REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.5570 OF 2014

Fed. of Bank of India Staff Unions & Anr.              ….Appellant(s)

VERSUS

Union of India & Anr.            …Respondent(s)

J U D G M E N T

Abhay Manohar Sapre, J.

1) This appeal is directed against the final

judgment and order dated  08.04.2011  passed  by

the High Court of Bombay  at Goa in  Writ Petition

(c) No.618 of 2010 whereby the High Court

dismissed the writ petition filed by the appellants

herein.

2) The appeal involves a short point as would be

clear from the facts stated infra.

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3) The appellants herein are the writ petitioners

and the respondents herein are the respondents in

the writ petition filed in the High Court of Bombay

at Goa, out of which this appeal arises.

4) Appellant No.1 is an Association of various

Staff Unions of the employees working in the Bank

of India ­ respondent No.2 herein. Appellant No.1 is

a registered Association under the Trade  Unions

Act, 1926.   Appellant No.2 is an employee of

Respondent No.2 ­ Bank and at the relevant time

was working as Deputy General Secretary of

appellant No.1­ Association.

5) The Banking Companies (Acquisition and

Transfer of Undertakings) Act, 1970/1980

(hereinafter referred to as “the Act”) deals with

Banking Companies and their internal affairs.

Section 9 of the Act empowers the Central

Government to make scheme after consultation with

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the Reserve Bank of India for carrying out the

provisions of the Act.  

6) Section 9 (3) of the Act provides for

composition of Board of Directors and also provides

as to  who  can  be  nominated  as  Directors in the

Board of Directors. Clauses (a) to (i) of sub­section

(3) of Section 9 of the Act sets out various categories

from which one Director from each of such

categories is nominated in the Board of Directors.

Clause(e) deals with a category of

workman/employee Director whereas clause(f) deals

with a category of officer/employee Director for their

nomination in the Board of Directors.   

7) In exercise of powers conferred under Section

9(1) of the Act, the Central Government has framed

a Scheme called­The Nationalized Banks

(Management and Miscellaneous provisions)

Scheme, 1970.

8) Chapter II of the Scheme deals with Board of

Directors.   Clause 3 of the Scheme deals with the

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constitution of the  Board  whereas  Clause  3(2)(iii)

deals with disqualification of a workman/employee

for being nominated as a Director.  

9) So far as the procedure relating to the

nomination of a Director out of the officer/employee

category falling in clause(f) of Section 9(3) of the Act

is concerned, it is provided in the third schedule to

the Scheme.

10) So far  as the case  at  hand is concerned, it

relates to the  nomination of a  Director from the

workman/employee category falling in clause (e) of

Section 9(3) of the Act and also relates to his

disqualification for being nominated as a Director in

that category.

11) On 28.05.2009, the Management of the Bank

(respondent No.2) called upon the appellants to

furnish a panel of three workers/employees for

being nominated as a Director in order of preference

in the category of “Workman Director” in the Board

of Directors.  

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12) The appellants, in compliance with the request

made  by respondent  No.2, sent a panel of three

names of the workers/employees in order of

preference to the Central Government by their letter

dated 08.06.2009.  These names were ­ Mr. Dinesh

Jha “Lallan”, Mr. Ram Gopal Sharma and Mr.

Pranab Kumar Roy Chowdhary.

13) The Secretary, Government of India, by letter

dated 10.10.2009, however, informed the appellants

that since all the three workers/employees, whose

names  were sent, have less than three years of

residual service before their superannuation,

therefore it is not possible to nominate any of the

workers/employees as Director in the Board of

Directors. The appellants were accordingly

requested to send a fresh panel of names to enable

the Central Government to nominate one, out of the

three new names, as Director in the Board of

Directors.

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14) The appellants instead of sending the fresh

three names submitted their representation on

21.10.2009 and requested the Central Government

to re­consider the matter afresh and nominate any

one out of  the three names already sent by them

vide their letter dated 08.06.2009.  The parties then

went on exchanging the letters on this subject, but

the Central Government did not accede to the

request  made by the appellants and insisted on

them to send fresh names of the

workers/employees.

