http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 16  

PETITIONER: STATE BANK OF INDIA & ORS.

       Vs.

RESPONDENT: YOGENDRA KUMAR SRIVASTAVA & ORS.

DATE OF JUDGMENT01/05/1987

BENCH: DUTT, M.M. (J) BENCH: DUTT, M.M. (J) REDDY, O. CHINNAPPA (J)

CITATION:  1987 AIR 1399            1987 SCR  (3) 115  1987 SCC  (3)  10        JT 1987 (2)   477  1987 SCALE  (1)937  CITATOR INFO :  RF         1991 SC1289  (14)

ACT: Service Law     State Bank of India Officers (Determination of Terms and Conditions  of Service) Order, 1979: Paragraphs 2(1),  3(h), 7, 8 & 18(5)-Merger of Grade-I and Grade-II Officers  exist- ing   on   October   1,  1979   into    Junior    Management Grade--Probationary  Trainee  Officers appointed in  Grade-I on October 30/31, 1979--Fixation of inter se seniority. Statutory Construction     Repugnancy--’Definition’ Clause--When repugnant to other provisions.

HEADNOTE:     Consequent to an agreement between the Executive Commit- tee  of  the  Central Board of the appellant  Bank  and  its Officers’  Federation, in pursuance of the Pillai  Committee Report, the Grade-I and Grade-II Officers discharging  mana- gerial  and supervisory functions, were merged into the  new Junior  Management  Grade. It was agreed that  Officers,  of Grade-II would be junior to the existing officers of Grade-I and the seniority list would be prepared accordingly. There- after,  in exercise of powers conferred by sub-s. (1) of  s. 43  of the State Bank of India Act, 1955 the State  Bank  of India  Officers’ (Determination of Terms and  Conditions  of Service)  Order, 1979 was made and brought into  force  with effect  from October 1, 1979. Paragraph 2(1) of  that  Order provided that it shah apply to the existing officers of  the Bank  and  to such employees of the Bank to whom it  may  be made applicable. Under paragraph 3(h) the expression "exist- ing officers" was defined to mean officers in the service of the  Bank  immediately prior in the  appointed  date,  i.e., October  1, 1979. Paragraph 7 provided for the placement  of existing officers on the appointed date in the corresponding new  grades and scales. Paragraph 8(1) provided for  fitment of existing officers in the new grades, and scales of pay in accordance with paragraph 7, at a stage corresponding to the existing grade and scale. Under paragraph 18(5) the seniori- ty among the existing officers was to 116

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 16  

remain  the  same, i.e., the Officers Grade-I were  to  rank senior to Officers Grade-II.     Certain Probationary/Trainee Officers, who were appoint- ed by the Bank in Grade-I on October 30/31, 1979 before  the Order  was  made on December 19, 1979 flied  writ  petitions before  the Allahabad High Court and some others before  the Delhi  High  Court  claiming seniority  over  the  erstwhile Grade-II  Officers, in which it  was contended for the  Bank that  since  the petitioners were not the employees  of  the Bank  on  October 1, 1979, i.e., the  appointed  date,  they could  not  be given seniority over the  erstwhile  Grade-II Officers, who were the ’existing officers’ within the  mean- ing of the expression under paragraph 3(h) of the Order.     The Allahabad High Court took the view that the  expres- sion  ’existing  officers’ has to be read as  including  the Probationary  Officers  and Trainee  Officers,  otherwise  a repugnancy between the definition of ’existing officers’ and the provisions of paragraph 7 and 8 of the Order will arise, that  the  notional  date of the coming into  force  of  the Order,  viz., October 1, 1979 is only to protect the  emolu- ments  of  the officers and nothing else, and  directed  the Bank  to prepare the seniority list of its officers  accord- ingly.  The Delhi High Court, however, took a contrary  view and dismissed the writ petitions.     In these appeals by the Bank against the decision of the Allahabad  High  Court  and Special Leave  Petition  by  the Probationary/Trainee  Officers against the decision  of  the Delhi    High    Court,   it   was   submitted    for    the Probationary/Trainee Officers in support of their contention that they should be considered as ’existing officers’ within the  meaning of paragraph 3(h) of the Order, that  the  Bank itself  had treated them as ’existing officers’  by  fitting them to the Junior Management Grade and giving them a higher start of Rs.960 p.m., that such fitment had been made by the Bank following the principles laid down in paragraphs 7  and 8  of the Order, that unless the expression ’existing  offi- cers’ is read as including ’Probationary/Trainee  Officers’, three will be a repugnancy between the definition of ’exist- ing officers’, as contained in paragraph 3(h) and the provi- sions  of  the  paragraphs 7 and 8 of the  Order,  that  the definition  of ’existing officers’ is only illustrative  and not exhaustive, that the merger of officers of Grade-II  and Grade-I  into the Junior Management Grade was only  for  the purpose  of fitment in the higher scale of pay and  not  for the  purpose of seniority, that they have to  undergo  tests which were more stringent than the tests to be undergone  by Grade-II Officers and as such Probationary/Trainee       117 Officers, could not be placed under Officers Grade-II in the seniority  list, and that the Bank had no authority to  give retrospective operation to the Order with effect from  Octo- ber  1,  1979 inasmuch as s. 43 of the Act under  which  the Order  has been passed, did not authorise the Bank  to  pass any such Order with retrospective effect.     For  the  Bank it was contended that the order  had  not been  made  retrospective, that all that has been  done  was that  the  Officers Grade-I and Grade-II, who  were  in  the employment  of the Bank immediately before October  1,  1979 have  been merged into one category, namely, Junior  Manage- ment  Grade, in terms of the recommendations of  the  Pillai Committee, that these Officers were already employees of the Bank before October 1, 1979 and as such they were  ’existing officers’ within the meaning of paragraph 3(h) of the Order, that  the Probationary/Trainee Officers, who were  appointed on 30th/31st October, 1979 had no locus standi to  challenge

