State
Bank of Indian Staff Association & Anr Vs. State Bank of Indian & Ors
[1996] INSC 496 (3
April 1996)
Faizan
Uddin (J) Faizan Uddin (J) Kuldip Singh (J) Faizan Uddin, J.
CITATION:
1996 AIR 1685 1996 SCC (4) 378 JT 1996 (4) 100 1996 SCALE (3)249
ACT:
HEAD NOTE:
With Writ
Petition No. 713 OF 1995 State Bank of India Staff Association and another V. State
Bank of Indian and others
1. The
parties in the aforementioned Civil Appeal and the Writ Petition are the same
with the distinction that in the Civil Appeal, the appellants have challenged
the order dated July 17, 1995 passed by a Division Bench of the Allahabad High
Court, Bench Lucknow, dismissing the Writ Petition no.1662 (M/B) of 1995, filed
by the appellants on the ground that the same was not maintainable as the
earlier Writ Petition no. 400 (S/B) of 1995 was dismissed as withdrawn without
permission to file a fresh petition for the same relief. While the Writ
Petition under Article 32 of the Constitution of Indian pertains to the relief
for quashing of the letter dated May 3, 1995 issued by the respondents to the
General Secretary of the SBI Staff Association, Lucknow Circle and also for a
writ of mandamus commanding the respondents not to interfere with the affairs
of the petitioner Association and to negotiate with the appellant/petitioner
No. 2 Mr. M.R. Awasthy who Claims to be the General Secretary of the State
Association. The appellants and the petitioners being the same, they shall
hereinafter be referred to as the appellants.
2. The
facts in brief as they emerge from the memo of appeal and the writ petition are
that the State Bank of India, respondent No. 1 is divided into
13 local Head Offices including one at Lucknow. These Head Offices are called Circles of the respondent Bank. In all
the circles there is a Circle Management consisting of Chief General Manager
and General Managers. The appellant No. 1 - The State Bank of India Staff
Association (hereinafter referred to as the Staff Association') is an affiliate
of the All India State Bank of India Staff Federation (hereinafter referred to
as the Staff Federation'), a registered Trade Union. under The Trade Unions
Act. 1926 (hereinafter referred to as the 'Act'). The Staff Association
represents the workmen / employees of Lucknow Circle. According to the appellants, there is an Office of the
Staff Association in each circle as well as in each branch of respondent Bank
throughout the country. The Staff Association represents the workmen /
employees of the respective circles through its lawfully elected Office bearers
in accordance with the Constitution and Bye-laws of the Staff Association ,
having a right to negotiate to industrial matters as the Circle Associations
and their duly elected members are recognized by the respondents. Further case
of the appellants is that according to the Code, the Joint Consultative
Committee comprising the Management and the representatives of the Staff
Association is constituted at two levels, namely, (1) at the Central Level with
respondent No. 1 and (2) in each local Head Office of the Circle of respondent
No. 1, which are called as a Central Consultative Committee and Circle
Consultative Committee of the Bank respectively. The Central Consultative
Committee is represented through the Staff Federation and the Circle
Consultative Committee is represented though the Circle Staff Association.
3.
Further case of the petitioners is that in the Circle General Body Meeting of
the Staff Association held at Lajpat Bhawan, Kanpur on October 16, 1994 M.R. Avasthi,
appellant No. 2 was elected as General Secretary of the Staff Association for a
period of three years, in accordance with the bye-laws and Constitution of the
Staff Association. The said election of appellant No. 2 as General Secretary
was further confirmed by the Central Committee held at Vrindaban on November 19, 1994, by reason of which M.R. Awasthi,
the appellant No. 2 has a legitimate right to represent the Staff Association,
appellant No. 1 and about 16,000 workmen / employees of the Circle Management.
But the respondent No.3, the Assistant General Manager (Personnel) of the State
Bank of India, Lucknow by his impugned letter dated May 3, 1995, communicated
to the General Secretary, the appellant No. 2 herein, that in view of the
advise received from the Central Office, the Management shall not negotiate
with Shri M.R. Awasthi. appellant No. 2 on any matter of the Union / Association as Shri M.R. Avasthi had already
retired from the Bank on January
31, 1995. It is the
legality and propriety of this letter which is under challenge herein.
