Research › Browse › Judgment

Gujarat High Court · body

1997 DIGILAW 34 (GUJ)

Ushaben K. Shah v. Bharat Overseas Bank Ltd.

1997-01-16

M.R.CALLA

body1997
M. R. CALLA, J. ( 1 ) ). Rule. Mr. Panesar, learned Counsel for the respondents, waives service of Rule on behalf of respondents. With the consent of the parties, the matter is taken up for final hearing today. ( 2 ) ). This Special Civil Application filed by an employee of the Bharat Overseas bank Ltd. is directed against her transfer order dated 14-9-96 and the order dated 18- 9-96 whereby she has been relieved on transfer in pursuance of the order dated 14- 9-96. When the matter came up before the court on 23-9-96 notice returnable on 7- 10-96 was issued and by way of ad interim relief it was ordered that the petitioner shall not be compelled to report for duty at rajkot. In the affidavit-in-reply filed on behalf of the Bharat Overseas Bank Ltd. , madras-the respondent No. 2, at the very threshold a preliminary objection has been taken that the Bharat Overseas Bank Ltd. is a Banking Company under the Companies act, 1956 and this Banking Company is not an agency or instrumentality of the state within the meaning of Article 12 of the Constitution of India so as to make it amenable to the writ jurisdiction under Article 226 of the Constitution of India. The affidavit-in-rejoinder dated 30-10-96 was filed and the petition was sought to be amended. The amendment was granted and a reply to the amended petition has also been filed. ( 3 ) ). This Court is, therefore, first required to consider as to whether the Bharat Overseas Bank Ltd. is any other authority or an agency or instrumentality of the State within the meaning of Article 12 of the constitution of India. Mr. Panesar, the learned Counsel appearing on behalf of the respondent-Bank has submitted that the bharat Overseas Bank Ltd. is a Limited company under Companies Act and there is no deep or pervasive control of the State in any form over this Banking Company. While referring to the Certificate of Incorporation dated 22-9-73 issued by the registrar of Companies, Tamil Nadu, it has been submitted that government of India has no share in the respondent No. 1- banking Company, that 70% shares of the respondent-Banking Company are held by 6 private Banks, which are Bank of rajasthan Ltd. , The South Indian Bank ltd. While referring to the Certificate of Incorporation dated 22-9-73 issued by the registrar of Companies, Tamil Nadu, it has been submitted that government of India has no share in the respondent No. 1- banking Company, that 70% shares of the respondent-Banking Company are held by 6 private Banks, which are Bank of rajasthan Ltd. , The South Indian Bank ltd. , The Karnataka Bank Ltd. , The Vysya bank Ltd. , The Karur Vysya Bank Ltd. , and The Federal Bank Ltd. , while 30% of the shares are held by Indian Overseas bank. A statement of the shareholding pattern of the respondent-Banking Company has also been attached and it has been submitted that the Government does not have any control over the activities of the respondent No. 1 and the entire management and affairs of the Company are being further clarified that the words joint Sector bank" used in the pamphlet issued by the respondent-Company means that this Banking Company is managed by 7 private ventures as aforesaid and the words "joint sector Bank" cannot lead to the inference that the respondent Bank is a State or other authority or an agency or an instrumentality of the State within the meaning of article 12 of the Constitution of India. ( 4 ) ). Mr. Ajmera, learned Counsel for the petitioner, has submitted that while deciding the question with reference to Article 12 it has not to be seen as to how the banking Company has come into existence, even if it is not a statutory body, it can yet be an agency or instrumentality of the State and it has been further submitted that the chairman of the Bharat Overseas Bank ltd. is appointed with the approval of the reserve Bank of India and the Reserve bank of India has an effective control over the respondent-Bank and further that the indian Overseas Bank holding 30% of the share is a nationalised Bank. Mr. Ajmera has referrd to and relied upon AIR 1991 sc 1173 (Grih Kalyan Kendra Workers union v. Union of India); 1984 GLH (NOC) 9 (Dr.) Mukul Sinha v. Physical research Laboratory); AIR 1984 SC 541 (P. K. Ramchandra Iyer v. Union of India) and 1995 (1) GLH 12 (Textile Labour Association v. State of Gujarat ). Date : 30 1 97 : ( 5 ) ). Mr. Date : 30 1 97 : ( 5 ) ). Mr. Ajmera has also submitted that the High Court of Judicature at Madras has entertained the petitions under Article 226 in the matter of Bharat Overseas Banks ltd. and interim stay orders have also been passed staying the operation of the