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State Bank of Bikaner and Jaipur Employees Association and anr. Vs. State Bank of India and ors. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtChennai High Court
Decided On
Case NumberW.P. No. 3648 of 1976
Judge
Reported in(1982)ILLJ413Mad
ActsState Bank of Bikaner and Jaipur Employees Provident Fund Regulations, 1969; State Bank of India (Subsidiary Banks) Act, 1939 - Sections 3, 4, 38, 51 and 63; Bank of Jaipur Limited Employees Provident Fund Rules - Regulations 3, 11, 12, 12(1), 12(2), 14, 15, 17 and 18; Industrial Disputes Act, 1947; Indian Income-Tax Act, 1961; Indian Trust Act, 1988; Constitution of India - Articles 32 and 226; State Bank of India (Subsidiary Banks) (Amendment) Act, 1959 - Sections 63 and 63(1)
AppellantState Bank of Bikaner and Jaipur Employees Association and anr.
RespondentState Bank of India and ors.
Cases ReferredIn Hindustan Sugar Mills v. State of Rajasthan
Excerpt:
labour and industrial - writ of mandamus - state bank of bikaner and jaipur employees provident fund regulations, 1969, sections 3, 4, 38, 51 and 63 of state bank of india (subsidiary banks) act, 1939, regulations 3, 11, 12, 14, 15, 17 and 18 of bank of jaipur limited employees provident fund rules, industrial disputes act, 1947, indian income tax act, 1961, indian trust act, 1882, articles 32 and 226 of constitution of india and section 63 of state bank of india (subsidiary banks) (amendment) act, 1959 - petition for issue of writ of mandamus - locus to initiate proceedings under article 226 or article 32 depends on whether public property is dissipated - mandamus lies to secure performance of public or statutory duty in performance of which one who applies for it has sufficient legal.....1. the prayer in the writ petition is for the issued of a writ of mandamus forbearing the respondents from agreeing and/or approving, and/or ratifying the refund of the sum of rs. 50,46,116-27 from the 'state bank of bikaner & jaiyur employees provident fund account' to the second respondent, to be passed by a resolution at a meeting proposed to be held on 20-9-1976 or on any other date on the said alleged ground that the said amount was paid by mistake in violation of regulation 12(2) of the state bank of bikaner & jaipur employees provident fund regulations, 1969, framed under s. 63 of the state bank of india (subsidiary banks) act 38 of 1939, hereinafter referred to as the act. the facts on the basis of which the above prayer has been projected, run as follows : the first petitioner is.....
Judgment:

1. The prayer in the Writ Petition is for the issued of a writ of mandamus forbearing the respondents from agreeing and/or approving, and/or ratifying the refund of the sum of Rs. 50,46,116-27 from the 'State Bank of Bikaner & Jaiyur Employees Provident Fund Account' to the second respondent, to be passed by a resolution at a meeting proposed to be held on 20-9-1976 or on any other date on the said alleged ground that the said amount was paid by mistake in violation of Regulation 12(2) of the State Bank of Bikaner & Jaipur Employees Provident Fund Regulations, 1969, framed under S. 63 of the State Bank of India (Subsidiary Banks) Act 38 of 1939, hereinafter referred to as the Act. The facts on the basis of which the above prayer has been projected, run as follows : The first petitioner is an association of the employees of the second respondent and it is being represented by its President, who is also an employee of the second respondent, working at its Madras Branch, and he and he is the second petitioner in the writ petition. The second respondent is a body corporate constituted under Ss. 3 and 4 of the Act. The undertaking of the State Bank of Jaipur Limited was merged with the Bank of Jaipur limited was merged with the Bank of Bikaer Limited under the terms of the amalgamation scheme sanctioned by the Government of India under S. 38 of the Act. The second respondent is employing about 6,000 employees in its various branches all over India, which were about 385 in number as on 31-12-1975. Under S. 51 of the Act, the Second respondent is empowered to establish and maintain, inter alia, a provident fund for the benefit of its employees and officers. Pursuant to powers under S. 63 of the Act, the first respondent framed with the approval of the Reserve Bank of India Regulations known as 'State Bank of Bikaner & Jaipur Employees Provident Fund Regulations, 1969', hereinafter referred to as the Regulations and which Regulations came into force with effect from 1-10-1969, There is no dispute that the regulations are statutory in character. The Regulations have been made in supersession of the Bank of Bikaner Limited Staff Provident Fund Regulations and the Bank of Jaipur Limited Employees Provident Fund Rules, obviously in view of the merger of the two Banks. Under Regulation 3, the Fund known as 'State Bank of Bikaner & Jaipur Employees Provident Fund', hereinafter referred to as the Fund, stood vested in trustees, who shall be the Directors of the second respondent together with not more than six members of the Fund to be nominated by the Board of Directors of the second respondent to represent as far as possible all categories of staff, provided that at least one-fourth of the total number of trustees shall be members of the Fund, each of whom is also a workman, viz., an employee who is a workman within the meaning of the Industrial Disputes Act, 1947. Respondents 3 to 18 are the trustees of the Fund, Respondents 13 to 15 and 18 are the trustees representing the Award staff and respondents 16 and 17 are the trustees representing officer-employees of the second respondent. The nineteenth respondent is the secretary of the Fund an is not a trustee of the Fund. By order date 12-2-1981, this Court dismissed the writ petition against respondents 5, 6, 8 and 10 because there was a failure on the part of the petitioners to pay the requisite batta for service of notice on the said respondents.

