Kerala High Court
State Bank Of India vs The Chief General Manager on 4 April, 2012
Author: P.R. Ramachandra Menon
Bench: P.R.Ramachandra Menon
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON
TUESDAY, THE 27TH DAY OF NOVEMBER 2012/6TH AGRAHAYANA 1934
WP(C).No. 14435 of 2012 (D)
---------------------------
PETITIONERS:
-------------
1. STATE BANK OF INDIA,
BUSINESS FACILITATORS ASSOCIATION (KERALA),
`ABHILASH', DOOR NO.4/1400, KRISHNAN NAIR ROAD,
KARAPARAMBA, CALICUT-10,
REPRESENTED BY ITS SECRETARY RADHIKA SURESH,
AGED 40 YEARS, WIFE OF SURESH,
RESIDING AT KOZHIKODE.
2. SUDHEESH.T.A.
BUSINESS FACILITATOR, STATE BANK OF INDIA,
RESIDING AT `CHALLAMS' P.O., CHEVARAMBALAM,
CALICUT-673 017.
BY ADV. SRI.N.JAMES KOSHY
RESPONDENTS:
--------------
1. THE CHIEF GENERAL MANAGER, STATE BANK OF INDIA,
LOCAL HEAD OFFICE, THIRUVANANTHAPURAM-695 001.
2. THE CHAIRMAN,
STATE BANK OF INDIA, CORPORATE CENTRE, HEAD OFFICE,
MUMBAI-400 021.
3. THE DEPUTY GOVERNOR,
RESERVE BANK OF INDIA, MUMBAI-400 008.
4. THE SECRETARY,
MINISTRY OF FINANCE (BANKING), NEW DELHI-110 001.
WP(C).No. 14435 of 2012 (D)
5. THE CHAIRMAN,
NABARD (NATIONAL BANK FOR AGRICULTURAL AND RURAL
DEVELOPMENT),
MUMBAI-400 051.
6. STATE OF KERALA,
REPRESENTED BY ITS SECRETARY, FINANCE DEPARTMENT,
SECRETARIAT, THIRUVANANTHAPURAM-695 001.
R4 - BY ADV. SRI.P.PARAMESWARAN NAIR, ASG OF INDIA
R1,R2- BY ADV. SRI.P.V.SURENDRANATH
BY GOVERNMENT PLEADER SRI.T.R.RAJESH
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
27-11-2012, ALONG WITH WPC. 18146/2012 & WPC. 19527/2012, THE
COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No. 14435 of 2012 (D)
APPENDIX
PETITIONERS' EXHIBITS :
EXHIBIT P1: TRUE COPY OF THE MASTER CIRCULAR ON STRATEGY AND
GUIDELINES ON FINANCIAL INCLUSION F.NO.21/13/2009-FI
(VOL. II-PT)DATED 4/4/2012 ISSUED DIRECTOR, FINANCIAL
INCLUTION/REGIONAL RURAL BANKS.
EXHIBIT P2: TRUE COPY OF THE BUDGET SPEECH 2008-2009 AT
PARAGRAPHS 91 TO 93.
EXHIBIT P3: TRUE COPY OF THE GUIDELINES RBI/2005-06/288 DBOD
NO.KL.BC.58/22-1-001/2005-2006 DATED 25/1/2006
ISSUED BY THE CHIEF GENERAL MANAGER, RESERVE BANK OF
INDIA.
EXHIBIT P4: TRUE COPY OF THE GUIDELINES RBI/2007-2008/295 DBOD
NO.BL.BC.74/22.1.009/2007-2008 DATED 24/4/2008
ISSUED BY THE CHIEF GENERAL MANAGER, RESERVE BANK OF
INDIA.
EXHIBIT P5: TRUE COPY OF THE APPLICATION DATED 25/12/2010
INVITING FOR ENGAGEMENT AS BUSINESS FACILITATORS
PUBLISHED IN MALAYALA MANORAMA DAILY BY THE STATE
BANK OF INIDA, SHANMUGHAM ROAD, ERNAKULAM.