transfer orders and, therefore, also this court may entertain this Special Civil Application. On the other hand Mr. Panesar appearing on behalf of the Bharat Overseas bank Ltd. has relied upon a final decision rendered by the Madras High Court holding that the Writ Petition under Article 226 cannot be entertained against Bharat Overseas bank Ltd. In this decision dated 1-3- 95 rendered in Writ Petition No. 3005 of 1995 the High Court of Judicature at Madras has held that the Bharat Overseas bank Ltd. is. neither owned nor controlled by the Central or State Government and 70% of the total share capital of the Bank is held by other private Banks. While referring to the provisions of the Banking regulation Act, 1949 the Madras High Court has held that the respondent-Bharat Overseas Bank Ltd. cannot be regarded even as an instrumentality of the State. Reserve bank of India, as a regulatory body, supervises the working of all the Scheduled banks and the expenditure incurred by those Banks are also to be regulated by the reserve Bank of India to the extent such regulation is required under law. As a regulatory body, the Reserve Bank of Inida will no doubt take necessary action against the officer or employee of the Banking company to the extent it is authorised to do so under law, if the affairs of the Banking company are being conducted in a manner detrimental to the interests of the depositors and if it is necessary to take action for securing the proper management of the banking Company. On such considerations, the Writ Petition was not entertained and the same was rejected in limine by the madras High Court. Mr. Panesar has also placed reliance on a Division Bench decision of the Karnataka High Court reported in 1987 (1) KLT 101 (C. J. Thomas v. Sound Indian Bank Ltd. , and others) wherein the Karnataka High Court considered as to whether South Indian Bank Ltd. was other authority or agency or instrumentality under Article 12 of the , constitution of India or not. In para 6 of the judgment it is observed by Karnataka High court that the Government had no shares in the two Banks, there was no deep or pervasive state control, nor the management of the bank was controlled by the representative of the Governmenl. The effective control of the affairs of the Bank rests with the board of Directors of the Bank and there was no financial assistance by the Government, much less, any substantial financial assistance to meet the expenditure. On the premises, as aforesaid, the Division Bench of the Karnataka High Court had held that they have no hesitation in holding that the two Scheduled Banks, viz. South Indian bank Ltd. and the Catholic Syrian Bank ltd. were not agencies or instrumentalities of the Government and, therefore, not state within the meaning of Article 12 of the Constitution of India. The Karnataka high Court also observed that true it is that reserve Bank of India has a hold and control over the functioning of all Scheduled banks but these two features alone cannot make them instrumentalities of the state. A mere statutory regulation or restriction in the conduct of the affairs of the company or Society is not an imprint of state under Article 12, it is well within the province of a Statute to impose reasonable restrictions and the State can thus regulate and even prohibit the conduct of trade or business but what is meant by deep and pervasive control is deep and pervasive financial control and not a strict severe statutory restriction. The decision rendered by the Supreme Court in the case of Ajay hasia v. Khalid Mujib Sehravardi reported in AIR 1981 SC 487 , as has been followed by the Supreme Court in the case of manmohan Singh v. Commr, U. T. , chandigarh reported in AIR 1985 SC 364 , was also noted in which the Supreme Court observed that the financial assistance of the state to the aided Schools was about 95% by way of grant from the Public Exchequer, that the employees received statutory protection and that the relevant State Act created Tribunals which were subject to the superintendence and control of the High court. It was thus held that statutory control of the Reserve Bank cannot be equated to the control of the State and the finance of the State are not involved in the management of the banking business of the two scheduled Banks as aforesaid which were under consideration before the Karnataka high Court. The case of Arun Madan v. Oriental Bank of Commerce reported in 1987 (Supp.) Supreme Court Cases 535 was also cited by Mr. Panesar in which the order of termination of the services of the appellant-Arun Madan was challenged as had been passed by the Oriental Bank of commerce before nationalisation. The Supreme Court held that High Court was right in holding that a Writ Petition under Article 