# RESERVE BANK OF INDIA & ORS v. C.N. SAHASRAIWWI & ORS

- **Citation:** [1986] 2 S.C.R. 881
- **Court:** Supreme Court of India
- **Decided:** 1986
- **Case number:** Civil Appeal No. 3234 of 1981
- **Bench:** R.S. Pathak, Sabyasachi Mukharji
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/reserve-bank-of-india-ors-v-c-n-sahasraiwwi-ors-9334
- **Pages:** 31

## Headnote

1
Centre-wise seniority and promotion through written
departmental
examlnor
Reserve
Bank
of
India
(Staff)
Regulations 1948 - Administrative Circular No. 8 and 9 dated
13.5.1972, clause ll(a)(i) of the Scheme for Promotion - Staff
'
Officers Grade 11 (Now designated Grade A) covered under -
r Whether part of the scheme is violative of guarantee of
equality before law and equal opportunity ln Public employment
~ as enshrined in Article 14 and 16 of the Constitution -
Industrial Disputes -
Settlement by direct negotiations or
through collective bargaining value of.
The Reserve Bank of India had its offices at nearly 15
centres throughout India.
The
service conditions of the
employees of the Reserve Bank are governed by the Reserve Bank
of India (Staff) Regulations, 1948 and Administrative orders
• -~ passed from time to time and also by Industrial Disputes
Awards
or Settlements
by
negotiations or settlement by
collective
bargaining.
In
the
Reserve
Bank
separrate
-
departmentwise, Groupwise seniority and promotion for cadres
of officers and non-officers (Award Staff) was prevalent from
time to time.
- t ,
-j
In September 1962, the issue of maintenance of combined
seniority list at each centre for the purpose of promotions
was referred to the National industrial Tribunal presided over
by Justice K. T. Desai. The reconmendations of the said Desai
Award were approved by the Supreme Court in All India Reserve
Bank &lployees' Association v. Reserve Bank of India, [ 1966] 1
s.c.R. 25 @ 57 and Reserve Bank of 1ndia v. N.c. Palbral &
On., [1977] 1 S.C.R. 377. In 1970, the Supervisory Staff in
class I was upgraded to staff officers in class I pursuant to
the Memorandum of Settlement dated 9th January, 1970 between
A
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G
H
A
B
c
D
E
F
G
H
882
SUPREME COURT REPORTS
[19861 2 .s.c.R.
the Bank and the All India Supervisory Staff Association,
subject. to certain conditions. The channel of promotion from+-
~
the post of clerk (Grade II) is staff officer (Grade A) and
further from that post to the staff officer (Grade B) and so
on upto Grade F. Prior to 6th June 1970, oral interviews of
all the eligible candidates were held for being considered for
promotion. Then Administrative circular No. 20 was introduced
for the first time for departmental promotions of clerk Grade
!/(Assistant) etc. to the post of Staff Offker Grade II
(Sub-Accountants & Research Superintendent) in all the groups. 'I'
On 7th May 1972, the Bank took several steps towards equalising promotional opportunities of employees by introducing the
Optee Scheme of 1965, the Optee Scheme of 1966 and finally by
:
entering into a Memorandum of Settlement dated 7th May 1972 {
with the Association accepting the principle of maintenance of
.
a combined seniority. On or about 7th May 1972, the Bank
forlllllated a "Scheme for Promotion; Staff Officer Grade II"+
after giving full opportunity to the Association to make its
suggestions. On 7th May 1972 the Bank and the Association
further agreed by exchange of correspondence that the ratio of
direct recruits to the total strength of staff officers Grade
II shall be at 17. 5% -
82. 5%. On 13th May 1972, the Bank
introduced the Administrative Circular No. 8 on "Scheme for
Promotion: Staff Officers Grade II". On the same day the Bank
introduced sillllltaneously the Administrative Circular No. 9 on~."'
"Scheme for combined Seniority List and Switch over from
non-clerical to clerical cadre with effect from 7th May 1972,
Both the circulars are binding on all employees of the Bank in
-
view of the decision of the Supreme Court in M.C. Paliwal 's
case. On May 22, 1974, the Bank took a decision based on the "trecol!IDi!ndations of the cadre Review Co11111ittee under the
Chairmanship of Mr. Justice J.L. Naim and issued Administrative circular No.15 to prepare a c01m00n seniority List and to 1 '
provide for inter group mobility at the lowest level of (~
officers in Grade A with effect from 1st January 1970. On or '
about 7th l"anuary 1978, the Bank

## Text

_Characters 0–39,930 of 72,428. This is a partial read: ask again with offset=39930 for what follows._

;
881
RESERVE BANK OF INDIA & ORS.
v.
