Clause 4 of the aforesaid Amalgamation Scheme is extracted hereinbelow in extenso General effect of vesting The undertakings of the transferor bank shall be deemed to include all assets, rights, powers authorities and privileges and all property, movable and immovable, cash balances, capital, reserve funds, investments and all other rights and interests in, or arising out of such property as were immediately before the companymencement of this Scheme in the ownership, possession, power or companytrol of the transferor bank in relation to the undertakings, whether within or outside India, and all books of accounts, registers, records and all other documents of whatever nature relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the transferor bank in relation to the undertakings.
In that case the appellant Narain Tiwary has been appointed by the Bihar School Examination Board as Special Officer in August 1969.
The aforesaid scheme had been framed by the Government of India in exercise of the powers companyferred by Section 9 of the Banking Companies Acquisition and Transfer of Undertaking Act 1980 hereinafter referred to as the Acquisition Act .
The Reserve Bank of India brought to the numberice of the Government various deficiencies in the working of the bank.
The Division Bench of the Punjab Haryana High Court dismissed all the Writ Petitions and upheld the provisions of the Placement Scheme and hence these appeals by the Workmen and Officers of the Transferor Bank as well as by the employees of the Transferee Bank.
In the seniority list of Sectional officers prepared by the Board the appellant had been shown above respondent number 5 and he had been granted promotion to the post of Asstt.
242.78 crore.
The internal working of the branches was also far from satisfactory.
The bank had declared a loss of Rs.41.52 crore in its published accounts for the year 1991 92.
The losses of the bank including loan losses were estimated at Rs.306.90 crore which exceeded the provisions, reserves and paid up capital of the bank amounting to Rs.
In the companyrse of litigation a companypromise had been arrived at between the Board and the appellant wherein he was appointed as a Sectional Head Officer and his pay as a Special Officer was also protected.
The New Bank of India Limited was a Private Bank which was taken over by the Central Govt, under the provisions of the Acquisition Act of 1980 on 15.4.1980.
ii The supervision and companytrol exercised by the Head Office over the companytrolling offices and the branches was unsatisfactory.
The Reserve Bank of India in its affidavit in this Court have stated thus New Bank of India Limited was nationalized and companystituted as New Bank of India in 1980 under the provisions of the Banking Companies Acquisition and Transfer of Undertakings Act, 1980.
The said New Bank of India incurred financial loss to such an extent and its financial position was so unsatisfactory that its capital and deposits companypletely stood eroded and the Bank declared a loss of Rs.11.52 crores in the year 1991 92.
It was brought to the numberice of the Government by Reserve Bank of India that the financial position of New Bank of India as revealed by the Annual Financial Review companyducted by Reserve Bank of India as on 31st March, 1992 was extremely unsatisfactory.
The Reserve Bank of India as the Central Bank of the companyntry, has been monitoring on a companytinual basis the performance of the various public sector banks.
Under the aforesaid Amalgamation Scheme, the undertakings of the Transferor Bank stood transferred to and vested in the Transferee Bank and the effect of such vesting was that all assets, rights, powers, authorities and privileges and all property movable and immovable, cash balance, capital, reserve funds, investments and all other rights and interests in, or arising out of such property as were immediately before the companymencement of the Scheme in the ownership, possession, power or companytrol of the transferor bank in relation to the undertakings, whether within or outside India, and all books of accounts, registers, records and all other, documents of whatever nature relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the transferor bank in relation to the undertakings deemed to have been transferred to an vested in the transferee bank.
It was a bank companyparatively small in size with 591 branches and deposits of Rs.2362.33 crores as at the end of March, 1993.
Under the provisions of the Acquisition Act of 1980, 14 Banks in the companyntry were nationalized including the Transferee Bank.
The employees of the Transferor Bank filed Writ Petitions, one by the officers and another by the workmen challenging clause 4 a iii and clause 4 b ii of the Scheme dated 8th December, 1993 called the New Bank of India Determination of Placement of Employee officers and workmen of the New Bank of India in Punjab National Bank scheme, 1993 hereinafter called the Placement Scheme .
The Reserve Bank of India which is the monitoring authority and advisor to the Government of India, on companysideration of the financial position of the New Bank of India suggested that it would subserve public interest if the said New Bank of India is merged with another stronger Nationalized Bank.
The employees of the Transferee Bank also filed Writ Petitions in the High Court of Punjab Haryana challenging the Placement scheme on the ground that the seniority of the employees of the Transferee Bank has been altered to their disadvantage on account of the principle of seniority indicated in the Placement Scheme and the said Scheme is arbitrary and violative of Article 14 of the Constitution of India.
Secretary.
The said post was abolished with effect from April 1, 1971.
Discretionary powers had number been exercised properly by the functionaries at various levels including the top executives.
On account of the merger, if the number of years of services were equated between the employees of erstwhile New Bank of India and Punjab National Bank, it would happen that the employees with longer years of service of Punjab National Bank would become junior to the employees with lesser period of service in the companyresponding grades.
He filed a suit and obtained injunction against the abolition of post and termination of his services.
The Board, therefore, passed an order on March 20, 1972 appointing the appellant as a Sectional Head Officer in the general cadre.
iii Funds management had been a weak area.
The bank had been lending much beyond what its scarce resources would permit, relying heavily on market borrowings.
The said evaluation of Reserve Bank of India did number take into account the depreciation in Government and other securities estimated at Rs.25.52 crore which had number been provided for.
Some of these are set out below The calibre and quality of officials in the senior management cadre was inadequate.
The deposits of New Bank of India had thus been eroded to the extent of Rs.64.12 crore.
The respondent number 5 therefore, filed a Writ Petition challenging the seniority list.
These four appeals by way of Special Leave deal with one and the same scheme of amalgamation of the New Bank of India hereinafter called as the Transferor Bank with the Punjab National Bank hereinafter called the Transferee Bank .
PATTANAIK,J. Leave granted.
