K. Thimmappa v. Chairman, Central Board of Directors, SBI, (SC) BS11980
SUPREME COURT OF INDIA

Before:-G.B. Pattanaik and B.N. Agrawal, JJ.

Transferred Case No. 25 of 1998. D/d. 5.12.2000

K. Thimmappa and others - Petitioners

Versus

Chairman, Central Bd. of Dirs. SBI - Respondent

Constitution of India, Article 14 - State Bank of India Act, 1955, Section 43(1) - State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979, Paragraphs 6, 7 and 8 - Whether merely because the Officers of Grade I have been placed in two different newly created Grades on basis of their confirmation would constitute discrimination amongst same or not - Held, placement made in respect of officers Grade 1, confirmed on or before 31.12.1972 in Middle Management Grade Scale II and others in Junior Management Grade Scale I, is not hit by Article 14 of the Constitution of India.

[Para 5]

B. Constitution of India, Article 14 - State Bank of India Act, 1955, Section 43(1) - State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979, Paragraphs 6, 7 and 8 - Whether putting officers of Grade I, who had not been confirmed on or before 31.12.1972 along with the officers of Grade II in Junior Management Grade Scale I, would per se be discriminatory inasmuch as prior to the new structurisation of the management, promotion was being made from Officers Grade II to Officers Grade I - No doubt prior to new structuring of management persons from Grade II were being promoted to officers Grade I but in suggesting restructuring of entire managerial cadre by way of standardisation - When less category of Grades have been evolved necessarily there would be merger of different pre-existing Grades - But such merger will neither amount to demotion in any manner nor would it amount to treating unequals as equals - It is in fact a part of exercise of cadre adjustment process after taking decision of minimising number of cadres - It cannot be said that Central Board of State Bank of India in making Conditions of Service Orders treated Officer of Grade I who had not been confirmed on or before 31.12.1972 with hostile discrimination.

[Para 6]

Cases Referred :-

Direct Recruit Class I Engineering Officers' Association v. State of Maharashtra, 1990(2) SCC 715.

New Bank of India Employees' Union v. Union of India, 1996(2) SCT 583 (SC).

Tarsem Lal Gautam v. State Bank of Patiala, 1989(1) SCC 182.

P.S. Sadasivaswamy v. State of Tamil Nadu, 1975(1) SCC 152.

Ramachandra Shankar Deodhar v. State of Maharashtra, 1974(2) SCR 216.

B. Prabhakar Rao v. State of Andhra Pradesh, 1985(Supp.) 2 SCR 573.

Bradbury v. London Borough of Enfield, 1967(3) All England Law Reports 434.

JUDGMENT

G.B. Pattanaik, J. - These Transferred Cases from different High Courts relate to the common question, namely, in the matter of placement of existing officers in the new grades and scale in the State Bank of India made under State Bank of India Officers (Department of Terms and Conditions of Service) Order 1979, (hereinafter referred to as 'The Service Order'), under Paragraph 7 of the said Order is discriminatory in nature, so far as it deals with the Officers Grade I. The Central Board of the State Bank of India in exercise of power conferred by sub-section (1) of section 43 of the State Bank of India Act, 1955 made the condition of Service Order which came not force with effect from 1.10.1979. Paragraph 7 deals with the placement of the existing officers on the appointed date in the corresponding grades and scale as per the table given in Schedule I and Paragraph 8 deals with the fitment of the said existing officers in the new grade and scale of pay. Prior to coming into force of the condition of Service Order, in the State Bank of India there were different grades of officers in the organisational structure and so also in other Nationalised and Subsidiary Banks. In the year 1973 the Government of India appointed a Committee, called Pillai Committee for bringing uniformity and standardisation in the conditions of service of the officers of various Nationalised Banks. The said recommendations of the Pillai Committee were later on applied to the State Bank of India and its Associate Banks with suitable modification having regard to their special features. So far as the State Bank of India is concerned, the entire re-structuring of its officers was made by passing the conditions of Service Order which came into force on 1.10.1979. Paragraph 6 of the Order deals with categorisation. Paragraph 7 of Order deals with the placement of existing officers on the appointed date in corresponding grades and scales. Paragraph 8 deals with fitment in the new scales of pay. The aforesaid 3 paragraphs are quoted herein-below in extenso :