4. The
respondents have resisted the appeal and Writ petition by contending that
according to the practice followed by the Bank since decades only a serving
employee may represent the Union in
bilateral discussions with the Bank which practice is recognized by the Staff
Federation also. They have taken the stand that on account of the fact that
Bank being a credit institution cannot deal with a person who is not regard to
be bound by the declaration of secrecy and fidelity by which other serving
employees are bound and also because the Act no where lays down that the
employer are bound to have negotiations with the Trade Union nor the members of
such Unions are entitled to insist upon their presence in negotiations with the
Employers. The respondents have taken the plea that though outsiders may be
admitted as members of the Trade Unions and its office bearers, but the Act
does not restrict the Employer s right or option to have negotiation only with
such of the Office bearers who are its serving employees specially in a
commercial concern like Banking Industry. The respondents have stated that the
Code of Discipline, relied upon by the appellants does not entitle such office
bearers to claim any right of representation and negotiation with the Bank. The
respondents have taken further stand that M.R. Avasthi, appellant No. 2 having
retired from the service of the Bank on January 31, 1995 has no right to
negotiate with the Management on behalf of the Union / Staff Association and
the Management is within its right and authority to decline to negotiate with
him.
5. The
application filed by the Staff Federation for intervention has been allowed by
us to The Staff Federation has taken the same stand as is taken by the
respondents and have supported the respondents in toto, it is stated on behalf
of the Staff Federation that it is the central organization of the employees of
the State Bank of India and circle level Unions/Associations including the
First Petitioner who are affiliated with it, the aims and objects of which are
laid down in its Rules and the Constitution. It deals with all policy matters
and the decisions of the Staff Federation is absolutely binding on all the
affiliates. The Staff Federation has emphatically stated that the accepted
policy followed since decades is that none but a serving employee has to
represent Federation or Circle Union/Association at all levels in bilateral
forums. The Staff Federation has pressed into service past instances for such
policy. It is stated that in 1991 when one Mr Charles Coutto, the then General
Secretary of Bombay Circle Union had ceased to be an employee, and claimed to
represent the Bombay Circle Union in bilateral forums, it was M.R. Awasthi ,
the appellant No. 2 who was then the President of the Federation as well as the
General Secretary of Staff Association Lucknow, who full endorsed the aforesaid
practice of representation by a serving employee only. The Federation,
therefore, rejected claim of Charles Coutto in view of the decision as
contained in letter dated April 26, 1991
(Annexure-B) to which M.R. Awasthi was a party. the said policy was formalized
by Federation by amending its Rules in Council Meeting held on December 23. 1994
under the chairmanship of M.R. Awasthi, appellant No. 2.
6.
Having regard to the present circumstances of the case and with a view to forge
efficiency in Public Utility Services like Bank and with a view to prevent and
remove the employer and the workmen in day to day working of the establishment
and to promote measures for securing amity and good relations between them. We
proposed the parties it the Barto also go into the legality of the election of
appellant No. 2. M.R. Avasthi as General Secretary and his continuance as such
even after his retirement from service on January
31.
1995 and the parties were required to address on the same besides the legality
/ propriety of the impugned letter dated May 3, 1995 issued by the respondent
No. 3 refusing to negotiate with appellant No. 2 - M.R. Awasthi - as representative
of the Union / Staff Association.
Consequently,
the parties addressed us on the same and have also submitted written
submissions.
7.
Learned counsel appearing for the appellants vehemently urged that even though
appellant No. 2, M.R. Awasthi retired from the service of the respondent Bank
on January 31. 1995 on attaining the age of superannuation yet he is entitled
the age of superannuation yet he is entitled to continue as General Secretary
of the Staff Association and represent the Union and its members in the
negotiations to be held with the Management. He submitted that by virtue of the
provisions contained in Section 6 (e) read with the with which the Trade Union
is so connected, are also entitled to be admitted as ordinary or temporary members
of the Trade Union and, therefore, the respondents cannot deny to negotiate
with M.R. Awasthi, the General Secretary of the Staff Association even after
this retirement from service of the Bank. He also urged that the scheme
contemplated under Section 6 (e) and Section 22 of the Act is identical to the
one as contemplated in Section 36 (i) of the Industrial Disputes Act, 1947
under which a member of the executive or office bearer of a registered Trade
Union who is not an employee of the industry is also entitled to represent the
workman and on that basis it was contended that the impugned letter of May 3,
1995 declining to negotiate with M.R.