2. In this writ petition we are not very much concerned with the details of the constitution of the Fund and the contribution thereto by the employees of the second respondent. The Fund gets invested as per Regulation 11, which reads as follows :

'11. All moneys of the Fund except sums withdrawn under Regulations 14, 15 and 17 shall be deposited in the Bank in an account styled 'The Trustees of the State Bank of Bikaner and Jaipur Employees Provident Fund' or invested by the Trustees in any securities for the time being authorised under the Indian Income-Tax Act, 1961 and the Indian Trust Act, 1988 and the Rules made thereunder in respect of the investment of money of a Provident Fund recognised under the Indian Income Tax Act, 1961.'

In the present writ petition, we are concerned with the moneys of the Fund deposited with the second respondent. So far as such moneys deposited with the second respondent are concerned, Regulation 12 is relevant with reference to the payment of interest and it reads as follows :

'12. (1) The Bank shall pay on all moneys of the Fund held by it compound interest with half-yearly rests at the rate fixed in accordance with sub-regulation (2).

(2) The account of each member will be credited with interest on the amount standing to his credit at a rate which shall be fixed by the Trustees at the end of each year and which shall be the equivalent of the average yield to redemption throughout the year of rupee securities of the Government of India of approximately 20 years maturity rounded off to the nearest one-half per cent above; such interest shall be calculated to the nearest quarter rupee on the monthly products of each member's account and shall be applied to the account half-yearly as on 31st March and 30th September.'

According to the second respondent, the rate of interest payable on moneys of the Fund deposited with the second respondent ought to have ranged between 5 per cent an 6 per cent during the period from 1-10-1969 to 31-3-1976 as per sub-regulation (2) of Regulation 12 and yet, the second respondent had been paying interest on such deposits at staff rates which ranged between 6 per cent and 11 per cent, which was not the permissible rate and neither under the regulation nor under the contract governing investments, the second respondent is bound in pay interest higher than that provided. By virtue of crediting the Fund with interest at the rates ranging from 6 per cent to 11 per cent, the amount of over Rs. 50 Lakhs now in dispute got credited to the Fund by mistake and this mistake has got to be rectified and according to the second respondent, which has filed an affidavit after the writ petition was heard in part, the amount has been withdrawn on 16-7-1976 by the trustees of the Fund and debited to the current account with the Public Park Bikaner Branch of the second respondent Bank on the said date and the aforesaid amount was later, on 23-12-1976, credited by the second respondent to its sundry deposit account, in which account the said amount lies as on date. The nineteenth respondent, the Secretary in charge of the Fund had written on 6-7-1976 to the Branch Manager of the Public Park Bikaner Branch of the second respondent, stating that the amount in dispute, which is alleged to represent the excess payment of interest for the period 1-10-1969 to 31-3-1976 could be debited to the Fund's current Deposit credited to the Bank's income account. The second respondent circulated the papers mentioning the agenda for the meeting of the trustees of the Fund to be held on 20-9-1976 at Bombay and Item 3 of the agenda reads as follows :

'3. To approve the refund of excess interest received by the Trustees to the State Bank of Bikaner and Jaipur on the term deposits of the Fund.'

