Before

THE HON’BLE SUPREME COURT OF

INDIA

UNDER ARTICLE 136 OF THE CONSTITUTION OF INDIA

IN MATTER OF:
Left out Employees of Amalgamated Banks……………(Appellant)

Versus

State Bank of India…………………………………….(Respondent)

UPON SUBMISSION TO THE HON’BLE JUDGES OF THE SUPREME

COURT OF INDIA

MEMORIAL ON BEHALF OF THE RESPONDENT

Submitted to: Submitted by:

Prof.(Dr.) Babita Devi Pathania Sejal Bansal

Department of Laws, LLB 4th Sem

Panjab University Roll no. 362/22

 Table of Contents

1. Abbreviations…………………………………page 2
2. Index of Authorities…………………………..page 3
3. Statement of Jurisdiction……………………..page 4
4. Statement of Facts……………………………page 5
5. Issues…………………………………………page 6
6. Summary of Arguments……………………...page 7
7. Arguments Advanced………………………...page 9
8. Prayer…………………………………….…page 16

MEMORIAL ON BEHALF OF RESPONDENT Page 1

 Abbreviations
1. Hon’ble- Honorable
2. &- and
3. SBI- State Bank of India
4. Sec.- Section
5. Ar.- Article
6. Vs.- Versus
7. Co.- Company
8. Ltd.- Limited
9. i.e.- that is
10. ors.- Others

MEMORIAL ON BEHALF OF RESPONDENT Page 2

 Index of Authorities

Table of Cases:
1. Satyabrata Ghose Vs. Mugneeram Bnagur & Co., 1954 AIR 44
2. Central Inland Water Transport Corporation Ltd. Vs. Brojo Nath
Ganguly, AIR 1986 SC 1571
3. S.L. Kapoor Vs. Jagmohan, 1981 AIR 136
4. Union of India Vs. Cynamide India Ltd, 1987 AIR 1802
5. Life Insurance Corporation of India Vs. Escorts Ltd., 1986 AIR
1370
6. Consumer Education and Research Centre Vs. Union of India,1995
AIR 922
7. BALCO Employees Union Vs. Union Of India & ors., [2001]
INSC 646 (2001)
8. Maneka Gandhi Vs. Union of lndia, AIR 1958 SC 597
9. Bari Doab Bank Vs. Union of lndia, 1997 (6) SCC 417
10. Steel Authority of India Ltd. Vs. National Waterfront Workers,
AIR 2001 SC 3527

Statutes:
1. Constitution of India, 1950
2. Banking Regulation Act, 1949

Legal Databases:
1. www.manupatra.co.in

MEMORIAL ON BEHALF OF RESPONDENT Page 3

 Statement of jurisdiction
The Respondent, State Bank of India(SBI), submits this statement
under Article 136 of the Constitution of India, 1950 in response to the
appeal filed by the Appellant (Left out employees of the amalgamated
banks). This appeal is before the Hon’ble Supreme Court of India, as
it involves a matter of public importance and legal complexity that
warrant consideration by the highest judicial authority in the country.

Article 136 of the Constitution of India reads as follows:

136. Special leave to appeal by the Supreme Court

(1) Not withstanding anything in this Chapter, the Supreme Court may, in its
discretion, grant special leave to appeal from any judgment, decree,
determination, sentence or order in any cause or matter passed or made by any
court or tribunal in the territory of India.

(2)Nothing in clause (1) shall apply to any judgment, determination, sentence or

order passed or made by any court or tribunal constituted by or under any law
relating to the Armed Forces.

MEMORIAL ON BEHALF OF RESPONDENT Page 4

 Statement of Facts

1. ABC Bank, EFG Bank and PQR Bank (all private banks) were
amalgamated with the SBI in the year 1990 under Sec.45 of the
Banking Regulation Act,1949.
2. Pursuant to the schemes, 28 employees of ABC Bank, 21
employees of EFG Bank and 76 employees of PQR Bank were
excluded & their services were not taken by SBI.
3. Excluded employees filed a writ petition before the Kerala High
Court under Ar.226 of the Constitution of India which was
dismissed by the High Court.
4. Employees contended that the draft schemes did not contain
their names; no opportunity of being heard was afforded to them
and; the authorities concerned have acted unfairly even though
their conduct during service was good.
5. SBI contended that those excluded were responsible for
fictitious, improper or non-business like advances of loan to
parties thereby bringing conditions near about bankruptcy for
the concerned banking companies; moreover many other
employees against whom there were definite charges were
already pending enquiry or even orders of dismissal had been
proposed.
6. SBI further contended that the provisions of the Act did not
confer any right on the employees of being heard. Although
there are provisions under the Act for Post-Decisional hearing
and the employees may avail it to address their grievance.

