A private bank employee challenged his termination and sought whistle-blower protection and investigation of alleged misconduct. The Court dismissed the petition as not maintainable, treating the relief as contractual employment relief. It declined a CBI referral and left the merits unexamined.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF APRIL, 2021
BEFORE
THE HON’BLE MR. JUSTICE PRADEEP SINGH YERUR
WRIT PETITION NO.9765 OF 2015 (GM-RES)
BETWEEN:
SRI M.SUDHAKAR S/O.V.MUTHUVADIVEL AGED ABOUT 45 YEARS R/AT NO.13, ‘V’ BLOCK ANGLO INDIAN QUARTERS AUSTIN TOWN BENGALURU – 560 047 ... PETITIONER
(BY SRI ASHOK B.PATIL, ADVOCATE)
AND:
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4. SRI SHALENDRA BHANDARI MAJOR
THE THEN MANAGING DIRECTOR & CEO, ING VYSYA BANK NO.22, M.G.ROAD BENGALURU – 560 001
BENGALURU – 560 001
CHIEF OPERATING OFFICER ING VYSYA BANK NO.22, M.G.ROAD BENGALURU – 560 001
... RESPONDENTS
(BY SRI R.V.S.NAIK, SENIOR COUNSEL FOR SRI T.SURYANARAYANA, ADVOCATE FOR R-1 & R-2) SRI UDAYA HOLLA, SENIOR COUNSEL FOR SRI VIVEK HOLLA, ADVOCATE FOR R-3 TO R-7)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT QUASH LETTER DATED 21.01.2015 ISSUED BY SECOND RESPONDENT VIDE ANNEXURE-Y AND ETC.
THIS PETITION HAVING BEEN HEARD AND RESERVED ON 04.02.2021 AND COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE COURT MADE THE FOLLOWING:
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ORDER
Petitioner has filed this writ petition seeking following
reliefs:
iv) Grant such other relief / reliefs as deem fit to grant in the facts and circumstances of the case.
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as under:
The petitioner enrolled himself as an advocate in the year 1994 at Bar Council of Tamil Nadu, Chennai. After practicing as an Advocate till 2002, petitioner joined as Legal Officer at Karur Vysya Bank, Karur. Thereafter, petitioner joined the 3rd respondent as Assistant VicePresident at Corporate Office, Bengaluru vide appointment order dated 18.02.2008. After working for a period of two years, the petitioner was promoted as Corporate Legal Adviser by letter dated 04.11.2010. As the petitioner was efficient in his work, he had received several appreciation letters from 3rd respondent and also an award of Overdrive on 22.11.2011.
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letter from one Sri Malaykumar, Regional Legal Adviser to ING Vyasya Bank, Mumbai to the effect that the bill of the Advocate for conducting above said criminal case included bribe amount of Rs.15,000/- which was alleged to have been demanded by the Public Prosecutor to the close the case. Petitioner was required to recommend the above said payment, as he was discharging his duty as Corporate Legal Adviser. After receipt of the said letter, the petitioner was surprised about mentioning of bribe in the e-mail dated 18.04.2012 sent by Regional Legal Advisor. Petitioner immediately forwarded the said e-mail to the 5th respondent, who was head of legal department, with a comment that he was not aware of the concept of bribe to be paid to Public Prosecutor and moreover, the payment of bribe is illegal and against policy of the 3rd respondent. Petitioner also forwarded the above said e-mail to the 5th respondent for information and necessary action. However, the 5th respondent instead of taking proper steps to curb the illegal practices of offering bribe, sent a reply through mail stating as follows ‘extremely immature way of handling the matter! Pls. speak to Ashok (7th respondent) and sort out.’
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the above said case closed by manipulating the Court process whereby they have managed to pay penalty without being personally present in the Court.
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Rs.60,000/- towards registration of said lease deed. Petitioner found some foul play and unethical practice adopted by 5th respondent and the Regional Legal Advisor of New Delhi and on coming to know of it, issued a circular to all the branches in India coming under the 3rd respondent not to pay more than Rs.5,000/- towards Advocate’s fee for registration of lease deed and further issued a statement in the very same circular that in case any amount more than Rs.5,000/- is to be paid for such work, there shall be prior approval of petitioner or of the 5th respondent before approving the same.
to the Chairman of the Audit Committee of the Bank under the Whistle Blower Policy highlighting the illegal activities committed by Mr.Ashis Mahajan in connivance with 5th respondent and simultaneously, sought for protection of the audit committee as per Whistle Blower Policy of the Bank.