The case of the petitioners is that no exception could be taken to the interest credited to the Fund and a proper interpretation of Regulations 11, 12 and 18 will amply bear out that there is no prohibition for the payment of interest at a rate higher than the one provided under sub-regulation (2) of Regulation 12, and the interest having had been credited at a specified rate, it is not open to the second respondent, admittedly at the instructions of the first respondent, to recover the alleged excess payment of interest and hence the proposed resolution to be passed at the meeting to be held on 20-9-1976 or on another date should not be countenanced and the respondents should be restrained from agreeing to, approving or ratifying such resolution.

3. The contest of the respondents rests on a five-fold basis - Mr. G. Ramaswami, learned counsel appearing for the second respondent, would first state that the writ petition, as laid down by the petitioners, one being an association and the other an individual employee, is not maintainable and redress and relief as sought for cannot be granted by this Court. In support of this submission, the learned counsel draws my attention to three pronouncements of this Court. The first one is that of Ismail, J., as he then was, in N. A. District Pawn Brokers' Association v. Secretary to Government of India : (1975)1MLJ290 . There, the learned Judge observed as follows :

'It is well-established that only a person whose rights are alleged to have been threatened or transgressed or on whom obligations are imposed by any statute can approach this Court invoking the jurisdiction of this Court under Art. 226 of the Constitution of India. It is not the case of any of these Associations that the Association as such is carrying on business of pawn broker and, therefore, the said Association as such has been called upon to discharge any obligation or perform any duty imposed by the Gold Control Act. Therefore, the said Associations cannot invoke the jurisdiction of this Court under Art. 226 of the constitution of India.'

4. The second judgment is that of Kailasam, J., as he then was, in C. I. Kannan v. E. S. I. Corporation, : (1968)ILLJ770Mad , where the learned judge held that the petition by a federation on behalf of the workers is not maintainable and each of the persons aggrieved should file a separate petition. A similar view has been expressed by a Division Bench of this Court, consisting of Ismail, C.J., and Sathar Sayeed, J., in M. Ramaswami v. Government of Tamil Nadu (W.A. No. 472 or 1976-judgment, dated 11-8-1980).

5. In contrast, Mr. B. R. Dolia, learned counsel appearing for the petitioner, relies on two pronouncements of the Supreme Court. The first one is the case of F.C.K.U. (Regd), Sindri v. Union of India : (1981)ILLJ193SC . There, the first petitioner was the union of the workers of the factory, the second petitioner was the President of the union and the other petitioners were the workers employed in the factory. The following observations do support the stand of the learned counsel for the petitioners that a representative action in appropriate cases cannot be completely ruled out :

'But, we feel concerned to point out that the maintainability of a writ petition which is correlated to the existence and violation of a fundamental right is not always to be confused with the locus to bring a proceeding under Art. 32

These two matters often mingle and coalesce with the result that it becomes difficult to consider them in watertight compartments. The question whether a person has the locus to file a proceeding depends mostly and often on whether he possesses a legal right and that right is violated. But in an appropriate case, it may become necessary in the changing awareness of legal rights and social obligations to take a broader view of the question of locus to initiate a proceeding be it under Art. 226 or under Art. 32 of the Constitution. If public property is dissipated, it would require a strong argument to convince the Court that representative segments of the public or at least a section of the public which is directly interested and affected would have no right to complain of the infraction of public duties and obligations.'

