Judgment

AYYANGAR, J. : Civil Appeal No. 154 of 1961 has been filed on special leave obtained from this Court against an order of K. T. Desai, J., functioning as the National Industrial Tribunal (Banks Disputes) Bombay dated October 31, 1960. The point arising for decision in the appeal is as regards the constitutional validity of S. 34A of the Banking Companies Act, 1949 which was enacted on August 26, 1960 as an amendment to the patent Act (Act X of 1949), The appellant before this Court is the All India Bank Employees Association which is a trade union organization of Bank Employees of several banks operating in India. The Punjab National Bank Employees Union, which is a trade union with similar objects has been permitted to intervene in this appeal in support of the appellant union. The three other Writ Petitions are by other Bank Employees Unions whose description would be apparent from the cause title and all these cases have been heard together because in the writ petitions also the point raised is identical, viz., the validity of S. 34A of the Banking Companies Act, which will be referred to hereafter as the impugned provision.

2. Section 34A whose validity is the matter in dispute in these proceedings runs in the following terms:-

"34A, (1) Notwithstanding anything contained in Sec. 11 of the Industrial Disputes Act, 1947, or any other law for the time being in force, no banking company shall, in any proceeding under the said Act or in any appeal or other proceeding arising therefrom or connected therewith, be compelled by any authority before which such proceeding is pending to produce, or give inspection of, any of its books of account or other document or furnish or disclose any statement or information, when the banking company claims that such document, statement or information is of a confidential nature and that the production or inspection of such document or the furnishing or disclosure of such statement or information would involve disclosure of information relating to .

(a) any reserves not shown as such in its published balance sheet; or

(b) any particulars not shown therein in respect of provisions made for bad and doubtful debts and other usual or necessary provisions.

2. If, in any such proceeding in relation to any banking company other than the Reserve Bank of India, any question arises as to whether any amount out of the reserves or provisions referred to in sub-section (1) should be taken into account by the authority before which such proceeding is pending, the authority may, if it so thinks fit, refer the question to the Reserve Bank and the Reserve Bank shall after taking into account principles of sound banking and all relevant circumstances concerning the banking company, furnish to the authority a certificate stating that the authority shall not take into account any amount as such reserves and provisions of the banking company or may take them into account only to the extent of the amount specified by it in the certificate, and the certificate of the Reserve Bank on such question shall be final and shall not be called in question in any such proceeding.

(3) For the purposes of this section, banking company" shall have the meaning assigned to it in the Industrial Disputes Act, 1947".

3. Before commencing the examination of the points in controversy and the grounds on which the legality of the above provision is impugned, it would be helpful for a better appreciation of the problem if we set out, in very brief outline, the history of the steps which led to the enactment in dispute. There was a long standing practice in England of Banking Companies, as distinguished from companies carrying on other commercial etc. activities, not to disclose, in their balance sheets and Profit & Loss accounts, bad and doubtful debts and the provision made therefor, as well as the secret reserves created and held under various items-a practice which received judicial recognition by Buckley, L. J. in Newton v. Birmmgh