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PETITIONER: GENERAL MANAGER (OPERATIONS), STATE BANK OF INDIA & ORS.

       Vs.

RESPONDENT: STATE BANK OF INDIA STAFF UNION & ANR.

DATE OF JUDGMENT:       20/03/1998

BENCH: SUJATA V.MANOHAR, D.P. WADHWA

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Mrs. Sujata V. Manohar, J.      The appellants,  representing the  state Bank  of India have challenged  a decision of the Andhra Pradesh High Court setting aside  a Circular  issued by the State Bank of India dated 28.1.1987  as also  a Circular in the same terms dated 7.3.1987,  as   violating  Section  9-A  of  the  Industrial disputes Act,  1947  read  with  the  Fourth  Schedule.  The respondents to  the present  appeal are  the State  Bank  of India  Staff   Union,  Hyderabad   Circle  and   the  second respondent who is a person aggrieved by the Circulars.      The Rules  of Conduct  of the  Award staff of the State Bank of  India which  were in  force at  all material times, provide, inter  alia, that  "an employee of the bank may not take  active   part  in   politics  or   in  any   political demonstration, nor  may  an  employee  accept  office  on  a Municipal Council  or other  public body  without the  prior sanction of  the  bank".  In  respect  of  officers  of  the appellant-Bank, prior  to 28th  of January,  1987, under the State Bank  of India  Supervising Staff  Service Rules,  and officer who  wanted to  contest an  election to  Parliament, State assemblies,  Municipal council etc. had to resign from the bank’s service before doing so. In the case of the Award staff, however, permission to contest such an election could be considered  by the  General Manager on certain conditions and on  the employee  giving an  undertaking that he was not and he  would not become a member of a political party, that he was  not being nominated by a political party and that he would not  be required  to be  present in  the  Council/Body during  office   hours.  He   also  would  not  receive  any remuneration and  would not  plead his  membership of such a body as  a bar to his transfer. If he violated any condition of his  undertaking, it  would be  open to  the bank to call upon him  not  to  continue  in  his  office  in  the  above mentioned public or civic body.      According to  the appellants-bank,  cases came to their notice where  employees who had been elected to public/civic office had  not been  performing their  normal  day’s  work, causing inconvenience  to the  bank and its customers. There were also  some cases  of employees indulging in restrictive

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practices  or   favouring  certain   political  parties  for obtaining benefits  from the  appellant-bank. The appellant- bank, therefore,  issued a  Circular  on  28.1.1987  to  the effect that  the local  head offices  will, in future, while considering  the  request  of  an  Award  employee  to  seek election to  any public/civic body, first thoroughly examine whether his  contesting the election will interfere or would be likely  to interfere  with his  duties in  the bank.  The local  Head   offices  were   also  directed  to  obtain  an undertaking  from  the  employee  indicating  that  (1)  his contesting election  will not  interfere with  his duties in the bank  and he  will not  take any  undue advantage of his position in  the bank  and (2)  in case  he gets elected, he will immediately  resign from  the bank’s  service,  failing which he will be liable to be discharged or he bank would be free to  treat his  letter seeking permission as a letter of resignation  from  the  day  he  is  declared  elected.  The Circular  of   7.3.1987  gives   a   capsule   of   previous instructions and repeats the Circular of 28.1.1987.      The  Second   respondent,  who   was  a  Clerk  in  the appellant-bank,  Hyderabad   Circle,  on   18.2.1987  sought permission of the appellant-bank for contesting elections to the Municipal  Council of  Rtsepalle. Although  he  did  not receive  permission,   he  filed   his  nomination.  He  was thereafter  informed  by  the  bank  on  5.3.1987  that  his application for permission to contest the election could not be granted  unless he  gave an  undertaking  that  he  would resign from  the bank’s  service  on  his  getting  elected. Thereupon the  respondents filed  a writ petition before the Andhra Pradesh  High Court  challenging the two Circulars of 28.1.1987 and  7.3.1987. The  High Court has held that these two circulars  amount to  a  change  in  the  conditions  of service of  workmen and  are violative of Section 9-A of the Industrial Disputes Act, 1947.      We fail  to see  how these  circulars can  be  said  to violate Section  9-A of  the Industrial  Disputes act, 1947. Under Section  9-A no  employer, who  proposes to effect any change in  the  conditions  of  service  applicable  to  any workman in  respect of  any matter  specified in  the Fourth Schedule,  shall   effect  such  change  without  notice  as prescribed in  that Section.  Schedule  Four  sets  out  the conditions  of  services  for  change  of  which  notice  is required to  be given  under Section  9-A. The conditions of service prescribed  in the  Fourth Schedule  include,  inter alia, wages,  contribution to  any provident fund or pension fund, compensatory  and other  allowances,  hours  of  work, leave etc.  Condition 8  is: "Withdrawal  of  any  customary concessions or  privileges clearly  relate to  conditions of service or work. Participating in an election to a Municipal Council or local body is not a customary privilege connected with  conditions  of  service  of  work.  The  Circulars  of 28.1.1987 and  7.3.1987, therefore,  do not  bring about any change in  the conditions of service of a workman. the Rules of Conduct of the Award staff have always included a Rule to the effect  that the  employee of  the bank  may not  accept office on  Municipal Council  or other  public body  without prior sanction of the bank. The Circulars, therefore, do not bring about  nay change  in this Policy. The appellants have explained  that   the  appellant-bank  is  a  public  sector undertaking set  up for carrying out a public purpose. As an employer, the  appellant-bank is a public sector undertaking set up  for carrying  out a  public purpose. As an employer, the appellant-bank  has to  ensure that  the employees carry out their  functions without  being influenced in any manner and their  behaviour does  not give  rise  to  any  talk  of

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favouritism in  granting loans,  credit facilities  or other facilities of  the bank. When a person contests elections to a municipal  or public  body he naturally seeks support from political  parties   or  various   other  persons   in   his constituency. Without their support it is not possible for a person a  get elected.  In turn,  the elected person will be under an obligation to those persons who are responsible for his election.  Such an  elected person, if he is an employee of a  public sector bank which deals with sanction of loans, advances, overdrafts  etc., may  be in a position to use his influence  with   officers  regarding   granting  of   these facilities. In order, therefore, that the functioning of the bank if  free from political influences and favouritism, and in order to ensure that the employees attend to their duties during office hours, the Circulars have been issued.      The same  Circulars were  challenged before  the  Delhi High  Court   by  an   employee  of  the  appellant-bank  at Saharanpur branch  in Uttar  Pradesh. The  petitioner before the Delhi  High Court  also desired  to contest elections to the local Municipal council. The Delhi High Court upheld the decision of the management that the petitioner’s continuance as Municipal Counsellor does affect his work in the bank and that there  was no  question of  any  violation  of  Article 19(1)(a), (b)  and (c) of the Constitution. This decision of the Delhi  High Court was upheld by this Court by a Bench of three judges  by its  short speaking  order  dated  5.4.1991 dismissing the  special leave  petition from the judgment of the Delhi High Court.      Before the  Delhi High  Court  the  Provisions  of  the Industrial Disputes Act, 1947 were not invoked in respect of these Circulars, as has been done in the present case. There is, however,  no merit  in the  challenge to these Circulars under Section  9- A of the Industrial Disputes Act, 1947 for reasons which we have set out above.      The appeal  is, therefore,  allowed  and  the  impugned judgment and  order of the Andhra Pradesh  High Court is set aside. There will, however, be no order as to costs. IN THE MATTER OF: