Bombay High Court

All India Idbi Sc,St,Nav Buddhist ... vs Idbi Bank Ltd. And Anr on 1 March, 2017

Bench: S.C. Dharmadhikari

                                               903.writ petition no.1235.13.doc




  IN THE HIGH COURT OF JUDICATURE AT BOMBAY

          ORDINARY ORIGINAL CIVIL JURISDICTION

                   WRIT PETITION NO. 1235 OF 2013



All India IDBI SC,ST,Nav Buddhist
and OBC,
Officers' Welfare Association
through Vice President R. S. Mane
IDBI Bank Ltd
2nd Floor, Mittal Court, Nariman Point
Mumbai-400021                                          ..Petitioner
              Vs.
IDBI Bank Ltd

24th Floor, IDBI Tower,

World Trade Centre Complex,

Cuffe Parade, Mumbai 400005

and Others                                              ..Respondents


Mr. Sangram Suryavanshi a/w Mr. Arun D. Nagarjun, Mr.

Sunil Shankar Sonawane,for the Petitioner.

Mr. Sudhir K. Talsania, Senior Counsel a/w Mr. Sagar Sheth,



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Ms. Kanchan Pamnani, for the Respondent No.1.

Mr. D.P. Singh, for Respondent No.3-U.O.I.

                             CORAM :- S.C. DHARMADHIKARI &
                                         B.P.COLABAWALLA , JJ.

DATE :- MARCH 1, 2017.

ORAL JUDGMENT (Per. S. C. Dharmadhikari, J.)

By this Writ Petition under Article 226 of the

Constitution of India the Petitioner is seeking the following

two reliefs:-

"(b) That this Hon'ble Court may be pleased to direct by Writ of Mandamus / any other Appropriate Writ / Order / Direction, directing the Respondent No.1 and 2 to quash and set aside the Circular IDBI Bank / 2009-10 / 118 /HR/ HR-30 dated July 31, 2009 relating to reduction of Sick Leave from 540 days to 360 days, the order of arbitrarily cancellation of accumulated sick leave of 180 days and direct the Respondent Nos.1 and 2 to reinstate / credit the cancelled Sick Leave of 180 days in the Leave Accounts of the adversely affected Officers with retrospective effect.

(c) That this Hon'ble court may be pleased to direct by Writ of Mandamus / any other Appropriate Writ / Order / Direction, directing the Respondent No.1 and 2 to compensate the cancelled Sick Leave of 180 days by granting monetary benefits to the adversely affected retired / resigned Officers with all the consequential benefits as applicable to all of them with retrospective effect."

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                                                         903.writ petition no.1235.13.doc



2                  Petitioner No.1 is an Association of the Scheduled

Caste, Scheduled Tribe, Nav-Buddhist and Other Backward

Class Officers. The Petitioner association was registered as a

Society under the Societies Registration Act, 1860 and

equally the Bombay Public Trust Act, 1950. Mr. R. S. Mane is

the Vice President of this Petitioner Association and duly

authorized to file the Writ Petition.

3 1st Respondent before us is the Industrial

Development Bank of India ("IDBI" for short). It is claimed

that it is "Other Public Sector Bank" registered under the

Indian Companies Act, 1956. The Union of India through its

Ministry of Finance holds more than 51% shares in 1 st

Respondent Bank. Thus, there is all pervasive control and

supervision of Union of India over the affairs of 1 st

Respondent Bank. It is a "State" within the meaning of

Article 12 of the Constitution of India. The IDBI bank

performs a public function. Even when it recruits, appoints

and deals with its employees particularly of the officer grade,

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it performs a duty. That is a public duty. In such

circumstances, all the Respondents are amenable to the writ

jurisdiction of this Court.

4 The Writ Petition projects the grievance of this

Association particularly of reduction of the duration of sick

leave from the initial 540 days to 360 days. The reduction by

180 days is termed as unilateral, wholly arbitrary and

equally illegal.

5 The Petitioner refers to a Circular issued by IDBI

on harmonization of leave rules.

