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CASE NO.: Appeal (civil)  2790 of 2006

PETITIONER: Personal Manager,SBI &Anr

RESPONDENT: Krishna Grameena Bank Employees Union & Anr

DATE OF JUDGMENT: 28/11/2007

BENCH: Dr. ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO.  2790 OF 2006

Dr. ARIJIT PASAYAT, J.

1.       Challenge in this appeal is to the judgment of a Division  Bench of the Karnataka High Court dismissing the writ appeal  filed by the appellant.

2.      Background facts in a nutshell are as follows:          3.      On 1.9.1987 employees of Regional Rural Banks (in short  the ’RRBs.’) filed Writ Petition Nos. 7149-50 of 1982 and Writ  Petition No. 132 of 1984 under Article 32 of the Constitution of  India, 1950 (in short the ’Constitution’) challenging salary  structure in these Banks.  This court directed the issues to be  referred to a National Industrial Tribunal (in short the ’National  Tribunal’). On 26.11.1987 the National Tribunal was  constituted by the Government of India to consider the disputes  relating to pay, salary and allowances payable to the employees  of RRBs. On 10.4.1989 "Industry Level Fifth Bipartite  Settlement" was signed between 54 Banks and their  associations, wherein inter alia agreed that special allowances  for clerical staff would be payable to the employees of 54  (sponsor) Banks, and "Cashier in charge of cash" would be  entitled to special allowance of Rs.189 per month.  On 9.6.1989  an agreement was entered into between the State Bank of India  and its federation, called the "Fifth Bipartite Settlement"  wherein revised functional allowance for workmen was agreed  to be paid and each "cashier in charge of cash" was to be paid  allowance of Rs.380/- per month. On 30.4.1990 the National  Tribunal passed an award directing that the officers and  employees of the RRBs. will be entitled to claim parity with their  counterparts in the sponsor bank in the matter of pay scale  with effect from 1.9.1987.  On 16.1.1991 Government of India  constituted an Equation Committee pursuant to the  observations made in the Award wherein it was provided that  "allowances and benefits" which are provided in the Bipartite  settlement of the concerned sponsored bank may be extended to  the RRBs’ employees.  On 22.2.1991 Government of India  issued instructions to all sponsor banks and RRBs for  implementing NIT award and recommendation of the Pay  Equation Committee.  On 31.7.1991, arose the starting point of

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controversy so far as the present dispute is concerned.   According to the appellants, on an erroneous reading of the  award and without appreciating the fact that there is no post of  "Joint Custodian of Keys" in the sponsor bank i.e. State Bank of  India, the RRBs. issued a circular stating that "Joint custodian  of Keys (junior/senior clerk )will be eligible for a cash allowance  of Rs.380/- per month.  This was issued by the appellant No. 2.   Another RRB i.e.  Nagarjuna Gramin Bank on 8.8.1991 which is  also sponsored by appellant No. 1 (SBI) issued a circular stating  that there is no comparable post of clerk or cashier holding keys  as Joint Custodian in SBI and as per Government of India and  as per Government of India’s instructions, "cashier in charge"  holding keys will be entitled to allowance of Rs.189/- per month  and not Rs.380/- per month. The appellant No. 2 RRB also  issued similar circular clarifying that Joint Custodian allowance  shall be paid at the rate of Rs.189/- (as per Industry Level  Settlement) instead of Rs.380/- per month.  The respondent- Union filed writ petition before the High Court.  That writ  petition No. 23469 of 1991 was filed praying for quashing  circular dated 21.10.991 issued by the appellant No. 2 on the  ground that Fifth Bipartite Settlement entered between SBI and  Staff Federation provided that said allowance was to be paid at  the rate of Rs.380/- per month as cash allowance and joint  custodian allowance is payable to the employees of sponsor  bank and there should be parity of allowance of the employees  of RRB as per the National Tribunal Award.  By judgment dated  27.1.1992 the Patna High Court which was dealing with similar  issues granted liberty to Government and RRB to reduce the  said allowance. On 21.4.1992 NABARD issued a Circular to all  sponsor banks including SBI stating that of RRBs’ special  allowance of only Rs.189/- shall be payable.  This order of  NABARD was issued with the prior approval of the Government  of India.  The writ petition filed by respondent was allowed by a  learned Single Judge of the Karnataka High Court.  Challenge  was raised by the employees of another RRB i.e. Nagarjuna  Gramin Bank which was also sponsored by SBI before Andhra  Pradesh High Court. A Division Bench of the Andhra Pradesh  High Court held that employees are entitled to allowance at the  rate of Rs.189/- and not at the rate of Rs.380/- per month.  The  order of learned Single Judge of the Karnataka High Court was  challenged before the Division Bench in Writ Appeal which as  noted above was dismissed.

