N N KAW Vs. STATE BANK OF INDIA

JUDGEMENT

(1.) A preliminary objection was raised by Mr, Gupta about the maintainability of the writ petition on the ground that the respondents herein were not authorities within the meaning of Article 12 of the Constitution of India and were not amenable to the writ jurisdiction of this court. It was stressed that they were neither instrumentalities nor agencies of the Central Government so as to come within the purview of Art. 12 of the constitution. Learned counsel wanted a finding on the preliminary objection first. Therefore the consideration of the writ petition on merits was deferred. Mr. S.P. Gupta appearing for the respondents in support of the objection has referred to various provisions of the State Bank of India Act, 1955. his argument he gave the scheme of the functioning of the Bank to sections 10, 13, 17, 43, 49 and 50.

(2.) , Section 10 relates to the transferability of the shares. It provides that the shares of the State Bank shall be freely transferable subject to the condition that Reserve Bank will not transfer any share hold by it in the State Bank if such transfer will result in reducing the shares held by it less than fifty five percent of the issued capital of the State Bank. Section 13 makes a provision for keeping a register or one or more books of the share holders shall be entered. Section 17 provides over all superintendence and direction of the affairs and business of the State Bank shall be entrusted to the Central Board which may exercise all powers which are required to be exercised by the State Bank. Section 43 empowers the State Bank to appoint officers, advisers, employees as its consulers necessary or desirable for the efficient performance of the functions and the bank is empowered to determine the terms and conditions of their appointment and service, Section 49 prescribes that the Central Govt. in consultation with the Reserve Bank may by notification in the Official Gazette make rules for all matters for which provision is necessary or expedient f6r the purpose of giving effect to the provisions of the Act. Section 50 authorises Central Board after consultation with the Reserve Bank and with previous sanction of the Central Government make regulations not inconsistent with the Act or rules framed thereunder for all matters for which provision is expedient for the purpose of giving effect to the provisions of this Act.

(3.) IT was contended on the basis of aforesaid provisions of the Act that functioning of the State Bank of India was governed by a statute and it was an autonomous body which was not discharging any functions of the Central Government nor was it controlled by the Central Government. The administration of the Bank was vested with the Board of Directors, who had independent existence, therefore, it cannot be held to be agency or instrumentality of the State. Reliance is placed on K.M. Thomas Vs. Cochin Refineries Ltd. and others (AIR 1982 Kerala: 248) It was held by a learned Judge of Kerala High Court that Cochin Refineries Ltd. was not an instrumentality of State because the share capital thereof belonged to a foreign company and there was no evidence to suggest that any financial assistance was given by the Government or Board of Directors had full control over the management of the affairs of the company. Government had no exclusive or unusal control over the management of the company. It may be mentioned that the said company was registered under the companies Act though the State Govt. had nominated some members to the Board of Directors But it was a commercial concern and did not perform any governmental function under the supervision of the government. Therefore, the company was held not to be an authority within Art.12 of the Constitution of India.