Ram Narain Sinha v. Union of India — 1985 DIGILAW 49 (PAT)

Judgment LALIT MOHAN SHARMA, J. The question involved in this case is whether an employee of the State Bank of India can be posted in a, regional rural bank without his consent. 2. The petitioner was in the employment of the State Bank of India in Senior Management Grade Scale IV as Manager, Regional Stationary Department at the Head Office at Patna when the impugned orders in Annexures 3 and 5 were passed. The question of selection of the Chairman of Samastipur Rural Bank, a bank established under the provisions of the Rural Regional Banks Act, 1976 (hereinafter referred to as the 'R.B. Act') arose and the petitioner no.1 was chosen for the Post. According to the petitioner's case, his consent was never obtained and as soon as he learnt about the decision, he expressed his unwillingness to join the post by his letter. Annexure 1 dated 19.12.83. He also asked the Officers Association of the State Bank to take up the issue. The matter was referred to the Central Office of the Bank which refused to rescind the appointment by the order as contained in Annexure 3 dated 24.2.84. The petitioner again represented, but by Annexure 5 dated 22.3.84 he was directed to hand over charge and proceed to Samastipur Bank. He then filed a suit but later came to this Court with the present application in may 1984. The case was admitted but the prayer for stay was refused. 3. The Regional Rural Banks Act, 1976 was enacted in 1976 with the object of developing rural economy by providing, for the purpose of development of agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs and for other connected matters Section 3 of the Act, deals with the establishment and incorporation of rural banks. It states that the Central Government may, if requested so to do by a Sponsor Bank, establish a rural bank and such a bank shall be a body corporate. It states that the Central Government may, if requested so to do by a Sponsor Bank, establish a rural bank and such a bank shall be a body corporate. The third sub-section of this section which has been referred to by the learned counsel for the parties during the argument reads as follows:- "It shall be the duty of the Sponsor - Bank to aid and assist the Regional Rural Bank sponsored by it, by subscribing to the share capital of such Regional Rural Bank, recruitment and training of personnel during the first five years of the functioning of the Regional Rural Bank and providing such managerial and financial assistance as may be mutually agreed upon between the Sponsor Bank and the Regional Rural Bank. (Emphasis added) A decision was taken in 1979 to establish four regional rural banks in the State of Bihar and the State Bank of India became the Sponsor Bank for one of them. Accordingly, Samastipur Rural Bank was established at Samastipur in May, 1980. The case of the State Bank is that it is its duty as the Sponsor Bank to assist the rural bank as indicated in section 3 (3) quoted above and accordingly the State Bank posted one of its officers Mr. S. P. Karn as the Chairman of the Samastipur Rural Bank, Later, it was noticed that the rural Bank was not functioning satisfactorily. It was considered necessary to post more competent officer as its Chairman. The petitioner who is an efficient and experienced officer was selected. The impugned decision has been defended as proper and legal. It has also been stated that the petitioner had initially agreed to function as Chairman of the rural bank, but, later, changed his mind. 4. It has been stated in the counter affidavit that while posting the State Bank officers to rural bank great care is taken to protect the grade, seniority, pay scale, allowance and other benefits of the concerned officers. Such officers continue to be under the control of the State Bank authorities. The posting of a State Bank officer in a rural bank does not amount to reduction in rank and the officer does not lose any of the benefits he has been enjoying and is, therefore, not prejudiced in any manner. Such officers continue to be under the control of the State Bank authorities. The posting of a State Bank officer in a rural bank does not amount to reduction in rank and the officer does not lose any of the benefits he has been enjoying and is, therefore, not prejudiced in any manner. The counter affidavit deals with this aspect of the matter at length and on behalf of the petitioner it was not suggested before us that by his selection for the post of Chairman of the rural bank, the petitioner was being adversely affected. It has been asserted by the respondents (See paragraphs 16 and 21 of the counter affidavit) that the post of the Chairman is the highest post in the rural bank and he is vested with all powers and day to day management of the organisation. The post of a Chairman is supposed to be a prized position and is generally offered to only officers of prudence, quality, ability and integrity. In the case of the petitioner also, his impugned