PUNJAB NATIONAL BANK AND ORS. versus ALL INDIA NEW BANK OF INDIA EMPLOYEES FEDERATION AND ORS.

Citation: [1997] 1 S.C.R. 1126 · Decided: 11-02-1997 · Supreme Court of India · Bench: S.C. AGRAWAL · Disposal: Appeal(s) allowed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

' 
A 
PUNJAB NATIONAL BANK AND ORS. 
v. 
y 
ALL INDIA NEW BANK OF INDIA EMPLOYEES' 
FEDERATION AND ORS. 
B 
FEBRUARY 11, 1997 
[S.C. AGRAWAL AND G.T. NANAVATI, JJ.) 
Service Law: 
:.; 
c 
New Bank of India (Amalgamation and Transfer of Undertakings) 
Scheme, 1993: Paragraphs 5(2) and 5(4). 
Power of Bank-To transfer officers/employees of a Bank in accord-
ance with its guidelines before framing of Placement Scheme by Central 
Government-Held: Such Power was available under Amalgamation 
D Scheme-Plea that such transfers could not be made before framing of 
'Placement Scheme, rejected--Fwther, such transfers were not rotational but 
---.. 
iii effect redeployment of surplus officers/staff-New Bank of India (Deter-
mination of Placement of Employees-Officers and Workmen-Of the New 
Bank of India in (Punjab National Bank) Scheme, 1993, Para 3-Banking 
E 
Companies (Acquisition and Transfer of Undertakings) Act, 1980, S.9. 
Bank~Transfer of employees-Held: Banks entitled to decide on a 
consideration of the necessities of banking business, whether the tramf er of 
an employee should be made to a particular branch--The management best 
judge to distribute the employees between different branches. _ 
--~
F 
Banks-Transfer of employees-Outside limited area-field: Pennis-
sible in special circumstances. 
BankS"-Transfer of employees--Clwllenge against-On ground of ar-
bitrariness or discrimination-Employees alleged that their transfers were 
G arbitrat01y and discriminatory because the transfers were made to accom-
modate some other employeeS"-Allegation not refuted by Bank but employees 
did not fumish details as to when and under what circumstances the other 
employees were transferred-Held: Onus of proof on person challenging 
)"'
tramfer-Hence, plea of arbitrariness/discrimination not accepted. 
H 
Administrative Law : 
1126 
P.N.B. v. ALL IINDIA NEW RANK OF INDIA EMPLOYEES FEDERATION 1127 
·-,.-
Natural justice-!'Faimess in action''-Action of State or State in-
A 
stmmentalities-Test of fairness-Held: An established test to judge validity 
of such action. 
Words and Phrases : 
"Redeployment" and. "Transfer''-Meaning of-In the context of New 
B 
Bank of India (Detennination of Placement of Employees-Officers and 
,.. 
Workme~f the New Bank of India in Punjab National Bank) Scheme, 
1993, Para 3. 
''Placement"-A1ea11i11g of-17ie word ''placement" has a widl}r meaning c 
but the word as used in the Amalgamation Scheme of New Bank of India 
with Punjab National Bank (PNB) referred only to fitment of officers/staff in 
the administrative set-up of PNB-lnterpretation of Statutes. 
The Central Government framed a scheme for amalgamation of New 
Bank of India (NBI) wit6 Punjab National Bank (PNB) and in exercise of D 
its powers under Section 9 of the Banking Companies (Acquisition and 
Transfer of Undertakings) Act, 1980, made a scheme named as New Bank 
of India (Amalgamation and Transfer of Undertakings) Scheme, 1993 •. 
. 
------
Paragraph 5(4) of the Amalgamation Scheme provided that the Central 
Government would make another scheme for placeme~ officers and E 
staff of NBI. On the commencement of.the scheme the Undertakings of 
NBI stood transferred to and vested in PNB. After the amalgamation, PNB 
did not close any of the branches ofNBI but it did not consider it necessary 
~ 
to have separate head office and regional offices for NBI at the places 
-
where PNB was already having its regional offices. Some of the officers and 
employees of NBI were, therefore, found surplus and it became necessary F 
to deploy/redeploy them in other branches which involved outstation trans-
fers. These transfers were made in accordance with the guidelines framed 
by PNB on 16-9-1993. Subsequently on 8-12-1993 the Central Government 
made the New Bank of India (Determination of Placement of Employees -
Officers and Workmen • of the New Bank of India in Punjab National G 
Bank) Scheme, 1993. 
-")-
The respondents as well as some employees of NBI challenged the 
aforesaid transfers before the High Court. The grounds of challenge were: · 
(i) the transfers were violative of paragraphs 5(2) and 5(4) of the Antal-
gamation Scheme, (ii) PNB could not make transfers before framing of H 
1128 
SUPREME COURT REPORTS 
[1997] 1 S.C.R. 
A Placement Scheme by the Central Government, (iii) the transfers were 
T-' 
arbitrary and discriminatory although not a single branch or office was 
closed by PNB, (iv) the transfers were violative of the agreements
Excerpt shown. Read the full judgment & AI analysis in Lexace.