NEW BANK OF INDIA EMPLOYEES UNION v. UNION OF INDIA
1987-08-31
G.T.NANAVATI, P.R.GOKULAKRISHNAN
body1987
DigiLaw.ai
P. R. GOKULAKRISHNAN, J. ( 1 ) THIS Special Civil Application is filed to issue a writ of mandamus or any other appropriate writ order or direction directing the respondent not to discontinue or remove petitioner No. 2 from the post of workmen Director of the New Bank of India on the Board of Directors until the successor is appointed by the respondent after following due procedure laid down in clause 3 (b) read with clause 2 (h) of the Schedule to the Nationalised Banks (Management and Miscellaneous Provisions) Scheme 1980 (hereafter referred to as the Scheme) and the Banking Companies (Acquisition and Transfer of Undertakings) Act 1980 (hereafter referred to as the Act ). ( 2 ) MR. Vyas the learned Counsel appearing for the petitioner questions the legality of discontinuing the workmen Director as and from 1-9-1987. even before a workmen Director is appointed on the Board of Directors of the Bank. The learned Counsel submits that Board of Directors cannot function even a single minute without having a Director representing the workmen as envisaged by sec. 9 (3) of the Act. If it is said that as per clause 9 of the Scheme the workmen Director cannot hold office for more than 3 years and he can hold office only during the pleasure of the Central Government the said clause is ultra vires sec. 9 (3) of the Act It is the further submission of the learned Counsel Mr. D D. Vyas that the classification of the Directors of the Bank regarding the term of office mentioned in clause 9 of the Scheme is discriminatory in character and as such it offends Art. 14 of the Constitution. Finally the learned Counsel contended that clause 9 of the Scheme which states that the Director will hold office during the pleasure of the Central Government will lead to arbitrariness and also will result in circumventing sec 9 of the Act by not appointing or continuing the workmen Director on the Board of Directors. ( 3 ) WE have carefully considered the abovesaid submission made by the learned Counsel appearing for the petitioner herein. Section 9 of the Act empowers the Central Government to make scheme. Section 9 (3) of the Scheme states Every Board of Directors of a corresponding new bank constituted under any scheme made under sub-sec.
( 3 ) WE have carefully considered the abovesaid submission made by the learned Counsel appearing for the petitioner herein. Section 9 of the Act empowers the Central Government to make scheme. Section 9 (3) of the Scheme states Every Board of Directors of a corresponding new bank constituted under any scheme made under sub-sec. 1 shall include: (A) representatives of the employees and of depositors of such bank and (b) such other persons as may represent the interest of each of the following categories mainly farmers workers and artisans. to be elected or nominated in such manner as may be specified in the Scheme. Clause 9 of the Scheme which came into being on 1-9-1987 reads as follows9 Term of office of other Directors: (1) A Director appointed under sub-clauses (b) (c) (d) (e) (f) (g) or (h) of clauses 3 shall hold office during the pleasure of the Central Government. (2) Subject to the provisions of sub-clause (1) such Director shall hold office for such term not exceeding three years as the Central Government may specify at the time of his appointment. In this clause 9 the term of the office of the workmen Director has also been specified. There is nothing in this clause 9 to suggest that the representation of the workmen D"rector will not be on the Board of Directors. Simply because the duration of the office of such Director is mentioned the same cannot be considered as running contrary to sec. 9 and in our opinion clause 9 has nowhere suggested that the Board of Directors will not be without the representation of a workmen Director. ( 4 ) CLAUSE 3 of the Scheme deals with Constitution of the Board. Clause 3 (a) states that not more than two whole-time Directors of whom one shall be the Managing Director to be appointed by the Central Government after consultation with the Reserve Bank of India.
( 4 ) CLAUSE 3 of the Scheme deals with Constitution of the Board. Clause 3 (a) states that not more than two whole-time Directors of whom one shall be the Managing Director to be appointed by the Central Government after consultation with the Reserve Bank of India. Clause 3 (b) deals with appointment of workmen Director The proviso to clause (b) reads provided that where the Central Government is of opinion that owing to the delay which is likely to occur in the verification and certification of any Union or Federation has a representative Union it is necessary in the interest of the nationalised bank so to do it may appoint any employee of the nationalised bank who is a workman to be a director of that Bank. Clause (9) of the Scheme prescribes term of office of the Directors and in that clause except the Director appointed as whole-time Director as per clause 3 (a) other Directors have to hold office during the pleasure of the Central Government and they will hold office for such term not exceeding three years as the Central Government may specify at the time of their appointment. This accord. ing to Mr. Vyas is discriminatory in nature and as such this clause prescribing the term of office offends Art. 14 of the Constitution. We are not able to appreciate this argument. The whole-time Directors stand on a different category both in service to the bank and in the manner of appointment of such Directors. Hence it cannot be said that the Directors other than the whole-time Directors and the directors appointed under clause 3 (a) are of the same category and as such the service condition should be equal to both these categories. We find no question of discrimination in this case since the classification is reasonable and term of office fixed for these categories have nexus to -the object sought to be achieved. As we have seen already that the pleasure doctrine and the fixing of the terns of office for workmen Directors do not run counter to sec. 9 of the Act and further proviso to clause 3 (b) of the Scheme which we have extracted above clearly envisages appointment of workmen Director without any delay. The apprehension of Mr. Vyas that the appointment of a workmen Director will not be made immediately was alleged by Mr.
9 of the Act and further proviso to clause 3 (b) of the Scheme which we have extracted above clearly envisages appointment of workmen Director without any delay. The apprehension of Mr. Vyas that the appointment of a workmen Director will not be made immediately was alleged by Mr. Shah learned Counsel for the respondent by stating that the appointment will be made at the earliest possible since it is the duty of the Central Government both as per the Act and the Scheme to appoint such Directors. ( 5 ) THE doctrine pleasure advanced by Mr. Vyas suggesting that it runs counter to the provisions contained in sec. 9 (3) of the Act cannot be appreciated since there is nothing in clause 9 which should suggest that the Board of Directors will be without any representative of the workmen. It cannot also be said that the absence of such workmen-Director for a short period i. e. between the date of expiry of the term of office of the previous workmen-Director and the date of appointment of his successor by the Central Government will in any way amount to conflict between the provisions contained in sec. 9 (3) of the Act and the provisions contained in clause 9 of the Scheme. ( 6 ) IN view of the above discussion we find no substance in any of the contentions raised by Mr. Vyas learned Counsel for the petitioners. Accordingly this petition is dismissed. Notice stands discharged. Rule discharged. .