This writ petition challenged a circular prohibiting Mini Deposit Collectors (MDCs) from collecting deposits exceeding Rs. 1,000/-, unlike a prior order. The Court upheld the circular, ruling that it was not arbitrary and served the scheme's intent to target marginalised sections rather than financially sound individuals.
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 KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN
TUESDAY, THE 27TH DAY OF SEPTEMBER 2016/5TH ASWINA, 1938
WP(C).No. 2975 of 2006 (D)
PETITIONER:
PUNJAB NATIONAL BANK EMPLOYEES UNION KERALA (REGD) ALLEPPY REPRESENTED BY ITS GENERAL SECRETARY VARGHESE RAJU, AGED 52 YEARS, S/O.VARGHESE UNNUNNI.
BY ADVS.SRI.RENJITH THAMPAN
SMT.P.A.ANITHA
RESPONDENT:
PUNJAB NATIONAL BANK REPRESENTED BY ZONAL MANAGER ZONAL OFFICE, KOZHIKKODE.
BY ADVS. SMT.SHAHNA KARTHIKEYAN SRI.M.P.SREEKRISHNAN
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27-09-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No. 2975 of 2006 (D)
APPENDIX
PETITIONER'S EXHIBITS :-
| EXT.P1 | - | COPY OF THE CIRCULAR ISSUED BY THE RESPONDENT BANK DATED 04.05.1982. |
|---|---|---|
| EXT.P2 | - | COPY OF THE PASSBOOK ISSUED BY THE RESPONDENT BANK FOR ACCOUNT NO.2162. |
| EXT.P3 | - | COPY OF THE PASSBOOK ISSUED BY THE RESPONDENT BANK FOR ACCOUNT NO.2272. |
| EXT.P4 | - | COPY OF THE PASSBOOK ISSUED BY THE RESPONDENT BANK FOR ACCOUNT NO.2242. |
| EXT.P5 | - | COPY OF THE CIRCULAR ISSUED BY THE BANK DATED 02.07.2004. |
| EXT.P6 | - | COPY OF THE REPRESENTATION FILED BY THE PETITIONER DATED 28.07.2004. |
| EXT.P7 | - | COPY OF THE JUDGMENT DATED 08.08.2005 IN WP(C) NO.29347 OF 2004. |
| EXT.P8 | - | COPY OF LETTER DATED 07.01.2006 ISSUED BY PUNJAB NATIONAL BANK, ALAPPUZHA BRANCH. |
RESPONDENTS' EXHIBITS:-
EXT.R1(A) - COPY OF JUDGMENT OF THE HONOURABLE SUPREME COURT IN CIVIL APPEAL NO.3355 OF 1998.
//TRUE COPY//
P.A. TO JUDGE
sp
K. VINOD CHANDRAN, J.
----------------------------------
W.P.(C) No.2975 of 2006-D
---------------------------------Dated this the 27th day of September, 2016
JUDGMENT
The petitioner, a Union, is concerned with Ext.P8, which, the learned counsel appearing for the petitioner contends, is passed in compliance with directions in Ext.P7, but however going against the spirit of the judgment. The issue raised is with respect to the commission payable to the Mini Deposit Collectors [MDCs] engaged by the Bank. There is no dispute raised as to the rate prescribed of such commission, but to the extent to which the MDCs are entitled on the basis of the amount collected from the depositors.
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Mini Deposit was to be Rs.5/- and there could be amounts deposited in multiples of 50 paise either directly or through MDCs, subject to a ceiling of Rs.1,000/- in a calender month in each Account. The commission payable was 2% in the case of collections made in Accounts of 12 months duration and in all other cases 3.5%. There is said to be a revision of such percentage of commission, based on the judgment of the Andhra Pradesh High court as confirmed by the Hon'ble Supreme Court.
this Court in a writ petition numbered as WP(C) No.29347 of 2004, which was disposed of as per Ext.P7 judgment dated 08/08/2005. The specific contention taken up then, was also with respect
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to the ceiling of Rs.1,000/- prescribed for deposit in each of the Accounts. The Union of MDC's contended that when deposits were made by the Account holders in excess of Rs.1,000/-, they were denied commission for that excess amounts. This Court by Ext.P7, elaborately considered the grounds raised by the petitioners of legitimate expectation and a right under Section 9A of the Industrial Disputes Act, 1947.
mutually destructive plea raised in so far as the right being attempted to be established being rendered nugatory for reason of the claim of legitimate expectation being raised. This Court noticed that there could be no right asserted when there is a claim of legitimate
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expectation raised. The object of the Mini Deposit Scheme was also considered and it was found that the Scheme was intended at spreading the banking net to cover the maximum number of people, that too, persons from the marginalised sections of society.
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persons who have the regular habit of savings and who even otherwise utilise the Banking facilities.
and within one year the Bank came out with
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Ext.P8. Ext.P8 clarified the issue and expressly prohibited the MDC's from collecting any amount in excess of Rs.1,000/- and directing the MDC's to advice the Account holder to deposit any amount in excess of Rs.1000/- in the branch directly. It was also made clear that any excess amount deposited by the MDC's would not be reckoned for the purpose of computing the commission. This is the circular impugned herein.
Counsel appearing for the respondent Bank that the limit has been enhanced to Rs.5,000/- and there are also certain modifications made in the remuneration paid, on the basis of the judgment of the High Court of Andhra Paradesh as confirmed by the Hon'ble Supreme Court. The
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learned counsel for the petitioner refutes such modification having been made to the MDC's under the respondent Bank in the State of Kerala. However, that does not come within the scope of the present writ petition, which is confined to a challenge against Ext.P8 circular.
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the Bank. What is to be specifically noticed is that the scheme had not prohibited the MDC's
from collecting such amount in excess of Rs.1,000/-; though there was a stipulation that no account holder could deposit amounts in excess of Rs.1000/-. There was a lack of clarity in the prescription and it was to an extent anomalous. It is hence, this Court directed payment of commission for even those amounts deposited in excess of Rs.1000/- which was collected by the MDC's; despite this Court having found the restriction to be eminent and serving the very intention of the Scheme.
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the circular cannot be interfered with by this Court. The MDC Scheme formulated by the Bank, as has been noticed in Ext.P7, was intended to bring the banking facilities to the maximum number of people and for inculcating the savings habit in those who belong to the marginalised sections of society. Providing for a deposit through the MDC's incurs the liability of commission on the respondent Bank, which is not the intention behind the Scheme. Financially sound people would not require such incentive of daily collection at their doorsteps to deposit money with the Bank for a rainy day. The restriction placed by the Bank through the impugned circular is to ensure that the scheme benefits the maximum number of people from the targeted group of impecunious
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people and they too are brought within the banking net. Additionally it is also intended at avoiding payment of commission for those amounts which would at any rate come to the banking sector; if not to the individual Bank.
The Scheme designed, on the policy formulated by the respondent Bank, is not liable to be interfered with by this Court under Article 226 of the Constitution of India, unless the same is found to be arbitrary or illegal. The writ petition hence fails and dismissed. No costs.
K. VINOD CHANDRAN, JUDGE.
sp/27/09/16
3 issues framed by the court
Whether the circular restricting Mini Deposit Collectors from collecting amounts in excess of Rs. 1,000/- is arbitrary or illegal under Article 226 of the Constitution.
Whether this Court can interfere with a bank scheme intended to bring banking facilities to the marginalised sections of society.
Whether the respondent Bank is liable to pay commission on deposits collected by MDCs in excess of the prescribed limit.
Punjab National Bank Employees Union Kerala (Regd) Alleppey
Punjab National Bank
K. Vinod Chandran
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
