The main legal point established in the judgment is the interpretation of section 35(13) of the State Bank of India Act, 1955, and the applicability of the procedure for acquisition under section 35 in the context of the acquisition of the business of a subsidiary bank.

JUDGMENT : 

By means of this petition filed as public interest litigation the petitioners have challenged the action of the respondents No. 1, 3 and 4 acquiring the business of the respondent No. 2 under section 35 of the State Bank of India Act, 1955 [hereinafter referred to as 'the 1955 Act'] after declaring Sub-section (13) of section 35 of the 1955 Act as partially ultra vires and further have prayed for staying the proceedings pertaining to acquisition of the State Bank of Indore by the State Bank of India under the aforesaid provision vide letter dated 20-6-2009, Annexure-P/1.

2. Admitted facts for adjudication of the issues involved in this petition which lie in a narrow compass, are that the respondent No. 2 which initially was Bank of Indore Limited was subsequently under the provisions contained in the State Bank of India (Subsidiary Banks) Act, 1959 [for brevity 'the 1959 Act'] which came into force with effect from 10-9-1959, was constituted as a new bank, i.e., State Bank of Indore under section 3 of the 1959 Act. The Board of Directors of the respondent No. 2 in its meeting dated 19-6-2009 resolved to approach the State Bank of India for initiating necessary formalities to acquire the State Bank of Indore by the State Bank of India. The aforesaid resolution was considered by the State Bank of India in its meeting held on 19-6-2009. Thereafter, the Central Board of State Bank of India considered the matter and approved the aforesaid proposal and resolved to acquire the State Bank of Indore in exercise of power under section 35 of the 1955 Act subject to the approval of the Scheme framed by the Reserve Bank of India. The Central Government also accorded its sanction for entering into negotiation for acquisition of business, assets and liabilities of the State Bank of Indore, respondent No. 2, vide order dated 8-2-2009. Thereafter negotiations between the two, i.e., State Bank of India and State Bank of Indore were held and the proposed scheme of acquisition was framed and approved by the Board of Directors of both the banks on 31-10-2009.

3. The petitioner No.1 claims to be All India Bank Officers' Association, whereas the petitioner No. 2 is the office bearer of the respondent No. 2. Petitioner No. 3 claims to be the shareholder of the State Bank of Indore and the petitioner No. 4 claims to be a social organisation of citizens of Indore established in the year 1959. Petitioner No. 5 claims to be the Director (Workmen) of the State Bank of Indore, respondent No. 2. The petitioners being aggrieved by the aforesaid action for amalgamation of the respondent No. 2 with the respondent No. 1, have filed the instant writ petition seeking the aforesaid reliefs.

4. As per pleadings, the case of the petitioners is that section 35 of the 1955 Act does not empower the respondent No. 1 to acquire the business of the respondent No. 2. It has further been asserted in the writ petition that section 35(13) of the 1955 Act which defines the expression 'banking institution' does not include the subsidiary banks. It is further averred in the writ petition that the action of respondent No. 1 in acquiring the business of the respondent No. 2 is in violation of Article 14 of the Constitution of India, as it has applied the method of pick and choose and other similarly placed banks constituted under section 3 of the 1959 Act have been left untouched.

5. On the other hand, the respondent No. 1 in its return, inter alia, contended that the Central Government has yet to issue an order as contemplated under section 35(2) of the 1955 Act. It has further been pointed out that writ petition filed by the petitioners No. 3 and 5 before the Indore Bench of this Court has already been dismissed. The order passed by the learned Single Judge of Indore Bench has been upheld in appeal by a Division Bench. There is no concluded cause of action available to the petitioners for filing of the instant writ petition. It has further been averred that