6 Inviting our attention to this Circular dated 31 st

July, 2009, copy of which is at Annexure-A to the Writ

Petition page 20 of the paper book, it is urged that the

Petitioner is aggrieved and dissatisfied only with the decision

of the bank in revising and harmonizing sick leave.



7                  The Association requested the bank to withdraw

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                                                    903.writ petition no.1235.13.doc

this Circular to the extent duly indicated therein by its

Communication dated 11th and 16th September, 2009.

8 It is submitted that 1st Respondent Bank

addressed a letter dated 3rd October, 2009 advising the

Petitioner that the Board of IDBI Bank Ltd at its meeting held

on 23rd May, 2009 had approved certain changes to the leave

rules, as applicable to the officers of e-IDBI in terms of

relevant provisions of Officers Service Rules, 2006 and it is

that decision which has been circulated by two Circulars

dated 31st July, 2009 and 29th August, 2009. The modified

rules have already been implemented by the Bank. That is

why it cannot accede or accept the Petitioner's request. The

All India IDBI Officers' Association's letter dated 5 th

September, 2009 is relied upon to submit that the minutes in

respect of the above issues which were discussed at the

meeting held on 23rd May, 2009 have not been confirmed by

the Board at its subsequent meetings held on 15 th July, 2009

and August 28, 2009.

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                                                       903.writ petition no.1235.13.doc


9                  The Petitioner took up the matter of this alleged

arbitrary cancellation / reduction of the sick leave with

several authorities, bodies and personalities including the

then Chairman of the National Commission for Scheduled

Caste, the Union of India, Ministry of Finance and the

Reserve Bank of India. It is submitted that the Petitioner's

representation to the competent authorities and referred to

in paragraph 15 of the Petition eventually met with some

success.

10 While alleging that the cancellation of the

accumulated sick leave by 180 days deprives the officers of

their legitimate rights and is in the nature of punishment,

the impugned circular is discriminatory and causes great

harm and prejudice to the members of the Petitioner and

other officers, additionally, it is urged that the Circulars

contravene Section-5 of the Industrial Development Bank

(Transfer of Undertaking and Repeal) Act, 2003.



11                 There are written submissions also handed in on

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                                                903.writ petition no.1235.13.doc

the earlier occasion. In addition thereto, Mr. Suryavanshi

appearing for the Petitioner would submit that the Petitioner

is restricting the challenge to the above mentioned revision

or harmonization in sick leave resulting in its reduction by

180 days. He would invite our attention to the affidavit-in-

reply and the stand of the bank particularly enunciated

therein that this Circular and on the point or subject of

rationalization seeks to only affect those whose interests are

being protected allegedly by some Association like the

Petitioner. It is pointed out that the rationalization inter alia

of sick leave and other leave was approved by the competent

authority, namely, Board of the Respondent Bank. Prior to

conversion and revision of the terms and conditions of

service, 1163 employees were belonging to erstwhile IDBI, to

which even Mr. Mane belongs and some of whom would have

been affected by the rationalization of sick leave. The

representation by 205 officers (Annexure-B to the Writ

Petition) espouses the cause of merely 17.6% of 1163 officers

for whom the provisions of rationalization of sick leave as

contained in the circular would apply. Presently, there are

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more than 13000 officers and 205 purportedly disgruntled

officers forming a minuscule percentage of the total officers

strength of the bank has projected this cause but 35 out of

205 officers have retired by April 2013 and out of these

officers, only 11 officers have made a representation to 1st

Respondent Bank. That is how, the Petitioner's advocate

would submit that this stand is contrary to the record. In

that regard, he has taken us through the written submissions

and filed in addition to the pleadings of the Petitioner. In

that, it is submitted that the stand of the IDBI is incorrect.

