JUDGMENT

THOMMEN, J. :— The first petitioner is a registered Central Trade Union claiming to represent about -85 per cent of the officers working in the various nationalised banks. Petitioners 2 and 4 are principal office-bearers of the first petitioner and are officers of different nationalised banks. They are aggrieved by Circular dated 23-8-1982 (Annexure-A) issued by the Joint Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs, -(Banking Division), New Delhi. They contend that the circular is contrary to the mandate of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Act No. 5 of 1970) (hereinafter referred to as the Act) and the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1980 (hereinafter referred to as the Scheme). They further contend that Cl. 3 of the Scheme in terms of which the circular is purported to have been issued is ultra vires S. 9 of the Act unless the said clause is so read as to be in harmony with the section, and when so read the said clause does not justify or support the impugned circular. The petitioners, therefore, seek a writ of mandamus to direct the Central Government to appoint a nominee of the majority association of each of the nationalised banks as a member of its Board of Directors.

The circular in question reads :

"As you are aware, in terms of sub-clause (c) of Cl. 3 of Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970/1980, one Director from among the employees of the nationalised banks who are not workmen, is to be appointed by the Central Government in consultation with the Reserve Bank of India on the Board of each of the Nationalised Banks. Unlike in the case of workmen, the Scheme does not lay down any procedure for selection of the non-workman Director. The intention clearly was that in the case of Officer-Director, Government should have ample scope and freedom in selecting any officer of the Bank to be the non-workman Director. However, hitherto panel of names sent by the banks for selection of the non-workman Director has been confined to office-bearers of the Association of Officers. Government has recently reviewed this matter in the light of the relevant provisions of the Scheme and come to a conclusion that there is no justification for restricting the choice to - the office-bearers of the Associations."

2. The object of the circular is to clarify that the Central Government no longer regards itself bound by its earlier practice of appointing a person from out of the panel or; three names submitted by the respective Association representing the majority of the non-workmen-employees of each nationalised bank. The circular makes it clear that the Government wishes to appoint any officer of proven ability and character to the Board of Directors of a nationalised bank irrespective of his affiliation with any Association. The petitioners contend that the circular is undemocratic and contrary to the letter and spirit of the Act and the Scheme insofar as it cuts at the root of the representative form of selection for appointment to the Board of Directors as contemplated by the statute.

3. The stand of the Central Government and other respondents, as stated in their counter-affidavits, appears to be that the object of the circular is to neutralise and discourage trade unionism amongst the officers and to keep the directorship above union affiliation, and thus encourage the growth of a "management culture". Mr. Rajinder Sachar, supported by Mr, Ramamurthi, contends that there is no justification whatsoever to issue any such circular for the very object of the Act is to encourage democratic selection of the Directors who will truly represent the interests of the various categories of persons mentioned in the Act. To discourage trade unionism is contrary to the very spirit of the statute and repugnant to constitutional principles enshrined in Art. 19(l)(c) and Art. 43A of the Co