Writ Petition (S) No. 754 of 2002
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In the matter of an application under Article 226 of the Constitution of India
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Palamau Kshetriya Gramin Bank Adhikari Sangh
Through its General Secretary Sri Kishori Kumar
Shukla Petitioner
Versus
Palamau Kshetriya Gramin Bank through its
Chairman and another Respondents
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For the Petitioner: Mr. Saurav Arun, Advocate
For the Respondents: Mr. N. Bakshi, Advocate
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PRESENT
HON'BLE MR. JUSTICE D.G.R. PATNAIK
CAV ORDER
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Reserved On: 23.07.2009 Pronounced On: 28.08.2009
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D.G.R. Patnaik, J: The petitioner being an Association of Officers of Palamau Kshetriya
Gramin Bank, have filed this writ application, praying for quashing of part of the
notification dated 1.12.2001 (Annexure-8), whereby the reimbursement of
medical expenditure has been fixed for the employees of the Palamau Kshetriya
Gramin Bank unequal to the employees of the Sponsor Bank namely, the State
Bank of India. Claiming parity with the employees of the Sponsor Bank in respect
of medical reimbursement, the petitioner has claimed that the impugned portion
of Annexure-8, is illegal, arbitrary and contrary to the directions contained in the
Award dated 30.4.1990 passed by the National Industrial Tribunal (NIT).
2. Respondents by filing counter-affidavit, have denied and disputed the
petitioner's claim and have counter asserted that the impugned notification is only
by way of a communication of the decision taken by the Sponsor Bank namely,
the State Bank of India, which in turn, is based upon a notification issued by the
Central Government in exercise of its powers under the provisions of section
17(1) of the Regional Rural Banks' Act, 1976.
3. In the light of the stand taken by the respondent Bank and for better
appreciation of the dispute, the backgrounds facts of the petitioner's case has
necessarily to be noted.
The Rural Banks including the Palamau Kshetriya Gramin Bank (referred
to as Kshetriya Bank) (Respondent No. 1), were created by the Central
Government notification under the provisions of section 2 of the Regional Rural
Bank Act, 1976 The State Bank of India became the Sponsor Bank of respondent
no. 1.
Resentment was expressed by the employees of the Rural Banks on
account of disparity in their service conditions as compared to the service
conditions applied to the employees of the Sponsor Bank. Such grievance raised
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on the claim of equal pay for equal work, was referred to the Supreme Court. The
Apex Court referred the matter to the National Industrial Tribunal (NIT).
The NIT declared its Award on 30.4.1990, holding that the employees of
the Regional Rural Banks would be entitled to claim parity with the officers and
other employees of Sponsor Banks in the matter of pay scales, allowances and
other benefits. The Tribunal directed that the Award should be given effect to
from 1.9.1987. However, with regard to equation of posts and consequent fixation
of the new scales of pay, allowances and other benefits for officers and
employees of the Regional Rural Banks, at par with the officers and other
employees of comparable level in corresponding posts in Sponsor Banks and their
fitment into new scales of pay as are applicable to the officers of the Sponsor
Bank, the Tribunal held that it is a matter which has to be decided by the Central
Government in consultation with such authorities as it may consider necessary.
Since, from the date when Award was made effective with effect from
1.9.1987
, the employees of the Nationalized Commercial Banks, were getting
their pay scales on the basis of the 5th bipartite settlement and by implementation
of the NIT Award, the employees of the Regional Rural Banks were also given
the benefit of the 5th bipartite settlement on the basis of which, pay structure of
the Nationalized Commercial Banks had been determined.
In consonance with the directions contained in the NIT Award of 1990,
the National Bank for Agricultural and Rural Development (NABARD) issued a
direction on 19.2.1991 to all the Rural Banks, declaring therein that allowances
and other benefits which are provided in the Bipartite settlement in the Service
Regulations of the concerned Sponsor Banks, be extended to the employees and
officers of the Regional Rural Banks respectively. It was also announced in the
direction of the NABARD that Government of India has decided to implement
the NIT Award and has also accepted the recommendations of the Equation
Committee regarding equation of posts in the Rural Banks with those of the
Sponsor Banks.