MEMORIAL ON BEHALF OF RESPONDENT Page 5

 Issues
I. Whether the exclusion of the employees was justified?
II. Whether this exclusion of employees is a matter of
violation of Principles of Natural Justice?
III. Whether the provision of Post-Decisional Hearing
provided by the Act satisfies the employees’
grievances?

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 Summary of Arguments
I. Whether the exclusion of the employees was justified?
This issue focuses on whether the exclusion of the employees
was justified on part of the Respondent. The counsel submits
that the Respondent alleges misconduct on the part of the
employees so excluded. Proof of such misconduct had been
provided by the banking companies wherein the Appellants
were found to be involved in activities that threatened the
financial stability of the banking companies so concerned.
Many other employees not party to this suit had already been
dismissed by the concerned banking companies before the
amalgamation was initiated.

II. Whether this exclusion of employees is a matter of

violation of Principles of Natural Justice?
This issue focuses on whether the exclusion of employees by
the Respondent violates Principles of Natural Justice. The
counsel submits that the exclusion of employees will be
covered under the exceptions of Principles of Natural Justice,
hereby not violating them. SBI carried out its actions under
the authority granted by the Banking Regulation Act,1949,
which empowers banking authorities to formulate
amalgamation schemes and take necessary actions to ensure
the stability and integrity of the banking sector. Moreover to
ensure an expedient and efficient amalgamation, it was
necessary to take swift and decisive action.

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 III. Whether the provision of Post-Decisional Hearing
provided by the Act satisfies the employees’ grievances?
This issue focuses on whether the grievances of the
employees can be satisfied by a Post-Decisional Hearing,
provision of which has been provided by the Act.
The counsel submits that where the Act provides for a Post-
Decisional Hearing, there is no explicit provision for a pre-
decisional hearing. A Post-Decisional Hearing allows
employees to address their grievances after the decision is
made; it also ensures that the employees have a meaningful
opportunity to present their case and seek redress. Given this
situation of amalgamation of the banking companies which
required speedy and efficient action, giving an opportunity of
pre-decisional hearing would have delayed the process and
SBI wouldn’t be able to safeguard interest of the public and
key shareholders. A Post-Decisional hearing therefore not
only helps in protecting greater interest but is also fair to the
Appellants.

MEMORIAL ON BEHALF OF RESPONDENT Page 8

Arguments Advanced

Issue 1- Whether the exclusion of the employees

was justified?
It is humbly submitted before the Hon’ble Supreme Court that the
exclusion of the Appellants by the Respondent was justified as
evidence of misconduct on part of the employees was supplied to the
Respondent by the concerned banking companies. The Appellants
were found to be responsible for fictitious, improper or non-business
like advances of loan to parties thereby bringing conditions near about
bankruptcy for the appropriate banking companies. Many other such
employees had already been pending enquiry under the concerned
banking companies and had their dismissal had been proposed prior to
the scheme of amalgamation was drafted.

1.1 Legal Basis of Exclusion

The counsel further submits that the exclusion of the concerned
employees was carried out in accordance with Sec.45 of the Banking
Regulation Act,1949. This provision empowers banking authorities to
formulate amalgamation schemes, which may involve the exclusion
of employees based on various considerations, including performance,
conduct, and the interests of the amalgamated banks.

Sec.45 of the Banking Regulation Act reads as follows:

45. Power of Reserve Bank to apply to Central Government for suspension of
business by a banking company and to prepare scheme of reconstruction or
amalgamation.

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(1) Notwithstanding anything contained in the foregoing provisions of this Part
or in any other law or [any agreement or other instrument], for the time being
in force, where it appears to the Reserve Bank that there is good reason so to
do, the Reserve Bank may apply to the Central Government for an order of
moratorium in respect of [a banking company].

