View source for INDIAN BANK V. K. USHA AND ANR INSC 35

Keeping in view the aforesaid settled rule of construction when we consider the scope and ambit of clauses 2 and 10 of the Scheme we do not find any thing provided therein which would of necessity contraindicate the foisting of liability and obligation on the transferee-bank in connection with the contractual obligation undertaken by its predecessor-in- interest, namely, the transferor-bank under the 2(p) Settlement of 1982 in connection with the question of providing compassionate appointment to the heirs of deceased bread-winner who might have died in harness.

Learned senior Counsel for the appellant in support of his first contention invited our attention to a three Judge Bench decision of this Court in the case of Canara Bank, Bangalore v. M.S. Jasra and others [(1992) 2 SCC 484] for submitting that the schemes framed under the Act as per Section 45 of the Act must be given their full effect ad they are comprehensive in nature. It must be kept in view that in the said decision this Court was not concerned with the examination of the question whether the successor bank, namely, the transferee- bank under the scheme of Amalgamation had undertaken the liabilities of transferor- bank or not. The question in that case was that when the liabilities of the transferor bank in connection with the service conditions of its existing employees were taken over by the transferee- bank, would such taking over entitle the erstwhile employees of the transferor - bank to claim better rights from the transferee-bank than what they had already got by way of existing service conditions at the time of amalgamation. In that case Lakshmi commercial Bank was amalgamated with Canara Bank. the erstwhile employees of the transferor bank claimed age of superannuation to be 60 years instead of 58 years which was the age of superannuation in the transferee-bank, namely, the Canara Bank. Rejecting such a claim it was held by this Court that as laid down by sub- section (5) of section 45 the Scheme was to contain provisions in connection with the service conditions of the employees of the transferor-bank as laid down therein and such a scheme so framed under sub-section (4), therefore, may contain provisions for all or any of the matters specified in sub-section (5) so that it enables all or any of the specified matters to be provided in the scheme prepared under sub-section (4) and the matters specified in the several clauses in sub-section (5) do not automatically get incorporated in such scheme unless the scheme specifically includes any such matter. We fail to appreciate how the said decision can be of any assistance to the learned senior counsel for the appellant on the facts of the present case. If the scheme deals with a topic and if it is comprehensive enough then it would rule out any contrary provision found elsewhere and express provision of the scheme only has to be given effect to. In the facts of the present case, as seen earlier, neither clause 2 nor clause 10 of the Scheme represents any provision regarding compassionate appointments to be given to the heirs of the erstwhile deceased employees of the transferor-bank. Hence there is no occasion for the said clauses of the Scheme to project any contrary express provision to override r to supersede the provisions contained in 2(p) Settlement which was binding on the transferee-bank would remain operative to the extent benefit thereunder is available to the concerned claimants like the respondents herein. In the light of the relevant clauses of the Amalgamation Scheme, therefore, it is not possible to agree with the contention of the learned senior counsel for the appellant that no liability could be imposed on the appellant-bank so far as the claim of the respondents for compassionate appointments was concerned. The first contention, Hereford, stands rejected.

That takes us to the consideration of the second contention. It is true that the settlement under Section 2(p) of the I.D. Act was entered into not by the appellant- bank but by the transferor-bank with the union of its erstwhile employees. they were outsiders so far as the transferee-bank is concerned. Such 2(p) Settlement which was not arrived at during conciliation could not be binding on the successor or transferee management as Section 18 sub- section (3) of the I. D. Act would not get attracted to such a settlement. There cannot be any dispute on this aspect. Further it cannot also be gainsaid that under Section 18 sub-section (1) of the I. D. Act such settlement was binding at least on the parties to the settlement, namely, ex- workmen of the transferor-bank on the one hand and the management of the transferee- bank on the other. That consequence squarely flows from Section 18 sub-section (1) of the I. D. Act which reads as under:

"Persons on whom settlement and awards are binding .- (1) A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement."
Till the time of amalgamation, therefore, the said settlement remained operative and binding on the transferor- bank being a party thereto. That was the situation on 19th June 1990, a day prior to the date on which the Scheme of Amalgamation saw the light of the day, that is, w.e.f. 20th June 1990. Thus it was an operative contractual obligation of the transferor-bank flowing from the settlement which had legal binding force qua it. Question is whether the binding effect of such a settlement could be visited on the transferee or successor bank, namely, the appellant. Section 18 sub-section (3) of the I. D. Act being out of picture by itself the said settlement under Section 2(p) of the I.D. Act which was binding under Section 18(1) on the transferor- bank could not have been pressed in service against the transferee-bank which is the successor bank and which was obviously not a party to the said settlement. However, it is Section 2 of the Act which becomes operative in such a situation. Section 2 reads as under:

