Full Judgment Text
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PETITIONER:
STATE BANK OF TRAVANCORE
Vs.
RESPONDENT:
ELIAS ELIAS & ORS.
DATE OF JUDGMENT:
04/09/1970
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
BHARGAVA, VISHISHTHA
CITATION:
1971 AIR 143 1971 SCR (2) 28
1970 SCC (2) 761
CITATOR INFO :
D 1992 SC1100 (12)
RF 1992 SC1341 (12)
ACT:
Banking Regulation Act (10 of 1949), s. 45(5)(1)-Clause (ii)
of the first proviso-Scope of-Second proviso-Finality of
decision of Reserve Bank-Extends to what matters.
HEADNOTE:
The respondent was doing the duties of a civil agent in a
Bank. His duties were those of clerk and the salary paid to
him was that of a clerk. Pursuant to a scheme of
amalgamation prepared by the Reserve Bank under s.
45(4)(d)(ii) of the Banking Regulation Act, 1949, the Bank
was amalgamated with the State Bank of Travancore. The
respondent was admitted as an employee of the State Bank and
was allotted the duties of a ’civil agent’. But the State
Bank directed that ’civil agents should be treated as
’subordinate staff consisting of peons, watchmen and
sweepers, whose scale of remuneration was very much lower
than that of the clerical staff. He submitted
representations to the authorities which were rejected. The
Reserve Bank of India, to which the matter was referred
under s. 45(5) of the Act, held that the State Bank was
justified in placing the respondent in the subordinate cadre
which was a residual cadre in the State Bank.
On the question : (1) Whether the decision of the Reserve
Bank was final and binding under the second proviso to s.
45(5)(i); and (2) Whether the terms and conditions of the
respondent’s service were not affected by the classification
of his post in the subordinate cadre,
HELD : (1) The decision of the Reserve Bank whether the
qualifications and experience of any of the employees of a
transferor bank are the same as or equivalent to the
qualifications and experience of employees of corresponding
rank or status of a transferee bank is declared final by the
second proviso to s. 45(5)(i) of the Act. But finality is
not attached to any other matter. In the present case,
however, the Reserve Bank purported to determine that the
rank and status of civil agents working in the original Bank
corresponded with the rank and ’status of the subordinate
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cadre under the State Bank. That was a matter which could
not be referred to the Reserve Bank and, its decision
thereon was not final. [32 C-D; 33 A-D]
(2)Under cl. (ii) of the proviso to s. 45(5) (i), a
transferee bank must grant the same remuneration and same
terms and conditions of service as are applicable to
employees of corresponding rank or status of the transferee
bank subject to the qualifications and experience of the
employee being the same as or equivalent to those of such
other employees of the transferee bank. That is, a person
performing certain duties in a transferor bank when admitted
into the service of the transferee bank must be fitted in a
cadre which is equivalent in status and rank with the status
and rank of the employees in the transferor bank. In
grading him into the cadre of equivalent status and rank,
experience and qualifications may be taken into account,
but, the rank and status enjoyed by him in the transferor
bank cannot be ignored. [33 F-H; 34 A-D]
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In the present case, it was conceded that the respondent
satisfied the conditions as to rank, status and
qualifications of a clerk in the State Bank and it was only
contended that he did not have the requisite experience On
the ground of lack of experience the respondent could not be
deprived of his rank and status in the transferee Bank.
Also, the decision of the Reserve Bank that the subordinate
cadre was a residual cadre is not supported by any evidence.
Therefore, it was not open to the State Bank to fit the
respondent, who was performing the duties of a clerk in the
original bank, into a subordinate cadre manned by employees
performing duties, which are not clerical, but of peons and
the like. [33 D-F; 34 D]
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. ’1720 of
1968.
Appeal by special leave from the judgment and order dated
November 2, 1967 of the Kerala High Court in Writ Appeal No.
64 of 1966.
M.C. Chagla, P. C. Bhartari and J. B. Dadachanji, for
the appellant.
