S.A. KINI & ANOTHER

UNION OF INDIA & ORS.

April I 6, I 985

[D.A. DESAI AND 0. CHINNAPPA REDDY, JJ.]

Servic1s t

Empfoyeea of a Nationalised Bank/ Public Sector Corporc.tion-Whether they can collect. donations for any trust or other organisation fro!n p'ersons who comejnto contact in the course of their employment-Code of conduct.

.. _/f

The petitioners, Deputy General Secretary of the Canara Ban'k Offirs' Association and the Canara Bank Officers' Association, filed a writ petition in the High Court alleging that the Chairman and Managing Director, te General Manager and tb.e top. officials of the Management of Canara Bank 'have been using their official position and authority to coerce the officers and taff of the Canara Bank to collect funds for the Canara Bank Relief and Welfre Society and the Kamakoti Prabba Trust and one of the principal modes of collecting funds was the sale of greeting cards by the officials of the. bank to t.heir customers. They also alleged that officers, who protested against the diredtive to sell greeting cards, were victimised by the bank, and officers, who \Vere highly successful 'card-sellers' were given accelerated promotion over the beads -°!j seniors. The respondent-Bank made a statement before the High Court "that/ it has never at any time whatsoever compelled it') employees to sell greeting cards or collect funds for the Canara Bank Relief and Welfa1e Sodety or any other institution; nor has the first respondent-bank at any time considered the same as a relief factor for evaluating performance of its employees for promotion; nor shall the first respondent-bank do so in future." The High Court accepted the statement of the respondent-bank and dismissed the writ petition.

But, the petitioners were not satisfied with the assurance given by the respondent bank and filed the present special leave petition and the writ petition repeating the same allegations and praying for "the issue of a writ in the nature of Mandamus directing the respondents to forbear from using the bank o(Iicials/bank machinery bankfresourccs for the purpose of collections of funds in the garb of any welfare organisation.

S. A. KINi!v. UNION

While dismissing the petition and the special leave petition as malicious and as designed to denigrate the management of the bank, it was found by. the Court during the course of the hearing that the petitioners themselves were indulging in rash and feckless activities of the very nature of which they were Complaining against the respondents. Pursuant to several orders made by the Court from time to time calling for detailed information from both the parties about the activities of the Canara Bank Relief and Welfare Society and the Canara Bank Staff Officers' Association and the collections made for them and by them, it transpired that the Canara Bank. OfficcrE' Association was formed in the year

1971. On August 18, 1981 the Association started the Canara Bank Officers' Association Trust Fund registering it as a Public Trust under the Bombay Public Trust Act, 1950. Five officers of the bank who were also office bearers of the Association were made life trustees of the Association Trust Fund. Right ....... from the date of formation of the Trust, donations were collected by the ~- members of the Officer!' Agsociation from the customers of the bank. In the

"short span of about twe years, the funds of the Trust have s_welled to more than Rs. twenty four Jakhs. The sowcalled donations range from sums in hundreds to thousands of rupees. The number of donors is also quite large.

HELD : 1.1 While one does appreciate that there must be several chari~ table inclined persons amongst the bank's customers, there is no doubt that most of the customers that gave donations to the Trlist Fund must have felt obliged to do so because of favour received or expected to be received by them.

Even if no coercive methods were employed by the members of the Association to collect donations, the customers must have felt morally pressurised i.hat otherwise their interests would not be properly taken care of or would be jeopar disedor neglected by the officers with whom they wer~ compelled to deal in the course of their business. [769C-D]

1.2 No employee of a nationalised bank or any other Public Sector Corporation should engage himself in coliecting 'donations' for any trust or other organisation from person'i with whom he com:s into contact in the course Or

his employment. It is not desirable. It is likely to lead to unhealthy practices ) ..,., _and harmful results, intended or unintended. In the world of commerce, quid !L _pro quo and not charity is the rule, Those in a position of advantage by reason

'"' of their office have to be very wary. Otherwise, they may unsuspetingly walk into traps. That b why the Central Civil Services (Condµct) Rules:, 1964, for example, provide that no Government servant shall, except with the previous sanction of the Government or of prescribed authority, ask for or accept contributions to, or otherwise associate himself with raising of any funds or other collections in cash or in kind in pursuance of any object whatsoever (Rule 12).

