FED. OF BANK OF INDIA STAFF UNIONS & ANR. versus UNION OF INDIA & ANR
[2019] 4 S.C.R. 135, Supreme Court of India, 2019
Outcome: Dismissed (Dismissed)
Segment: Ratio
A
B
C
D
E
F
G
H
135
FED. OF BANK OF INDIA STAFF UNIONS & ANR.
v.
UNION OF INDIA & ANR.
(Civil Appeal No. 5570 of 2014)
MARCH 01, 2019
[ABHAY MANOHAR SAPRE AND INDU MALHOTRA, JJ.]
The Nationalized Banks (Management and Miscellaneous
provisions) Scheme, 1970 – Appellant No.1 is the association of
various Staff Unions of the employees working in the Respondent
No.2-Bank – 1970 Scheme framed under the Banking Act – s.9(3)
of the Banking Act provides for composition of Board of Directors
as to who can be nominated as Directors in the Board of Directors
– Clause (a) to (i) of s.9(3), Banking 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 category of
workman/employee Director whereas clause(f) deals with category
of officer/employee Director – Clause 3(2)(iii) of the Scheme deals
with disqualification of workman/employee for being nominated as
Director – Respondent no.2 called upon the appellants to furnish
panel of three workers/employees for being nominated as Director–
Appellants sent panel of three names vide letter dtd. 08.06.09 –
Rejected vide letter dtd. 10.10.2009 – Appellants filed writ petition
in the High Court for quashing letter dtd. 10.10.2009 and
declaration that Cl.3 (2) (iii) of the Scheme, be struck down as
being ultra vires the Constitution – Dismissed – On appeal, held: So
far as the challenge to letter dtd. 10.10.2009 and enforcement of
appellants’ letter dtd.
08.06.2009, i.e. (Relief Nos.(a) & (b) in the
writ petition) is concerned, both the reliefs are rendered infructuous
as employees/workers whose names were recommended in letter dtd.
08.06.2009 have retired long back – Further, it would be clear from
Clauses (e) & (f) of s.9(3) of the Banking Act that both the categories
of employees are different – One is worker/employee category and
the other is officer/employee category – It is for the legislature to
decide as to what qualifications/disqualifications be prescribed for
various categories of the employees for their nomination on the
post of Director – Worker is governed by 1947 Act whereas the
officer is governed by separate service rules – Both these categories
[2019] 4 S.C.R. 135
135
A
B
C
D
E
F
G
H
136
SUPREME COURT REPORTS
[2019] 4 S.C.R.
of employees cannot be equated with each other, nor can be placed
at par for providing equal qualification or/and disqualification for
their nomination – Art.14 applies inter se two equals and not inter se
unequals – Present case falls under the latter category – High Court
rightly dismissed the appellants’ writ petition, upholding Clause
3(2)(iii) of the Scheme as legal – Trade Unions Act, 1926– Banking
Companies(Acquisition and Transfer of Undertakings) Act, 1970/
1980 – Industrial Disputes Act, 1947 – s.2(s) – Constitution of India
– Art.14.
Dismissing the appeal, the Court
HELD: 1.1  It would be clear from a perusal of clauses (e)
and (f) of Section 9(3) of the Banking Companies (Acquisition
and Transfer of Undertakings) Act, 1970/1980 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. 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.  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 the Board of
Directors. 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. 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 The
Nationalized Banks (Management and Miscellaneous provisions)
Scheme, 1970 but not beyond it. [Para 29][143-B-E]
A
B
C
D
E
F
G
H
137
1.2 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. 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.  [Paras 31-33][143-G, H;
144-A-B]
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5570
of 2014.
From the Judgment and Order dated 08.04.2011 of the High Court
of Bombay at Goa in Writ Petition (Civil) No. 618 of 2010.
Siddharth Bhatnagar, Sidharth Mohan, Ankit Kumar Yadav, T.
Mahipal, Advs. for the Appellants.
Pranab Kumar Mullick, Ms. Soma Mullick, Sebat Kumar Deuria,
Ms. Bhakti Pasrija, T. M. Singh (For Mrs. Anil Katiyar, Adv.) Advs. for
the Respondents
The Judgment of the Court was delivered by
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.
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
FED. OF BANK OF INDIA STAFF UNIONS v. UOI
A
B
C
D
E
F
G
H
138
SUPREME COURT REPORTS
[2019] 4 S.C.R.
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 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 sub-section (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 called-The 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 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
A
B
C
D
E
F
G
H
139
the category of “Workman Director” in the Board of Directors.
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.
14. The appellants instead of sending the fresh three names
submitted their representation on 21.10.2009 and requested the Central
Government to re-consider 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 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
FED. OF BANK OF INDIA STAFF UNIONS v. UOI
[ABHAY MANOHAR SAPRE, J.]
A
B
C
D
E
F
G
H
140
SUPREME COURT REPORTS
[2019] 4 S.C.R.
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.
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 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
disqualifications-one 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 Scheme for the worker/employee
category is only confined to their category. No such similar disqualification
A
B
C
D
E
F
G
H
141
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) ……….
(3) Every Board of Directors of a corresponding new bank,
constituted under any scheme made under sub-section (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;
FED. OF BANK OF INDIA STAFF UNIONS v. UOI
[ABHAY MANOHAR SAPRE, J.]
A
B
C
D
E
F
G
H
142
SUPREME COURT REPORTS
[2019] 4 S.C.R.
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 sub-section
(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
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 sub-clause 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
A
B
C
D
E
F
G
H
143
(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.”
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
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 Directors-may be from different
categories specified under Section 9, then no distinction should be made
between them while prescribing the qualification and disqualification.
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
FED. OF BANK OF INDIA STAFF UNIONS v. UOI
[ABHAY MANOHAR SAPRE, J.]
A
B
C
D
E
F
G
H
144
SUPREME COURT REPORTS
[2019] 4 S.C.R.
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.
33. The appeal is thus found to be devoid of any merit.  It fails and
is accordingly dismissed.
Divya Pandey
Appeal dismissed.