{"id":47334,"date":"2004-02-12T00:00:00","date_gmt":"2004-02-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/andhra-bank-vs-b-satyanarayana-ors-on-12-february-2004"},"modified":"2016-03-11T19:31:35","modified_gmt":"2016-03-11T14:01:35","slug":"andhra-bank-vs-b-satyanarayana-ors-on-12-february-2004","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/andhra-bank-vs-b-satyanarayana-ors-on-12-february-2004","title":{"rendered":"Andhra Bank vs B. Satyanarayana &amp; Ors on 12 February, 2004"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">Andhra Bank vs B. Satyanarayana &amp; Ors on 12 February, 2004<\/div>\n<div class=\"doc_author\">Author: S.B. Sinha<\/div>\n<div class=\"doc_bench\">Bench: Cji, S.B. Sinha, S.H. Kapadia.<\/div>\n<pre>           CASE NO.:\nAppeal (civil)  1877 of 1999\n\nPETITIONER:\nAndhra Bank\n\nRESPONDENT:\nB. Satyanarayana &amp; Ors.\n\nDATE OF JUDGMENT: 12\/02\/2004\n\nBENCH:\nCJI, S.B. Sinha &amp; S.H. Kapadia.\n\nJUDGMENT:\n<\/pre>\n<p>JUDGMENT<\/p>\n<p>S.B. SINHA , J :\n<\/p>\n<p>\tThis appeal is directed against the judgment and order<br \/>\ndated 31.3.1998 passed by a Division Bench of the Andhra<br \/>\nPradesh High Court in Writ Appeal No.1152 of 1988 whereby<br \/>\nand whereunder an appeal preferred by the appellant herein<br \/>\nagainst a judgment and order dated 13.6.1988 passed by a<br \/>\nlearned Single Judge in Writ Petition No.6076 of 1984 was<br \/>\ndismissed.\n<\/p>\n<p>\tIn view of the point involved in this appeal, it may<br \/>\nnot be necessary to dwell  at length the fact of the matter.<br \/>\nSuffice it to point out that  Respondent Nos. 3 to 12 herein<br \/>\nat all relevant times were holding the posts of  Regional<br \/>\nManager.  They along with the Respondent Nos.1 and 2 herein<br \/>\nwere considered for promotion to the post of  Assistant<br \/>\nGeneral Manager upon following the procedures laid down in a<br \/>\ncircular letter dated 11.2.1984 issued in terms of<br \/>\nRegulation 17(1) of the Andhra Bank (Officers&#8217;) Service<br \/>\nRegulations, 1982, (hereinafter referred to as &#8216;the<br \/>\nRegulations&#8217;, for the sake of brevity).  Upon consideration<br \/>\nof the cases of the private parties herein, the respondent<br \/>\nNos. 3 to 13 were promoted; whereafter the writ petition was<br \/>\nfiled by the respondent Nos. 1 and 2 herein questioning the<br \/>\nvalidity of the said circular.  A learned Single Judge of<br \/>\nthe High Court in the said writ petition held that<br \/>\nRegulation 17(1) of the Regulation is arbitrary as no<br \/>\nguideline was provided thereby.  Aggrieved by and<br \/>\ndissatisfied with the said judgment, the appellant herein<br \/>\npreferred an appeal before the Division Bench of the High<br \/>\nCourt.  The Division Bench despite holding that Regulation<br \/>\n17 of the Regulations may not be ultra vires the<br \/>\nConstitution of India but the promotion policy formulated<br \/>\nby the appellant should have been issued in compliance of<br \/>\nthe procedure laid down in Section 19 of the Banking<br \/>\nCompanies (Acquisition and Transfer of Undertakings) Act,<br \/>\n1980 (hereinafter referred to as &#8216;the Act&#8217;, for the sake of<br \/>\nbrevity)  holding :\n<\/p>\n<p>&#8220;&#8230;It is a settled principle of law<br \/>\nwhen power is delegated to a subordinate<br \/>\nlaw making body subject to certain<br \/>\nconditions, the conditions must be<br \/>\ncomplied with.  Otherwise the<br \/>\nsubordinate legislation would be ultra<br \/>\nvires, the power granted to it, which<br \/>\nitself is subject to a condition.&#8221;\n<\/p>\n<p>\tMr. V.R. Reddy, learned Senior Counsel appearing on<br \/>\nbehalf  of the appellant would submit that the Division<br \/>\nBench of the High Court went wrong in holding that in making<br \/>\nthe guidelines, the conditions precedent for making the<br \/>\nregulation as contained in Section 19 of the Act were<br \/>\nrequired to be complied with.  The learned counsel would<br \/>\nsubmit that it is not in dispute that the Board of Directors<br \/>\nof the appellant-Bank before framing the regulations had<br \/>\nconsulted the Reserve Bank of India and also obtained prior<br \/>\napproval of the Central Government in terms of Section 19 of<br \/>\nthe Act.   The policy decision as regard promotion of the<br \/>\nofficers having been framed in terms of Regulation 17 and in<br \/>\nconformity with the guidelines issued by the Union of India,<br \/>\nMr. Reddy would submit, it was not necessary to consult the<br \/>\nReserve Bank of India or obtain prior permission of the<br \/>\nCentral Government.\n<\/p>\n<p>\tIt is not in dispute that the appellant-Bank was a<br \/>\n&#8216;corresponding new bank&#8217; within the meaning of the<br \/>\nprovisions of the Act.  Section 8 of the Act obligates every<br \/>\ncorresponding   new bank to be guided by such directions as<br \/>\nregard the matters of policy involving public interest  as<br \/>\nthe Central Government may, after consultation with the<br \/>\nGovernor of the Reserve Bank, give.\n<\/p>\n<p>\tSub-section (2) of Section 12 of the Act reads as<br \/>\nunder:\n<\/p>\n<p>&#8220;(2)  Save as otherwise provided in<br \/>\nsub-section (1), every officer or other<br \/>\nemployee of an existing bank shall<br \/>\nbecome, on the commencement of this Act,<br \/>\nan officer or other employee, as the<br \/>\ncase may be, of the corresponding new<br \/>\nbank and shall hold his office or<br \/>\nservice in that bank on the same terms<br \/>\nand conditions and with the same rights<br \/>\nto pension, gratuity and other matters<br \/>\nas would have been admissible to him if<br \/>\nthe undertaking of the existing bank had<br \/>\nnot been transferred to and vested in<br \/>\nthe corresponding new bank and continue<br \/>\nto do so unless and until his employment<br \/>\nin the corresponding new bank is<br \/>\nterminated or until his remuneration,<br \/>\nterms or conditions are duly altered by<br \/>\nthe corresponding new bank.&#8221;\n<\/p>\n<p>\tThe Board of Directors of the corresponding new bank is<br \/>\nempowered to make a regulation after consultation with the<br \/>\nReserve Bank of India and previous sanction of the Central<br \/>\nGovernment.  Such regulation, inter alia, may relate to the<br \/>\nduties and conduct of officers and other employees of the<br \/>\ncorresponding new bank.\n<\/p>\n<p>\tIt is not in dispute that pursuant to or in furtherance<br \/>\nof sub-section (2)  of Section 12 read with Section 19 of<br \/>\nthe Act, in consultation with the Reserve Bank of India and<br \/>\nupon obtaining prior permission therefor, the Board of<br \/>\nDirectors of the appellant-Bank framed  the Regulations<br \/>\nknown as &#8216;Andhra Bank (Officers&#8217;) Service Regulations 1982&#8242;.<br \/>\nRegulation 17 of the said Regulations reads thus :\n<\/p>\n<p>\t\t&#8220;17. Promotions :\n<\/p>\n<p>1.\tPromotions to all Grades of<br \/>\nofficers in the Bank shall be made<br \/>\nin accordance with the policy laid<br \/>\ndown by the Board, from time to<br \/>\ntime, having regard to the<br \/>\nguidelines of the Government, if<br \/>\nany.\n<\/p>\n<p>2.\tFor the avoidance of doubts, it is<br \/>\nclarified that this regulation<br \/>\nshall also apply to promotions of<br \/>\nany category of employees to the<br \/>\nJunior Management Grade.&#8221;\n<\/p>\n<p>It appears that the Central Government had also issued<br \/>\nguidelines purported to be in terms of  Regulation 17 of the<br \/>\nRegulations.\n<\/p>\n<p>It was not the contention of the Respondent Nos.1 and 2<br \/>\nbefore the High Court or before us that the Board of<br \/>\nDirectors by reason of  the regulation making power could<br \/>\nnot have been delegated with the power to lay down a policy<br \/>\nfor grant of promotion to the officers working in the bank.