Madras High Court
State Bank Of Bikaner And Jaipur vs State Bank Of Bikaner And Jaipur ... on 7 January, 1991
Equivalent citations: (1993)ILLJ57MAD
JUDGMENT Mishra, J.
1. The employer, the State Bank of Bikaner and Jaipur, represented by the Managing Director, has preferred this appeal against the judgment in a writ petition under Art. 226 of the Constitution of India in which a mandamus has been issued commanding the appellant and other respondents in the writ petition to forbear from agreeing and/or approving and/or ratifying the refund of the sum of Rs. 50,46,116.27/- from the 'State Bank of Bikaner and Jaipur Employees' Provident Fund Account' to the second respondent in the writ petition, i.e., the appellant.
2. Facts shortly stated are :-
The first petitioner in the writ petition/first respondent in this appeal, is an association of the employees of the second respondent/appellant and the second petitioner is the President. The second respondent/appellant is a body corporate constituted under Section 3 and 4 of the State Bank of India (Subsidiary Banks) Act 38 of 1959, for short the 'Act'. The second respondent/appellant employed about 6,000 employees in its various branches all over India which were about 385 in number, as on December 31, 1975. Section 51 of the Act empowered the second respondent/appellant to establish and maintain, inter alia, a provident fund for the benefit of its employees and officers. The second respondent/appellant accordingly took recourse to Section 63 of the Act and with the approval of the Reserve Bank of India, framed regulations known as State Bank of Bikaner and Jaipur Employees' Provident Fund Regulations, 1969, which regulations were brought into force with effect from October 1, 1969. It seems, previous to the present regulations there were certain regulations separately for the Bank of Bikaner Limited and the Bank of Jaipur Limited, but obviously for the reasons of the amalgamation of the two banks under the Act, the new regulations were brought in and a Fund known as State Bank of Bikaner and Jaipur Employees' Provident Fund was created. Under the said regulations the Fund stood vested in Trustees who under its scheme included the Directors of the second respondent/appellant together with not more than six members of the Fund nominated by the Board of Directors of the second respondent/appellant.
3. According to the writ petitioner Association, everything worked peacefully in accordance with Regulation 12 and the account of each member was credited to his benefit to the satisfaction of all concerned until it transpired that the second respondent/appellant intended to alter, if not totally abandon, the scheme of keeping the provident fund money payable to the employees in deposit with it on such interest as was payable according to the prevailing bank's rate on the pretext that the interest in accordance with the regulations payable on the deposit of the provident fund ought to have ranged between 5% and 6% during the period from October 1, 1969 to March 31, 1976. This prompted the Association to move this Court by way of writ petition.
4. The second respondent/appellant maintained in its return to the petition of the Association that the rate of interest payable on money of the fund deposited with it ought to have ranged between 5% and 6% during the period from October 1, 1969 to March 31, 1976 as per sub-regulation (2) of Regulation 12, yet the appellant had been paying interest on such deposits at staff rates which ranged between 6% and 11% which according to the appellant was not the permissible rate either in the regulation or under the contract governing the investments. According to it, by virtue of crediting the fund with interest at the rates ranging from 6% to 11% the amount of over Rs. 50,00,000/- now in dispute, on account of a mistake, had got credited in favour of the employees but in effect the employees were not entitled to it. In an affidavit filed in the course of the hearing of the writ petition; however, the Trustees withdrew the investments on July 16, 1976 and debited to the current account with the Public Park Bikaner Branch of the second respondent/appellant and thereafter credited to its sundry deposit account on December 23, 1976.
5. We are not required to go into further details of the facts of the case as we shall presently show that the controversy herein has been correctly assessed by the learned single Judge and the only contention that fell for a decision in the case has been correctly answered by him. The contention is based upon the interpretation of Regulations 11, 12 and 18. Regulation 11 runs thus :
"11. All moneys of the fund except sums withdrawn under Regulations 14, 15 and 17 shall be deposited in the Bank in an account styled, 'The Trustees of the State Bank of Bikaner and Jaipur Employees Provident Fund' or invested by the Trustees in any securities for the time being authorised under the Indian Income-tax Act, 1961 and the Indian Trusts Act, 1882 and the Rules made thereunder in respect of the investment of money of a Provident Fund recognised under the Indian Income-tax Act, 1961".
Regulation 12 reads :
"(1) The Bank shall pay on all moneys of the Fund held by it compound interest with half yearly rests at the rate fixed in accordance with sub-regulation (2).