K. Jayaram, for respondent No. 1.
Niren De, Attorney General and I. N. Shroff, for respondent
No. 2.
The Judgment of the Court was delivered by
Shah, J. K. E. Elias-first respondent herein-was an employee
of the Orient Central Bank Ltd. He was posted to do duty as
a "Civil Agent". The Orient Central Bank Ltd. was amal-
gamated with the Kottayam Bank Ltd. The amalgamated bank
was named the Kottayam Orient Bank Ltd.-hereinafter called
’the K. 0. Bank.’ The services of Elias were transferred to
the K. 0. Bank. Elias continued to perform the duties of a
"Civil Agent" of that Bank, and certain specific duties
relating to court cases were assigned to him by the K.O.
Bank. The K. 0. Bank issued a circular sanctioning the
salary and allowances payable to all its subordinate staff
under three heads-Assistants, Clerks and Peons. The salary
and allowances paid to the clerks were Rs.
46-2-50-3-80-EB-4-100 plus dearness allowance Rs. 20/-. No
separate scale was fixed for "Civil Agents" and it is common
ground that Elias was given the salary and allowances
payable to Clerks.
Pursuant to a scheme of malgamation prepared by the Reserve
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Bank under s. 45(4)(d)(ii) of the Banking Regulation Act 10
of 1949, the K. 0. Bank was amalgamated with the State Bank
of Travancore-hereinafter called the "State Bank". Under
that scheme, Elias was admitted as an employee of the State
Bank and he was allotted the duties of a "Civil Agent". To
fix the remuneration and the terms and conditions of the
employees under the State
30
Bank, the Board of Directors constituted a Committee to
assess the qualifications of all its employees. Pursuant to
a report received from the Committee, the State Bank
directed that the "Civil Agents" be treated as "subordinate
staff" and that their remuneration be refixed. The
"subordinate staff" consisted of peons, watchmen, sweepers
and employees with similar duties. Their scale of
remuneration was Rs. 28-2-86-1-96-EB-1-101. The scale of
remuneration of the clerical staff was Rs. 11 2-307.
Elias submitted a representation to the Deputy General Mana-
ger that in absorbing him in the subordinate staff he was
denied the statutory guarantee of remuneration and terms and
conditions of service. This representation was rejected by
the Deputy General Manager by letter dated October 19, 1963,
and Elias was informed that "having regard to his
educational qualifications and experience it had been
decided by the State Bank to place him in the subordinate
cadre." Elias made a representation to the General Manager
which was rejected on December 11, 1963 and he was informed
that the Bank was unable to grant his request for absorption
into the "clerical cadre".
Elias then moved a petition in the High Court of Kerala for
a writ of certiorari or other appropriate writ quashing the
orders dated October 19, 1963 and December 11, 1963, fixing
his rank ,in the cadre of subordinate staff. A Single Judge
of the High Court dismissed the petition. He observed that
since there was no post of "a Civil Agent" in the State
Bank, that Bank was competent to place Elias in the
subordinate cadre. The learned Judge also observed that,
having regard to the educational qualifications and
experience Elias was properly placed in the "subordinate
cadre", and no ground was made out to quash the fixation of
the rank and status based on an assessment of his
qualifications and experience.
Elias appealed to a Division Bench of the High Court. Dur-
ing the pendency of the appeal, the State Bank applied for
taking on record the decision dated September 15, 1967, of
the Reserve Bank of India, holding that the State Bank was
justified in not giving Elias the status of a clerk, and in
placing him in the residual classification of "subordinate
staff". This document was admitted on the record. The
Court in allowing the appeal observed that on a
consideration of the relevant circumstances, Elias was
entitled to the rank and status of a clerk under the State
Bank, and the order of the Reserve Bank being in violation
of the statutory provisions contained in the Banking
Regulation Act, 1949, the orders dated October 19, 1963 and
December 11. 1963 were liable to be set aside. This appeal
has been filed with special leave granted by this Court.