C.N. SAHASRAIWWI & ORS.
APRIL 30, l 986
[R.S. PATHAK AND SABYASACHI MUKHARJI, JJ.]
1
Centre-wise seniority and promotion through written
departmental
examlnor
Reserve
Bank
of
India
(Staff)
Regulations 1948 - Administrative Circular No. 8 and 9 dated
13.5.1972, clause ll(a)(i) of the Scheme for Promotion - Staff
'
Officers Grade 11 (Now designated Grade A) covered under -
r Whether part of the scheme is violative of guarantee of
equality before law and equal opportunity ln Public employment
~ as enshrined in Article 14 and 16 of the Constitution -
Industrial Disputes -
Settlement by direct negotiations or
through collective bargaining value of.
The Reserve Bank of India had its offices at nearly 15
centres throughout India.
The
service conditions of the
employees of the Reserve Bank are governed by the Reserve Bank
of India (Staff) Regulations, 1948 and Administrative orders
• -~ passed from time to time and also by Industrial Disputes
Awards
or Settlements
by
negotiations or settlement by
collective
bargaining.
In
the
Reserve
Bank
separrate
-
departmentwise, Groupwise seniority and promotion for cadres
of officers and non-officers (Award Staff) was prevalent from
time to time.
- t ,
-j
In September 1962, the issue of maintenance of combined
seniority list at each centre for the purpose of promotions
was referred to the National industrial Tribunal presided over
by Justice K. T. Desai. The reconmendations of the said Desai
Award were approved by the Supreme Court in All India Reserve
Bank &lployees' Association v. Reserve Bank of India, [ 1966] 1
s.c.R. 25 @ 57 and Reserve Bank of 1ndia v. N.c. Palbral &
On., [1977] 1 S.C.R. 377. In 1970, the Supervisory Staff in
class I was upgraded to staff officers in class I pursuant to
the Memorandum of Settlement dated 9th January, 1970 between
A
B
c
D
E
F
G
H
A
B
c
D
E
F
G
H
882
SUPREME COURT REPORTS
[19861 2 .s.c.R.
the Bank and the All India Supervisory Staff Association,
subject. to certain conditions. The channel of promotion from+-
~
the post of clerk (Grade II) is staff officer (Grade A) and
further from that post to the staff officer (Grade B) and so
on upto Grade F. Prior to 6th June 1970, oral interviews of
all the eligible candidates were held for being considered for
promotion. Then Administrative circular No. 20 was introduced
for the first time for departmental promotions of clerk Grade
!/(Assistant) etc. to the post of Staff Offker Grade II
(Sub-Accountants & Research Superintendent) in all the groups. 'I'
On 7th May 1972, the Bank took several steps towards equalising promotional opportunities of employees by introducing the
Optee Scheme of 1965, the Optee Scheme of 1966 and finally by
:
entering into a Memorandum of Settlement dated 7th May 1972 {
with the Association accepting the principle of maintenance of
.
a combined seniority. On or about 7th May 1972, the Bank
forlllllated a "Scheme for Promotion; Staff Officer Grade II"+
after giving full opportunity to the Association to make its
suggestions. On 7th May 1972 the Bank and the Association
further agreed by exchange of correspondence that the ratio of
direct recruits to the total strength of staff officers Grade
II shall be at 17. 5% -
82. 5%. On 13th May 1972, the Bank
introduced the Administrative Circular No. 8 on "Scheme for
Promotion: Staff Officers Grade II". On the same day the Bank
introduced sillllltaneously the Administrative Circular No. 9 on~."'
"Scheme for combined Seniority List and Switch over from
non-clerical to clerical cadre with effect from 7th May 1972,
Both the circulars are binding on all employees of the Bank in
-
view of the decision of the Supreme Court in M.C. Paliwal 's
case. On May 22, 1974, the Bank took a decision based on the "trecol!IDi!ndations of the cadre Review Co11111ittee under the
Chairmanship of Mr. Justice J.L. Naim and issued Administrative circular No.15 to prepare a c01m00n seniority List and to 1 '
provide for inter group mobility at the lowest level of (~
officers in Grade A with effect from 1st January 1970. On or '
about 7th l"anuary 1978, the Bank took further decision, based
on the reco1111¥!ndations of two Collllllittees headed by Mr. Justice
Naim and Mr. Justice Thareja respectively and issued Administrative Circular No. 8 to combine the seniority of all
officers in Grade 'B' and above with effect from 22nd May 1974
with a view to equalise opportunity for promotions among-tofficers. Both the circulars Nos. 15 of 1974 and 8 of 1978,
'
were approved by the Supreme Court in V.T. Kban:r!Ode & Ors. v.
