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PETITIONER: G.S. KAUSHIK & ANR.

       Vs.

RESPONDENT: UNION OF INDIA & ORS.

DATE OF JUDGMENT:       12/04/1996

BENCH: AGRAWAL, S.C. (J) BENCH: AGRAWAL, S.C. (J) NANAVATI G.T. (J)

CITATION:  JT 1996 (5)   606        1996 SCALE  (3)491

ACT:

HEADNOTE:

JUDGMENT:                             WITH WRIT PETITION I.A. NOS. 1 & 2 IN (CIVIL) NO. 7149-50 OF 1982 Rakesh Kumar Gautam & Anr V. Union of India & Ors.                       J U D G M E N T S.C. Agrawal, J.      These applications  for directions  have been  filed in Writ Petitions  Nos. 132 of 1984 and 7149-50 of 1982. In the said Writ  Petitions filed  by the  All India Regional Rural Banks Employees  Association and  the All  India Gramin Bank Worker’s Organization  representing  the  employees  of  the Regional Rural  Banks (for  short ’RRBs’),  the  petitioners sought parity  in emoluments  between the  employees of RRBs inter se  as well  as  the  employees  of  the  Nationalized Commercial Banks.  The said  Writ Petitions were disposed of by this  Court by  the following  order dated  September  1, 1987:-      "We are  happy  to  know  that  the      Central Government  had  agreed  to      appoint   a   National   Industrial      Tribunal  to  decide  the  question      relating  to   pay,  salary,  other      allowances   and   other   benefits      payable   to   the   employees   of      Regional  Rural  Banks  constituted      under the Regional Rural Banks Act,      1976. The  learned counsel  for the      petitioners  also   agreed  that  a      reference  may   be  made   to  the      proposed Tribunal.  In view  of the      above,  it   is  not  necessary  to      pronounce on  the questions  of law      raised  in   these  writ  petitions      before  us.   We  leave   all   the      contentions. The Central Government

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    shall  refer  the  dispute  to  the      Tribunal, preferable  to a  retired      Chief  Justice  of  a  High  Court,      within four  weeks from  today.  We      hope   that   the   Tribunal   will      pronounce     its      award     as      expeditiously  as  possible.  These      writ  petitions   are  disposed  of      accordingly."      In accordance  with the directions given by this Court, the Central  Government, by  order dated  November 26, 1987, constituted  a  National  Industrial  Tribunal  (hereinafter referred to  as ’the  Tribunal’) consisting  of Hon’ble  Mr. Justice S.  Obul Reddy,  retired  Chief  Justice  of  Andhra Pradesh High  Court, as  its Chairman. By the said order the disputes relating to pay, salary, other allowances and other benefits payable  to the  employees of  RRBs in terms of the pleadings of  the parties  in Writ  Petitions  (Civil)  Nos. 7149-50 of  1982 and  132 of  1984 filed  in this Court were referred to  the Tribunal. The Tribunal gave its award dated April 30,  1990, wherein  the Tribunal  has held  that  upto August 31, 1987 the employees of RRBs should be extended the pay scale  and allowances  as are  admissible to  the  State Government employees in comparable posts and status and that with effect  from September 1, 1987 the said employees shall be entitled to the pay scales, allowances and other benefits on  par   with  the   employees  of   comparable  levels  in corresponding posts of respective sponsor banks. With regard to  equation  of  posts  the  Tribunal  has  held  that  the Government of India may decide the same in consultation with such  authorities,   as  it   may  consider  necessary.  The Government of  India  appointed  an  Equation  Committee  on October 5,  1990 under  the Chairmanship  of Shri P. Kotaiah the  then   Managing  Director  of  the  National  Bank  for Agriculture and  Rural Development (for short ’NABARD’). The Equation Committee  submitted its  report on January 8, 1991 which has  been accepted  by the  Government  of  India  and instructions  have  been  issued  to  all  the  implementing agencies by  circulars dated  February 22, 1991 whereby RRBs employees have  been brought into the sponsor bank scales of pay with  effect from  September 1,  1987. The  salaries  of employees in  the employment  of RRBs  are being paid in the revised scales from January 1, 1991.      By  these   applications  the  applicants  are  seeking directions regarding  implementation of the directions given by the  Tribunal in  the award.  The main  grievance of  the applicants is  regarding non-payment  of arrears  payable to the employees of RRBs in terms of the award of the Tribunal. As per the counter affidavit filed on behalf of the Union of India the  said liability  is about Rs. 220 crores. By order dated September  12, 1994,  the Court  directed the Union of India and  NABARD to  prepare a  scheme in consultation with the Employees’  Association with  regard to the discharge of the said liability. In pursuance of the said directions, the Government  of  India  constituted  a  Committee  under  the Chairmanship of  Shri  K.  Basu,  General  Manager,  NABARD, [hereinafter referred  to as ’Basu Committee’], to prepare a scheme  with  regard  to  payment  of  arrears  to  all  the employees of  RRBs as a consequence of the implementation of the award  of the  Tribunal read  with  the  report  of  the equation Committee.  Basu Committee,  in  its  report  dated February 22, 1995, has suggested a scheme for payment of the arrears payable  to the  employees of  RRBs in  terms of the award. In respect of the employees who are in the employment of RRBs  as on  the date  of pronouncement of the Scheme and