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Two contentions were urged by the State Bank in support of
the appeal:
(1)that the decision of the Reserve Bank
dated September 15, 1967, was final by virtue
of s. 45(5)(i) read with proviso (ii) of the
Banking Regulation Act X of 1949 and could not
be ignored by the Court; and
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(2)that the State Bank having assured to
Elias the remuneration which he was drawing, a
mere classification of his post in the
subordinate cadre did not affect the terms and
conditions of his service under the State
Bank.
Section 45 of the Banking Regulation Act, 1949, by sub-s.
(4) authorises the Reserve Bank in certain eventualities to
prepare a scheme for reconstruction of a banking company or
for amalgamation of the banking company with any other
banking institution. By sub-s. (5), insofar as it is
relevant, it is provided :
"The scheme aforesaid may contain provisions
for all or any of the following-matters,
namely
(i)the continuance of the services of all
the employees of the banking company (except
such of them as not being workmen within the
meaning of the Industrial Disputes Act, 1947,
are specifically mentioned in the scheme) in
the banking company itself on its recon-
struction, or, as the case may be, in the
transferee bank at the same remuneration and
on the same terms and conditions of service,
which they were getting or, as the case may
be, by which they were being governed, im-
mediately before the date of the order of
moratorium :
Provided that the scheme shall contain a
provision that--
(i).............................................
(ii)the transferee bank shall pay or grant
not later than the expiry of the aforesaid
period of three years, to the said employees
the same remuneration and the same terms and
conditions of service as are applicable to the
other employees of corresponding rank or
status of the transferee bank subject to the
qualifications and experience of the said
employees being the same as or equivalent to
those of such other employees of the trans-
feree bank
Provided further that if in any case under
clause (ii)of the first proviso any doubt
or difference arises as
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to whether the qualifications and experience
of any of the said employe s are the same as
or equivalent to the qualifications and
experience of the other employees of
corresponding rank or status of the transferee
bank, the doubt or difference shall be
referred to the Reserve Bank whose decision
thereon shall be final;"
In exercise of the authority under sub-ss. (4) & (5) of s.
45 of the Banking Regulation Act, 1949, the Reserve Bank
prepared a scheme under which employees under the K. 0. Bank
were transferred to the employment of the State Bank. The
terms of cl. (ii) ,of the first proviso to sub-s. (5) of s.
45 were expressly included in ,the scheme.
The decision of the Reserve Bank that the qualifications and
,experience of any of the employees of the transferor bank
are the same as or equivalent to the qualifications and
experience of the other employees of corresponding rank or
status of the transferee bank, is declared by the Act to be
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final. But finality is not attached to any other matter
decided by the Reserve Bank. The Reserve Elank by its
decision purported to determine that the rank and status of
the Civil Agents working in the K. 0. Bank corresponded with
the rank and status of the subordinate cadre under the State
Bank. The Reserve Bank of India observed that "the Civil
Agent has nothing to do with the office work in the Bank
just as in the case of clerks and other employees and his
work is essentially different from the work of the ordinary
staff in the bank". The Bank then proceeded to observe that
:
"In fitting an employee of the transferor bank
into the transferee bank, the rank and status
of the employee as also the nature of the
duties performed by the employee in the
transferor bank have to be ascertained. The
mere fact that the employee in transferor bank
bore a particular designation either as a
clerk or otherwise does not conclude the issue
and that does not necessarilly follow that he
should, in the transferee bank, be placed in a
post having the same designation.......... On
examining the position the Reserve Bank of
India is of opinion that the duties which the
employee was discharging in the transferor
bank do not relate to the duties which a clerk
has to do in the office."
In the view of the Bank the duties performed by the Civil
Agent were "essentially different from those of a clerk and
called for a much lower degree of qualifications, skill and
competence than those which a clerk normally brings to bear
on his work", and since the subordinate cadre of the State
Bank in which Elias was
33
fitted was "in effect a residual classification" there was
no change and the Bank was justified in placing him in that
classification. It was also observed that there was "no
change in the work" allotted to Elias, nor was he expected
to do the work of a chaprasi or a peon and that his
emoluments were better than those in the transferor bank.