Awasthi,
the General Secretary of the Union is wholly illegal and void. This contention
is seriously opposed by the respondents as well as by the Staff Federation. In
order to appreciate the rival contentions it would be appropriate to look to
the relevant provisions of the Trade Unions Act.
8.
Section 6 with its clause (e) of the Act reads thus:-
6.
Provisions to be contained in the rules of a Trade Union.- A Trade Union shall
not be entitled to registration under this Act, unless the executive thereof is
constituted in accordance with the provisions of this Act and the rules there
of provide for the following matters, namely- (a) (b) (c) (d).....
(e) the
admission of ordinary members who shall be persons actually engaged or employed
in an industry with which the admission of the number of honorary or temporary
member as (Office bearers) required under Section 22 to form the executive of
the Trade Union.
(f),
(g), (h), (i), (j)............
Relevant
part of Section 22 reads as under:-
22.
Proportion of officers to be connected with the industry:- Not less than
one-half of the total number of the (office bearer) of every registered Trade
Union shall be persons actually engaged or employed in an industry with which
the Trade Union is connected.
It may
be noted that Section 6 contemplates two essential requirements. Firstly, the
executive of the Trade Union must be constituted in accordance with the
provisions of the Act and unless it is so constituted a Trade Union shall not
be entitled to the registration under the Act and Secondly, the rules of such a
Trade Union should provide for the matters enumerated in clauses (a) to (j) of
Section 6. Clause (e) of Section 6 of the Act provides for admission of
honorary or temporary members (office bearers) also in accordance with Section
22 of the Act. that being so, the rules of the Trade Union according to clause
(e) of Section 6 should provide for the admission of ordinary members who shall
be persons actually engaged or employed in the industry with which the Trade
Union is connected and also to provide for the admission of number of honorary
or temporary members as office bearers as required by Section 22 of the Act
with a view to form the executive of the Trade Union. A reading of Section 22
reproduced above would show that it mandates that at least one half of the
total number of office bearers of the Trade Union should be persons actually
engaged or employed in a industry with which the Trade Union is connected. That
means the number of actually employed office bearers should in no case be less
than half of the total number of office bearers. The provisions contained in
Section 6 and 22 reproduced above relate to the registration of a Trade Union
and constitution of the executive of the said Union. The provisions of Sections 6 and 22 indicate that an
ordinary or a temporary member may be an office bearer but they no where provide
that such a member shall also have a right to negotiate with the management or
the management would be under an obligation to negotiate with an office bearer
of the Union who is no longer in the employment of the Industry which the Trade
Union is connected.
9. Now
coming to the contention that the scheme of Section 6 read with 22 of the Act
is similar to that of Section 36 of the Industrial Disputes Act 1947 in terms
of which a workman is entitled to be represented in any proceedings under the
Act by any member of the executive or other office bearers of a registered
Trade Union, even though he is no longer in the employment of the Industry, it
may be pointed but Section 3 is a complete answer to this submission. It may be
seen that Section 3 of the Industrial Disputes Act provides for the
constitution of Works Committee consisting of the representatives of the
employers and workman engaged in the establishment. It is significant to note
that it clearly provides that the representatives of workman the workman
engaged in the establishment and in consultation with the Trade Union if any,
registered under the Indian Trade Unions Act. 1926. under the Industrial
Disputes Act, the Works Committee so constituted is enjoined with the duty to
promote measure for securing and preserving amity and good relations between
the employer and workman and, to that end, to comment upon the matters of their
common interest or concern and endeavor to compose any material difference of
opinion in respect of such matters. It, therefore, becomes clear that under the
Industrial Disputes Act the representatives of the workman have to be chosen
only from amongst the workmen already engaged in the establishment and not an
outsider or an ex-workman of the establishment concerned or any other person.