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mentioned about unethical practice which was followed by some of the officials of the Legal Department of the 3rd respondent. On receipt of said response, 5th respondent called the petitioner to her chamber and threatened him of termination for having raised the issues of unethical practices in the 3rd respondent-Bank. Further, the 5th respondent prevailed upon the petitioner to withdraw the issues relating to unethical practices in his letter. Petitioner refused to withdraw the issues of unethical practice, due to which, 5th respondent recommended for transfer of petitioner from Corporate Office to Regional Office, Bengaluru, within a week from the date of issuance of the said notice as punitive measure.
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4th and 5th respondents wherein favourable orders passed in favour of 3rd respondent was mentioned.
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action or inaction by an employee resulting in unethical practices, fraud, misappropriation and other illegal activities to the managing Director of 3rd respondent.
terminated without assigning any reason vide Annexure-R. Pursuant to the termination of services of petitioner, 7th respondent sent an e-mail dated 10.01.2014 to the petitioner stating that allegations made against him under the Whistle Blower Policy was baseless. Thereafter, the petitioner lodged a complaint with Independent Director of 3rd respondent for victimizing him for initiating action under the Whistle Blower Policy. Since the petitioner did not receive any response, he lodged a complaint with the Chief General manager, RBI, Mumbai of the 1st respondent on
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24.02.2014, thereafter, on oral instructions of Chief General Manager, petitioner lodged a complaint to second respondent on 27.03.2014.
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the petitioner is purely contractual in nature. Hence,
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preliminary objection is raised by the respondents that even though RBI is made as 1st respondent the petition is misconceived and not maintainable in law and on the facts and circumstances of the case. They have denied the averments made by the petitioner and have sought for dismissal of the writ petition.
CONTENTIONS OF THE LEARNED COUNSEL FOR THE PETITIONER
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illegal practice on the part of the respondent Nos.4 to 7, the service of the petitioner was terminated without assigning any reason by a termination letter on 09.01.2014.
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faith and ethical practice, has been opposed by respondents No.3 to 7 and have joined hands with ill-motive and with an intention to take vengeance on the petitioner, have conspired to throw out the petitioner from 3rd respondent – Bank without any justifiable reason.
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terminating his service suddenly without any rhyme or reason is arbitrary and in violation of Article 14 of the Constitution of India. Learned counsel further contends that letter of termination issued to him pursuant to letters and e-mails bringing to the notice of the respondent about the unethical, unfair and mal-practice followed in the 3rd respondent – Bank and by its officials clearly exhibits that this is a case of victimization rather than protecting the whistle blower. Learned counsel further contends that invoking Clause 24 of the Contract Act is only with an extraneous intention of strangulating the voice of whistle blower. Hence, he contends that the termination, per se, is contrary to the Contract Act and against the principles of natural justice.
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respondent – Bank with regard to performance improvement plan on which the petitioner was put prior to his termination, cannot be considered as an exit tool. Therefore, he contends that it is a sham document created by 3rd respondent – Bank with clear intention to see that the petitioner is terminated and thrown out of the service of the 3rd respondent – Bank.
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and fraud committed by the 3rd respondent – Bank, no action has been taken by 1st respondent – RBI. Hence, serious injustice is caused to the petitioner.
role of 1st respondent - RBI under which all banks are governed as model agencies is to inspire confidence in performance of ethical fair practice in the Banking Industries. He further contends that 1st respondent has formulated whistle blowing policy for smooth operation of
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the Banking industry and any such complaint lodged against even the private bank shall be investigated and enquired by 1st respondent. Learned counsel further contends that it is the responsibility of 1st respondent – RBI, which has formulated whistle blowing policy to protect, curb the corruption, mis-use of office, criminal offence, suspected actual fraud committed by the bank, which are coming within the purview of the Banking Regulations Acts under the Reserve Bank.
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CONTENTIONS OF THE LEARNED COUNSEL FOR THE RESPONDENTS NO.1 & 2.