Reserve Bank of India & Anr., reported in [1982] 2 s.c.c. 7.
R.B.I. v. C.N. SAflASRANAMAN
883
The respondents who were grade U clerks working at
-1Nagpur
Reserve
Bank
ever
since their employment
which
conmenced somewhere between 1960 and 1965 who were aggrieved
by Part of Clause II(a)(i) of the scheme for promotion - Staff
Officers Grade II covered under Administration Circular No. 8
challenged its validity averring that under the new scheme
chance to appear in the examination depended not on relative
merits but merely on the fortuitus circWD!ltances, namely, the
number of vacancies occurring in a particular centre in a
\>anel year which had no nexus with the purpose of promotion
viz. to secure efficient cadre of staff officers. The High
Court accepted the pleas of the respondents and by its order
dated 19th March 1981 struck down that part of clause II(a)(i)
of the scheme Us ted "Number of candidates for the qualifying
test". As a result no examination could be held for panel
~ears 1980-81,
1981-82 and 1983-84. Hence the appeal by
special leave.
Allowing the appeal and approving the modified scheme of
1984 as per the orders and directions of the Supreme Court
including holding a referendum, the Court,
HELD:
1. In service jurisprudence there cannot be any
\I' _.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
and fortunes of sone
individuals is not the
,.
touch-stone. Further, whether there has been
denial
of
equality of the view of promotion or any constitutional right
--•inf ringed or not cannot be judged, where interest of large
number of people are concerned, in the abstract. [909 D-E;
B-C)
--~
Kam! Kanti Datt & Ors. v. Union of India & Ors., [1980)
3 s.c.R. 811 referred to.
2. Circular No. 9 is a counterpart of Circular No. 8.
Circular No. 8 having been held valid, by the Supreme Court
Circular No. 9 1111st also follow to be good. Circular No. 9
1-cannot stand in vaccum and in isolation. It is s step to the
'
fulfilment of the object to be achieved by Circular No. 8,
Viewed in that point of view and as a feasibility and having
regard to the factors and in regard to the history of Reserve
Ban1t eaployees, the scheme as modified by the Ban1t and as
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884
SUPREME COURT REPORTS
[1986] 2 s.c.R.
accepted by vast majority indeed an over willing majority of
the workmen is a proper and just scheme and does not suffer~
from the vice of article 14 or article 16 <>r any other
constitutional guarantees. [909 F-G)
3.1 Settlement of disputes by direct negotiations or
settlement through collective bargaining is always to be
preferred for it is best suited for indusrial peace which is
the aia of legislation for settlement of labour disputes-.
[909 H; 910 A)
~
New Standard F.ngineerlng Co. Ltd. v. II. L. Ahbyankar &
~
Ors., [1978) 2 S.C.R. 798 and Tata F.ngineerlng & Locomtive v.
their Workmen, [1982] 1 S.C.R. 929 referred to.
-'(" ...
3.2 The reference held pursuant to the orders of thil!~ ...
Court dated Lnd May, 1984 undoubtedly indicates that majority
of the employees are in favour of acceptance of the modified
settlement. In matters of service conditions it is difficult
to evolve as ideal set of norms governing various conditions
of services and in grey area where service rules operated, if
more than one view is possible without sacrl.ficing either
reasons or co111110nsense the ultimate choice has necessarily to
be conditioned by several considerations ensuring justice to~ "'
as many as possible and injustice to as few. These principles
however, significant do not authorise the majority of the
employees to trample
up~n the constitutional guarantees or
rights of the individuals or minority employees. Majority
..,.
cannot thwart or barter away the constitutional rights of the
1111.norities. The constitutional guarantees are to protect thist~
very danger. But in judging the content of the constitutional
rights, the entire perspective of the equality of opportunity,
here and denial of equal right in public employment have to be~
viewed in a fair, reasonable and just perspective.
