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1984 Supreme(Pat) 369
HIGH COURT OF PATNA
N. P. Singh & M. P. Varma, JJ.
State Bank of India Officers' Association, Patna Circle, and another - Petitioners
Versus
Shri S. D. Ganda, Chief General Manager and others. - Respondents.
Civil Writ Jurisdiction Case No. 2877 of 1981
Decided on : 7.11.1984
For the petitioners: M/s B. C. Ghose, Syed Imam Ali, Swaraj Kumar Ghose, Sushant Kumar Das and S. N. Das.
M/s Basudeva Prasad and Shailesh Kumar Sinha.
Paragraph 20(1) of the State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979 was not ultra vires the Constitution merely because it vested power in the Bank to terminate the service of a permanent employee. However, the Bank could not terminate the services of an employee without satisfying the court that it had been exercised in the interest of the Bank and public.
Headnote:
STATE BANK OF INDIA OFFICERS (DETERMINATION OF TERMS AND CONDITIONS OF SERVICE) ORDER, 1979 - PARAGRAPH 20(1) - VALIDITY - TERMINATION OF SERVICE - POWER OF BANK - CONDITIONS - JUDICIAL REVIEW.
Fact of the Case:
Petitioner, an officer of the State Bank of India, was terminated from service under Paragraph 20(1) of the State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979. The petitioner challenged the termination, arguing that Paragraph 20(1) was unconstitutional as it vested unbridled power in the Bank to terminate the services of a permanent employee without any guidelines.
Finding of the Court:
The Court held that Paragraph 20(1) was not ultra vires the Constitution merely because it vested power in the Bank to terminate the service of a permanent employee. However, the Court held that the Bank could not terminate the services of an employee without satisfying the court that it had been exercised in the interest of the Bank and public.
Issues: 1. Whether Paragraph 20(1) of the State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979 was ultra vires the Constitution? 2. Whether the Bank could terminate the services of an employee without satisfying the court that it had been exercised in the interest of the Bank and public?
Ratio Decidendi: 1. The Court held that Paragraph 20(1) was not ultra vires the Constitution merely because it vested power in the Bank to terminate the service of a permanent employee. The Court reasoned that Government undertakings have a different object for their existence than the Government of India and the State Governments, and their functions are also different in many respects. One broad object which such Government undertaking have to achieve is the efficiency of service for a higher output to meet ever increasing need of the society. If it is held that permanent employees, even of Government undertakings, cannot be removed from service without institution of a departmental proceeding, such employees without having protection of Article 311 (2) shall enjoy the right like holders of the civil posts. 2. The Court held that the Bank could not terminate the services of an employee without satisfying the court that it had been exercised in the interest of the Bank and public. The Court reasoned that whenever the exercise of such power is challenged in court of law, the Bank cannot take a plea that as the Order under which the power has been exercised does not prescribe any condition for exercise thereof, the Bank is not required to satisfy the court that it has been exercised in the interest of the Bank and public.
Final Decision: The Court allowed the writ petition and quashed the order of termination.
N. P. Singh, J.-The writ application has, been filed for quashing an ORDER :of termination issued by the respondent-State Bank of India (hereinafter to be referred to as 'the Bank') in exercise of the powers under paragraph 20 of the State Bank of India Officers (Determination of Terms and Conditions of' Service) ORDER :, 1979 (hereinafter to be referred to as 'the ORDER :'). The said ORDER :has been framed under sub-section (1) of section 43 of the State Bank of India Act, 1955 (hereinafter to be referred to as 'the Act').
2. Petitioner no. 1 is the State Bank of India Officer1s Association, Patna Circle. Petitioner no. 2 is Vinod Jetley (hereinafter to be referred to as 'the petitioner'). The petitioner passed B. Sc. (Hons.) in Mathematics in First Class from the Punjab University securing second position in the University. He was awarded British Council Studentship for research in Theoretical physics at the University of Manchester for 3 years from 1972 to 1975 and was awarded Diploma for Advanced Studies in Science from the University of Manchester. The petitioner joined the State Bank of India on 19.11.1977 as a Probationary Officer after having competed in an All India Recruitment Test. The petitioner was confirmed in Bank's service on 19-11-1979 as Officer Grade I. After series of selection tests he was selected for being posted as India Based Trainee Officer at Chicago Branch of the Bank. The petitioner joined the aforesaid post of the Overseas Branch at Chicago on 29.5.1980.
3. According to the petitioner, after he joined at Chicago, he noticed certain glaring irregularities which were likely to jeopardise the interest of the Bank. By a letter dated 20.7.1980 petitioner brought to the notice of the Manager of the Bank at Chicago the aforesaid irregularities. It bas been stated that the Manager of the Bank became annoyed and threatened the petitioner that he shall be removed from the service of the Bank. The petitioner requested the Manager of the Bank at Chicago for his repatriation back to India. The petitioner returned to India in the last week of December, 1980. He addressed a letter dated 29.12.1980 to the Managing Director of the Bank informing him about the glaring irregularities in- the functioning of the Chicago Branch saying that it was likely to cause sub•' 8tantialloss to the Bank and the country.
4. On return to India, petitioner was posted in Bihar. The Regional Manager of the Bank, Region II, Muzaffarpur by a letter dated 27.3.1981 called for an explanation from the petitioner as to h9W he had addressed the aforesaid letter dated 29.12.1980 to some of the Directors of the Central Board of the Bank. On 3.4.1981 the petitioner replied saying that he bad addressed the letters in good faith, keeping in view the interest of the Bank and if there had been any lapse on his part in that respect he was expressing regrets. The Chief General Manager of the Bank at Patna on 21.5.1981 while forwarding the letter aforesaid, dated 3.4.1981 addressed by the petitioner to the Central Officer of the Bank recommended that the ends of justice would be met if an administrative warning is given to the petitioner. However, the Deputy Managing Director (Personnel and Service) of the Bank, Central Office, Bombay instructed the Chief General Manager of the Local Head Office. Patna by his letter dated 12.8.1981 to terminate the service of the petitioner. The Chief General Manager in exercise of the power under paragragh 20(1) of the aforesaid ORDER :, passed the impugned ORDER :dated 24.8.1981 saying, "In terms of paragraph 20(1) of the SBI Officers (Determination of Terms and Conditions of Service) ORDER :, 1979 your services in the Bank are hereby terminated at the close of business today." A cheque for three months' emoluments in lieu of three months' previous notice in writing was also enclosed. Copies of the communications aforesaid have been annexed to the writ application.
5. The terms and conditions of the servic