It is a rule of prudence. It is a rule of com nensencse.

It is born of wi5dom gained by experience. [771G-H; 772A-B]

2. The que!tion, therefore, is what was to be done with the Canara Bank Officers' Association Trust Fund. First, an in_iunction on the same lines as that which was in force during the pendency of the writ petition in this Court shall

issue, that is, the officers of the Canara Bank, their agents nominees are restrai- 'H

SUPlBME COURT REPORTS (198 5) 3 s.C.R

ned from directly or indirectly recovering or manipulating to get any fund or contribution to the Trust Fund. Second, no officer of the Canara Bank shall be permitted to hold the office of life trustee, trustee or any other office of the Canara Bank Officers• Association Trust Fund. Third, the Union of Itidia, who bas been impleaded as a party shall be entitled to nominate five trustees .who are not connected with the Canara Bank to administer the Canara Bank Officers• Association Trust Fund. Fourth, the trustees nominated by the Union.of India shall administer the Trust Fund in accordance with the provisions of the Bombay Public Trusts Act and the deed of trust by which the Canra Bank Officers' Association Trust Fund was created.

Fifth, the trustees appt;>inted by the Union of India shall hoJd oitice until apprQpriate arrangements are made by the Charity Commissioner, Maharas\itra on an applicatien to be moved by the Centra1 Government within six months from today. Sixth, there slall be an inquiry by the CBI into the conduct of the five life trustees in relati'on to the Trust Fund and such further action as may be necessary may be taken by the ,~ CBf. Any further direction which may be necessary may be sought from the--· High Court of Bombay. (7720-G]

ORIGINAL JURISDICTION: Writ Petition No. 9933 of 1982

(Under Article 32 of the Constitution of India.)

WITH Special Leave Petition (Civil), No. 13981 of 1982

From the Judgment and Order dated 21. JO. 1982 of the Bombay High Court in W. P. No. 3137 of 1982.

S. Balakrishnan, M. K. D. Namboodiri and Ramesh Kesll'ani for the Petitioners.

K. N. Bhat and Ms. Madhu Moo/chandani for the Resp'ondents.

The Judgment of the Court was delivered by

CH1NNAPPA REDDY, J,. The writ petition and the special leav~ petition are malicious and ill-motivated. But they have served one good purpose, namely, they have brought to light the undesirable

activities of the petitioners themselves. We will have some harsh things to say about the petitioners in our judgmet. In!an attempt to malign the top management of the Canara Bnk, they have exposed themselves and the allegations have boomeranged.

The spider has been caught in its own web.

The first petitioner in the writ petitions is S.A. Kini, _Deupty General Secretary of the Canara Bank Officers' Association and the second petitioner is the Canara Bank Ofli 1l rs' Association. The

respondents in the writ petition are the Union of India represented by the Secretary, Ministry of Finance, Department of Economic Affairs, Banking Division, Canara Bank (a nationalised bank!, the Chairman and Managing Director of Canara Bank and the . General Manager of Canara Bank. The special leave petition is directed against an order of the High Court of Bvmbay dated October 21, 1982 dismissing a writ petition filed by the same petitioners as in the writ petition before us. The respondents to the petition for special leave are also the same as in the writ petition.

The principal allegation made by the petitioners in the writ petition filed in the Bombay High Court and repeated in this Court is that the Chairman and Managing Director, the General Manager and the top officials of the Management of Canara Bank have been using their official position and authority to coerce the officers and staff of the Canara Bank to collect funds for the Canara Bank Relief and Welfare Society. Apart from seeking donations from customers, it is alleged that one of the principal modes of collecting funds was the sale of greeting cards by the officials of the bank to their customers.

Each officer was allotted a certain quota and was compelled to sell his quota of cards to customers. The petitioners further alleged that officers, who protested against the directive to sell greeting cards, were victimised by the bank, and officers, who were highly successful 'card-sellers' were given accelerated promotion over the heads of seniors. Thiruvengandam was cited as an instance of a victimised officers who was danied promotion while Annappa Pai was cited as an instance of an officer, who had benefited and who was allowed to leap over seveal senior officers and was promoted as a reward for bis services by the sale of cards. The petitioners alsu alleged that the top management was also interested in collecting fonds for-

(i) Deposit Mobilisation Club;

(ii) The Canara Cank Cultural Brotherhood Organisation; and

(iii) The Kamakoti Prabha Trust.

ts8

SUPREME COURTS REPORTS (l98SJ j S1C.R.

