Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICITION
CIVIL APPEAL NO. 4194 OF 2003
Chairman, Magadh Gramin Bank & Anr. ...Appellants
Versus
Madhya Bihar Gramin Bank & Ors. ...Respondents
(With C.A. No.4483 of 2003)
JUDGMENT
T.S. THAKUR, J.
1. These appeals by special leave arise out of an order
passed by the High Court of Judicature at Patna whereby LPA
No.84 of 2003 filed by the appellant-bank has been dismissed
in limine and the order passed by a Single Bench of that Court
allowing Writ Petitions No.7367 of 2001 and 5924 of 2002
affirmed. The controversy in the appeals lies in a narrow
compass but before we come to the precise issue that falls for
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our consideration, we may briefly set out the facts giving rise
to the proceedings before the High Court and the present
appeals before us.
2. In South Malabar Gramin Bank Vs. Coordination
Committee of South Malabar Gramin Bank Employees
Union (2001 (1) SCC 101) this Court, inter alia, held that the
Central Government was vested with the power to determine
the pay structure of the employees working in the Regional
Rural Banks in accordance with second proviso to sub-section
(1) of Section 17 of RRB Act, and that it should try to maintain
parity between the pay structure of the employees of the RRBs
and those working in the nationalized commercial banks. As a
sequel to the said direction the Government of India, Ministry
of Finance, Department of Economic Affairs (Banking Division)
issued notification dated 11th April, 2001, inter alia,
determining the pay scales of the employees of RRBs and
granting to them the benefit of 6th and 7th Bipartite Settlements
and Officers Wage Revision w.e.f. 1st November, 1992 and 1st
November, 1997 respectively. The notification attempted to
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bring at par the pay scales of the RRB employees and those of
their counterparts in other nationalized banks. It was then
followed by a letter dated 25th April, 2001, defining the
expressions “Basic Pay and Dearness Allowance” used in the
notification. The clarification was to the effect that “Basic Pay
and the Dearness Allowance” would mean “Basic Pay,
Dearness Pay, Dearness Allowances, ad hoc or additional D.A.;
interim relief or any other allowance which form part of pay or
D.A.”
3. Pursuant to the above, the appellant-bank issued a
circular dated 16th May, 2001, giving to its employees the
benefit of what is known as “computer increment” as per 6th
and 7th Bipartite Settlements and Officers Wage Revision. The
circular envisaged that each staff member shall file an
undertaking that he/she shall refund in lump the excess
amount drawn by them in case a contrary decision is received
from the Government of India/NABARD sponsor bank. This
circular was some time later recalled by an order dated 5th
June, 2001 and the benefit of computer increment and
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automatic switch over from scale II to scale III granted to the
employees of the appellant-bank withdrawn. The order further
directed that the amount already paid shall be recovered from
the employees concerned.
4. Aggrieved by the order aforementioned, the employees-
association filed Writ Petition No.7367 of 2001 challenging the
validity of the withdrawal order on several grounds. While the
said writ petition was still pending, this Court passed an order
dated 7th March, 2002 in All India Regional Rural Bank
Officers Federation and Ors. Vs. Govt. of India and Ors.
2002 (3) SCC 554 whereby paragraphs 2 and 3 of the
notification dated 11th April, 2001 were quashed and the
Government directed to issue a fresh notification for proper
implementation of the judgment of this Court. The
Government of India accordingly appears to have examined
the matter and issued a fresh notification dated 17th April,
2002, para 5 whereof provides as under:
“All other allowances should be immediately
revised, if not already revised pursuant to
5order dated 11.4.2001 by respective sponsor
banks after negotiations with RRB employees.”
5. In the writ petition filed by the association before the
High Court, the Bank filed an affidavit in reply, inter alia,
stating that the matter relating to the grant of “computer
increment”, “computer allowance” and “automatic switchover
from scale II to scale III” was pending consideration of the
Government of India which is the authority competent under
Section 17 of the RRB Act. A learned Single Judge of the High
Court of Judicature at Patna, however, allowed the Writ
Petition Nos.7367 and 5924 of 2002 by a common order dated
17th December, 2002 and directed the appellant-bank to act
upon the decision dated 17th April, 2002, taken by the
Government of India, Ministry of Finance, Department of
Economic Affairs (Banking Division) in its letter and spirit and
to pay to the employees the benefits admissible to them in
accordance with law. The said direction proceeded on the
premise that the decision of the Government of India dated
17th April, 2002, particularly, clause (5) of the notification
issued by the Government envisaged grant of all allowances
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admissible to the employees of the nationalised banks to those
serving in the RRBs. A Letters Patent Appeal preferred against
the said order, having been dismissed summarily, the
appellant-bank has filed appeal to this Court by special leave
as already noticed above.
