- (1.) The respondent No. 1-Sagar Thomas was working as a Branch Manager in Karunagappally branch of the appellant-Bank, namely, the Federal Bank, having its registered office at Alwaye, Kerala. He was, however, suspended on 29-5-1982, since a disciplinary enquiry was ordered into some charges against him for having exceeded his authority in grant of loans and advances to different parties. The Inquiry Officer found him guilty of the charges and ultimately punishment of dismissal was awarded to the respondent.
(2.) The respondent No. 1 challenged the order of his dismissal by filing a writ petition in the High Court. A preliminary objection about maintainability of writ petition seems to have been taken, in defence by the Federal Bank, saying that it is a private bank and not a State or its agency or instrumentality, within the meaning of Art. 12 of the Constitution of India, hence a writ petition under Art. 226 of the Constitution is not maintainable against it. The learned single Judge, however, found that the Federal Bank performs public duty and observed thus : "As per statutes, the Reserve Bank and the Central Government exercise all pervading functional, fiduciary and managerial control over the banking industry. Every banking company is duty bound to carry on banking business as per the banking policy under stringent control of the Reserve Bank in the interest of banking system or in the interest of monetary stability of sound economic growth, having due regard to the interest of the depositors. The activities carried on by the bank are vital to public interest and have potential to affect the socio-economic development and growth of the nation. Banking companies are therefore, public institutions, accepting deposits from public, financial assistance from the State through its agencies/instrumentalities, for the purpose of lending or investment, pursuing banking policy and engaged in matters of high public interest or performing public functions, ensuring monetary stability, sound economic growth, equitable allocation of various funds to efficient use, for the promotion and growth of economy and welfare of the State. The first respondent is, thus, performing a public duty and a positive obligation towards its employees and customers exists. Therefore, it is amenable to writ jurisdiction." Ultimately the order passed by the learned single Judge is : ". . . . . . .In the light of the above decisions of the Apex Court, I can very well find that the Federal Bank Ltd., is performing public duty and as such it comes under the definition of 'other authority' within the meaning of Art. 12 of the Constitution of India and as such the writ petition is maintainable before this Court." Aggrieved by the aforesaid judgment of the learned single Judge, the appellant preferred a writ appeal but referring to a decision of this Court in U. P. State Co-operative Land Development Bank Ltd. v. Chandra Bhan Dubey and others,1 the Division Bench, observed that in an identical fact situation it was held that writ application would be maintainable, minor distinctions on facts, here and there, would not make the aforesaid decision inapplicable to scheduled banks. With such observations the appeal was dismissed providing that the learned single Judge shall decide writ petition on merits. The Federal Bank Ltd. has preferred this appeal, against the aforesaid judgment of the High Court.
(3.) Learned senior counsel appearing for the appellant, so as to indicate the structure of the appellant, submits that the Federal Bank Ltd. is a 'company' incorporated under the Indian Companies Act, 1913, now replaced by the Companies Act, 1956. Its activities are regulated by the provisions of the Banking Regulation Act, 1949 The entire shareholding of the company is held by private individuals and entities. The finances of the banks are raised by its own resources and efforts, and the profits of the bank are utilized by the bank for its own purposes. It does not perform any sovereign function nor does it exercise any authority over a third person. The nature of the activity of the bank is that of a commercial undertaking which receives deposits from the individuals and advances loans and performs other ancillary monetary transactions. The management of the bank is in the hands of the Board of Directors. There are 10 Directors, out of which 7 are selected by the General Body of the shareholders. Two members are co-opted by the Board of Directors and one of them is nominated by the Reserve Bank of India. The Board of Directors exercise the powers of superintendence and control over the bank. The bank is, therefore, merely a private limited company; it is neither a 'State' nor any 'authority' within the meaning of Art. 12 of the Constitution nor it is amenable to writ jurisdiction of the High Court. It is also the case of the appellant-bank that services of an employee or an office of a private body, cannot be imposed or thrust upon it nor a relief of reinstatement can be granted. In this connection, the appellant has referred to the reliefs prayed for in the writ petition, which are as follows : "i) a writ of certiorari or any other appropriate writ, order or direction quashing Exhibit P3 Enquiry Report and P6 and P7 orders of the disciplinary authority and the Board of Directors as illegal and unsustainable in law; ii) a writ of mandamus or any other appropriate writ, order or direction commanding the respondents to reinstate the petitioner with all wages and increments in the salary applicable to him as if he had continued in service from the date of his suspension; iii) any other appropriate writ, order or direction as this Hon'ble Court may deem fit and necessary on the facts and in the circumstances of the case and allow this petition with all costs." In the light of the prayer made for issue of a writ of certiorari for quashing of inquiry report and the order of punishment and further for issue of a writ of mandamus or any other appropriate writ or direction for reinstatement of the petitioner with all wages and increments etc. as if, he had been continued in service, a plea in reply has been raised by the appellant that it being a private body incorporated under the Companies Act, it is not amenable to writ jurisdiction of the High Court. It is in the above background that the learned single Judge considered the matter and held that the Federal Bank Limited is performing public duty, as such it is covered under the expression of 'other authority,' within the meaning of Art. 12 of the Constitution, hence the writ petition is maintainable before the High Court.;