In accordance with Paragraph 7 of the Order Schedule I has been drawn up which indicates the grade and scale immediately before the appointed date in which the officer was there and the grade and scale in which he is placed on the appointed date. In the case in hand we are concerned with officer described in Items 8 and 9 of the aforesaid Schedule. The same is extracted herein-below in extenso :-

"8. Officers Grade I confirmed as such on or before 31.12.1972 Scale - Rs. 500-40-620-45-755-95-850-50-1050-EB-50-1150-60-1330. Middle Management Scale II - Rs. 1200-70-1550-75-2000.
9. Other Officer Grade I. Scale-Rs. 500-40-620-45-755-95-850-50-1050-EB-50-1150-60-1330 Junior Management Grade Scale I. Rs. 700-40-900-50-1100-EB-1200-60-1800.
and
Officers Grade II-Scale Rs. 500-40-620-45-980-50-1030."
The grievance of the petitioners, who happened to be the officers of Grade I, prior to the appointed date is that while those of them who had been confirmed before 31.12.1972 they had been placed in the Middle Management Grade Scale II in the scale of Pay of Rs. 1200-2000 while the unconfirmed officers of Grade I prior to 31.12.1972 have been placed in the Junior Management Grade Scale I in the scale of pay of Rs. 700-1800 along with officers of Grade II prior to the appointed date. According to the petitioners, treating the officers confirmed in Grade I before 31.12.1972 differently from other officers of Grade I is a hostile discrimination and the so called classification made on the basis of confirmation made prior to 31.12.1972, with unconfirmed hands is not founded on any intelligible differentia and further having the cut off date at 31.12.1972 has not relation with the object sought to be achieved, and as such, must be held to be arbitrary. According to the employer bank, however, taking into account the period on probation which an officer of Grade I is required to undertake on being recruited, the successful completion of the period of probation, after which an employee is entitled to be confirmed, the guidelines indicated as to the period of service, one must have for holding a post in the Middle Management Scale Grade II and all other germane factors, the decision having been taken on the question of placement, that only those confirmed prior to 31.12.1972 will be placed in MMG Grade Scale II, whereas others should be placed in Junior Management Grade Scale I cannot be held to be arbitrary or irrational.

3. Mr. Sanyal, Mr. P.P. Rao and Mr. R.K. Jain, the learned counsel appearing for the petitioners in different sets of Transferred Petitions, raised the following contentions, in assailing the legality of Schedule I, drawn in accordnace with Paragraph 7 of the Conditions of Service Order, 1979 in relation to Items 8 and 9 quoted earlier in this judgment :