15) It is with these background facts, the

appellants felt aggrieved and filed a writ petition in

the  High  Court of Bombay at  Goa. In that writ

petition, the appellants (writ petitioners) sought

quashing of the communication of respondent No.1

dated  10.10.2009  by  which respondent  No.1  had

rejected the panel of three names sent by them vide

their letter dated 08.06.2009.  A writ of mandamus

was also prayed commending the respondents to

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consider the nomination penal sent by the

appellants vide their letter  dated  08.06.2009  and

nominate one worker/employee as Director  out of

the three names sent by them in the Board of

Directors.  

16) In the alternative, the appellants  also sought a

declaration that clause 3 (2) (iii) of the Scheme,

1970 be struck down as being  ultra vires  the

Constitution.  

17) The respondents opposed the writ petition by

filing their counter affidavit.   The respondents

placed reliance on the provisions of the Act and the

Scheme framed thereunder and contended inter alia

that the challenge made in the writ petition has no

factual or/and legal basis.

18) By the impugned order, the High Court

dismissed the writ petition finding no merit therein,

which has given rise to filing of this appeal by way

of special leave by the unsuccessful writ petitioners

­ Union of workers/employees in this Court.

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19) Heard Mr. Sidharth Bhatnagar, leaned counsel

for the appellants and Mr.Pranab Kumar Mullick &

Ms. Bhakti Pasrija, learned counsel for the

respondents.

20) Having heard the learned counsel for the

parties at length and on perusal of the record of the

case, we find no merit in this appeal.  

21) At the outset, we find that so far as the

challenge to the impugned communication dated

10.10.2009 and enforcement of the appellants’

letter dated 08.06.2009, i.e. (Relief Nos.(a) and (b) in

the writ petition) is concerned, both the reliefs have

been rendered infructuous.  

22) It is for the reason that the employees/workers

whose names were recommended by appellant No.1

in their letter  dated 08.06.2009 have  retired  long

back. Not only that, on their retirement, many other

persons were nominated as Director out of the

category of worker/employee in the Board of

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Directors of the  Bank.   This relief, therefore, no

longer survives for consideration.

23) Now the only question, which survives for

consideration in this appeal, is regarding the legality

of  Clause  3(2)(iii) of the  Scheme,  1970 ­  whether

Clause 3(2)(iii) of the Scheme is legal or  ultra vires

the Constitution. The High Court, in the impugned

order, has held that the Clause 3(2)(iii) of the

Scheme is legal and valid.   

24) The challenge to the Clause 3(2)(iii) of the

Scheme is essentially based on one argument.

According to the appellants, there does not appear

to be any rational or basis in providing two different

types of disqualifications­one for

workers/employees and the other for the

officers/employees while considering their cases for

nomination as Director from their respective

categories.  

25) In other words, the submission is that the

disqualification provided in Clause 3(2)(iii)(b) of the

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Scheme  for the  worker/employee  category is only

confined to their category. No such similar

disqualification is made applicable to the

officer/employee category.

26) This, according to the appellants, has created

discrimination between the two categories of the

Directors without any reasonable basis and,

therefore,   Clause 3(2)(iii) of the Scheme and

especially clause (b) thereof violates the principle

underlined in Article 14 of the Constitution of India.

27) We find no merit in this submission for more

than one reason.  

28) Section 9(3)(e) and (f) of the Act and Clauses

3(2)(i),(ii) and (iii) of the Scheme are relevant for the

disposal of this appeal which read as under:

“Section 9(3)(e) and (f) of the Act

9.  Power of Central Government to make scheme­(1) The Central Government may, after consultation with the Reserve Bank, make a scheme for carrying out the provisions of this Act. (2) ……….

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(3) Every Board of Directors of a corresponding  new  bank, constituted  under any scheme made under sub­section (1), shall include­ (a)  ……… (b)  ……… (c)  ………. (e)  one director, from among such of  the

employees of the corresponding new bank who are workmen under clause (s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947), to be nominated by the Central Government in such manner as may be specified in a scheme made under this section;

(f)  one director, from among the employees of the corresponding new bank who are not workmen under clause (s) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947), to be nominated by the Central Government after consultation with the Reserve Bank;  

Clause 3(2)(i),(ii) and (iii) of the Scheme

3. Constitution of the Board­(1) The Central Government shall  by notification  in the Official Gazette, constitute the Board of a Nationalised Bank.  