6. A much more pragmatic view has been expressed by Krishna Iyer, J., in A.B.S.K. Sangh (Rly.) v. Union of India, : (1981)ILLJ209SC and it reads as follows :

'A technical point is taken in the counter-affidavit that the first petitioner is an unrecongnised association and that, therefore, the petition to that extent, is not sustainable. It has to be overruled. Whether the petitioners belong to a recognised union or not, the fact remains that a large body of persons with a common grievance exists and they have approached this Court under Art. 32. Our current processual jurisprudence is not of individualistic Anglo-Indian mould. It is broad-based and people-oriented, and envisions access to justice through 'class actions', 'public interest litigation', and 'representative proceedings'. Indeed, little Indians in large numbers seeking remedies in Courts throught collective proceedings; instead of being driven to an expensive plurality of litigations is and affirmation of participative justice in our democracy. We have no hesitation in holding that the narrow concept of 'cause of action' and 'person aggrieved' and individual litigation is becoming obsolescent in some jurisdictions. It must fairly be stated that the learned Attorney General has taken no objection to a non-recognised association maintaining the writ petitions.'

7. Keeping in trend with the pronouncements of the Supreme Court, It is not possible to throw out the writ petition at the threshold itself on the sole ground that it has been filed by an association of employees, without going into the merits' of the other contentions. Even otherwise, the second petitioner is an individual employee and he must be deemed to be directly interested in and affected by the proposed action of the respondents. Besides the first petitioner is a registered trade union, and it is stated that it has got membership of about 5,000, who are all employees of the second respondent all over India. It cannot be state that the rights of its members would not be affected by the proposed action of the respondents. The writ laid by the first petitioner, as representing a large body of employees of the second respondent whose rights and interests are likely to be affected, must be held to be competent. Representative actions even in writ jurisdiction cannot be thrown out on the simple ground that the body which represents the cause of its members on roll is not by itself affected. It would suffice the purpose if the rights of its members are affected; and then, as observed by the Supreme Court, collective proceedings are permissible instead of driving each individual employee affected to file an independent writ, which would result only in plurality of litigation on the common question. The Supreme Court was prepared to countenance a non recognised association maintaining a writ petition. As observed earlier the first petitioner is a registered trade union and it can legitimately, as representing its members, employees of the second respondent, give vent to their grievances and seek redress and relief, as representing their cause.

8. The second contention urged by the learned counsel for the second respondent is that respondents 3 to 9 are private individuals and merely because respondents 3 to 18 happen to be trustees of the Fund and the nineteenth respondent happen to be the secretary of the Fund, they cannot become statutory authorities or 'other authorities' so as to be amenable to writ jurisdiction. It is further pointed out that respondents 1 and 2 will not participate in the meeting in which the proposed resolution is to be passed and hence the prayer in the writ petition, projected against the said respondents, cannot be countenanced. Learned counsel for the second respondent would further submit that the trustees do not discharge any statutory duty or obligation and a writ of mandamus as prayed for in the present case is misconceived. To advance this submission of his, learned counsel for the second respondent relies on the judgment of the Supreme Court in Lekhraj v. Dy. Custodian, Bombay : [1966]1SCR120 , where it has been held that a writ of mandamus may be granted only in a case where there is a statutory duty imposed upon the officer concerned and there is a failure on the part of that officer to discharge that statutory obligation and the chief function of the writ is to compel the performance of public duties prescribed by statute and to keep the subordinate Tribunals and officers exercising public functions within the limits of their jurisdiction; any duty or obligation falling upon public servant out of a contract entered into by him as such public servant cannot be enforced by the machinery of writ under Art. 226 of the Constitution of India.

9. Learned counsel for the second respondent also draws my attention to another judgment of the Supreme Court in Praga Tools Corporation v. Imanual, : (1969)IILLJ479SC In that case, a company registered under the Companies Act entered into an agreement with the workmen's union with regard to retrenchment of the workmen and some of the affected workmen filed a writ petition under Art. 226 of the Constitution of India, praying for a writ of mandamus against the company restraining it from giving effect to the said agreement. The single Judge dismissed the petition on merits. On appeal, the Division Bench held that the company being one registered under the Companies Act and not having any statutory duty or function to perform was not one against which a writ petition for mandamus or any other writ could lie. The Division Bench, however, held that though the writ petition was not maintainable, it could grant a declaration in favour of three of the petitioners that the impugned agreement was illegal and void. The competency of the High Court to make such a declaration was challenged by the company in appeal before the Supreme Court. The Supreme Court upheld the view of the Division Bench that no writ petition for mandamus of an order in the nature of mandamus could lie against the company. But, the Supreme Court opined that the High Court was in error in granting the declaration as it did. The following observations in the judgment of the Supreme Court do sufficiently indicate that a writ of mandamus can issue to an official to carry out duties and honour obligations placed on him by statutes constituting him and governing his functioning;

