Case: Indian Bank Vs. K. Usha &amp; Another

3. The common appellant, Indian Bank, in this group of appeals has brought in challenge the judgment and orders of Division Benches of Madras High Court allowing writ petitions of the respondents concerned who are the heirs and legal representatives of deceased employees of Bank of Thanjavur Limited which was amalgamated with the appellant-bank with effect from 20th February 1990 in accordance with the Scheme of Amalgamation framed under Section 45 of the Banking Regulation Act, 1949 (hereinafter referred to as `the Act). The respondents concerned had sought compassionate appointments from the appellant-bank on the ground that they were the heirs and legal representatives of the deceased employees of Thanjavur Bank (hereinafter referred to as `the transferor bank) whose assets and liabilities were taken over by the appellant-bank, hereinafter referred to as `the transferee bank for the sake of convenience. The claim of the respondents for such appointments was based on an agreement entered into between the recognised Union of the employees of the transferor bank in the year 1982 with the Management of the transferor bank under Section 2(p) of the Industrial Disputes Act, 1947 (hereinafter referred to as `the I.D. Act). The said settlement was not arrived at during conciliation proceedings, hence it remained binding only on the parties to the said settlement, namely, the Union of employees of transferor bank on the one hand and the Management of the transferor bank on the other. As per the said settlement a scheme of compassionate appointment to be given to the eligible heirs of deceased employees of transferor bank who died in harness was evolved. The respondents contention was that the said settlement remained binding to the transferee bank as the successor bank which had taken over assets and liabilities of the transferor bank pursuant to the order of amalgamation. The appellant-transferee bank refused to entertain the said claims. That resulted in diverse writ petitions by the respondents before the High Court. The High Court took the view that the respondents were entitled to get the benefit of the said settlement which was binding not only on the transferor bank which was a party to the settlement but also on its successor-in-interest, namely, the appellant-bank and as the appellant-bank had rejected the request of the respondents by the impugned judgments, writs of mandamus were issued to the appellant-bank to grant appointments on compassionate ground to the concerned respondent-writ petitioners. Having obtained special leave to appeal under Article 136 of the Constitution of India these appeals have been moved by the appellant-bank challenging the aforesaid decisions rendered by the High.4. It may be stated that earlier seven Special Leave Petitions arising out of a common judgment of the Division Bench of the High Court in writ appeals confirming decisions of the learned Single Judge were taken up for consideration by this Court and while granting leave the prayer for stay was refused. We are informed that as there was no stay of the impugned orders of the High Court pending these appeals the respondents concerned have already been appointed to the respective posts which they are holding and are working as employees of the appellant-bank. However, it was brought to our notice by learned senior counsel for the appellant that the said appointments were given by the appellant subject to the result of these appeals and they will, therefore, have to abide by the present decision of ours.

Reasoning: 14. Learned senior counsel for the appellant in support of his first contention invited our attention to a three Judge Bench decision of this Court in the case of Canara Bank, Bangalore v. M.S. Jasra and others, 1992(2) SCC 484 for submitting that the schemes framed under the Act as per Section 45 of the Act must be given their full effect and they are comprehensive in nature. It must be kept in view that in the said decision this Court was not concerned with the examination of the question whether the successor bank, namely, the transferee-bank under the Scheme of Amalgamation had undertaken the liabilities of transferor-bank or not. The question in that case was that when the liabilities of the transferor bank in connection with the service conditions of its existing employees were taken over by the transferee-bank, would such taking over entitle the erstwhile employees of the transferor-bank to claim better rights from the transferee-bank than what they had already got by way of existing service conditions at the time of amalgamation. In that case Lakshmi Commercial Bank was amalgamated with Canara Bank. The erstwhile employees of the transferor bank claimed age of superannuation to be 60 years instead of 58 years which was the age of superannuation in the transferee- bank, namely, the Canara Bank. Rejecting such a claim it was held by this Court that as laid down by sub-section (5) of Section 45 the Scheme was to contain provisions in connection with the service conditions of the employees of the transferor-bank as laid down therein and such a scheme so framed under sub-section (4), therefore, may contain provisions for all or any of the matters specified in sub-section (5) so that it enables all or any of the specified matters to be provided in the scheme prepared under sub-section (4) and the matters specified in the several clauses in sub-section (5) do not automatically get incorporated in such scheme unless the scheme specifically includes any such matter. We fail to appreciate how the said decision can be of any assistance to the learned senior counsel for the appellant on the facts of the present case. If the scheme deals with a topic and if it is comprehensive enough then it would rule out any contrary provision found elsewhere and express provision of the