HON’BLE SRI JUSTICE NAGESH BHEEMAPAKA WRIT PETITION No. 8538 OF 2018

O R D E R:

Heard Sri Prabhakar Sripada, learned Senior Counsel representing Sri Setty Ravi Teja, learned counsel for petitioners as well as Sri B.S. Prasad, learned Senior Counsel on behalf of M/s Pearl Law Associates for the respondents.

2. The case of petitioners is that Respondent No.4 – State Bank of India acquired five Associate Banks viz: (1) State Bank of Bikaner and Jaipur, (2) State Bank of Hyderabad, (3) State Bank of Mysore, (4) State Bank of Patiala, and (5) State Bank of Travancore as per said Gazette Notifications dated 22.02.2017 which were to come into force from 01.04.2017. It was mentioned in Clause 7 of the said Notification that Employees of the Transferor Banks (Associate Banks) shall become, from the effective date, an officer of, as the case may be, of Transferee Bank (State Bank of India) and shall hold his / her office of service therein on such terms and conditions as may be approved by the Central Board of the Transferee Bank (State Bank of India) and shall continue to work in accordance there with. However, no terms and conditions of service were approved by the Central Board, even though the effective date of the operation of Gazette Notification was 01.04.2017. Two days prior thereto, i.e. on 29.03.2017, Respondent No. 2 - Chief General Manager (HR), State Bank of India, Corporate Centre, Mumbai issued Option Letters to all the employees and officers of the Associate Banks asking them to either accept the terms and conditions contained in the Option Letters by exercising option “A” or “B” or discontinue their services by exercising option “C”. In other words, employees were told either to accept Options A or B or resign immediately by exercising option C.

It is stated that this so-called option letter is unknown to service jurisprudence. A permanent employee or officer cannot be forced to resign if he or she does not like the new terms and conditions imposed by the Management. Moreover, the so-called offer of Employment Letter dated 29.03.2017 does not refer to any terms and conditions of service approved by the Central Board of the Transferee Bank i.e. State Bank of India. Therefore, it can be seen that Respondent No. 2 has no authority to unilaterally issue offer of employment letter which are not sanctioned or approved by the Central Board of the Transferee Bank. Respondent No.2 by himself cannot frame service conditions, as service conditions have to be approved only by the Central Board of the Transferee Bank. As per Section 43 of the State Bank of India Act, 1955 (for short, ‘the Act’), it is only the SBI which may appoint officers or other employees. The bank acts through the Central Board as defined under Section 2 (b). As per Section 17, the management of SBI vests with the “Central Board” and not the “Chief General Manager (HR)” i.e. Respondent No.2. Section 19 deals with composition of Board. As per Section 19 (a), “Central Board” consists of Chairman to be appointed by the Central Government. Section 19 (b) provides such number of Managing Directors, not exceeding four. Section 19 (ca) : one director, from among the employees of the State Bank, who are workmen, to be appointed by the Central Government in the manner provided in the rules made under this Act. Section 19 (cb) : one director, from among such of the employees of the State Bank, as are not workmen, to be appointed by the Central Government in the manner provided in the rules made under this Act. Section 19 (d) : not less than two and not more than six directors to be nominated by the Central Government, from among persons having special knowledge of the working of co- operative institutions and of rural economy or experience in commerce, industry, banking or finance. Section 19 (e) : one director to be nominated by the Central Government. Thus, it can be seen that Respondent No.2 is not a member of the Central Board and he alone cannot frame the terms and