I Bank Limited v. Lakshminarayanan

In the High Court of Judicature at MadrasDated: 4 - 1 - 2008Coram: The Honourable Mr.Justice S.J.MukhopadhayaandThe Honourable Mr.Justice M.VenugopalWrit Appeal No.2245 of 2002ICICI Bank Limited,Corporate Office, Chennai Unit,192, Anna Salai,Chennai-600 002,Rep. by its Sr. Vice President-HR(Cause Title accepted-vide Orderof Court dated 18.7.2002, made inW.A.M.P.No.3581 of 2002).. Appellant/Respondent in WP.7744/00. vs.Lakshminarayanan .. Respondent / Petitioner in WP.7744/00.Writ Appeal against the order of this Court dated 16.4.2002 inWrit Petition No.7744 of 2000 a Writ of Mandamus directing therespondent to pay pension to the petitioner under the Bank of MaduraEmployees Pension Regulations 1995.For appellant : Mr.Sanjay Mohan for M/s.Ramasubramaniam AssociatesFor respondent: Mr.M.Radhakrishnan for M/s.RajaramJudgmentS.J.Mukhopadhaya,JThe respondent-Writ Petitioner, who was allowed voluntaryretirement with effect from 1.2.1992 from the services of theappellant-Bank of Madura Limited (hereinafter referred to as 'theBank') on his request, preferred Writ Petition No.7744 of 2000, fordirection to the appellant-Bank to pay pension. The prayer in thesaid Writ Petition, having been allowed by the learned single Judge,the present Writ Appeal has been preferred by the appellant-Bank.2. It is seen that with effect from 10.3.2001, the Bank of MaduraLimited merged with ICICI Bank Limited; subsequently, by virtue ofthe Order of the Reserve Bank of India, dated 26.2.2002, the Bank ofMadura Limited was changed as ICICI Bank Limited; accordingly, the https://hcservices.ecourts.gov.in/hcservices/ name of the appellant in the cause title in the Memorandum of theGrounds of Writ Appeal was accepted by as ICICI Bank Limited as perthe Order of the Court dated 18.7.2002 in W.A.M.P.No.3581 of 2002 inW.A.S.R.No.52118 of 2002.3. The questions involved in this Writ Appeal for determinationare:(i) Whether a Writ Petition is maintainable against a privateBank? and(ii) Whether the respondent-Writ Petitioner was eligible forpension as per the Bank of Madura Employees' Pension Regulations (forshort, "Pension Regulations") ?4. Relevant facts of the case are that the Bank floated"Voluntary Retirement Scheme" (for short, 'VRS'), vide CircularNo.CO:STF:10:91-92, dated 21.5.1991, pursuant to which, therespondent-Writ Petitioner applied for Voluntary Retirement on2.11.1991; his application seeking for VRS having been considered bythe Bank, he was allowed to voluntarily retire and relieved witheffect from 1.2.1992 by the letter of the Bank, contained inRef.No.2310, dated 1.2.1992. Another VRS was floated by the Bank byCircular No.CO:STF:39:94-95, dated 21.7.1994; thereafter, therespondent-Writ Petitioner applied for "pension" under the Bank'sPension Scheme, on which no action was taken by the Bank. 5. Learned counsel appearing for the appellant-Bank relied ondifferent decisions of the Supreme Court in support of his plea thata Writ Petition against a "private Bank" is not maintainable. He alsoplaced reliance on the relevant Pension Regulations, namely "Bank ofMadura Employees' Pension Regulations" (in lieu of earlierRegulations of January 1995) in support of the stand of the Bankthat the respondent-Writ Petitioner was not even eligible for pensionin terms of the said Pension Regulations. 6. On the other hand, according to the learned counsel for therespondent-Writ Petitioner, the Bank cannot deny pension to its'retired employees' and no discrimination can be made between"retired employees" and 'voluntarily retired employees'. 7. We have heard learned counsel appearing for the parties andnoticed the judgments referred by one or other counsel, as also therelevant provisions of the said Pension Regulations.8. Learned counsel appearing for the respondent-Writ Petitionerrelied on the decision of the Supreme Court reported in AIR 1983 SC130 = 1983 Lab.I.C. 1 (D.S.Nakara vs. Union of India), wherein theSupreme Court held that the classification in revised pension formulaamong the pensioners on the basis of the date of retirement specifiedin memoranda, is violative and arbitrary of Article 14 of theConstitution of India, and the same being severable, beneficial part https://hcservices.ecourts.gov.in/hcservices/ was retained and made applicable to all pensioners. Reliance was alsoplaced on the said judgment (Nakara's case) to suggest that thepayment of pension is a welfare measure, wherein the retiral benefitsis allowed on considerations of State's obligation to its citizens,for having rendered service during the useful span of life. Thereasons underlining the grant of pension as laid down in the saidcase, was also referred to. 9. Learned counsel appearing for the respondent-Writ Petitioner,while submitting that payment of pension is a "public function",amounting to "public duty", relied on the decision of the SupremeCourt reported in 1989 (2) SCC 691 (Andi Mukta S.M.V.S.S.J.M.S. Trustvs. V.R.Rudani). In that case, the Supreme Court determined thequestion as to when a "Writ of Mandamus" can be issued and whether itcan be issued on a 'private body'. The Supreme Court, having noticedthe word "any person or authority" used in Article 226 of theConstitution, held that a "Writ" be not confined only to statutoryauthorities and instrumentalities of the State, but they may alsocover any other person or body performing public duties. The form ofthe body concerned is not very much relevant. What is relevant is thenature of duty imposed on the body. Writ of Mandamus can be issuedagainst a person or body to carry out the duties placed on them bythe statutes, even though they are not public officials or statutorybodies. 10. In the above context, reference was made to the decision ofthe Supreme Court reported in 2005 (4) SCC 649 (Zee Telefilms Ltd.vs. Union of India). That was a case in which the Supreme Court,while deciding the question whether the Board of Control for Cricketin India (for short, 'the BCCI') is a State, noticed the tests laiddown by the Supreme Court reported in 2002 (5) SCC 111 (Pradeep KumarBiswas vs. Indian Institute of Chemical Biology) and came to theconclusion that the BCCI is not shown to be "functionally" or"administratively dominated" by or is under the control of theGovernment. It held that the exercise by the Board did not pervadeit, merely it is regulatory in nature and thus held that the BCCI isnot "State" for the purpose of Article 12 of the Constitution ofIndia. However, taking into consideration the fact that the BCCIdischarges certain duties like the selection of an Indian Cricketteam, controlling the activities of the players and others involvedin the game of Cricket, the Supreme Court held that these activitiescan be said to be akin to public duties or State's functions and ifthere is violation of any constitutional or statutory obligation orrights of other citizens, the aggrieved party may not have a reliefby way of petition under Article 32 of the Constitution, but suchparty can always seek a remedy under the ordinary course of law or byway of a Writ Petition under Article 226 of the Constitution ofIndia. https://hcservices.ecourts.gov.in/hcservices/

11. With regard to the maintainability of the Writ Petitionagainst a private party, reliance was also placed on the decision ofthe Supreme Court reported in 2005 (6) SCC 657 (Binny Ltd. vs.Sadasivan), wherein similar view was taken that the word "any personor authority" used in Article 226 of the Constitution of India be notconfined only to statutory authorities and instrumentalities of theState, but they may also cover any other person or body performingthe public duties. The Supreme Court further held that a Writ ofMandamus or a remedy under Article 226 of the Constitution of India,is pre-eminently a "public law remedy" and is not generally availableas a remedy against private wrongs. The Supreme Court in that case(Binny Ltd's case-supra) made the following observations: "29. Thus, it can be seen that a writ ofmandamus or the remedy under Article 226 is pre-eminently a public law remedy and is not generallyavailable as a remedy against private wrongs. Itis used for enforcement of various rights of thepublic or to compel public/statutory authoritiesto discharge their duties and to act within theirbounds. It may be used to do justice when there iswrongful exercise of power or a refusal to performduties. This writ is admirably equipped to serveas a judicial control over administrative actions.This writ could also be issued against any privatebody or person, specially in view of the wordsused in Article 226 of the Constitution. However,the scope of mandamus is limited to enforcement ofpublic duty. The scope of mandamus is determinedby