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Constitution of India as the petitioner would be totally out of jurisdiction of this Court without making the 1st respondent a party to this petition, as it is clearly apt that the dispute raised by the petitioner is purely private dispute between him and the 3rd respondent – Bank, which is admittedly a private bank.
the petition as brought by the petitioner involve several questions of disputed facts. Learned counsel further contends that no doubt 1st respondent is a regulator in the financial system of the Country of all the banking institutions but it is trite law that it cannot resolve dispute between independent private parties. He further contends that under the Banking Regulation Act, 1949, 1st respondent - RBI is empowered to monitor and regulate banking industries in the Country for the purpose of conducting any banking business involving financial intermediation. As stated earlier it is only a regulatory authority.
the basis of written complaint registered by the petitioner, the same was forwarded to the 3rd respondent – Bank and
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after making enquiry came to the conclusion that there is no fraud or illegal activity committed by 3rd respondent – Bank and that the services of the petitioner was terminated purely on the basis of his poor performance and not on account of any complaint made as whistle blower under the whistle blowing policy.
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respondent to enquire in the private contractual obligations of the 3rd respondent and others. Accordingly, 1st respondent issued a letter dated 21.01.2015, vide Annexure-Y closing the complaint of petitioner and directed him to approach the Court of law or any other competent authority, if the petitioner was aggrieved. He further contends that in the letter written by petitioner vide Annexure-U dated 24.03.2014 to 2nd respondent, the prayer sought for by petitioner was to set aside the order of termination issued by 3rd respondent and to reinstate him with backwages and for other consequential reliefs. On bare reading of this letter ex-facie it is apparent that the dispute is purely private in nature between the petitioner and 3rd respondent which is contractual, in the nature of employee and employer dispute, which cannot be interfered or gone into by 1st respondent and so also this Court cannot look into the aspects of contractual matters of private parties under Article 226 of the Constitution of India.
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of public interest litigation against 1st respondent – The General Manager, Central Fraud Monitoring Cell Reserve Bank of India, 2nd respondent – Ministry of Labour and Employment and 3rd respondent – Superintendent of Police, CBI, which came to be dismissed by the Division Bench of this Court vide order dated 30.11.2020
CONTENTIONS OF THE LEARNED COUNSEL FOR THE
RESPONDENTS NO.3 TO 7.
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for the reason that 3rd respondent – Bank, against whom petitioner has filed this writ petition seeking certain reliefs is a private Bank and hence no writ would lie against a private Bank. So also he contends that respondent Nos.4 – 7, being private persons, who are employees of 3rd respondent – Bank also would not come within the ambit of writ jurisdiction and hence, prayer as sought for by the petitioner, is not maintainable.
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respondent – Bank in the guise of whistle blower was due to his non-performance and this was pointed out to him by 5th respondent vide e-mail communication. Therefore, learned Senior counsel contend that the entire story woven by the petitioner with regard to alleged mal-practice, corruption and bribe, all these issues had not arisen prior to the 3rd respondent – Bank and its officials informing him about non-performance in the organization and the termination of his services. Hence, he contends that this would clearly indicate that the grievance of petitioner in the present writ petition is personal in nature arising out of the contractual obligations between the 3rd respondent – Bank and petitioner, which is agitated in the guise of whistle blowing policy, which act is not maintainable.
the prayer sought for by the petitioner cannot be granted for more than one reason, that there is no jurisdiction for this Court to venture into the matters pertaining to disputed question of facts and also no jurisdiction to exercise its extraordinary writ jurisdiction for matters pertaining to contractual obligations of the parties. Learned counsel further contends that merely for asking by the petitioner to
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refer the matter for CBI for investigation or any other investigating agency, cannot be granted, as the petitioner will have to make out extra ordinary situation and grounds for referring the mater to premier investigation agency of the country, which has not been established in the present petition.
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and the learned counsel for respondents and having perused the material placed before the Court, the points that would arise for consideration before this Court are:
Re. POINT NOS.1 AND 2
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service 3rd respondent – Bank conducted its performance improvement program, wherein it has stated that the petitioner’s performance being not up to the mark, rather being poor was asked to show improvement in his performance and thereafter petitioner came to be terminated from service on 09.01.2014 vide Annexure-R.
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great academic records and awards to his credit in the very same organization.
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simply due to the fact of termination of petitioner from third respondent. On a bare reading of complaint which the petitioner has lodged before second respondent also shows that said complaint has been though styled as praying relief as Whistle Blower, subject matter of the complaint reads as under:
“Sub: complaint under Reserve Bank of India guidelines RBI/2006-2007/328 DO DBS FrMC No. BC 5/23.02.011/2006-07 dated April 18, 2007 and Praying relief as whistle blower, who has been terminated without notice and reason and approached the competent authorities in the bank for redressal but no relief was granted.”