At the hearing before us, the alegations in regard to the Deposit Mobilisation Club and the Canara Bank Cultural Brotherhood were abandoned. In regard to the Kamakoti Prabha Trust, the allegation was that it was started by one S. Venkataraman, whti at the time when it was formed, happened to be the Deputy General Manager of the bank. He has long since retired from the bank and nothing bas been shown to us as to how the Kamakoti Prbha Trust is in any manner linked with the top management of the bank or how the management has promoted the int ere• t~ of the Trust. It is unnecessary to pursue the allegations made in regard

to the Kamakot; Prabha Trust, which in our opinion have lieen made out of pure spite and mere vexation. We are only left jl'ith the allegations made in connection with the collection of fttnds 'and the sale of greeting card• for the benefit of the Canara Bnk Relief and Welfare Society. The allegation that Thiruvengandm was superseded because he refused to sell greeting cards and the allegation that Annappa Pai was given an accelerated promotion because of his excellent performance in selling greeting cards reri1ained mere allegations. There was no material whatsoever placed before us to substantiate either of these allegations. It was, however, asserted before us by the petitioners and admitted by the respondonts that until the year 1982, the General Manager and other top officials used to associate themselves with the sale of greeting cards to benefit the Canara Bank Relief and Welfare Society. It appears from the facts placed before us that the Canara Bank. Relief and Welfare Society was formed and registered in the year 1961 at a time when the bank was a private bank. The bank was nationalised

in 1969 and thereafter the bank ceased to have anything to do with the society, though out of a total membership of2020 about ioo

past and present employees of the bank only are now members of the society. Until 1982 one individual director of the bank used to be one of the several members of the Executive Committee of the Society, but the present position is that no member of the Executive Committee of the Society is an official of the bank.

The only link of the bank with the society now is the name of the Society. The memorandum of associati\)n of the society was also placed before us and the objects of the society are wholly unconnected with the bank or its employees.

The principal objects are to provide relief in case of calamities like flood, earthquake, fire, famine, epidemic, etc, to organise hospitals, maternity and child welfare centres, homes for the poor, sick, aged

S. A. KiNJ. v. UNiON (Chinnappa Reddy, J.) iS9

and disabled, to maked cash contributions to educational and other social welfare organisations, to undertake rural development programmes and so on. None of the objectives involves any special benefit or advantage to the employees of the bank. A great many details of the commendable work done by the society have been given to us in the several statements filed on behalf of the respondents. The pe.itioners, unfortunately, have needlessly dragged the society into the picture' making unworthy allegations. But even so when the writ petition was filed by the present petitioners in. the Bombay High Court, the management of the bank realised that there may be some scope for abuse by some officials of the bank .in the matter of selling greeting cards or raising funds for the society.

They, therefore, made a statement before the Bombay High Court in the following terms:

"The first respondent bank states that it has never at any time whatsoever compelled its employees to sell

greeting cards or collect funds for the Canara Bank Relfef D and Welfare Society or any other institution, nor has the first respondent bank at any time considered the same as a relief factor for evaluating performance of its employees for promotion, nor shall the first respondent bank do so in future.''

The High Court accepted the statement of the respondent bank and rejected the writ petition. The assurance given by the bank, as contained in the statement made by the bank before the, Bombay High Court, should have satisfied the petitioners if they had

'1DY genuine grievance that, in the past, officers of the bank had been forced to raise funds and sell greeting cards for. the benefit of the society. But the petitioners were not willing to be easily satisfied. They filed the present special leave petition and the writ petition repeating the allegations made in the Bomby High Court and praying for 'the issue of a writ in the nature ol mandamus directing the respondents to forbear from using the bank officials/bank m1chinery ban\: resources for the purposes of collections of funds in the garb of any welfare organisation in general and.in particular in the name of the various funds, details of which wore set out in paragraph 22 of the writ petition'.

