M. Ramu and Another vs Government of India and Others

Kailasam, J.—W. P. No. 504 of 1989 is filed by an employee of the Indian, Overseas Bank Ltd., Madras and W. P. No. 505 of 1969 by

an employee of the State Bank of India, Madras, for the issue of writs of mandamus to strike down the provisions of Section 36-AD of the

Banking Laws (Amendment) Act 1968, as unconstitutional and illegal.

The Government of India introduced in Parliament Banking Laws Amendment Bill on 23-2-1967. The Bill mentioned several objects for its

introduction, viz., (1) to snap or at least to make ineffective the link between a few industrial houses and the banks, (2) to change the exclusive

orientation of the Banks towards industry and business and to reorient credit facilities to several priority sectors such as agriculture, small scale

industries, rural finance, cooperation and exports, (3) to arrest monopolistic trends of the investment of funds of the Banks and misdirection of

bank''s resources, and (4) to ensure that the credit decisions of the management of Banking companies conform with the plans for economic

development. The Bill was passed by the Parliament and received the assent of the President of India on 2-1-1969 and was brought into force

throughout India from 1-2-1969. The petitioners submit that the provisions of Clauses (a) to (c) to Sub-section (1) of Section 36-AD are violative

of the fundamental rights of the petitioners and as such void. The impugned Sub-section may be set down below:

Section 36-AD(1) No person shall-

(a) obstruct any person from lawfully entering or leaving any office or place of business of a banking company or from carrying on any business

there, or

(b) hold within the office or place of business of any banking company, any demonstration which is violent or which prevents, or is calculated to

prevent, the transaction of normal business by the banking company, or

(c) act in any manner calculated to undermine the"" confidence of the depositors in the Banking company.

The attack against Sub-section (1) is stated --as follows: The section as amended prohibits peaceful picketting, satyagraha and holding of peaceful

demonstrations of Bank employees if they result in obstruction of any person from lawfully entering or leaving any office or place of business of the

Banking company or from carrying on any business there or prevent the transactions of normal business of the Banking company. The petitioners

claim that the right conferred under Article 19(1) of the Constitution on the citizen to have the right of freedom of speech and expression and to

assemble peaceably could be affected if they are prevented from peacefully picketting or holding peaceful demonstrations if they result in

obstruction of any person from lawfully entering the premises. I am unable to construe that the right of freedom of speech and expression or the

right to assemble peaceably would include the right to obstruct a person from entering into the place of business to which he has got a right to

enter. The learned counsel for the petitioners in support of his contention that their fundamental rights to demonstrate cannot in any way be

curtailed, referred to the decision of the Supreme Court reported in Kameshwar Prasad and Others Vs. The State of Bihar and Another, where

the court held that a demonstration much as was prohibited by the impugned rule may be of the most Innocent type -- peaceful, orderly such as the

mere wearing of a badge by a Government servant or even by a silent assembly say outside office hours -- demonstrations which could in no sense

be suggested to involve any breach of tranquillity. The court in explaining what the word ""demonstration"" meant observed that it is a visible

communication of one''s ideas to others to whom it is intended to be conveyed and it is in effect a form of speech or of expression because speech

need not be vocal since signs made by a dumb person would also be a form of speech. As the demonstration is a form of speech it was submitted

that freedom of speech or of expression cannot in any way be curtailed.

The learned Judge added that from the nature of things a demonstration may take various forms; it may be noisy and disorderly, for instance stone-

throwing by a crowd. This is not guaranteed under fundamental rights. The court held that if the rule was framed as to single out those types of

demonstrations which were likely to lead to a disturbance of public tranquillity, demonstration will not be protected. The question that was being

considered by the Supreme Court was the validity of Rule 4-A of the Bihar. Government Servants Conduct Rules. 1956, which prohibited the

Government servant from taking part in any demonstrations or any form of strike in connection with any matter pertaining to his conditions of

service. This ''blanket ban'' the court held was not valid, but specifically observed that if the demonstration was likely to lead to disturbance of

public tranquillity it will not be protected."" This decision instead of supporting the contention of the petitioners negatives their plea. The petitioners

cannot claim any right to demonstrate outside the premises which would result in an obstruction and prevention of any person seeking to do

business with the bank from doing so. The provisions in Sub-clause (a) cannot, therefore, be challenged as being violative of the fundamental rights

conferred under the Constitution.

