Umendra Kumar Tandon vs Chairman, Bank of Baroda and Another

Prafulla C. Pant, J.—By means of this writ petition, moved under Article 226 of the Constitution of India, the petitioner has sought writ in the nature of mandamus commanding respondent No. 2 to decide the representation made by the petitioner for reinstatement in service. It is ''further prayed that writ in the nature of certiorari be issued quashing order dated 29th March 1985, whereby petitioner''s services were terminated.

Heard learned Counsel for the parties and perused the record.

Brief facts of the case, as narrated in the writ petition, are that the petitioner was an employee of Nainital Bank Limited. More than 51 per cent shares of the Nainital Bank Limited (hereinafter referred as the Bank) are owned by Bank of Baroda. The petitioner was appointed as Clerk-cum-Cashier/Typist, on 3rd of May 1982, with the Branch of the Bank at Kashipur. He was confirmed in the service on 3rd of November. 1982. One Mr. Ram Chandra was holding a savings Bank Account with the Kashipur Branch of the Bank, on 5th of February, 1983, is shown to have moved an application for issuance of cheque book, and the cheque book was accordingly issued. On that very day, an application was moved in the name of one Mr. S.P. Gupta, for opening a new account with the Bank, who was introduced by one Mr. Mohan Lal, an account holder of the Bank. On the same day, a cheque under the signatures of Mr. Ram Chandra was shown issued in favour of Mr. S.P. Gupta, and an amount of Rs. 5,000 was transferred in the account of Mr. S.P. Gupta, from the account of Mr. Ram Chandra. On 7th of February 1983, Mr. S.P. Gupta withdrew the amount. On 10th of February, 1983, another cheque was issued in favour of Mr. S.P. Gupta, for an amount of Rs. 20,000, purporting to be under the signatures of Mr. Ram Chandra. The said amount was also withdrawn by Mr. S.P. Gupta, in two parts, one amounting to Rs. 10,000 on 11.2.1983, and the other amounting to Rs. 9,990 on 14.3.1983. One more cheque, amounting to Rs. 20,000, purporting to be under the signatures of Mr. Ram Chandra was issued in favour of Mr. S.P. Gupta, and after said amount was transferred in the account of Mr. S.P. Gupta, the same was also withdrawn by the account holder Mr. Gupta. Some vouchers were found missing on 31st of March, 1983, where upon, after enquiry on 20th of April, 1983, a first information report was lodged with the Police. Assistance in this regard was taken from a private handwriting expert. Meanwhile, on being found that the petitioner is being involved in said case, on 1st of August, 1983, the petitioner was placed under suspension and he was served with a charge-sheet. Investigation also resulted in charge-sheet and the petitioner stood trial before the Additional Chief Judicial Magistrate, Kashipur, in respect of the offences allegedly committed by him punishable under Sections 420, 467 and 471 of I.P.C. The petitioner was found guilty by the trial court and was convicted in respect of aforesaid offences punishable under Sections 420, 467 and 471 of I.P.C, vide Judgment and order dated 23.3.1985, passed in Criminal Case No. 1523 of 1983. The petitioner was sentenced to rigorous imprisonment for a period of four years and fine of Rs. 25,000, u/s 467 of I.P.C. He was further sentenced to rigorous imprisonment for a period of four hours u/s 420 of I.P.C. The etitioner/convict was further ientenced to rigorous imprisonment for two years u/s 471 of I.P.C. It appears that the petitioner preferred an appeal before the Court of Sessions, which was numbered as Criminal Appeal No. 57 of 1985. The same was allowed by the special Judge, Nainital, vide its judgment and order dated 6.3.1986. The conviction recorded by the trial court was set aside by the appellate court. Meanwhile, on 29 of March, 1985, the petitioner was dismissed from service by the Bank, keeping in view provisions contained in Section 10(1)(b)(i) of the Banking Regulation Act, 1949. This writ petition has been filed, challenging the said order of dismissal, on the ground that after the conviction is set aside by the appellate court, the dismissal order is liable to be quashed and the petitioner is entitled to the reliefs, claimed by him in this writ petition.

A counter-affidavit was filed on behalf of respondent No. 2, the Nainital Bank Limited, in which it is stated that the Bank is a private sector bank and is not an instrumentality of State, within the meaning of Article 12 of the Constitution of India. It is further stated in the counter-affidavit of the Bank that the Bank of Baroda, respondent No. 1, has merely a capacity of shareholder of the answering Bank. It is further stated that Bank of Baroda is a Nationalized Bank under the Banking Company (Acquisition and Transfer of Undertakings) Act, 1970, whereas, Nainital Bank Ltd. is merely a company incorporated under the provisions of Companies Act, 1956. In reply to the facts alleged in the writ petition, it is stated in the counter-affidavit, that the petitioner, claiming himself to be a workman, has already approached the labour court, for redressal of his grievances, and two parallel proceedings are not maintainable. It is further alleged that the petitioner is guilty of concealment of facts relating to proceedings pending in the labour court. As to the misconduct, it is stated in the counter-affidavit that an appeal against acquittal has already been preferred by the Government, in the High Court against the order of the appellate court, by which the judgment of the trial court was set aside. Defending the order of dismissal passed u/s 10(1)(b)(i) of the Banking Regulation Act, 1949, it is alleged by the answering respondent, that the writ petition is liable to be dismissed.

The Bank of Baroda, though, represented through its counsel, has not filed its counter-affidavit.