After the statement filed by the bank in the High Court of Bombay, we are unable to find any justification whatsoever for the petitio-

760 SUPREME COUl<.T RP.PORTS

[1985]3 ~,.C.R.

ners to pursue the matter by filing the present special leave petition and writ petition except to harrow the bank. When we poinledly and repeatedly asked the learned counsel for the petitioners whther ' there was a single instance of a sale of greeting card or colleetion

of funds by an official of the bank subsequent to the order of the Bombay High Court on October 21, 1982, the learned counsel was unable to cite a single instance, but persisted in referring to the sale of greeting cards before the order of the Bombay High Court.

Ultimately he had to admit that there was not a single instance of sale of greeting cards or collection of funds by officials of the bank subsequent to the order of the Bombay High Court. We hav6 no hesitation in holding that the writ petition and the special leave petitionare both malicious and are designed to denigrate the management of the bank. Sri K.N. Bhatt' learned counsel for respondents (2 to 4) assures us that the bank stands by the statement m.ade before the Bombay High Court. We have, therefore, on hesitation in dismissing the writ petition and.the special leave petition with costs which we quantify at Rs. 10,000 in each.

But that is not an end of the matter. Right at the commencement, when the petitions came up for admission, the court cam~ to be oppressed by the vast opportunity for abuse of financial power presented to Nationalised Banks and Financial Institutions of the Public Sector. There were indications in the writ petition itelf which revealed that while the petitioners were indulging in rash and feckless allegations against the top echelons of the bank, on the other hand .. they themselves were indulging in brash and recklss activities of the very nature of which they were complaining against the respondents. lt appeared to the court that the petitioners, hands were unclean, and that they were by no means the champions . of the 'oppressed' officers of the bank. There was one significant paragraph in the writ petition, which though meant to mislead he court, exposed them. In paragraph 12 of the writ petition, it \\'.as stated;

"12. That realising the importance of strict observance of legal and moral norms in bank business, the Central Government had issued the following directive:- •

Immediate

F .No.6/9/5/82, I. R.

Government of India Ministry of Finance Department of Economic Affairs

(Banking Division) B

Chairman, Indian .Banks' Association, Bombay.

New Delhi, the July 22, 1982.

Subject: ......... Bank officers, Association Trust Fund- Collection of funds and creation of trust-

Dear Sir.

I am directed to state that it has come to the notice of 'the Government that ......... Bank Officers' Association has formed a Trust by name ...... Bank Officers' Association Trust Fund, which is registered in 1981 under the Bombay Public Trust Act, 1950 and it has also been granted exemption under sec• ion 80-G of Income Tax Act for donations made by asscssees to the Fund. Apart from using bank's name which will have avoidable misgivings in the clientele, trust Fund has issued an appeal soliciting donations etc. from general public. We feel that even as members of the Association, the employees cannot collect funds from the public and the clients to. the bank as it constitutes a clear misuse of their office. I am, therefore, to suggest that TBA may consider avising member banks to ensure that such trusts are not set up elsewhere.

Kindly acknowledge receipt of the letter.

Yours faithfully,

Sd/- ( Yashwant Raj) Under Secretary to the Government of India This directive ha< been flagrantly violated by the top management of the bank and personal aggrandizement of

stagcring proportions are be in~ made at the cost of lhe

SUPREME COURT REPORTS

(1985] 3 S.C:R.

Bank and at the cost of the depositors money."

It was a blatant case of supprcisio veri a"d suggestio falsi.

The petitioners sought to imply and suggest that the directive oflhe Central Government was directed against the activities of the top management of the Bank in connection with the collection of fu11ds for the Canara Bank Relief and Welfare Society, a society which was in existence years before the nationalisation of banks was thought of, whereas the truth was that the directive was a direct consequence of the complaint> feceived against the activities of \he petitioners in collecting funds for the Canara Bank Officrs Association Trust Fund. The allegations in the petition and t'he reference in pargaraph 12 to the " ..•...... Bank Officers' Trlist Fund" provoked the court into a deeper probe as it was felt that the customer-public was being exploited by some officers of the bank and the matter needed comment and required correction.

Thereafter we made several orders from ti me to time calling for detailed information from both the parties ab6ut the activities of the Canara Bank Relief and Welfare Society and the Canara Bank Staff Officers. Association and the collections made from them and by them. The orders made by us are selfexplanatory and are worth extracting since they give a picture of the dilatory and recalcitrant attitude of the present petitioners. We propose to extract the ordes_ in so far as they relate to the peti(ioners only, since we have already absolved the respondents. By \Jur order dated January 17, 1983, we directed,

"The petitioners are directed to give the followiag detailed informotion.

