NEW BANK OF INDIA EMPLOYEES UNION AND ANR. versus UNION OF INDIA AND ORS.

Citation: [1996] 3 S.C.R. 322 · Decided: 13-03-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.B. PATTANAIK · Disposal: Dismissed
Cited by 2 judgment(s) · cites 2 · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A 
NEW BANK OF INDIA EMPLOYEES UNION AND ANR. 
v. 
UNION OF INDIA AND ORS. 
MARCH 13, 1996 
B 
(K. RAMASWAMY AND G.B. PATTANAIK, JJ.] 
Banking Companies (Acquisition and Transfer of Undertakings) Act, 
1980/New Bank of lndia(Amalgamation and Transfer of Undertakings) 
C Scheme, 1993/New Bank of India Detennination of Placement of Employees 
(Officers and Workmen) of New Bank of India in Punjab National Bank 
Scheme, 1993. 
S.9/clauses 4.5/clauses 3.4(a)(iii), 4(b )(ii)-Amalgamation of New 
Bank of India with Punjab National Bank-Redeployment of employees of 
D transferor bank in transferee bank and detemiination of their seniority with 
employees of transferee bank-Employees of transferor bank made employees 
of tran;feree bank on same tenns and conditions with same rights to pension, 
gratuity etc. as would have been admissible to them had they continued in 
transferor bank-For detennination of seniority and in matter of promotion 
computation of years of service rendered, made in ratio of 2: 1, i.e., two years 
E of se1vice in transferor bank as equivalent to one year of service in transferee 
bank-Held provisions of Placement Scheme neither arbitra1y nor irration-
al-Central Government competent to make the Scheme-Scheme made 
under s.9 of the Act is a legislative one-Expression 'placement'-Mean-
ing-Explained. 
F 
Constitution of India. 
A1ticle 14-0auses 4(a)(iii) and 4(b)(ii) of New Bank of India (Deter-
mination of Placemellt of Employees (Officers and Workmen) of New Bank 
of India in Punjab National Bank) Scheme, 1993-For detennination of 
G seniority and in matter of promotion computation of years of service rendered 
by employees of transferor bank, made in ratio of 2: 1 i.e. two years of service 
in transferor bank as equivalent to one year of service in transferee 
bank-Held, neither irrational nor arbitrary. 
H 
Words and Phrases : 
322 
• 
NEW BANK OF INDIA EMPLOYEES UNION v. U .0.1. 
323 
'Placement'-Meaning of in the context of clause 5(4) of New Bank of A 
India (Amalgamation and Transfer of Undertaking) Scheme, 1995. 
The New Bank of India, a nationalised Bank, incurred financial loss 
to such an extent and its financial position was so unsatisfactory that it 
was not practicable to run the Bank. The Reserve Bank of India advised B 
the merger of it into another stronger nationalised bank. The Central 
Government, .~xercising its powers under Section 9 of the Banking Com-
panies (Acquisition and Transfer of Undertakings) Act, 1980, and in 
consultation with the Reserve Bank of India framed the New Bank of India 
" ..( 
(Amalgamation and Transfer of Undertaking) Scheme, 1993 whereunder 
the New Bank of India (transferor bank) was amalgamated with the C 
Pun~ab National Bank (transferee bank) with all consequential effects. 
I 
. By virtue of Clause 5 of the Amalgamation Scheme, the Board of 
Directors of the Transferor bank stood dissolved and its employees be· 
came the employees of the transferee bank on the same terms and condi· D, 
tions and with the same rights to pension, gratuity and other matters as 
would have been admissible to them if the transfer of undertakings had 
rrot taken place. For placement of the employees of the transferor bank, 
the Central Government, exercising powers under clause 5(4) of the Amal-
gamation Scheme read wiih Section 9 of the Acquisition_ Act, and in 
consultation with the Reserve Bank of India, framed the New Bank of India E 
(Determination of Placemerrt of Employees (Officers and Workmen) of the 
New Bank of India in Punjab National Bank) Scheme, 1993 which came 
into operation with effect from 4.9.1993. Clause 4(a)(iii) of the Placement 
Scheme, dealing with the procedure for computation of years of service 
rendered in the transferor Bank for the purpose_ of determining the F 
minimum length of service for promotion from subordinate cadre to 
clerical cadre in the transferee Bank, and clause·4(b)(ii) dealing with the 
guidelines for determination of seniority fitment or for promotion to the 
next grade or scale of an officer of the transferor Bank in the transferee 
bank, provided that for the above purposes years of service rendered in 
the transferor Bank would be computed in the ratio of 2:1 i.e. 2 years of G 
service in the transferor-bank as equivalent to one year of service in the 
~ transferee bank. 
The workman and officers of the transferee bank challenged clauses 
4(a)(iii) and 4(b)(ii) of the Placement Scheme by filing writ petitions H 
324 
SUP
Excerpt shown. Read the full judgment & AI analysis in Lexace.