the nature of the duty to be enforced, ratherthan the identity of the authority against whom itis sought. If the private body is discharging apublic function and the denial of any right is inconnection with the public duty imposed on suchbody, the public law remedy can be enforced. Theduty cast on the public body may be eitherstatutory or otherwise and the source of suchpower is immaterial, but, nevertheless, there mustbe the public law element in such action.Sometimes, it is difficult to distinguish betweenpublic law and private law remedies. According toHalsbury's Laws of England, 3rd Edn., Vol.30,p.682,"1317. A public authority is a body,not necessarily a county council,municipal corporation or other localauthority, which has public or statutoryduties to perform and which perform thoseduties and carries out its transactionsfor the benefit of the public and not for https://hcservices.ecourts.gov.in/hcservices/ private profit."There cannot be any general definition of publicauthority or public action. The facts of eachcase decide the point." 12. Reliance was also placed on the decision of a Division Benchof this Court reported in 1999 (3) L.L.N. 310 (A.K.Ansari vs. BharatOverseas Bank Ltd.), wherein this Court held that the right ofpension is a matter of livelihood and denial of such livelihoodoffends the Constitution and such a situation is monstrous inrespect of retirees who lead a frugal life and this Court allowed thepensionary benefits in favour of a retired employee of the BharatOverseas Bank Limited.13. We have also noticed the other decisions of the Supreme Courtas referred to by the learned counsel appearing for the appellant-Bank.14. A co-operative Society, whether amenable to Writjurisdiction or not, fell for consideration before a Full Bench ofthis Court reported in 2006 (4) L.W. 495 = 2006 (4) CTC 689(K.Marappan vs. The Deputy Registrar of Co-operative Societies,Namakkal and another). In that decision, what are all thecircumstances in which a Writ will lie against a Co-operativeSociety, have been laid down, and this Court held that a Co-operativeSociety is not a 'State' under Article 12 of the Constitution ofIndia. 15. The question whether a "Writ" can be issued on a privateCompany, which is not a statutory or having any public duty orresponsibility imposed by "statute", fell for consideration beforethe Supreme Court in the decision reported in AIR 1969 SC 1306 (PragaTools Corpn. vs. C.V.Imanual), wherein, the following observationswere made by the Supreme Court:"6. ...... Therefore, the conditionprecedent for the issue of mandamus is that thereis in one claiming it a legal right to theperformance of a legal duty by one against whomit is sought. An order of mandamus is, in form, acommand directed to a person, corporation or aninferior tribunal requiring him or them to do aparticular thing therein specified whichappertains to his or their office and is in thenature of a public duty. It is, however, notnecessary that the person or the authority onwhom the statutory duty is imposed need be apublic official or an official body. A mandamuscan issue, for instance, to an official of asociety to compel him to carry out the terms ofthe statute under or by which the society is https://hcservices.ecourts.gov.in/hcservices/ constituted or governed and also to companies orcorporations to carry out the duties placed onthem by the statutes authorising theirundertakings. A mandamus would also lie againsta company constituted by a statute for thepurposes of fulfilling public responsibilities.(Cf. Halsbury's Laws of England (3rd Ed.), Vol.II,p.52 and onwards).""7. The company being a non-statutory bodyand one incorporated under the Companies Actthere was neither a statutory nor a public dutyimposed on it by a statute in respect of whichenforcement could be sought by means of amandamus, nor was there in its workmen anycorresponding legal right for enforcement of anysuch statutory or public duty. The High Court,therefore, was right in holding that no writpetition for a mandamus or an order in the natureof mandamus could lie against the company.""9. ..... In our view once the writ petitionwas held to be misconceived on the ground that itcould not lie against a company which was neithera statutory company nor one having public dutiesor responsibilities imposed on it by a statute,no relief by way of a