CHAIRMAN, CANARA BANK, BANGALORE versus M. S. JASRA AND ORS.

Citation: [1992] 2 S.C.R. 68 · Decided: 06-03-1992 · Supreme Court of India · Bench: L.M. SHARMA · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

A 
CHAIRMAN, CANARA BANK, BANGALORE 
v. 
;...__ 
M. S. JASRA AND ORS. 
MARCH 6, 1992 
B 
[L. M. SHARMA, J. S.VERMA ~ 
YOGESHWAR DAYAL, JJ.] 
Banking Regulation Act, 1949: 
Section 45-Amalgamation of banks-Scheme of amalgamation-Con-
c ditions of service in respect of employees continued after amalgamation-Age 
~--~
of superannuation-Whether to be the same as was available in transferor 
Bank or whether to be at par with the employees of same rank or status in 
the transferee Bank. 
.~ 
D 
Respondent No. 1 who was a Banking Officer in the Reserve Bank 
of India applied for the post of Assistant General Manager in Lakshmi 
Commercial Bank. he was selected for the said post and he joined in 
March 1983. In 1985 on an application made by the Reserve Bank under 
Section 45(1) of the Banking Regulation Act, 1949, the Central Government 
passed an order of moratorium und~r Section 45(2) of the said Act, in 
E 
respect of Lakshmi Commercial Bank and it came to be amalgamated with 
Canara bank. The services of the employees of Lakshmi Commercial Bank 
were continued with Canara Bank, and respondent No. 1 was fitted in the 
y 
post of Divisional Manger in Canara Bank. He claimed that he should be 
fitted against a higher post by virtue of his position as Assistant General 
F 
Manager in Lakshmi Commercial Bank. He also claimed that he was -
entitled to continue in service till he attained the age of 60 years which was 
the age of superannuation in Lakshmi Commercial Bank. His repre-
sentations were rejected by the petitioner Bank and the Reserve Bank. 
~ 
Thereafter respondent No. 1 filed a writ petition before the High Court _,..\. 
claiming the relief that he should be allowed to continue in service till he 
G attains the age of 60 years. 
The High Court allowed the Writ Petition. Aggrieved against the 
High Court'i. order, the petitioner-bank has preferred this appeal by 
special leave. 
-~· 
H 
The appellant-bank contended that on the basis of Section 45 of the 
68 
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CHAIRMAN v. JASRA 
69 
Banking Regulation Act, 1949 and the consequent amalgamation of A 
Lakshmi Commercial Bank with Canara bank, the service conditions 
under Lakshmi Commercial Bank would not be available to the respon-
dent No. 1; and that the terms and conditions of service applicable to 
employees of corresponding rank and status in Canara Bank would only 
apply. 
:,..._ 
Allowing the appeal, this Court, 
HELD: 1. Respondent No. 1 could not claim to be governed by the 
age of superannuation of 60 years applicable to him in Lakshmi Commer-
B 
cial Bank. When his services were continued on amalgamation of Lakshmi C 
Commercial Bank with Canara Bank, he became an employee of Canara 
Bank and was, therefore, entitled only to the right given by proviso (ii) to 
clause (i) of sub-section (5) of Section 45 of the Banking Regulation Act, 
1949 which entitled him to the same terms and conditions of service as 
employees of the corresponding rank or status in Canara Bank. Age of D 
superannuation of the employees in Canara Bank being 58 years only, 
respondent No. 1 could not claim to retire at 60 years. The High Court 
misconstrued clause (i) and proviso (ii) thereunder of sub-section (5) of 
section 45 of the Act and clauses 10 and 12 of the arna:gamation scheme, 
to take the contrary view. [SOD, E] 
E 
2. It is not necessary that every scheme of amalgamation framed 
under sub-section (4) of Section 45 must provide for continuance of 
services of all the employees of the banking company in the transferee 
bank; but where such a provision is made it must contain a provision as 
required by provisos in clause (i). This is clear from the use of the word F 
'may' in the opening words of sub-section (5) and the word 'shall' in the 
proviso. If the scheme for amalgamaiion provides for continuance of the 
services of the employees in the transf~ree bank, then beyond a period of 
three years from the date on which the scheme is sanctioned by the Central 
Government, the transferee bank cannot discriminate between such 
employees and its other employees of corresponding rank or status. The G 
only right of such an employee whose service is so continued is, therefore, 
to claim parity with the employees of the transferee bank itself of cor-
responding rank or status subject equivalent qualifications and experience 
and no more. The right of such an employee is provided in the proviso to 
clause (i) and not in the earlier enacting part of clause (i) of sub-section H 
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