Nitin Jamdar, J.
1. The Petitioner was working as a Managing Director with the ICICI Bank. The Petitioner was terminated from service. The Reserve Bank India communicated its approval to the termination. The Petitioner has challenged the termination order and has prayed for consequential reliefs. The Petitioner has also challenged the communication issued by the Reserve Bank.
2. The Petitioner joined the ICICI Bank on 17 April 1984 as a Management Trainee. The Petitioner was appointed as Executive Director of the ICICI with effect from 1 April 2001 to 3 March 2006. The Petitioner was reappointed as Executive Director from 1 April 2006 to 31 March 2009. In April 2006 the Petitioner was promoted as a Deputy Managing Director. The Petitioner was then promoted as Joint Managing Director in October 2007. The Petitioner was appointed as Joint Managing Director and Chief Financial Officer from 1 April 2009 to 30 April 2009. After that, as a Managing Director and Chief Executive Officer from 1 May 2009to 31 March 2014. The Petitioner was re-appointed as a Managing Director and Chief Executive Officer for five years from 1 April 2014 to 31 March 2019. Approval for these appointments were communicated by Reserve Bank. We refer to the Petitioner as Managing Director.
3. According to the ICICI, complaints were received against the Petitioner. ICICI, in its meeting held on 29 May 2018, constituted an enquiry by a retired Judge of the Supreme Court of India. In June 2018 the Petitioner informed ICICI that Petitioner would go on leave till the enquiry is completed. By letter dated 3 October 2018, the Petitioner sought an early retirement. ICICI, by the communication dated 4 October 2018 accepted the request for early retirement subject to certain conditions. On 27 January 2019 the report of the enquiry was submitted. The report was adverse to the Petitioner. In the meeting held on 30 January 2019, the Board of the ICICI treated the separation of the Petitioner's service as a Termination for Cause. A communication to that effect was issued to the Petitioner. By further communication dated 1 February 2019, ICICI revoked the retirement benefits of the Petitioner. Correspondence ensued between the parties. The Petitioner called upon the ICICI to restore to the Petitioner the existing and future entitlements, including unpaid amounts, stock options, medical benefits. ICICI refused the request.
4. The Petitioner thereafter filed the present Petition on 20 November 2019 praying for a declaration that the communication accepting the request of the Petitioner for early retirement, is valid. Petitioner challenged the order of termination. Petitioner sought to refrain ICICI from recovering and/or cancelling the benefits granted to the Petitioner for early retirement. Petitioner sought a declaration to exercise the benefits of stock options.
5. The Petition came up on board on 28 November 2019 when it was adjourned to 2 December 2019. On 30 November 2019, ICICI filed a reply, and raised a challenge to the maintainability of the Writ Petition. In this reply, ICICI annexed a communication dated 5 February 2019 addressed to Reserve Bank regarding the termination of the Petitioner’s services. So also the communication of the Reserve Bank dated 13 March 2019 referring to Section 35B(1)(b) of Banking Regulation Act, 1949. When the Petition came up on board on 2 December 2019, the Petitioner sought leave to amend the Petition and challenged the communication of the Reserve Bank dated 13 March 2019. The amendment was allowed by the Division Bench. The objections of the Respondents, including that of the maintainability of the Petition were kept open. By amendment, the Petitioner challenged the approval dated 13 March 2019 of the Reserve Bank. On 9 December 2019, the Division Bench issued notice to the Reserve Bank of India. On 18 December 2019, the Division Bench adjourned the Petition for filing of further replies. Thereafter, the matter is placed before us.
6. At the outset, the Respondents have raised a serious objection to the maintainability of the Petition. They contend that this objection be decided first. Accepting this request we have heard the parties on the preliminary issue of maintainability. Mr. Vikram Nankani, Senior Advocate for the Petitioner addressed us for the Petitioner; Mr. Darius Khambata and Mr. Mustafa Doctor, Senior Advocates for ICICI; and Mr. Venkatesh Dhond, Senior Advocate for the Reserve Bank of India.
