2007 (3) TMI 726 - SC - Companies Law

Whether in relation to a Multi-State Co-operative Bank carrying on business in more than one State, which government Central or State, is the appropriate government for the purposes of the Industrial Disputes Act, 1946?

Issues Involved:
1. Determination of the "appropriate government" for a Multi-State Co-operative Bank under the Industrial Disputes Act, 1946.
2. Applicability of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 to a Multi-State Co-operative Bank.
3. Interpretation of the term "Banking Company" in the context of the Industrial Disputes Act, 1946 and its relation to the Banking Regulation Act, 1949.
4. Application of the doctrine of statutory incorporation vs. mere reference in legislative interpretation.

Detailed Analysis:

1. Determination of the "appropriate government" for a Multi-State Co-operative Bank under the Industrial Disputes Act, 1946:
The core issue was whether the Central or State Government is the "appropriate government" for a Multi-State Co-operative Bank under the Industrial Disputes Act, 1946 (ID Act). The Supreme Court concluded that for the purposes of the ID Act, the definition of "Banking Company" must be read as it existed at the time of the insertion of Section 2(bb) into the ID Act. Consequently, the "appropriate government" for a Multi-State Co-operative Bank, which is not a "Banking Company" as per the original definition, would be the State Government.

2. Applicability of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 to a Multi-State Co-operative Bank:
The respondent, a trade union, filed a complaint under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act) alleging victimization due to the transfer of employees. The Bank argued that it was governed by the Central Government, making the State Act inapplicable. The Industrial Court initially upheld this objection, but the High Court later ruled that the State Government was the appropriate authority, thus making the MRTU & PULP Act applicable.

3. Interpretation of the term "Banking Company" in the context of the Industrial Disputes Act, 1946 and its relation to the Banking Regulation Act, 1949:
The term "Banking Company" in Section 2(bb) of the ID Act was pivotal. The Bank contended that the definition should include Co-operative Banks following amendments to the Banking Regulation Act (BR Act) in 1965. However, the Supreme Court held that the definition in the ID Act was an instance of legislation by incorporation, meaning subsequent amendments to the BR Act did not alter the definition in the ID Act. Therefore, the term "Banking Company" did not encompass Co-operative Banks.

4. Application of the doctrine of statutory incorporation vs. mere reference in legislative interpretation:
The Court examined whether the reference to the BR Act in the ID Act was a case of incorporation by reference or mere citation. It concluded that Section 2(bb) of the ID Act incorporated the definition of "Banking Company" from the BR Act as it existed in 1949. This incorporation meant that subsequent amendments to the BR Act did not affect the definition in the ID Act. The Court emphasized that legislative intent was to make the definition exhaustive, evidenced by periodic amendments to include specific banks and institutions.

Conclusion:
The Supreme Court upheld the High Court's view that the State Government is the "appropriate government" for a Multi-State Co-operative Bank under the ID Act. The appeal was dismissed, and the Bank was ordered to pay the costs of the respondent throughout. The judgment clarified that the definition of "Banking Company" in the ID Act is fixed as per the 1949 BR Act and does not automatically incorporate later amendments.

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