'But it is well-understood that a mandamus lies to secure the performance of a public or statutory duty in the performance of which the one who applies for it has a sufficient legal interest. Thus, an application for mandamus will not lie for an order of reinstatement to an office which is essentially of a private character nor can such an application be maintained to secure performance of obligations owned by a company towards its workmen or to resolve any private dispute ................. Therefore the condition precedent for the issued of mandamus is that there is ins one claiming it a legal right to the performance of a legal duty by one against whom it is sought. An order of mandamus is, in form, a command directed to a person corporation or an inferior tribunal requiring him or them to do a particular thing therein specified which appertains to his or their office and is in the nature of a public duty. It is, however, nor necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue, for instance, to an official of a society to compel him carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporation to carry out duties placed on them by the statute authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purposes of fulfilling public responsibilities.'

10. P. A. Chowdhary, J, of the Andhra Pradesh High Court, in T. Gattiah v. Commissioner of Labour : (1981)IILLJ54AP , went to the extent of holding that a writ petition is maintainable against private management for the enforcement of its statutory duties under Chapter V-A of the Industrial Disputes Act. It is not necessary to go to that extreme and it would be in order and in consonance with the view expressed by the Supreme Court to hold that whenever a body is constituted by statutes or by statutory regulations, the duties such a body per forms and the obligations such a body discharges cannot but be viewed as statutory duties and obligations and a writ of mandamus can legitimately issue to compel such a body to carry out such duties and honour such obligations.

11. The second respondent is a subsidiary of the first respondent. Section 63(1) of the act empowers the State Bank of India, with the approval of the Reserve Bank of India, to make in respect of a subsidiary bank the regulations not inconsistent with the Act and the Rules made thereunder, providing for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act. The Regulations have come to be formulated only pursuant to the powers conferred by S. 63 of the Act. The preamble to the Regulations, which reads as follows, makes the position clear :

'In exercise of the powers conferred by S. 63 of the State Bank of India (Subsidiary Banks) Act, 1959 (No. 38 of 1959), the State Bank of India, with the approval of the Reserve Bank of India and in consultation with the Board of Directors of the State Bank of Bikaner and Jaipur hereby makes, in supersession of the Bank of Bikaner Ltd, Staff Provident Fund Regulations and the Bank of Jaipur Ltd., Employees Provident Fund Rules the following regulations, which shall be known as the State Bank of Bikaner and Jaipur Employees' Provident Fund Regulations, 1969. They shall come into force with effect from the 1st October, 1969.'

Regulations 3, 4 and 5 should also be noted in this context and they stand extracted as follows :

'Trustees

3. The Fund shall be vested in Trustees who shall be the Directors of the Bank together with not more than six members of the Fund to be nominated by the Board of Directors of the Bank to represent, as far as possible, all categories of staff provided however that atleast one fourth of the total number of Trustees shall be members of the Fund each of whom is also a 'workman'. the Board of Directors shall have the authority to replace any Trustee so nominate by them.

Meetings of the Trustees

4. At every meeting of the Trustees, the Chairman of the State Bank of India, and if for any reason he is unable to be present at a meeting, a director authorised by the Chairman in writing in this behalf and in the absence of such authorisation any Trustee elected by the Trustees present, from among themselves, shall be the Chairman of the meeting. The presence of at least three Trustees, of whom one shall be a director, and another a member of the Fund shall be necessary to form a quorum for the transaction of business.

Each Trustee shall have one vote and in case of equality of votes, the Chairman of the meeting shall have a casting vote.

Committee

5. The Trustees may appoint a Committee from their members of whom at least one shall be a member of the Fund, to carry on the ordinary business of the Fund including sanctioning of payments to members two Trustees shall form a quorum of the Committee'.