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 16  

the Order or the merger of Officers Grade-I and Grade-II and that as no order has been passed under paragraph 2(1) of the Order  applying the same to the Probationary/ Trainee  Offi- cers, they were outside the purview of the Junior Management Grade  and,  as such, were precluded  from  challenging  the seniority of the erstwhile Officers of Grade-II.     Allowing  the appeals and dismissing the  special  leave petition, this Court.     HELD:  1. The expression ’existing officers’ as  defined in  paragraph  3(h)  of the State Bank  of  India  Officers’ (Determination  of Terms and Conditions of  Service)  Order, 1979  means officers in the service of the Bank  immediately prior  to  the appointed date, i.e., October  1,  1979.  The Probationary/Trainee Officers who were appointed by the Bank on 30/31st October, 1979 after the appointed date could not, therefore,  be  held to be ’existing  officers’  within  the meaning of paragraph 3(h) of the Order. [128B; F]     2.  It  is  incorrect to say that when  an  employee  is fitted  to  a particular scale of pay of another  cadre,  he does not become a member of that cadre. In the instant case, the Probationary/Trainee Officers were placed in the  corre- sponding  scales of pay in the Junior Management  Grade  for the  purpose of fitment in the new scales of pay. It may  be that  such fitment has been made by the Bank  following  the principles  as laid down in paragraphs 7 and 8 of the  Order presumably  with  a view to removing any  disparity  between Officers Grade-I and Officers Grade-II in the Junior Manage- ment Grade, but it cannot be said that they were treated  as existing officers and such fitment was made under 118 paragraphs  7 and 8 of the Order.  The  Probationary/Trainee Officers  were  not in the service of the  Bank  immediately prior  to  the appointed date. As such the  Bank  could  not treat  them as existing officers for the purpose of  fitment or giving a higher scale of pay. [128D-F; B]     3.1  Repugnancy of the definition of any term  my  arise only  if such definition does not agree with the subject  or context  of  a particular provision. But any action  not  in conformity with the provision of the definition clause  will not render the definition of a term repugnant to the subject or  context of any provision of the statute containing  that term. [129BC]     3.2  In the instant case, there is no ambiguity  in  the definition  of  ’existing officers’, as given  in  paragraph 3(h)  of  the Order, nor is it in any way repugnant  to  the subject or context of paragraphs 7 and 8. If the  Probation- ary/Trainee  Officers are treated as ’existing officers’  it would be doing violence to the provision of paragraph  3(h). [129B; A]     4.  The definition of ’existing officers’  in  paragraph 3(h)  does  not  give any illustration  whatsoever.  On  the contrary, it is quite specific and points to only one  class of officers who were in the service of the Bank  immediately prior to the appointed date and to whom any of the rules, as mentioned in that paragraph were applicable. [129D]  5.  All the officers of the Bank at the lower level  before the Probationary or Trainee Officers were appointed on 30/31 October,  1979 had agreed that they would merge into  a  new grade, and Officers Grade-I would be senior to the  Officers Grade-ii. When two grades of officers are merged into a  new grade,  the  question of inter  se  seniority  automatically arises and casts a duty on the employer to fix the  seniori- ty. Paragraph 18(5) of the Order lays down that the seniori- ty among the existing officers will remain the same, that b, the  Officers Grade-I will remain senior to Officers  Grade-

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 16  

II.  Therefore, it cannot be said that the merger  was  only for  the purpose of fitment in the higher scale and not  for purposes of seniority. [130B-D; 129F]     6. The question is not whether the  Probationary/Trainee Officers  have  to undergo more stringent  tests   than  the tests  to be undergone by Grade-H Officers, but whether  the Probationary/Trainee Officers were existing officers or not, that  is to say, whether they were in the employment of  the Bank immediately prior to October 1, 1979. As they were  not existing  officers, they could not claim seniority over  the Officers of Grade-II. [130FG]            119     7.1 Unless the statute, under which the rules are framed by  the rule making authority, does not specifically  autho- rise  the  making of rules with retrospective  effect,  such authority  cannot frame any role with retrospective  effect. [130H- 131A]     Cannanore  Spinning and Weaving Mills Ltd. v.  Collector of Customs and Central Excise, Cochin, & Ors., [1970] 2  SCR 830;  Income-Tax Officer, Alleppey v. M.C. Ponnoose &  Ors., [1970] 1 SCR 678; Hukam Chand etc. v. Union of India & Ors., [1973] 1 SCR 896 and Regional Transport Officer, Chittoor, & Ors. v. Associated Transport Madras (P) Ltd. & Ors.,  [1980] 4 SCC 597, referred to.     7.2  In  the instant case, it cannot be  said  that  the Order was retrospective in operation. All that has been done by  it is that the Officers Grade-I and Grade-II in the  em- ployment  of the Bank immediately prior to October  1,  1979 have  been merged into one category, namely, Junior  Manage- ment  Grade.  Although the Order was actually  published  on December  19, 1979, the Officers of the Bank who were  there on  or before October, 1, 1979 were aware of the  fact  that the  Order would be given effect to from October 1, 1979  as agreed to between the Bank and the Officers’ Federation. The appointed date is relevant for the purpose of  applicability of  the  Order to the Officers who have been  there  in  the service of the Bank immediately prior to the appointed date. [131E; C; 132G-133A]     V.T.  Khanzode & Ors. v. Reserve Bank of India  &  Anr., [1982] 4 SCR 411 and Reserve Bank of India v. C.N.  Sahasra- naman, [1986] Suppl. SCC 143, referred to.     8. The distinction in the status of Officers Grade-I and Grade-II  having been abolished in the instant case,  it  is apparent that the Probationary/Trainee Officers being  Offi- cers of Grade-I were of the same status and position as  the Officers of Grade-II. Admittedly, the erstwhile Officers  of Grade-H    were    appointed   much   earlier    than    the Probationary/Trainee  Officers. They cannot,  therefore,  be considered  senior  to  the  erstwhile  Officers   Grade-II. [134G-135AB]     9.  The  Probationary/Trainee  Officers  have  not  been brought  within  the  purview of the new  cadre,  viz.,  the Junior Management Grade since no order has been passed under paragraph  2(1) of the Order applying the same to  them.  As they  are  not in the Junior Management Grade,  which  is  a completely  different  cadre, they have no locus  standi  to challenge any benefit conferred on the Officers of the 120 Junior   Management  Grade  comprising  erstwhile   Officers Grade-I  and Officers Grade-II as were in the employment  of the Bank prior to October 1, 1979. [134F; CD; 135C]