declaration as toinvalidity of an impugned agreement between itand its employees could be granted. The HighCourt in these circumstances ought to have leftthe workmen to resort to the remedy available tothem under the Industrial Disputes Act by raisingan industrial dispute thereunder. The only courseleft open to the High Court was therefore todismiss it. No such declaration against acompany registered under the Companies Act andnot set up under any statute or having any publicduties and responsibilities to perform under sucha statute could be issued in writ proceedings inrespect of an agreement which was essentially ofa private character between it and its workmen.The High Court, therefore, was in error ingranting the said declaration." 16. Similar question relating to maintainable of a 'Writ' underArticle 226 of the Constitution of India, was considered by theSupreme Court in 2003 (10) SCC 733 = 2003 (4) CTC 418 (SC) (FederalBank Ltd. vs. Sagar Thomas). In the said case, the Supreme Courtobserved that a Writ Petition under Article 226 of the Constitutionof India may be maintained against a private body discharging publicduty or positive obligation of public nature. Similar argument https://hcservices.ecourts.gov.in/hcservices/ advanced on behalf of an employee that the Federal Bank performspublic duty, in the light of the control of the Reserve Bank of Indiaover the Banking industries, was accepted by the High Court. However,the Supreme Court, on appeal preferred by the Federal Bank Ltd.,reversed such finding with the following observation: "18. From the decisions referred to above,the position that emerges is that a writ petitionunder Article 226 of the Constitution of Indiamay be maintainable against (i) the State(Government); (ii) an authority; (iii) astatutory body; (iv) an instrumentality or agencyof the State; (v) a company which is financed andowned by the State; (vi) a private body runsubstantially on State funding; (vii) a privatebody discharging public duty or positiveobligation of public nature; and (viii) a personor a body under liability to discharge anyfunction under any statute, to compel it toperform such a statutory function." "27. Such private companies would normallynot be amenable to the writ jurisdiction underArticle 226 of the Constitution. But in certaincircumstances a writ may issue to such privatebodies or persons as there may be statutes whichneed to be complied with by all concernedincluding the private companies. For example,there are certain legislations like theIndustrial Disputes Act, the Minimum Wages Act,the Factories Act or for maintaining properenvironment, say the Air (Prevention and Controlof Pollution) Act, 1981 or the Water (Preventionand Control of Pollution) Act, 1974 etc. orstatutes of the like nature which fasten certainduties and responsibilities statutorily upon suchprivate bodies which they are bound to complywith. If they violate such a statutory provisiona writ would certainly be issued for compliancewith those provisions. For instance, if a privateemployer dispenses with the service of itsemployee in violation of the provisions containedunder the Industrial Disputes Act, in innumerablecases the High Court interfered and has issuedthe writ to the private bodies and the companiesin that regard. But the difficulty in issuing awrit may arise where there may not be any non-compliance with or violation of any statutory https://hcservices.ecourts.gov.in/hcservices/ provision by the private body. In that event awrit may not be issued at all. Other remedies, asmay be available, may have to be resorted to.""32. Merely because Reserve Bank of Indialays the banking policy in the interest of thebanking system or in the interest of monetarystability or sound economic growth having dueregard to the interests of the depositors etc. asprovided under Section 5(c)(a) of the BankingRegulation Act does not mean that the privatecompanies carrying on the business or commercialactivity of banking, discharge any publicfunction or public duty. These are all regulatorymeasures applicable to those carrying oncommercial activity in banking and thesecompanies are to act according to theseprovisions failing which certain consequencesfollow as indicated in the Act itself. As to theprovision regarding acquisition of a bankingcompany by the Government, it may be pointed outthat any