KSHETRIYA KISAN GRAMIN BANK Vs. D B SHARMA

JUDGEMENT

(1.) The appellant is a Regional Rural Bank, established under Section 3 of the Regional Rural Banks Act, 1976 and is sponsored by the Uttar Pradesh Co-operative Bank Limited, Lucknow, which is a society registered under the U.P. Co-operative Societies Act. There are 196 Regional Rural Banks in the country but out of them 195 banks are sponsored by the nationalised banks and it is only the appellant bank, which is sponsored by the U.P. Co-operative Bank. Under Section 3 of the Regional Rural Banks Act, 1976, it is the Central Government, who by Notification in the official Gazette, establishes one or more Regional Rural Banks, only on being requested by a sponsor bank to establish the same. Under sub-section (3) of Section 3 of the said Act it is the duty of the sponsor bank to aid and assist the Regional Rural Bank sponsored by it by subscribing to the share capital, training personnel of such Regional Rural Bank and providing such managerial and financial assistance to such Regional Rural Bank during the first five years of its functioning as may be mutually agreed upon between the Sponsor Bank and the Regional Rural Bank. Under sub-section (2) of Section 6 of the capital issued by a Regional Rural Bank fifty per cent shall be subscribed by the Central Government, fifteen per cent by the concerned State Government and thirty five per cent by the Sponsor Bank. Under Section 17, the Regional Rural Bank is empowered to appoint such number of officers and other employees as it may consider necessary and may determine the terms and conditions of their appointment and service. Under second proviso to aforesaid Section 17 remuneration of officers and other employees appointed by Regional Rural Bank will be such as may be determined by the Central Government and in determining such remuneration the Central Government shall have due regard to the salary structure of the employees of the State Government and the local authorities of comparable level and status in the notified area. The employees of the Regional Rural Bank filed Writ Petitions in this Court under Article 32, being Writ Petitions Nos. 7149-50 of 1982 and 132 of 1984 seeking parity in respect of pay, salary, allowances and other benefits with the employees of Nationalised Banks in corresponding or comparable posts. This Court by order dated 1-9-1987 disposed of those writ petitions as the Central Government agreed to appoint a National Industrial Tribunal to decide the question relating to pay, salary, allowances and other benefits payable to the employees of the Regional Rural Banks constituted under the Regional Rural Banks Act, 1976. Pursuance to the aforesaid order the Government of India by Notification dated 26th November, 1987 referred the disputes raised in Writ Petitions Nos. 7149-50 of 1982 and 132 of 1984 to the Industrial Tribunal consisting of a Retired Chief Justice of Andhra Pradesh High Court Justice Obul Reddy. The said Tribunal elaborately considered the materials placed before it and gave its Award on 30th April, 1988. The said Tribunal by its Award came to hold that so far as the equation of posts and consequent fixation of new scale of pay, allowances and other benefits for officers and other employees of the Regional Rural Banks at par with the officers and other employees of comparable level in the corresponding posts in the sponsor Banks and their fitment into new scale of pay, as are applicable to officers of sponsor Bank in corresponding posts of comparable level, it is a matter which has to be decided by the Central Government in consultation with such authorities as it may consider necessary. In view of the aforesaid observations of the Tribunal the Government of India constituted a Committee, called the 'Equation Committee' and referred the Award to the Committee seeking for a report in the matter of Equation. On the basis of the recommendation of the Equation Committee dated 22nd February, 1991, the Union Government in exercise of power under Proviso to sub-section (1) of Section 17 of the Act issued certain directions whereunder the Branch Managers' post has been equated with the post of Assistant Manager of the U.P. Co-operative Bank Ltd. and the scale of pay for the latter post has also been made applicable to the former post. This Notification of the Union Government was assailed by the concerned officers of the Bank by filing Writ Petition No. 19929 of 1991 (reported in 1996 Lab IC 1280 : 1996 All LJ 855). The High Court of Allahabad having allowed the writ petitions and having issued certain directions relating to the salary of the employees of Kshetriya Kisan Gramin Bank the present appeal has been filed by the Bank on getting Special Leave to Appeal. By the impugned judgment the High Court set aside the circular of the Central Government dated 27th February, 1991, and directed not to make any discrimination between the officers and employees of the Kshetriya Kisan Gramin Bank with the officers of the other Gramin Banks and, further directed that the Assistant Branch Managers of the Appellant Bank should get the same scale of pay as the Assistant Managers of other Gramin Banks sponsored by the Nationalised Banks. For issuing aforesaid direction the High Court came to the conclusion that the Tribunal has accepted the claim of the employees of Appellant Bank and had held that they are entitled to the pay scales which are given to the employees of the Commercial Bank. After referring to paragraph 4.428 of the Award the High Court further came to the conclusion that the Equation Committee wrongly came to the conclusion that the petitioners being Branch Managers are entitled to the pay scales of Assistant Manager on the plea that since the Banks where petitioners were previously employed have been sponsored by Uttar Pradesh Co-operative Bank Limited, Lucknow and not by other nationalised Bank. Since the Kshetriya Kisan Gramin Bank, Mainpuri, is the only Bank which is sponsored by the Uttar Pradesh Co-operative Bank Limited, Lucknow and all other rural Banks have been sponsored by the nationalised banks, the High Court is of the opinion that the distinction made by the Equation Committee is in gross violation of catena of decisions of the Supreme Court relating to the principle 'equal pay for equal work'. The High Court also came to the conclusion that 27 officers of the appellant Bank have been discriminated in the payment of salary and pay scales as they are otherwise entitled to get the same pay scales of the Commercial Banks as well as Nationalised Banks. On the question of job evaluation the High Court also came to the conclusion that the nature of job being performed by the officers of the appellant Bank is not dis-similar to that being performed by those sponsored by commercial or nationalised banks and, therefore, there cannot be a discrimination in the matter of pay scales and other benefits with their counter parts.