By a notification dated 11.7.1991 (Annexure-3) a similar direction was
issued by the Ministry of Finance, Department of Economic Affairs (Banking
Division) of the Central Government, addressed to the Chairman of the Regional
Rural Banks for implementation of the Award. In the aforesaid Central
Government directives, emphasis was placed vide Clause-14, declaring therein
that “allowances, special allowances and other benefits which are provided in the
Bipartite settlement and service Regulation of concerned Sponsor Banks be
extended to the employees / officers of Regional Rural Banks respectively”. The
allowances and other benefits made effective both retrospectively and
prospectively as detailed in Clause-15 of the directives, include the benefits of
reimbursement of medical expenses, hospitalization and other benefits as per
hospitalization scheme.
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In compliance of the above direction issued by the Central Government,
through the Ministry of Finance, the Respondent Kshetriya Bank issued a
direction for implementation of the Central Government directives declaring that
the officers of Kshetriya Bank would get 100% medical reimbursement of
hospitalization charges and their wards will get 75%.
Consequent upon the notification, members of the petitioner Association
began to receive the medical benefits at par with the employees of the Sponsor
Bank
4. While the matter thus came to be finally settled, the Kshetriya Bank
(Respondent No. 1) by a subsequent notification, proceeded to revise the medical
facilities of its officers and employees.
Being aggrieved, the employees of the Kshetriya Bank preferred a writ
application vide CWJC No. 2893 of 1991 (R) before this court. The writ
application was disposed of on the basis of the assurance given by the
respondents that they are contemplating to extend some more facilities to the
employees of the Kshetriya Bank and the matter is under consideration by the
Central Government.
5. The petitioner alleges that contrary to the assurance given before the High
Court, the Respondent Bank arbitrarily stopped extending medical facilities to the
employees of the Kshetriya Bank and had also threatened to recover the amounts
given to them by way of medical reimbursement. Such action was taken by the
Respondent Bank on the presumption that the writ petition filed by the employees
of the Kshetriya Bank was dismissed by the High Court.
6. Being aggrieved, the employees of the Kshetriya Bank filed another writ
application vide CWJC No. 864 of 1999 (R), challenging the notification issued
by the respondent Bank, whereby the medical facility was withdrawn. The
impugned notification was quashed by the High Court and a direction was issued
to the respondent Bank to follow the guidelines issued by the Sponsor Bank and
also take into consideration the earlier notification issued by the respondent no. 1,
as also the NIT Award and to provide the same medical facilities as being given
to the employees of the Sponsor Bank.
7. Later, when the pay structure of the employees of the Nationalized
Commercial Banks was further revised in 1992 and 1997 by means of 6th and 7th
bipartite settlement, there was no corresponding revision of the pay structure of
the employees of the Regional Rural Banks
As a consequence, the dispute regarding disparity in the pay structure of
the employees of the Regional Rural Banks vis-à-vis the Nationalized
Commercial banks, once again reared its head, which culminated in the filing of
the litigation referred to as South Malabar Gramin Bank vs. Co-ordination
Committee of South Malabar Gramin Bank Employees Union and South
Malabar Gramin Bank Officer’s Federation and others, (2001 (4) Supreme
Court Cases 101.
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The impugned challenge in South Malabar Gramin Bank case (Supra)
was regarding the validity of section 17 of the Regional Rural Banks Act, 1976,
on the ground that the provisions of section 17 of the Act is ultra-vires of Articles
14 and 16 of the Constitution.
8. While deciding the issue, the Supreme Court had declared that the
provisions of section 17(1) of the Regional Rural Banks Act, was not ultra-vires
to the Constitution and that the revision of pay structure of the employees of the
Regional Rural Banks could be made only after the Central Government exercises
its powers under the provisions of the Act and determines the same. The Supreme
Court had however laid down a guideline that while exercising the pay structure
of the employees of the Regional Rural Banks, the Central Government would be
duty bound to maintain parity with the pay structure of the employees of the
Nationalized Commercial Banks in the same sense and spirit as the Tribunal
decided and was given effect to by the Union Government in the year 1987.