(2) The account of each member will be credited with interest on the amount standing to his credit at a rate which shall be fixed by the Trustees at the end of each year and which shall be the equivalent of the average yield of redemption throughout the year of rupee securities of the Government of India of approximately 20 years maturity rounded off to the nearest one-half per cent above; such interest shall be calculated to the nearest quarter rupee on the monthly products of each member's account and shall be applied to the account half yearly as on March 31 and Sept. 30."
Regulation 18 reads :
"18. On any member ceasing to be a member of the Fund any amount not payable to him or to the Bank, under the provisions of these Regulations, shall be forfeited to the Fund.
All sums so forfeited to the Fund, due to any reason whatsoever, all profits earned at any time on the sale of investments and all surplus income not allocated for payment of interest as provided under these Regulations, shall be transferred to a separate account and shall be used and applied by the Trustees primarily as a reserve against any loss to the Fund on the sale or in consequence of any depreciation of investments and secondly for the benefit of the members and/or retired members and/or dependents of the deceased members and/or any such persons collectively and/or for such purpose connected with the Fund in such manner as the Trustees shall in their absolute discretion think fit."
6. The Regulations above-quoted thus show that (1) all money of the Fund except sums withdrawn under Regulations 14, 15 and 17 were to be deposited in an account styled 'The Trustees of the State Bank of Bikaner and Jaipur Employees Provident Fund' or invested by the Trustees in any securities for the time being authorised under the Indian Income-tax Act, 1961, and the Indian Trusts Act, 1882, and the rules made thereunder in respect of the investment of money of a Provident Fund recognised under the Indian Income-tax Act, 1961; (2) the Bank on such deposit was required to pay compound interest with half-yearly rests; (3) the account of each member was required to be credited with interest on the amount standing to his credit; (4) Interest was also required to be credited at a rate fixed by the Trustees at the end of each year, the method of calculating the interest being as indicated in sub-Regulation (2) of Regulation 12, that is to say, being the equivalent of the average yield of redemption throughout the year of rupee securities of the Government of India of approximately 20 years maturity rounded off to the nearest one-half per cent above; (5) there could be forfeiture but only in terms of Regulation 18 and (6) there could be withdrawals but only in accordance with Regulations 14, 15 and 17.
7. As an incidence of the deposits being fixed in the Bank, (incidentally the appellant), it appears, interest ranged from 6% to 11% during the period October 1, 1969 to March 31, 1976. The appellant somehow found that it would have credited only at a rate which according to it, ranged between 5% and 6% during the said period. Although on the deposit of any other creditor, the appellant would not have denied the interest between 6% and 11% on any fixed deposit, it found, however, that since it was a Provident Fund money it could debit and withdraw interest credited beyond 5% and 6% during the period from October 1, 1969 to March 31, 1976 and thus, deny the benefit of the interest earned on the deposit to the account holders, that is to say, each member of the Scheme.
8. Before the learned single Judge, several contentions were raised, one with respect to the defence of party, the other with respect to the nature of the relief and the third with respect to any right of the members of the writ petitioner-Association to claim anything in the name of interest beyond what had been stipulated under Regulation 12 aforesaid. Learned Single Judge has held :
"Keeping in trend with the pronouncements of the Supreme Court, it is not possible to throw out the writ petition at the threshold itself on the sole ground that it has been filed by an association of employees, without going into the merits of the other contentions. Even otherwise, the second petitioner is an individual employees and he must be deemed to be directly interested in and affected by the proposed action of the respondents. Besides, the first petitioner is a registered trade union, and it is stated that it has got membership of about 5,000, who are all employees of the second respondent all over India. It cannot be stated that the rights of its members would not be affected by the proposed action of the respondent. The writ laid by the first petitioner, as representing a large body of employees of the second respondent whose rights and interest are likely to be affected, must be held to be competent. Representative actions even in Writ jurisdiction cannot be thrown out on the simple ground that the body which represents the cause of its members on roll is not by itself affected. It would suffice the purpose if the rights of its members are affected; and then, as observed by the Supreme Court, collective proceedings are permissible instead of driving each individual employee affected to file an independent writ, which would result only in plurality of litigation on the common question. The Supreme Court was prepared to countenance a non-recognised association maintaining a writ petition. As observed earlier, the first petitioner is a Registered trade union and it can legitimately, as representing its member, employees of the second respondent, give vent to their grievance and seek redress and relief, as representing their cause."