It would, therefore, not be correct to contend that having regard to the
provisions of Section 36 read with Section 3 of the Industrial Disputes Act an
honorary/temporary member of a private individual is entitled to represent the
workman in the matters aforesaid.
While
referring to the provisions of Section 36 of the Industrial Disputes Act, the
provisions of Section 3 of the said Act can not be over- looked or ignored. The
provisions of the Trade Union Act, 1926 have to be harmonized with the relevant
provisions of the Industrial Disputes Act, 1947. It has also to be kept in view
that the industrial Disputes Act is a much later Act, which besides other
matters, specifically concentrates on harmonious relations between the employer
and workmen, the disputes between the two and settlement thereof by
negotiations with the assistance of their respective representatives. It is for
all these reasons and as stated in their counter-affidavit by the respondents,
that a practice and usage is followed by the respondent-Bank since decades
whereby only serving employees represent the Union in bilateral discussions
with the Bank and that this practice has been recognized by the Staff
Federation also which is a body to coordinate the activities of various Unions/Associations
of the employees of the State Bank of India and its associate Banks. This stand
of the respondents has been fully supported by the Staff Federation -
intervener.
10.
Here it would be advantageous to look into the relevant rules and constitution
of the State Bank of India Staff Association. Rules (5), (6) and (9) relate to
the membership of the Union while Rule (14) relates to the Management and
Officers of the Union the relevant parts of said rules read as under:-
5.
None but a permanent employee of the State Bank of India who is not below the age of 18
shall be enrolled as ordinary member of the Association provided, however, a
member employee promoted to Supervisory Cadre shall have to apply for retaining
his membership in the usual manner.
6.
Honorary Member- Persons who are not eligible as members under rule 5 but are
in sympathy with the objects and spirits of the Union may be elected Honorary Members at the Triennial or Special
Meeting of the General Council/Central Committee/Central Working Committee
convened for the purpose.
Besides,
considering the cases of Honorary Membership directly, the General
Council/Central Committee/Central Working Committee shall consider all the
individual cases as proposed by the Circle representatives.
9.
Ordinary member after retirement from the Bank s service shall not continue to
be such members.
(a)
None but an Ordinary/Honorary Member of the Association will be eligible to
occupy or continue in any post in the Central Committee/Central Working Committee/Circle
Committee/Unit Committee. Notwithstanding anything contains elsewhere in these
rules, a member of the Central Committee/Central working Committee/Circle
Committee/Unit Committee will forthwith cease to be such member if he ceases to
be an Ordinary/Honorary Member.
14.
The management of the Union shall be vested in the Central
Committee which consists of:- (a) (1), (ii), (iii), (iv), (v), (vi), (vii),
(viii)...............
(ix)
One General Secretary elected by the Circle General Council for each administrative
Circle of the State Bank of India who shall belong to any Branch/Office of the
Bank of the Circle for which he is elected and one Dy. General Secretary
elected by the Circle General Council for each Zonal Office of the State Bank
of India.
(x) etc.....................
A
cursory look to rule 5 Will make it clear that to become an ordinary member of
the Association one has to be a permanent employee of the State Bank of India
and at the same time not below the age of 18 years whereas Rule 6 provides that
a person who is not a permanent employee of the Bank as contemplated under Rule
5 but has some sympathy with the objects and spirits of the Union he may be
elected honorary member at the triennial or special meeting of the General
Council etc.......convened for the purpose. Further, according to Rule 9
ordinary members after retirement from the Bank s service shall act continue to
be such members while clause (a) of Rule 9 provides that an ordinary/honorary
member of the Association will be eligible to occupy or continue in any post in
the Central Committee/Central Working Committee/Circle Committee/Unit Committee
but such ordinary/honorary member of the aforesaid committees will forthwith
cease to be such member if he ceases to be an ordinary/honorary member,
notwithstanding contained to the contrary in the Rules.
