V RAMIAH Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) THE petitioner entered service in 1941 as a cashier in the former Imperial Bank of India. The undertaking of the Bank was in 1955 transferred to the State Bank of india, as it was constituted by the provisions of the State Bank of India Act, 1955. Section 43 of this Act empowers the State Bank to appoint its officers, advisers and employees and determine the terms and conditions of their appointment and service. The petitioner was taken over into the service of the State Bank and was in 1958 appointed as head cashier under an agreement for service entered into on 12-8-1958 with it. Clause 1 of the agreement provided that the petitioner

(2.) THE grounds on which the petition has been argued are that the order of termination is in effect an order of dismissal which is (1) in violation of the said service Rules, (2) in violation of the principles of natural justice and (3) was not competent for the Executive Committee at Madras to make. It may at once be stated that the ground based on incompetency of the Executive Committee was not pursued in view of certain amendments of the Service rules. Regarding the order as one of termination of service under the terms of the agreement, a further point for the petitioner is made that termination by payment of salary and allowances in lieu of two months' notice is not authorised by the terms of the service agreement as well as Rule 14 of the Service rules.

(3.) BEFORE dealing with the petitioner's grounds the objection of the learned advocate General to the maintainability of the petition should first be considered. He submits that the State Bank of India, established, as it is, by the special provisions of the State Bank of India Act, 1955, is, despite its statutory origin, but a commercial corporation or concern doing business in a commercial way and is not a public corporation or public authority with public duties. If he is right in his submission, he says the act of termination of the petitioner's services is a unilateral act indistinguishable from a similar act of a private individual acting on his own terms and conditions of service and that the statutory origin of the Bank makes no difference to the position. This Court will not, therefore, interfere under article 226 of the Constitution with such an order. Even regarding the Bank as a statutory authority, in the sense of its statutory origin and functioning within the statutory provisions, there are here no statutory rules of service and so long, as it acts in good faith or bona fide it is not subject to judicial review. From the point of certiorari, the act of termination is not a decision with its usual attributes. Where there is competency' and power, no question of bona fides can arise in relation to its exercise. But where power is exercised" through a statutory authority and an act done, in purported exercise of such power, is shown to be mala fide, the Court at the instance of the aggrieved1 party will interpose and find that the act cannot be attributed to the authority and is, therefore, void. If the petition is regarded as one for mandamus, the learned advocate General adds that there is here no public duty on the part of the Bank to do or to refrain from doing anything in relation to the impugned order.