In the rejoinder-affidavit filed on behalf of the petitioner, the averments made in the writ petition, are reiterated. It is stated that 86.99 per cent shares of the Nainital Bank Ltd. are held by the Bank of Baroda, and as such, being a Scheduled Bank sponsored by the Bank of Baroda, the writ petition as against the Nainital Bank Ltd., is maintainable. It is further stated in the rejoinder-affidavit, that it is the Bank of Baroda, who appoints the Chairman and the General Manager of the Nainital Bank Ltd., as such, the Bank functions under the control of Bank of Baroda. Regarding the proceedings before the labour court, it is stated in the rejoinder-affidavit, that only proceedings u/s 33(c)(ii) of the Industrial Disputes Act, 1947, were initiated for payment of the wages and the dismissal order was not challenged, before said authority.

Before further discussions, it is pertinent to mention here, the relevant provision of law applicable to the case. Section 10(1)(b)(i) of the Banking Regulation Act, 1949, reads as under:

Prohibition of employment of managing agents and restrictions on certain forms of employment.

(1) No Banking Company :

(a) ...

(b) shall employ or continue the employment of any person:

(i) who is, or at any time has been, adjudicated insolvent, or has suspended payment or has compounded with his creditors, or who is, or has been, convicted by a criminal court of an offence involving moral turpitude ; or

(ii) ...

The aforementioned provision of Banking Regulation Act, 1949, makes it very clear that there is prohibition for the Banking Company to employ or to continue in employment, a person who has been convicted, by a criminal court. Since, the petitioner has admittedly been convicted of offences punishable under Sections 420, 467 and 471 of I.P.C. by the competent criminal court, though, has been acquitted by the appellate court, his case is covered under the aforesaid provision, as such, Section 10 of the Banking Regulation Act, 1949, bars the Banking Company, now, to employ the petitioner.

Learned Counsel for the petitioner argued that it is only the finally convicted person, who cannot be employed, and not whose conviction has been set aside, by the appellate court. In the opinion of this Court, had it been the intention of the Legislature, the expression used in the above provision would have been ''who is convicted'' and not who is, or has been convicted''. Learned Counsel for the petitioner further argued that that the restriction is applicable only in respect of the persons, who are seeking recruitment in the Banking Company and not to reinstatement. I am unable to accept said submission for the reason that the expression ''shall employ'' is added with the expression ''or continue the employment'', which makes it clear that not only the bar is applicable in the case of new recruitees but also in the cases of the employees, who are or were already working with the Banking Companies.

Apart from this, on behalf of the respondent No. 2, it is vehemently argued that the Bank is not an instrumentality of the State, within the meaning of Article 12 of the Constitution of India, and as such, no writ can lie against it. In reply to said argument, on behalf of the petitioner, my attention was drawn to a case law in Rqjendra Nath v. Nainital Bank Limited and Ors. 2005 (2) UJ 152 in which a Division Bench of this Court has entertained the writ petition and issued certain directions. On going through the said case law, this Court did not find any ratio or discussion on the point, whether a writ can be entertained against a private Banking Company or a Banking Company who is subsidiary of a Nationalized Bank. Learned Counsel for the petitioner, in this connection submitted that there was a plea in the counter-affidavit filed by the Bank, in said case. However, the same even if raised in the counter-affidavit, since, has not been discussed in the judgment, it cannot be said that there is any ratio of the Division Bench holding that the writ petition is maintainable, against the Bank, nor is there any ratio on the point, whether the Bank Is an instrumentality of State, or not? Learned Counsel for the petitioner could not show any case law on the point that a Scheduled Bank subsidiary of a Nationalized Bank is an instrumentality of the State. This Court is of the view that in the circumstances, merely for the reason that a Scheduled Bank, who is sponsored by a Nationalized Bank, cannot be said to be an instrumentality of the State for the reason that it is so sponsored by the Nationalized Bank. And as such, writ petition is not maintainable against the Nainital Bank Ltd., in its present status.

Learned Counsel for the petitioner relied on The Mysore Paper Mills Ltd. Vs. The Mysore Paper Mills Officers'' Association and Another, , wherein it has been held that the Mysore Papers Mill of which 97 per cent shares were owned by the State Government was held to be an instrumentality of the State. On the same analogy it is argued on behalf of the petitioner that since, now 97 per cent of the shares of the Nainital Bank Ltd. was held by the Bank, of Baroda, as such, the Bank should also be treated an instrumentality of the State. Learned Counsel for the petitioner further drew attention of this Court to Virendra Kumar Srivastava Vs. U.P. Rajya Karmachari Kalyan Nigam and Another, , and it is argued that the Apex Court has held that a Corporation, under administrative, financial and functional control of the State, is nothing but Instrumentality and Agency of State. In the opinion of this Court, said principle of law is not applicable to this case, as it is not evident in the present case, if there is administrative, financial and functional control of the Bank of Baroda, over the Nainital Bank Ltd. Mr. S.K. Jain, learned Counsel for Bank of Baroda contended that Bank of Baroda is an independent entity and has no administrative and functional control over the Nainital Bank Ltd. The petitioner was appointed by the Nainital Bank Ltd. and was dismissed by the said Bank, and relief too has been sought against only said Bank. No relief has been sought as against the Bank of Baroda.

For the reasons as discussed above, this writ petition is liable to be dismissed. The same is dismissed. No order as to costs. (All pending/ applications in this petition also stand disposed of).