JUDGMENT:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 16  

   CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 4 125-28 of 1986.     From  the  Judgment  and Order dated 3.1.  1986  of  the Allahabad High Court in Writ Petition No. 422 of 1981, 5900, 4207 and 5899 of 1985. With Special Leave Petition (Civil) No. 3371 of 1982.     From the Judgment and Order dated 22.4.1981 of the  High Court of Delhi in Civil Writ Petition No. 823 of 1981. S.S.  Sharma  for the Appellants in C.A. Nos.  4  125-28  of 1986.     Soli J. Sorabjee and Mrs. Madhu Sikri for the  Petition- ers in S.L.P- No. 3371 of 1982.     S.N.  Kacker and R.B. Mehrotra for Respondent No.  1  in C.A. No. 4 125 of 1986.     S.P. Gupta and R.B. Mehrotra for Respondent Nos. 2 to 26 in C.A. No. 4 125 of 1986.     Shanti  Bhushan  and R.P. Kapur for the  Respondents  in S.L.P. No. 337 1 of 1982. The Judgment of the Court was delivered by     DUTT,  J. In these appeals by special leave and  in  the Special Leave Petition the dispute relates to the  seniority of erstwhile Officers Grade-II and the  Probationary/Trainee Officers in the Grade-I of the State Bank of India.     In  the  lower level, the State Bank of  India  had  two categories  of officers, namely, Officers Grade-I and  Offi- cers Grade-II; the function of the former was managerial and that of the latter supervisory. The conditions of service of these two categories of officers were, admit- 121 tedly,  governed  by the State Bank  of  India  (Supervising Staff)  Service Rules, hereinafter referred to as ’the  1975 Rules’.     The  1975  Rules were not framed under the  rule  making power  of the Government, as conferred by section 49 of  the State  Bank of India Act, but under section 43 of  the  Act, sub-section(1)  of  which provides that the State  Bank  may appoint  such number of officers, advisers and employees  as it  considers necessary or desirable for the efficient  per- formance  of  its  functions, and determine  the  terms  and conditions  of their appointment and  service.  Sub--section (2)  of section 43 provides that the officers, advisers  and employees  of the State Bank shall exercise such powers  and perform  such  duties as may, by general special  order,  be entrusted or delegated to them by the Central Board.     Although the Officers Grade-I were superior in ’rank  to the  Officers Grade-II, there was little difference  in  the pay scales of these two categories of officers. The  duties, which were to be performed by Officers Grade-I and  Officers Grade-II,  were  also similar in nature.  Indeed,  with  the expansion  of  the: banking activities, a  large  number  of Officers  Grade-II  were  required,  to  perform  managerial duties  which normally were performed by  Officers  Grade-I. The Officers’ Federation of the State Bank of India compris- ing  both Officers Grade-I and Grade-II had  been  demanding the  abolition of the distinction between these two  Grades. The  Bank,  however,  had been  successfully  resisting  the demand  made by the Officers’ Federation from time to  time. The  Federation  had, at one time started taking  resort  to agitational method in order to force the Bank to abolish the theoretical  distinction between Officers Grade-I and  Offi- cers Grade-II.     In the mean time, another external factor had crept into the  situation.  The Government had appointed  a  Committee, known  as  Pillai Committee, for considering a  question  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 16  

standardisation of pay and allowances of the officers  staff in  the nationalised Banks. After the Pillai  Committee  had submitted its report, the Government declared its  intention to apply the recommendations of the Pillai Committee to  the State  Bank of India as well. According to  the  recommenda- tions  of  the  Pillai Committee, there should  not  be  any distinction  between  Officers  Grade-I  and  Grade-II.  The Committee  recommended  four  Grades for  officers  and  had provided for only one scale at the junior management  level. Four Grades of officers are as follows:- 1. Top Executive Grade. 122 2. Senior Management Grade. 3. Middle Management Grade. 4. Junior Management Grade. After proposals and counter-proposals between the  Executive Committee  of the Central Board of the State Bank  of  India and  the  Officers’ Federation, the Committee agreed  to  do away  with  the  distinction between  Officers  Grade-I  and Grade-II, who would be placed in a new cadre, called  Junior Management Grade, having a scale of pay being   Scale-I--Rs. 700-40-900-50-1100-EB- 1200-60-1800.  It  was further agreed that  the Officers Grade-II would be junior to the  existing Officers  Grade-I and the seniority list would  be  prepared accordingly.      After the said agreement was reached between the Execu- tive  Committee  of the Central Board of the State  Bank  of India  and the Officers’ Federation, the Central  Board,  in exercise  of  the  powers conferred by  sub-section  (1)  of section 43 of the State Bank of India Act, passed an  order, called State Bank of India Officers (Determination of  Terms and  Conditions  of  Service) Order, 1979,  for  short  ’the Order’, determining certain terms and conditions of  service of officers in the Bank. Some of the provisions of the Order which are relevant for our purpose are extracted below:-                          "1.(1)This  order  may  be   called               State Bank of India Officers (Determination of               Terms and Conditions of Service) Order, 1979.                          (2)  This  order  shall  come  into               force on the 1st day of October 1979.                         2. (1) This order shall apply to the               existing  officers  of the Bank  and  ’to  the               officers  of  the Bank who  are  appointed  or               promoted  to  any of the grades  mentioned  in               paragraph 4 and to such other employees of the               Bank to whom it may be made applicable by  the               Central  Board or the Executive  Committee  or               the  competent  authority to  the  extent  and               subject to such conditions as it may decide.                         (2)  It shall not apply,  except  to               the  extent specified by the Central Board  or               the Executive Committee or the                123               competent authority, to an officer during  his               tenure of service outside India or to  employ-               ees  engaged in any country outside India  and               serving there.                   3. In this order, unless there is anything               repugnant to the subject or context--               (a)  "Appointed  Date" means the  1st  October               1979; .................................................... .................................................... ................................................... ................

