TMI Blog2020 (3) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... of banking policy. Part II of the Act deals with banking companies. The Reserve Bank, constituted under the Reserve Bank of India Act, is a Central Bank exercising supervisory and regulatory powers. The Reserve Bank, exercises power under the Act to grant approvals. It issues directions to the banks under the Act in furtherance of economic and banking policy. It is invested with various powers in the interest of depositors, efficient use of deposits and banking resources. The predominant object of conferment of power on the Reserve Bank is the interest of banking policy. Banking companies such as ICICI have the freedom to conduct their affairs; however, Reserve bank ensures that their activities will not affect the economy in general. Section 35B(1)(b) is also enacted with the same object, that is to ensure that the actions of a bank does not have an adverse impact on the banking. Various situations may arise under Section 35B(1)(b) of the Act. For instance, an order returning the proposal of the employer as not being in the interest of the banking system. In this petition, in the context of public law element we are only concerned with fact situation of approval for terminati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Respondent No.2 Judgment (Nitin Jamdar, J) :- The Petitioner was working as a Managing Director with the ICICI Bank. The Petitioner was terminated from service. The Reserve Bank India communicated its approval to the termination. The Petitioner has challenged the termination order and has prayed for consequential reliefs. The Petitioner has also challenged the communication issued by the Reserve Bank. 2. The Petitioner joined the ICICI Bank on 17 April 1984 as a Management Trainee. The Petitioner was appointed as Executive Director of the ICICI with effect from 1 April 2001 to 3 March 2006. The Petitioner was reappointed as Executive Director from 1 April 2006 to 31 March 2009. In April 2006 the Petitioner was promoted as a Deputy Managing Director. The Petitioner was then promoted as Joint Managing Director in October 2007. The Petitioner was appointed as Joint Managing Director and Chief Financial Officer from 1 April 2009 to 30 April 2009. After that, as a Managing Director and Chief Executive Officer from 1 May 2009 to 31 March 2014. The Petitioner was re-appointed as a Managing Director and Chief Executive Officer for five years from 1 April 2014 to 31 March 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was allowed by the Division Bench. The objections of the Respondents, including that of the maintainability of the Petition were kept open. By amendment, the Petitioner challenged the approval dated 13 March 2019 of the Reserve Bank. On 9 December 2019, the Division Bench issued notice to the Reserve Bank of India. On 18 December 2019, the Division Bench adjourned the Petition for filing of further replies. Thereafter, the matter is placed before us. 6. At the outset, the Respondents have raised a serious objection to the maintainability of the Petition. They contend that this objection be decided first. Accepting this request we have heard the parties on the preliminary issue of maintainability. Mr. Vikram Nankani, Senior Advocate for the Petitioner addressed us for the Petitioner; Mr. Darius Khambata and Mr. Mustafa Doctor, Senior Advocates for ICICI; and Mr. Venkatesh Dhond, Senior Advocate for the Reserve Bank of India. 7. The preliminary objection of ICICI is as follows. ICICI is not an authority under Article 12 of the Constitution of India. It performs no public duty. There is no public law element in its functioning. It is only a private bank having a purely private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile approving termination of a Managing Director, the Reserve Bank of India does not enter into employer-employee dispute. Section 35B(1)(b) of the Act is a regulatory provision only to oversee that the action of the bank does not have an adverse impact on the depositors or the banking system. Scrutinizing the rights of the managing director as against the employer is not a matter of focus. 10. At the outset we will deal with the argument of the petitioner that since the amendment challenging the order of Reserve Bank was allowed, therefore petition has to be heard on merits. This contention has no substance. The argument of Respondents on maintainability of the Petition was always kept open. 11. The ambit of writ jurisdiction in respect of the private bodies has come up for consideration of the Courts in several cases. The leading decisions in respect of employees of private bodies are (i) K.K. Saxena v/s. International Commission on Irrigation Drainage;(2015) 4 SCC 670 (ii) Federal Bank Ltd. v/s. Sagar Thomas Ors.(2003) 10 SCC 733 (iii) Ramakrishna Mission Anr. v/s. Kago Kunya Ors.(2019) SCC OnLine SC 501 ; (iv) Binny Limited Anr. v/s. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by its Board of Directors. ICICI is not established under any statutory instrument. ICICI receives no funds from the Government. Division Bench of this Court in the case of M/s. Ruchi Soya Industries Ltd. Ors. v/s. IDFC Bank Ltd. Ors. (2017) SCC OnLine Bom. 4252, in case of another private bank, Standard Chartered Bank, has held that it is not amenable to writ jurisdiction. ICICI is not an Authority under Article 12 of the Constitution of India. 14. The Petitioner also accepts that ICICI is not an authority under Article 12, but contends that a writ is maintainable because ICICI discharges a public duty or positive obligation of public nature in respect of its employment of the managing directors. The Petitioner contends to compel it to perform such a statutory function a writ can be issued. This argument is based on the Banking Regulation Act and more particularly Section 35B(1)(b) thereof. The petitioner seeks to import an element of public duty and statutory duty in its employer-employee relationship through this provision and consequently prays to issue of a writ to both, ICICI and Reserve Bank. Based on Section 35B(1)(b), the Petitioner contends that this stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve officer as: employees. 17. The question therefore is whether the Section 35B(1)(b) of the Act can be said to govern the service conditions of the Petitioner so as to impose a statutory duty on the ICICI bank and whether the petitioner can challenge exercise under writ jurisdiction. 18. When employments in a private entity is regulated by contracts, the courts do not to exercise the writ jurisdiction. Courts exercise writ jurisdiction when a public law element involved, if the services are governed by a statute. For that purpose the nature of the concerned enactment and its purpose and scope has to be ascertained. 19. The Banking Regulation Act is enacted to supervise and regulate commercial banking. The Act empowers the Reserve Bank to issue directions to the banks, regulate the shareholding and the operations of banks in the interest of banking policy. Part II of the Act deals with banking companies. The Reserve Bank, constituted under the Reserve Bank of India Act, is a Central Bank exercising supervisory and regulatory powers. The Reserve Bank, exercises power under the Act to grant approvals. It issues directions to the banks under the Act in furtherance of economi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the legislature. Section 35B(1)(b) enacted to examine the situation post termination, that is, its impact on the larger banking interest. The focus of scrutiny under this provision is not the rights of the employee. Section 35B(1)(b) is not a provision enacted to regulate the service conditions between the employer and employee. 21. The Petitioner has relied upon certain decisions of the Supreme Court in support. The decision of Supreme Court in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v/s. V.R. Rudani and Ors.(1989) 2 SCC 691, arose from case of a teacher. Andi Mukta Sadguru Trust was running a science college. Teacher working in the college was terminated from service. The college was an institution affiliated to the University under certain obligations. The relationship of the institution with its employees regarding service conditions was governed by rules and regulations of the university. In this contest the Apex Court held that since the employer-employee relationship was governed by statutory provision, there is a public law element regarding the same. In the decision of Raj Soni v/s. Air Officer Incharge Adm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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