The Petitioner Association has taken up the cause and in the

written submissions it is submitted that the Bank took up this

cause with the authorities. The authorities have

sympathetically considered the same. Reliance is placed

upon the correspondence in this regard and carried out from

time to time. It is submitted that on 8 th July, 2009 the Joint

Secretary, Ministry of Finance, Government of India

(Department of Financial Services) addressed a letter to Shri

Yogesh Aggarwal, the Chairman of 1st Respondent Bank. It is

submitted that during the course of presentation made by the

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team and the Chairman on 30th June, 2009, on the

functioning of IDBI, including harmonization and proposed

restructuring of compensation and benefit structure for

officers and workmen staff of the Bank, the contents of the

circular were reiterated. It was unambiguously pointed out

that such restructuring at this juncture, would have wide and

grave ramifications, apart from affecting the ongoing

negotiations on the IXth Bipartite Settlement between the

Indian Banks' Association and United Forum of Bank Unions

relating to the pay revision of the employees of the Public

Sector Banks. That is how it was advised that the Circular be

kept in abeyance. Then, reliance is placed upon a further

Communication dated 10th July, 2009 and particularly

paragraph 5 thereof, which records the view of the Ministry

of Finance, Government of India that confirmation of the

minutes of the 50th Board Meeting held on 22 nd May, 2009

relating to item nos. 33, 34 and 35 may be kept in abeyance,

till the matter is resolved. The matter was also taken up with

the then Minister of Finance, Government of India and

reliance is placed upon further Communication dated 19th

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August, 2009 copy of which is at page 157 as also at page

no.159 of the paper book, where the then Minister of State of

Finance had addressed the letter to the member of

Parliament Shri Anant G. Geete that the decisions of the

Board of IDBI's Directors relating to harmonized and

restructured compensation package and as also

harmonization of terms and conditions of service of officers

and workmen staff in the bank has been deferred. Thus, this

decision was not implemented and that would demonstrate as

to how the Government of India and the Reserve Bank was

also of the considered view that the above Circular adversely

affects the working conditions of the officers of the bank. For

this reason, it is submitted that on the oral and written

arguments of the Petitioner, the reliefs as prayed be granted.

12 On a specific query from the Court as to what

preexisting legal right is sought to be enforced by the

Petitioner and what public duty is performed by the bank,

insofar as the subject decision is concerned, reliance is placed

on the principles of promissory estoppel and legitimate

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expectation emerging from several judicial precedents and

Section 115 of the Indian Evidence Act. It is submitted that

in the decision in the case of Sethi Auto Service Station

and Another v/s Delhi Development Authority and

Others reported in (2009) I SCC 180, the legitimate

expectation and doctrine in that regard has been amplified.

13 On the other hand, Mr. Talsania, learned Senior

Counsel appearing for 1st Respondent Bank, consistent with

its stand in the affidavit-in-reply would submit that there is

no merit in the Writ Petition. There is no vested right in the

Association or its members and they cannot insist that they

must enjoy a certain leave package. Eventually, service

conditions as are now relied upon particularly on the subject

of sick leave, would indicate that the sick leave is intact. It

has not been abolished or withdrawn. The Circular only

revises and harmonizes general leaves, one of which is sick

leave. As far as this decision is concerned, the aggrieved

person had already filed a Civil Suit in a Civil Court. The Civil

Judge, Junior Division dismissed the Suit (Regular Civil Suit

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No.296 of 2009) on 5th October, 2009 for want of jurisdiction

in the Civil Court. Thereafter, an Appeal No. 180 of 2009

was preferred in the Court of District Judge, Satara. That

Appeal was allowed on 14th November, 2009. Against the

decision of the District Judge, 1st Respondent Bank filed Civil

Revision Application No.200 of 2010 in this Court and on 5th

October, 2011 this Court observed that Civil Suit is

maintainable. At the relevant time, the Civil Suit was

pending but later on as instructed, Mr. Talsania brings to our

notice a judgment delivered on 6th January, 2017 by the

District Judge, Satara in Regular Civil Appeal No.92 of 2015.

The said Appeal was dismissed with costs. It is submitted

that the trial Court's dismissal of the Suit is thus confirmed.