(2) The Central Government, after considering the application made by the
Reserve Bank under sub-section (1), may make an order of moratorium staying
the commencement or continuance of all actions and proceedings against the
company for a fixed period of time on such terms and conditions as it thinks fit
and proper and may from time to time extend the period, so, however, that the
total period of moratorium shall not exceed six months.

(3) Except as otherwise provided by any directions given by the Central

Government in the order made by it under sub-section (2) or at any time
thereafter, the banking company shall not during the period of moratorium
make any payment to any depositors or discharge any liabilities or obligations
to any or grant any loans or advances or make investments in any credit
instruments.

(4) [or at any other time, if the Reserve Bank is satisfied that-

(a) in the public interest; or

(b) in the interests of the depositors; or

(c) in order to secure the proper management of the banking company; or

(d) in the interests of the banking system of the country as a whole,-it is

necessary so to do, the Reserve Bank may prepare a scheme-(i)for the
reconstruction of the banking company, or(ii)for the amalgamation of the
banking company with any other banking institution (in this section referred to
as "the transferee bank").]………………

As per the above provision, a banking institution may prepare a

scheme of amalgamation upholding the interest of the public,
depositors and the interests of the banking system of the country as a
whole.

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1.2 Evidence of Misconduct
It is humbly submitted that there is evidence of misconduct of the
employees showing that they were involved in detrimental activities
harming the integrity of banking institutions. Evidence includes
documented instance if misconduct, i.e. facilitation of improper loans
and advances which led to the near about bankruptcy for the
concerned banking companies.
In Satyabrata Ghose Vs. Mugneeram Bnagur & Co.1, the Hon’ble
Supreme Court emphasized the principle of fiduciary duty, which
requires employees to act in the best interests of the employer.
In Central Inland Water Transport Corporation Ltd. Vs. Brojo Nath
Ganguly2, the Hon’ble Supreme recognized the employer’s right to
terminate employees for misconduct that breaches the terms of their
employment contract or is otherwise detrimental to the employer’s
interests.

Issue 2- Whether this exclusion of employees is

a matter of violation of Principles of Natural
Justice?
It is humbly submitted before the Hon’ble Supreme Court that the
exclusion of employees by the Respondent will be out of the ambit of
the Principles of Natural Justice because it is covered within its
exceptions. SBI carried out its actions under the authority granted by
the Banking Regulation Act 1949, which empowers banking
authorities to formulate amalgamation schemes and take necessary
actions to ensure the stability and integrity of the banking sector.

1
1954 AIR 44
2
AIR 1986 SC 1571

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2.1 Legislative Process and Discretionary Powers
The counsel submits that the Respondent acted within its legal
authority and discretion under Sec.45 of the Banking Regulation Act
1949 to amalgamate private banks and exclude certain employees.
In S.L. Kapoor Vs. Jagmohan3, it was recognized that in matters of
public interest or necessity, the requirement of natural justice could be
relaxed in certain situations.
Furthermore, the process of making a draft scheme was legislative in
character and does not come within the ambit of natural justice. The
draft scheme was made by The Reserve Bank of India which is
covered under the definition of ‘state’ under Ar.12 of the Constitution
of India. Hence, Principles of natural justice will not be employed on
legislative processes.
In Union of India Vs. Cynamide India Ltd.4, it was contended that
legislative action will not be subject to the Principles of Natural
Justice.

2.2 Public Interest

The counsel submits that the Respondent’s actions were justified for
the greater good. A broader public interest was served by the actions
of SBI, including the protection of depositors, investors, and the
stability of the financial system as a whole. The exclusion of
employees while potentially harsh, was necessary to safeguard wider
interests of the public and ensure the continued functioning and
integrity of the banking sector.

