the names are included in the scheme, the Reserve Bank should have passed a speaking order, The statute does not require so nor is the Reserve Bank exercising quasi-judicial power with respect to the employees when framing a scheme and, thereforee, there is no requirement of passing a speaking order when it included the name of the petitioner in the schedule. I was referred to Prem Nath and Ors. v. S. Venkatesan and Ors. (1967) D.L.T. 210, Testeels Ltd. v. N.M. Desai Conciliation Officer and Anr. : AIR1970Guj1 , L.P.A. No. 108 of 1970, decided by This Court on 13-1-1972, Mahabir Prasad Santosh Kumar v. State of U.P. and Ors. : [1971]1SCR201 , State of Gujarat and Anr. v. Krishna Cinema and Ors. : [1971]2SCR110 . All these cases, however, are cases where quasi-judicial functions were being performed by the administrative authorities and it was in these circumstances that it was held that as the quasi-judicial powers were being exercised, the orders passed by these authorities must be speaking one. But the Reserve Bank in framing the scheme is exercising the statutory power vested in it under the Act and is bound only to follow the procedure laid down therein which requires a notice to be given to the banking company. The grievance, thereforee, of the petitioner that the Reserve Bank has not passed a speaking order has no merit and is, thereforee, repelled.

20. The next objection by the petitioner was that Sub-section (5) of Section 45 of the Act suffers from vice of excessive delegation as it gives uncanalised and uncontrolled powers without providing any guide-lines for the Reserve Bank of India or Central Government to formulate the scheme there under. It is important to note that no challenge apart from this ground of excessive delegation was made to Sub-section (5) of Section 45 of the Act by the counsel for the petitioner. This argument, however, runs counter to the other argument that sub-section (5) of Section 45 of the Act was mandatory. If that argument is correct there can be no scope in the contention of the counsel that any discretion has been left which gives unfettered discretion to the Reserve Bank for framing the scheme because if Sub-section (5) of Section 45 is mandatory then the Reserve Bank is bound to include the matters mentioned therein and the argument of excessive delegation would not arise. This argument can only proceed on the assumption that Sub-section (5) of Section 45 is discretionary. Even when examinedfrom that angle I find no merit in the contention that this sub-section suffers from vice of excessive delegation. It would be seen that Sub-section (4) of Section 45 provides that during the period of moratorium, if the Reserve Bank is satisfied that in the public interest or in the interests of the depositors or in order to secure the proper management of the banking company or in the interests of the banking system of the country as a whole, it is necessary so to do, the Reserve Bank may prepare a scheme for the reconstruction of the banking company or for the amalgamation of the banking company with any other banking institution. Thus before the Reserve Bank undertakes to frame a scheme it is incumbent on it to be satisfied that the conditions mentioned in Sub-section (4) of Section 45 of the Act exists. Not only that Sub-section (5) further gives guide-lines on the matters that should be contained in the scheme. It is apparent that when framing a scheme the details are so varied and the problems arising there from are so varied that all these details cannot be provided by the Act and that it is natural and inevitable that all these matters be left to be provided in the scheme by the Reserve Bank. What has to be seen when a legislation is challenged as suffering from the vice of excessive delegation is whether the Legislature has laid down the broad principles of the policy in the legislation and has only left the details to be supplied by the administrative authorities. If by delegated legislation the delegate completes the legislation by supplying the details within the limits prescribed by statute it cannot be held to be a case of excessive delegation. The reason is that the Legislature is not delegating its functions; rather having laid down the binding rule of conduct and having laid down the guiding-lines has only left to the Reserve Bank to frame the scheme keeping in view the various requirements which must necessarily vary with each case. The power thus delegated is within the denned limits and is not so indefinite as to amount to excessive delegation. It is also important to note that this power to frame a scheme is given to the Reserve Bank of India a very high powered body. Reference in this connection may be made to Joseph Kuruvilla Vellukunnel v. Reserve Bank of India and Ors. : AIR1962SC1371 . In that case the virus of Section 38(1) of the Act, which provided that the High Court shall order the winding up of the banking company if an application for its winding up has been made by the Reserve Bank, was challenged. The contention urged was that in leaving the decision to the Reserve Bank the law must be said to offend the principles of natural justice and that it was unreasonable restriction within the provision of Article 19 of the Constitution. In the course of the judgment it was observed:

The Act, at every turn, makes the Reserve Bank the authority to sanction, permit, certify, inspect, report, advise, control, direct, license and prohibit. There is hardly any provision where the Reserve Bank's judgment is not made final vis-a-vis a banking company except rarely where an appeal to the Central Government can lie.

It was further observed:

These observations lay down clearly that there may be occasions and situations in which the Legislature may, with reason, think that the determination of an issue may be left to an expert executive like the Reserve Bank rather than to Courts without incurring the penalty of having the law declared void. The law thus made is justified on the ground of expediency arising from the respective opportunities for action...

No doubt, the Court can also, given the time, perform this task. But the decision has to be taken without delay and the Reserve Bank already knows intimately the affairs of banking companies and has had access to their books and accounts. If the Court were called upon to take immediate action, it would almost always be guided by the opinion of the Reserve Bank. It would be impossible for the Court to reach a conclusion unguided by the Reserve Bank' if immediate action was demanded. But the law which gives the same position to the opinion of the Reserve Bank is challenged as unreasonable. In our opinion, such a challenge has no force.

