STATE BANK'S STAFF UNION (MADRAS CIRCLE) versus UNION OF INDIA AND ORS.

Citation: [2005] SUPP. 3 S.C.R. 200 · Decided: 15-09-2005 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Dismissed

Judgment (excerpt)

A 
B 
STATE BANK'S STAFF UNION (MADRAS CIRCLE) 
v. 
UNION OF INDIA AND ORS. 
SEPTEMBER I 5, 2005 
[ARIJIT PASAYAT AND H.K. SEMA, JJ.] 
Banking laws (Amendment) Act, 1984-Customary bonus abolished-
Provisions added to various Acts-State Bank of India Act, 1955-Section 43-
C A-State Bank of India (Subsidiary Banks) Acts, 1959-Section 50-A-Banking 
Companies (Acquisition and Transfer of Undertakings) Act, 1970-Section 
12-A-Banking Companies (Acquisition and Transfer of Undertakings) Act, 
1980-Section 12-A-Amendment Act enacted during pendency of a writ 
petition filed against award of the Central Government Industrial Tribunal, 
previously confirming payment of customary bonus-Writ petition dismissed 
D and award attained finality-Appellant filed writ petition challenging the 
Amendment Act-Dismissed by High Court-On appeal Held, there is 
distinction between encroachment on the judicial power and nullification of 
the effect of a judicial decision by changing law retrospectively, the former is 
outside the competence of legislature but the latter is permissible-Bank 
E possessed power to change and determine the terms and conditions of services 
of its employees-Award under the Industrial Disputes Act cannot have the 
effect of preventing the Parliament for all times to come from amending the 
law on the foundation of which the award was made-Amended provision 
operates notwithstanding anything contained in any other law, including the 
Industrial Disputes Act or anything contained in any judgment, decree or 
F order of any court or tribunal-Industrial Disputes Act, 1947-Payment of 
Bonus Act, 1965-Constitution of India, 1950-Part III. 
Interpretation of Statutes-Operation of Amending Act-Objects and 
Reasons of a statute to be looked into as an extrinsic aid to find out legislative 
intent only when meaning by its ordinary language is obscure or ambiguous-
G Every sovereign legislature possesses right to make retrospective legislation-
Public interest at large is one of the relevant considerations in determining 
constitutional validity of a retrospective legislation-Curative statutes are by 
their very nature intended to operate upon and affect past transactions. 
H 
Words and Phrases-' 'Retroactive'' and ''Retrospective' '-Meaning of 
200 
STATEBANK'S STAFF UNION (MADRASCIRCLE)v. U.0.1. 
20 ! 
The Central Government Industrial Tribunal held that employees A 
of the State Bank of India were entitled to payment of bonus at the rate 
of one month's substantive pay, every half year. The management of the 
bank challenged the said award by filing a writ petition. During the 
penden~y of the same the State Bank of India Act, 1955, the State Bank 
of ,India (Subsidiary Banks) Act, 1959, the Banking Companies 
(Acquisition and Transfer of Undertakings) Act, 1970 and the Banking B 
Companies (Acquisition and Transfer of Undertakings) Act, 1980 were 
amended by the Banking Laws (Amendment) Act, 1984 by adding 
provisions that denied the appellants of customary bonus as per the award. 
The writ petition of the management was dismissed and the award attained 
finality. Thereafter, the appellant challenged the said Amendment Act by C 
filing a writ petition in the High Court, which was dismissed. Hence this 
appeal. 
Appellant contended that the Amendment Act was unconstitutional 
as it nullified a judicial decision; that an award passed under the Industrial 
Disputes Act, 1947 was entitled to greater recognition over the State Bank D 
of India Act; that Parliament was not vested with the power to reduce 
wages, therefore, the legislation was ultra vires; that bonus being a 
customary bonus was peculiar to the employees of the bank and a mere 
fact that other public sector banks were not paying such bonus was of no 
consequence; that bonus was nothing but deferred wage; that customary E 
bonus was one which was paid de hors the bonus paid under the payment 
of Bonus Act, 1965; that customary bonus was not profit linked; and that 
even if the amendment was accepted to be valid it could only have 
prospective effect. 
Respondents contended that payment of customary bonus was F 
creating different yardsticks for different public sector banks; that even 
if a custom acquires a force of law, it could be changed as there was no 
fundamental right involved in any custom; that bonus cannot be called 
deferred wages; that the payments were related to profits and they were 
not uniform and so in that sense it was not really a condition 

Excerpt shown. Read the full judgment & AI analysis in Lexace.