EXHIBIT P6: TRUE COPY OF THE LETTER NO.NB/FID/239/F1-47(G)/
2009-10 DATED 24/7/2009 SENT BY NATIONAL BANK FOR
AGRICULARAL AND RURAL DEVELOPMENT (NABARD) TO THE
CHAIRMAN OF COMMERCIAL BANKS.
EXHIBIT P7: TRUE COPY OF THE BUSINESS TARGET FOR BUSINESS
FACILITATORS ISSUED BT THE CHIEF MANAGER (RURAL),
STATE BANK OF INDIA, REGIONAL BUSINESS OFFICE, FRANCIS
ROAD, KOZHIKODE-673002.
EXHIBIT P7(a): TRUE COPY OF THE ADVERTISEMENT PUBLISHED IN
MALAYALA MANORAMA DATED 5/2/2011.
EXHIBIT P8: TRUE COPY OF THE ORDER NO.RB/AC/RKA/58 DATED
11/4/2012 ISSUED BY THE CHIEF GENERAL MANAGER
(RURAL), STATE BANK OF INDIA, CORPORATE CENTRE,
MUMBAI.
WP(C).No. 14435 of 2012 (D)
EXHIBIT P9: TRUE COPY OF THE TERMINATION ORDER
NO.RBO/KKD/218-16 DATED 4/6/12 ISSUED TO THE
SMT.RADHIKA A.P., SECRETARY OF 1ST PETITIONER
ASSOCIATION BY THE REGIONAL MANAGER, STATE BANK OF
INDIA, FRANCIS ROAD, KOZHIKODE-673002.
EXHIBIT P10: TRUE COPY OF THE TERMINATION ORDER
NO.RBO/KKD/218-16 DATED 4/6/12 ISSUED TO THE 2ND
RESPONDENT BY THE REGIONAL MANAGER, STATE BANK OF
INDIA, FRANCIS ROAD, KOZHIKODE - 673002.
EXHIBIT P11: TRUE COPY OF THE REPRESENTATION DATED 7/5/12
SUBMITTED BY THE 1ST PETITIONER ASSOCIATION TO THE
RESPONDENTS HEREIN.
EXHIBIT P12: TRUE COPY OF THE POSTAL RECEIPTS FOR SENDING EXHIBIT
P11 TO THE RESEPONDENTS.
EXHIBIT P13: TRUE COPY OF THE REPRESENTATION DATED 11/6/12
SUBMITTED BY THE 1ST PETITIONER ASSOCIATION TO THE
HON'BLE MINISTER OF FINANCE NEW DELHI.
EXHIBIT P14: TRUE COPY OF THE INTERIM ORDER DTD.14/8/2012 IN
CIVIL WRIT JURISDICTION CASE No.14622 OF 2012 PASSED
BY THE HON'BLE PATNA HIGH COURT.
EXHIBIT P15: TRUE COPY OF THE INTERIM ORDER DTD.8/8/2012 SWP
No.1657/2012 IN CMP No.2681/2012 PASSED BY THE
HON'BLE HIGH COURT OF JAMMU & KASHMIR.
EXHIBIT P16: TRUE COPY OF THE EXTRACT OF THE INTERIM ORDER
DTD.4/7/2012 IN WPMP No.24987 OF 2012 IN WP
No.19491 OF THE HON'BLE ANDHRA PRADESH HIGH COURT.
RESPONDENTS' EXHIBITS :
EXT.R1(a) : TRUE COPY OF THE PROFORMA OF THE CONTRACT
AGREEMENT BETWEEN THE STATE BANK OF INDIA AND
BUSINESS FACILITATORS AS SERVICE PROVIDERS.
P.R. RAMACHANDRA MENON, J.
---------------------------------------
W.P.(C).Nos. 14435, 18146
& 19527 of 2012
----------------------------------------
Dated this the 27th day of November, 2012
JUDGMENT
Whether the non renewal of the contract appointing 'Business Facilitators' by the respondent S.B.I. is in contravention of any Rules, Regulations, Guidelines or Orders issued by the Government of India or the Reserve Bank of India forms the subject matter of consideration in all these writ petitions. For the purpose of convenience, parties and documents are referred to, as arrayed in W.P.(C).No. 14435/2012, unless specified otherwise.