6. Appearing for the appellant-bank, Mr. Dhruv Mehta,
learned counsel, submitted that so far as grant of automatic
switch over from scale II to scale III was concerned, the issue
stood finally resolved by the Government and NABARD who
have now taken a decision to extend the facility of automatic
switch over to the employees working in the RRB w.e.f. 16th
December, 2002. In support of his submissions, Mr. Mehta
drew our attention to a letter dated 11th April, 2002 addressed
by NABARD to the Government of India suggesting certain
modalities and conditions for the grant of automatic switch
over facility to the officers of RRBs and order dated 6th
January, 2003 issued by the said bank pursuant to the
decision taken by the Government of India on the subject. A
careful reading of the said order would show that the
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Government of India and NABARD have agreed to the grant of
automatic switch over from scale II to scale III to the officers of
RRBs w.e.f. 16th December, 2002 subject to the conditions
stipulated in the said order. Mr. Mehta argued, and in our
opinion rightly so, that the facility of automatic switch over
from scale II to scale III shall stand granted to the officers
w.e.f. 16th December, 2002 subject to the conditions stipulated
in the said order and that the directions issued by the High
Court can subject to that modification be affirmed.
7. Mr. Rakesh Dwivedi, learned senior counsel, appearing
for the respondents-writ petitioners were agreeable to the
disposal of these appeals subject to the condition that the
payment already made to the employees shall not be recovered
from them for the period earlier to 16th December, 2002. We
order accordingly.
8. The only other question that had fallen for consideration
before the High Court and that need be noticed by us relates
to the grant of computer increment to the employees of the
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RRBs. Mr. Tripathi, Additional Solicitor General, appearing for
the Government of India, has placed before us a compilation of
documents comprising a letter dated 6th January, 2003 from
the Government of India to NABARD approving the consensus
of the bank as set out in NABARD’s letter dated 23 rd July,
2002. A perusal of the said letter would show that the grant of
computer increment to the employees/officers of RBBs was
not favoured by the banks and the NABARD which consensus
was agreed to by the Government of India thereby effectively
declining the grant of computer increment to the
employees/officers of the RRB. It was contended by Mr.
Tripathi and Mr. Mehta that the Government of India had
taken a conscious decision on the subject leaving no manner
of doubt relating to the admissibility of computer increment to
the employees/officers of RRBs.
9. The material placed on record was not disputed by Mr.
Dwivedi. Mr. Dwivedi fairly conceded that the Government’s
decision, as is evident from the documents placed on record,
does indeed deny the said benefit to the employees of RRBs. It
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was, however, argued by the learned counsel that the decision
of the Government of India was arbitrary and ought to be set
aside by permitting the respondents to amend the writ
petitions suitably or by remanding the matter back to the High
Court. We are not impressed by that submission. We say so
because the legality of the decision taken by the Government
was not in question before the High Court in the writ petitions
filed by the respondents. We, therefore, see no reason why we
should allow the employees to challenge the said decision in
the present proceedings when the High Court did not have an
occasion to examine the matter in the writ petitions heard and
disposed of by it. Since the Government’s decision denies the
benefit of computer increments the direction issued by the
learned Single Judge and upheld by the Division Bench in
appeal to the extent requiring the respondent-bank to grant
the said benefit cannot be sustained. We, however, make it
clear that this order shall not prevent the respondent-
association or any member thereof from challenging in
appropriate proceedings the validity of the decision taken by
the Government of India on all such grounds as may be open
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to them but subject to all just exceptions including delay and
laches. These appeals are accordingly allowed in part and the
orders passed by the High Court to the extent indicated above
set aside. The parties are left to bear their own costs.
……………………………J.
(MARKANDEY KATJU)
……………………………J.
(T.S. THAKUR)
New Delhi
February 17, 2010