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 16  

                (h) "Existing Officers" means all  officers               in  the service of the Bank immediately  prior               to  the appointed date and to whom any of  the               following  sets  of  Rules as  amended  or  as               deemed  to  have been amended  by  appropriate               resolutions of the Central Board or the Execu-               tive Committee are applicable, namely:-               (i) Rules governing the service of Officers in               the Imperial Bank of India;               (ii) Rules governing the service of Assistants               in the Imperial Bank of India; and               (iii) State Bank of India (Supervising  Staff)               Service Rules;                   4.  (1) There shall be the following  four               grades  for  officers with the scales  of  pay               specified against each of the grades:- (A) Top Executive Grade:   Special Scale     --  Rs.3500 (fixed)   Scale VII         --  Rs. 3250-125-3500   Scale VI          --  Rs.3000- 125-3250 124 (B) Senior Management Grade:         Scale V          --  Rs .2500-100-3000         Scale IV-A       --  Rs.2300-100-2600         Scale IV         --  Rs. 2000-100-2400 (C) Middle Management Grade:         Scale III         --  Rs. 1800-75-2250         Scale II          --   Rs. 1200-70-1550-75-2000 (D) Junior Management Grade:         Scale           --  Rs.700-40-900-50-1100-                             EB- 1200-60-1800                         (2)  Notwithstanding  anything  con-               tained  in  subparagraph (1),  a  Probationary               Officer  and a Trainee Officer shall,  on  ap-               pointment, be placed at the stage of Rs.860 in               Scale I in the Junior Management Grade. .................................. .................................. ..................................                         7.  Subject  to  the  provisions  of               paragraph 6, existing officers serving in  the               grades and scales of pay mentioned in column 1               of the table given in Schedule I to this order               shall  be placed as on the appointed  date  in               the grade and scale specified there against in               column 2 of the said schedule.                         Provided  that any  difficulties  or               anomalies  arising out of the above  placement               shall  be  referred  to a  committee  of  such               persons  as the Chairman of the Bank  may  ap-               point  and the decision of that  committee  in               this regard shall be final.                         8. (1) Every existing officer placed               in any of the new grades and scales of pay  in               accordance  with paragraph 7, shall be  fitted               at  such stage in the new scale of pay  corre-               sponding  to the existing grade and  scale  as               specified in Schedule II to this order.                125                        (2) Subject to sub-paragraph (3),  on               being so fitted in the new scale of pay,  such               officer  shall  be eligible to draw  the  next               increment-,  if any, in such new scale on  the               first day of the month in which he would  have               been  eligible to draw increment in  terms  of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 16  

             the  provisions  in this behalf prior  to  the               appointed date.                        (3) Where two or more officers having               different  seniority  in  the  scales  of  pay               immediately  before  the  appointed  date  are               fitted  at the same stage in the new scale  of               pay,  different  months may be fixed  for  the               eligibility  of  such officers  for  the  next               increment in the new scale of pay.                        (4)  The  mere fact that on  the  ap-               pointed  date an officer happens to be  posted               in  a post categorised as that of a  grade  or               scale  higher  than  the one in  which  he  is               placed  in  accordance with the  provision  of               paragraph  7 will not by itself  entitle  that               officer to any higher placement or fitment."     The Order was actually made and published on 19th Decem- ber, 1979. but in view of paragraph 1(2) it came into  force on the first day of October, 1979. Under paragraph 2(1),  it is  inter  alia provided that the Order shall apply  to  the existing  officers of the Bank and to such employees of  the Bank  to  whom it may be made  applicable.  Under  paragraph 3(h), the expression "existing officers" has been defined as meaning all officers in the service of the Bank, immediately prior  to  the appointed date, that is to  say,  October  1, 1979. Thus, it follows prima facie that the Order will apply only  to  the existing officers, that is, the  officers  who were  in  the service of the Bank immediately prior  to  the appointed date, which is October 1, 1979. It is not disputed that  no Order has been passed by the Central Board  or  the Executive Committee or the competent authority directing the application of the Order to employees of the Bank other than the existing officers, as provided in paragraph 2(1).     Before the Order was made and published on December  19, 1979,  certain  Probationary Officers and  Trainee  Officers were  appointed  by the Bank in Grade-I on  October  30  and October 31, 1979. These Probationary/Trainee Officers, being Officers in Grade-I were, on the dates they were  appointed, superior in rank to the Officers Grade-II. These  Probation- ary/Trainee  Officers were fitted to the  Junior  Management Grade: Scale-I, after the Order was passed ereat- 126 ing  such a Grade at Rs.960 p.m. with effect from  30/31-10- 1979. These Probationary/Trainee Officers, however,  claimed that  they were seniors to the erstwhile  Officers  Grade-II and that they should be placed above such Officers  Grade-II in the seniority list. As the Bank had refused the claim  of these  Probationary/Trainee Officers, to seniority over  the erstwhile Officers Grade-II in the Junior Management  Grade, some of them filed writ petitions before the Allahabad  High Court and some before the Delhi High Court. The Bank, howev- er,  opposed the writ petitions and contended that  as  they were not the existing officers, that is to say, employees of the  Bank on October 1, 1979, which is the  appointed  date, they  could  not be given the seniority over  the  erstwhile Grade-II Officers, who were the existing officers within the meaning of the expression under paragraph 3(h) of the Order.     The  Allahabad  High Court has taken the view  that  the expression  "existing officers" has to be read as  including the Probationary Officers and Trainee Officers, otherwise  a repugnancy between the definition of "existing officers" and the  provisions  of  paragraphs 7 and 8 of  the  Order  will arise.  Further, it has been held that the notional date  of the  coming into force of the Order, namely,  1-10-1979,  is only  to protect the emoluments of the officers and  nothing