9. For implementation of the directions of the Supreme Court in South
Malabar Gramin Bank case (Supra), Government of India, Ministry of
Finance, Department of Economic Affairs (Banking Division) issued a
notification on 11.4.2001 (which is referred to by the respondents as Annexure-A
to the counter-affidavit), declaring the pay scales as determined for the employees
of the Regional Rural Banks.
10. Raising a strong protest against the notification (Annexure-A), the All
India Regional Rural Banks’ Officers Federation challenged the same before the
Supreme Court in the case of All India Regional Rural Banks’ Officers v.
Government of India and others (2002 (3) SCC 554). The controversy raised in
respect of the notification, was concerning the limitation imposed in the current
payment of increase in the salary and in the payment of arrears. The Supreme
Court after analyzing Clause-II and III of the notification, had declared it
unacceptable and quashed the same. It appears that in the aforesaid case, no
dispute was raised in respect of the other clauses, including Clause-V of the
notification.
Clause-V of the notification reads as follows:
“As far as other allowances are concerned, individual Sponsor
Banks shall negotiate the same with the respective RRBs. The
revised allowance shall be paid with effect from 1.4.2000. The
ceiling in the payment shall, however, be as per the formula stated
in Clause-iii above.
11. Pursuant to the directives contained in Clause-V of the Central
Government Notification, the Sponsor Bank of Respondent No. 1 namely, the
State Bank of India, constituted a Committee comprising of three Chairman of
RRBs, two Assistant General Manager (RRBs) of the State Bank of India to
examine the issue for extension of other allowances. Adopting the
recommendation contained in the specially constituted Committee, the State Bank
of India issued a Circular (Annexure-B) on 25th October 2001 to be followed all
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over the country, specifying the amount of allowances payable to the officers and
employees of the sponsored Regional Rural Banks.
12. The revised decision on the basis of the recommendation of the
Committee in respect of allowances payable, have been mentioned in Annexure-I
and II to the Circular (Annexure-B) and have been made payable from 1.4.2000.
While Annexure-I to the Circular relates to the allowances payable to the Clerical
and Subordinate Staff, Annexure-II relates to the allowances payable to the
officers of the Regional Rural Banks. The allowances which have been
specifically incorporated in Annexure-I and II includes reimbursement of medical
expenses (other than hospitalization scheme) of Rs. 1,000/- in respect of Clerical
and Subordinate staff up to 5 years of service and Rs. 1,200/- in respect of the
Clerical and Subordinate staff above 5 years of service. For officers, though an
amount of Rs. 2,225/- per annum has been fixed towards medical aid, but the
hospitalization charges have not been revised and the existing allowances prior to
the date of issuance of Circular, was to be paid, till further instructions.
13. Thus, Annexure-II to the Circular continues to provide existing allowances
in respect of the hospitalization charges and does not make any revision therein.
Yet, contrary to the stipulations contained in Annexure-II, the Respondent
Kshetriya Bank, by the impugned notification (Annexure-8), has altered the
amount of medical reimbursement for the officers fixing the same at the rate of
90% for self and 60% for the dependants. Against this, the petitioner is aggrieved
on the ground that earlier, reimbursement of medical expense in case of
hospitalization was 100% for self and 75% for the dependants of the employees /
officers which has now been reduced by the impugned notification.
14. Respondent No. 1 Kshetriya Bank has filed its counter-affidavit. The stand
taken by the Kshetriya Bank (Respondent No. 1) is that the impugned order
(Annexure-8) in respect of fixation of medical aid for the employees of the
Gramin Banks, has not been done by the Respondent Bank. Rather, such decision
was taken by the Sponsor Bank in pursuance of the order of the Central
Government under the second proviso to Section 17(1) of the Regional Rural
Banks Act, 1976.
Referring to Annexure-A which is the order of the Central Government
dated 11.04.2001, learned counsel for the respondent Bank submits that the
aforesaid order was passed pursuant to the order of the Supreme Court passed in
Civil Appeal No. 2218 of 1999 in the case of South Malabar Gramin Bank
(Supra).