226 of the Constitution was not maintain- able against an order made when the Bank was a public limited company. In the case of Chander Mohan Khanna v. NCERT reported in AIR 1992 SC 76 the question came up for consideration before the Supreme court with reference to National council of Education Research and Training and the Supreme Court has observed that article 12 should not be stretched so as to bring in every autonomous body which had some nexus with the Government within the sweep of the expression state. A wide enlargement of the meaning must be tempered by a wise limitation. It must not be lost sight of that in the modern concept of welfare State, independent institution, corporation and agency are generally subject to State control. The State control does not render such bodies as state under Article 12. The State control, however, vast and pervasive is not determinative. The financial contribution by the State is also not conclusive. The Supreme Court also considered that NCERT was a Society registered under the Societies Registration Act. Like all Societies, it has a Memorandum of association, it has Rules for internal management and the object of the NCERT was to advise and assist the Ministry of Education and Social Welfare in the implementation of its policies and major programmes in the field of education particularly school education. The affairs of the NCERT were conducted by the Executive Committee comprising of government servants and educationists. The Executive Committee would enter into arrangement with Government, public or private organisations or individuals in furtherance of its objective and implementation of its programmes. The affairs of the NCERT were conducted by the Executive Committee comprising of government servants and educationists. The Executive Committee would enter into arrangement with Government, public or private organisations or individuals in furtherance of its objective and implementation of its programmes. The funds of NCERT consist of (i) grants made by Government; (ii) contribution from other sources; and (iii) income from its assets. It is free to apply its income and property towards the promotion of its objective and implementation of the programmes. The government control is confined only to the proper utilisation of the grant. The NCERT was thus largely an autonomous body. Reference was then made to the earlier decision in the case of Tekraj Vasandhi alias K. L. Basandhi v. Union of India, reported in air 1988 SC 469 where the Court was required to determine whether the Institute of Constitutional and Parliamentary Studies (ICPS) was State under Article 12. It was noticed that the ICPS was a registered society financed mostly by the Central government and partly by gifts and donations from Indian and foreign agencies. It was also noticed that the First President of the Society was the then Speaker of the Lok sabha, out of the five Vice-Presidents three were the then Central Ministers, the other two were the then Chief Justice of India and the Attorney General. The object of the society was to provide for constitutional and parliamentary studies, promotion of research in constitutional law, setting up of legislative research and reference service for the benefit of legislators, organisation of training programmes in matters of parliamentary interest and importance and publication of a journal. The ICPS was born as a voluntary organisation. It was further found that the annual financial contribution from the State was substantial and it was entitled to receive aid from the public and in fact, received contributions from other sources. The argument that the government exercised pervasive control over ICPS was sought to be supported by all these aforesaid factors, but the Supreme court held that in a Welfare State the government control is very pervasive and touches all aspects of social existence. The argument that the government exercised pervasive control over ICPS was sought to be supported by all these aforesaid factors, but the Supreme court held that in a Welfare State the government control is very pervasive and touches all aspects of social existence. A broad picture of the matter has to be taken and a discerning mind has to be applied keeping the realities and human experiences in view so as to reach a reasonable conclusion and notwithstanding the factors, as aforesaid, rather in the light of all these factors, it was held that ICPS was not a "state. After considering several cases, as aforesaid, in the case of Chander Mohan khanna (supra), it was held that the ingredients on the basis of which NCERT was sought to be treated as a state or other authority or agency or instrumentality of the State did not satisfy the requirements of article 12. ( 6 ) ). After