Viewed in
that light, it is true there may be individual instances
exemplifying injustices by postponing or delaying the chances
of promotions of the contesting respondents yet that does not
deny them their constitutional right in its proper measure,
and the considerations that have weighed with the making of
the m:>dified scheme and in light of the, other considerations,__
it 1111st be observed that with whatever care and objectivity or
foresight any rule is framed, soae hardship, inconvenience or
injustice might to result but the paramount consideration is
the reconciliation of the conflicting claims of two important
R.B • .I. v. C.N. SAHASRANAMAN
885
constituents of service -
one which brings fresh clerical
~ employees and the other 1111ture experience. There has been a
happy merger of these two considerations in the scheme
proposed and in that merger, no violation of the guaranteed
rights of the opposing respondents have occurred. [910 C-il;
9ll A-B)
3.3 The promotion scheme having been evolved after
~ careful consideration and having been in operation ever since
the inception of the Banlt with llOdif ication from time to till!
as a result of the negotiations under the Industrial Disputes
Act should not be modified drastically. In such matters one
should hasten slowly. [911 B-C)
'r
4.1 The promotion on the basis of centrewise seniority,
t in the instant case is constitutionally valid, inas1111ch as the
appellant banlt is an undertaking which colll!s within the
Industrial Disputes Act, 1947 and the class Ill employees are
fully covered by the definition of the term "workman" in
section 2(s) of the said Act and one of the principles
normally applicable in fixing their tel"lll!I and conditions of
service is industry-cum-region principle. [893 G-11)
~ ~
llamcbandra
Sba*ar
Deodhar
& On.
v.
State of
Maharashtra & Ors., [1974) 2 S.C.R. 216 distinguished.
~
Billllastan Anl:lbiotics v. 'lfurlLwt, [1967) l s.c.R. 652
and AU-India Reserve Bank Employees' Association v. Reserve
lie'*- of. l:ndia, [1966) 1 S.C.R. referred to.
4.2 The integration of different cadres into one cadre
could not be said to involve any violation of the equality
'
. clause. The right of pr0110tion should not be confused with
mere chance of pr01D:>tion. Though the right to be considered
for promotion was a condition of service, 11ere chances of
prOllOtion were not. It is clear therefore, that the chances of
promotion in some areas occur more often in smaller centres
than in other bigger centres like Bombay, Calcutta, Delhi but
that is fortutious and would not really affect the question,
i
and violate articl!!S 14 and 16 of the Constitution. The
justice of the case should be judged in conjunction with other
factors, the convenience, the future of the fllllily etc.
[899 G; 903 E-F)
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886
SUPREME COURT REPORTS
[1986] 2 S.C.R.
laml ~tl ~t & Ors. v. Union of lndla & Ors., (1980]
3 s.c.R. 811, at pages 841-842; li>bd. Slmjat Ali v. Union of ~
Indla, (1975] l s.c.R. 449 and Reserve Bank of Indla v. c.r.
Dlgbe, (1982] 1 S.C.R. 107 at 121-122 referred to.
4.3 Regulation 31 of the Reserve Bank of India (Staff)
Regulations 1948 is subject to the condition that "unless in
any case it be otherwise distinctly provided." In the instant
case, it has been distinctly provided in the appointment ~
letters as to where the class III employees of the Bank are
liable to serve. All appointment letters issued to all staff
members appointed in class III and below ever since the
inception of
the
Bank
contained,
identical or similar
provision specifying the offices in which of the Bank these {
employees are required to work. 'nlerefore, there was definite
.
provision contrary to as contemplated by Regulation 31 of the +
Reserve Bank of India (Staff) Regulation 1948 and therefore
the general provisions of Regulation 31 would not have any
application. (904 B-<:; D-E]
4, 4 If an All -India cadre is enforced in respect of
Class III employees, it would result in injustice to all the
employees in that class at the injustice to all the employees
in that class at the smaller centres for a considerably long
period of time leading t!l industrial unrest. 'nle result of
applying the principles of an All-India cadree for this class
of employees would be that the senior-most in that whole cadre
All-India wise would
alone have
to be
considered for
promotion. In such a case, for a considerable long time, only
employees of the older offices namely, Bombay, Nagpur, Madras, +-
Calcutta and Delhi will have to be considered, they being by
far senior most among the All-India employees and such a ,
consideration and empanelling would continue for a very long •
time as the principal basis of the settlement was not one of
promotion
on
merit but rather an upgradation on mere
seniority, the only qualification being an examination to •
determine
fitness.