The fact that prior to the fitment in the transferee bank,
in terms of the provisions of paragraph-15 of the Scheme,
Elias was addressed as a civil clerk did not confer on him
the status of a clerk in the transferee bank. These
observations relate to matters which could not be referred
to the Reserve Bank and the decision of the Reserve Bank
thereon is not made final under the second proviso to sub-s.
(5)(i) of s. 45 of the Act. Only the question whether the
qualifications and experience of any of the empolyees of the
transferor bank are the same as or equivalent to the
qualifications and experience of the other employees of
corresponding rank or status under cl. (ii) of the first
proviso is intended to be referred to the Reserve Bank. In
that view the first argument advanced on behalf of the
appellant must be rejected.
It is said that Elias "had studied only upto 5th Form". But
that is not decisive of the corresponding rank or status in
which "he could be fitted" in the State Bank. Elias was
employed in the K. 0. Bank as a Civil Agent. The duties of
a Civil Agent were not menial. In the K. 0. Bank no
separate scale was prescribed for the post of a Civil Agent.
The salary paid to Elias was that of a Clerk and his duties
were those of a clerk. In the and there was no separate
classification of the office of a Civil Agent. The
subordinate cadre consisted of peons, watchmen and sweepers
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and of employees performing similar duties, and a Civil
Agent performing duties which could not appropriately be
placed in that classification. The decision of the Reserve
Bank that the subordinate cadre was a residual cadre,
is, in our judgment, not supported by any evidence. It was
conceded before the High Court that Elias satisfied " three
conditions as to the rank-, status and qualifications" of a
clerk in the State Bank. It was only the said employees
being the same as or equivalent to those of the first
proviso to s. 45(5)(i) the transferee bank must grant the
same remuneration and the same terms and conditions of
service as are applicable to employees of corresponding rank
or status of the transferee bank subject to the
qualifications and experience of the said employees
being the same as or equivalent to those of such other
employees of the transferee bank. The guarantee under cl.
(i) of s. 45,(5) of the Act does not cover merely the
remuneration : it covers the terms and conditions of service
as well . I would be a gross denial of the guarantee if
the employee is not given the rank and status which he had
in the transferor bank. It is, in our judgment, not open to
the transferee bank to "fit" an emplo-
34
yee of the transferor bank performing the duties of a clerk
into a subordinate cadre manned by employees performing
duties which are not clerical, but of peons, watchmen,
sweepers and the like.
The Banking Regulation Act, 1949, guarantees the same terms
and conditions of service, and the transferee bank is
entitled to "fit" the employees of the transferor bank into
the corresponding- rank or status. In doing so it ’has to
take into account tile qualifications and experience of the
employees of the transferor bank. But in "fitting" an
employee into the transferee bank, the rank and status
enjoyed by an employee in the transferor bank cannot be
ignored. A person performing certain duties in the
transferor bank when. admitted into the service of the
transferee bank- may be so "fitted" in a cadre which is
equivalent in status and rank with the status and rank of
the employees in the transferee bank, but in grading him
into the cadre of equivalent status and rank, experience and
qualifications must be taken into account. Oil the ground of
lack of experience and qualifications a person cannot be
deprived of his rank and status in the transferee bank.
Clause (ii) to the first proviso of s. 45(5)(i) does not, in
our judgment. authorise the transferee bank to "fit" an
employee in’ the transferee bank into a post with rank and
status lower than the rank and status enjoyed by the
employee in the transferor bank, To accept the contention
raised on behalf of the State Bank is ill effect to defeat
the guarantee relating to the terms and conditions of
service under cl. (i) of s. 45(5) and the first proviso
thereto.
In our judgment tile High Court was right in holding that
the orders passed by the State Bank "fitting" Elias into a
subordinate cadre infringed the guarantee under s. 45(5)(i)
of the Banking Regulation Act, 1949.
The appeal fails and is dismissed with costs in favour of
Elias.
V.P.S. Appeal dismissed.
35