IMPORTANT POINT
In the case of merger of the New Bank of India with the Punjab National Bank, on commencement of the NBI (Amalgamation and Transfer of Undertakings) Scheme 1993, the undertakings of NBI stood completely transferred to and vested in PNB and the Central Government did not intend that till a placement scheme was framed by it PNB should not deploy or transfer any employee of NBI to any other branch or office.

Headnote:(i) BANKING-Banking Companies (Acquisition & Transfer of Undertakings) Act, 1980-Section 9-New Bank of India (Amalgamation and Transfer of Undertakings) Scheme, 1993-Paras 5(2) and 5(4)-New Bank of India (Determination of Placement of Employee - Officers and Workmen of the New Bank of India in Punjab National Bank) Scheme, 1993-Amalgamation of NBI with PNB-Undertakings of NBI stood transferred to and vested in PNB-Deployment/re-deployment of surplus staff of former NBI-Surplus workmen-staff of NBI transferred to various branches of PNB-Transfer orders and transfer policy challenged as illegal as placement scheme was not framed by Central Government till then-Whether merger was intended to be complete only after Central Government framed a Placement Scheme ?-(No)-On comm.encement of Amalgamation Scheme the undertakings of NBI stood completely transferred to and vested in PNB-Making of a separate placement scheme by Central Government is not a statutory requirement- Word placement as used in Paragraph 5(4)-Meaning.
       Held; the High Court has neither construed the Amalgamation Scheme nor interpreted the word placement used therein correctly. On commencement of the Amalgamation Scheme the undertakings of NBI stood completely transferred to and vested in PNB. More over, Paragraph 5(2) thereof in clear terms provided that every officer and other employee of NBI shall become from that date an officer or employee of PNB. Not only that it further provided that they shall hold office or be in service on the same terms and conditions. Since they became officers and employees of PNB it was further provided that they will continue in the service on the same terms and conditions until they are duly altered by PNB. Thus from the date of commencement of the Scheme the officers and other employees of NBI not only became officers and employees of PNB but also became subject to supervision and control of PNB. It was, therefore, not correct to say that did not become part and parcel of the then existing service of PNB right from that date. If the officers and employees of NBI were to be treated as a separate lot and not to be disturbed till the placement scheme was made by the Central Government then it would not have made a provision with respect to the terms and conditions on which they were to become the employees of PNB. In Paragraph 5(2) the Central Government also made it clear that it was thereafter open to PNB to terminate services of such employees and also to alter their remuneration and other terms and conditions of service. If the merger was intended to be complete only after making of the placement scheme then the Central Government would not have made such a provision in the amalgamation scheme itself. If the PNB could thus exercise such wide powers of an employer before making of a placement scheme it is difficult to appreciate why it did not have the power to deploy or transfer the employees of NBI till the placement scheme was made. Therefore, it could not have been the intention of the Central Government, when it made the amalgamation scheme, that no deployment or transfer of the employees of the erstwhile NBI should be made. (Para 11)
       Further held : Making of a separate placement scheme by the Central Government is not a statutory requirement. It appears that in order to see that no injustice was done to the employees of NBI, as a result of their absorption in the service of PNB, it reserved to itself the power to make another scheme with respect to them for determining their placement in the administrative set-up of PNB and to lay down the norms and guidelines for determination of their inter se seniority vis-a-vis the employees of PNB. Though the word placement has a wider dictionary meaning it does not appear to have been used in Paragraph 5(4) of the amalgamation scheme to mean an act of placing or posting. After amalgamation of NBI with PNB it was not expected that PNB should maintain all the offices and branches of NBI and should carry on its business through those offices and branches with the same employees of NBI. NBI was not run efficiently and it was for that reason that it had made huge losses. These circumstances, also indicate that the Central Government did not intend that till a placement scheme was framed by it PNB should not deploy or transfer any employee of NBI to any other branch or office. In this context, the word placement appears to have been used in the sense of fitment into a position in the administrative set-up of PNB. In other words, what was contemplated was making of a scheme by the Central Government for the purpose of deciding at which level or in which position the employees of NBI were to be fitted in the administrative set-up of PNB. It was possibly for that reason that it was further provided in Paragraph 5(4) that while making the scheme the Central Government shall take into account relevant factors such as experience of the employee, etc. (Para 12)
       (ii) BANKING-Amalgamation of NBI with PNB-Action of framing guidelines and then effecting transfers in accordance therewith of surplus staff of NBI-Not inconsistent with or contrary to statutory amalgamation and placement scheme-Failure to establish discrimination-PNB has acted in a fair manner. (Paras 15, 16, 17)

