TMI Blog2008 (5) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act to provide for the acquisition and transfer of the undertakings of certain banking companies, having regard to their size, resources, coverage and organization in order to further control the heights of the economy, to meet progressively, and serve better, the needs of the development of the economy and to promote welfare of the people, in conformity with the policy of the State towards securing the principles laid down in clauses (b) and (c) of Article 39 of the Constitution and for matters connected therewith or incidental thereto. Section 3 of the Act provides for the transfer of undertakings of the existing banks. Appellant bank is a New Bank within the meaning of the provisions of the said Act. Undertaking of the existing bank in terms of the said Act vested in the New Bank . Section 8 of the Act provides that every corresponding New Bank shall in the discharge of its functions be guided by such directions in regard to the matters of policy involving public interest as the Central Government may, after consultation with the Governor of the Reserve Bank, issue. Section 19 of the Act empowers the Board of Directors to make regulations, sub-section (1) whereof is in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all concerned in terms of its letter dated 7.3.1985, the relevant part whereof reads as under : 1. Travel from residence to office and back is to be considered as travel for office work (as far as reimbursement of conveyance expenses is concerned). The Central Government, however, by reason of a circular letter dated 25.4.1990 addressed to the Chief Executive of all public sectors banks, inter alia, stated : The to and from journeys between office and residence should not be treated as official journeys and no reimbursement for such journeys be made. The claim duly countersigned by an officer at least one step higher than the officer claiming the reimbursement for the entire month should be submitted only once. However, the officers in Scale IV and above may not get their vouchers countersigned. The said letter was circulated by the Indian bank Association. 6. A writ petition was filed by the respondents herein before the Andhra Pradesh High Court questioning the validity of the said purported guidelines issued by the Central Government. During the pendency of the said writ petition, the Board of Directors issued a circular letter dated 22.2.1991, the relevant po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys from residence to office and viceversa were to be treated as on official duty . This was a specific term in the scheme. Respondent No.1 had absolutely no power to tinker with the provisions of the scheme. 8. A Division Bench of the High Court affirmed the said view of the learned Single Judge, stating : Section 8 of the Act lays down that the Bank in the discharge of functions shall be guided by such directions in regard to matters of policy involving public interest as the Central Government may after consultation with the Governor of Reserve Bank of India. A perusal of the impugned guidelines makes it clear that there was no prior consultation with the Governor of the Reserve Bank of India. The said consultation was only with the Indian Banks Association. Had such a consultation been there, the bank is bound by the directions. From this it is beyond doubt that the power for issuing the impugned guidelines cannot be traced to Section 8 of the Act. 9. With a view to ascertain as to whether, in fact, any consultative process had been undergone with the Reserve Bank of India by the Central Government, the former was impleaded as a party to this appal. At our reque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k, in terms of Section 19, it is for the Board of Directors to consult the Reserve Bank. Only thereafter the Regulations can be brought in force with the previous sanction of the Central Government. Such Regulations must be consistent with the provisions of the Act or the scheme made thereunder. It must provide for all matters for which provisions have been made for the purpose of giving effect to the the said Act wherefor Section 12(2) of the Act has also a significant role to play. The services of the employees of the existing bank were contemplated to be taken over by reason of the provisions of the Act. They were to be governed by the same terms and conditions and continue to have the same rights as regards pension, gratuity and other matters subject, however, to any alternation made by the corresponding new bank with regard to his remunerations and other terms and conditions of service. Such alternations are required to be made only in terms of the regulations made under Section 19 and not otherwise. Use of the Bank s cars for personal purpose is only one of the regulations. The guidelines contemplated under sub-regulation (2) of Regulation 26 would be those issued by the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s permission of the Central Government but also the amended Regulations were required to be laid before both the Houses of Parliament in terms of Section 19 of the Act. With a view to avoid the rigours of such procedural requirements, we see no reason as to why the said power cannot be delegated to the Board of Directors keeping in view the fact that a policy decision was required to be laid down for effecting promotions to different grades of officers and employees at different points of time. 14. The term rules used in sub-regulation (2) of Regulation 19 appeared to have been loosely used. It did not envisage any statutory rules. The power to frame rules is vested with the Bank. The power of the bank is required to be exercised by the Board of Directors. The scheme in regard to reimbursement of the expenses incurred for going to office from the residence or coming back from the office to the residence was treated to be official. The Central Government could, thus, issue a guideline in relation thereto. When the Central Government, in exercise of its power under Regulation 6 of the Regulations, issues a direction, the requirements of subregulation (2) thereof regulating f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