2. The 1st petitioner in W.P.(C).No. 14435/2012 is an Association of Business Facilitators in the SBI, Kerala Region and the 2nd petitioner is one of the members. Similarly situated Business Facilitators, are petitioners in the other cases. The order passed by the 1st respondent on 11.4.2012, terminating the service of existing 'Individual' Business Facilitators and the consequential order passed pursuant to the same are under W.P.C. Nos. 14435, 18146 & 19527 of 2012 -2- challenge.
3. The case of the petitioners as projected in the writ petitions is that, the Government of India took a 'Policy decision' as early as in the year 2006, to the effect that the 'financial inclusion' was to be a matter of utmost priority to the Government. The objective of 'financial inclusion' was to extend financial services to the large unserved population of the country, unlock its growth potential striving towards a more inclusive growth by making finance available to the poor in particular. Various guidelines came to be issued pursuant to the said Policy decision and the RBI was entrusted with the duty to give effect to the same.
4. The Policy decision of the Government in respect of the 'financial inclusion', increasing the outreach of banking sector in public interest and the directions issued by the Government of India, were mainly intended to be given effect to by the RBI who issued necessary guidelines to the Chairman and Chief Executive Officer of Scheduled and Commercial Banks including the Regional and Rural Banks in the year 2006 itself, as borne by Ext.P3, directing to use 'Business Facilitators' and 'Business Correspondents' for 'financial inclusion' by extension of Banking W.P.C. Nos. 14435, 18146 & 19527 of 2012 -3- Services. Subsequently, it was clarified by the RBI by Ext.P4 communication dated 24.8.2008, that there was no objection at all in engaging 'individuals' also as Business Facilitators, while the particulars of service, nature of service, eligibility, commission of Business Facilitators etc., are reflected from Ext.P3 itself. The policy of the Government and the objective to be achieved were sought to be explained in the 'Budget Speech' for the year 2008- 2009, and as borne by Ext.P2 (Paragraph 91 to 93), it was made clear that, individuals such as retired Bank Officers, Ex-service Men etc., could be appointed as Business Facilitators or Correspondents or Credit Counsellors.
5. The Government issued a 'Master Circular' on strategy and guidelines of 'financial inclusion', for implementation by RRBs and other Banks as borne by Ext.P1 dated 4.4.2012. From Ext.P1 it is seen that, only 5% of about six lakhs villages in the country were having Bank branches and there were 296 under banked Districts and under banked States in the country and it was taking note of the said factual position, that the Government of India has undertaken a major initiative aimed at 'financial inclusion' by ensuring the reach of Bank and other financial services, to the hitherto unserved areas. In furtherance to the W.P.C. Nos. 14435, 18146 & 19527 of 2012 -4- announcement made in the Budget 2010-2011, the Government had taken steps to extend the banking service through new Bank Branches and Banking Correspondents in areas/villages, having population of 2000 and more (as per 2001 census). Under the 'financial inclusion' plan, about 73,000 villages having population of 2000 and more were provided with banking services in March 2012 and Business Correspondents and new Bank Branches opened in these villages were also expected to provide service in the adjoining areas.
6. It was taking note of the Scheme and objective of the plan as above, that Ext.P1 Master Circular was issued on 4.4.2012. The service of Business Facilitators and Business Correspondents has been accepted by the Banks, in implementation of Government of India directive and the RBI guidelines. The petitioners point out that the SBI has also issued notifications in various dailies, inviting applications for engagement of Business Facilitators, like Ext.P5. Pursuant to such publication and other notifications, about 600 Business Facilitators came to be appointed by the SBI in Kerala, while they have appointed about 40,000 Business Facilitators all over India. It is stated that, altogether 2,00,000 Business Facilitators have W.P.C. Nos. 14435, 18146 & 19527 of 2012 -5- been appointed by all the Banks, in a national level, in implementation of Exts. P1 to P4.