JUDGMENT

Nanavati, J.-Leave granted.

2. This appeal by special leave is directed against the judgment and order passed by the High Court of Allahabad in Special Appeal No. 877 of 1993.

3. Fourteen banks including the Punjab National Bank Ltd. (for short PNB ) were nationalised in 1970. Six more banks including the New Bank of India (for short NBI ) were nationalised by the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1980 (for short the Act ). Finding it necessary, the Central Government, in exercise of the powers conferred by Section 9 of the Act, framed a scheme for amalgamation of NBI with PNB, named as the New Bank of India (Amalgamation and Transfer of Undertakings) Scheme, 1993. On the commencement of the Scheme the Undertakings of NBI stood transferred to and vested in PNB. All the officers and other employees of NBI, who were willing to join PNB, became officers and employees of PNB. As a result of this merger, some officers and employees of former NBI were found surplus. Therefore, on 16.9.93, the PNB framed guidelines for deployment/re-deployment of such surplus staff as well as for ensuring exchange of personnel and proper placing of officers of the banks. Following those guidelines the surplus workmen-staff of NBI was transferred to various branches of PNB. These transfer orders were challenged by the All India New Bank of India Employees Federation and NBI Employees Union as well as some of the employees of NBI (for short referred to as petitioners) by filing a writ petition in the Allahabad High Court. It was allowed by a learned Single Judge of the High Court on 11.11.93. PNB and their officers filed an appeal before a Division Bench of that Court. While the appeal was pending an application for impleadment was made by 27 employees of NBI. That was allowed. The Division Bench dismissed the appeal with certain observations.

4. The transfer orders and the transfer policy were challenged before the learned Single Judge on two grounds. It was contended that they were illegal as hit by paragraph 5(2) of the Amalgamation Scheme and also because no scheme as envisaged by paragraph 5(4) thereof for "placement of the employees of the transferor bank including the determination of their inter-se-seniority vis-a-vis the employees of the transferee bank" as framed by the Central Government till then and without which no deployment or transfers could have been made. It was also contended that the transfer orders and the transfer policy were bad as they meted out discriminatory treatment to the employees of NBI by illegally terming them as surplus staff although not a single branch or office of the NBI was closed by PNB. The appellant supported its orders and the transfer policy on the ground that neither the transfer policy nor the transfer orders were inconsistent with paragraph 5(4) of the Scheme which really provided for making a separate scheme for fitment of the employees of NBI and consequent determination of their inter se seniority. It was its contention that deployment by way of transfers was required to be made as of necessity to adjust the surplus staff of NBI, as it was found after scrutiny that a large number of them were in excess and the Management was faced with the problem of either retrenching their services or adjusting them at some other places. The learned Single Judge rejected the contention that the transfer policy was hit by paragraph 5(4) of the Scheme and that in absence of a scheme for placement of the employees of NBI no transfers could have been made. But he found substance in the second contention for the reason that no office establishment or branch run by NBI had been closed nor it was explained as to how some of the employees of NBI had become surplus and also because the averment made in paragraph 30 of the writ petition "that the employees/officers of the erstwhile NBI are being transferred outside the stations/states and in their places the employees/officers of the PNB a

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