4.      Stand of the respondent on the other hand appears to be  that the appellants have relied on the alleged circular of  NABARD dated 21.4.1992 purportedly issued in exercise of  power under Section 38 of the NABARD Act, 1981.  It is  submitted that the same cannot be treated as a decision  by the  Government of India issued under Section 17(1)(ii) proviso of  the Act. It was further submitted that the circular was  inapplicable to RRB acting under sponsor banks covered by  industry level settlement and not bank level settlement as is  evident from  a reading of the said circular.  In case of appellant  no. 1 the power is exercisable by the Government of India under  Section 18 of the State Bank of India Act, 1985 and not the  NABARD Act.  It is submitted that the appellants’ stand that the  post of "Cashier in Charge" of cash has become redundant in  the sponsor bank has been contested by the respondent on the  ground that the so called redundancy took place much after the  6th Bipartite Settlement of 1995 whereas the offending circular  was issued on 21.10.1991.  It is stated that the appellants’  stand that parity in pay between the employees of the sponsor  bank and the RRB according to the NABARD in case of post of  similar category is not correct on the date the bank level  settlement was made. Post of cashier in charge of the sponsored

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bank and in the appellant No.1 in fact existed and there existed  a basis for parity.  The re-designation of the post due to change  of job profile subsequent to the circular cannot be the basis of  special/functional allowance since the original determination of  such allowance was made on the basis of the existing job profile  which in the case of appellant No. 2 remains unaltered and the  members of the respondent No. 1 continue to discharge some  function up to date.

5.      It is to be noted that NABARD was not a party in the writ  petition.  There is no stand taken by the respondent that the  NABARD did not have the consent of the Government of India.   It is accepted that NABARD in its letter dated 21.4.1992 wrote  to all RRBs as follows:

       "Please refer to instructions contained in  Finance Ministry (Banking Division) letter No.  11-3/90 RRB(I) dated 22nd February, 1991 on  the captioned subject.  In this connection,  attention is invited to para 14 and also item  8(ii)(b) of Annexure VI thereof.  It has been  reported that different banks are paying  different rates of allowance to the cashiers-in-  charge of cash in RRBs.  In RRBs. Clerks-in- charge of cash shall be entitled to allowance  provided to cashier-in-charge of cash in pay  offices/branches in the industry level bipartite  settlement i.e. a special allowance of Rs.164/-  per month only from Ist September, 1987 as  provided in the IV Industry level bipartite  settlement.  This allowance will be payable to  the RRB employees concerned from 1st  September, 1987 i.e. the date of implementation  of the Award of NIT.  The excess allowance paid,  if any, may be recovered from the employee  concerned excepting where specific court orders  are in operation.  These instructions shall be  uniformally applicable to all RRBs. throughout  the country.  

       This order is issued with the prior approval  of the Ministry of Finance (Banking Division),  Government of India, New Delhi."

6.      It is also to be noted that the Central Government is not  objecting to Rs.189/- though it is the stand of the respondent  that there is functional similarity.  If that logic should apply  then that allowance of Rs.189/- shall have to go. The Staff  Circular No. 11 dated 31.7.1991 stipulated as follows:

(i)     "Senior among Jr. Clerk or Sr. Clerk  wherever available will act as Joint  Custodian of safe keys alongwith Branch  Manager and will hold one set of safe  keys. (iv)    When an employee with custody of keys  also officiates as Branch Manager, he will  be paid only the officiating allowance,  which is higher than the cash allowance  during the period he officiates as Branch  Manager, the employee is eligible for only  one type of allowance at a time. (v)     (iia)   Joint Custodian of keys (Junior  Clerk/Senior Clerk) of the branch will be

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eligible for a cash allowance of Rs.380/-  p.m."

7.      It is seen that the National Tribunal decided on the basis  of parity. It, however, does record any finding about the  functional similarity. It did not go into the question post wise.   It purportedly adopted the parity principle and not ’equal pay  for equal work’ concept.  National Tribunal’s direction was that  the details were to be adopted by the Equation Committee.   

