Important Point
Circulars dated 28.1.87 and 7.3.87 are issued by State Bank of India to keep the functioning of Bank free from political influence and favouritism and to ensure that its employees attend to their duties during office hours thus they cannot be said to be violating Section 9A of I.D. Act, 1947 r/w its 4th Schedule.

Judgment

Mrs. Sujata V. Manohar, J.-The appellants, representing the State Bank of India have challenged a decision of the Andhra Pradesh High Court setting aside a Circular issued by the State Bank of India dated 28.1.1987 as also a Circular in the same terms dated 7.3.1987, as violating Section 9-A of the Industrial Disputes Act, 1947 read with the Fourth Schedule. The respondents to the present appeal are the State Bank of India Staff Union, Hyderabad Circle and the second respondent who is a person aggrieved by the Circulars.

2. The Rules of Conduct of the Award staff of the State Bank of India which were in force at all material times, provide, inter alia, that “an employee of the bank may not take active part in politics or in any political demonstration, nor may an employee accept office on a Municipal Council or other public body without the prior sanction of the bank”. In respect of officers of the appellant-Bank, prior to 28th of January, 1987, under the State Bank of India Supervising Staff Service Rules, an officer who wanted to contest an election to Parlia­ment, State Assemblies, Municipal Council etc. had to resign from the bank’s service before doing so. In the case of the Award staff, howev­er, permission to contest such an election could be considered by the General Manager on certain conditions and on the employee giving an undertaking that he was not and he would not become a member of a political party, that he was not being nominated by a political party and that he would not be required to be present in the Council/Body during office hours. He also would not receive any remuneration and would not plead his membership of such a body as a bar to his trans­fer. If he violated any condition of his undertaking, it would be open to the bank to call upon him not to continue in his office in the above mentioned public of civic body.

3. According to the appellants-bank, cases came to their notice where employees who had been elected to public/civic office had not been performing their normal day’s work, causing inconvenience to the bank and its customers. There were also some cases of employees indulging in restrictive practices or favouring certain political parties for obtaining benefits from the appellant-bank. The appellant-bank, there­fore, issued a Circular on 28.1.1987 to the effect that the local head offices will, in future, while considering the request of an Award employee to seek election to any public/civic body, first thoroughly examine whether his contesting the election will interfere or would be likely to interfere with his duties in the bank. The local Head Offices were also directed to obtain an undertaking from the employee indicating that (1) his contesting election will not interfere with his duties in the bank and he will not take any undue advantage of his position in the bank and (2) in case he gets elected, he will immedi­ately resign from the bank’s service, failing which he will be liable to be discharged or the bank would be free to treat his letter seeking permission as a letter of resignation from the day he is declared elected. The Circular of 7.3.1987 gives a capsule of previous instruc­tions and repeats the Circular of 28.1.1987.

4. The second respondent, who was a Clerk in the appellant-bank, Hyderabad Circle, on 18.2.1987 sought permission of the appellant-bank for contesting elections to the Municipal Council of Repalle. Although he did not receive permission, he filed his nominated. He was thereaf­ter informed by the bank on 5.3.1987 that his application for permis­sion to contest the election could not be granted unless he gave an undertaking that he would resign from the bank’s service on his getting elected. Thereupon the respondents filed a writ petition before the Andhra Pradesh High Court challenging the two Circulars of 28.1.1987 and 7.3.1987. The High Court has held that these two Circulars amount to a change in the conditions of service of workmen and are violative of S