Madras HC Directs Nationalised Banks To Provide Equal Opportunity To SC/ST, OBC Candidates In Lawyers Empanelment

The Madras High Court has urged all nationalised banks to give equal chance to candidates from the SC/ST and OBC communities in the appointment of lawyers.

In addition, the court held that the current system for appointing lawyers to nationalised banks is unconstitutional.

According to a single bench led by Justice SM Subramaniam, each bank currently follows its own method for appointing lawyers, which is opaque and favors individuals with “godfathers.”

Because nationalised banks are defined as a “State” under Article 12 of the Constitution, they cannot dodge their responsibilities to apply the “necessary principles of equal opportunity enunciated under the Indian Constitution,” the bench stated.

As a result, the single-judge ordered all 28 nationalized and public sector banks in the country to revise the system within four months, assuring that the revised procedure provides equal opportunity to candidates from Scheduled Castes/Scheduled Tribes (SC/ST) and Other Backward Classes (OBCs).

“In view of the facts and circumstances, the respondents 7 to 34 herein are directed to review the existing procedure of their respective
Banks for empanelment of Lawyers and suitably alter / amend / frame new rules / procedures in consonance and in compliance with the Constitutional mandates and based on the established principles to be adopted for appointment / empanelment. The said exercise is directed to be completed within a period of four (4) months from the date of receipt of a copy of this order,” the bench noted.

The single bench was hearing a petition filed by one K Marimuthu, who asked that the Reserve Bank of India (RBI) be ordered to reinstate a previous circular directing all banks to encourage and provide equitable employment opportunities to lawyers from the SC/ST/OBC community for empanelment.

The RBI issued the circular in 1991 and removed it in 2006. The RBI withdrew a series of 41 circulars published between January 1991 and June 2004 in December 2006, citing the changes in the banking sector’s operational problems after liberalisation.

Marimuthu, on the other hand, claimed that the circular on providing equal opportunities to SC/ST candidates had nothing to do with changes in operational affairs and so should not have been revoked.

He also informed the bench that there are 19 nationalised banks, 6 public sector banks in the nationalised State Bank of India Group, and 3 additional public sector banks. It was argued that by not providing equal opportunity to SC/ST/OBC candidates, they were robbing them of enormous employment opportunities.

Appearing for the RBI, Senior Counsel M. Arvind Kumar stated that the petitioner lacked locus standi to initiate the case and that courts should not meddle with banks’ internal activities.

The singe bench however stated that leaving the empanelment procedure to the whims and fancies of each bank’s senior employees violated the fundamental rights of eligible candidates.

“Going through the procedures now being adopted by the Nationalised Banks and Public Sector Banks, this Court could able to form an opinion that equal opportunity for empanelment has been denied to the eligible and meritorious candidates. The procedures though seem to be transparent, but not in compliance with the equality clause enunciated under the Constitution of India. Equal opportunity in public employment is the Constitutional mandate. No doubt, empanelment of Lawyer cannot be construed as an appointment into the service of the Nationalised Banks and Public Sector Banks. Lawyers are engaged on contract basis for a particular tenure on terms and conditions and by fixing remuneration. However, the Nationalised Banks and Public Sector Banks are public institutions are ‘State’ within the meaning of Article 12 of the Constitution of India. Therefore, they cannot shirk their responsibility from complying with the mandatory principles of equal opportunity enunciated under the Indian Constitution,” Justice Subramaniam directed.