1988 (4) TMI 439 - SC - Indian Laws

Summary

Issues Involved:
1. Applicability of Tamil Nadu Shops and Establishments Act, 1947 to Nationalised Banks and State Bank of India.
2. Applicability of Andhra Pradesh Shops and Establishments Act, 1966 to Nationalised Banks.
3. Applicability of Kerala Shops and Commercial Establishments Act, 1960 to Nationalised Banks.
4. Definition and interpretation of "establishments under the Central Government."

Issue-wise Detailed Analysis:

1. Applicability of Tamil Nadu Shops and Establishments Act, 1947 to Nationalised Banks and State Bank of India:
The primary issue was whether the Tamil Nadu Shops Act applied to the Bank of India and State Bank of India. The Bank of India argued that it was exempt under Section 4(1)(c) of the Act, which exempts establishments under the Central Government. The Madras High Court initially accepted this argument, ruling that the Bank of India and State Bank of India were establishments under the Central Government and thus exempt. This decision was challenged, but the Supreme Court upheld the High Court's ruling, stating that due to the deep and pervasive control of the Central Government over these banks, they are indeed establishments under the Central Government.

2. Applicability of Andhra Pradesh Shops and Establishments Act, 1966 to Nationalised Banks:
The case involved employees of Syndicate Bank who were dismissed and subsequently appealed under the Andhra Pradesh Shops Act. The Bank contended that it was exempt under Section 64(1)(b) of the Act, which exempts establishments under the Central Government. The Andhra Pradesh High Court initially ruled against the Bank, but the Supreme Court overturned this decision, emphasizing the deep and pervasive control of the Central Government over nationalised banks, thereby exempting them from the Act.

3. Applicability of Kerala Shops and Commercial Establishments Act, 1960 to Nationalised Banks:
The issue was whether the Kerala Shops Act applied to the Bank of India. The Bank argued that it was exempt under Section 3(1)(c) of the Act, which exempts establishments under the Central Government. The Kerala High Court initially ruled against the Bank, but the Supreme Court overturned this decision, again citing the deep and pervasive control of the Central Government over nationalised banks, thus exempting them from the Act.

4. Definition and interpretation of "establishments under the Central Government":
The Supreme Court analyzed the term "under" in the context of the various Shops Acts. It referred to dictionary meanings and concluded that "under" implies subjugation, regulation, or subordination. The Court examined the statutory provisions governing the State Bank of India and nationalised banks, highlighting the extensive control and supervision exercised by the Central Government. This included the power to appoint directors, control capital structure, issue policy directions, and even liquidate the banks. The Court concluded that the State Bank of India and nationalised banks are establishments under the Central Government due to this deep and pervasive control.

Judgment Summary:
The Supreme Court dismissed the appeals challenging the applicability of the Tamil Nadu Shops Act to the Bank of India and State Bank of India, upholding the Madras High Court's decision. The Court allowed the appeals concerning the Andhra Pradesh Shops Act and Kerala Shops Act, setting aside the judgments of the Andhra Pradesh and Kerala High Courts. The Court ruled that the State Bank of India and nationalised banks are establishments under the Central Government and are exempt from the respective Shops Acts. The employees whose appeals under the Kerala and Andhra Pradesh Shops Acts were dismissed were given the liberty to seek other legal remedies.