8.      In Kshetriya Kisan Gramin Bank vs. D.B. Sharma and  Ors.(2001(1) SCC 353) it was observed in paras 5 & 7 as  follows: "In view of the rival submissions at the Bar, the  first question that arises for our consideration is  whether the Tribunal had really accepted the  plea of principle of Equal pay for Equal work or  had rejected the same and instead, had applied  the principle of parity. We have gone through  the award passed by Justice Obul Reddi. The  dispute which had been referred to the tribunal  for its decision was the dispute relating to pay,  salary, allowances and other benefits payable to  the employees of the Regional Rural Banks in  terms of the pleading of the parties in the Writ  Petition (Civil) Nos. 7149-50/82 and 132 of  1984, filed in the Supreme Court of India. The  first two writ petitions had been filed by the All  India Grameena Bank Workers Organisation  and the third one had been filed by the All India  Regional Rural Bank Employees Association. It  is undoubtedly true that in the writ petition  prayer had been made for issuance of a  mandamus to fix the emoluments of the  Regional Rural Bank employees in conformity  with the laid down judicial maxims of ’equal pay  for equal work’ and ’industry-cum region  formula’ and bring about parity in emoluments  between the employees of Regional Rural Banks  Inter se and employees of the Nationalised  Commercial Banks. The Tribunal on  consideration of the stand of the parties and  various statistics given by the Banks, came to a  conclusion that there would be no serious  economic repercussions, if the parity in the  matter of pay-scales and allowances, is given to  the Regional Rural Banks employees. It also  came to the conclusion that there cannot be any  comparison between the District Central Co- operative Banks and Regional Rural Banks  inasmuch as Co-operatives are a State subject  and the said banks are run by the State  Governments; whereas Regional Rural Banks  are run by the Central Government under an  Act of Parliament. It also found that the work  carried out by Regional Rural Bank employees  and Nationalised commercial bank employees is  the same, both in quality and quantity. It  further found that there are absolutely no  grounds whatsoever to deny parity between the  employees of the rural branches of the  commercial banks and those of Regional Rural  Banks, applying the yardstick of cost of living  and volume of business. It also found that the

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Regional Rural Banks and the rural branches of  the commercial banks perform the identical  functions and duties. The tribunal came to hold  on the basis of evidence on record that the  employees of Regional Rural Banks form a  separate class under a separate statute and so  are the employees of the commercial banks. In  paragraph 4.422, the tribunal held: 4.422. I further observed in para  4.149 that "I must make it very clear  in this connection and let there be no  ambiguity about it, that my finding  that the RRB employees form a  separate class and that, therefore,  they are not discriminated against so  as to attract the doctrine of "equal  pay for equal work" has to be  disengaged and de-linked from the  question of their claim for parity in  their pay structure with the sponsor  bank employees in corresponding and  comparable posts within the  framework of the 2nd proviso on the  facts and circumstances of the case.  Shred of legal nuances, their claims  have to be examined on the principles  of justice and equity".  Ultimately, the tribunal held that the officers  and employees of the Regional Rural Banks will  be entitled to claim parity with the officers and  other employees of the sponsor banks in the  matter of pay scales, allowances and other  benefits. In paragraph 4.428, the tribunal held  as follows: 4.428. So far as the equation of posts  and the consequent fixation of the  new scales of pay allowances and  other benefits for Officers and other  employees of the RRBs on par with  the Officers and other employees of  comparable level in corresponding  posts in sponsor banks and their  fitment into the new scales of pay as  are applicable to Officers of sponsor  banks in corresponding posts of  comparable level, it is a matter which  has to be decided by the Central  Government in consultation with  such authorities as it may consider  necessary. This will also include the  pay scales, benefits, other allowances  and fitment of sub-staff of the RRBs  with the sub-staff of sponsor banks.  This Award is accordingly passed and  it shall cover all existing RRBs. The  Award shall be given effect to from  01st day of September, 1987.  In view of the aforesaid conclusions of the tribunal on  the basis of evidence placed before it, the conclusion  is irresistible that the tribunal never applied the  principle of ’equal pay for equal work’ and on the  other hand was of the view that the employees of the  Regional Rural Banks will be entitled to claim parity  with the officers and other employees of the sponsor  banks in the matter of pay scales, allowances and

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other benefits and for determining the parity, it left  the matter to be decided by the Central Government  in consultation with such authorities as it may  consider necessary. We are, therefore, persuaded to  accept the submissions of Mr. Ramachandran,  appearing for the appellant that while resolving the  dispute of the employees of the Regional Rural  Banks, the tribunal did no apply the so-called  principle of ’equal pay for equal work’ and on the  other hand applied the principle of parity with the  officers of the respective sponsor banks."

