Jammu and Kashmir Bank is a symbol of sovereignty for the people of Jammu and Kashmir. It has been part of highs and lows since 1938 A.D. and has ever since played a pivotal role in their day to day life. It reminds them of the era when Jammu and Kashmir enjoyed complete independence. It was not conceived as a private enterprise by a few individuals to make a fortune but its creation was expression of sovereign will aimed at improving economic conditions of the State Subjects. The profit making was not the primary motive. The people of Jammu and Kashmir therefore have deep interest in wellbeing of the Bank and cannot see it run down by vested interest. The appointment of non-state subjects as Directors makes the people apprehensive of lurking danger that the administration of Bank may be given to a non-State Subject in days to come.
With little expectations from political class, revisit of the status of the bank is the only option. The Bank if amenable to writ jurisdiction and its actions subject to judicial review, shall have to adhere to rule of law. It will not be possible for political executive or management to act arbitrarily, or in a capricious manner. To those who swear by “autonomy” of the Bank, it means freedom to act arbitrarily sans accountability and when eyebrows get raised to deny responsibility.
The Bank is a big employer and with transparency in place, educated unemployed shall have a fair opportunity to compete for the available positions that are presently filled up in a clandestine manner away from judicial gaze. Transparency is bound to bring relief to all the stakeholders, prevent selective distribution of public largesse and make possible fair share of the benefits to everyone.
Would it be permissible to revisit the Bank’s status after Tanki Case? Law is never static. It is dynamic and ever changing, ready to meet new challenges even without change in text.
There has been no change in text of Article 21 between A.K.Gpolan, ADM Jabalpore, Maneka Gandhi and now Puttaswamy cases but a big change in concept of right to life and personal liberty and a silent journey from “procedure established by law” to “due process of law.”
The seeds of change are often sown by judicial dissent. In the words of Chief Justice Hughes, “A dissent in a court of last resort is an appeal to the brooding spirit of law, to the intelligence of a future day when a later decision may possibly correct the error into which the dissenting judge believes the court to have been betrayed.”
Three important judicial dissents in history recorded by Justices Fazal Ali in AK Gopalan, Subha Rao in Kharak Singh and HR Khanna in ADM Jabalpur played a historic role in evolution of rights jurisprudence. Time has proved the dissent and not the majority view to be correct law. The Tanki Case, let us recall witnessed a dissent. Should the dissent inspire a fresh look on the Bank status, noticing new trends in development of law and concerns about working of the Bank. Of course, it should.
First a word about new trends in law. The BCCI is a society registered under Societies Registration Act. It controls the sport of cricket, selects players, has State Associations as its members and itself is member of ICCI. All these functions are self-arrogated without any statutory backing. The Supreme Court in Netaji Cricket Club case held that BCCIs control over the sport was deep and pervasive (not governments control over BCCI), it exercised enormous public functions which obligated the Board to follow doctrine of “fairness and good faith” in all its activities. In Zee Telefilms Ltd case the Apex Court reiterating the law observed that BCCI is amenable to the writ jurisdiction under Article 226 even when it is not “State” within meaning of Article 12. Latest verdict in BCCI Case holds that BCCI because of its control over game cannot be said to be undertaking any private activity and that the Board is “certainly amenable to writ jurisdiction under Article 226 of the Constitution of India.”
The majority view in Tanki Case overemphasised the statutory backing of the duties and placed less focus on other important aspects. To begin with, it remained to be appreciated that the Bank was created on a proposal made by the Finance Department in obedience to will of the Sovereign – repository of all powers, as an arm of the Government to advance and develop financial, commercial, industrial and agricultural interests of the State; that the Government to make its intention clear decided to hold 92% and allow private individuals from three regions and communities to have rest 8% shares; that as public welfare and not profit making was the motive the Government decided to have effective control over administration of the Bank so that it adheres to delineated path. The majority view downplayed key role of the Chairman, a government appointee and the Government appointed Directors in administration of the Bank; that the Board of Directors is to fall in line as in absence of Government Directors Board cannot meet; that election of other Directors is influenced by the majority shareholder and that while elected directors retire by rotation same is not true about Government appointees.
The dissenting judgment on the other hand noticed that “The Principal authority responsible for the business of the Bank is the Chairman. The Chairman is man of the Government….. For all practical purposes therefore, Chairman remains all powerful and in the position where he can bulldoze his way. The Governments functional domination and control over the Bank through its Chairman and Government nominated and Government supported Directors can be seen to be all pervasive and not mere regulatory in nature”. The dissent referring to the entities “which are Government in fact but corporate in form” held the Bank to be an “authority” within the definition of Article 12 and thus “state” and amenable to the writ jurisdiction under Article 226 of the Constitution.
Let us now revisit the Bank’s status in light of new trends in law. The J&K Bank performs important public functions, in addition to routine banking business. In the words of Apex Court “A body is performing a “public function” when it seeks to achieve some collective benefit for the public or a section of the public and is accepted by the public or that section of public as having authority to do so. Bodies therefore exercise public functions when they intervene and participate in social or economic affairs in the public interest.” It has been held that “the concept of private action must yield to a concept of State action where public functions are being performed.” The Bank though replaced by RBI as State Banker continues to transact the Governments banking business. The Bank in terms Government Orders including Circular dated 15-12-2015 handles all government payments to individuals and indirectly controls actual payment of credited amount. It collects taxes, duties, bills like electricity charges on behalf the Government. What else does Bank do other than performing public functions within meaning of BCCI Case when it runs 1109 Common Service Centre in the State under Service Centre Agency. The Common Service Centre Scheme is part of the National e-Governance Plan. It covers host of functions otherwise performed by Government. The Bank partners with JKEDI in motivating, training etc of educated youth to take up entrepreneurship as a career option and as part of the Screening Committee plays prominent role in selection of the beneficiaries under the Scheme. The Bank as partner in Seed Capital Fund Scheme plays pivotal role in addressing the problem of unemployment. These all activities are akin to government functions.
The Jammu and Kashmir Bank therefore satisfies the “Public Function” test laid down in BCCI case and would be amenable to the “Writ Jurisdiction” under Article 226 Constitution. The majority view in Tanki case, so viewed, calls for a second look. Bringing the Bank within judicial review, writ jurisdiction and RTI would promote transparency and fairness in its affairs – what we need most in present crisis.
Concluded
(Author a Harvard graduate and former Judge of High Court is a Senior Advocate Supreme Court of India)