posting as Chairman does not amount to any demotion or reduction in rank or status over and above the salary and allowance he has been drawing, he would be allowed special deputation allowance of Rs.250/ - per month. The service which he has to reader in the - rural bank would be given equal and additional weightage for his promotion to the next higher grade in the State Bank and his confidential report etc. would be scrutinised and examined by the same officer under whom he has been working in the State Bank. The only reason why the petitioner does not appear to like the appointment is his anxiety to stay at Patna. The State Bank after taking into account all the relevant circumstances considered it expedient to post him as the Chairman of Samstipur Bank. 5. The main question which has been debated in the case is whether the petitioner, can be sent to the rural bank without his consent. 6. Mr. Shreenath Singh, appearing in support of the application contended that-at an employee of the State Bank the petitioner is entitled to continue in its service and to refuse to work for any other master. The main question which has been debated in the case is whether the petitioner, can be sent to the rural bank without his consent. 6. Mr. Shreenath Singh, appearing in support of the application contended that-at an employee of the State Bank the petitioner is entitled to continue in its service and to refuse to work for any other master. The learned counsel referred to the provisions of the State Bank of India, Act, 1955 and the rules framed thereunder and the Regional Rural Banks Act, 1975 and argued that the petitioner is not required by any law to work for another employer. 7. The State Bank of India was constituted under section 3 of the State Bank of India Act, to carry on the business of banking and other business in accordance with the, provisions of this Act. Referring to Chapter VI of the Act, Mr. Singh argued that the business of the State Bank did not include the business of running another Bank. Section 43 which deals with the appointment of officers and other employees of the State Bank was interpreted as authorising the appointment for the purpose of running the State Bank and not other banks it was suggested that the provisions of the State Bank of India Officers (Determination of Terms and Conditions of Service) Order 1979 and the State Bank of India (Supervising Staff) Since Rules have to be read in this background. 8. The interpretation of the provisions of the Rural Regional Bank Act, 1976 was the subject of very serious controversy between the parties before us. As has been mentioned earlier, the, State Bank is the Sponsor Bank in relation to the Regional Rural Bank, Sitamarhi. According to the provisions of section 3(3) of the Rural Banks Act, 1976, quoted above, it is the duty of the State Bank to assist the Rural Bank in recruitment and training of personnel during the first five years of its functioning and providing managerial assistance. By posting one of its experienced officers to function as the Chairman of the Rural Bank, the State Bank is precisely fulfilling this obligation. In the course of his argument, Mr. Singh stressed on the expression as may be mutually agreed upon and the Regional Rural Bank and urged that the petitioner does not have any information of any agreement whereby the State Bank has to supply the Chairman. In the course of his argument, Mr. Singh stressed on the expression as may be mutually agreed upon and the Regional Rural Bank and urged that the petitioner does not have any information of any agreement whereby the State Bank has to supply the Chairman. However, it has not been suggested in the writ application that the Rural Bank has not agreed to have the Chairman from amongst the officers of the State Bank. During the course of hearing' of the case, it was stated on oath that the petitioner was appointed as the Chairman that is a fact from 15.10.84 until 30th October, 1987 and that he joined the post on 15.10.84. It is, therefore, futile, to suggest that the petitioner's appointment to that post is bad on account of lack of agreement between the two banks. 9. The learned counsel next argued that since the power of appointment of the Chairman vests in the Central Government under section 11 of the R. B. Act, should be inferred that the duty of the Sponsor Bank in section 3(3) does not include the lending of an officer to function as the Chairman. He also relied on section 17 and suggested that the 'officers' and 'other employees' also do not include the Chairman. I am not impressed with this contention. The Chairman is incharge of the main managerial duty of the Rural Bank, as has been explained in the counter affidavit and so his role in the management of the Bank must be deemed to be of vital importance. Section 3(3), inter alia, speaks of the duty of the Sponsor Bank to provide managerial assistance. The provision must be given a side meaning with a view to advance the object of the Act, and it