21. Applying the ratio of the above case it can hardly be urged that the power given to the Reserve Bank under Section 45 of the Act to frame a scheme for amalgamation of the banking company, is a case of excessive delegation. Moreover, it will be seen that the scheme framed by the Reserve Bank has to be sent to the banking company and to the transferee-bank. The suggestions received there under have further to be considered by the Central Government and the Central Government under Sub-section (7) of Section 45 of the Act may sanction the scheme without modification or with modification. A further safeguard against the arbitrariness of the scheme is also provided by Sub-section (11) of Section 45 of the Act which provides that the copies of the scheme shall be laid before both Houses of Parliament, as soon as may be, after the scheme has been sanctioned by the Central Government. The fact that the scheme will be laid before the Houses of Parliament also ensures a guarantee of public scrutiny and a safeguard against arbitrariness. If the scheme framed by the Reserve Bank is against the provisions of the statute or can be attacked on the ground of having been framed on irrelevant or extraneous ground it may be open to challenge. But the scheme cannot be challenged as in the present case merely on the ground that the power to frame a scheme had been given to the Reserve Bank and the Act, thereforee, suffered from the infirmity of excessive delegation. The challenge on this ground, thereforee, fails.

22. The next attack was about the virus of Sub-section (10) of Section 45 of the Act, though in the petition no such challenge was made. Moreover I do not see how the question of Sub-section (10) of Section 45 being bad as it amounted to excessive delegation is in any way relevant. No order has been passed by the Central Government under Sub-section (10) of Section 45 purporting to remove any difficulty in the implementation of the scheme. The scheme contains the name of the petitioner and it is that scheme that is being implemented. The respondents are not justifying their action by seeking to resort to any action of the Central Government under Sub-section (10) of Section 45 of the Act. It is, thereforee, really unnecessary to decide about the virus of Section 45(1) of the Act. I may, however, mention that Sub-section (10) of Section 45 of the Act was specifically held to be not suffering from vice of excessive delegation, vide The Goodland Plantations (P.) Ltd. v. State Bank of Travancore A.I.R. 196J Kerala 297. I was referred to M/s. Jalan Trading Co. (P.) Ltd. v. Mill Mazdoor Sabha : (1966)IILLJ546SC . In my view the case has no parallel with the present one. In that case power was given to the Central Government to provide by order for removal of doubts and difficulties in giving effect to the provisions of the Act and it was in these circumstances that it was held that this provision delegated legislative power which was not permissible and it was also observed that if in giving effect to any provision of the Act any doubt or difficulty arises, normally it is for the Legislature to remove that difficulty. In the present case, however, Sub-section (10) of Section 45 of the Act gives power to the Central Government to remove difficulty in giving effect to the provisions of the scheme which is not inconsistent with such provisions. It would be apparent that 'the scheme itself is framed by the Central Government under Sub-section (7) of Section 45 and, thereforee, the authority to remove the difficulty under subs. (10) is the same which has framed the scheme. There is thus no question of any delegation to the executive as in the Jalan Trading case, supra. Here the power to sanction the scheme is with the Central Government and that very authority has also power to remove difficulties in giving effect to the provisions of the scheme so long as they are not inconsistent with the provisions of the scheme. The argument, thereforee, that Sub-section (10) of Section 45 of the Act suffers from the vice of excessive delegation cannot be accepted.

23. The next grievance of the petitioner that though second proviso to para 14 of the scheme provides that nothing herein shall be deemed to prevent the transferee-bank from re-employing any person whose name has been specified in the schedule, he has not been re-employed. In my view this grievance is misconceived. In view of the proviso it is open to the transferee-bank if it likes to re-employ a person whose name has been specified in the schedule. But the proviso does not confer a right on the petitioner to demand that he must be re-employed. The petitioner asked for re-employment and under the proviso it was open to the State Bank of India to employ or not to employ a person. The transferee-bank has refused to re-employ the petitioner and he was informed of it by the Reserve Bank by its letter dated July 21, 1970. The petitioner has thus no grievance because be had no right whatsoever to be re-employed by the State Bank of India.

24. The last grievance of the petitioner was that under the first proviso to para 14 of the scheme he is entitled to get compensation for the loss of employment as may be determined by the Reserve Bank, respondent No. 2, but it has failed to do so. In the counter-affidavit filed by respondent No. 2 it is denied that respondents 2 to 3 have failed to exercise jurisdiction vested in them under the Act. It is stated that the question of payment of compensation does not arise because no such claim has been preferred by the petitioner. It is specifically averred that as regards the compensation there is no duty cast on the Reserve Bank to award compensation without any compensation claim having been filed on this behalf. Thus it is the case of respondent No. 2 that the petitioner has not asked for any compensation and, thereforee, he cannot urge that it has failed to discharge its obligation under the Act or as per proviso. The petitioner in the rejoinder filed by him has not controverter the stand of the respondent that he, i.e., the petitioner, has not asked for compensation as provided in the scheme. All that he has stated is that respondent No. 2 is competent to grant compensation. That, however, is not the point in issue. It is obvious that before any grievance can be made by the petitioner in This Court, he has first to approach the Reserve Bank under the Act and to demand of it to carry out its obligation under first proviso to para 14 of the scheme. On the facts on record it is clear that the petitioner never asked for compensation and as such his grievance at this stage is futile. Whether it is still open to the petitioner to ask respondent No. 2 to consider his case for compensation or whether he has a right or not does not call for decision at present because the petitioner not having asked for it, the respondent has not had any occasion to deal with the question. Of course, if the petitioner feels and is advised that it is open to him in law to apply under para 14 of the scheme now, he may do so and in that case, I have no manner of doubt that the respondents will deal with it in accordance with law and the provisions of the scheme.

25. The result is that there is no merit in the writ petition and the same is dismissed with costs. Counsel's fee Rs. 250. One set of fee.


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