7. The preliminary objection of ICICI is as follows. ICICI is not an authority under Article 12 of the Constitution of India. It performs no public duty. There is no public law element in its functioning. It is only a private bank having a purely private character. There are no pleadings in the Petition whatsoever that there is any public duty performed by ICICI nor there are any pleadings of it being an authority under Article 12. The services of the Petitioner are not governed by any statute, but it is a purely contractual relationship with ICICI. The challenge to the order of Reserve Bank is not bonafide, and it is only to create a case for maintainability for an otherwise contractual dispute. The legal implications of the order passed by the Reserve Bank will at the most be a ground in the challenge to the action of ICICI in the appropriate forum, and it is not a cause of action for the Petitioner. The dispute raised by the Petitioner being purely of private nature would not be subject to writ jurisdiction, and the Petition be dismissed as not maintainable.
8. The Petitioner counters the preliminary objection as follows. The Writ Petition is maintainable. The amendment to challenge the order of Reserve Bank is allowed, and order allowing amendment is not challenged. The services of the Petitioner are governed by a statute, more particularly Section 35B(1)(b) of the Banking Regulation Act. The Reserve Bank granting approval for termination directly affects the rights of the Petitioner, and therefore such order is justiciable in writ jurisdiction. The impugned order of Reserve Bank shows that the approval is granted ex-post facto when Section 35B(1)(b) postulates prior permission. The Reserve Bank will have to justify its actions, and therefore, the Writ Petition is maintainable. ICICI is a private bank, and no claim is made to treat it as an authority under Article 12 of Constitution of India; however, that does not mean that the writ jurisdiction cannot be invoked against ICICI. The scope of Article 226 is wide and it’s exercise would depend on facts and circumstances. No decision of any Court on Section 35B(1)(b) is shown by the Respondents. Since the Petitioners services are regulated by the statute, it casts the statutory duty on the ICICI which can be enforced by the issuance of a writ of mandamus. As for the Reserve Bank of India, it cannot be disputed that the writ is maintainable to challenge the action. The preliminary objection to the maintainability be overruled and the Petition be heard on merits.
9. The Reserve Bank joined the ICICI in raising the issue of maintainability as follows. While approving termination of a Managing Director, the Reserve Bank of India does not enter into employer-employee dispute. Section 35B(1)(b) of the Act is a regulatory provision only to oversee that the action of the bank does not have an adverse impact on the depositors or the banking system. Scrutinizing the rights of the managing director as against the employer is not a matter of focus.
10. At the outset we will deal with the argument of the petitioner that since the amendment challenging the order of Reserve Bank was allowed, therefore petition has to be heard on merits. This contention has no substance. The argument of Respondents on maintainability of the Petition was always kept open.
11. The ambit of writ jurisdiction in respect of the private bodies has come up for consideration of the Courts in several cases.
The leading decisions in respect of employees of private bodies are (i) K.K. Saxena v/s. International Commission on Irrigation & Drainage; (2015) 4 SCC 670)(ii) Federal Bank Ltd. v/s. Sagar Thomas & Ors. (2003) 10 SCC 733)(iii) Ramakrishna Mission & Anr. v/s. Kago Kunya & Ors. (2019) SCC OnLine SC 501); (iv) Binny Limited & Anr. v/s. V. Sadasivan & Ors. (2005) 6 SCC 657). The summary of the law laid down in these decisions is as under.
12. The scope of Article 226 of the Constitution of India is wide. Writs and orders of diverse nature can be issued. The exercise of this power is not bound in technicities. However same width is not to be implied as to whom the writs and directions can be issued under Article 226. 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 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. Before issuing any writ, particularly writ of mandamus, the Court has to satisfy that action of such authority, is in the domain of public law as distinguished from private law. For a function to be of a public character, the function must be closely related to functions performed by the State in its sovereign capacity. A writ of mandamus or the remedy under Article 226 is a public law remedy and is not generally available as a remedy against private wrongs. Mandamus is limited to enforcement of public duty. If the private body is discharging a public function and the denial of any right is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be statutory or otherwise, and the source of such power is immaterial, but there must be the public law element in such action.