7. Taking note of the need of the hour, the National Bank for Agriculture and Rural Development (NABARD) sought to provide necessary training to Business Providers and Business Facilitators, in collaboration with Indian Institute of Banking & Finance. A copy of the letter dated 24.7.2009 issued by the NABARD to the Chairman of the Commercial Banks for conducting such capacity building training to Business Correspondents and Business Facilitators has been produced as Ext.P6. The activities of the Business Facilitators, including the duties and responsibilities were also fixed by the SBI, in tune with the RBI guidelines as borne by Ext.P7. It was accordingly that, individual persons also came to be appointed as Business Facilitators and the service being rendered by Business Correspondents/Agents/Business Facilitators was proudly presented and projected by the SBI in connection with the opening of their 5000th Rural Branch and the 22,222th ATM counter in West Bengal, being inaugurated by the Minister for Finance, Government of India on 6.2.2011, as borne by Ext.P7
(a), advertisement appeared in Malayala Manorama daily dated W.P.C. Nos. 14435, 18146 & 19527 of 2012 -6- 5.2.2011. Ext.P7(a) reveals that the Bank was providing the service, also by virtue of 28,500 Business Correspondents/Facilitators, besides the service being rendered through 13,333 branches.
8. As a bolt from the blue, there came Ext.P8 General Termination order of individual Business Facilitators ( dated 11.4.2012) directing to terminate the existing 'Individual' Business Facilitators, on expiry of their agreement, actually for no specific reason at all, but for stating that, there were some complaints with regard to the functioning of Individual Business Facilitators. It was stated that, the said order was passed without getting any approval or permission from the Government of India or the RBI, before changing the policy and it is stated as issued in violation of Exts. P1 to P4 Policy decision and the earlier directions issued by the SBI. On the basis of Ext.P8, individual termination orders were issued to the concerned petitioners/Business Facilitators as borne by Exts.P9 and P10. Pointing out the arbitrary course of action being pursued by the SBI, that too, contrary to the policy decisions of the Central Government/RBI, the petitioner Association filed Ext.P11 representation dated 7.5.2012, to reconsider the matter at W.P.C. Nos. 14435, 18146 & 19527 of 2012 -7- Government level and to withdraw Ext.P8, so as to continue the Scheme of engaging Individual Business Facilitators. The said representation was sent by registered post, as borne by Ext.P12 postal receipt and on finding no response, Ext.P13 representation dated 11.6.2012 was preferred before the Hon'ble Minister for Finance, which is now stated as forwarded and pending consideration before the 4th respondent. Petitioners are challenging Exts. P8, P9, P10 and other similar termination orders on various grounds, also placing reliance on Exts. P14, P15 and P16 interim orders passed by the High Courts of Patna, Jammu & Kashmir and Andhra Pradesh in similar writ petitions ( produced along with I.A.No. 11825/2012).
9. Respondents 1 and 2 have filed a counter affidavit pointing out that, there is absolutely no merits or bonafides in the writ petition, in so far as the petitioners' engagement as service providers/Business Facilitators (Individual) was purely on 'contract basis' for one year and none of them has been terminated during the contract period. It is pointed out that, there is no post of 'Business Facilitators' in the SBI and the functioning of 'Individual' Business Facilitators was no more feasible, but for detrimental to the rights and interest of Bank, W.P.C. Nos. 14435, 18146 & 19527 of 2012 -8- adversely affecting the reputation, also involving high risk in view of several complaints received from different corners, besides the fact that the desired objective with regard to the 'financial inclusion' sought to be achieved by the Bank was not obtained. It was in the said circumstance, that a policy decision was taken by the Bank to dispense with the engagement of 'Individual' Business Facilitators after expiry of the term of contract. It is also stated that, the rights and liberties of the parties concerned have been given in crystal clear terms, in the agreement executed between the Bank and the Business Facilitators like the petitioners, a copy of which has been produced as Ext.R1(a). It is also pointed out that, Ext.P4 was only an 'enabling letter' issued by the RBI, whereby 'Individual' Business Facilitators could be engaged, depending on the comfort level of the Banks and that there was no direction, order or Circular from the Government of India or the RBI to engage 'Individuals' as Business Facilitators.