So far as Sub-clause (b) of Section 36-AD (l) is concerned, it prohibits a person from holding, within the office or place of business of any banking

company, any demonstration which is violent or which prevents, or is calculated to prevent, the transaction of normal business by the banking

company."" The attack on this sub-clause is on the ground that the right to hold any demonstration which is guaranteed under the Constitution is

curtailed. The learned counsel submitted that a perfectly peaceful demonstration by the demonstrators wearing black badges may result in persons

seeking to do business with the bank being prevented and therefore violative of their fundamental rights. What the sub-clause seeks to prevent is a

demonstration which is violative or which prevents or is calculated to prevent the transaction of the normal business by the banking company. A

perfectly peaceful demonstration by wearing black badges would not come within the mischief of this sub-clause for that is not violent or would in

any way prevent or is calculated to prevent the transaction of the normal business by the banking company.

The learned counsel referred to the decision in The Punjab National Bank Ltd. Vs. Its Workmen, and submitted that in industrial law a peaceful

pen-down strike is not an offence and that therefore such a demonstration could not be made punishable. In the case cited it was held that where a

person participates in a pen-down strike, it cannot be said that he had the requisite intention to commit criminal trespass. But it was also made

clear that the intention of the person who resorted to pen-down strike had to be gathered from the circumstances of the case. For instance, if in

resorting to pen-down strike, the persons started shouting slogans or in any other way caused annoyance to the management, the offence of

criminal trespass may be made. What the decision of the Supreme Court above referred to has laid down is that a peaceful pen-down, strike

would not be a criminal trespass or an offence under the Industrial Disputes Act. This would not in any way, help the petitioners in this case, as

''the section makes a demonstration punishable only if it is violent or when it prevents or is calculated to prevent the transaction of the normal

business of the banking company.

Prevention of normal transaction of business by the banking company by violence or acts calculated to prevent the transaction would in all

probability lead to a disturbance of the public tranquillity. A customer of the Bank may be badly in need of some money and proceeding to the

Bank, and if he is obstructed or if by violent demonstration or otherwise prevented from transacting his normal business, a protest is most likely.

The provisions that are found in Sub-clauses (a) and (b) would squarely fall within the scope of exceptions provided for under Article 19(2) and

(3) of the Constitution of India. That the attack on the constitutional validity of sub-clauses (a) and (b) is without substance is made clear by the

provisions made in Sub-section (2) of Section 36-AD which provides that contravention of the provisions of Sub-section (1) without reasonable

cause alone is made punishable. The penal provision can only be affected if the acts specified in Sub-section (1) are committed without reasonable

cause. The existence of Sub-section (2) to Section 36-AD renders the attack on Sub-section (1) futile.

Sub-clause (c) of Sub-section (1) of Section 30-AD prohibits a person from acting in any manner calculated to undermine the confidence of the

depositors in the banking company. The validity of this sub-clause was challenged on the ground that the right of freedom of speech in criticising

the affairs of the banking company would be adversely affected. The sub-clause cannot be understood in the manner sought to be construed by the

learned counsel for the petitioners. What is prohibited is any adverse act calculated to undermine the confidence of the depositors of the Banking

company without reasonable excuse. The Legislature cannot be denied its right to protect the interests of the bank without prejudice to the right of

freedom of speech. ""Freedom of speech"" would not include acting in a manner calculated to undermine the confidence of the depositors of the

Banking company without any reasonable excuse. That the act of speeches that are made is punishable only when it is made without reasonable

cause is made specific in Sub-section (2) of Section 36-AD which provides that whoever contravenes any provision in Sub-section (1) without any

reasonable excuse shall be punishable. This provision amply safeguards the right of freedom of speech of the petitioners regarding the affairs of the

bank.

Lastly, the learned counsel submitted that the preamble and the objects of the amending Act do not justify the provisions of Section 36-AD. A

copy of the objects and the preamble to the amending Act was not placed before me. But the learned counsel relied upon his statement in his

affidavit in paragraph 2. Accepting his statement as correct, the objects that are mentioned relate to snapping or at least making ineffective the link

between a few industrial houses and the banks, changing the exclusive orientation of the banks towards industry and business, arresting

monopolistic trends of the investment of funds of the Banks and ensuring the credit decisions of the management of banking companies conform

with the plans for economic development. Even accepting the contention that the impugned sub-clauses would not fall within the objects of the

amending Act, the validity of the clauses cannot be questioned as it is within the scope of the legislative competence of the Parliament and is not in

any way violative of the fundamental rights conferred on the citizens. In the result. I am unable to accept any of the grounds urged ''by the learned

counsel for the petitioners. The writ petitions are dismissed.