Kewal Krishan vs Punjab National Bank and Others

G.R. Majithia, J.—This judgment disposes of CWP No. 13046, 12732, 12538 and 12819 of 1993.

A challenge has been made to the guidelines issued by the Punjab National Bank providing for transfer of the employees of the New Bank of India and also to the orders passed pursuant to the guidelines transferring the petitioners, in these petitions under Articles 226/227 of the Constitution of India.

In exercise of the powers conferred by Section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), the Central Government after consultation with the Reserve Bank of India, framed a scheme called the New Bank of India (Amalgamation and Transfer of Undertaking) Scheme, 1993 (hereinafter referred as the Scheme). On the commencement of the Scheme, the undertakings of the New Bank of India were transferred to the Punjab National Bank (hereinafter to be referred to as the ''transferee Bank''). Para 5 (2) of the Scheme envisages that every Officer or other employee of the New Bank of India (hereinafter the transferor bank) shall become, on the commencement of this scheme an officer or other employee, as the case may be, of the transferee bank and shall hold his office or service in that bank on the same terms and conditions and with the same rights and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him under the transferor Bank. Para 5 of the Scheme reads thus:-

"5. Dissolution of the Board of Directors, etc.

(1) On and from the commencement of this Scheme:-

(a) the Chairman or any other whole time director, including the Managing Director, of the transferor Bank shall cease to hold office and shall be entitled to receive three months'' salary and allowances in lieu of the notice of three months specified in sub-clause (2) of clause 8 of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1980;

(2) Save as otherwise provided in this Scheme, every officer or other employee of the transferor bank shall become, on the commencement of this scheme an officer or other employee, as the case may be, of the transferee bank and shall hold his office or service in that bank on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if the undertakings of the transferor bank had not been transferred to and vested in the transferee bank subject, however, to such facilities being available at the time of the transfer to similarly placed officers and employees of the transferee bank and continue to do so unless and until his employment in the transferee bank is terminated or until his remuneration, terms or conditions are duly altered by the transferee bank.

(3) Any officer or other employee of the transferor bank who does not want to hold his office or service in the transferee bank under sub-clause (2) shall be entitled to leave his office or service on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if the undertaking of the transferor bank had not been transferred to and vested in the transferee bank.

(4) The Central Government shall, as soon as possible after the commencement of this Scheme, make a scheme in consultation with Reserve Bank of India for determining the placement of the employees of the transferor bank including the determination of their inter se seniority vis-a-vis the employees of transferee bank. While making the Scheme, the Central Government shall take account of relevant factors such as experience of the employees of the transferor bank.

(5) The trustees or administrators of any. Provident Fund, Gratuity and such other funds constituted for the employees of the transferor bank shall on, or as soon as possible after, the commencement of this Scheme, transfer to the trustees of the employees Provident Funds, Gratuity and any other fund, constituted for the transferee bank or otherwise as the transferee bank may direct, all monies and investments held in trust for the benefit of the employees of the transferor bank:

"Provided that such latter trustees shall not be liable for deficiency in the value of investments or in respect of any act, neglect or default done before the commencement of this scheme."

The transferee Bank framed guidelines for transfer of the employees of the transferor Bank. These guidelines were only a temporary arrangement in view of para 5 (4) of the Scheme. The Scheme had to be framed by the Central Government in consultation with the Reserve Bank of India for determining the placement of the employees of the transferor Bank.

The Central Government in the Ministry of Finance, Department of Economic Affairs ( Banking Division) has framed the Scheme called the New Bank of India [Determination of Placement of Employees (Officers and Workmen) of the New Bank of India in Punjab National Bank] Scheme, 1993, which was published in the Gazette of India (Extraordinary) vide Notification No. S.O.936 (E), dated December 8, 1993. Under this Scheme, placement of the employees of the transferor Bank including determination of their inter se seniority vis-a-vis the employees of the transferee Bank has been provided for . The transferee Bank cannot effect transfers of the employees of the transferor Bank pursuant to the guidelines unilaterally framed by it. Transfer of the employees of the transferor Bank, if any, has to be effected by the transferee Bank in conformity with the Scheme framed by the Central Government, which was published vide Notification dated December 8, 1993. We accordingly issue following directions to the transferee Bank:-

(i) The transfers will be made in conformity with the Scheme framed by the Central Government as "the New Bank of India [Determination of Placement of Employees (officers and Workmen) of the New Bank of India in Punjab National Bank] Scheme, 1993, published vide Notification No. S.O. 936 (E), dated December 8, 1993;

(ii) Transfers effected earlier purporting to be under the guidelines framed by the transferee Bank will be reviewed to bring those in harmony with the Scheme;

(iii) The employees of the transferor Bank, who had already been transferred and whose transfer was stayed under the interim orders of this Court, can file representations to the appropriate authority within fifteen days from today for reviewing the orders of transfer if not made consistent with the Scheme. The transferee Bank shall take a final decision thereon expeditiously; and

(iv) The employees of the transferor Bank, who had been transferred under the guidelines framed by the transferee Bank but had not joined their new place of posting under the orders of this Court, will also be entitled to move for review of the orders as indicated in direction (iii) supra.

For the reasons stated above, these writ petitions are disposed of accordingly.