10. The SBI, as a matter of policy, engaged Insurance Agents, Ex-service Men, retired Government Employees, retired College Teachers, retired Bank Employees etc., as service providers for a term of one year, which was purely on contract W.P.C. Nos. 14435, 18146 & 19527 of 2012 -9- basis. It is also stated that, the decision to disengage 'Individual' Business Facilitators at National level is a policy decision of the Bank taken in the best interest of the Bank and the customers and that, this will not at all affect the 'financial inclusion' goals as per Exts.P1 to P4. It is pointed out that, '12' villages were identified and earmarked in Kerala for 'financial inclusion' goals; such as '7' in Palakkad District, 'one' each in Thiruvananthapuram, Pathanamthitta, Malappuram, Wyanad and Kollam and all these villages are now covered by Ultra Small Branch or Branch of the Bank. It is further pointed out that, as on date, there are 256 Business Facilitators (Individuals) in Kerala Region and their contract period will be completed on different dates, on expiry of 'one' year from the date of contract agreement. It is stated that, the new policy as per Ext.P8 is not because of specific malpractice of any 'Individual' Business Facilitators, but on a 'policy decision' taken by the Bank in its best interest; for which, no approval or permission of the RBI or the Government is necessary. It is contended that the petitioners do not have any vested right for renewal of the contract.
11. The respondent Bank also adds that the existing W.P.C. Nos. 14435, 18146 & 19527 of 2012 -10- Business Facilitators are Insurance Agents, Ex-service Men, Postal Agents, retired Bank Employees, retired Government Employees, retired College Teachers etc. The person by name Radhika Suresh, representing the 1st petitioner is stated as an insurance agent and 2nd petitioner is stated as a Car Loan Agent of HDFC Bank. This being the position, the service availed from the persons like the petitioners was not an exclusive one and there is no merit or bonafides as to the alleged loss of avenues to eke out their living. With regard to the remittance of 'security deposit' by the petitioners, it has been asserted that security deposit will be returned to the Individual Business Facilitators on expiry of the contract, in terms of the agreement. In respect of the 'commission' payable, it is stated as being settled every month, on submission of the claims and no amount is due under this head and if at all any such claim is pending, it will be cleared and paid on submission of the claim in the prescribed form. It has also been added that the Kerala sector of Bank has not received any representation like Exts.P11 and P13.
12. The learned counsel for the petitioners submits that the course pursued by the respondent Bank is per se wrong and illegal, being arbitrary in all respects. It is stated that, the W.P.C. Nos. 14435, 18146 & 19527 of 2012 -11- dispensation of service is only in respect of 'Individual' Business Facilitators; while, corporate entities are sought to be retained, mainly as a matter of convenience for the bank. The very purpose of the Scheme behind the policy decision taken by the Government is to extend/outreach the banking facility to the rural folk, giving attention on individual/family basis, which cannot be properly catered to, by the corporate entities. It is also stated that, very huge target was fixed by the respondent Bank as borne by Ext.P7, to be satisfied by 'Individual' Business Facilitators. Their service has been quite unceremoniously dispensed with, for vague reason, which does not have any legal or factual basis. All other Banks in India are giving effect to the policy decision and guidelines like Exts.P1 to P4 and the SBI cannot take exception, to make things easy for them. Reliance is also sought to be placed on the decision rendered by the Apex Court in Sardar and Others v. Punjab & Sind Bank & Others (2009 (8) SCC 257); pointing out that the RBI is empowered to issue directions under the relevant statute and by virtue of Section 21(3) of the Banking Regulations Act 1979, all the Banks are bound to follow the same. Interception made by different High Courts of India, as borne by Exts. P14 to P16 orders W.P.C. Nos. 14435, 18146 & 19527 of 2012 -12- granting interim stay, is also sought to be pressed in, to contend that the course being followed by the SBI is nothing but arbitrary and is liable to be interfered.