For us to say, if at all it is necessary, that, this is the most correct view is not a mere formality. Learned single Judge has not come to the said conclusion without examining the scope of the writ action by a body of individual members, who together joined as an Association for such action, which is in the interest of all the members. He has rightly distinguished the cases of N.A. District Pawn Brokers' Association v. Secretary to Government of India, 1975 I MLJ 290; C. I. Kannan v. E.S.I. Corporation 1968 - I - LLJ - 770 and M. Ramaswami v. Government of Tamil Nadu (Writ Appeal No. 472 of 1976, Judgment dated August 11, 1980) and relied upon the statement of law in the case of F.C.K.U. (Registered). Sindri v. Union of India 1981 - I - LLJ - 193 and A.B.S.K. Sangh (Rly.) v. Union of India 1981 - I - LLJ - 209. The law on the subject has been candidly stated by the Supreme Court in the last of them that 1981 - I - LLJ - 209 at 230" a technical point of this kind has to be overruled for the reasons that a large body of persons with a common grievance can always approach the Court on principle, "our current procedural jurisdiction is not of individualistic Anglo-Indian mould. It is broad-based and people-oriented and envisions access to justice through 'class actions,' 'public interest litigation' and 'representative proceedings'. Indeed, little Indians in large numbers seeking remedies in Court through collective proceedings; instead of being driven to an expensive plurality of litigations, is an affirmation of participative justice in our democracy. We have no hesitation in holding that the narrow concept of 'cause of action', and 'person aggrieved' and individual litigation is becoming obsolescent in some jurisdictions. It must fairly be stated that the learned Attorney General has taken no objection to a non-recognised association maintaining the writ petitions." In the instant case, the Association is a recognised body as a trade union of the employees.
9. Learned single Judge has also rightly rejected the contention that a writ could not issue against the Trustees, who had withdrawn the money as by now it is well settled that those who are invested with a statutory function and charged with a statutory duty cannot escape a mandamus by pleading that they themselves are not statutory authorities. Learned single judge has taken notice of the judgments of the Supreme Court in Lekhraj v. Dy. Custodian, Bombay and Praga Tools Corporation v. Imanual 1969 - II - LLJ - 749. We do not think we should detain our judgment with any further discussion on this subject as it is by now well settled that for maintaining a writ petition it is enough that some sort of interest, a legal interest, should be present in the petitioner and some sort of public duty is found existing in the respondent. One of the rulings of the Supreme Court is in the case of Shri Andi Mukhta Satguru S.M.V.S.J.M. Trust v. V. R. Rudani 1989 - II - LLJ - 324 in which it is stated after referring to Article 12, Article 226 and also Article 32 of the Constitution of India at page 330-331 :
"the term "authority" used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Art. 32. Article 226 confers power on the High Court to issue writs for enforcement of the fundamental rights as well as non-fundamental rights. The words "Any person or authority" used in Art. 226 are, therefore, not to be confined only to statutory authorities an instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists, mandamus cannot be denied.
****** ****** ******* Mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statute. Commenting on the development of this law, Professor De Smith states : "To be enforceable by mandamus a public duty does not necessarily have to be on imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract. (Judicial Review of Administrative Act 4th Ed. p. 540). We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water-tight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available 'to reach injustice wherever it is found'. Technicalities should not come in the way of granting that relief under Art. 226. We, therefore, reject the contention urged for the appellants on the maintainability of the writ petition."
10. Thus, it is not only that this Court in exercise of its jurisdiction can issue a mandamus to a statutory authority of the kind envisaged in Art. 12 of Constitution, but can issue it to enable a person or body performing public duty and that such public duty for the writ to be enforceable need not be created or imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract. Herein, it is a case in which a public duty is created and imposed upon the Trustees and the second respondent/appellant by the regulations, which it is not in dispute are statutory. Trustees, whether they constitute a statutory body or not, are required to perform a public duty of preserving the provident fund for the benefit of each contributor/member thereof.
11. Coming to the actual merit, what was happened ? Is there any violation of Regulation 12(2) in investing the provident fund in a fixed deposit of a nationalised bank ? Can it be said that by such investment in the bank, which incidentally is also the employer, liability is different than the one which any statutory bank will hold for depositor ? The answer is, a banker shall have one and the same liability; the similar responsibility with respect to the claims of each and every creditor, otherwise, it shall cause discrimination and act arbitrarily. That being the liability of the appellant as a banker and not as the employer, it is legally bound to discharge its liability as a banker; as employer it discharged the liability the moment it parted with its contribution to the provident fund and along with the contribution to the provident fund and along with the contribution of the employers, deposited it in the provident fund. That precisely is the conclusion recorded by the learned single Judge. We find no error in that judgment.
12. We are not traversing to the other aspects of the case because the learned single Judge has dealt with them exhaustively.
13. In the result, we find no merit in the appeal and it is accordingly dismissed. No costs.