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with continuity of service and with all other attendant benefits immediately or pass any other orders deem fit and proper and protect the life and dignity of a citizen as per any other order as per other order as per the Reserve Bank guidelines dated April 18, 2007 or
2. To pass appropriate order for Compensation for loss of income, mental agony, trauma, humiliation, reputation loss, dignity, honour, future prospects and financial security, adverse publicity among colleagues caused by the bank.
To enquire and initiate criminal action against suspects, the conspirators and facilitator of criminal offence under section 8 and 9 of prevention corruption Act and under Indian penal code.
3. Please file a complaint before National Human Rights Commission against ING Vysya Bank for violating the human rights of the employee (i.e., me, the Whistle blower)
4. To inform SEBI that whistle blowers are victimized in ING Vysya Bank for pointing out the corrupt practices and to bring to the notice of shareholders.
5. Permit me to delete or to add any other prayer if deem fit.
6. Interim Relief:- Please direct the bank to reinstate me immediately or pay salary till my reinstatement.”
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“12. We have considered the submissions made by the learned counsel for the parties. In our opinion, in view of the judgment rendered by this Court in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust there can be no doubt that even a purely private body, where the State has no control over its internal affairs, would be amenable to the jurisdiction of the High Court under Article 226 of the Constitution, for issuance of a writ of mandamus. Provided, of course, the private body is performing public functions which are normally expected to be performed by the State authorities.
14. In view of the law laid down in the aforementioned judgments of this Court, the judgment of the learned Single Judge as also the Division Bench of the High Court cannot be sustained on the proposition that the writ petition would not be maintainable merely because the respondent institution is a purely unaided private educational institution. The appellant had specifically taken the plea that the respondents perform public functions i.e. providing education to children in their institutions throughout India.
15. We must, however, notice that the learned Single Judge has dismissed the writ
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petition also on the ground that it involves disputed questions of fact. Mr Ray, learned counsel appearing on behalf of the respondents has submitted that the appellant actually has not been able to contradict any of the proven facts. According to the learned counsel, the remedy of the appellant is to file a civil suit, if so advised. Therefore, the writ petition has been rightly dismissed by the High Court. Mr.Parikh, learned counsel for the appellant, however, submits that the civil suit would not be an alternative efficacious remedy in the facts of this case. In support of this submission, he brought to our notice certain observations made by a Constitution Bench of this Court in T.M.A. Pai Foundation v. State of Karnataka. The learned counsel pointed out that, in the aforesaid case, this Court had directed that the Appellate Tribunal should be set up in each district of each State to hear appeals over the decisions taken by the disciplinary bodies of even purely private educational institutions. It was emphasised that speedy resolution of the disputes between the teachers and the management is in the interest of all i.e. students, management as well as the teachers concerned. It appears that at the time when the appeal of the appellant was heard, such a tribunal had not been set up in the State of Punjab. The appeal
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filed before the Disciplinary Committee was also not referred to the District Judge by the Disciplinary Committee.
16. We are of the considered opinion that since the writ petition clearly involves disputed questions of fact, it is appropriate that the matter should be decided by an appropriate tribunal/court.”
58. In the case of Reserve Bank of India vs.
Jayantilal N. Mistry as stated supra, it has been held at paras-61, 62, 70 as under:
“61. RBI is a statutory body set up by the RBI Act as India’s Central Bank. It is a statutory regulatory authority to oversee the functioning of the banks and the country’s banking sector. Under Section 35-A of the Banking Regulation Act, RBI has been given powers to issue any direction to the banks in public interest, in the interest of banking policy and to secure proper management of a banking company. It has several other farreaching statutory powers.
62. RBI is supposed to uphold public interest and not the interest of individual banks. RBI is clearly not in any fiduciary relationship with any bank. RBI has no legal duty to maximise the benefit of any public
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sector or private sector bank, and thus there is no relationship of “trust” between them. RBI has a statutory duty to uphold the interest of the public at large, the depositors, the country’s economy and the banking sector. Thus, RBI ought to act with transparency and not hide information that might embarrass individual banks. It is duty-bound to comply with the provisions of the RTI Act and disclose the information sought by the respondents herein.
70. We have surmised that many financial institutions have resorted to such acts which are neither clean nor transparent. RBI in association with them has been trying to cover up their acts from public scrutiny. It is the responsibility of RBI to take rigid action against those banks which have been practicing disreputable business practices.”
59. In the case of Andi Mukta S.M.V.S.S.J.M.S.
Trust v. V.R. Rudani as state supra, it has been held at para-20 as under:
“20. The term “authority” used in Article 226, in the context must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the
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High Courts to issue writs for enforcement of the fundamental rights as well as nonfundamental rights. The words “any person or authority” used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists mandamus cannot be denied.”