13. The learned counsel appearing for the respondent Bank submits with reference to the contents of the counter affidavit, that there is no vested right for the petitioners to have the contract renewed after expiry of the agreed term. The nature of engagement is clearly discernible from Ext.R1(a) and it is possible to be terminated, even during subsistence of the contract, in the manner as specified therein. None of the Individual Business Facilitators has however been sought to be disengaged during the tenure of the contract and Ext.P8 decision only refers to the non renewal of the contract, once the term is expired. The learned counsel further submits that, individual assessment of the person concerned is not necessary, as the reason shown in Ext.P8 is a systemic problem in respect of 'Individual' Business Facilitators felt all over the Nation and it was accordingly, that a policy decision was taken, not to avail the service of 'Individual' Business Facilitators any further, after expiry of the contract period. The learned counsel also submits that, exactly similar issue was pending consideration before the W.P.C. Nos. 14435, 18146 & 19527 of 2012 -13- High Court of Karnataka at Bangalore, by way of W.P.(C)s 24718 to 24720 of 2012 and after hearing both the sides, interference was declined and writ petitions were dismissed as per Ext.R1(b) common judgment dated 24.8.2012 (produced in W.P.(C). No.18146/2012).
14. The nature of engagement of the petitioners/Individual Business Facilitators 'on contract basis', stands conceded. Admittedly, it was pursuant to Ext.P5 notification that they submitted necessary applications and it was on the basis of the agreement executed by them, as borne by Ext. R1(a) that they came to be engaged; which was only for a period of 'one' year. Clause 4 of Ext.R1(a) agreement shows that the service providers like the petitioners were to act as independent service providers and they shall not be deemed to be the agents of Bank, except in respect of transactions/services which give rise to a principal - agent relationship having regard to the nature of transactions or by implication and that, neither the service providers nor its/his employees, representatives or agents shall be entitled to claim permanent absorption or any other claim or benefits against the Bank. The tenure of contract is specified under Clause 8, to be valid only for a period of 'one' year from the date of execution W.P.C. Nos. 14435, 18146 & 19527 of 2012 -14- and the renewal if at all any, can only be on mutually agreed terms.
15. Clause 8 enables to terminate the contract by giving three months' notice in writing. Notwithstanding this, the Bank is given liberty to terminate the agreement immediately, by giving a notice in writing to the Service Provider on the following eventualities:
"a. If any Receiver/Liquidator is appointed in connection with the business of the SP or SP transfers substantial assets in favour of its creditors or any orders / direction are issued by any Authority / Regulator which has the effect of suspension of the business of SP.
b. If SP applies to the Court of passes a resolution for voluntary winding up of SP or any other creditor / person files a petition for winding up or dissolution of SP.
c. If SP in the reasonable opinion of the Bank is unable to pay its debts or discharge its liabilities in normal course of business.
d. If SP is unable to render the services upto the mark as envisaged under this agreement upon a W.P.C. Nos. 14435, 18146 & 19527 of 2012 -15- reasonable assessment of the circumstances by the Bank which affect rendering of the services by SP as envisaged under this agreement.
e. If SP is owned/controlled wholly/partly by any other bank operating in India.
If any officer/employee/director of SP or their relatives as defined in Section 6 of the Companies Act, 1956 becomes a director/officer or employee of the Bank. In the event of the termination of the agreement by the Bank pursuant to clause 8.3 herein above, SP shall be liable and responsible to return all records and information in its possession as envisaged under clause 8.2 above." There is a contention for the petitioners, that none of the above eventualities has taken place, so as to have issued Exts. P8 to P11. If at all Sub Clause (d) of Clause 8 of Ext.R1(a) is to be attracted, there has to be a reasonable assessment of performance of the Business Facilitators, to see whether it was upto the mark as envisaged by the Bank as per agreement or not, without which the service cannot be terminated at all. The crucial question is whether, the said clause could be invoked to W.P.C. Nos. 14435, 18146 & 19527 of 2012 -16- the case in hand and is it necessary to direct the respondent Bank to conduct a reasonable assessment of service/performance rendered by the concerned petitioners/Business Facilitators.