14 Apart therefrom, it is submitted that there is

nothing in the Writ Petition which would demonstrate that

there is any pre-existing legal right and which is sought to be

enforced by seeking a writ of mandamus. That is the

condition which must be satisfied before any writ of

mandamus is issued. Secondly, the Bank has explained as to

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how, post the Act of 2003, it was necessary to restructure the

affairs of the Bank. There was a conversion of the erstwhile

IDBI into a Commercial Bank, it became imperative that the

terms and conditions of service of the employees of IDBI

bank should be in consonance with the organizational

objectives and business model. In a dynamic business

environment, there had to be changes brought about

including harmonization and revision so also structuring of

the service conditions. It is in these circumstances that it

was advised that the Bank undertakes a broad consultative

process and thereafter arrive at an informed and rational

decision. It is in these circumstances the bank submits that

prior to conversion into a commercial bank and subsequent

merger of two other commercial banking entities having

varied set of terms and conditions of service as also pay and

allowances, the employees of IDBI bank Limited had different

terms and conditions than what are prevailing now. The

then rules of sick leave provided for availing of sick leave not

exceeding 18 months at half pay on production of a medical

certificate during the entire period of service of an employee.

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Accordingly, certain employees were having their sick leave

account equivalent to 18 months at half pay. It is in these

circumstances that the bank decided to take decision as

contained in the Circular. Mr. Talsania would submit that the

prevailing leave of 540 days at half pay now post

rationalization has been readjusted and revised cap of 360

days. As such the readjustment cap to 360 days was done

with the approval of the Board and the Circular was issued as

per the practice. There is nothing unilateral and/or arbitrary.

The IDBI was earlier governed by the Act of Parliament,

namely, the Industrial Development Bank of India Act, 1964.

That was repealed on IDBI converting into a banking

company in 2004, through Industrial Development Bank

(Transfer of Undertaking and Repeal) Act, 2003. In terms of

Section 5 (1) of the IDBI Repeal Act, IDBI does not intend to

perpetually protect the terms and conditions of service of

employees as the provision is designed to be effective to only

six months, essentially to protect those employees who opt

not to continue in the service of the new entity namely, IDBI

Bank Ltd. The IDBI Repeal Act does not create a static

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situation and is not intended to perpetually freeze the terms

and conditions of contract of employment including the

remuneration structure in an ever changing, vibrant and

dynamic market environment. Mr. Talsania therefore

submits that paragraph 6.5 at page 100 of the affidavit-in-

reply cannot be read in isolation but must be read together

with the preceding and subsequent paragraphs which would

indicate that there is absolutely no discrimination. No terms

and conditions including pay leave etc have been altered to

the detriment and prejudice of the officers. Sick leave is a

conditional right. That is not earned by the officer but it is

accumulated for a period of service rendered by the employee

with the bank subject to limit specified with the approval of

the Board. It is in such circumstances that Mr. Talsania

would submit that there is no legal, statutory or contractual

right which has been infringed Hence, the Writ Petition be

dismissed.

15 With the assistance of both the advocates, we have

perused the bulky record namely, the Petition, its Annexures,

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the affidavits filed in reply, rejoinder, surrejoinder, sur-

surrejoinder so also written submissions.

16 Upon perusal of all these materials, we are of the

considered view that there is no merit in the Writ Petition.

The Petitioner has not been able to demonstrate any

preexisting legal right and which would enable it to seek a

writ of mandamus for the enforcement of the same. As is well

settled, a writ of mandamus is not issued for the mere asking.

It is a writ and one of the prerogative writ which can be

issued in this Court's extraordinary, equitable and

discretionary jurisdiction under Article 226 of the

Constitution of India. In a recent decision of the Hon'ble

Supreme Court of India delivered in the case of Rajasthan

State Industrial Development and Investment

Corporation and Another v/s Diamond and Gem

Development Corporation Limited and Another

reported in AIR 2013 Supreme Court 1241, the

preconditions for issuance of such a writ are set out. The

relevant paragraphs of this judgment read thus:-

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"14. It is evident from the above, that generally the court should not exercise its writ jurisdiction to enforce the contractual obligation. The primary purpose of a writ of mandamus, is to protect and establish rights and to impose a corresponding imperative duty existing in law. It is designed to promote justice (ex debito justiceiae). The grant or refusal of the writ is at the discretion of the court. The writ cannot be granted unless it is established that there is an existing legal right of the applicant, or an existing duty of the respondent. Thus, the writ does not lie to create or to establish a legal right, but to enforce one that is already established. While dealing with a writ petition, the court must exercise discretion, taking into consideration a wide variety of circumstances, inter-alia, the facts of the case, the exigency that warrants such exercise of discretion, the consequences of grant or refusal of the writ, and the nature and extent of injury that is likely to ensue by such grant or refusal.