60. In the case of Janata S. Bank vs. State of
Mah. as stated supra, it has been held at para-8 as under:
“8. Considering section 35A of the Banking Regulation Act, 1949 minutely we feel that the submission of Dr.Naik cannot be accepted. Section 35A(1)(aa) states that where the Reserve Bank is satisfied that ‘in the interest of banking policy’ ‘it is necessary to issue directions…’. ‘Banking policy’ as defined in section 5(ca) clearly stipulates that it means a policy which is specified from time to time by the Reserve Bank of India in the interest of the banking system or in the interest of monetary stability or sound economic growth, having due
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regard to the interests of the depositors, the volume of deposits and other resources of the bank and the need for equitable allocation and the efficient use of these deposits and resources. Thus, an overall responsibility to find out the well being of a Banking Company, in improving monetary stability and economic growth as well as keeping in view the interests of depositors, the Reserve Bank of India has to formulate its policy vis-à-vis Banking Companies. ‘Banking’ as defined in section 5(b) only gives a grammatical meaning of the transaction of a bank and nothing more. If any management or supervision is to be done over the banking activities of a bank, it will have to be governed by banking policy. Regard will have to be given to the fact that Co-operative Banks like any other Banking Companies are entrusted with the funds from the public. The amounts are in trust with them which are payable on demand to the public and hence deposits or the profits earned from the same or their capital have to be augmented rather than depleted and if excess amounts are likely to be depleted by way of donations for charitable and public purposes, the very stability of a Co-operative Bank may come in danger. We feel that ‘banking policy’ and ‘banking’ are not independent but coordinating subjects and both are covered within the
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supervisory powers of the Reserve Bank of India within the meaning of section 35A of the Banking Regulation Act. Even otherwise, we feel that the directions issued by the Reserve Bank of India are in the larger interest of the public and the Reserve Bank of India being a body of experts in banking, the directions given by it should not be lightly brushed aside.”
61. In the case of G.Arasukumar & others v.
State Bank of India & others as stated supra, it has been
held at paras-39 and 89(v) as under:
“39. Exposing the inaction of the bank in the light of series of cash shortages can only be in public interest and making such statements cannot be detrimental to the interest of the bank. As pointed out earlier, the bank itself expects its officers to take all possible steps to ensure and protect interest of the bank. Publishing or exposing the cash shortages in the bank and the inaction of the top officers cannot amount to willful damage to the property of the bank. It cannot even be said to prejudicial to the interest of the bank. 89. xxxxxxxxxxx
(v) Writ Petition No.3267 of 2015 will stand allowed to the extent indicated above. The order of the dismissal dated 6.2.2015 will
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stand revoked with a further direction to the bank to reinstate the employee with all consequential benefits including back wages within 4 weeks. It will be open to the Bank to proceed further with the disciplinary action, by taking the charges under clauses 7(b), 7(c) and 7(e) as proved and to impose any of the penalties stipulated in clause 8 of the Memorandum of Settlement dated 10.4.2002.”
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dominated by 1st respondent-RBI. Hence, it would fall within the definition of ‘State’.
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private duties and no public duty, the question of issuing a writ would not arise. It is no doubt true that under Article 226 of Constitution of India, writs can be issued against any person or authority and it need not be confined only to statutory authority or instrumentalities of the State. However, the instrumentalities of the State ought to provide and perform public duty and receive benefits or funding from statutory authorities of the State. These are some of the requirements and ingredients to come within the ambit of Article 226 of the Constitution of India. The judgments stated supra relied upon by learned counsel for petitioner would not be helpful to the petitioner for the reasons stated above.
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“10. The reason why we are not inclined to add to the enormous erudition on the point already accumulated in case- law is that a close perusal of the writ petition will disclose that essentially the appellant is seeking merely to enforce an agreement entered into between the employees and the Cooperative Bank.