16. As observed already and as discernible from Ext.R1(a) agreement, termination of agreement is contemplated under two different circumstances; the 1st one by giving 'three months' notice in writing, by either side and the 2nd one exclusively vested upon the Bank immediately on arising the eventualities as contemplated under sub clauses (a) to (e) of Clause 8. Termination of an agreement is something different from non renewal of the agreement. The terms of the agreement clearly stipulate the operative period for which it is to be valid in force and once such period is over, it automatically comes to an end, unless renewed further. The offer and acceptance supported by the consideration is in respect of such specified terms, including the tenure of the agreement, as agreed between the parties. There is no case for the petitioners that the agreement has been terminated before expiry of the tenure. Ext.P8 common letter dated 11.4.2012 issued by the 1st respondent and the consequential orders such as Exts. P9 and P10 are with regard to the non engagement of the petitioners/Business Facilitators after W.P.C. Nos. 14435, 18146 & 19527 of 2012 -17- the expiry of the tenure of the agreement, which was only for a period of 'one' year. It is accordingly, that different termination dates have been given for different petitioners, as discernible from Exts. P9, P10 etc., i.e., after completion of 'one' year as originally agreed in between. As it is not a case of termination of agreement, sub clauses (a) to (e) under Clause 8 of Ext.R1(a) are not attracted and the petitioners can't be heard to say that there has to be an individual assessment before termination of the contract as envisaged under Clause 8 (d) of Ext.R1(a). This is more so, for the fact that there is an ocean of difference between the termination of an agreement during its subsistence and the non-renewal of the agreement, after the date of its expiry. Clause '8' of Ext.R1(a) itself provides for renewal of agreement only on mutually agreed terms. This itself suggest that, if it is not agreed to by the respondent Bank as well, to have extended it further, there cannot be any vested right for the petitioners to seek the same to be continued for ever. In the said circumstances, this Court finds that the idea and understanding of the petitioners to continue to be engaged as Business Facilitators, notwithstanding the expiry of the term specified in the agreements like Ext.R1(a) is throughly wrong and W.P.C. Nos. 14435, 18146 & 19527 of 2012 -18- misconceived. This being the position, there cannot be any legally sustainable challenge against Ext.P8, General Order of termination or the consequential orders like Ext.P9 and P10.
17. With regard to the contention of the petitioners that, termination of the individual Business Facilitators is arbitrary and it is violative of the policy decision taken by the Government of India and the RBI vide Exts. P1 to P4, this Court finds considerable force in the submission made from the part of the respondent Bank that, Ext.P1 to P4 do not mandate engagement of 'Individual' Business Facilitators. On the other hand, as per Ext.P4 issued by the RBI, it has only been clarified that, the RBI does not have any objection in engaging 'Individual' Business Facilitators, to the extent as specified therein. This of course is in tune with the stand of the Government as reflected in Ext.P2 Budget Speech itself (paragraph 91 to 93). It was only by virtue of the said enabling clause, that the respondent SBI sought to engage 'Individual' Business Facilitators as well, like Insurance Agents, Ex-service Men, retired Bank Employees, retired College Teachers etc. The observation in Ext.P8 that the required extent of desired results could not be achieved by engaging 'Individual' Business Facilitators and that, there were complaints from W.P.C. Nos. 14435, 18146 & 19527 of 2012 -19- different corners affecting the reputation of the Bank, involving risk is only a general observation, as to the situation prevailing in the country as a whole and it was accordingly, that a decision was taken to dispense with further engagement of 'Individual' Business Facilitators and for non-renewal of contract after its expiry. The decision taken by the SBI in general lines as above cannot be assailed, unless it is in violation of any relevant provisions of the Act/Rules or the orders/guidelines issued by the Government/RBI. Ext.P4 issued by the RBI itself reveals that, engagement of 'Individual' Business Facilitators was permitted and 'no objection' was given, depending on the comfort level of Banks, subject to their taking adequate precaution and conducting proper and due diligence before engaging 'Individuals' as Business Facilitators.