4. Mr. Shanti Bhushan and Mr. Kapil Sibal, learned counsel, appearing for the bank, on the other hand contended that Conditions of Service Order, 1979, is a statutory order, made in exercise of powers conferr under sub-section (1) of section 43 of the State Bank of India Act, 1955 and the said order purports to rationalise and standardise in restructuring the administrative set up of the Management cadres and in process of such restructuring, if on consideration of relevant and germane materials, placement of the officers has been made, as provided under Paragraph 7 of the Conditions of Service Order, then such placement is not liable to be interfered with by a Court of law, unless a strong case is made out, ether on the ground of mala fides or on the ground of infraction of a constitutional provision. According to the learned counsel, when officers of a pre-existing Grade are sought to be placed in the different grades, which emanated on account of standardisation and re-structuring, then it may not be possible in a given situation to put all the officers of a particular grade to be placed in a corresponding grade or scale of pay evolved in the process of restuctuing. This being the position, while grafting of these officers in the newly created grade and scale, if there is a bifurcation of officers of a particular grade into two, based on their period of service, experience and other relevant factors, such bifurcation would not tantamount to treating them discriminately, and would not attract the provisions of Articles 14 of the Constitution. It was further urged under Paragraph 6, what was required to be performed is to categorisethe officers, on the basis of the responsibilities and functions exercisable by such officers whereas paragraph 7 deals with the placement and Paragraph 8 deals with the fitment in the new scale of pay and this being the position, notwithstanding Paragraph 7 is subject to Paragraph 6, there would be no bar in bifurcating the officers of a particular grade and placing them in two different grades, as has been done in the present case, if there is any reasonable basis for such bifurcation. According to the learned counsel, the provision for confirmation, contained in Paragraph 16, would not attract the mischief of inglorious uncertainty of confirmation in the service and on the other hand, it is the satisfactory completion of training of the officers, which is determinative of the confirmation in service and failure on the part of the officer, who is not found fit for confirmation by the Competent Authority, would entail termination of service in case of direct appointee and reversion to the substantive grade in case of a promotee. This being the position with regards to confirmation, the ratio in Patwardhan's case as well as Direct Recruits' case, on which reliance has been placed by the counsel, appearing for the petitioners, would have no application at all. According to Mr. Shanti Bhushan, the judgment of this Court in Tarsem Lal Gautam v. State Bank of Patiala, 1989(1) SCC 182, fully governs the present batch of cases and as such, there is no infirmity with the classification that has been made amongst the officers of Grade I on the basis of their date of confirmation, whether prior to 31.12.1972 or thereafter. Mr. Sibal further urged that it would be a sound and wise exercise of discretion for the Courts to refuse to exercise their extraordinary powers under Article 226 in the case of persons who do not approach the Court expeditiously for relief and who stand by and allow things to happen and then approach the Court to put forward stale claims and try to unsettle settled matters and in the case in hand, the placement that was made in the year 1979 is now sought to be assailed in writ petitions filed in different High Courts, the earliest being in the year 1988 and the latest being in the year 1998 and such delay in approaching the Court disentitles the petitioners from invoking the extraordinary jurisdiction of the Court under Article 226 of the Constitution, and, therefore, these petitions are liable to be dismissed. In support of this contention, reliance was placed on the decision of this Court in the case of P.S. Sadasivaswamy v. State of Tamil Nadu, 1975(1) SCC 152. Before we deal with the respective contentions of the parties it would be appropriate for us to notice that what Article 14 prohibits is class legislation and not reasonable classification for the purpose of legislation. If the Rule Making Authority takes care to reasonably classify persons for a particular purpose and if it deals equally with all persons belonging to a well defined class then it would not be open the charge of discrimination. But to pass the test of permissible classification two conditions must be fulfilled :

The classification may be founded on different basis and what is necessary is that there must be a nexus between the basis of classification and the object under consideration. Article 14 of the Constitution does not insist that the classification should be scientifically perfect and a Court would not interfere unless the alleged classification results in apparent inequality. When a law is challenged to be discriminaroty essentially on the ground that it denies equal treatment or protection, the question for determination by Court is not whether it has resulted in inequality but whether there is some difference which bears a just and reasonable relation to the object of legislation. Mere differentiation does not per se amount to discrimination within the inhibition of the equal protection clause. To attract the operation of the clause it is necessary to show that the selection or differentiation is unreasonable or arbitrary; that it does not rest on any rational basis having regard to the object which the legislature has in view. If a law deals with members of well defined class then it is not obnoxious and it is not open to the charge of denial of equal protection on the ground that it has no application to other persons. It is for the Rule Making Authority to determine what categories of persons would embrace within the scope of the rule and merely because some categories which would stand on the same footing as those which are covered by the rule are left out would not render the Rule or the Law enacted in any manner discriminatory and violative of Article 14. It is not possible to exhaust the circumstances or criteria which may afford a reasonable basis for classification in all cases. It depends on the object of the legislation, and what it really seeks to achieve.