A reading of the other regulations also leaves no room for doubt that the Trustees of the Fund have come to be constituted by a statutory scheme and their functioning as such is circumscribed by statutory regulations. The Trustees cannot be deemed to be private individuals when they deal with and administer the Fund. Their duties and obligations are referable only to their functioning under the statutory regulations. If any action of theirs does not purport to protect the interests of the members of the Fund, then definitely this court can be called upon to intervene and issue the appropriate writ to safe-guard the interests of the employees who stand to be affected by such action of the body of trustees. Such being the factual position, it is not possible to discountenance the prayer of the petitioners of for the issue of a writ of mandamus on the second contention urged by the learned counsel for the second respondent.

12. The third and the fourth contentions putforth by the learned counsel for the second respondent can be dealt with together. It is urged that the entries relating to transfer of the amount representing the alleged excess interest credited have been made even on 6-7-1976 and the debit has also been made and the amount now stands credited to the sundry deposit account of the second respondent with effect from 23-12-1976. As such, the learned counsel for the second respondent would submit that the prayer in the writ petition cannot be granted. Supplementing this contention, learned counsel would further advance his argument by stating that the petitioners practically ask for a declaratory relief which, according to the learned counsel, cannot be granted by this Court in writ jurisdiction, and the view of the learned counsel is that on the facts of the case, a suit alone is competent. He draws may attention to certain averments in the affidavit filed in support of the writ petition, and states that the petitioners themselves are aware that the entries have been carried out and the prayer in the writ petition, if granted, would amount to a grant of a money decree in favour of the petitioners. Counteracting this submission of the learned counsel for the second respondent, Mr. B. R. Dolia, learned counsel for the petitioners, would submit that irrespective of carrying out of the entries, the prayer in the writ petition could be maintained and bare entires could not clothe the second respondent with power to touch, deal with and disburse the amount in question without the resolution of the body of trustees. Taking note of this submission of the learned counsel for the petitioners, this Court put a specific question to the learned counsel for the second respondent as to whether the second respondent could deal with the moneys without the ratification now sought for by the proposed resolution of the body of trustees. To this, learned counsel for the second respondent could not answer one way or the other. This clearly indicates the lack of confidence on the part of the second respondent as to the propriety and legality of what has been done, viz, carrying out of the entries in the books. Admittedly, the entries have been made on the basis of the letter of the nineteenth respondent, who is the Secretary of the Fund. It cannot be urged that he was competent to give such instructions in the absence of the backing of the appropriate resolution of the body of trustees. The administration of the Fund vests with the trustees and that is why the appropriate resolution by the body of trustees is being anxiously coveted. Learned counsel for the petitioners says that these technicalities need not stand in the way of the Court granting the writ of mandamus as prayed for if there is a warrant for it on merits because, according to the learned counsel, the entries will remain ineffective and the petitioners would be content to take the issue of a writ of mandamus as prayed for, that would protect their rights and interests and would serve their purpose.

13. The contentions that a declaratory relief cannot be granted in a Writ Petition and such a relief could be granted only in a suit cannot be countenanced by this Court. In this context, the following observations of Ramaprasada Rao, C.J., in Ramaswamy v. Vasantha Pai : (1979)1MLJ94 can be taken note of and that provides a complete answer to the contention of the learned counsel for the second respondent :

'As regards the contention that a declaratory relief cannot be granted in a writ petition and that such a relief could be granted only in a suit, it is well established by now, that in exercise of the powers under Art S. 32 or 226 the Courts are not fettered by the procedure and technicalities of the writs in English law and the jurisdiction of our Courts is wide enough even to make a declaratory order, if that is the proper relief to be given to the aggrieved party vide Kochunni v. State of Madras 1959 SCJ 858 C. K. Allen in his book on 'Law and Orders', III Edn. at page 227 says that declaration as a from of action is neither supervisory, like the prerogative orders, nor appellate, though it partakes of the nature of both forms of remedy, that the action is peculiar in form, since it is not usually a lis inter partes enforceable by execution and that it merely declares rights and liabilities on existing state of facts. At page 229 the author says : 'Decisions of non-statutory and even statutory tribunals are subject to declaration whether or not (semble) other remedies are available; except that when legislation has prescribed a complete course of procedure, litigation and appeal, recourse cannot be had to declaration in addition. A question of status, e.g., nationality or of members of the House of Commons or of a local authority may be established by declaration.'

