Full Judgment Text
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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
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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
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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-
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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:
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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
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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;
....................................................
....................................................
...................................................
................
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(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
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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
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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
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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,
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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
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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
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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
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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
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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
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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
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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