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 16  

else.  In that view of the matter, the Allahabad High  Court directed  the  Bank  to prepare the seniority  list  of  its officers in the light of the observations made in the  judg- ment.  Although  it was not specifically directed  that  the Probationary/Trainee  Officers  should be placed  above  the officers  in the erstwhile Grade-II in the  seniority  list, yet  that  would follow from the findings made by  the  High Court.     On the other hand, the Delhi High Court took a  contrary view  and dismissed the writ petitions. Though according  to the Allahabad High Court, the Probationary/Trainee  Officers should be placed above the erstwhile officers in the  Grade- II,  according to the Delhi High Court they would be  placed below the Officers in the Grade-II. Hence, these Appeals  by the  State Bank of India and the Special Leave  Petition  by the Probationary/Trainee Officers.     Mr.  Kacker, learned counsel appearing on behalf of  the Probationary/Trainee Officers, has urged that the  Allahabad High Court was justified in holding that the writ  petition- ers appointed as Probationary/Trainee Officers on  30/31-10- 1979,  should be considered as the existing officers  within the meaning of paragraph 3(h) of the Order. It is  submitted by him that the Bank itself had treated them as  127 existing  officers.  In  support  of  that  contention,  the learned counsel has drawn our attention to the fact that the Bank had fitted the Probationary/Trainee Officers  appointed on 30/31-10-1979 to the Junior Management Grade: Scale-I  at Rs.960 p.m. Such fitment, according to the learned  counsel, was made under paragraphs 7 and 8 of the Order.     Paragraph  7  provides  for the  placement  of  existing officers  on the appointed date in the corresponding  grades and  scales.  It lays down, inter alia,  that  the  existing officers  shall  be placed as on the appointed date  in  the grade  and scale specified in column 2 of Schedule  I.  Item No.  9  of column 2 specifies the Junior  Management  Grade: Scale-I. Paragraph 8(1) provides that every existing officer placed in any of the new grades and scales of pay in accord- ance with paragraph 7, shall be fitted at such stage in  the new  scale  of pay corresponding to the existing  grade  and scale  as specified in Schedule II to the Order. It  appears that by a circular dated June 24, 1980, the following direc- tions were given by the Chief General Manager, State Bank of India:-               "Officers  who were promoted on or  after  the               1st October 1979 but upto 31st December  1979,               should  be  first fitted in the old  scale  in               terms of the then existing formula and  there-               after their basic pay should be refixed in the               new scale for Junior Management Grade Scale  I               in accordance with the table given below: Basic pay in the     Basic pay in the    Basic pay in the old clerical scale   old officer’s scale junior manageme-                                          nt G.S.I on the                                          date of promotion ---------------------------------------------------------- Upto   350                      500          950        370                      540          1000        390                      540          1000        420                      580          1200        450                      620          1200        480                      665          1260        515                      710          1320        550                      755          1380               The  basic  pay of Probationary  Officers  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 16  

             Trainee Officers who were appointed during the               period  1st  October 1979 to  3  1st  December               1979, will also be fixed on the same basis. " 128     It  is submitted on behalf of  the  Probationary/Trainee Officers  that it is clear from the said circular that  they were also treated as existing officers, otherwise they could not be given the same benefit as the other existing officers of the Bank.     The  existing  officers, as defined in  paragraph  3(h), means  all officers in the service of the  Bank  immediately prior    to    the   appointed   date.    Admittedly,    the Probationary/Trainee Officers were not in the service of the Bank  immediately  prior  to the appointed  date,  that  is, October  1, 1979. They cannot, therefore, be held to be  the existing  officers  in  the face of the  definition  of  the expression in paragraph 3(h) of the Order.     It  is difficult to accept the contention of the  Proba- tionary/ Trainee Officers that they were treated by the Bank as existing officers merely because they were fitted to  the Junior Management Grade: Scale-I and given a higher start at Rs.960 p.m. It is incorrect to say that when an employee  is fitted  to  a particular scale of pay of another  cadre,  he does not become a member of that cadre. In the instant case, the Probationary/Trainee Officers were placed in the  corre- sponding  scales of pay in the Junior Management  Grade  for the purpose of fitment in the new scales of pay. Indeed,  as stated  already, they were fitted to the  Junior  Management Grade:  Scale-I at Rs.960 p.m. It may be that  such  fitment has  been made by the Bank following the principles as  laid down in paragraphs 7 and 8 of the Order, presumably with  a- view to removing any disparity between Officers Grade-I  and Officers  Grade  II in the Junior Management Grade,  but  it will be difficult to accept the contention made on behalf of the Probationary/Trainee Officers that they were treated  as existing officers and such fitment was made under paragraphs 7  ’and  8 of the Order. The  Probationary/Trainee  Officers appointed  on 30/31-10-1979, that is, after  1-10-1979,  the appointed date, are not existing officers within the meaning of paragraph 3(h) of the Order and the Bank could not  treat them  as such for the purpose of fitment or giving a  higher scale of pay.     We are unable to subscribe to the view of the  Allahabad High Court that unless the expression "existing officers" is read  as including the Probationary/Trainee Officers,  there will  be  a repugnancy between the  definition  of  existing officers, as contained in paragraph 3(h), and the provisions of paragraphs 7 and 8 of the Order. This view of the Allaha- bad  High Court proceeds on the assumption that  the  Proba- tionary/Trainee  Officers having been given the  benefit  of extra  emoluments by fitting them in the  Junior  Management Grade: Scale-I,             129 they  were treated as existing officers. In our opinion,  if the  Probationary/Trainee Officers are treated  as  existing officers.  it  will be doing violence to the  provisions  of paragraph  3(h)..We do not think that the definition of  the expression  "existing officers", as given in paragraph  3(h) is, in any way, repugnant to the provisions of paragraphs  7 and 8 of the Order. On the contrary, it is quite in  harmony with  the said provisions and also the other  provisions  of the  Order.  There  is no ambiguity  in  the  definition  of "existing  officers" and in regard to paragraphs 7 and 8  of the  Order there is no repugnancy of the definition  to  the subject or context. Repugnancy of the definition of any term