15. Hence, discretion must be exercised by the court on grounds of public policy, public interest and public good. The writ is equitable in nature and thus, its issuance is governed by equitable principles. Refusal of relief must be for reasons which would lead to injustice. The prime consideration for the issuance of the said writ is, whether or not substantial justice will be promoted. Furthermore, while granting such a writ, the court must make every effort to ensure from the averments of the writ petition, whether there exist proper pleadings. In order to maintain the writ of mandamus, the first and foremost requirement is that the petition must not be frivolous, and must be filed in good faith. Additionally, the applicant must make a demand which is clear, plain and unambiguous. It must be made to an officer having the requisite authority to perform the act demanded. Furthermore, the authority against whom mandamus is issued, should have rejected the demand earlier. Therefore, a demand and its subsequent refusal, either by words, or by conduct, are necessary to satisfy the court that the opposite party is determined to ignore the

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demand of the applicant with respect to the enforcement of his legal right. However, a demand may not be necessary when the same is manifest from the facts of the case, that is, when it is an empty formality, or when it is obvious that the opposite party would not consider the demand."

17 These are not tests evolved for the first time. The

conditions and the tests were always there and have been

merely reiterated in this decision. We have seen that the

Circular dated 31st July, 2009, copy of which is Exhibit-A to

the Writ Petition is issued by the bank after a meeting was

held on 23rd May, 2009. It is a Circular issued and internally

to the Heads of Verticals, Departments/ Regional and Branch

Heads, Director of the JN IDBI Staff College of the IDBI Bank

Limited. The Circular states that the Board of Directors at its

meeting held on 23rd May, 2009 has approved certain

changes to the leave rules as applicable to the officers of e-

IDBI in terms of the relevant provisions of Officers Service

Rules, 2006. The modified service rules shall be uniformly

applicable to all officers of IDBI bank Including the officers of

e-IBL and e-UWB, effective from August 01, 2009. The types

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of leave enumerated in paragraph 2 of this Circular were

revised and harmonized. The Circular is not challenged, the

authority and power of the Board to meet and take a decision

is not challenged, that the bank's power to issue such

Circulars and therefore they can be issued and amended or

substituted from time to time also is not challenged.

Pertinently, this is not a entire union or association of officers

before us. It is All India Industrial Development Bank of

India Scheduled Caste/Scheduled Tribes and Nav-Buddhist as

also Other Backward Class Officer's Welfare Association

through its Vice President Mr. Mane which is before us.

There is therefore enough material on record for us to

conclude that it is only one of the group of officials and

organizing themselves as above which is seeking to challenge

this Circular. Though paragraph 2 of this Circular is read and

insofar as it concerns leave, what we must read also is that

the revised and harmonized categories of leave were

applicable to all officers of bank and effective from August 1,

2009. From 10th August 2009, the officers can apply for

modified leave, through the Absence Management System.

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Consequent to the approval of the revised and harmonized

type of leave by the board of the bank, the extent and types of

leave and leave rules applicable to above officers earlier stood

abolished. The details of the revised rules are at Appendix-I

to this Circular. The process to be followed by the officers /

supervisors and LRKs for the types of leave indicated in

paragraph 2, is furnished at Appendix-II to this Circular. The

issues relating to migration of leaves as per the revised rules

and course of action to be followed, is furnished at Appendix-

III. The entire procedure is set out and what is evident from

the Appendix and particularly in relation to sick leave is that

an officer shall be eligible for 30 days of half pay sick leave

for each completed year of service, subject to a maximum of

360 days during the entire service period. The officers will

be eligible for sick leave on half pay only after completion of

one year of service. Availment of sick leave is for a minimum

of four days. If sufficient casual leave balance is not

available, less than four days of sick leave can be availed. On

completion of three years of service, an officer will be eligible

for sick leave on full pay. Sick leave on full pay means an

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officer would get salary on full pay on double debit of the