5. In view of the submission of the counsel for the parties, the first question, that arises for consideration is whether merely because the officers of Grade I have been placed in two different newly created grades, on the basis of their confirmation, would constitute discrimination amongst the same group or not ? The petitioner's contention is based upon the observation of this Court in Patwardhan's case as well as Direct Recruits case, to the effect that confirmation being one of the inglorious uncertainties of Government service could not have formed the basis for placement in two different grades. In Patwardhan's case, the inter se seniority between the direct recruits and promotees was being determined on the basis of the date of their respective confirmation. Under the rules in question, a ratio between the direct recruits and promotees to the cadre was being maintained at 34 : 66, and confirmation, necessarily, depended upon the availability of the posts in the cadre in the respective quota. Further, the promotees were to depend on the availability of substantive vacancies and then on the arbitrary discretion of the Government to confirm or not to confirm them in those vacancies. It is in that situation, when the rule of seniority was related to the date of confirmation, the Court had observed that the confirmation being one of the inglorious uncertainties of Government Service, could not have become a reasonable basis for determination of inter se seniority. This decision in Patwardhan's case was reaffirmed in the Constitution Bench decision in Direct Recruit Class II Engineering Officers' Association v. State of Maharashtra and others, 1990(2) SCC 715, and the Court reiterated and upheld the decision of the Court in Patwardhan. But what has been stated in relation to a rule for the purpose of determination of inter se seniority, may not be applicable to all contingencies and it cannot be said that the confirmation of an employee in a particular cadre cannot form a rational basis for any purpose whatsoever. In the case in hand, under the Conditions of Service Order, a person appointed as a probationary officer or a trainee officer, is required to be on probation for a period of two years. An employee of the bank when promoted as an officer to the Junior Management Grade is required to be on probation for a period of one year. In accordance with paragraph 16 of the said Conditions of Service Order, such officers on probation, shall be confirmed in the service of the bank, if the Competent Authority is of the opinion that the employee has satisfactorily completed the period of probation. The said Competent Authority also has a right to extend the period of probation, if in his opinion, the officer has not satisfactorily completed the probationary period. In paragraph 16(3), on the end of the period of probation, including the period of extension, if any, if the Competent Authority is of the opinion that the officer is not fit for promotion, then the service of the direct appointee is liable to be terminated and in case of a promotee, he is liable to be reverted to his substantive cadre. In view of the aforesaid statutory provision, dealing with confirmation and probation, the observation made by this Court in Patwardhan's case or Direct Recruit case, will have no application. The question of inglorious uncertainties in the matter of confirmation, does not arise in the case in hand, in view of the aforesaid statutory provisions. Consequently, the main argument of the petitioners' counsel and their reliance on the two decisions, referred to earlier, will have no application and the contention on this score accordingly fails.

5-A. Notwithstanding the aforesaid conclusion of ours, it still remains to be examined, as to whether in the matter of placement, prescribing 31.12.1972, as the cut off date, can be referred to any rational basis. It is too well settled that even if a classification would be permissible, but unless there is any rational basis of the same, the very basis would be hit by Article 14. The stand of the bank is that taking into account the fact that the period of probation is either one year or two years in case of promotees or direct recruits and that successful completion of probationary period entitles the employee to be confirmed the minimum six years of service in the Grade is required for being placed in Middle Management Grade Scale II, as per the guidelines issued and since placement was required to be made on 1.10.1979, which is the appointed date in the Conditions of Service Order, the Competent Authority of the bank namely the Central Board of the State Bank of India, has determined the date 31.12.1972. In view of the explanations, offered by the bank as well as the averments made in the counter affidavit, we are unable to hold that date 31.12.1979 is an arbitrary date and has no rational nexus with the placement of the officers of Grade I in Middle Management Grade Scale Ii. If the Competent Authority on relevant and all germane factors, takes a decision in the matter of placement or fitment, whenever a restructuring of the cadre is made, then the Court will not be justified in examining the basis of such placement or fitment in a mathematical scale and would not ordinarily interfere with such decision, unless it is established beyond doubt that the decision is totally arbitrary or has been mala fidely taken. When we examined the assertions, made by the petitioners in their writ petition, we do not find any basis or even any pleadings of mala fides. In New Bank of India Employees' Union and another v. Union of India and others, 1996(8) SCC 407 : 1996(2) SCT 584 (SC), placement of officers of a particular bank, after its amalgamation with another bank was the subject matter of challenge and in that context, this Court had observed :