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 16  

may  arise only if such definition does not agree  with  the subject  or context of a particular provision. But,  surely, any  action  not  in conformity with the  provision  of  the definition  clause will not render the definition of a  term repugnant to the subject or context of any provision of  the statute  containing the term. We are also unable  to  accept the convention of Mr. Kacker that the definition of  "exist- ing  officers" is only illustrative and not  exhaustive  and that such narrow definition does not fit in everywhere.  The definition does not give any illustration whatsoever, and it is  wrong to submit that the definition is illustrative.  On the contrary, the definition trader paragraph 3(h) is  quite specific and points to only one class of officers, that  is, the officers who were in the service of the Bank immediately prior to the appointed date and to whom any of the rules, as mentioned  in that paragraph, are applicable. In  our  view, therefore,  the Probationary/ Trainee Officers appointed  on 30/31-10-1979,  that is, after the appointed date,  are  not existing officers.     In  this connection, we may notice the argument  of  Mr. Gupta,  learned counsel appearing on behalf of some  of  the Probationary/ Trainee Officers, that the merger of  Officers Grade-II  and Grade-I into the Junior Management  Grade  was only  for the purpose of fitment in the higher scale of  pay and  not for the purpose of seniority. It has  been  already stated  that it was the demand of the Officers’  Federation, representing  both Officers Grade-I and  Officers  Grade-II, that  the  distinction between these two  Grades  should  be abolished  in every. respect and, ultimately, it was  agreed that they would be placed in one grade, that is, the  Junior Management  Grade, having a higher scale of pay, subject  to this  that the Officers Grade-I will be above  the  Officers Grade-II in the seniority list. It appears from the Circular No.  9 issued by the Officers’ Federation, that  the  Pillai Committee’s  recommendations  would be  implemented  in  the State  Bank Group from October 1, 1979. Thus, it was  agreed by  the  Officers’  Federation that a  scheme,  namely,  the merger of Officers Grade-I and Officers Grade-II into 130 Junior  Management Grade would take place with  effect  from October 1, 1979 and that has been exactly given effect to by the  Order under which the existing Officers, that  is,  the officers who were in the employment of the Bank  immediately prior to October 1, 1979, would be placed in the new  Junior Management Grade and to Scale-I, as contained in Schedule  I to the Order. In paragraph 2(1) of the Order, provision  has been  made for the application of the Order to  other  offi- cers. Thus, it is clear that all the officers of the Bank in the lower level before the Probationary or Trainee  Officers were appointed on 30/31-10-1979 agreed that they would merge into a new Grade and Officers Grade-I would be senior to the Officers  Grade-II. This was the result of  the  recommenda- tions  of the Pillai Committee suggesting that there  should be  one grade for the Officers Grade-I and II in  the  lower level.  It  may be that Pillai Committee did  not  make  any recommendation with regard to seniority, but when two grades of  officers  are merged into a new grade, the  question  of inter  se seniority will automatically arise and it will  be the  duty  of  the employer to fix  the  seniority.  Indeed, paragraph  18  of  the Order lays down  the  principles  for computing  the seniority of the officers of the  Bank.  But, under paragraph 18(5) of the Order, the seniority among  the existing officers will remain the same. In other words,  the Officers Grade-I will remain seniors to Officers Grade-II.     Another  contention that has been made by Mr. Gupta  for

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 16  

the  Probationary\Trainee  Officers is that  these  officers have  to  undergo tests which are more  stringent  than  the tests to be undergone by the Grade-II Officers and, as such, the Probationary/Trainee Officers, though they were appoint- ed on 30/31-10-1979, should not be placed under the Officers Grade-II in the seniority list. This, in our opinion, is  an argument in despair. The question is not whether the  Proba- tionary/  Trainee  Officers have to undergo  more  stringent tests  than the tests to be undergone by the Grade-II  Offi- cers,  but the question is whether the  Probationary\Trainee Officers  are  existing  officers or not, that  is  to  say, whether they were in the employment of the Bank  immediately prior to October I, 1979. As the Probationary/Trainee  Offi- cers are not existing officers, they cannot claim  seniority over the Officers Grade II, who are existing officers.     It  is next contended that the Bank had no authority  to give  retrospective operation to the Order with effect  from October 1, 1979, inasmuch as section 43 of the State Bank of India  Act under which the Order has been passed,  does  not authorise the Bank to pass any such Order with retrospective effect. It is now well settled that unless the  131 statute, under which the rules are flamed by the rule making authority,  does  not specifically authorise the  making  of rules with retrospective effect, such authority cannot frame any rule with retrospective effect. (See Cannanore  Spinning and  Weaving Mills Ltd. v. Collector of Customs and  Central Excise, Cochin & Ors., [1970] 2 SCR 830; Income-Tax Officer, Alleppey  v.M.C.  Ponnoose & Ors., [1970] 1 SCR  678;  Hukam Chand  etc. v. Union of India & Ors., [1973] 1 SCR  896  and Regional  Transport Officer, Chittoor, & Ors. v.  Associated Transport Madras (P) Ltd. & Ors., [1980] 4 SCC 597).     Mr. Shanti Bhushan, learned counsel appearing on  behalf of  the State Bank of India, however, submits that  the  im- pugned  Order has not been made retrospective, as  contended on behalf of the Probationary/Trainee Officers. All that has been  done  by the Order is that the  Officers  Grade-I  and Grade-II have been merged into one category, namely,  Junior Management  Grade  with effect from October 1,  1979.  These Officers  were already employees of the Bank before  October 1, 1979 and, as such, they are existing officers within  the meaning  of  paragraph  3(h) of the Order.  Further,  it  is submitted by him that the Bank after considering the  injus- tice done ’to the Officers Grade-II numbering about  15,000, sought  to  remove the same by  abolishing  the  distinction between  Officers Grade-I and Officers Grade-II in terms  of the recommendations of the Pillai Committee by the  impugned Order with effect from October 1, 1979. It may be that there was some delay in publishing the decision of the Bank,  that is,  the  Order,  but it cannot be said that  the  Order  is retrospective in operation.     Mr.  Shanti Bhushan points out that in V.T.  Khanzode  & Ors. v. Reserve Bank of India & Anr., [1982] 4 SCR 411  this Court  upheld the decision of the Reserve Bank of  India  as regards  the introduction of common  seniority,  inter-group and mobility amongst different grades of officers  belonging to Group-I, Group-II and Group-III with retrospective effect from  May  22,  1974. In that case,  officers  belonging  to Group-I urged that the scheme should be brought into  effect from January 1, 1976, while those belonging to Groups-II and III wanted the scheme to be brought into effect from January 1,  1970.  The Central Board of the Reserve  Bank  struck  a balance by choosing the date May 22, 1974. Chandrachud, C.J. delivering  the judgment of the Court held that it  was  the best solution in the peculiar circumstances of the case  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 16  

