SOUTH MALABAR GRAMIN BANK Vs. CO ORDINATE COMMITTEE OF SOUTH MALABAR GRAMIN BANK EMPLOYEES UNION AND SOUTH MALABAR GRAMIN BANK OFFICER FEDERATION

JUDGEMENT

(1.) South Malabar Gramin Bank and the Union of India, have filed two civil appeals against the judgment of the Kerala High Court dated 25-11-1998. The Division Bench of Kerala High Court by the impugned judgment, dismissed the appeals filed against the judgment of the learned single Judge and held that the Central Government having accepted the NIT Award as well as the report of the Equation Committee and having given effect to the 5th Bipartite Settlement between the employees of the sponsor bank and the management, the employees and officers of the Regional Rural Banks ipso facto would be entitled to the revision of their wages, as and when the wages of the sponsor bank employees get revised, pursuant to Bipartite Settlement and, therefore the subsequent Bipartite Settlements, namely the 6th and 7th Bipartite Settlement should be given effect to revise the pay structure of the officers and employees of the Regional Rural Banks also. In these appeals, apart from the respondents, who had filed the writ petition in Kerala High Court, namely Co-ordination Committee of South Malabar Gramin Bank Employees' Union, All India Regional Rural Bank Employees Association, who had filed the writ petition in the Karnataka High Court had applied for intervention, All India Regional Rural Bank Officers Federation, who happen to be the petitioners in Transfer Petition No. 403/99, All India Gramin Bank Workers Organisation, who had filed a writ petition in this Court, under Article 32 wherein order has been passed that writ petition would come after disposal of the civil appeals, had made their respective submissions through different counsel, all the respondents having supported the judgment of the learned single Judge of Kerala High Court, as upheld in appeal by the Division Bench. It may be noticed at this stage that the similar question had been raised before the Calcutta High Court and a learned single Judge of the Calcutta High Court had dismissed those writ petitions by judgment dated 5-9-95 in C. O. No. 12653/95 and C.O. No. 12869/95 and the appeal against the same before the Division Bench is pending. In the Karnataka High Court Writ Petition No. 17905/97 had been filed by All India Regional Rural Bank Employees' Association and that writ petition stood disposed of by judgment dated 11th of November, 1998. The High Court allowed the writ petition, quashed the appointment of the Committee as well as its Report dated 17th May, 1997 and issued directions to pay salary and allowances to all the employees of Regional Rural Banks w.e.f. 1-11-1992 in accordance with the pay and allowances and benefits implemented in respect of the employees of Nationalised Commercial Banks as per the Memorandum of Settlement dated 14-2-1995 and as per the wage revision given to those officers of the Nationalised Commercial Banks from 1-11-92 and 1-7-1993. Against the said judgment, an appeal filed before the Division Bench is pending.

(2.) Writ Petitions under Article 32 of the Constitution had been filed in 1982 and 1994 in the Supreme Court, challenging the validity of Section 17 of the Regional Rural Banks Act, 1976 (hereinafter referred to as 'the Act') on the ground that the provision of Section 17 is ultra vires of Articles 14 and 16 of the Constitution. The writ petitions had been filed by All India Gramin Bank Workers' Association and by All India Regional Rural Bank Employees' Association. The employees of the Rural Banks had all along been making a grievance that in the matter of their pay structure, they are entitled to get the same scale of pay, as is available to the employees of rural banks of different nationalised commercial banks. But since the Government did not meet their demand, they filed the writ petitions under Article 32, as stated earlier. It was prayed in the writ petitions that Section 17 of the Regional Rural Banks Act, be struck down, as being ultra vires of Articles 14 and 16(1) of the Constitution and writ in the nature of mandamus be issued directing the Union of India to fix the emoluments of the Regional Rural Banks Employees in conformity with the judicial maxim of "Equal pay for equal work" and "industry-cum-region formula" and bring about parity in