number of days of sick leave availed. The sick leave can be

availed of only on production of medical certificate,

acceptable to the bank. The bank reserves its right to

require, an officer desiring to resume duty on expiry of sick

leave, to produce medical fitness certificate indicating that

the officer is fit to resume duty. Sick leave can be combined

with ordinary leave. The officer is not allowed to apply for

sick leave while serving a notice period.

18 Thus, a one sided projection and without reading

the circular in its entirety particularly as above would

definitely give an impression that the bank has in the garb of

revision and harmonization of various leaves unilaterally

reduced the leave period. However, nothing has been done

beyond harmonizing and revising it but in the above manner.

Therefore, if this Circular and the Appendices are all read

together, it would mean that there is a power vesting in the

Board to organize and manage so also administer the affairs

of the bank and additionally to revise and harmonize the

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leaves. It is pertinent to note that several types of leaves

availed of, have been harmonized and revised. The Petitioner

only picks up for challenging the decision to revise and

harmonize the sick leave. Even the decision in relation

thereto has not been demonstrated to be affecting the

interests of the employees/officers adversely. In the

representation dated 11th September, 2009 requesting

withdrawal of the Circular, it is vaguely stated that the two

Circulars adversely affect the established service conditions

of the officers of e-IDBI by way of reduction, withdrawal and

cancellation of existing facilities relating to various types of

leave including violation of statues etc which are detrimental

to the officer's interest. Further, this has resulted into

causing pecuniary loss, mental torture, harassment,

indiscrimination and injustice to all. This is a vague

assertion. If the pleadings in the Writ Petition are properly

perused, this is not a grievance of all the officers. It is only a

group of officials and organized on the above lines and

members of the Petitioner who are aggrieved by this decision.

Even when they make a representation they are unable to

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spell out a particular legal right vesting in them which has

been adversely affected. In such circumstances, we do not

think that the Petitioner's counsel can successfully urge that

the bank's decision is arbitrary, discriminatory and violative

of the mandate of Articles 14 and 16 of the Constitution of

India. In matters of public employment, the right guaranteed

by Article 16 (1) is of a fair, just and equitable treatment. We

have perused the subsequent letter of 5th September, 2009,

as well. The All India IDBI Officers' Association, through its

General Secretary complained to the bank that the various

Circulars on the subject of terms and conditions of service

and issued by the bank, are not acceptable to the officers and

they requested to withdraw the same. The Officers'

association was aware, as of 5th September, 2009, that the

Board Meeting was convened on 23rd May, 2009 but its

Minutes have not been confirmed by the Board at subsequent

meeting held on 15th July, 2009 and 28th August, 2009. IDBI

Officer's Association and which is claiming to be an All India

Association prayed for withdrawal of the Circulars in their

entirety. However, they have not pursued their grievances

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as allegedly projected in this letter. Further, on 3 rd October,

2009, the President of the Petitioner association was

informed by the bank that the modified rules have already

been implemented. Therefore, the bank cannot accede to the

request of the Petitioner to withdraw the Circular.

19 Then, there was an Appeal which was stated to

have been preferred under Section 19 (1) of the Right to

Information Act, 2005. We need not pursue this part for we

have substantial material on record to indicate that the

necessary and requisite particulars and information as a

whole, was provided by the bank.