that in order to rectify the imbalances and anomalies caused by  the compartmental-wise and group-wise seniority, it  was necessary  to  give  retrospective effect  to  the  combined seniority list. Further, it has been 132 observed by the learned Chief Justice that no scheme govern- ing service matter can be fool-proof and some section or the other  of employees is bound to feel aggrieved on the  score of  its  expectations  being falsified or  remaining  to  be fulfilled. Mr. Shanti Bhushan has also placed reliance  upon the observation of Sabyasachi Mukharji, J., in Reserve  Bank of India v. C.N. Sahasranaman, [1986] Suppl. SCC 143. It has been  observed  by Mukharji, J that whether there  has  been denial of equality or any constitutional right infringed  or not  cannot be published where interests of large number  of people  are concerned, in judged the abstract.  Further,  it has been observed that in service jurisprudence there cannot be  any  service  rule which would satisfy  each  and  every employee  and  its  constitutionality has to  be  judged  by considering whether it is fair, reasonable and does  justice to the majority of the employees.     Relying  upon the above two decisions of this Court,  it is  submitted on behalf of the State Bank of India  that  in the instant case also a large number of employees,  particu- larly  the  Officers Grade-II numbering about  15,000,  have been  benefitted.  Indeed, justice has been  done  to  these 15,000 employees as agreed to by the Officers’ Federation of the Bank comprising both Officers Grade-I and Officers Grade II.  Counsel submits that existing officers have been  given the  benefit  of the Junior Management Grade:  Scale-I  with effect  from 1.10.1979. So, the Order was also given  effect to  from that date, which is the appointed date. It is  sub- mitted  that the Order has been given effect to  from  1-10- 1979  in the interest of a large number of employees of  the Bank. The Probationary/Trainee Officers, who are only 900 in number and appointed on 30/31-10-1979, have no locus  standi to challenge the Order or the merger of Officers Grade-I and Officers  Grade-II in one cadre, namely,  Junior  Management Grade, as per the recommendations of the Pillai Committee.     It  is not disputed that negotiations had been going  on between the Bank and the Officers’ Federation as to how  and in  what manner the recommendations of the Pillai  Committee accepted  by the Government would be given effect to.  Ulti- mately,  it  was decided that the recommendations  would  be given effect to from 1-10-1979 by merging the two categories of officers who were in the employment of the Bank,  immedi- ately  prior  to 1-10-1979 into one  category,  namely,  the Junior  Management  Grade. Although the Order  was  actually published  on December 19, 1979, the officers of  the  Bank, who  were there on or before October 1, 1979, were aware  of the fact that the Order would be given effect to from  Octo- ber 1, 1979, as agreed to between  133 the Bank and the Officer’s Federation. The appointed date is relevant  for the purpose of applicability of the  Order  to the officers, who had been there in the service of the  Bank immediately prior to the appointed date.     Mr.  Soli Sorabjee, learned counsel appearing on  behalf of  the petitioners in the Special Leave Petition No. 337  1 of  1982, has drawn our attention to a telex  message  which has  been  communicated to all the  petitioners  instructing them to complete their formalities and to join the duty well before  October  31, 1979 in their own  interest.  Telegrams were also sent to the petitioners to the following effect:-               "Reference  to your selection as  Probationary