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employees who  were/are  dismissed/whose  services  were/are terminated/who ceased to be in employment of the RRBs by any other  method   save  those   who  retired/resigned/deceased whether prior  to or  after the pronouncement of the Scheme, the  Scheme  envisages  payment  of  the  arrears  in  three instalments. The  first instalment  to be  paid  within  six months from  the date of pronouncement of the scheme by this Court, the  second instalment  to be paid not later than one year from  the date  of payment of the first instalment, and the third instalment to be paid not later than one year from the date  of payment  of the  second instalment.  As per the said Scheme  the first  instalment would  cover 50%  of  the arrears while the second and third instalments each would be in respect  of 25% of the said arrears. As regards employees who have  retired/resigned upto  and including  the date  of pronouncement of  the scheme by this Court and in respect of legal heirs  of deceased  employees who died either while in service  or   otherwise  upto  and  including  the  date  of pronouncement of  the scheme, it has been suggested that the entire payment should be paid lump sum in one instalment. As regards those  employees who retired/resigned after the date of pronouncement of the scheme by this Court and legal heirs of  deceased   employees  who  died  either  in  service  or otherwise after  the date  of pronouncement of the scheme by this Court,  it has  been suggested  that the payment may be made  in   two  instalments  of  50%  each.  Basu  Committee suggested that  the funds  for the purpose of payment should be provided  by the  Government of India in the form of soft loan and  there shall  be a  moratorium for repayment of the loan by  the RRBs to the Government of India for a period of five years  from the  date of the receipt of last instalment by RRBs  from the  Government of  India and the repayment of the loan  by RRBs  to the  Government  of  India  after  the moratorium period  shall be  as determined by the Government of India  in consultation  with each  RRB  separately.  With regard to  the  rate  of  interest  to  be  charged  by  the Government of  India from  the RRBs, it is suggested that it shall not  exceed one  fourth of the Bank Rate prevailing as on the date of pronouncement of the scheme by this Court.      The response  of the  Union  of  India  to  the  scheme suggested  by   the  Basu  Committee  is  contained  in  the affidavit of  Shri  Sudhir  Shrivastava,  Deputy  Secretary, Ministry of Finance, Department of Economic Affairs, Banking Division,  dated February 20, 1996. In the said affidavit it has been  stated that providing loan to RRBs for the purpose of payment   of arrears as recommended by Basu Committee has been considered  in depth  and was not found appropriate for the following reasons :      "a) The  RRBs are in wide different      and varying  financial position and      uniformity may  not  be  consistent      with   their    widely    different      financial      performance      and      achievements. The provision of loan      from  Government  of  India,  would      require repayments  and thus burden      the RRBs.      b) The  provision of  equity on the      other hand  is being made as a part      of  a  comprehensive  restructuring      package. Further  the servicing  of      equity is  optional and  contingent      on generation of profits.      c)  Any   decision  regarding  RRBs      should  ideally  also  reflect  the