emoluments between the employees of Regional Rural Banks inter se and employees of the Nationalised Commercial Banks. While these writ petitions were being heard in the Supreme Court, the Government of India agreed to appoint a National Industrial Tribunal to decide the question relating to pay, salary, other allowances and other benefits payable to the employees of the Regional Rural Banks constituted under the Regional Rural Banks Act, 1976 and the counsel for the petitioners also agreed that a reference may be made to the proposed Tribunal. This Court, therefore left all the contentions open and directed the Central Government to refer the dispute to the Tribunal, preferably to a retired Chief Justice of a High Court, who will pronounce its award as expeditiously as possible. In terms of the aforesaid orders of this Court, the Central Government appointed Justice S. Obul Reddi, retired Chief Justice of High Court of Andhra Pradesh as Chairman of National Industrial Tribunal and referred the disputes to the said Tribunal. The Notification, appointing the Tribunal stated that the decisions of the Tribunal will be final and binding. The Tribunal thus appointed, passed an award after elaborate discussion of the materials placed before it. The ultimate directions of the Tribunal were that officers and employees of the Regional Rural Banks will be entitled to claim parity with the officers and other employees of the sponsor banks in the matter of pay scale, allowances and other benefits and the Tribunal further directed that the aforesaid award should be given effect to with effect from 1st September, 1987. With regard to equation of posts and consequent fixation of the new scales of pay, allowances and other benefits for officers and employees of the Regional Rural Banks at par with the officers and other employees of the comparable level in corresponding posts in sponsor banks and their fitment into the new scales of pay as are applicable to officers of sponsor banks, the Tribunal held that it is a matter which has to be decided by the Central Government in consultation with such authorities as it may consider necessary and the award, according to the Tribunal will cover all the existing Regional Rural Banks. By 1st of September, 1987, the employees of the nationalised commercial banks were getting their pay scales on the basis of 5th Bipartite Settlement and by implementaton of the award of Justice S. Obul Reddi, the employees of the Regional Rural Banks were also given the benefit of the said 5th Birpartite Settlement on the basis of which the pay structure of the Nationalised Commercial Banks had been determined. Thereafter, when pay structure of the employees of the Nationalised Commercial Banks were further revised in 1992 and 1997 by means of 6th and 7th Bipartite Settlements, as there was no corresponding revision of the pay structure of the employees of the Regional Rural Banks, the present litigation started which had ultimately culminated in filing of these appeals, one by Union of India and the other by the South Malabar Gramin Bank Management. Before the High Court, the Bank took the stand that it is the Government of India, who has to determine the salary of employees of Regional Rural Banks in terms of Section 17 of the Regional Rural Banks Act, 1976 and on the basis of the revised pay structure of the Nationalised Commercial Bank Employees, pursuant to 6th and 7th Bipartite Settlements, the employees of the Regional Rural Banks ipso facto cannot get their pay structure changed. It was also stated that in fact the Reserve Bank of India had appointed S.C. Mahalik Committee to examine the pay structure of the employees of the Regional Rural Banks and to suggest changes therein. The learned single Judge of the High Court came to the conclusion that by the decision of the Government of India dated 22nd February, 1991 implemented the award of Justice S. Obul Reddi and thereby extended the benefits of 4th and 5th Bipartite Settlements and on principle having accepted the same, further consideration by the Government of India or any order by the Government of India is not necessary for extending the benefits of the subsequent Bipartite Settlements to the employees and officers of the Regional Rural Banks and accordingly, the impugned direction was issued, which was upheld in appeal by the Division Bench.