11. There is no doubt that some of the legal problems argued by Sri Ramamurthy deserve in an appropriate case jurisprudential study in depth, although much of it is covered by authority. But assuming, for argument's sake, that what he urges has validity, the present case meets with its instant funeral from one fatal circumstance. The writ petition, stripped of embroidery and legalistics, stands naked as a simple contract between the staff and the Society, agreeing upon a certain percentage of promotions to various posts or an omnibus, all-embracing promise to give a quota to the existing employees. At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repellant is that the remedy of Art. 226 is unavailable to enforce a contract qua contract. We fail to see how a supplier of chalk to a government school or cheese to a government hospital can ask for a constitutional remedy under Art. 226 in the event of a breach of a contract, bypassing the normal channels of
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civil litigation. We are not convinced that a mere contract agreeing to a quota of promotions can be exalted into a service rule or statutory duty. What is immediately relevant is not whether the respondent is State or public authority but whether what is enforced is a statutory duty or sovereign obligation or public function of a public authority. Private law may involve a State, a statutory body, or a public body in contractual or tortious actions. But they cannot be siphoned off into the writ jurisdiction.
12. The controversy before us in substance will turn on the construction and scope of the agreement when the claim to a quota as founded cannot be decided in writ jurisdiction without going back on well-settled guidelines and even subverting the normal processual law-except perhaps in extreme cases which shock the conscience of the Court or other extra-ordinary situation, an aspect we are not called upon to explore here. We are aware of the wide amplitude of Art. 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course, without even statutory complexion, can be enforced by this short, though, wrong cut.
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“31. The other case which has been heavily relied upon is Andi Mukta (supra). It is no doubt held that a Mandamus can be issued to any person or authority performing public duty, owing positive obligation to the affected party. The writ petition was held to be maintainable since the teacher whose services were terminated by the institution was affiliated to the university and was governed by the Ordinances, casting certain obligations which it owed to that petitioner. But it is not the case here. Our attention has been drawn by the learned counsel for the appellant to paragraphs 12, 13 and 21 of the decision (Andi Mukta) to indicate that even according to this
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case no writ would lie against the private body except where it has some obligation to discharge which is statutory or of public character.
32. Merely because the Reserve Bank of India lays the banking policy in the interest of the banking system or in the interest of monetary stability or sound economic growth having due regard to the interests of the depositors etc. as provided under Section 5(c)(a) of the Banking Regulation Act does not mean that the private companies carrying on the business of or commercial activity of banking, discharge any public function or public duty. These are all regulatory measures applicable to those carrying on commercial activity in banking and these companies are to act according to these provisions failing which certain consequences follow as indicated in the Act itself. Provision regarding acquisition of a banking company by the Government, it may be pointed out that any private property can be acquired by the Government in public interest. It is now judicially accepted norm that private interest has to give way to the public interest. If a private property is acquired in public interest it does not mean that the party whose property is acquired is performing or discharging any function or duty of public
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character though it would be so for acquiring authority.
33. For the discussion held above, in our view, a private company carrying on banking business as a scheduled bank, cannot be termed as an institution or company carrying on any statutory or public duty. A private body or a person may be amenable to writ jurisdiction only where it may become necessary to compel such body or association to enforce any statutory obligations or such obligations of public nature casting positive obligation upon it. We don't find such conditions are fulfilled in respect of a private company carrying on a commercial activity of banking. Merely regulatory provisions to ensure such activity carried on by private bodies work within a discipline, do not confer any such status upon the company nor puts any such obligation upon it which may be enforced through issue of a writ under Article 226 of the Constitution. Present is a case of disciplinary action being taken against its employee by the appellant Bank. Respondent's service with the bank stands terminated. The action of the Bank was challenged by the respondent by filing a writ petition under Article 226 of the Constitution of India. The respondent is not trying to enforce any statutory duty on the part of the Bank. That
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being the position, the appeal deserves to be allowed.”
69. In the case of Federal Bank Ltd., respondent
therein, Sagar Thomas was working as a Branch Manager in Karunagappally Branch of the appellant Bank, namely, Federal Bank. Since a disciplinary enquiry was ordered against him for having exceeded his authority in grant of loans, the Inquiry Officer found him guilty of the charges and ultimately punishment of dismissal was awarded to the respondent. This dismissal order was challenged by filing a writ petition before the High Court, wherein a preliminary objection was raised with regard to maintainability of writ petition contending that Federal Bank is a private bank and not a State or its agency or instrumentality, within the meaning of Article 12 of the Constitution of India and hence, a writ petition under Article 226 of the Constitution of India is not maintainable against it. However, in the said case, the learned Single Judge found that Federal Bank performs public duty and that it was amenable to writ jurisdiction. Aggrieved by the said order of the learned Single Judge, the appellant has challenged the same and the Division Bench had observed that the writ could be
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maintainable and accordingly, dismissed the appeal which was challenged before the Hon’ble Apex Court.
