FEDERAL BANK LIMITED Vs. SAGAR THOMAS

JUDGEMENT

(1.) The respondent No. 1-Sagar Thomas was working as a Branch Manager in Karunagappally branch of the appellant-Bank, namely, the Federal Bank, having its registered office at Alwaye, Kerala. He was, however, suspended on 29-5-1982, since a disciplinary enquiry was ordered into some charges against him for having exceeded his authority in grant of loans and advances to different parties. The Inquiry Officer found him guilty of the charges and ultimately punishment of dismissal was awarded to the respondent.

(2.) The respondent No. 1 challenged the order of his dismissal by filing a writ petition in the High Court. A preliminary objection about maintainability of writ petition seems to have been taken, in defence by the Federal Bank, saying that it is a private bank and not a State or its agency or instrumentality, within the meaning of Art. 12 of the Constitution of India, hence a writ petition under Art. 226 of the Constitution is not maintainable against it. The learned single Judge, however, found that the Federal Bank performs public duty and observed thus :

(3.) Learned senior counsel appearing for the appellant, so as to indicate the structure of the appellant, submits that the Federal Bank Ltd. is a 'company' incorporated under the Indian Companies Act, 1913, now replaced by the Companies Act, 1956. Its activities are regulated by the provisions of the Banking Regulation Act, 1949 The entire shareholding of the company is held by private individuals and entities. The finances of the banks are raised by its own resources and efforts, and the profits of the bank are utilized by the bank for its own purposes. It does not perform any sovereign function nor does it exercise any authority over a third person. The nature of the activity of the bank is that of a commercial undertaking which receives deposits from the individuals and advances loans and performs other ancillary monetary transactions. The management of the bank is in the hands of the Board of Directors. There are 10 Directors, out of which 7 are selected by the General Body of the shareholders. Two members are co-opted by the Board of Directors and one of them is nominated by the Reserve Bank of India. The Board of Directors exercise the powers of superintendence and control over the bank. The bank is, therefore, merely a private limited company; it is neither a 'State' nor any 'authority' within the meaning of Art. 12 of the Constitution nor it is amenable to writ jurisdiction of the High Court. It is also the case of the appellant-bank that services of an employee or an office of a private body, cannot be imposed or thrust upon it nor a relief of reinstatement can be granted. In this connection, the appellant has referred to the reliefs prayed for in the writ petition, which are as follows :