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    views    of     the    other    two      shareholders, namely,  the  sponsor      bank and State Governments.           The equity route necessarily      requires examination  by  the  said      shareholders  of  the  problems  of      continuing  losses   and  financial      implications arising therefrom.      d)  The   Government  considers  it      infeasible  and   inappropriate  to      provide  loans   to  RRBs   towards      financing revenue expenditure. This      would  result  in  similar  demands      from   other    undertakings    and      increasingly   strain   and   drain      Government’s  budgetary  resources.      Government’s   view   is   to   put      together  a   package   that   will      enhance the  viability of RRBs. The      long   term    interests   of   the      employees are  also best  subserved      in  this  manner.  The  scheme  for      payment  of   arrears,  as   stated      above, is  a  bonafide  attempt  at      reconciling the  interests  of  the      depositors, the borrowers, the RRBs      themselves   and   the   employees.      Respondent   No.   1   respectfully      submits that  the Hon’ble Court may      be pleased  to approve the measurss      in the  facts and  circumstances of      the case stated hereinbefore."      In the  said affidavit  the following  course of action has been suggested :-      "i) 49  out of  196 RRBs  have been      taken    up    for    comprehensive      restructing by  way of  infusion of      additional share  capital. These 49      banks along  with 4  RRBs in profit      (in all  53 RRBs) have already been      asked   to    make   payments    in      accordance    with    the    scheme      suggested by Basu Committee.      ii) At least 50 more RRBs are being      identified                      for      restructuring/revamping. Such banks      will also  start paying the arrears      as per the scheme suggested by basu      Committee, within  six months  from      date.      iii)  It   is  submitted  that  the      remaining RRBs.  will also commence      payment   within   six  month  from      date but they may be allowed to pay      in four equal annual instalments."      The learned  Solicitor General  Of India. appearing for the Union  of India has submitted that the number of RRBs in the category (i) mentioned above is now 53.      Having regard  to  the  submissions  contained  in  the affidavit of  Shri Sudhir  Shrivastava, we  direct that  the liability for payment of arrears payable to the employees of the RRBs  for the  period upto December 30, 1990 in terms of the award  of  the  Tribunal  shall  be  discharged  in  the following manner ; (1) 53  RRBs, as  mentioned in para 4(i) of the affidavit of

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Shri sudhir  Srivastava shall  make    payment  as  per  the scheme suggested  by Basu  Committee  in  its  report  dated February 22, 1995. The said scheme in respect of these banks will be operative with effect from February 20, 1996. (2) The  RRBs falling under para 4( of the affidavit of Shri Sudhir Srivastava,  will make  payment  as  per  the  scheme suggested by  Basu Committee.  In respect of these Banks the scheme will be operative with effect from August 20 1996. (3) As   regards remaining RRBs falling under para 4(iii) of the affidavit  of Shri  Sudhir  Srivastava,  the  scheme  as suggested by  Basu Committee  would  apply  subject  to  the modification that  the amount  of arrears  shall be  paid in four instalments  instead of  three instalments as suggested by basu Committee and each instalment will be for 25% of the amount of  arrears. The first instalment would be payable by August 20  1997 and other instalments would be payable after yearly intervals. (4) The  employees falling  in categories  (b) and  (c),  as mentioned at  page No. 74 of Report of Basu Committee, shall be paid  all the  arrears in  lump sum in one instalment. In respect of  RRBs mentioned  in para 4(i) of the affidavit of Shri Sudhir  Srivastava the  said amount, if not paid, shall be paid  by April 30, 1996. In respect of  RRBs mentioned in paras (ii)  and  (iii)  of  the  affidavit  of  Shri  Sudhir Srivastava, the said amount shall be paid by August 20, 1996 and August 20, 1997 respectively. (5) The  employees falling  in categories  (d)  and  (e)  as mentioned at  page 74  of the  report of  the Basu Committee shall be  paid the   arrears in two instalments as suggested in the scheme prepared by Basu Committee. In respect of RRBs mentioned in  paras 4(1),4(ii)  of  the  affidavit  of  Shri Sudhir Srivastava,  the first  instalment will be payable by April 30  1996, August  20, 1996 and August 20, 1997 and the second instalment  will be  payable by  February  20,  1997, August 20 1997, and August 20,1998 respectively. (6) No  interest will  be payable on amount of arrears to be paid as per these directions. <7) it  will be  the responsibility of the Union of India to ensure  that   the  payment  are  duly  made  as  per  these directions.      Apart from the payment of arrears, the petitioners have also sought  directions in respect of other directions given by the Tribunal in the Award. We do not propose to deal with these grievances  of the  petitioners. We, therefore, direct that the award of the National Industrial  tribunal shall be treated as  award of tribunal  under the industrial Disputes Act, 1947  and it  will be  open to  the employees  of RRBs, irrespective of  the fact whether they fall within the ambit of the  expression ’workman’  as defined  in section 2(s) of the industrial  Disputes Act  or not, to seek their remedies for implementation  of the award in respect of those matters before the  appropriate forum  under the industrial Disputes Act.  The   application  for   directions  are  disposed  of accordingly. No costs.