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 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 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– 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 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 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 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 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
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 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 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 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 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]
1.2 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, 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 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 3(2)(iii) of the Scheme as being legal. [Paras 31-33][143-G, H; 144-A-B]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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