9.      No where has the National Tribunal said anything about  the functional similarity and as noted above they also did not  examine the question post wise.  The Equation Committee does  not say that the two posts are equal because of earlier position.   In para 6 of Kshetriya Kisan Gramin Bank’s case (supra) stress  was laid on comparable level and status.  In SBI there is no  post of Joint Custodian.  In the State Bank of India and the  sponsored bank there are two posts as cash officer and clerk  cum cashier who perform distinct functions.   The custody of  the cash is held by the cash officer and as and when cashiers  perform the additional function of cash officer they are paid an  allowance of Rs.380/- which is called officiating allowance and  not the keys allowance.  Significantly in RRB the cash in charge  is a workman, while in the sponsor bank he is an officer. In  view of what has been stated above, this appeal is bound to  succeed.  It is, however, directed that no amount shall be  recovered from the period from 1.1.1991 to 21.10.1991.  The  amounts already paid shall not be recovered if not already done.   There shall be no order as to costs.      10.     It may be noted that so far as delay in seeking the  reference is concerned, no formula of universal application can  be laid down. It would depend on facts of each individual case.            11.     However, certain observations made by this Court need to  be noted. In Nedungadi Bank Ltd. v. K.P. Madhavankutty and  Ors. (2000 (2) SCC 455) it was noted at paragraph 6 as follows:     

"6.     Law does not prescribe any time-limit for  the appropriate Government to exercise its  powers under Section 10 of the Act. It is not  that this power can be exercised at any point of  time and to revive matters which had since heel)  settled. Power is to be exercised reasonably and  in a rational manner. There appears to us to be  no rational basis on which the Central  Government has exercised powers in this case  after a lapse of about seven years of the order  dismissing the respondent from service. At the  time reference was made no industrial dispute  existed or could be even said to have been  apprehended. A dispute which is stale could not  be the subject-matter of reference under Section  10 of the Act. As to when a dispute can be said  to be stale would depend on the facts and  circumstances of each case. When the matter  has become final, it appears to us to be rather  incongruous that the reference be made under  Section 10 of the Act in the circumstances like  the present one. In fact it could be said that  there was no dispute pending at the time when  the reference in question was made. The only  ground advanced by the respondent was that

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two other employees who were dismissed from  service were reinstated. Under what  circumstances they were dismissed and  subsequently reinstated is nowhere mentioned.  Demand raised by the respondent for raising an  industrial dispute was ex-facie bad and  incompetent."

12.     In S.M. Nilajkar and Ors. v. Telecom District Manager,  Karnataka (2003 (4) SCC 27) the position was reiterated as  follows: (at para 17) "17.     It was submitted on behalf of the  respondent that on account of delay in raising  the dispute by the appellants the High Court  was justified in denying relief to the appellants.  We cannot agree. It is true, as held in M/s.  Shalimar Works Ltd. v. Their Workmen (supra)  (AIR 1959 SC 1217), that merely because the  Industrial Disputes Act does not provide for a  limitation for raising the dispute it does not  mean that the dispute can be raised at any time  and without regard to the delay and reasons  therefor. There is no limitation prescribed for  reference of disputes to an industrial tribunal,  even so it is only reasonable that the disputes  should be referred as soon as possible after they  have arisen and after conciliation proceedings  have failed particularly so when disputes relate  to discharge of workmen wholesale. A delay of 4  years in raising the dispute after even  reemployment of the most of the old workmen  was held to be fatal in M/s. Shalimar Works  Limited v. Their Workmen (supra) (AIR 1959 SC  1217), In Nedungadi Bank Ltd. v. K.P.  Madhavankutty and others (supra) AIR 2000 SC  839, a delay of 7 years was held to be fatal and  disentitled to workmen to any relief. In Ratan  Chandra Sammanta and others v. Union of  India and others (supra) (1993 AIR SCW 2214,  it was held that a casual labourer retrenched by  the employer deprives himself of remedy  available in law by delay itself, lapse of time  results in losing the remedy and the right as  well. The delay would certainly be fatal if it has  resulted in material evidence relevant to  adjudication being lost and rendered not  available. However, we do not think that the  delay in the case at hand has been so culpable  as to disentitle the appellants for any relief.  Although the High Court has opined that there  was a delay of 7 to 9 years in raising the dispute  before the Tribunal but we find the High Court  factually not correct. The employment of the  appellants was terminated sometime in 1985-86  or 1986-87. Pursuant to the judgment in Daily  Rated Casual Employees Under P&T  Department v. Union of India (supra) (AIR 1987  SC 2342), the department was formulating a  scheme to accommodate casual labourers and  the appellants were justified in awaiting the  outcome thereof. On 16-1-1990 they were  refused to be accommodated in the scheme. On  28-12-1990 they initiated the proceedings  under the Industrial Disputes Act followed by

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conciliation proceedings and then the dispute  was referred to the Industrial Tribunal cum- Labour Court. We do not think that the  appellants deserve to be non suited on the  ground of delay."  

13.     Appeal is allowed with no order as to costs.