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such body or association to enforce any statutory obligations or such obligations of public nature casting positive obligation upon it. It has further held that “we don’t find such conditions are fulfilled in respect of a private company carrying on a commercial activity of banking. Merely regulatory provisions to ensure such activity carried on by private bodies work within a discipline, do not confer any such status upon the company nor put any such obligation upon it which may be forced through issue of a writ under Article 226 of the Constitution.”
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Court in the said case has also held that respondents therein were not trying to enforce any statutory duty on the part of Bank. In view of the fact that his services with the Bank was terminated by the Bank and therefore, set aside the judgment of learned Single Judge.
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“52. It is trite that contract of personal service cannot be enforced. There are three exceptions to this rule, namely:
(i) when the employee is a public servant working under the Union of India or State;
(ii) when such an employee is employed by an authority/ body which is a State within the meaning of Article 12 of the Constitution of India; and
(ii) when such an employee is 'workmen' within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 and raises a dispute regarding his termination by invoking the machinery under the said Act.
In the first two cases, the employment ceases to have private law character and 'status' to such an employment is attached. In the third category of cases, it is the Industrial Disputes Act which confers jurisdiction on the labour court/industrial tribunal to grant reinstatement in case termination is found to be illegal.”
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issued. In the present case on hand, admittedly, the petitioner was employed in a private bank i.e. 3rd respondent which as stated above would not come with the purview of meaning of Article 12 of the Constitution of India, i.e. State or instrumentality of the State.
“30. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. But nevertheless it may be noticed that the Government or Government authorities at all levels is increasingly employing contractual techniques to achieve its regulatory aims. It cannot be said that the exercise of those powers are free from the zone of judicial review and that there would be no limits to the exercise of such powers, but in normal circumstances, judicial review principles cannot be used to enforce the contractual obligations. When that contractual power is being used for public purpose, it is certainly amenable to judicial review. The power must be used for lawful purposes and not unreasonably.
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31. The decision of the employer in these two cases to terminate the services of their employees cannot be said to have any element of public policy. Their cases were purely governed by the contract of employment entered into between the employees and the employer. It is not appropriate to construe those contracts as opposed to the principles of public policy and thus void and illegal under Section 23 of the Contract Act. In contractual matters even in respect of public bodies, the principles of judicial review have got limited application. This was expressly stated by this Court in State of U.P. vs. Bridge & Roof Co. (1996) 6 SCC 22 and also in Kerala State Electricity Board vs. Kurien E. Kalathil (2000) 6 SCC 295. In the latter case, this Court reiterated that the interpretation and implementation of a clause in a contract cannot be the subject matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily, the remedy is not a writ petition under Article 226.
32. Applying these principles, it can very well be said that a writ of mandamus can be issued against a private body which is not a State within the meaning of Article 12 of the Constitution and such body is amenable to the
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jurisdiction under Article 226 of the Constitution and the High Court under Article 226 of the Constitution can exercise judicial review of the action challenged by a party. But there must be a public law element and it cannot be exercised to enforce purely private contracts entered into between the parties.
33. We are unable to perceive any public law element in the termination of the employees by the appellant in Civil Appeal No. 1976 of 1998 and the remedy available to the respondents is to seek redressal of their grievance in civil law or under the labour law enactments especially in view of the disputed questions involved as regards the status of employees and other matters. So also, in the civil appeal arising out of SLP(Civil) No. 6016 of 2002, the writ petition has been rightly dismissed by the High Court. We see no merit in the contention advanced by the appellant therein. The High Court rightly held that there is no public law element and the remedy open to the appellant is to seek appropriate relief other than judicial review of the action taken by the respondent company.”
in the case of Secretary, Minor Irrigation and Rural
Engineering Services, UP and others VS Sahngoo Ram
63
Arya and others (supra) , wherein at paras-5 and 6, it is
held as under:
“5. While none can dispute the power of the High Court under Article 226 to direct an inquiry by the CBI, the said power can be exercised only in cases where there is sufficient material to come to a prima facie conclusion that there is a need for such inquiry. It is not sufficient to have such material in the pleadings. On the contrary, there is a need for the High Court on consideration of such pleadings to come to the conclusion that the material before it is sufficient to direct such an inquiry by the CBI. This is a requirement which is clearly deducible from the judgment of this Court in the case of Common Cause (supra). This Court in the said judgment at paragraph 174 of the report has held thus:
"174. The other direction, namely, the direction to CBI to investigate "any other offence" is wholly erroneous and cannot be sustained. Obviously, direction for investigation can be given only if an offence is, prima facie, found to have been committed or a person's involvement is prima facie established, but a direction to CBI to investigate whether any person has committed an
64
offence or not cannot be legally given. Such a direction would be contrary to the concept and philosophy of "LIFE" and "LIBERTY" guaranteed to a person under Article 21 of the Constitution. This direction is in complete negation of various decisions of this Court in which the concept of "LIFE" has been explained in a manner which has infused "LIFE" into the letters of Article 21."
