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Issues:
- Validity of promotion policy under Regulation 17 of the Andhra Bank (Officers') Service Regulations, 1982. - Compliance with Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980. - Delegation of power to Board of Directors for policy decisions. - Interpretation of Regulation 17 and guidelines issued by the Central Government. - Distinction between essential legislative competence and policy formulation. Validity of Promotion Policy: The case involved a challenge to the promotion policy under Regulation 17 of the Andhra Bank (Officers') Service Regulations, 1982. The High Court held that the regulation was arbitrary as it lacked guidelines. However, the Supreme Court emphasized that a valid regulation forms part of the statute and the employer has the authority to define promotion criteria realistically. The policy decision for promotions must consider talent selection and management requirements. Compliance with Section 19: The Division Bench of the High Court required compliance with Section 19 of the Banking Companies Act for formulating the promotion policy. The appellant argued that consultation with the Reserve Bank of India and prior approval of the Central Government had been obtained, making compliance unnecessary. The Supreme Court noted that the procedural requirements under Section 19 were irrelevant for formulating the policy decision under Regulation 17. Delegation of Power: The Board of Directors of the appellant-Bank was empowered to make regulations after consultation with the Reserve Bank of India and prior sanction of the Central Government. The Court held that delegation of power to the Board for policy decisions on promotions was justified to meet management requirements and avoid procedural rigors. Interpretation of Regulation 17: Regulation 17 of the Andhra Bank (Officers') Service Regulations, 1982, required promotions to be made in accordance with the policy laid down by the Board, considering government guidelines. The Court emphasized that the regulation did not confer unguided power and was issued in conformity with Central Government guidelines, providing sufficient safeguards. Distinction in Legislative Competence: The Court clarified the distinction between essential legislative competence delegated to the Board of Directors and policy formulation. It highlighted that the regulation was not ultra vires as it contained guidelines and necessary safeguards. The High Court's decision was deemed erroneous, and the judgment was set aside, allowing the appeal.
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