There is a trust called "Canara Bank Officers"

Associatio~ Trust Fund, which is alleged to have been formed on August 18, 1981. The petitioners will have detailed information since the constitution of the Trust of its office bearers and their position in the Bank including the designation and salary as also if any emoluments in cash or kind is drawn from the Trust. The petitioners will also give detailed information of every contribution made to this Trust with reference to the party's name, his dealing with the bank as a customer and the amount contributed by the party to the trqst anq ]\ow the contrib11tors were

persuaded to make the contributions and the motives for contribution, as also service received by each contributer from the bank, with reference to the branch. If there are withdrawals from the trust, the details should be furnished with the name of the person who has withdrawn the amount and where the money is at present kept or deposited and how the money was utilised. Withdrawal by'cash or demand daft may be separately mentioned.

By our order dated April 27, 1983, we directed,

"By an order made by this Court on January 17, 1933, this Court directed the petitioners to give the following information in respect of a Trust called Canara Bank Officers' Association Trust Fund. The information was to be given under the following heads :

Names of the office bearers of the Trust since its inception.

2- The position of each trustee in the organisation of the hank showing the designation, the place of work and salary drawn.

Whether any salary or emolument of any kind return in cash or kind was drawn from the aforementioned Trust.

If the answer to query 3 is in the affirmative the mode and method of payment.

Name of each contributor to the Trust fund, the amount of contribution, relation of the contributor to the bank and whether at any point of time, the contributor had been using or enjoying the services of the bank especially from the branch in which the trustee was working and the contributor was . connected to the branch.

If the contributor is not connected with the bank . organ.isaton, the reasons and the motives for making

contr:buhon to such a trust, the beneficiaries of which


(1985] 3 S.C.R.

A are none other than the officers of Canara Bank.

The service received by each contributor from the bank or its branch since making the contribution or since six months prior to the making of the contribution.

Withdrawal from the Trust fund, if any made by whom in what amount on what date and for what: purpose and whether the withdrawal was in cash, cheque or demand draft.

The petitioners were called upon to furnish this information when the matter was taken up for hearing ..

Mr. R.K. Garg, learned counsel for the P"titioncrs read out the affidavit of Mr. S.A. Kini dated February 18, 1983.

We also went through the accompaniments to the affidavit.

We arc satisfied that the petitioners have not given full details under every head and there is non-compliance with '

the order of the Court.

We direct the petitioners to fully comply with the order of this Court giving information under each of the separate head as set out hcrcinbcfore except those where the information has already been supplied as an annexure to the afore-mentioned affidavit. In that case, the deponent shall state which annexurc of the earlier affidavit complies with the Court's direction. This information must necessarily be supplied by July 17, 1983 and the matter shall appear on board on July 25, 1983.

Both the parties including their officers, agents or nominees are injuncted from directly or indirectly recovering or illanipulating to get any fund or contribution io the trust funds, one mentioned in our order and those other mentioned at page 16 of the writ petition hereafter. This will not come in the way of the association recovering the membership fee from the members who are bona fide members and are on the staff of the bank.,'

We direct accordinly."

."" ( '

s. A. "!NI v: UNION (Chinnappa Reddy, J.) 765

By our order dated August 30, 1983, we again directed,

Petitioner No.2, the Canara Bank Officers' Association shall give full detail of the donations collected by the said Association, commenCing from 1970 till today. While giving the datails of the donation, the Association shall specify the name of the donor not the branch from which the donation was received, the amount of donation, the full name and address of the parties giving donation, its relation with the bank, and also to specify the branch through which the parties were getting banking service and .alteration and or modification of banking service , or facilities granted since giving of the donation and which officers motivated persons to give donation to the Association as also the name and full address of the officer. If possible, the Association may state the motivation for the donation.