Explaining further, learned counsel submits that the impugned notification
issued by the Respondent Bank is only by way of a Circular conveying
information to all the concerned officers about the decision of the Central
Government taken vide Annexure-A and if the petitioners’ are at all aggrieved,
they ought to have challenged the aforesaid decision of the Central Government.
If the petitioner’s prayer for quashing the impugned order (Annexure-8) is
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allowed, it will have the effect of quashing the order of the Central Government
which was passed in exercise of its powers under section 17(1) of Regional Rural
Banks Act, 1976. In absence of the Central Government as also the Sponsor Bank
being impleaded as necessary parties, the prayer of the petitioners for quashing
the impugned notification, cannot be allowed.
15. It is further sought to be explained that in compliance with the verdict of
the Supreme Court as laid down in the case of South Malabar Gramin
Bank(Supra), in which the petitioner had intervened as member of the Regional
Rural Bank Employees Association, the basic pay, Dearness allowance, house
rent allowance and all other allowances except medical aid (which is not treated
as allowance) have been granted to the officers of the Gramin Bank, including the
Palamau Kshetriya Bank, on exactly the same lines and at par with the employees
of the Nationalized Commercial Banks and of the Sponsor Bank. Furthermore, the
same medical allowance of Rs. 2,225/- per annum as given to the officers of all
Nationalized Commercial Banks and other Gramin Banks, is being paid to the
employees of the Kshetriya Bank and in this respect, there is no disparity
whatsoever amongst the employees of the Nationalized Commercial Banks and
the employees of the Respondent Kshetriya Bank.
16. Having heard learned counsel for the parties, it has to be seen as to
whether, by the impugned notification (Annexure-8), the respondent Bank has
curtailed any benefit relating to medical aid to the members of the petitioner
Association, which was earlier extended to them, and if so, whether it was within
the competence of the respondent Kshetriya Bank to issue the impugned
notification?
17. Admittedly, earlier, pursuant to the Central Government Notification dated
11.7.1991 (Annexure-3), the respondent Kshetriya Bank had issued Circular for
proper implementation of the Central Government directives, declaring that the
officers of the Kshetriya Banks would 100% medical facilities and their ward
would get 75% medical facilities towards hospitalization charges and this
direction was implemented.
By the impugned notification, medical facilities have been curtailed.
18. As observed above, the decision taken by the Sponsor Bank so indicated
through its Circular (Annexure-B), does not make any alteration in the extent of
reimbursement of allowances towards hospitalization for the officers and other
staff of the Regional Rural Banks. Rather, it declares that the existing allowances
must be treated to be the same which was earlier declared by the Kshetriya
Gramine Bank in pursuance to the Central Government Notification dated
11.7.1991 (Annexure-3) whereby officers of the Kshetriya Banks were allowed
100% medical facilities and their wards were allowed 75% medical facilities
19. The stand taken by the respondents that the decision, as conveyed by the
impugned notification, is in fact a decision taken by the Sponsor Bank in
consonance with the decision taken by the Central Government vide its
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notification (Annexure-3), is apparently incorrect. As observed above, the
Circular issued by the Sponsor Bank (Annexure-B) does not make any alteration
or change in the extent of medical facilities including reimbursement of
hospitalization charges. Yet, the respondent Bank has unilaterally proceeded to
alter the medical facilities which were earlier extended to the members of the
petitioner Association. Such power is certainly not vested with the respondent
Bank. The decision to curtail the facilities, is in violation of the directions
contained in the NIT Award and arbitrarily tends to deprive the benefits which
were earlier extended to the members of the petitioner Association.
20. In the light of the above discussions, I find merit in this writ application
and the same is accordingly allowed. The impugned portion of the notification
(Annexure-8) is hereby quashed. The members of the petitioner Association shall
continue to receive the same medical facilities as was fixed and allowed to them
in pursuance to the earlier Central Government Notification dated 11.7.1991
(Annexure-3)
(D.G.R. Patnaik, J)
Jharkhand High Court, Ranchi
Dated 28th August 2009
Ranjeet/N.A.F.R.