Amalgamation schemes govern employee rights only within their express terms; transferee bank liability depends on the sanctioned scheme.

Under a sanctioned amalgamation scheme under section 45 of the Banking Companies Regulation Act, 1949, the transferee bank is bound only to the extent the scheme expressly provides. Employee continuance, salary arrears, and related liabilities arise only for employees covered by the scheme's terms and only where pending proceedings or service protection are specifically preserved. Where an employee had already ceased service before the relevant date and no proceeding was pending against the transferor bank, the transferee bank did not assume liability for reinstatement or salary claims. The principle is that rights and obligations in amalgamation depend on the express scope of the sanctioned scheme, not on general assumptions about succession.

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Issues: Whether, under the scheme of amalgamation sanctioned under section 45 of the Banking Companies Regulation Act, 1949, the transferee bank was bound to take over the respondent's service and whether the respondent's suit claiming service-related reliefs was maintainable.

Analysis: Section 45 empowers the Reserve Bank and the Central Government to frame and sanction a scheme of amalgamation, and the effect of such a scheme depends on its express terms. The scheme in question protected only those employees of the transferor bank who were in service on the prescribed date and continued their employment under the transferee bank on the stated terms. The respondent had already ceased to be in service before the relevant date, and no suit or proceeding concerning him was pending against the transferor bank on that date. The liabilities undertaken by the transferee bank under the scheme did not extend to his claim for arrears of salary or to his asserted continuation in service. The earlier authority on amalgamation schemes likewise made it clear that employee continuance arises only when the scheme expressly provides for it and the employee falls within its terms.

Conclusion: The respondent was not entitled to be taken over as an employee of the transferee bank, and the suit was not maintainable against the appellant bank.

Final Conclusion: The appeal succeeded, and the respondent's claim against the appellant bank failed for want of liability under the amalgamation scheme.

Ratio Decidendi: In an amalgamation under section 45 of the Banking Companies Regulation Act, 1949, employee continuance and related liabilities bind the transferee bank only to the extent expressly provided by the sanctioned scheme and only in respect of employees and proceedings covered by that scheme.

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