The Canara Bank Officers' Associartion Trust shall give full details of the donation received from .the public giving some details as hereinabove indicated as in the case of Canara Bank Officers' Associaiion. Let it be noted that the details given till now are far from sufficient and are

evasive in character. It must state whether a receipt is E issued to each individual donor and whether counterfoils are preserved ..................... "

Finally, by our Order dated August 23, 1984, we observed and directed :

"By our detailed Order dated April 27, 1983, the petitioners were directed to give, amongst others, the following information in respect of Canara Bank Officers' Association Trust Fund ('Trust' for short) :

"Name of each contributor to the Trust f1<nd, the amount of contribution, relation of the contributor to the bank and whether at any point or time, the contributor had been using or enjoying the services of the bank especially froin the branch in which the trustee was working and the contributor was connected to the !>ranch,"

SUpREME COURT REPORTS [1985] 3 s.c.R.

S.A. Kini, one of the petitioners, filed his affidavit to which was annexed a list showing the amount received from each individual/firm/company. It is annexure IV at

pages 126·163 of Volume-I.

It immediately transpired that there was a delierate attempt at evading the court's order with a view to relevant information being not made available.

The Court by its order dated Augnst 30, 1983, gave certain specific directions. Petiti0ners No.2 was specifically directed to give further detail of the donations collected by the trust from 1970 till the date of the order.

It was clarified so as to leave no one in doubt that the petit10ners shall specify the name of the donor (not branch from which donation was received), the amount of donation, the full name and address of the parties giving the donation and the relation, business commercial or otherwise of the donor to the bank and to further specify the branch through which the donor parties were getting banking services and facilities from the Canara Bank. The petitioners were also directed to state whether there was any advantageous alteration or modification of the banking services or facilities granted to the donor since the donation as also to indicate and specify the name of each of the officers who were members of the Trust and who facilitated such alteration or modification advantageous to the customers in respect of banking facilities. The name of the officer and his full address was also directed to be stated. The petitioners were also directed, if possible, to state the motivation for the donation.

There was noticeable relucta11ce en the part of the petitioners to implement this order or at any rate to avoid compliance with the same. On the last occasion, the Court directed the petitioners strictly comply with the aforementioned order.

Y csterday when the matter came up for hearing, a statement running into about 24 pages not signed by any responsible person and not verified by an affidavit was

placed on record. We would be perfectly justified in rejecting this spurious document as unworthy of being looked into. Mr.M.K. Ramamurthy repeatedly, though wholly unsuccessfully, tried to persuade us to hold that the state is in compliance with the. orders of this Court. A mere glance at the statement would -show that fr is a futile repetition of a bizaree exercise which resulted in the statement Annexure IV volume I and by the information supplied by the statement we are in no way wiser. The purpose for calling upon the petitioners to submit the name of each donor was to identify the donor so that a detailed enquiry can be made as .to how the officers of the Trust misusing and abusing their petition have procured donations by granting banking facilities to the donors. The additional purpose was also to ascertain whether the donors were coerced into making the so-called donations at the instance of the officers of the Trust so that a detailed

(,'

enquiry can be undertaken to ascertain the use and misuse p and abuse of the office by the members of the Trust.

The petitioners have been consistently striving to suppress this information from the court. This becomes evident from the fact that even the statement filed yesterday and marked as Volume VI the name of the donor is mentioned without the address or even the city in which the donor was residing or having his place of business .. It is not stated what banking facilities the donors obtained since the donation and through which officer. Every . . covert or overt attempt is made to withl:iold the identity of the donor to thwart the court to reach the donor so that the shady of the members of the Trust in collecting the so-called donations can be unearthed.

Apart from the statement being barren, it is not supported by an affidavit and as it does not appear to have been signed by any responsible officer. We reject it as unworhy of any credence. The result is•that till today there is non-compliance with the aforementioned orders

of the court.

SUPREME COURT REPORT'

(1985]3 S.C.R

It was made specifically clear that the name of the donor and the address must be clearly specified. Even after long lapse of more than. year and a half since the order, the information is branchwise which was categorically rejected by this Court. The specific instances which remains . unexplained are pointed out by Mr .K.N. Bhatt, learned

advocate for the Canara Bank in his statement annexed to the letter dated August 22, 1984. The statement is taken on record.

We propose to give hst opportunity to the petitioners to comply with the orders of this court in letter and spirit.

