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State Bank of India & ors. Versus Yogendra Kumar Srivastava & ors.

1987 AIR 1399, 1987 (3) SCR 115, 1987 (3) SCC 10, 1987 (2) JT 477, 1987 (1) SCALE 937 - Civil Appeal Nos. 4125-28 of 1986 with Special Leave Petition (Civil) No. 3371 of 1982 - Dated:- 1-5-1987 - M. M. Dutt And O. Chinnappa Reddy, JJ. For the Appellants : S. S. Sharma, Soli J. Sorabjee, Madhu Sikri For the Respondent : S. N. Kacker, R. B. Mehrotra, S. P. Gupta, R. B. Mehrotra, Shanti Bhushan, R. P. Kapur JUDGMENT M. M. Dutt, J. In these appeals by special leave and in the Special Leave Petition .....

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, 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 performance of its functions, and determine the terms and conditions of their appointment and service. Su .....

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lar 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 comprising 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. T .....

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the Government declared its intention to apply the recommendations of the Pillai Committee to the State Bank of India as well. According to the recommendations 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. 2. Senior Management Grade. 3. Middle Management Grade. .....

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icers Grade-I and the seniority list would be prepared accordingly. After the said agreement was reached between the Executive 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 c .....

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he 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 competent authority, to an officer during his tenure of service outside India or to employees engaged in any country outside India and serving .....

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as deemed to have been amended by appropriate resolutions of the Central Board or the Executive 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: Sp .....

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on appointment, be placed at the stage of ₹ 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. Pro .....

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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 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 .....

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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 e .....

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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 Probationary/Trainee Officers were fitted to the Junior Management Grade: Scale-I, after the Order was passed ereating such a Grade at ₹ 960 p.m. with effect from 30/31-10-1979. These Probationary/Trainee Officers, however, claimed that they were seniors to t .....

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yees 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 th .....

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aced 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 .....

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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 ₹ 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 offi .....

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80, the following directions 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 old clerical scale Basic pay in the old officer's scale Basic pay in .....

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erwise 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 paragrap .....

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ding 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 ₹ 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 th .....

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iew 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 Allahabad High Court proceeds on the assumption that the Probationary/Trainee Officers having been given the benefit of extra emoluments by fitting them in the Junior Management G .....

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rder. 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 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 cont .....

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s, 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 Gr .....

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er 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 Junior Management Grade would take place with effect from O .....

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e 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 recommendations 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 .....

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s 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 appointed 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 Probationary/Trainee Officers have to undergo more stringent tests than the tests to be undergone by the Grade-II Officers, but .....

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ate 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 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 .....

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s. 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 injustice done 'to the Officers Grade-II numbering about 15,000, sought to remov .....

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he 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 Reserv .....

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of 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 pe .....

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e 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 .....

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what manner the recommendations of the Pillai Committee accepted by the Government would be given effect to. Ultimately, 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, immediately 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, .....

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e 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 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 i .....

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ey 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 recommendations 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 a .....

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tionary/Trainee Officers, that the impugned Order takes 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 .....

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hat the right of the Probationary/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 complet .....

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t 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 Officers Grade-I and Officers Grade-II. It was urged that such distinction should be abolished and both these categories .....

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t petitioners in the High Courts. Although they had to perform almost the same duty and there was no difference between their positions, 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 .....

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