11. It
may be noticed that M.R. Awasthy, appellant No. 2 was an ordinary member of the
Staff association within the meaning of Rule 5 of the Staff Association Rules.
Being such ordinary member he was elected as General Secretary of the Staff
Association in the triennial meeting held on October 16, 1994. Admittedly. M.R. Awasthi retired from the service of the
respondent-Bank on January
31, 1995 on attaininng
the age of superannuation. He was not elected as an honorary or a temporary
member in any Special Meeting of the General Council or of the Committees
referred to above convened for that purpose any time after his retirement.
Consequently, in view of Rule 9 M.R. Awasthi appellant No. 2 cannot
legitimately claim his continuance as an ordinary member and General Secretary
of the Union after his retirement from the
service of the Bank. Clause (a) of Rule 9 further reinforces this position
which contemplates that notwithstanding anything contained elsewhere in the
Rules, a member of the Central Committee/Central Working Committee/Circle
Committee/Unit Committee will forthwith cease to be such member is he ceased to
be an ordinary/honorary member. Since M.R. Awasthi ceased to be an ordinary
member on his retirement on January 31. 1995 and since he was not elected as
honorary member at the triennial or a Special Meeting of the General Council,
etc. as contemplated in Rule 6, he neither remained as ordinary member or as
honorary member of the Association. He therefore, cannot claim a right to
negotiate with the management as a representative of the Union. Even otherwise he cannot claim such a right in view
of the provisions contained in clause (ix) of Rule 14 (a) which provide that
the General Secretary elected by the Circle General Council for each
administrative circle of the said Bank should belong to any Branch/Office of
the Bank of the Circle for which he is elected, M.R. Awasthi can be said to
belong either to any Branch/Office of the Bank only if he is in the employment
of the Bank. After the retirement he no longer belongs to any Branch/Office of
the Bank of the Circle as he would be deemed to have ceased to belong to any
Branch/Office of the Bank. In these facts and circumstances no case is made out
for any interference in the decision taken by the respondents and conveyed to
the appellants through the impugned letter dated May 3, 1995.
12. It
may also be appropriate to have a look to the relevant rules of the Federation.
Clause (d) of Rule 1 of the said Rules provides that the jurisdiction of the
Federation shall extend to the whole of the territory of the Indian Union. Rule
2 lays down the aims and objects of the Federation and according to clause (b)
thereof one of the aims and objects is to coordinate the activities of the
Union/Associations of the employees of the State Bank of India and its
associate Banks within the Indian Union and the Unions outside Indian Union and
to initiate policies conductive to the progress and benefit of the affiliated
unions/Associations. sub-clause (v) of clause (e) of Rule 2 contemplates that
the decision of the Federation in matters of policy shall be absolute and
binding on all affiliated Union/Association/Administrative Circle shall have
the right to send any person as delegate to any General Body of the Federation
who is a serving employee of the Further clause (g) of Rule 20 of the
Federation Rules provides for affiliation to only such Union/Associations of
the employees of the State Bank of India and associate Banks which is run.
managed
and led by serving employees. Similarly Rule 21 lays down that if any of the
office-bearer or member of the Federation, council, representing an affiliated
Union/Association/Circle, ceases to be a serving employee of the Bank or an
office-bearer, etc, shall be deemed to have become vacated. Thus from the
aforementioned federation Rules it is distinctly clear that the policy of the
Federation by which the appellant No. 1 being its affiliate is also bound
permits representation only by a serving employee of the Bank and not by a
person who ceases to be an employee of the Bank.
13.
The contention that by a resolution passed in the Circle General Council on October 16, 1994 M.R. Awasthi was elected as an
honorary member of the Association Rules which resolution was subsequently
affirmed / approved in the meeting of the Central Committee on November 19, 1994 does not hold good for two reasons.
Firstly, no material has been placed on record to show that there was ant such
resolution as alleged having been approved in the meeting of the Central
Committee on November
19, 1994, whereby M.R.
Avasthy is said to be elected accepted as an honorary member of the Union after his retirement. Secondly, even if it is
assumed that there was such a resolution the same was premature and in respect
of a non-existing matter which was not obtainable either on October 16, 1994 or
on November 19, 1994 as the question of M.R. Awasthi being an honorary member
would have arisen only after January 31, 1995 on his retirement provided he was
so elected in accordance with Rule 6 of Staff Association Rules.