<br \/>\nFrom a bare perusal of Regulation 17, it would be evident<br \/>\nthat sufficient safeguards have been provided for therein<br \/>\ninasmuch as while laying down such policy, the Board must<br \/>\nhave regard to the guidelines issued by the Central<br \/>\nGovernment.  It is further not in doubt or dispute that such<br \/>\nguidelines had been provided by the Government in terms of<br \/>\nthe aforementioned regulation.\n<\/p>\n<p> \tA valid regulation once framed would be a part of the<br \/>\nstatute.\n<\/p>\n<p>It is a well-settled principle of service jurisprudence<br \/>\nthat the employer is entitled to lay down policy decision<br \/>\nlaying down the criteria for grant of promotion to its<br \/>\nofficers.  The eligibility norms for such promotions must be<br \/>\ndefined  by the bank on a realistic basis wherefor a system<br \/>\nto  choose the  best available talent to man the critical<br \/>\npositions is to be devised.   Once a power vests in an<br \/>\nauthority by reason of the provisions of a statute, it is<br \/>\ntrite that such power can be exercised from time to time.<br \/>\nChanges are required to be made keeping in view the<br \/>\nrequirement of the management as also the exigency of the<br \/>\nsituation obtaining at the relevant time.  Furthermore, it<br \/>\nis one thing to say that by reason of Section 19, the<br \/>\nParliament has conferred essential legislative functions<br \/>\nupon the Board of Directors to make regulation but it is<br \/>\nanother thing to say that the regulation is arbitrary and<br \/>\nultra vires as it did not contain sufficient guidelines.<br \/>\nThe High Court did not come to the conclusion that essential<br \/>\nlegislative competence of the Parliament has been delegated<br \/>\nto the Board of Directors in terms of Section 17 of the Act<br \/>\nor otherwise.\n<\/p>\n<p>\tThe regulations in terms of  sub-section (2) of Section<br \/>\n12 read with Section 19 of the Act were required to be<br \/>\nframed by the Board of Directors.  For amending the<br \/>\nregulations each time they were not only required to consult<br \/>\nthe Reserve Bank of India and obtain previous permission of<br \/>\nthe Central Government but also the amended regulations were<br \/>\nrequired to be laid before both the Houses of the Parliament<br \/>\nin terms of Section 19 of the Act.   With a view to avoid<br \/>\nthe rigors of such procedural requirements, we see no reason<br \/>\nas to why the said power cannot be delegated to the Board of<br \/>\nDirectors keeping in view of the fact that the policy<br \/>\ndecision required to be laid down for effecting promotions<br \/>\nto different grades of officers and employees at different<br \/>\npoints of time.\n<\/p>\n<p> \tRegulation 17 of the Regulation, in our opinion, does<br \/>\nnot confer any unguided, uncanalised and arbitrary power as<br \/>\nthe same was issued in conformity with the guidelines issued<br \/>\nby the Central Government.  The requirement to lay down the<br \/>\nregulation before both Houses of Parliament also provides<br \/>\nfor sufficient safeguard.  For making a regulation, the<br \/>\nrequirements of Section 19 of the Act were required to be<br \/>\ncomplied with but the procedure laid down therefor are<br \/>\nwholly irrelevant for the purpose of formulating the policy<br \/>\ndecision in terms of Regulation 17 aforementioned.  The High<br \/>\nCourt in its impugned judgment failed to notice the said<br \/>\ndistinction and, thus, based its decision wholly on a wrong<br \/>\npremise.\n<\/p>\n<p> \tA machinery provision, it is trite, must be construed<br \/>\nin such a manner so as to make it workable having regard to<br \/>\nthe doctrine &#8216;ut res magis valeat quam pereat&#8217;.