Any attempt at deviance or defiance will unquestionably land to serious consequences which we refrain from specifiying at this stage. We record our utter disapproval of this hide and seek game of the petitioners and we want to leave no one in doubt that they do so was at their own peril. The arms oflaw are long and strong to reach them and no effort will be spared to unearth their illegal activities if once they are so establi•hed. It is not for a moment suggested that we so held. But this escapist attitude of the petitioners have raised strong suspicion in our minds that there is something imroper, illegal and unbusiness-like in their conduct disclosing either misuse or abuse of -0ffice by the officers of the Canara Bank in collecting a huge amount as donation from the customers of the baQk for the purpose of the trust. What is stated is just. a warning.

We direct that petitioners shall comply "ith the orders as bereinabove as indicated within a period of 6 weeks from , today. The matter shall come up before this Bench after

6 weeks."

Pursuant to the last of our orders, the petitioners have filed some more statements, but even so the full information which

we. desired to have bas not been furnished. The reason is fairly obvJous. and we consider it unnecessary to further dilate on this matter. From the information now available to us as a result of the several statements filed before us, it transpires that the Canara Bank Officers' Association was formed in the year 1971. On August 18, 1981 the Associatjon started the Canara Bank Officers' Association Trust Fund registering it as a Public Trust under the l3ombny

s. A. k1N1 v. UNION (Chinnappa Reddy; .j.) ' 769

Public Trust Act, 1950. Five officers of the bank who were also office bearers of the Association were made life trustees of the Association Trust Fund. Right from the date of formation of a Trust, donations were collected by the members of the Officers' Association from the customers of the bank. In the short span of r, .about two years, the funds of the Trust have swelled to more than Rs. twenty four lakhs.

The so-called donations range from sums in hundreds to thousands of rupees. The number of donors is also quite large. While one does appreciate that there must be. several charitably inclined persons amon:st the bank's customers, Vie do not have any doubt that most of the customers that gave donations .to the Trust Fund must have felt obliged to do so because of

) favours received or expected to be received by them. Even if no coercive method• were employed by the members of the Association to collect donations, the customers must have felt morally pressurised that otherwise their interests would not be properly taken care of or would b"' Jeopardised or neglected by the 9fficers with whom they were compelled to deal in the course of their b.usin.ess. Very shortly after the formation of the Trust Fund, complaints began pouring in against the collection of funds for the Association Trust Fund by the officers of the bank. The All-India Bank Depositors' Association complained to the Central Minister incharge of banking as fol19ws

"We are receiving complaints that some bank employees are pressurising customers for dona_tions for various activities which have nothing to do with the bank as such.

For instance these funds are demanded for ponfere• nces, for helping the family ofdeceased employees, etc.

Where customers fail to respond, they begin to face problems and difficulties in their banking transactions .

. You are aware of the hostile public attitude towards G bank employees and the costs imposed on the economy as a result of poor service and frequent disruption of work.

Without allowini; the situation to deteriorate further the pubiic expect the Government to take remedial steps.

This is an opportunity for the Government to prove that it is responsive to public criticism." H.

1to SUPiEME COURT REPORTS [!985j 3 s.c.li.

The Management of the Canara Bank also received numerous complaints. Feeling rightly disturbed by the complaints received, the Management called upon the Association to furnish particulars of the collections made by the officers and sent the following telex message to the Association :

I __..,,

"This is with reference to the Canara Bank officers Association Trust Fund formed by the Association for which an appeal "also has b"en issued to the pu.blic for donations. We also learn that funds are being collected from the bank's clients as well as from the public and the staff by way of donations and coupons.

Usuage of the name of Canara Bank for a Tn., t of such type has led to the impression amongst our client• that the Bank. is also having a role and interest in this Trust. Apart from other reasons we are afraid that the usuage of the bank's name in a Trust which is not formed by the bank besides creating compiications may become a bad preedent for some others to form similar trusts. While we have no objection for your collecting funds from our own officers we request you not to collect funds from customers and the public. We also request you to kindly furnish to us the particulars of collections already made by.you from the bank's clients and from the public as we intend referring the matter to our Board at its next meeting and the Ministry for their consideration ....

- r .