13. 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. (2017) SCC OnLine Bom. 4252), in case of another private bank, Standard Chartered Bank, has held that it is not amenable to writ jurisdiction. ICICI is not an Authority under Article 12 of the Constitution of India.
14. The Petitioner also accepts that ICICI is not an authority under Article 12, but contends that a writ is maintainable because ICICI discharges a public duty or positive obligation of public nature in respect of its employment of the managing directors. The Petitioner contends to compel it to perform such a statutory function a writ can be issued. This argument is based on the Banking Regulation Act and more particularly Section 35B(1)(b) thereof. The petitioner seeks to import an element of public duty and statutory duty in its employer-employee relationship through this provision and consequently prays to issue of a writ to both, ICICI and Reserve Bank. Based on Section 35B(1)(b), the Petitioner contends that thid statute governs the relationship between the Petitioner and the ICICI and the order passed under Section 35B(1) (b) affects the Petitioner and therefore open to challenge by the Petitioner. ICICI Bank and Reserve Bank contend that Section 35B(1)(b) has nothing to do with the employer-employee relationship and operates in a different context and merely because the order under this provision is questioned it will not change the character of the present dispute from being a purely private dispute.
15. ICICI has its Code of Business Conduct and Ethics. This Code of ethics governs its employees, officers and directors. The Code deals with issues such as conflicts of interest, personal investments, workplace responsibilities, duties of directors, disciplinary procedures. The appointment of the Petitioner from time to time is with the resolutions of the Board of ICICI. Under the resolution appointments have been made wherein salaries, perrequisites, bonus have been fixed. The employer of the Petitioner is the ICICI and the relationship between the Petitioner and the ICICI Bank is governed by the contract of terms of the resolution and orders passed by the ICICI. The services of the Petitioner are in terms of matter of contract of service with ICICI. In respect of the appointments, communications have been issued by the Reserve Bank under Section 35B(1)(b) of the Banking Regulation Act. The question is of the implications of the Section 35B(1)(b) of the Act.
16. The Section 35B(1)(b) reads thus:-
“Section 35 B(1)(b)-
35B. Amendments of provisions relating to appointments of managing directors, etc., to be subject to the previous approval of the Reserve Bank.—
(1) In the case of a banking company –
(b) no appointment or re-appointment or termination of appointment of a chairman, a managing or whole-time director, manager or chief executive officer by whatever name called, shall have effect unless such appointment, re-appointment or termination of appointment is made with the previous approval of the Reserve Bank.]
Section 35B(1)(b) extracted above shows that the appointment, reappointment and termination of Chairman, Managing Director, will not have effect unless it is with the previous approval of the Reserve Bank. In the further discussion we refer to chairman, managing or whole-time director, manager or chief executive officer as: employees.
17. The question therefore is whether the Section 35B(1)(b) of the Act can be said to govern the service conditions of the Petitioner so as to impose a statutory duty on the ICICI bank and whether the petitioner can challenge exercise under writ jurisdiction.
18. When employments in a private entity is regulated by contracts, the courts do not to exercise the writ jurisdiction. Courts exercise writ jurisdiction when a public law element involved, if the services are governed by a statute. For that purpose the nature of the concerned enactment and its purpose and scope has to be ascertained.
19. The Banking Regulation Act is enacted to supervise and regulate commercial banking. The Act empowers the Reserve Bank to issue directions to the banks, regulate the shareholding and the operations of banks in the interest of banking policy. Part II of the Act deals with banking companies. The Reserve Bank, constituted under the Reserve Bank of India Act, is a Central Bank exercising supervisory and regulatory powers. The Reserve Bank, exercises power under the Act to grant approvals. It issues directions to the banks under the Act in furtherance of economic and banking policy. It is invested with various powers in the interest of depositors, efficient use of deposits and banking resources. The predominant object of conferment of power on the Reserve Bank is the interest of banking policy. Banking companies such as ICICI have the freedom to conduct their affairs; however, Reserve bank ensures that their activities will not affect the economy in general. The supervision by the Reserve Bank is in the realm of larger policy (2003)10 SCC 733).
