ANDHRA BANK versus ANDHRA BANK OFFICERS & ANR.

Citation: [2008] 7 S.C.R. 1125 · Decided: 08-05-2008 · Supreme Court of India · Bench: S.B. SINHA · Disposal: Case Allowed

Judgment (excerpt)

) 
[2008] 7 S.C.R. 1125 
· ANDHRA BANK 
v. 
ANDHRA BANK OFFICERS & ANR. 
(Civil Appeal No. 3405 of 2008) 
MAY 8, 2008 
[S;B. SINHA AND LOKESHWAR SINGH PANTA, JJ.} 
B 
Banking Companies (Acquisition and Transfer of 
Undertakings) Act, 1980 - ss. 8 and 19 ·- Regulations tnade 
under the Act in consultation with Reserve Bank of India 7 c 
Under the regulations scheme for reimbursement of the. _ 
amount spent on, to and frojourn~y between res(denae and 
Office treating the same as official journey -
Central 
Government's guideline that suchjourney not to be treated as 
official - Guideline challenged - Single Judge as well as 0 
Division Bench of High Court holding th.at the guideline was · 
violative of s. 8 as the same was issued by Central Government_ 
without prior consultation with Reserve Bank - On appeal, held: 
Guidelines were not in violation of s. 8 - s. 8 applies to matters · 
of policy - Regulations laying down terms and· conditions of E 
service of employees of Bank would not necessqri/y invo·lve 
. any policy decision - The guidelines were issued in exercise 
of power u(Jder the Regulations ;_ Reg&Jations having beerl 
made after following due process, fresh consultative process 
not required for the guidelines. issued thereunder - Andhra 
F 
Bank (Officers) Service Regulations, 1982 - Rsgulation 26. 
Board of Directors of the appellant~Bank, made 
Andhra Bank (Officers) Service Regulations, 1982 u/s ·19 
of Banking Companies (Acquisitibn and transfer of 
Undertakings) Act, 1980, in consultation with Reserve G 
Bank of India and prior sanction of Central Board of the 
Bank. Under Regulation 26 thereof, a scheme was made 
regarding reimbursement for to ~nd fro journey between 
residence.and office, treating the same as official.. Central 
1125 
H 
1126 
SUPREME COURT REPORTS 
[2008] 7 S.C.R 
A Government issued guideline to the effect that such 
journey not to be treated as official journey. Respondents 
filed writ petition challenging the same. Single Judge of 
High Court held that although the Bank was entitled to 
change its policy decision, yet the guidelines being 
B contrary to s. 8 is not sustainable as the same was issued 
without consultation with Reserve Bank of India. Division 
Bench of High court confirmed the order of Single Judge. 
Hence the present appeal. 
c 
Allowing the appeal, the Court 
HELD: 1.1 The scheme in regard to reimbursement 
of the expenses incurred for going to office from the 
residence or coming back from the office to the residence 
was treated to be official. The Central Government could, 
D thus, issue a guideline in relation thereto. When the Central 
Government, in exercise of its power under Regulation 
"" 
26 of Andhra Bank (Officers) Service Regulations, issues 
a direction, the requirements of sub-regulation (2) thereof 
regulating formulation of the rule only is that it should be 
E in accordance with the guidelines. The words used in the 
· provision are should be' and not 'must be'. The ultimate 
decision, therefore, is in the Bank although guidelines 
issued by the Government must be given due weight. 
Such guidelines may be issued from time to time as the 
Regulations itself have been framed in consultation with 
F the Reserve Bank of India. The latter must be held to have 
given its approval for such exercise of the power by the 
Ban~ as also issuance of guidelines by the Government. 
Whenever such guidelines are issued or rules are made, 
fresh consultative process need not be undergone. [Para 
G 14] [1136-G,H; 1137-A-C] 
1.2 . The word 'consultation' has different 
connotations in different contexts. Where one authority 
is required to consult the another, such consultation must 
H be meaningful. It must mean conscious and effective 
•
I 
ANDHRA BANK v. ANDHRA BANK OFFICERS & ANR. 
1127 
"' 
consultation but the same would apply where the A 
consultation is necessary. As fort.he purpose of issuance 
of guidelines; no consultation was necessary to be made 
with the Reserve Bank of India by the Central Government. 
. [Paras 14 and 15] [1137-D,F-G] 
1.3 Section 8 of Banking Companies (Acquisition and B 
Transfer of Undertakings) Act, 1980 provides for issuance. 
' 
of directions by the Central Government with regard to 
matter's of policy involving public interest which are 
bound to be followed by the 'New Banks' in the discharge 
of its functions. The functions of the Bank are regulated c 
not only by'the said Act but also by Banking Regulation 
Act, 1949 and 

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