(2.) At the outset, it may be stated that appellant Bank did not file any counter-affidavit in support of the Government order or the recommendation of the Equation Committee. Mr. Raju Ramachandran, learned senior counsel appearing for the appellant submitted that without controverting any facts which the employees of the Bank might have averred in the writ petitions filed before the High Court, the appellant would be able to assail the conclusions of the High Court emanating the ultimate direction with reference to the very award of the Tribunal and the report of the Equation Committee inasmuch as the High Court has failed to appreciate the basic principles on which the Tribunal proceeded and has mis-read the findings of the Tribunal which has vitiated the ultimate conclusions. According to Mr. Ramachandran the Tribunal had specifically negatived the applicability of the plea of equal pay for equal work. On the other hand the Tribunal thought it fit to apply the principle of parity for determining the salary and other conditions of service of the employees of the Regional Rural Banks. If the principle of parity is to be applied then the employees of the appellant Bank can have their pay structure with reference to the sponsor bank of the appellant, namely, U.P. Co-operative Bank Ltd., Lucknow, and not the salary of Commercial or Nationalised Banks who happen to be the sponsoror of 195 other Regional Rural Banks. Mr. Ramachandran also further urged that under the statute the remuneration of officers appointed by regional Rural Bank could be determined by the Central Government under the second proviso to sub-section (1) of Section 17 and while making such determination the Central Government is duty bound to have due regard to the salary structure of the employees of the State Government and the local authorities of comparable level and status in the notified area where the Bank situates. The aforesaid criteria fixed under the statute will also weigh with the Tribunal appointed for determining the pay structure of these employees who in essence is discharging the function of the Central Government. This being the position, it is obvious that the pay structure of the sponsor bank at the State level will be the relevant guiding factor and, as such, the Equation Committee had rightly determined the pay structure of the respondent employees bearing in mind the criteria fixed under the statute. The High Court, therefore, contended by Mr. Ramachandran, completely overlooked aforesaid statutory criteria while recording its conclusions and giving ultimate directions. Mr. Ramachandran also contended that the Tribunal, bearing in mind the germane considerations for determination of pay structure of the employees of the Regional Rural Banks came to hold that maintaining a parity with the employees of the sponsor bank would not be inconsistent with the second proviso to sub-section (1) of Section 17, but the High Court, however, had totally ignored the aforesaid statutory criteria provided under the second proviso to sub-section (1) to Section 17, and thus committed gross error in equating the employees of the appellant Bank with the employees of the other Regional Rural Banks whose sponsoror are the Nationalised Banks in the matter of the pay structure of the employees. According to Mr. Ramachandran under the scheme of the Act the umbilical links between the sponsor bank and the Regional Rural Bank sponsored by them cannot be ignored and on the other hand the same must be borne in mind while deciding the pay structure and other service conditions of the employees. Mr. Ramachandran also contended that a single Gramin Bank, like appellant Bank may constitute a class by itself and having regard to the sponsorship in question in fact such a classification would be permissible and would not violate the provisons of Article 14. According to Mr. Ramachandran, if the impugned direction of the High Court is given effect to then necessarily the pay scales of the sponsor Bank of the appellant namely, U.P. Co-operative Bank Ltd. will have to be raised and it would lead to absurd consequences which must be avoided. Mr. Ramachandran lastly submitted that in the matter of equation of posts or equation of salary of employees, the Expert Body appointed for the purposes is the best judge by virtue of its expertise and the decision of such Expert Body should not be interfered with by the Court unless either mala fides are alleged and proved or the Court comes to a conclusion that the decision is on account of extraneous consideration or its makes a hostile discrimination and arbitrary in nature. In the case in hand none of these having been alleged and established the High Court committed serious error in interfering with the conclusion of the Equation Committee who had gone into detail and had determined the pay structure of the officers of the appellant Bank.

(3.) Mr. Anantharaman, advocate appearing for some of the respondents, however, submitted that in terms of industrial jurisprudence the Regional Rural Bank employees are entitled to claim parity with the employees of Nationalised and Commercial Banks on the ground of similarity of duties and function and the same would be within the guidelines contained in the second proviso to sub-section (1) of Section 17 of the Act and in fact the Tribunal has held so, and this being the position, the Equation Committee could not have decided the pay structure of the employees of the appellant Bank differently from the employees of the other Regional Rural Banks and, accordingly the High Court was fully justified in coming to its conclusion about the discrimination meted out to the officers of the appellant Bank and was fully justified in issuing the impugned direction which need not be interfered with by this Court. According to Mr. Anantha-raman the Award of the Tribunal having been accepted by the Central Government in toto it is the Equation Committee which committed error in granting different pay structure for the officers of the appellant Bank on the basis of so-called parity with the employees of its sponsor Bank and as such, it was just and reasonable for the High Court to interfere with the same and the impugned judgment does not suffer from any legal infirmity so as to be interfered with by this Court. The counsel, further contends that neither the Bank nor the Union of India nor even the sponsor Bank having filed any counter-affidavit in the High Court, are not entitled to assail the conclusions of the High Court which is based on a reading of the findings of the Tribunals and based on the sound principles of discrimination under the Constitution and it would not be appropriate for this Court to interfere with the same. In his submissions as well as in the written submissions filed in this Court the learned counsel referred to various paragraphs of the Award to indicate that the very grievance of the employees of the Bank was to have parity with the employees of the Nationalised and Commercial Banks and that grievance has been satisfied only by impugned judgment of the High Court. Consequently the impugned judgment does not require to be interfered with by this Court.