20 A small contention was raised in regard to the

interpretation of sub-section (1) of Section 5 of the Industrial

Development Bank (Transfer of Undertaking and Repeal)

Act, 2003. This is an Act to provide for transfer and vesting

of the undertaking of the Industrial Development Bank of

India and in the company to be formed and registered as a

company under the Companies Act, 1956 to carry on banking

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thereto and also to repeal the Industrial Development Bank

of India Act, 1964. Therefore, this is a transfer of

undertaking and Repeal Act. By Chapter II transfer and

vesting of the undertaking of development bank meaning

Industrial Development Bank of India established under sub-

section (1) of Section 3 of the IDBI Act, 1964 is provided. The

Central Government may by a Notification appoint a date on

which there will be a transfer to and vesting in the company

of the whole of the undertaking of development bank. That is

provided by Section-3. The general effect of transfer and

vesting of undertaking as set out in Sections 4 and 5 would

mean that the general effect of transfer and vesting of the

undertaking, is provided by Section-4, whereas in respect of

officers and other employees of the development bank,

Section-5 is enacted. Sub-section (1) of Section-5 says every

officer or other employee of the development bank except a

Director of the Board or the Chairman and Managing Director

or any whole time Director serving in the employment

immediately before the appointed day shall, insofar as such

officer or other employee is employed in connection with the

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undertaking which has vested in the company by virtue of

the subject Act, become on and from the appointed day, an

officer or, as the case may be, the other employee of the

company and he shall hold his office or service therein by

same tenure, at the same remuneration, upon the same terms

and conditions, with the same obligations and with the same

rights and privileges as to leave etc and other benefits as he

would have held under the development bank if its

undertaking had not vested in the company and shall

continue to do so until expiry of a period of six months from

the appointed day, if such officer or other employee opts not

to continue to be the officer or other employee of the

company within such period. Therefore, such of those

officers or other employee of the development bank opting

not to continue to be the officer or other employee of the

company would derive their benefits for six months from the

appointed date and equally there is no guarantee that these

service conditions can never be altered or revised. The sub-

sections of Section 5 would indicate as to how it would be

open for the company to manage the affairs of the bank as it

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deems fit or proper so as to achieve the object and purpose of

setting up the same.

21 We do not see any reason for the Petitioner to rely

upon language of sub-section (1) of Section-5. It does not

mean and by any stretch of imagination that the terms and

conditions of service as prevailing prior to this vesting and

transfer of IDBI in a company remain and continue in the

same form, despite the vesting in a company. The

undertaking vests in different legal entity and if that

different entity decides to operate on business principles so

as to face other competitors in the market, then, it was open

for it to take such decisions as it deems fit and proper. We do

not think, therefore, that there is any prejudice caused or any

right which is pre-established is violated. Therefore there is

no question of any alteration in the terms and conditions, to

the detriment of the officers of the bank.

22 We do not see how in the above circumstances the

principles of either legitimate expectation or promissory

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estoppel can be invoked. The tests for applicability of the

same are salutary. They have been set out in several

decisions of the Hon'ble Supreme Court of India. Even if we

refer to the decision relied upon and copy of which is annexed

to the written submissions, what we find is, in that decision

itself, (Pratima Chowdhury v/s Kalpana Mukherjee and

Another reported in (2014) 4 SCC Pg.196, the Hon'ble

Supreme Court clarifies that rule of estoppel is a doctrine

based on fairness. It postulates the exclusion of the truth of

the matter. All for the sake of fairness. For Section 115 to

apply firstly one party should make a factual representation

to the other and secondly the other should accept and rely

upon the factual representation. Thirdly, having relied on

the same, the second or other party should alter its position.

The instant altering of position should be such that it would

be inequitable to require him to revert back to the original

position. Thus, for the principles to apply, certain

preconditions and prerequisites have to be satisfied. We do

not think that they are satisfied in the facts and

circumstances of the present case.

Aswale                                         28/30





                                                   903.writ petition no.1235.13.doc




23                 The concept of legitimate expectation has no role

to play where the State's action is, as a public policy or in

public interest unless the action taken amounts to an abuse

of power. The Court cannot by invoking this doctrine usurp

the discretion of the public authority which is empowered to

take decisions under law and the Court is expected to apply

an objective standard which leaves to the deciding authority

a full range of choice which the legislature has presumed as

intended. In the case of Union of India v/s Hindustan

Development Corporation reported in 1993 3 SCC

499, the legal principles have been set out and which are

reiterated in Sethi Auto Service Station V/s Delhi

Development Authority and Others reported in