3
1981 AIR 136
4
1987 AIR 1802

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In Life Insurance Corporation of India Vs. Escorts Ltd.5, the hon’ble
Supreme Court emphasized the duty of financial institutions to act in
the best interests of policy holders and the general public. Likewise,
SBI was acting in the interest of the shareholders and the greater
public.
In Consumer Education and Research Centre Vs. Union of India6, the
hon’ble Supreme Court recognized the importance of consumer
protection in ensuring the welfare of the general public. Similarly,
SBI’s actions were aimed at protecting the interests of consumers of
banking services by addressing misconduct that posed a risk to the
soundness and credibility of the banking institutions involved.
In BALCO Employees Union Vs. Union Of India & ors. 7, the
Hon’ble Supreme Court established that the principles of natural
justice are not applied in situations where the public interest at large is
involved. The Court further held that unless the government takes any
arbitrary, illegal, or unenforceable action, its decision cannot be
challenged as a violation of the principles of natural justice.

Issue 3- Whether the provision of Post-

Decisional Hearing provided by the Act satisfies
the employees’ grievances?
It is humbly submitted before the Hon’ble Supreme Court that the
amalgamation of the three banking companies with the Respondent
was done in accordance with Sec.45 of the Banking Regulation Act
1949, which required a speedy and efficient action to protect the
integrity of banking institutions as a whole.

5
1986 AIR 1370
6
1995 AIR 922
7
[2001] INSC 646 (2001)

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It has been contended on behalf of respondents that moratorium could
be for a total period of six months and that was the time allowed for
the entire operation to be conducted. As a fact, in respect of the three
banks the total number of excluded employees is around 125. It is the
common case of parties that proceedings were pending against some'
of them. It may be that in view of the time frame a detailed enquiry
involving communication of allegations, show cause, opportunity to
lead evidence in support of the a negation sand in defense of the stand
of the employees was not be possible. Therefore instead of the
employees getting no chance to be heard, the provision of a Post-
Decisional Hearing allows them to present their case and seek redress.

3.1 Provisions of the Act

The Banking Regulation Act 1949 allows for Post-Decisional
Hearings to address grievances. This provision not only offers a fair
opportunity for affected employees but also gives them a chance of
seeking redress.
Pre-decisional hearings are neither required nor explicitly mentioned
by the Act.

3.2 Significance of Post-Decisional Hearing

Post-Decisional Hearing refers to providing with an opportunity to
address their grievances and present their side of the story after a
decision has been made. Due to the unavailability of an opportunity of
a pre-decisional hearing because of the emergent circumstances of the
case, a post-decisional hearing will ensure fairness, transparency, and
the protection of individual rights.

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The principle of the post-decisional hearing was propounded by the
Supreme Court in Maneka Gandhi Vs. Union of lndia8. In this case,
the Hon’ble Supreme Court set out the rule that if in the interest of
the general public, quick action was fundamental and it is impractical
to manage the cost of a hearing before the decision, it ought to be
managed after the decision.
In Bari Doab Bank Vs. Union of lndia9, the legislature passed the
request for bank under Banking Regulations Act, 1949 of the
petitioner Bank. It was held by the Supreme Court that applicants
were not qualified for pre-decisional hearing before passing a request
as post-decisional at the phase of filing issues with the draft plan
would be adequate.
In Steel Authority of India Ltd. Vs. National Waterfront Workers10,
the Hon’ble Supreme Court reiterated the importance of procedural
fairness in administrative decisions affecting employment rights. The
court held that while pre-decisional hearings are generally preferred to
ensure a fair opportunity for affected individuals to present their case,
post-decisional hearings may also be adequate in certain
circumstances, provided that they are conducted promptly and afford
affected individuals a genuine opportunity to address their grievances.
The Respondent contends that with the support of given case laws,
while pre-decisional hearings are desirable, they may not always be
necessary or practical in all situations like the case in hand.
Henceforth, the opportunity for a Post-Decisional Hearing will ensure
fairness, and will be a meaningful mechanism for affected employees.

8
AIR 1978 SC 597
9
1997 (6) SCC 417
10
AIR 2001 SC 3527

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 Prayer

Wherefore, in the light of facts stated, issues raised,

arguments advanced and authorities cited, the counsel humbly
pleads before your lordship to dismiss this appeal or to pass
any other such order which the court may deem fit in the light
of justice, equity and in good conscience to which the counsel
shall forever be duty bound to.

Sd/-
(Humbly submitted by the counsels
appearing on behalf of the
Respondent)

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