\n<\/p>\n<p> \tIn People&#8217;s Union for Civil Liberties &amp; Anr. Vs. Union<br \/>\nof India &amp; ors. [JT 2004 (1) SC 152], this Court while<br \/>\nrejecting a similar contention as regard Section 18 of the<br \/>\nAtomic Energy Act, 1962 held:\n<\/p>\n<p>&#8220;The question as to whether a statute<br \/>\nis ultra vires Constitution of India<br \/>\nhaving conferred unguided, uncanalised<br \/>\nor wide power cannot be determined in<br \/>\nvacuum.  It has to be considered having<br \/>\nregard to the text and context of the<br \/>\nState as also the character thereof.  It<br \/>\ndeals with a sensitive subject.\n<\/p>\n<p> \tSection 18 has been enacted for the<br \/>\npurposes specified therein.  It is well-<br \/>\nsettled that guidelines for enacting the<br \/>\nsaid provision must be found out from<br \/>\nthe subject matter covering the field.<br \/>\nFor the said purpose even the preamble<br \/>\nof the Act may be looked into.\n<\/p>\n<p> \tThe notification of discovery of<br \/>\nuranium or thorium, control over mining<br \/>\noperations, the disposal of uranium,<br \/>\npower to obtain information are within<br \/>\nthe scope and ambit of the said Act.\n<\/p>\n<p>Section 13 provides for informations as<br \/>\nregard,  contracts.  Section 14<br \/>\npostulates control over production and<br \/>\nuse of atomic energy.  Restrictions as<br \/>\nregard  disclosure of information as<br \/>\ncontained in Section 18 are not vague or<br \/>\nwide in nature.  It specifies the areas<br \/>\nwhere such disclosures are prohibited.<br \/>\nThe powers of the Central Government to<br \/>\nmake an order in terms thereof are,<br \/>\nthus, limited.\n<\/p>\n<p> \tIt is not a case where as in<br \/>\nHamdard Dawakhana and Another Vs. Union<br \/>\nof India and others [AIR 1960 SC 554] or<br \/>\nKrishna Mohan (P) Ltd. Vs. Municipal<br \/>\nCorporation of Delhi [(2003) 7 SCC 151]<br \/>\nthe Central Government has been<br \/>\nconferred with a wide uncanalised and<br \/>\nunguided power.  It is also not a case<br \/>\nwhere the words employed in the<br \/>\nprovision provide for   no criteria nor<br \/>\ncan it be said that no  standard has<br \/>\nbeen laid down by the Parliament<br \/>\ntherefor. It is furthermore not a case<br \/>\nwhere principles on which the power of<br \/>\nthe Central Government are to be<br \/>\nexercised have not been disclosed.  By<br \/>\nreason of the Act, essential legislative<br \/>\nfunctions have also not been delegated.\n<\/p>\n<p>\tWe do not think that having regard<br \/>\nto the purport and object of the said<br \/>\nAct, the provisions of Section 18 have<br \/>\nbestowed unguided and uncanalised powers<br \/>\non the Central Government.  Sections 18<br \/>\nand 3 of the Atomic Energy Act had to be<br \/>\nenacted by the Parliament as in wrong<br \/>\nhands the information can pose a danger<br \/>\nnot only to the security of the State<br \/>\nbut to the public at large.&#8221;\n<\/p>\n<p> \tThe High Court, therefore, committed a manifest error<br \/>\nin passing the impugned judgment.\n<\/p>\n<p> \tFor the reasons aforementioned, the impugned judgment<br \/>\nof the High Court cannot be sustained.  It is set aside<br \/>\naccordingly.  The Appeal is allowed.  Since in view of the<br \/>\nfact that nobody appeared for the respondents, there shall<br \/>\nbe no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India Andhra Bank vs B. Satyanarayana &amp; Ors on 12 February, 2004 Author: S.B. Sinha Bench: Cji, S.B. Sinha, S.H. Kapadia. CASE NO.: Appeal (civil) 1877 of 1999 PETITIONER: Andhra Bank RESPONDENT: B. Satyanarayana &amp; Ors. DATE OF JUDGMENT: 12\/02\/2004 BENCH: CJI, S.B. Sinha &amp; S.H. Kapadia. JUDGMENT: JUDGMENT S.B. SINHA , [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-47334","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Andhra Bank vs B. 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