What has been observed in the case of amalgamation, would equally apply to a case of restructuring of the cadre and placement and fitment of the existing employees in the restructured cadre. In fact in Tarsem Lal Gautam v. State Bank of Patiala, 1989(1) SCC 182, this Court was examining the legality of classification, based upon their seniority and experience for being fitted into two different grades, though originally belong to the one grade, as in the present case. While upholding such placement and fitment and while coming to the conclusion that it would not amount to discrimination or violative of Article 14 of the Constitution, this Court had taken note of the fact that when new categories of posts and new scales of pay are created, while trying to standardise and rationalise the management cadre, some criteria have to be evolved and applied for the placement and fitment of the existing officers into the new categories of posts, which may necessitate the pre-existing cadre of officers to be fitted in two grades and so long as their exists a reasonable basis for such bifurcation, it would not be a case of discrimination, attracting Article 14 of the Constitution. Ultimately, this Court held that the principle of classification brought about by the statutory regulation, cannot be said to be unreasonable and arbitrary. The aforesaid dictum, in our opinion, would apply with full force to the facts of the present case. We are, therefore, of the considered opinion that placement of the existing officers in the new grades, as provided in Schedule I, made in paragraph 7 of the Conditions of Service Order, and more particularly, placement made in respect of officers Grade I, confirmed on or before 31.12.1972 in Middle Management Grade Scale II and others in Junior Management Grade Scale I, is not hit by Article 14 of the Constitution of India.

6. The next question, that arises for consideration is whether putting officers of Grade I, who had not been confirmed on or before 31.12.1972 along with the officers of Grade II in Junior Management Grade Scale I, would per se be discriminatory inasmuch as prior to the new structurisation of the management, promotion was being made from Officers Grade II to Officers Grade I ? According to Mr. Sanyal, this tantamounts to un-equals being treate as equals, and even demotion of the officers of Grade I who had not been confirmed before 31.12.1972. We are unable to accept this submission of the learned counsel for the petitioners. It is no doubt true that prior to the new structurising of the management, persons from officers Grade II were being promoted to the officers Grade I. But in suggesting restructure of the entire managerial cadre by way of standardisation, when less category of grades have been evolved, necessarily, there would be merger of different pre-existing grades, but such merger will neither amount to demotion in any manner nor would it amount to treating unequals as equals. It is in fact a part of exercise of cadre adjustment process, after taking the decision of minimising the number of grades and, consequently, such a decision having been taken by adopting the decision of expertised body of Pilai Committee's Report, it cannot be said that the Central Board of the State Bank of India in making the Conditions of Service Orders, 1979, treated the officers of Grade I, who had not been confirmed on or before 31.12.1972 with hostile discrimination. The argument on behalf of the petitioners on this score, therefore, stands rejected.

Mr. Sibal, appearing for the Bank, no doubt has raised the contention that gross delay on the part of the employees in filing the writ petition, dis- entitles them to get any discretionary relief and in support of the same, reliance has been placed on the decision of this Court in P.S. Sadasivaswamy v. State of Tamil Nadu, 1975(1) SCC 152. In the aforesaid case, this Court observed that even though no period of limitation is provided for the Courts to exercise power under Article 226, but it would be a sound and wise exercise of discretion for the Courts to refuse to exercise their extraordinary powerunder Article 226 in the case of persons who do not approach it expeditiously for relief and who stand by and allow things to happen and then approach the Court to put forward stale claims and try to unsettle settled matters.

7. Mr. Rao, the learned senior counsel, appearing for the petitioners, on the other hand, vehemently urged that if the treatment meted out to the petitioners is found to be discriminatory and as such violates Article 14 of the Constitution, then the Court will not throw away the petitions merely on the ground of laches. In support of the contention, reliance was placed on the Constitution Bench decision of this Court in the case of Ramachandra Shankar Deodhar and others v. The State of Maharashtra and others, 1974(2) SCR 216. In the said case, this Court had observed :

Mr. Rao also relied upon the observation of this Court in the case of B. Prabhakar Rao and others etc. v. State of Andhra Pradesh and others, etc. etc., 1985(Supp.) 2 SCR 573, wherein Chinnappa Reddy, J, speaking for the Court observed thus :

A passage from the judgment of Lord Denning in Bradbury and others v. London Borough of Enfield, 1967(3) All England Law Reports Page 434, was also pressed into service by Mr. P.P. Rao, which it is worth-while to quote hereunder :

8. On consideration of the aforesaid legal position, though, we are inclined to agree with Mr. P.P. Rao that these cases should not be thrown out on the ground of laches alone, inasmuch as the placement made on 1.10.1979 was assailed in the year 1988 at the earliest and 1998 at the latest, yet the same may not be brushed aside, particularly, when we have not been able to find out any infraction of any fundamental right of these petitioners, guaranteed under the Constitution.