14. In Hindustan Sugar Mills v. State of Rajasthan, : AIR1981SC1681 , the Supreme Court has gone to the extent of stating that the Central Government should honour its legal obligation arising out of contract and not drive the citizen concerned to file a suit for recovery of the amount and that in aldemocratic society governed by the rule of law, it is the duty of the State to do what is fair and just to the citizen, and the State should not seek to defeat the legitimate claim of the citizen by adopting a legalistic attitude but should do what fairness and justice demand. If what is sought to be done by the respondents is unsustainable in law and cannot be supported under the Regulations, this Court can perfectly protect the interests of the petitioners by issuing the writ of mandamus prayed for. That will take us to the fifth aspect of the case, which is on merits.

15. Under Regulation 11, all moneys of the Fund except sums withdrawn under Regulations 14, 15 and 17, about which we are not concerned, shall be deposited with the second respondent in an account styled 'The Trustees of the State Bank of Bikaner and Jaipur Employees Provident Fund' or invested by Trustees in any securities for the time being authorised under the Indian Income-Tax Act, 1961 and the Indian Trusts Act, 1882 and the Rules made thereunder in respect of the investment of money of a Provident Fund recognised under the Indian Income-Tax Act, 1961, The Regulations came into force with effect from 1-10-1969. There is no dispute that even earlier to the coming into force of the Regulations large amounts of the Fund, running to several lakhs, were invested by the trustees in long term fixed deposits issued by the Public Park Bikaner branch for the second respondent and the trustees also passed resolutions for such purposes. The case of the second respondent is that with effect from 1-10-1969, the Regulations would govern the situation and the rate of interest payable on moneys deposited with the bank by the Fund would have ranged between 5 per cent and 6 per cent during the period from 1-10-1969 to 31-3-1976 but, as against this, the second respondent has been paying interest at staff rates which ranged from 6 per cent to 11 per cent. According to the petitioners, under Regulation 12(1) the second respondent is duty bound to pay interest on the moneys of the Fund held by it at the rate fixed in accordance with Regulation 12(2) and while the second respondent cannot pay any interest less than the interest fixed under Regulation 12(2), there is no prohibition under Regulation 12 restraining the second respondent from paying a higher rate of interest as is paid to other customers and constituents on long term fixed deposits. As against this, the second respondent wants to maintain that Regulation 12 prohibits payment of interest at a rate higher than that to be determined in the manner laid down under Regulation 12(2). The moneys of the Fund, as stated above, stood invested in long term fixed deposits with the second respondent. Apart from such deposits, it is the case of the petitioners, the moneys of the Fund were invested in other avenues also and to this effect a supplementary affidavit has been filed on behalf of the petitioners. Regulation 12(1), as could be seen from the extract supra, speaks about payment of interest on all moneys of the Fund held by the second respondent at the rates fixed in accordance with Regulation 12(2) Mr. B. R. Dolia, learned counsel for the petitioners, further states that the trustees have not fixed the rate of interest at the end of each year as contemplated under Regulation 12(2). It is true, such a plea has not been expressed in the affidavit filed in support of the writ petition. Equally so, it is not stated on behalf of the second respondent that the rate of interest was fixed by the trustees at the end of each year. The controversy need not necessarily be solved by adverting to this aspect. The fact remains that the rate of interest, if paid as per the ratio set out under Regulation 12(2), would be less than the rate of interest actually paid on the moneys of the Fund held in long term fixed deposits by the second respondent. Then the questions as to whether Regulation 12(1) inhibits the payment of interests at a rate higher than the one permissible under Regulation 12(2). A bare reading of Regulation 12 does not explicitly convey any such inhibition. It does not say that the second respondent shall not pay interest at a rate higher than the one to be computed under Regulation 12(2). Regulation 12(2) lays down that the account of each member will be credited with interest on the amount standing to his credit at the rate to be computed as per the formula set out therein. But, that does not prohibit payment of interest on the moneys of the fund held by the second respondent at a higher rate, Regulation 18 contemplates utilisation of the surplus income of the Fund and it reads as follows :

'18. On any member ceasing to be a member of the Fund any amount not payable to him or to the Bank, under the provisions of these Regulations, shall be forfeited to the Fund.