private property can be acquired by theGovernment in public interest. It is now ajudicially accepted norm that private interesthas to give way to the public interest. If aprivate property is acquired in public interestit does not mean that the party whose property isacquired is performing or discharging anyfunction or duty of public character though itwould be so for the acquiring authority.""33. For the discussion held above, in ourview, a private company carrying on bankingbusiness as a scheduled bank, cannot be termed asan institution or a company carrying on anystatutory or public duty. A private body or aperson may be amenable to writ jurisdiction onlywhere it may become necessary to compel such bodyor association to enforce any statutoryobligations or such obligations of public naturecasting positive obligation upon it. We don'tfind such conditions are fulfilled in respect ofa private company carrying on a commercialactivity of banking. Merely regulatory provisionsto ensure such activity carried on by privatebodies work within a discipline, do not conferany such status upon the company nor put any suchobligation upon it which may be enforced throughissue of a writ under Article 226 of theConstitution. Present is a case of disciplinary https://hcservices.ecourts.gov.in/hcservices/ action being taken against its employee by theappellant Bank. The respondent's service with theBank stands terminated. The action of the Bankwas challenged by the respondent by filing a writpetition under Article 226 of the Constitution ofIndia. The respondent is not trying to enforceany statutory duty on the part of the Bank. Thatbeing the position, the appeal deserves to beallowed." 17. In the present case also, as the appellant-Bank of MaduraLtd., is a private Company, carrying on private banking business andnot carrying on any statutory or public duty, no "Writ Petition"under Article 226 of the Constitution of India is maintainableagainst the appellant-Bank of Madura Ltd. Merely because the Bank hasmade provisions to grant "pension" on VRS, under the relevant PensionScheme, the same cannot be a ground to hold that the Bank isperforming a public duty or public function. Hence, the firstquestion is answered in the negative against the respondent-WritPetitioner and in favour of the appellant-Bank of Madura Ltd. (nowICICI Bank Ltd.) 18. So far as the second question relating to the eligibility ofthe respondent-Writ Petitioner to claim "Pension" under the PensionRegulations, is concerned, we also accept the submission as made bythe learned counsel appearing for the appellant-Bank.19. Regulation 2(w) of the Pension Regulations defines"retirement" and Clause (b) of Regulation 2(w) deals with the"Voluntary Retirement" in accordance with Regulation 29, while Clause(d) of Regulation 2(w) related to VRS in terms of and subject to theprovisions contained in Regulation 2(ze) and Regulation 35 and thesame are quoted hereunder: "Regulation 2(w): "Retirement" meanscessation from Bank's service,-a) on attaining the age of superannuationspecified in Service Rules or Settlements;b) on voluntary retirement in accordance withprovisions contained in regulation 29 of theseregulations;c) on premature retirement by the Bank beforeattaining the age of superannuation specified inService Rules or Settlement;d) on VRS in terms of and subject toprovisions contained in Regulation 2(ze) andRegulation 35;" 20. Regulation 2(ze) of the Pension Regulations, defines "VRS",which is based on the 1994 Pension Scheme, as is evident from thesaid provision and reflected below: https://hcservices.ecourts.gov.in/hcservices/ "Regulation 2(ze): 'V.R.S' means Bank ofMadura Employees' Voluntary Retirement Schemeenclosed to the circular CO.STF:39/94-95 datedJuly 21, 1994, or any other specific scheme thatmay be implemented in future bringing such schemeunder the definition of this regulation. Theemployees who have completed 20 years of servicein the bank and who have retired subsequent tothe expiry of the scheme mentioned in theCircular CO:GM:CIR:2/93-94 dated May 20, 1993,and who were extended the additional benefits inaddition to the normal retirement benefits shallbe deemed and considered to have retired underV.R.S." 21. So far as the applicability of Regulations to the case ofthe appellant-Bank, is concerned, "as to whom" it will apply, hasbeen provided under