14. Mr
Rajiv Dhawan, learned senior counsel for the intervener supported by the
respondents counsel. Mr Harish Salve and other counsel appearing for the respondents
submitted that the triennial election of the Staff Association Lucknow Circle
had taken place in 1989 and the next election had become due after 3 years term
sometimes in 1992 and according to Rule 38 (a) of Staff Association Rules, the
triennial meeting of the General Council of the Association should be held
within 9 months from the triennial term unless precluded by law. It was
submitted that if the meeting is not held within 9 months from the triennial
term it can be so held only with the approval of Registrar of Trade Unions and
since the triennial meeting dated October 16, 1994 in which M.R. Awasthi was
elected as General Secretary was held without such approval of the Registrar,
it was unauthorized and election was invalid. the relevant part of Rule 38 (a)
reads thus:- Triennial Meeting of the General Council-The Triennial Meeting of
the General Council of the Association shall be held within 9 months from the
triennial term unless precluded by law, any extension of time beyond 9 months
will require specific approval of the Registrar of Trade Unions.
Further
Rule 42 of the Staff Association Rules relates to the triennial meeting of the
Circle General Council for the purposes of transacting the business mentioned
in various clauses of the said rule. Clause (iii) of Rule 42 relates to
election of office bearers of the Circle Committee and delegates of the
Triennial General Council of the Association. The relevant part of Rule 42
reads as under:-
42.
Triennial Meeting of the Circle General Council- The Triennial Meeting of the
Circle General Council shall be held within 6 months from the close of the
Triennial term unless precluded by law, any extension of time beyond 6 months
will require approval of the Central Committee/Central Working Committee of the
Association.
15.
Admittedly, the triennial election of the Staff Association. Lucknow Circle became due in 1992. The triennial
meeting of the Circle was however, called on October 16. 1994 in which M.R. Awasthy,
appellant No. 2 is saud to have been elected as General Secretary when he was
in the service of the Bank. Admittedly the said triennial meeting was called
much after the prescribed period of 9 months as contained in Rule 32(a) and
admittedly no approval of the Registrar of the Trade Union was obtained for
calling the said meeting on October 16, 1994.
The said meeting, therefore, cannot be held to be valid meeting in respect of
the matters transacted in the said meeting. As M.R. Awasthy, appellant No. 2 is
said to have been elected as General Secretary in the said triennial meeting of
the Council it cannot be said to be a valid election. Again as provided in Rule
42 of the Staff Association Rules, the triennial meeting of the Circle General
Council has to be held within 6 months from close of Triennial term, unless
precluded by law and extension of time requires approval of the Central
Committee for election of office-bearers of the Circle Committee, but no such
approval of the Central Committee has been placed on record. The election of
appellant No. 2 as General Secretary will be bad on this account also for this
reason also, therefore, the petition as well as the appeal would fail.
16. It
may be further noticed that some members of the Staff Association, Lucknow
Circle had filed a Writ Petition under Article 226 of the Constitution of India
before the High Court of Allahabad which was disposed of by an order dated
December 5, 1994 with a direction to the Registrar of the Trade Unions, West
Bengal to dispose of the representation of those petitioners to the said writ
petition within a period of six weeks. Consequently the Registrar took up the
matter and after hearing all concerned including the appellants herein,
recorded the finding that the triennial meeting held on October 16, 1994 was without obtaining prior
approval of the Registrar in accordance with the said rules.
Having
gone through the facts and circumstances of the present case and Rule 38 and 42
of the Staff Association Rules we are also of the view that the triennial
meeting held on October
16, 1994 in which M.R.
Awasthy, appellant No. 2 was elected as General Secretary was not a valid
meeting. In view of the facts and circumstances stated above it is not now
necessary for us to go into the question whether the second writ petition filed
by the appellants before the High Court was maintainable or not.
17.
For the reasons stated above, the appeal s well as the petition fail and are
hereby dismissed but without any order as to costs.
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