The Board of Directors discussed the matter and confirmed the action of the bank. They also looked with disfavour on the collection of funds from customers by the Association. . They de~

sired the bank to convey the information to the Ministry for appro- : priate action and follow-np measures. Thereupon the Bank addressed a detailed letter to the Government of India seeking guidance after setting forth the objects of the Trust, etc. and the action taken by them till then. The response of the Govenment was immediate and categoric. The Government said:-

"Please refer to your letter No. IRS/I. 2220. TPM dated 18.6.1982 regarding Canara Bank Officers' Association Trust Fund. We would request you to pursue this H matter seriously. Even as members of the Association the

employees cannot solicit funds from the public. This is clearly a misuse of their office. We would like to be informed of the further developments in the matter."

In addition to writing to the Chairman of the bank as aforesaid, the Government also wrote to the Chairman, Indian Banks' Association, Bombay a letter which was extracted.i.n paragraph 12 of the writ petition and which has also been quoted by us earlie.r.

In turn the Indian Bank's Association addressed the Chief Executives of all public sector Banks and told them :

"In one of the member'banks in the public sector the officers' Association had formed a trust and taken exe.mption under section 80-G of the Income Tax Act for receiving donations to the fund. On the question of the propriety of creating such trusts and collecting' funds from

the public, the Government is of the view that it would D constitute a clear misuse of their office by the employees.

We have been requested by the Government to advise all public sector banks to ensure that such trusts are not set up.

We reproduce overleaf a copy of the communication F, received by us from the Banking Division for your information and necessary action."

It is clear from what has been' stated above that the writ petition in this Court and the writ petition filed in tl:ie Bombay High Court which led upto the special leave petition are retaliatory actions consequent on the displeasure expressed by the Management and, on account of the Management, by the Board of Directors and the Central Government. We are of the firm opinion that no employee of a nationalised Bank or any, other Public Sector Corporation should engage himself in collecting 'donations' for any trust or other organisations fro.m per rnns with whom he comes into contact in the course of his employment. It is not desirable. It is likely to lead to unhealthy practices and harmful results, intended or im'iil-·

tended. In the world of comme'rce, quid pro quo and not charity is the rule. Those in a position of advantage by reason of their office have to be very wary. Otherwise, they may unsuspectingly walk into traps. That is why the Central Civil Services (Con.duct) Rules, 1964,_for example, provide that no Government servant shall

SUPREME COURT REPORTS (1985] 3 s.c.ll.

A except with the previous sanctions of the Government or of .prescribed authority, ask for or accept contributions to, or otherwise_ associate himself with raising of any funds or other collec.tions in cash or in kind in pursuance of any object whatsoever. (R.ule 12).

It is a rule of prudence. It is a rule of commonsens. It is born of wisdom gained by experience. We fully endorse the raison d'etre B behind the rule. We also endorse what has been said by the.bank in . its telex message to the officers' Association, by the Govarnment in its letters to the bank and to the Indian Banks' Associatio!) and by the Indian Banks' Association to the Chief Executives of ah Public Sector Banks, all of which we have extracted earlier in this c

judgment.

The question, therefore, is what has to be done with the Canara Bank Officers' Association Trust Fund. First, aa, injunction on the same lines as that which was in force during the pendency of the writ petition in this Court shall issue, that is, the officers of the Canara Bank, their agents or nominees are restrained from directly or indirectly recovering or mainpulating to get an~ fund or contribution to the Trust Fund. Second, no officer of the Canara Bank shall be permitted to hold the office of life trustee, trustee or any other office of the Canara Bank Officers' Association Tru; t Fund. Third, the Union of India, who has been impleaded as a party shall be entitled to nominate five trustees who are not connected with the Canara Bank to administer the Canara Bank Officers' Association Trust Fund. Fourth, the trustees. nominated by the Union of India shall administer the Trust 1:und in accorda'nce with the provisfons of the Bombay Public Trusts Act and the dee\! of trust by which the Canara Bank Officers' Association Trust Fund was created. Fifth, the trustees appointed by the Union of Ii\dia shall hold office until appropriate arrangements are made by the. Charity Commissioner, Maharashtra on an application to be movd by the Central Government within six months from today. Sixth, there shall be an enquiry by the CBI into the conduct of the five trustees in relation to the Trust Fund and such further action as may be necessary may be taken by the CBI. Any further directfon which may be necessary may be sought from the High Court of Bombay.

Mt.A.

Petitions dismissed.