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 16  

             Officer  and  our communications  to  you  for               immediate completion of necessary formalities.               We  reiterate  that  the  Pillai   Committee’s               recommendations  are likely to be  implemented               shortly.  If  you  join  after  implementation               thereof, you shall be governed by the  revised               terms  of service and salary scales.  You  are               advised  in your own interest to complete  the               remaining formalities viz., (1) acceptance  of               our  offer by 20th October, 1979 and be  ready               to join duty around 25th idem at the place  to               be  intimated to you after completion of  for-               malities, failing which the risk of change  in               the salary structure and other conditions will               be yours."     From  the telex and telegraph messages, it is  contended that  they show that the Bank had decided to give effect  to the  Order with effect from 30/31-10-1979. We are unable  to accept this contention. There is no indication in the  telex or  telegram  that the Order will be given  effect  to  from October  30/31, 1979. The telegram really mentions  that  if the petitioners join after implementation of the recommenda- tions of the Pillai Committee, they will be governed by  the revised  terms of service and salary scales. Indeed, it  has been  already  noticed  that after the  appointment  of  the Probationary/Trainee  Officers on 30/31-10-1979,  they  were fitted  to the Junior Management Grade: Scale-I and given  a higher  start at Rs.960 p.m. The telex and the  telegram  to which our attention has been drawn, do not seem to be of any consequence  to the Probationary/Trainee Officers  and  does not  at  all  support their contention that  the  Order  was intended to be given effect to from 30/31-10-1979.     It  is next contended by the learned counsel.  appearing on  behalf  of the Probationary/Trainee Officers,  that  the impugned Order takes 134 away    the    vested   fight   of    seniority    of    the Probationary/Trainee Officers with retrospective effect.  In elaboration of the contention, it is pointed out that on the day  these  Probationary/Trainee  Officers  were  appointed, namely,  on  October  30/31-10-1979,  they  were  admittedly seniors  to  the Officers Grade-II. This  seniority  of  the Probationary/Trainee Officers has been taken away by  giving retrospective  operation to the Order. It is submitted  that the  Bank has no authority to take away the vested right  of seniority  of the Probationary/Trainee Officers with  retro- spective  effect. On the other hand, it is contended by  Mr. Shanti  Bhushan, learned counsel appearing on behalf of  the State  Bank  of India, that there is no question  of  vested right  to  seniority.  Seniority is relevant  only  for  the purpose of promotion. A right to be considered for promotion is  a  vested right, but a mere chance of promotion  is  not such  a right. It is submitted that the right of the  Proba- tionary/Trainee Officers to be considered for promotion  has not been affected in the least by the Order, nor have  their chances  of promotion been affected. Moreover, no order  has been  passed under paragraph 2(1) of the Order applying  the same  to the Probationary/Trainee Officers.  These  Officers are outside the purview of the Junior Management Grade  and, as  such, they are precluded from challenging the  seniority of  the  erstwhile Officers Grade-II, now placed in  a  com- pletely  different category. In other words, it is the  con- tention   of   the   State   Bank   of   India   that    the Probationary/Trainee  Officers, who have been  appointed  on 30/31-10-1979  as  Officers Grade-I,  cannot  challenge  any

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 16  

benefit  that  is conferred on the officers of  a  different cadre, namely, the Junior Management Grade.     It  is not necessary for us to decide whether  there  is any    vested    right   to   seniority    or    not.    The Probationary/Trainee  Officers have not been brought  within the purview of the new cadre, that is, the Junior Management Grade.  Indeed, it is the complaint of the learned  counsel, appearing  on behalf of these Officers, that they have  been totally  ignored by the Order inasmuch as no  provision  has been  made about them in the Order. We have already  noticed that it was the contention of the Officers’ Federation  that there  should not be any distinction in the status of  Offi- cers  Grade-I and Officers Grade-II. It was urged that  such distinction should be abolished and both these categories of officers should be placed in one category so that they  have the  same status and position. The State Bank of  India  ac- cepted  the demand of the Officers’ Federation and the  dis- tinction  has  been removed. In these circumstances,  it  is apparent  that  the  Probationary/  Trainee  Officers  being Officers Grade-I, are of the same status and position as the Officers Grade-II. Admittedly, the erstwhile Officers 135 Grade-II    were   appointed   much   earlier    than    the Probationary/Trainee Officers, who were the writ petitioners in the High Courts. Although they had to perform almost  the same  duty and there was no difference between  their  posi- tions,  they  had to suffer an  artificial  distinction  and placed below the Officers Grade-I, who were considered to be superior  in rank to the Officers Grade-II. After  the  Bank had decided that both these two categories of officers  were same  in status and position and such decision  having  been implemented,  we are afraid, it is difficult to  accept  the contention made on behalf of the Probationary/Trainee  Offi- cers that they should be considered senior to the  erstwhile Officers Grade-II.     Moreover, there is some force in the contention made  on behalf of the Bank that as the Probationary/Trainee Officers are not in the Junior Management Grade which is a  different cadre,  they have no locus standi to challenge  any  benefit conferred  on  the officers of the Junior  Management  Grade comprising erstwhile Officers Grade-I and Officers Grade-II, as  were in the employment of the Bank prior to  October  1, 1979.     It  is submitted by Mr. Shanti Bhushan that  the  Proba- tionary/ Trainee Officers, with whom we are concerned,  have not  been prejudiced in the least by the Order  having  come into force on and from October 1, 1979. The learned  counsel has  categorically stated before us that all these  officers will be included in the Junior Management Grade and an order in  that regard will be passed under paragraph 2(1)  of  the Order.  It  is  pointed out by him that  everybody  will  be considered for promotion from the Junior Management Grade to the  Middle Management Grade. Thus, even though  the  Proba- tionary/Trainee  Officers  are placed  below  the  erstwhile Officers  Grade-II,  they will be allowed to appear  at  the written  test,  one of the modes prescribed  for  promotion, along with others including the erstwhile Officers Grade II, provided  they  complete six years of  service  in  Grade-I. Apart from this, the Probationary/Trainee Officers have been fitted  to  the higher scale of pay in the  Scale-I  of  the Junior Management Grade, although they have not been formal- ly included in that Grade. In these circumstances, it cannot be  said  that the Probationary/Trainee Officers  have  been prejudiced by the Order. We are sure that the Bank will take immediate   steps   for   applying   the   order   to    the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 16  

Probationary/Trainee Officers. No other point has been urged on behalf of the parties. For  the  reasons aforesaid, the judgment of  the  Allahabad High  Court is set aside and the Civil Appeals are  allowed. The judgment of 136 the  Delhi  High  Court is affirmed and  the  Special  Leave Petition  is dismissed. All the Writ Petitions filed by  the Probationary/Trainee  Officers  are  also  dismissed.  There will,  however,  be  no order as to costs in  any  of  these Appeals or in the Special Leave Petition. P.S.S.                         Appeals  allowed  &  Petition dismissed. 137