TMI Blog1992 (3) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... Commercial bank with the Canara Bank on August 23, 1985 under Sub-section (4) of Section 45 which was approved by the Central Government on August 24, 1985. As a consequence thereof, the services of the employees of Lakshmi Commercial Bank were continued on amalgamation in the Canara Bank and respondent No. 1, M.S. Jasra was fitted in the post of Divisional Manager in the Canara Bank. 3. M.S. Jasra, respondent No. 1 was aggrieved by his continuance in the Canara Bank as Divisional Manager since he claimed to be fitted against a higher post by virtue of the office of Assistant General Manager held by him in the Lakshmi Commercial Bank; and he also asserted that he was entitled to continue in the service of Canara Bank till he attained the age of 60 years which was the age of superannuation for him in the Lakshmi Commercial Bank instead of 58 years, the age of superannuation in the Canara Bank. These representations made by M.S. Jasra were rejected by the Canara Bank as well as by the Reserve Bank. Respondent No. 1, M.S. Jasra then filed Writ Petition No. 2199 of 1991 in the Delhi High Court for grant of the relief that he was entitled to continue in service in the Canara Bank til ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, for the time being in force, where it appears to the Reserve Bank that there is good reason so to do, the Reserve Bank may apply to the Central Government for an order or moratorium in respect of a banking company. (2) The Central Government, after considering the application made by the Reserve Bank under Sub-section (1), may make an order of moratorium staying the commencement or continuance of all actions and proceedings against the company for a fixed period of time on such terms and conditions as it thinks fit and proper and may from time to time extend the period so however that the total period of moratorium shall not exceed six months. (3) .... (4) During the period of moratorium, if the Reserve Bank is satisfied that - (a) in the public interest; or (b) in the interest of the depositors; or (c) in order to secure the proper management of the banking company; or (d) in the interests of the banking system of the country as a whole,-it is necessary so to do, the Reserve Bank may prepare a scheme- (i) for the reconstruction of the banking company, or (ii) for the amalgamation of the banking company with any other banking instituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme or any provision thereof, the scheme, or such proviso shall be binding on the banking company or, as the case may be, on the transferee bank and any other banking company concerned in the amalgamation and also on all the member, depositors and other creditors and employees of each of those companies or the transferee bank and on any other person having any right or liability in relation to any of those companies or the transferee bank including the trustee or other persons managing, or connected in any other manner with, any provident fund or other fund maintained by any of those companies or the transferee bank. xxx xxx xxx (14) The provisions of this section and of any scheme made under it shall have effect notwithstanding anything to the contrary contained in any other provisions of this Act or in any other law or any agreement, award or other instrument for the time being in force. (15) In this section, banking institution means any banking company and includes the State Bank of India or a subsidiary bank or a corresponding new bank. Explanation-References in this section to the terms and conditions of service as applicable to an employee shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication and experience of the other employees of corresponding rank or status of the transferee bank or as to the procedure of principles to be adopted for the fixation of the pay of the employees in the scales of pay of the employees in the scales of pay of the transferee bank, the doubt or difference shall be referred to the Reserve Bank of India whose decision thereon shall be final. 8. The High Court has taken the view that Clause (i) of Sub-section (5) of Section 45 read with Clause 10 of the amalgamation scheme confers a vested right on the transferred employees of the Lakshmi Commercial Bank in respect of their terms and conditions of service which could not be adversely affected as a result of the amalgamation with the Canara Bank and Proviso (ii) in Section 45(5)(i) and Clause 12 of the Scheme could not take away or dilute the vested right so conferred by Section 45(5)(i). The material portion of the High Court's Judgment is as under: The mandate of Section 45(5)(i) is that the scheme which is formulated may contain provisions with regard to employees of the banking companies and such a scheme should protect the remuneration and other terms and conditions of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or continuance of all actions and proceedings against the banking company for a fixed period of time on such terms and conditions as it thinks fit and proper and permits extension of the period of moratorium so as not to exceed six months. Sub-section (4) then provides for preparation of a scheme by the Reserve Bank for the reconstruction of the banking company for its amalgamation with any other banking institution if the Reserve Bank is satisfied that it is necessary so to do in the public interest; or in the interest of the depositors; or to secure the proper management of the basking company; or in the interests of the banking system of the country as a whole. 12. Sub-section (5) then specifies the provisions which may be made in such a scheme. It is Clause (i) and the provisos thereunder of Sub-section (5) with which we are concerned. The opening words in Sub-section (5) are : The scheme aforesaid may contain provisions for all or any of the following matters. ... It is clear that the scheme so framed under Sub-section (4) may contain provisions for all or any of the matter specified in Sub-section (5) so that it enables all or any of the specified matter to be provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation for the continuance of services of the employees of the banking company in the transferee bank on the same terms and conditions by which they were governed before the date of the order of moratorium but when such a provision is made, the scheme has also to provide that the transferee bank shall grant not later than the period of three years the same terms and conditions of service to the employees Who are continued, the terms and conditions of service in the transferee bank in the corresponding rank or status, subject to the requisite qualifications and experience. The right of the employees of the banking company in the transferee bank on continuance of the service by virtue of such a provision in the scheme as provided in Clause (i) of Sub-section (5) is merely that which is contained in the proviso thereunder, that is, that the transferee bank would treat them at par with its own employees of corresponding rank or status subject to the qualifications and experience irrespective of the earlier terms and conditions of service. In other words, if the scheme provides for continuance of the services of the employees in the transferee bank, then beyond a period of three years f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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