20. Section 35B(1)(b) is also enacted with the same object, that is to ensure that the actions of a bank does not have an adverse impact on the banking. Various situations may arise under Section 35B(1)(b) of the Act. For instance, an order returning the proposal of the employer as not being in the interest of the banking system. In this petition, in the context of public law element we are only concerned with fact situation of approval for termination and therefore our discussion on this provision is in this context. When a proposal for termination of employee is received from the employer bank, the Reserve Bank looks at it from the perspective of its impact on general banking. Proposal is not scrutinized in the context of a service contract. 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. If that would be so, the employees may demand pre-decisional hearing and copy of the decision. They may demand a reasoned order as to how the termination is approved. The order could be challenged and stay would be asked on the ground that the termination is likely to effected. Reserve Bank will be forced to justify its approval in the context of the service contract. For this purpose, Reserve Bank would be obliged to enter into the factual disputes, examine and construe the contract terms, and comment on the rights and obligations of the employer and employee, their breach and justifications. All this is not clearly not contemplated under by the legislature. Section 35B(1)(b) enacted to examine the situation post termination, that is, its impact on the larger banking interest. The focus of scrutiny under this provision is not the rights of the employee. Section 35B(1)(b) is not a provision enacted to regulate the service conditions between the employer and employee.
21. The Petitioner has relied upon certain decisions of the Supreme Court in support. The decision of Supreme Court in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v/s. V.R. Rudani and Ors. (1989) 2 SCC 691), arose from case of a teacher. Andi Mukta Sadguru Trust was running a science college. Teacher working in the college was terminated from service. The college was an institution affiliated to the University under certain obligations. The relationship of the institution with its employees regarding service conditions was governed by rules and regulations of the university. In this contest the Apex Court held that since the employer-employee relationship was governed by statutory provision, there is a public law element regarding the same. In the decision of Raj Soni v/s. Air Officer Incharge Admn. & Ors. (1990) 3 SCC 261), the school where the petitioner, a teacher had worked, though did not receive any aid, the teacher was governed by Delhi Education Code and the employer-employee relationship was thus governed by statutory provisions. In the case of Marwari Balika Vidyalaya v/s. Asha Srivastava & Ors. (2019) SCC OnLine SC 408) the employer, a Private School, was receiving a Grant-in-Aid. Because of the grant, approval was required for termination, and in this backdrop the Supreme Court had held that the writ was maintainable against such a school receiving a Grant-in- Aid. The case of Firozali Abdul Karim Jivani v/s. Union of India and Ors. (1992) Mh.L.J. - WP 1538/89 dtd. 15/16-10-1991(Bom.), was decided by this Court. Here the Petitioner had challenged the acceptance of the nomination of a candidate for the post of president of a Mult
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i State Co-operative bank. The action of the returning officer conducting the elections was questioned. The election was regulated by the Multi-State Co-Operative Societies Act. These decisions are rendered where a public duty or public law element existed and where terms of a statute governed the employer-employee relationship, and thus they not applicable to the present case. 22. Several situations may have an indirect effect on the employer-employee relationship. Unless a statute is enacted with a specific purpose of regulating the service conditions, it cannot be considered to be as one. A private organization is subject to various statutory enactments, but that cannot make its every activity amenable to the Writ Jurisdiction. Private contracts would not be subject to writ jurisdiction merely only because of the fact that they are structured by statutory provisions (2019) SCC OnLine SC 501). 23. ICICI is a private body. It is not an instrumentality of the State. It receives no public funding. Service conditions of the Petitioner are not governed by any statute. The dispute raised in this Petition arises from a contract of personal service. The termination of the Petitioner is in the realm of contractual relationship. Since Section 35B(1)(b) does not regulate service conditions , approval for termination under it does not adjudicate the rights of the Petitioner as an employee. Though Section 35B(1)(b) postulates that the termination would not come into effect if there is no prior approval of the Reserve Bank, the cause of action for the Petitioner is the termination by ICICI. For the Petitioner, the legal implications of the grant of approval, non-grant of approval or post-facto approval, as the case may be, would be grounds and arguments in the contractual dispute. 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. 24. As a result, we uphold the preliminary objection raised by the Respondents. The Writ Petition is dismissed as not maintainable.