(3.) Mr. P. P. Rao, the learned senior counsel, appearing for the South Malabar Gramin Bank, contended before us that under the provisions of the Act, more particularly under second proviso to Section 17(1) of the Act, it is only the Central Government, who has been conferred with the power to determine the remuneration of the officers and employees appointed by the Regional Rural Bank and for determining such remuneration, the legislature has also indicated the guidelines and this being the position the question of giving effect to any Bipartite Settlement arrived at between the employees of the Nationalised Commercial Banks and the Government ipso facto to the remuneration structure of the officers and employees appointed by the Regional Rural Bank does not arise. According to Mr. Rao, when the grievances and the anomalies that existed prior to the appointment of Justice S. Obul Reddi Tribunal were focussed before the Tribunal and the employees claimed the applicability of "equal pay for equal work", the Tribunal in no uncertain terms held that the said principle cannot be made applicable and yet the Tribunal held that the employees of the Regional Rural Bank are entitled to claim parity with the pay structure of the employees of the Nationalised Commercial Banks and in fact, directed implementation of the pay structure of the employees of the Nationalised Commercial Banks, as it stood then in the year 1987, which had been obtained on the basis of the 4th and 5th Bipartite Settlements and the Government of India did implement the said award. But neither the award anywhere indicated that all subsequent pay revision of the employees of the Nationalised Commercial Banks would pro tanto be given effect to for determining the pay structure of the employees of the Regional Rural Banks, nor such a direction could be given in law as that would be contrary to the plain language of the second proviso to sub-section (1) of Section 17 of the Act and that would tantamount to usurping the jurisdiction of the Central Government. According to Mr. Rao, the expression "parity" would not necessarily mean the same pay structure and therefore, the question of pay revision of the Regional Rural Bank employees will have to be re-determined by the Central Government in accordance with the guidelines stipulated in the second proviso to sub-section (1) of Section 17 and that in making such determination, the existing pay structure of the Nationalised Commercial Banks on the basis of any subsequent Bipartite Settlement would be undoubtedly a relevant factor for the Central Government in arriving at a conclusion. Mr. Salve, the learned solicitor General, appearing for the Union of India and Mr. P. P. Rao, appearing for the Bank contended with vehemence that the financial condition of the Regional Rural Banks is not that affluent so as to enable the management to offer the pay structure, as is available to the employees of the Nationalised Commercial Banks and in determining the pay structure of the employees, the financial capacity as well as the performance of the Bank cannot be totally ignored, rather the same should also be a germane factor in the matter of determination. According to Mr. Rao, the revision of pay scales being a periodic exercise in all spheres of public employment and the Act having conferred the power on the Union Government by virtue of the second proviso to Section 17(1) of the Regional Rural Banks Act, 1976, it would be for the Central Government to exercise that power at reasonable intervals, depending upon the circumstances of the case and then come to a conclusion on consideration of all germane factors, as to what would be the pay structure of the employees of the Regional Rural Banks. Mr. Rao also submitted that the legislature having clearly indicated by use of the expression "shall have due regard to" in the second proviso to sub-section (1) of Section 17, it would be obligatory for the Central Government to find out the pay scales of the employees of local authorities as well as the notified area of comparable level and status, and in this view of the matter, if the contention of the employees is accepted, as has been accepted by the High Court of Kerala, it would tantamount to going against the legislative provision and such a construction is not permissible. Mr. Rao, very strenuously contended that the findings arrived at by the Tribunal itself would indicate that the Tribunal never intended that as and when the pay structure of the employees of the Nationalised Commercial Banks is changed on the basis of any Bipartite Settlement, the same should ipso facto get reflected by revising the pay structure of the employees of the Regional Rural Banks and in this view of the matter, the High Court of Kerala committed serious error in issuing the impugned directions. Mr. Rao, the learned senior counsel further contended that the Regional Rural Banks are separate statutory entities managed by separate statutory Board of Directors subject to statutory controls by the Reserve Bank of India and the Govt. of India. On the aforesaid premises on principle, it cannot be held that the employees of the Regional Rural Banks are entitled to the same scales of pay, as are available to the employees of the sponsored banks under bipartite settlements, without any further determination by the Govt. of India or the Reserve Bank of India. According to the learned counsel, the bipartite settlements ordinarily bind the employers and employees who are parties to the same. Since the Regional Rural Banks nor their employees were parties to such settlements, they cannot claim any benefit under the settlements in question. According to Mr. Rao, revision of wage structure of the employees of the Regional Rural Banks will have to be undertaken by the Govt. of India in accordance with the statutory provisions contained in Section 17 of the Act and the Court can issue mandamus to the Central Government for exercise of power under Section 17, if the said power has not been exercised and in this view of the matter, the Kerala High Court was wholly unjustified in directing the pay revision of the employees, on the basis of bipartite settlements arrived at and given effect to, in respect of the employees of the nationalised commercial bank.