discussing the propositions laid in the cases, as aforesaid, the cases cited by mr. Ajmera on behalf of the petitioner, may also be dealt with. In the case of Grih kalyan Kendra Workers Union (supra), the supreme Court proceeded on the assumption that Grih Kalyan Kendra was an instrumentality of the State and the question as to whether it came within Article 12 of the Constitution of India or not was not considered in detail. In the case of (Dr.) mukul Sihha (supra) a single Bench of this court found that the control of the Government was deep and pervasive and it was also found that the nature of the objectives and functions of Physical Research Laboratory were closely related to the modern state function and after considering catena of cases, the Court found that the conclusion was inescapable that Physical research Laboratory was an other authority within the meaning of Article 12. In the case of P. K. Ramachandra Iyer (supra) the indian Council of Agricultural Research was held to be other authority within the meaning of Article 12. In the case of P. K. Ramachandra Iyer (supra) the indian Council of Agricultural Research was held to be other authority within the meaning of Article 12. In this case, the supreme Court noticed that Indian Council of Agricultural Research came into existence as a Department of the Government, continued to be an attached Office of the government even though it was registered as a Society under the Societies Registration Act and wholly financed by the government, the taxing power of the State was invoked to make it financial viable and to which independent research institutes set up by the Government were transferred. Thus, indian Council of Agricultural Research being almost an inseparable adjunct of the government of India having an outward form of being a Society, the Supreme court held that it could be styled as a society set up by the State and would, therefore, be an instrumentality of the State. and The analysis of all the decisions as above make it very clear that the ingredients, on the basis of which Bharat Overseas bank Ltd. is sought to be treated as an agency or instrumentality of the State, are hardly sufficient so as to take it as an authority or an agency or instrumentality of the State within the meaning of Article 12 of the Constitution of India for the purpose of invoking the jurisdiction of this court under Article 226 of the Constitution of India. There appears to be no deep or pervasive control of the Government whether State or Central, what to talk of a deep and pervasive financial control. It has to be agreed on all hands that 70% of the shares of the respondent-Banking Company were held by six other private Banks have been detailed out in para 2 of the Judgment and even if it is assumed in favour of the argument raised on behalf of the petitioner that the Chairman of the Bharat Overseas bank is appointed with the approval of reserve Bank of India, it cannot be said that it means any effective control of the reserve Bank of India over the respondent- bank. Even Indian overseas Bank held only 30% of the shares. Even Indian overseas Bank held only 30% of the shares. The requirements, which form the basis of the touch-stone so as to take a particular autonomous body of agency to be other authority, agency or instrumentality of the State within the meaning of Article 12 of the Constitution of India, are completely lacking in the facts of the present case and, therefore, it is clearly discernible on consideration of the ratio decided in various cases, as aforesaid, that the respondent-Bank does not fall under article 12 of the Constitution of India for the purpose of invoking the jurisdiction of this Court under Article 226 of the constitution of India or under Article 227 of the Constitution of India. ( 7 ) ). Mr. Ajmera then submitted that even if a body or authority does not fall under article 12, this Court can yet give appropriate directions and in support of this submission he has placed strong reliance on the Division Bench decision rendered by this Court in the case of Textile Labour association (supra ). It has been submitted by Mr. Ajmera that in this case, the Division bench of this Court had issued directions against a private Textile Company to pay the wages for the period for which they have not been paid though they have worked. In para 25 of this Judgment, a view taken by the Division Bench in a case decided earlier, i. e. Amruta Mills, an unreported division Bench decision of this court rendered on 5-3-1991 in Special civil Application No. 8201 of 1990 has also been referred. The Division Bench in this case was persuaded to issue directions against the private Textile Company because it found that the paramount consideration was to save