Chapter II, Regulation 3 of the PensionRegulations of the appellant-Bank; while under Clause (1)(a) ofRegulation 3, the Regulations apply to employees who were in theservices of the appellant-Bank on or after 1st January, 1986, butretired before 1st November, 1993, Clause (2)(a) of Regulation 3relates to employees who retired on or after 1st November, 1983 andthe rest of the Clauses relate to those who were in the services ofthe appellant-Bank before the notified date or those who joined theappellant-Bank on or after the notified date.22. Clause (9) of Regulation 3 of the Pension Regulationsrelates to employees retired under "VRS", which reads as under:"Regulation 3(9): (a) Retired under VRS as defined in Regulation 2(ze);(b) exercise an option in writing within thestipulated time as contained in Regulation 35 tobecome member of the Fund and (c) refund within thirty days from the date ofsuperannuation the entire amount of the Bank'scontribution to the Provident Fund and interestaccrued thereon together with a further simpleinterest at the rate of six percent per annumfrom the date of settlement of the Provident FundAccount till the date of refund of the aforesaidamount to the Bank as contained in Regulation 35.23. Under Chapter V relating to "Classes of Pension" in thePension Regulations, while Regulation 29 deals with the "Pension ofVoluntary Retirement", Regulation 35 relates to 'Pension to Employeesretiring under VRS. Those provisions being relevant, are quotedhereunder: https://hcservices.ecourts.gov.in/hcservices/ "Regulation 29: Pension on Voluntary Retirement:-(1) on or after the 1st day of November,1993, at any time after an employee has completedtwenty years of qualifying service he may, bygiving notice of not less than three months inwriting to the Appointing Authority retire fromservice.""Regulation 35 : Pension to Employees retiringunder VRS:(i) An employee who has opted for pensionand who retired under VRS enumerated inRegulation 2(ze) of these regulations and who hascompleted twenty years of service in the bankshall be eligible for pension from the date ofhis attaining the age of superannuation i.e. thedate on which he would have retired had hecontinued in the employment if he is otherwiseeligible under these regulations." 24. Admittedly, the respondent-Writ Petitioner voluntarilyretired on 1.2.1992 pursuant to VRS Scheme of 1991 under CircularNo.CO:STF:10:91-92, dated 21.5.1991. He has not retired pursuant tothe subsequent VRS Scheme of 1994 in Circular No.CO:STF:39:94-95,dated 21.7.1994. Therefore, he is not covered by Regulation 2(ze) ofthe Pension Regulations, which applies to VRS employees retiredpursuant to 1994 Scheme.25. Regulation 29 of the Pension Regulations relates to "Pensionon "Voluntarily Retirement" of those who retired on or after1.11.1993. The respondent-Writ Petitioner having been retired on1.2.1992 pursuant to his notice to the appellant-Bank, dated2.11.1991, and hence, he is also not covered under Regulation 29, andthereby, he does not also come within the definition of "Retirement"under Regulation 2(w)(b) of the Pension Regulations. Similarly, asRegulation 35 of the Pension Regulations is covered for the employeesretiring under the VRS enumerated under Regulation 2(ze), therespondent-Writ Petitioner cannot even claim the benefit prescribedunder Regulation 35, nor he falls within the meaning of 'Retirement'under Regulation 2(w)(d) of the Pension Regulations.26. In view of the aforesaid findings, we answer the secondquestion also in the negative, i.e. against the respondent-WritPetitioner-employee and in favour of the appellant-Bank.27. As the learned single Judge has failed to notice theaforesaid provisions of law in proper perspective and wronglyappreciated the findings of the Supreme Court, some of which havebeen referred to in this judgment, we have no other option except to https://hcservices.ecourts.gov.in/hcservices/ set aside the impugned order dated 16.4.2002 in W.P.No.7744 of 2000.28. In the result, the Writ Appeal is allowed. But in the factsand circumstances, there shall be no order as to costs. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.csToThe Sr. Vice President-HRICICI Bank Limited,Corporate Office, Chennai Unit,192, Anna Salai,Chennai-600 002.+ 1 CC To Mr. S.Ramasubramaniam and Associates, SR NO.447Writ Appeal No.2245 of 2002asm[co]gp/10.1.