"Application of other laws not barred. The provisions of this Act shall be in addition to, and not, save as hereinafter expressly provided, in derogation of the Companies Act, 1956, and any other law for the time being in force."
As clearly laid down therein the provisions of the Act will not be in derogation of the Companies Act , 1956 or any other law for the time being in force save and except as expressly provided to the contrary in latter part of the Act. The latter part of the Act obviously brings in its sweep section 45 and its various sub sections. Therefore, if any of the provisions of Section 45 or its sub-sections had said anything expressly contrary in connection with the binding effect, on the transferee-bank, of erstwhile settlements entered into between the transferor-bank on the one hand and its the then existing employees through their Union on the other hand, the provisions of any other law for the time being in force which foisted such an obligation on the transferee bank would not remain operative and clicking. However, as seen earlier, no provision in the Act and especially in any of the clauses of Section 45 or even in any of the clauses of the scheme of Amalgamation in the present case could be effectively pressed in service by the learned senior counsel for the appellant to cull out any express provision contra- indicating the foisting of liability under the settlement arrived at under Section 2(p) of the I. D. Act by the transferor-bank with its erstwhile employees on the topic of compassionate appointment. Hence Section 2 of the Act had its full operation. Once Section 2 applied it brought in its wake section 19 of the specific Relief Act, 1963 which obviously is a law in force. Section 19 provides for the relief against parties and persons claiming under them by subsequent title and lays down. 'Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against - (a) ....(b) ....... (c)........ (d) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation. It, therefore, becomes clear that apart from Section 18 Sub-Section (3) of the I. D. Act the liability of the transferee- bank to met the contractual obligation of the transferor bank under the Settlement binding under Section 1891) of the I. D. Act would remain squarely attracted by virtue of Section 19 (d) of the Specific Relief Act read with Section 2 of the Act. This is the view taken by the High Court in the Impugned judgments which remains well sustained on the conjoint operation of the 2(p) Settlement of 1982, Section 2 of the Act and Section 19(d) of the Specific Relief Act. The said legal effect flowing from the aforesaid statutory provisions is not contra- indicated by any express provisions in any part of the Act or in any part of Section 45 or for that matter in any of the clauses of the Scheme of Amalgamation. consequently the appellant transferee-company which has emerged as an amalgamated company as a result of the amalgamation with the earlier company would be liable to meet the contractual obligations flowing from the settlement binding on the transferor - company and these contractual obligations which could have been specifically enforced against the transferor- company during the currency of the settlement under Section 2(p) read with section 18 (1) of the I. D. Act would get transmitted and foisted on the shoulders of the appellant transferee-company on the combined operation of Section 19(1) (d) of the Specific Relief Act and Section 2 of the Act. The second contention, therefore has to be answered in the negative, in favour of the respondents and against the appellant.

Now remains the consideration of the third contention. Learned counsel for the appellant were right when they contended that if the scheme for granting compassionate appointments as per the rules and regulations of the employer concerned expressly provides that such appointments can be granted to the heirs of its deceased employees dying in harness only if vacancies exist for absorbing them, then the compassionate appointments could be granted only against such vacancies and the Court cannot direct, by mandamus, to create vacancies for that purpose if there are none. In this connection they rightly invited out attention to a decision of this Court in the case of Hindustan Aeronautics Ltd. V. A. Radhika Thirumalai (Smt.) [(1996) 6 SCC 394]. However the said decision cannot be of any avail to the appellant on the facts of the present cases. The first reason is that it was not the contention of the appellant before the High Court. Either before the learned single Judge or in appeal or in the writ petitions, the decisions wherein are challenged by direct special leave petitions before us, that there are no vacancies with the appellant-bank wherein the respondents could be fitted in. In fact respondents are already employed in these vacancies. Consequently the ratio of the aforesaid decision cannot be applicable to the peculiar facts of these cases. The appellant had already rejected the claim of the respondents only on the plea that they had no legal right to claim compassionate appointments being outsiders and heirs of ex-employees of the transferor-bank who could not claim any such appointments from the transferee-bank. It was not the case of the appellant while rejecting their claims that there were no vacancies where they could be fitted even though they were eligible for such appointments. On these acts, therefore, the High Court was perfectly justified in issuing mandamus to the appellant-bank once the main defence of the appellant was found to be unsustainable and which view of the High Court is approved by us as discussed while considering the aforesaid first two contentions. The second reason why the aforesaid decision cannot be of any avail to the appellant is that the appellant itself requested the High Court to decide the question of eligibility of the respondents on merits and it joined issue on this aspect before the High Court. In this connection our attention was invited by learned counsel for the appellant to para 17 of the impugned judgment of the Division Bench which reads as under:

"In these matters, the applications of the writ petitioners have not been considered by the Bank and excepting in one case the learned Single Judge has directed such consideration of the applications by the Bank. We discussed the matter with learned counsel on both sides and suggested that the eligibility of the writ petitioners can be decided here itself if all the relevant facts are placed before us, as otherwise there may be a fresh crop of writ petitions, if ultimately the appellant- Bank rejects the applications or some of them on other grounds of non-
eligibility. Counsel agreed to this course and placed all the facts before Court, We will consider the same in each case."
Thus the Division Bench of the High Court was invited by learned counsel for the appellant themselves to do into the question of merits of the eligibility of the respondents and once the High Court found that their claim was wrongly rejected by the appellant-Bank and especially when the appellant-bank had not put forward the defence of non- availability of vacancies no fault could be found with the high Court when it issued mandamus to the appellant to grant appointments to the concerned respondents. Hence on the peculiar facts of this case the ratio of Hindustan Aeronautics (Supra) cannot be of any assistance to the appellant. The third contention also, therefore, stands rejected.

As a result of the aforesaid discussion it must be held that the impugned decisions of the High Court are well sustained. The High Court was perfectly justified in granting reliefs to the respondents. No case is made out for our interference in these appeals. They therefore, fail and are dismissed. There will be no order as to costs in the facts and circumstances of the case.
[[Category:Supreme Court Of India Cases]]