human lives and such consideration was a relevant guideline for exercising the powers of the High Court. The Division Bench found that in this case the question involved was of right to life and livelihood of 2700 workmen and their families. The Division Bench found that in this case the question involved was of right to life and livelihood of 2700 workmen and their families. The Court cannot be oblivious of the fact that on account of closure of numerous mills in Ahmedabad, utterly miserable conditions had resulted for the families of the unemployed workmen, there had been instances of suicides because of utter economic hardship on account of unemployment of such Mill workers, there had been cases of premature deaths because of lack of economic support, medical treatment and medicines and further that many other undesirable consequences had followed driving the people, to criminal activities including prostitution. In such miserable circumstances, the Court took the view that if right to livelihood and a bare necessity of human dignity cannot be enforced, though guaranteed by the Constitution, the Court cannot justify its existence for the enforcement of Fundamental Rights. The Court found that Mill had been closed on 2-2- 1992 without permission as required by the provisions of Industrial Disputes Act and that too without even paying wages since november 1991, the total due wages for the month of November 1991 came out to be rs. 24,20,000/-, for the month of December 1991 it came out to be Rs. 32,50,000/-, for the month of January 1992 it came out to be Rs. 34,00,000/- and for the month of february it came out to be Rs. 29,00,000/ -. Thus in all Rs. 1,19,75,000/- was found to be the amount of wages outstanding for the period for which the workers had actually worked. The facts of this case were so glaring that it shocked the judicial conscience of the Court and the Court found that it was an appropriate case in which the right to livelihood and bare necessity of human dignity, which is guaranteed by the constitution as a Fundamental Right under article 21 of the Constitution of India, must be enforced and in such a case the right to earn wages coupled with the right to life, which was a right enforceable, was directed to be given effect to and with that end in view, the directions, as aforesaid, were issued. The issue of the directions, as aforesaid, by the Division Bench in the facts of this case granting relief to hundreds of workmen, whose life had become miserable in want of the payment of the amount of earned wages, cannot be said to be an authority so as to canvass the proposition of law that directions can be issued to all the bodies or persons whether they fall under Article 12 of the Constitution of india or not. This Division Bench Judgment rendered by this Court in Textile Labour association v. State of Gujarat (supra) cannot be said to be an authority for the purpose of holding it as a principle of universal application that private bodies like Textile Companies or such as respondent-Bank are amenable to Articles 226 and 227 of the Constitution of India. The case at hand is a case in which the petitioner is echoing her grievance against a transfer order and has submitted that she is facing a great hardship with regard to the education of her children and she is sought to be victimised by the Management of the respondent-Bank and she alone has been picked up because there was a strike for 48 days by all the staff of all the Branches all over the country. The petitioner may or may not be right in putting up her plea as aforesaid, but even if it is assumed that she is facing such hardship, they have to be accepted as a part of reality with regard to in service employees and this Court can neither express its opinion on such matters nor it can adjudicate such grievances. At one stage Mr. Panesar had submitted on behalf of the respondent-Bank that in case the petitioner makes any representation before the respondent-Bank enumerating her grievances, the Bank may be willing to consider those grievances and pass appropriate orders after taking into consideration the contentions which may be pointed out by the petitioner. It is, therefore, always open for the petitioner to make appropriate representation before the concerned authorities, but so far as this Court is concerned, this Writ Petition under Article 226 cannot be entertained by this Court because it has been held that Bharat Overseas Bank Ltd. is not other authority or an agency or instrumentality of the State under Article 12 of the Constitution of India. ( 8 ) ). ( 8 ) ). This Special Civil Application is accordingly dismissed. Rule is hereby discharged. The ad interim order dated 23-9- 96 is hereby vacated. No order as to costs. Rule discharged. .