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PETITIONER:

STATE BANK OF INDIAN STAFF ASSOCIATIONAND ANR.

Vs.

RESPONDENT:

STATE BANK OF INDIAN AND OTHERS

DATE OF JUDGMENT: 03/04/1996

BENCH:

FAIZAN UDDIN (J)

BENCH:

FAIZAN UDDIN (J)

KULDIP SINGH (J)

CITATION:

1996 AIR 1685 1996 SCC (4) 378

JT 1996 (4) 100 1996 SCALE (3)249

ACT:

HEADNOTE:

JUDGMENT:

WITH

WRIT PETITION NO. 713 OF 1995

State Bank of India Staff Association

and another

V.

State Bank of Indian and others

J U D G M E N T

FAIZAN UDDIN, J.

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Petition no. 400 (S/B) of 1995 was dismissed as withdrawn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

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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

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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

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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

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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

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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

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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.

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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

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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

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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.