6. It is seen from the above decision of this Court that the right to life under Article 21 includes the right of a person to live without being hounded by the Police or the CBI to find out whether he has committed any offence or is living as a law- abiding citizen. Therefore, it is clear that a decision to direct an inquiry by the CBI against a person can only be done if the High Court after considering the material on record comes to a conclusion that such material does disclose a prima facie case calling for an investigation by the CBI or any other similar agency, and the same cannot be done as a matter of routine or merely because a party makes some such allegations. In the instant case, we see that the High Court without coming to a definite conclusion that there is a prima facie case established to direct an inquiry has proceeded on the basis of 'ifs' and 'buts' and thought it appropriate that the
65
inquiry should be made by the CBI. With respect, we think that this is not what is required by the law as laid down by this Court in the case of Common Cause (supra).”
“5. In this case, the petitioner had not adopted either of the procedure provided under the Code. As a consequence, without availing of the above procedure, the petitioner is not entitled to approach the High Court by filing a writ petition and seeking a direction to conduct an investigation by the CBI which is not required to investigate into all or every offence. The High Court, therefore, though for different reasons, was justified in refusing to grant the relief as sought for.”
66
and it is a trite law that the same cannot be done as a matter of routine or merely for asking of petitioner based on the same allegations. In the present case on hand, petitioner has not made out any extra ordinary ground to refer the matter for CBI enquiry.
67
the matter and before parting, it is apposite to state that this Court has deliberately not examined the controversy raised by petitioner in the writ petition on merits as the same would be detrimental to the interest of petitioner in case he wishes to address his grievance in any other forum, if so adviced.
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ORDER
(i) Writ petition is dismissed as not maintainable;
(ii) No order as to costs.
Sd/JUDGE
LB VK
2 issues framed by the court
Was the writ petition challenging termination by a private bank and seeking whistle-blower protection maintainable?
Had the petitioner established sufficient grounds for directing a CBI investigation?
Colour shows how this judgement treated each authority
JANATA SAHAKARI BANK LTD AND ANOTHER vs STATE OF MAHARASTRA AND OTHERSDistinguished¶210
1993 MH.L.J 1147 · Who else cites this
Andi Mukta S.M.V.S.S.J.M.S. Trust v. V.R. RudaniDistinguished¶205
(1989) 2 SCC 691 · Who else cites this
RAMESH AHLUWALIA vs STATE OF PUNJAB AND OTHERSDistinguished¶188
(2012) 12 SCC 331 · Who else cites this
RESERVE BANK OF INDIA vs JAYANTILAL N.MISTRYDistinguished¶198
(2016) 3 SCC 525 · Who else cites this
G.ARASUKUMAR AND OTHERS vs STATE BANK OF INDIADistinguished¶217
2015-3 LW 849
KULCHHINDER SINGH AND OTHERS vs HARDAYAL SINGH BRAR AND OTHERRelied on¶240
(1976) 3 SCC 828 · Who else cites this
FEDERAL BANK LIMITED vs SAGAR THOMAS AND OTHERSApplied¶263
(2003) 10 SCC 733 · Who else cites this
K.K.SAKSENA vs INTERNATIONAL COMMISSION ON IRRIGATION AND DRAINAGE AND OTHERSRelied on¶266
(2015) 4 SCC 670 · Who else cites this
BINNY LTD AND ANOTHER vs V.SADAIVAN AND OTHERSRelied on¶277
(2005) 6 SCC 657 · Who else cites this
VINOD PATHAK vs AMERICAN EXPRESS BANK LTD.Referred¶153
(2015) SCC ONLINE DEL 12389 (DB) · Who else cites this
2 provisions across 1 enactments
M.SUDHAKAR
THE RESERVE BANK OF INDIA
THE GENERAL MANAGER CENTRAL FRAUD MONITORING CELL RESERVE BANK OF INDIA
KOTAK MAHINDRA BANK LTD.
SHALENDRA BHANDARI
SHRUTHI SHETTY
PRADEEP SINGH YERUR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
