M GOPALAKRISHNAIAH Vs. UNION OF INDIA

JUDGEMENT

(1.) We are reminded of the memorable words of lord Atkin in his dissenting judgment in mcht in l.liversidge v. Anderson and another , 1941(vol.3) All England Reports 338 (HL) : " In England amidst the clash of arms the laws are not silent. They may be changed, but they speak the same language in war as in peace." However, when a huge security seam involving thousands of crores of rupees surfaced, it would appear law became different for the petitioner who faced the ignominy of his services having been terminated in violation of law of the land.

(2.) The petitioner, who was at the relevant time Executive Director (whole-time Working Director) of the Bank of Maharashtra and Was also looking after the day to-day affairs of the bank until the appointment of regular Chairman and Managing Director or under further orders of the Central Government, was visited with order of termination dated 9 July 1993 issued by the Central Government in the exercise of powers conferred by sub-clause (I A) of clause 8 of the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970 (for short 'the scheme') made under section 9 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 ('the Banking Act' for short).The services of the petitioner were terminated with effect from the date of service of the notice on him and he was to be paid a sum equivalent to the amount of his salary and admissible allowances for a period of three months in lieu of the period of notice.This notice of termination of services of the petitioner was served upon him on 12 July 1993. The petitioner is now challenging this notice and also challenging the validity of sublause (I A) of clause 8 of the scheme.

(3.) The Banking Act provided for the acquisition and transfer of the undertakings of certain banking companies, and "corresponding new bank", under clause (d) of section 2 of the Banking Act, means the Bank of Maharashtra and other banks mentioned in the first schedule to that Act. Section ') of the Banking Act under which the scheme was framed, in relevant part, is as under :- "9. (1) The Central Government may, after consultation with the Reserve Bank, make a scheme for carrying out the provisions of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, the said scheme may provide for all or any of the following matters, namely :- (a) the capital structure of the corresponding new bank, so however that the paid-up capital of any such bank shall not be in excess of rupees fifteen crores; (b) the constitution of the Board of directors, by whatever name called, of the corresponding new bank and all such matters in connection therewith or incidental thereto as the Central Government may consider to be necessary or expedient; (c) the reconstitution of any corresponding new bank into two or more corporations, the amalgamation of any corresponding new bank with any other corresponding new bank or with another banking institution, the transfer of the whole or any part of the undertaking of a corresponding new bank to any other banking institution or the transfer of the whole or any part of the undertaking of any other banking institution to ilcorresponding new bank; (d) such incidental, consequential and supplemental matters as may be necessary to carry out the provisions of this Act. (3) Every Board of Directors of a corresponding new bank, constituted under any scheme made under sub-section (1), shall include - (a) representatives of the employees, and of depositors, of such bank, and (b) such other persons as may represent the interests of each of the following categories, namely, farmers, workers and artisans, to be elected or nominated in such manner as may be specified in the scheme. (4) ......... (5)........." Under clause (e) of clause 2 of the Scheme, "nationalised bank" means a cor- responding new bank constituted under sub-section (1) of section 3 of the Bank- ing Act.Under clause 3, the Central Government is required to constitute the Board of a nationalised bank consisting of not more than two whole-time Directors, of whom one shall be the Managing Director, to be appointed by the Central Government after consultation with the Reserve Bank. As to who would be other Directors also finds mentioned in this clause.Then under clause 5, the Central Government is also to appoint one of the Directors to be the Chairman of the Board after consultation with the Reserve Bank and the Chairman is to preside over the meetings of the Board.Under clause 6, a Managing Director is to be the Chief Executive Officer of the nationalised bank and shall exercise powers and discharge such duties as may be delegated to him by the Board.Under clause 7, same person may hold the office as Chairman and Managing Director.Clause 8 is as under :- "8. Term of office and remuneration of a whole-time Director including Managing Director,- (1)A whole time Director, including the Managing Director, shall devote his whole time to the affairs of the nationalised bank and shall hold offie for such term not exceeding five years as the Central Government may, after consultation with the Reserve Bank, specify and shall be eligible for reappointment. (1A) Not withstanding anything contained in sub-clause (1), the Central Government shall have the right to terminate the term of office of a whole-time Director including the Managing Director, at any time before the expiry of the term specified under that sub-clause by giving to him notice of not less than three months in writing or three months' salary and allowances in lieu of notice; and the whole-time Director, including the Managing Director, shall have also the right to relinquish his office at any time before the expiry of the term specified under that sub- clause by giving of the Central Government notice of note loss than three months in writing. (1B) Any reference to a whole-time Director, incoluding the Managing Director, in sub-clause (1 A) shall be construed as including a reference to the person hodling office as such at the commencement of the Nationalised Banks (Management and Miscellaneous Provisions) (Second Amendment) Scheme, 1976. (2) A whole-time Director, including the Managing Director, shall receive from the nationalised bank such salary, allowance, fees and perquisites, and be governed by such terms and conditions, as the Central Government may determine, after consultation with the Reserve Bank. (3) If a whole-time Director, including the Managing Director, is, by infirmity or otherwise, rendered incapable of carrying out his duties or is absent on leave or otherwise in circumstances not involving the vacation of his office, the Central Government may, afterconsultation with the Reserve Bank, appoint another person to act in his place during his absence. (4) The Central Government may, if it is satisfied that it is expedient in the interests of the nationalised bank so to do, remove a whole-time Director including the Managing Director from office; Provided that no such removal shall be made except after- (a) consultation With the Board, and (b) giving a reasonable opportunity to the whole-time Director, including the Managing Director, of showing cause against the proposed action." Under clause 9, term of office of other Directors except the whole-time Directors, is not to exceed three years as the Central Government may specify and shall be eligible for reappointment.The scheme also provides for constitution of committees of the Board and one of such committees is the Managing Committee.