All sums so forfeited to the Fund, due to any reason whatsoever, all profits earned at any time on the Sale of investments and all surplus income not allocated for payment of interest as provided under these Regulations shall be transferred to a separate account and shall be used and applied by the Trustees primarily as a reserve against any loss to the Fund on the sale or in consequence of any depreciation of investments and secondly, for the benefit of the members and/or retired members and/or dependents of the deceased members and/or any such persons collectively and/or for such purpose connected with the Fund in such manner as the Trustees shall in their absolute discretion thin fit.'

Hence, it is not possible to countenance an argument that the Fund as such cannot be allowed to earn more interest than what is permissible to a member. It is admitted that the accounts of a large number of employees were credited with a higher rate of interest and it has been proposed to condone the payment of such interest for the years from 1969 to 1973. The explanation offered by the second respondent is that such large number of employees had already retired or ceased to be in the service of the second respondent and since recovery at this stage is not possible it was proposed to the trustees to approve as a special case the a payment of such higher rate of interest. This, to a very great extent, indicates that there is no hard and fast rule adopted by the second respondent with reference to the payment of interest concerning the amounts of the Fund and its members. Legitimately, the petitioners advance a case that there is no statutory prohibition for the payment of interest at a rate higher than the one contemplated under regulation 12(2). It cannot be stated that the second respondent did something which stood prohibited by the statutory Regulations and on that account a mistake has crept in, which required ratification. After all, the Fund has earned interest at a rate permissible on long term fixed deposits and there is no justification for reopening the matter on the ground of mistake.

16. As stated above, it is not possible to spell out any statutory prohibition with regard to payment of interest on the moneys of the Fund held by the second respondent on long term fixed deposits at a rate over and above that contemplated under regulation 12(2). If the second respondent has paid such interest, it may not be permissible for it to re-claim it on the ground of mistake even if such an action is to be taken at the instance of the first respondent. The surplus had become available to the Fund for the purpose of the same being utilised as contemplated under Regulation 18. The case of the petitioners is that a sub-committee was constituted, including the nineteenth respondent, for suggesting welfare schemes to put before the trustees and an item to that effect was included in the agenda for the trustees meeting to be held on 19-8-1975 for working out welfare schemes. But, unfortunately, the meeting could not be held and it got postponed. The very move on the part of the second respondent to take away the benefit of interest already accrued to fund in which benefit is available for the purpose of working out its welfare schemes as contemplated under regulation 18 being an incompetent and unsustainable one, it is not permissible for the trustees of the Fund or any office bearer of the fund to give sanctity to this action by passing any resolution to that effect. Viewed from this angle, the grievance of the petitioners appears to be legitimate and tenable. The trustees of the Fund are bound to act in the interests of the members under the Regulations. The Regulations by themselves do not lay down a prohibition for payment of interest on the moneys of the Fund held by the second respondent at rate over and above the rate contemplated under Regulation 12(2). Regulation 12(1) could only be construed to compel the second respondent to pay interest at a rate not less than that contemplated under Regulation 12(2) and it cannot be construed as laying down a rule prohibiting the second respondent from paying interest on the moneys of the Fund held by it at a rate higher than that contemplated under Regulation 12(2). If the trustees of the Fund are to pass any such resolution as notified in the agenda for the meeting to be held on 20-9-76, that would not be in consonance with the duties and obligations which they are bound to discharge in the interest of the members under the Regulations. After all the trustees administer the fund and they cannot act in derogation of the rights and interests of its members. Any such proposed action by the trustees of the Fund must have the sanction of the Regulations. In the instant case such a sanction is lacking and on the other hand, there is a misconception and definitely, that would amount to a breach of the duties and obligations of the trustees, who are constituted by the statutory Regulations. It is stated by the petitioners that respondents 1 and 2 are behind this process of passing the proposed resolution and this not being denied by the second respondent. On the other hand, the second respondent justifies and supports the passing of such a resolution.

17. The above factors compel me to countenance the prayer in the writ petition. Accordingly, the petition is allowed. There will, however, be no order as to costs.


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