will, therefore, be not right to give a narrow and restricted interpretation as to exclude the main person responsible for the management from the purview of the sub-section. It is significant to note that there does not appear to be any conflict between sections 3, 11 and 17 and there is no difficulty to harmonise them and give full effect to each of these provisions. It is significant to note that there does not appear to be any conflict between sections 3, 11 and 17 and there is no difficulty to harmonise them and give full effect to each of these provisions. If the Central Government refuses to appoint an officer of the State Bank as Chairman of the Rural Bank it may justifiable be said that the State Bank cannot impose its choice and the same position probably may be obtained if the Rural Bank takes such an attitude. If a dispute arises between the State Bank the Rural Bank and/or the Central Government, the position may be different, but where they are all agreed about the choice of the Chairman, the incumbent or any other person cannot be permitted to challenge the decision on the grounds urged before us. 10. It is true that the State Bank of India Act, and the rules and regulations framed thereunder do not deal with this aspect of the matter in express term but that does not mean that the duty imposed on the State Bank by any other law including the Regional Rural Banks Act, has to be ignored. The Chapter VI of the State Bank of India Act, dealing with the business of the State Bank does not exhaustively enumerate the duties. Section 34 of the said chapter prohibits the State Bank from owning or acquiring any immovable property except for the purpose of providing building or other accommodations for carrying on the business of the Bank or for providing residence for its employees. This, itself suggests the wide range of the activities of the State Bank which necessitated a prohibitory provision to be included in express terms. Mr. Basudeva Prasad, appearing on behalf of the respondents, argued that even if there be any inconsistency between the State Bank of India Act, and the Regional Rural Banks Act, the latter Act, would prevail. I do not find any conflict in the provisions of the two Acts and there does not appear to be any difficulty in giving effect to the provisions of the Rural Banks Act. I do not find any conflict in the provisions of the two Acts and there does not appear to be any difficulty in giving effect to the provisions of the Rural Banks Act. The preamble to the State Bank of India Act, emphasises on the role of the State Bank in helping rand providing the banking facilities on a large scale in rural and semi urban areas and with that view, the provisions of Chapter VI of the State Bank of India Act, excepting section 34 have permitted the State Bank if so required to enlarge its activities in the field. So far as section 34 is concerned, it cannot be suggested that the same has any application in reference to the duties of the Bank under the Regional Rural Bank Act. 11. Mr. Shreenath Singh referred to section 43 of the State Bank on India Act, which, states that the Bank may appoint its employees for the purpose of that functions and contended that the functions are limited to the business of banking which are performed directly. Again there does not appear to be any warrant to limit the meaning of the word 'function' as suggested. The expression must be liberally construed as covering the obligation placed on the State Bank by the R. B. Act. I, therefore, hold that the State Bank of India has ample power to depute one of its officers in a rural bank to function as its Chairman provided no reduction in rank of the officer concerned is involved and he is not subjected to any illegal advantage by such posting 12. The learned counsel for the parties also argued on the question as to whether the petitioner bad initially agreed to his posting as the Chairman and referred to the relevant statements made in the affidavits. I am assuming in favour of the petitioner that he did not give such a consent but in view of my finding mentioned above, the writ application must fail. 13. A copy of the judgment of a learned single judge of Madhya Pradesh High Court in Misc. Petition. 627 of 1978 deciding the point raised in the case before me against the State Bank of India was placed before us. With respect I venture to differ from the view expressed in the judgment. 13. A copy of the judgment of a learned single judge of Madhya Pradesh High Court in Misc. Petition. 627 of 1978 deciding the point raised in the case before me against the State Bank of India was placed before us. With respect I venture to differ from the view expressed in the judgment. It was also stated by the learned counsel for the respondent that an appeal against the judgment is pending before the Supreme Court. 14. For the reasons mentioned above the writ application is dismissed, but in the circumstances, there will be no order as to costs. I agree Application dismissed.