(2) (i) The director referred to in clause (e) of sub­section (3) of section 9 of the  Act, shall be nominated by the Central Government from out of a panel of three such employees furnished to it by the representative union, within a date to be specified by the Central Government, which date shall not be more than six weeks from the date of communication made by the Central Government, requiring the

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representative union to furnish the panel of names:

Provided that where the Central Government is of the opinion that owing to the delay which is likely to occur in the verification and certification of any union or federation as a representative union it is necessary in the interest of the Nationalised Bank so to do, it may nominate any employee of the Nationalised Bannk, who is a workman, to be a director of that Bank.

(ii) (a)Where there is no representative union,  to represent the workman of  a Nationalised Bank, or

(b) where such representative union being in existence  omits or fails to furnish any panel of names within the specified date, or

(c) where all the persons specified in the panel furnished by the representative union are disqualified whether under item (iii) of this sub­clause or under clause 10, the Central Government may, at its discretion appoint such workman of the Nationalised Bank, as it may think fit, to be a director of such bank.  

(iii) A workman of a Nationalised Bank shall be disqualified for being nominated as a director unless­

(a) he is and has been, serving for a continuous period of not less than five  years in the  Nationalised  Bank, and  

(b) he is of such age that there is no likelihood of his attaining the age of superannuation during his terms of office as director.”  

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29) It would be clear from a perusal of clauses (e)

and (f) of Section 9(3) of the Act that both the

categories of employees are different ­ one is

worker/employee category as defined under Section

9(3)(e) and the other is officer/employee category as

defined under Section 9(3)(f) of the Act. Second, it is

for the legislature to decide as to what qualifications

and disqualifications should be prescribed for

various categories of the employees for their

nomination on the post of Director.  Third, there lies

a  distinction  between the  worker and the officer.

The former, i.e., worker is defined under Section 2(s)

of the Industrial Disputes Act, 1947 and is governed

by  that  Act  whereas the latter, i.e.,  officer is  not

governed by the Industrial Disputes Act but is

governed by separate service rules.   Both these

categories of employees, therefore, cannot be

equated with each other and nor can be placed at

par for providing equal qualification or/and

disqualification for their nomination as a Director in

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the  Board of  Directors. Fourth,  Article  14  of the

Constitution applies  inter se  two equals and  not

inter se unequals. The case at hand falls under the

latter category and, therefore, reliance placed on the

principle enshrined under Article 14 of the

Constitution by the appellants is wholly misplaced.

Fifth, the nominee worker/employee has only a

right under the Act to be appointed as Director from

the category of worker/employee in terms of Section

9 (3)(e) of the Act provided the concerned nominee

whose name is recommended by the Union fulfills

the qualifications laid down in Clause 3(2)(iii) of the

Scheme but not beyond it.

30) Learned counsel for the appellants then

submitted that once the employee is nominated to

the Board of Directors­may be from different

categories specified under Section 9, then no

distinction should be  made between them while

prescribing the qualification and disqualification.  

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31) This  submission has also  no merit.  A mere

reading of Section 9(3) clause (a) to (i) would go to

show that the Board of Directors consists of persons

coming from different fields. There cannot,

therefore, be a uniform qualification or/and

disqualification for such persons.   Indeed, the

qualifications and disqualifications are bound to

vary from category to category and would depend on

the post, experience and the stream from where a

person is being nominated as a Director.  Moreover,

the qualification and disqualification has to be seen

prior to his/her becoming a Director and not after

his/her appointment as a Director.

32) In view of the foregoing discussion, we find no

good ground to interfere with the reasoning and the

conclusion arrived at by the High Court, which

rightly dismissed the appellants’ writ petition, and

upheld Clause 3(2)(iii) of the Scheme as being legal.

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33) The appeal is thus found to be devoid of any

merit.  It fails and is accordingly dismissed.

                      ………...................................J.      [ABHAY MANOHAR SAPRE]

  …...……..................................J.              [INDU MALHOTRA]

New Delhi; March 01, 2019

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