Case Note & Summary
The case involved the A.P. Bank Deposit Collectors Association challenging the State Bank of India's decision to discontinue the Janata Deposit Scheme through a circular dated 4.6.2001. The scheme, introduced in 1971, aimed to promote savings among low-income groups but was deemed economically unviable and associated with frauds. The petitioners sought a writ of mandamus to continue the scheme and a writ of certiorari to quash the bank's decision. The Supreme Court consolidated various writ petitions from different High Courts to avoid conflicting decisions. The court analyzed the circular and determined that the discontinuation was a legitimate policy decision, not arbitrary or malafide. It also addressed the issue of retrenchment compensation for employees of the scheme, concluding that since the scheme was abandoned, there was no violation of Section 25F of the Industrial Disputes Act. Consequently, the court dismissed all writ petitions and applications for intervention, affirming the bank's decision to discontinue the scheme.
Headnote
A) Banking Law - Discontinuation of Scheme - Policy Decision - Discontinuation of Janata Deposit Scheme upheld as not arbitrary - State Bank of India Act, 1955 - The court found that the discontinuation was based on economic non-viability and did not constitute an arbitrary exercise of power. Held that the authority can discontinue a scheme as per policy decision (Paras 5-6). B) Industrial Law - Retrenchment Compensation - No entitlement under Section 25F of Industrial Disputes Act - Employees of Janata Deposit Scheme not entitled to retrenchment compensation as the scheme was abandoned by policy decision. The court ruled that the abandonment of the scheme did not infringe upon the provisions of the Industrial Disputes Act (Paras 7-8).
Issue of Consideration
Whether the discontinuation of the Janata Deposit Scheme by the State Bank of India was arbitrary and whether employees are entitled to retrenchment compensation.
Final Decision
The Supreme Court dismissed all writ petitions and applications for intervention, affirming the State Bank of India's decision to discontinue the Janata Deposit Scheme as a valid policy decision.
Law Points
- Policy decision
- economic viability
- writ of mandamus
- writ of certiorari
- retrenchment compensation
- Industrial Disputes Act
- arbitrary exercise of power