18. The issue has to be considered from another angle as well. The policy decision taken by the Government of India as to the planned implementation of 'financial inclusion' outreaching the banking services to the rural sector was taken as early as in the year 2006 and various directions/guidelines were being issued by the Government and also by the RBI at different points of time, as discernible from Ext.P1 to P4. The respondent Bank W.P.C. Nos. 14435, 18146 & 19527 of 2012 -20- contends in paragraph '7' of their counter affidavit that, in Kerala, '12' villages have been identified for 'Financial Inclusion' goals, which is to be implemented including by deployment of Business Facilitators. It is stated that all these villages are now covered by Ultra Small Branches or Branch of the Bank and hence the discontinuation of 'Individuals' as Business Facilitators will not affect the 'financial inclusion' goals. Whether the said '12' villages were identified only as the 1st phase of implementation program or whether the same level has already been achieved in other rural areas like those in Idukki, Kasaragode and such other Districts (giving due weight to the policy decision of the Government to outreach the banking service to the needy public in such remote areas, as discernible from Ext.P1), is not clear from the pleadings and proceedings. The respondent Bank also asserts that Ext.P8 decision taken to dispense with the engagement of 'Individual' Business Facilitators was taken as a 'Policy decision' at National level (which in turn has resulted in filing of several W.P(C)s in different States, leading to interim orders like Exts.P14 to Ext.P16 issued by High Courts of Patna, Jammu & Kashmir and Andhra Pradesh). The action of the SBI suggests that all the villages identified at National level have W.P.C. Nos. 14435, 18146 & 19527 of 2012 -21- almost attained the desired objective and hence the service of 'Individual' Business Facilitators is no more required. Obviously, such a decision has been taken by the SBI on 11.4.2012 (in respect of Kerala, vide Ext.P8), which is just one week after issuance of Ext.P1 Master Circular dated 4.4.2012 by the Government of India. How the factual scenario projected in Ext.P1 got a sudden face lift within one week, causing the SBI to have taken a decision putting an end to the practice of engaging 'Individual' Business Facilitators on a National level; that too, without doing any individual assessment as to the feasibility of retaining them, is not known.
19. Considering the nature and scope of Ext.P1, engagement of Business Facilitators is not only to procure more business to the Bank, but also is with a larger goal/object to make available the banking service within the reach of the rural folk. Of course, there is no vested right for the petitioners to seek for any direction so as to enable them to continue as Business Facilitators, notwithstanding expiry of the agreement executed in between. Even though no specific violation of any orders or guidelines issued by RBI is brought to the notice of this Court, whether the social commitment has been duly honoured W.P.C. Nos. 14435, 18146 & 19527 of 2012 -22- by the SBI, presumably the largest Bank in the world (with as many as 13,333 branches as on 5.2.2011, as discernible from Ext.P7(a) advertisement), is also a matter to be examined by the 4th respondent.
20. It is relevant to note that the 5th respondent NABARD has come forward to meet the social commitment as far as they are concerned, by providing training, in collaboration with the Indian Institute of Banking and Finance. A certification course for Business Correspondents/Business Facilitators at State/District level was conducted by the NABARD, providing support with 100% of course fee, at the rate of Rs.4,000/-(Rupees four thousand only) per candidate, in 256 Districts identified by the Committee for 'financial inclusion' and 75% of course fee in rest of the Districts, virtually proposing to train 20,000 (twenty thousand) candidates over a period of two years (2009 - 2010 and 2010 - 2011). Once a decision is taken to dispense with engagement of all such Business Facilitators, what will happen to the public money spent for providing such training, is also a matter of concern. This Court finds that the issue has to be considered by the 4th respondent at least to the said extent, to meet the desired objective in implementation of the 'Policy'. The W.P.C. Nos. 14435, 18146 & 19527 of 2012 -23- Court is not having any material in this regard, as the 3rd and 4th respondents have not come forward by filing any counter affidavit.
In the above facts and circumstances, this Court finds that the challenge raised against Ext.P8 general termination order and the consequential termination orders like Exts.P9 and P10 in respect of non-renewal of the contract for engagement fails and interference is declined. However, there will be a direction to the 4th respondent to consider Exts. P11 and P13 and pass appropriate orders in accordance with law, in the light of the observations made above, at the earliest, at any rate, within 'three months' from the date of receipt of a copy of this judgment. Petitioners shall make available a copy of the judgment along with Ext.P11 and P13 before the 4th respondent for further steps.
All the writ petitions are disposed of accordingly.
P.R. RAMACHANDRA MENON, JUDGE.
Kp/-