9. So far as the argument advanced on the interpretation of paragraph 7, on the ground that it is subject to the provisions of paragraph 6, we are of the considered opinion that paragraph 6 of the Conditions of Service Order indicates as to how categorisation has to be made. In fact on the basis of the adoption of the recommendation of the Pillai Committee, the officers have been categorised into four different categories with nine different scales of pay; Top Executive Grade with three scales, Senior Management Grade with three scales, Middle Management Grade with two scales and Junior Management Grade with one scale and categorisation has to be made taking into account the responsibilities and functions exercisable by the officers concerned. After such categorisation, as provided in Paragraph 6, officers are the required to be placed in corresponding grades and scale. In other words, in the case in hand, Grade I officers, confirmed on or before 31.12.1972 on being categorised as Middle Management Grade Scale II, other officer of Grade I, not confirmed till 31.12.1972 are categorised into Junior Management Grade Scale I, and further, on categorised as Middle Management Grade, while officers Grade I are being placed in Scale II thereof but Staff Officers, Grade III, enumerated in Item No. 7 of Schedule I are placed in Middle Management Grade Scale III. The concept of categorisation, placement and fitment in the new scale of pay are three different concepts, provided in Paragraphs 6, 7 and 8 of the Conditions of Service Order. If this concept is borne in mind and the provisions contained in Schedule I are examined, we see no infirmity in placing officers Grade I not confirmed till 31.12.1972 in Junior Management Grade Scale I, nor can it be said that it would violate the mandate contained in paragraph 6 of the Conditions of Service Order. The said contention of Mr. Rao, therefore, is rejected.

10. The only other contention that survives for our consideration is the Division Bench decision of the Andhra Pradesh High Court, which was upheld by this Court as well as the decision of the Rajasthan High Court in the State Bank of Patiala's case, which was also upheld by this Court. Both in the Andhra Pradesh case as well as the Rajasthan High Court case, it was the officers of the subsidiary bank, who had approached the Court for certain relief and no doubt the observations made by the learned Judges of the Andhra Pradesh High Court would support the contention of the petitioners in this batch of cases to a great extent. But the judgment of this Court, dismissing the bank's appeal against the same, does not contain any discussion, though it cannot be denied that dismissal was on merits. But it transpires that the earlier judgement of this Court in Tarsem Lal Gautam's case, 1989(1) SCC 182, had not been brought to the notice of the Court and when a Contempt Petition had been filed for non-implementation, when the Bank asked for variation of the order and brought to the notice of the Court the judgment in Tarsem Lal Gautam's case, 1989(1) SCC 182, the Court observed that the judgment in Civil Appeal must be confined to its own facts and as such the judgment of the High Court has now to be implemented. What has been observed by this Court in disposing of the contempt application, when the decision of the Court in Tarsem Lal Gautam's case had been brought to the notice, would apply equally to the case in hand, more so, as against a detailed discussion of law in Tarsem Lal Gautam's case, there had been no discussion at all, while dismissing the Bank's appeal against the judgment of the Andhra Pradesh High Court as well as Rajasthan High Court. Consequently, we are of the considered opinion that the observations of the Andhra Pradesh High Court, while disposing of the writ petitions, filed by the officers of the subsidiary banks will not have any application to the case in hand, as had already been observed, while disposing of the contempt application, that it would only be applicable to the facts of that case and more so, in the present case, when we have already considered the contentions raised by the petitioners in detail, and have not been persuaded to accept the same.

11. In the aforesaid premises, all the contentions raised, having failed, these transferred cases/petitions, stand dismissed and the writ petitions filed by different petitioners in different High Court stand dismissed.

12. For the grounds stated in the application for condonation of delay in filing the substitution application in Transfer Petition (Civil) No. 665-668/98, in the interest of justice, the delay is condoned and the substitution application is allowed. The Legal Representatives of the deceased respondent No. 12 are brought on record.

Case dismissed.