scheme only has to be given effect to. In the facts of the present case as seen earlier, neither clause 2 nor clause 10 of the Scheme represents any provision regarding compassionate appointments to be given to the heirs of the erstwhile deceased employees of the transferor-bank. Hence there is no occasion for the said clauses of the Scheme to project any contrary express provision to override or to supersede the provisions contained in 2(p) Settlement which was binding on the transferor-bank and which if binding on the transferee-bank would remain operative to the extent benefit thereunder is available to the concerned claimants like the respondents herein. In the light of the relevant clauses of the Amalgamation Scheme, therefore, it is not possible to agree with the contention of the learned senior counsel for the appellant that no liability could be imposed on the appellant-bank so far as the claim of the respondents for compassionate appointments was concerned. The first contention, therefore, standsclearly laid down therein the provisions of the Act will not be in derogation of the Companies Act, 1956 or any other law for the time being in force save and except as expressly provided to the contrary in latter part of the Act. The latter part of the Act obviously brings in its sweep Section 45 and its various sub-sections. Therefore, if any of the provisions of Section 45 or its sub-sections had said anything expressly contrary in connection with the binding effect, on the transferee-bank, of erstwhile settlements entered into between the transferor-bank on the one hand and its the then existing employees through their Union on the other hand, the provisions of any other law for the time being in force which foisted such an obligation on the transferee bank would not remain operative and clicking. However, as seen earlier, no provision in the Act and especially in any of the clauses of Section 45 or even in any of the clauses of the Scheme of Amalgamation in the present case could be effectively pressed in service by the learned senior counsel for the appellant to cull out any express provision contraindicating the foisting of liability under the settlement arrived at under Section 2(p) of the I.D. Act by the transferor-bank with its erstwhile employees on the topic of compassionate appointment. Hence Section 2 of the Act had its full operation. Once Section 2 applied it brought in its wake Section 19 of the Specific Relief Act, 1963 which obviously is a law in force. Section 19 provides for the relief against parties and persons claiming under them by subsequent title and lays down, `Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against - (a) ... .. ... ... (b) ... ... ... (c) ... ... ... (d) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation. It, therefore, becomes clear that apart from Section 18 sub-section (3) of the I.D. Act the liability of the transferee-bank to meet the contractual obligation of the transferor-bank under the Settlement binding under Section 18(1) of the I.D. Act would remain squarely attracted by virtue of Section 19(d) of the Specific Relief Act read with Section 2 of the Act. This is the view taken by the High Court in the impugned judgments which remains well sustained on the conjoint operation of the 2(p) Settlement of 1982, Section 2 of the Act and Section 19(d) of the Specific Relief Act. The said legal effect flowing from the aforesaid statutory provisions is not contra-indicated by any express provisions in any part of the Act or in any part of Section 45 or for that matter in any of the clauses of the Scheme of Amalgamation. Consequently the appellant transferee-company which has emerged as an amalgamated company as a result of the amalgamation with the earlier company would be liable to meet the contractual obligations flowing from the settlement binding on the transferor-company and these contractual obligations which could have been specifically enforced against the transferor-company during the currency of the settlement under Section 2(p) read with Section 18(1) of the I.D. Act would get transmitted and foisted on the shoulders of the appellant transferee-company on the combined operation of Section 19(1)(d) of the Specific Relief Act and Section 2 of the Act. The second contention, therefore, has to be answered in the negative, in favour of the respondents and against thethis connection our attention was invited by learned counsel for the appellant to para 17 of the impugned judgment of the Division Bench which reads as underIn these matters, the applications of the writ petitioners have not been considered by the Bank and excepting in one case the learned Single Judge has directed such consideration of the applications by the Bank. We discussed the matter with learned counsel on both sides and suggested that the eligibility of the writ petitioners can be decided here itself if all the relevant facts are placed before us, as otherwise there may be a fresh crop of writ petitions, if ultimately the appellant-Bank rejects the applications or some of them on other grounds of non-eligibility, Counsel agreed to this course and placed all the facts before Court. We will consider the same in eachthe Division Bench of the High Court was invited by learned counsel for the appellant themselves to go into the question of merits of the eligibility of the respondents and once the High Court found that their claim was wrongly rejected by the appellant-bank and especially when the appellant-bank had not put forward the defence of non-availability of vacancies no fault could be found with the High Court when it issued mandamus to the appellant to grant appointments to the concerned respondents. Hence on the peculiar facts of this case the ratio of Hindustan Aeronautics (supra) cannot be of any assistance to the appellant. The third contention also, therefore, stands rejected.