FED. OF BANK OF INDIA STAFF UNIONS & ANR.versusUNION OF INDIA & ANR

                         [2019] 4 S.C.R. 135                              135


      FED. OF BANK OF INDIA STAFF UNIONS & ANR.                           A
                                  v.
                    UNION OF INDIA & ANR.
                   (Civil Appeal No. 5570 of 2014)
                          MARCH 01, 2019                                  B
[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
                                                                          C
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              D
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–
                                                                          E
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         F
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
                                                                          G
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     H
                                   135
136            SUPREME COURT REPORTS                       [2019] 4 S.C.R.


A     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
B
      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
C             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
D     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
E     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
F     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
G     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]
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       FED. OF BANK OF INDIA STAFF UNIONS v. UOI                             137


       1.2 A mere reading of Section 9(3) clause (a) to (i) would go         A
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
                                                                             B
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           C
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          D
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,            E
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          F
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.                                                          G
      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
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138             SUPREME COURT REPORTS                           [2019] 4 S.C.R.


A     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.
B           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.
C
             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)
D     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
E     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.
F
             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
G
      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
H
        FED. OF BANK OF INDIA STAFF UNIONS v. UOI                               139
               [ABHAY MANOHAR SAPRE, J.]

the category of “Workman Director” in the Board of Directors.                   A
      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.                                B
       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.             C
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          D
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.
                                                                                E
       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                 F
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       G
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
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140             SUPREME COURT REPORTS                            [2019] 4 S.C.R.


A     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.
B            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.
C
             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.
D
            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,
E     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
F     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/
G     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
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        FED. OF BANK OF INDIA STAFF UNIONS v. UOI                                 141
               [ABHAY MANOHAR SAPRE, J.]

is made applicable to the officer/employee category.                              A
       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.                                                                         B
       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:
                                                                                  C
                      “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.                                                    D
       (2) ……….
       (3) Every Board of Directors of a corresponding new bank,
       constituted under any scheme made under sub-section (1),
       shall include-
       (a) ………                                                                    E

       (b) ………
       (c) ……….
       (e) one director, from among such of the employees of the
           corresponding new bank who are workmen under                           F
           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                          G
           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;
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142     SUPREME COURT REPORTS                       [2019] 4 S.C.R.


A              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
B     (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
C     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
D     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
E             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
F            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.
G     (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
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        FED. OF BANK OF INDIA STAFF UNIONS v. UOI                               143
               [ABHAY MANOHAR SAPRE, J.]

          (b) he is of such age that there is no likelihood of his              A
             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          B
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   C
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     D
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        E
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       F
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,      G
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
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144            SUPREME COURT REPORTS                           [2019] 4 S.C.R.


A     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
B     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.


C     Divya Pandey                                                Appeal dismissed.




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