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IN THE HIGH COURT OF ALLAHABAD
S. K. Phaujdar, J.
MANAGING DIRECTOR, CANARA BANK - Appellant
Versus
RAMJI SHUKLA - Respondents
Second Appeal 148 Of 1996
Decided On : 03/20/1998
BANKING REGULATION ACT - Termination of Service - Manager - Interpretation - Reinstatement - Jurisdiction of Civil Court - Amalgamation of Banks - Liability of Transferee Bank.
Fact of the Case:
The plaintiff, a Branch Manager of Laxmi Commercial Bank, was terminated from service. He filed a suit for a declaration that the termination was void and for reinstatement. The trial court dismissed the suit, but the first appellate court reversed the decision and decreed the suit. The defendant bank appealed to the High Court.
Finding of the Court:
The High Court held that the plaintiff was not a Manager as defined in the Banking Regulation Act, 1949, and therefore, the previous approval of the Reserve Bank of India was not required for the termination of his services. The Court also held that the termination was not effected by way of punishment, as alleged by the plaintiff. The Court further held that a suit for reinstatement was not maintainable in a Civil Court and that the Canara Bank, which had taken over the Laxmi Commercial Bank, was not liable for the plaintiff's claim.
Issues: 1. Whether the plaintiff was a Manager as defined in the Banking Regulation Act, 1949? 2. Whether the previous approval of the Reserve Bank of India was required for the termination of the plaintiff's services? 3. Whether the termination was effected by way of punishment? 4. Whether a suit for reinstatement was maintainable in a Civil Court? 5. Whether the Canara Bank was liable for the plaintiff's claim?
Ratio Decidendi: 1. The term "Manager" under Section 35-B (1) (b) of the Banking Regulation Act, 1949, has been uttered along with the Chairman, managing or whole time Director, or a Chief Executive officer by whatever name called. This suggests that a Branch Manager, not being in the rank of the managing or whole time Director, or a Chief Executive Officer cannot get the protection of section 35-B (1) (b) of the Act and an order of termination of the services of a Branch Manager of a Banking Company may not require the previous approval of the Reserve Bank of India. 2. The provisions of Article 311 of the Constitution are applicable only to persons holding a Civil Post under the Union or the State, but the facts are to be analysed as there had been a difference on the finding of facts by the two Courts below. 3. A contract of employment for personal service could not be specifically enforced under the law of contract and under the civil law an employee whose services were termination could not seek the relief for reinstatement or back wages. At best, he could seek the relief of damages for breach of contract. 4. The scheme of amalgamation provided that all the liabilities, duties and obligations of the transferor Bank would become the liabilities, duties and obligations of the transferee Bank. However, the benefit of this provision was not applicable to those employees whose name found mention in the schedule.
Final Decision: The appeal was allowed. The first appellate decree was set aside and the decree of dismissal recorded by the trial Judge was restored.
( 1 ) THE present appeal was preferred against the first appellate decree and judgment dated 12. 3. 1996 recorded by Sri V. S. Shukla, IVth Additional District Judge, Allahabad, in First appeal No. 397 of 1986 arising out of original suit No. 966 of 1982 between Ramji Shukla and laxmi Commercial Bank Ltd, and another. The suit of the plaintiff-respondent stood dismissed by the 1st Additional Civil Judge, Allahabad by his judgment and decree dated 7. 12. 1985. The first appellate Court had reversed the decree of dismissal and had decreed the suit and directed that the letter of the defendants terminating the services of the plaintiff was void. A further direction was given by the appellate Court that the plaintiff-respondent was entitled to full pay and allowances, as were claimed in the suit, as also for the period from the date of the suit till the decree with the benefits of increments, etc. There was a declaration that the plaintiff was continuing with his service. Canara Bank was made liable for the decree.
( 2 ) BEFORE the appeal was filed, a caveat was filed by the plaintiff-respondent through Sri A. K. Yog and accordingly Sri Yog was noticed at the time of admission of the appeal as. there were prayers for interim relief also. Sri Rakesh Tewari with Sri J. N. Tewari appeared for the appellant and Sri A. K. Yog appeared for the caveator-respondent. A counter affidavit was also filed on behalf of the caveator. A rejoinder affidavit was put in by the appellant. By an order dated 24. 7. 1996 this Court directed that the matter would be taken up; for final disposal at the admission stage itself on 9. 8. 1996. The matter, however, lingered on and could be heard on the point of admission, for final disposal, on 21. 2. 1998 only. At the hearing Sri A. K. Yog was assisted by Ms. Anu Jaiswal. The Court also directed the office to call for the records from the court below and the records had been received.
( 3 ) ORIGINAL suit No. 966 of 1982 was filed by Ramji Shukla arraying Laxmi Commercial Bank ltd. as defendant No. 1 and the Managing Director-cum-Chairman, Canara Bank, as defendant no. 2. The plaint indicated that the first defendant-Bank had merged with the Canara Bank by a notification of the Government of India, Finance Ministry, in the year 1985. It was stated that laxmi Commercial Bank was a Private Limited Banking Company under the Indian Companies act and the bank issued an advertisement for employment in officers cadre of the Bank. The plaintiff was an aspirant for the post and after interview and satisfaction of the Board of directors of the Bank, the plaintiff was appointed in the managerial cadre on condition, inter alia, that in all matters he would be governed by the Banks Rules, practice, procedure enforced from time to time and the Regulations applicable to the employees of his cadre. Upon a letter received from the Secretary of the Bank, the plaintiff joined the post on 1. 11. 1977 at New Delhi. He was directed to report to Kanpur Branch and accordingly he reported for duty at Kanpur on the next day. Subsequently, he was transferred as a Branch Manager to the Allahabad Branch of the Bank. It was stated that his performance as Manager of the Branch were appreciated by his employers and he had achieved the targets of business expected of him by his employers. However, due to back-biting and some mischievous maneuvering some complaints were made to the higher officers, who, in their turn, did not give any opportunity to the plaintiff to show-cause against the alleged conducts levelled against him and issued a letter on 15. 10. 1982 to the plaintiff determining his services and ordering him to make over charge of the Allahabad Branch to Sri R. M. Arora immediately. On a second thought, however, another letter was issued to him on 15. 10. 1982 charge-sheeting him levelling certain charges against him and advicing him to get the irregularities rectified and to deposit the amount, allegedly involved
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