Petitioner’s Service Conditions not Governed by any Statute, Bombay HC

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service conditions

Division bench of Justice Nitin Jamdar and Justice Makrand Subhash Karnik of the Bombay High Court upheld the preliminary objection raised by ICICI bank regarding maintainability of the petition since the bank was not a public body and that the issue was, at best, a contractual dispute between an employer and an employee. 

Facts : In January 2019, Chanda, her husband Deepak Kochhar, and industrialist Venugopal Dhoot were named in an FIR by Central Bureau of investigation for cheating and defrauding ICICI Bank to the tune of Rs 1,730 crore. CBI filed a charge sheet against the three for committing offences punishable under Section 120B (criminal conspiracy) and 420 (cheating) of IPC, Sections 7 (taking gratification) and 13(2) (criminal misconduct) read with 13(1)(d) (pecuniary advantage) of the Prevention of Corruption Act. 

Following this, ED also lodged a case of money laundering against Chanda Kochhar in connection with loans disbursed by bank to the Videocon Group which later turned into Non-Performing Assets. 

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Judgement 

After examining all submissions put forth by the three parties involved, the Court observed- 

“Writs can be issued to the State; an authority; a statutory body; an instrumentality or agency of the State; a company financed and owned by the State; a private body run substantially on State funding; a private body discharging public duty or positive obligation of public nature; and a person or a body under liability to discharge any function under any statute, to compel it to perform such a statutory function.

A private company would normally not be amenable to the writ jurisdiction under Article 226 of the Constitution. However, there are legislations like the labour legislation or environmental legislation which mandate certain duties. A writ may lie for compliance with such duties, for example, under the Industrial Disputes Act. A writ would not lie to enforce purely private law rights. Even if a body is performing a public duty and is amenable to writ jurisdiction, all its decisions would not be subject to judicial review. Contractual duties are enforceable as matters of private law by ordinary contractual remedies such as damages, injunction, specific performance and declaration.” 

Specifically addressing preliminary objections raised by the respondents, the bench said- 

“ICICI is a private bank. It is administered by its Board of Directors. ICICI is not established under any statutory instrument. ICICI receives no funds from the Government. Division Bench of this Court in the case of M/s. Ruchi Soya Industries Ltd. & Ors. v/s. IDFC Bank Ltd. & Ors, in case of another private bank, the Standard Chartered Bank, held that it is not amenable to writ jurisdiction. ICICI is not an authority under Article 12 of the Constitution of India. 

When employment in a private entity is regulated by contracts, the courts do not exercise the writ jurisdiction. Courts exercise writ jurisdiction when a public law element is involved, if the services are governed by a statute. For that purpose the nature of the concerned enactment and its purpose and scope have to be ascertained.” 

With regard to the petitioner’s argument that under the Banking Regulation Act, there was a mandatory requirement for approval by RBI before Kochhar’s termination was processed, Court said- 

“The Reserve Bank does not uphold or, adjudicate or decide the rights of the parties inter se, but only focuses on the consequences of the proposed action. The grant of approval by Reserve Bank does not mean that the action of termination is valid in terms of the service dispute. The approval is based on the opinion that no impact on the banking system is discernible. When the Reserve Bank grants approval to the termination, it has no lis between the employer and employee before it to determine. 

Thus merely because the approval under section 35B(1)(b) is questioned, that cannot infuse a public law element in this dispute, which remains a contractual dispute. For the contractual remedies, the petitioner will have to approach the appropriate forum and not writ jurisdiction.”

Petition dismissed.