Once
fitness
was
determined
by tlv'
examination the ranking in that examination did not come int_
play thereafter and the successful candidates were again
listed accordio.g to centrewise seniority in the matter of tupgradation and promoted as and when vacancies at that centre
occur. [905 A-El
CIVIL APPELLATE JURISDICTION
Civil Appeal No. 3234 of
1981.
R.B.I. v. C,N, SAHASRANAMAN
[SABYASACHI MUKHARJI, J,]
887
A
-+
From. the Judgment and Order dated 19th March, 1981 of
the Bombay High Court in Writ Petition No. 23311 of 1980.
G.B, Pai and R.H. Parihar for the Appellant.
C.N,
Sahasranaman in person, S.P. Sharma in person, B
K.T,A.
Anantha
Raman,
R.
Basu
Devan,
A.K.
Goel,
Ajit
Pudissery, M.S. Gupta and V.J, Francis for the Respondents.
The Judgment of the Court was delivered by
SABYASACIU MUKHAllJI, J. In the Reserve Bank of India
separate Departmentwise and Groupwise seniority and promotion c
for cadres of Officers and non-Officers (Award Staff) was
prevalent. This would be apparent from the decision of this
Court in Reserve Bank of India v. N.C. Paliwal & Ors., [1977]
1 s.c.R. 377 as well as V.T. Khan"Ode and Ors. v. Reserve Bank
of India and Anr., [1982] 2 s.c.c. 7.
D
In September, 1962, need was felt for maintenance of
combined seniority list at each centre for the purposes of
promotions
recommended
by
National
Industrial
Tribunal
presided over by Mr. Justice K. T. Desai. The recommendations
~ of the said Desai Award for centre-wise combined seniority
were approved by this Court in 1966. See in this connection E
the
observations
in
All
India
Reserve
Ban1t
F.ployees
Associatious v. Reserve Banlt of India, [1966] 1 s.c.R. 25 at
57 and Reserve Bank of India v. N.C. Paliwal & Ors., (supra).
In 1970, the Supervisory Staff in Class I was upgraded
to Staff Officers in Class I pursuant to the Memorandum of F
Settlement dated 9th January, 1970 between the Bank and the
All India Supervisory Staff Association, subject to certain
conditions.
Administrative Circular No. 20 dated 6th June, 1970 was
issued on introduction of written examination for departmental G
promotions of clerk Grade I/Assistants etc. to the post of
Staff
Officers
Grade
II
(Sub-Accountants
and
Research
"i Superintendents) in all the groups. This circular was not made
operative.
H
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888
SUPREME COURT REPORTS
[1986) 2 S,C,R.
On 7th May, 1972, the Bank took several steps towards
equalising
promotional
opportunities
of
employees
by ~
introducing the Optee Scheme of 1965, the Optee Scheme of 1966
and finally by entering into Memorandum of Settlement dsted
7th May, 1972 with the Association accepting the principle of
maintenance of a combined seniority list at a centre. See in
this connection the observations in Reserve Banlt of India v.
l!f,C, Palival, (supra).
On or about 7th May, 1972, the Bank foI'lllllated a Scheme ~
for Promotions : Staff Officer Grade II' after giving full
opportunity to the Association to make its suggestions. On 7th
May, 1972, the Bank and
the Association further agreed by
exchange of correspondence that the ratio of direct recruits
.~
to the total strength of Staff Officers Grade 11 should be at
17. 5% : 82. 5%. Reference in this connection may be made to
Annexure 11 & 111 to the further Affidavit for the bank filed
on 27th August, 1982 and which are in the appeal Paper Book at
p. 134 onwards.
On
13th
May,
1972,
the
Bank
introduced
the
Administrative Circular No. 8 dsted 13th May, 1972 on 'Scheme
for Promotions - Staff Officers Grade 11' which is binding on
all employees of the Bank. On the same day the Bank introduced
si1111ltaneously the Administrative Circular No. 9 on 'Scheme
for Combined Seniority List and switchover from non-clerical
to clerical cadre' with effect from 7th May, 1972 which is
binding on all employees of the Bank. The Constitutional
valdity of this scheme was upheld by this Court in lleaene
Banlt of India v. l!f,C. Palival (supra).
On 22nd May, 1974, the Bank took a decision, based on
I
...
the recommendations of the Cadre Review Committee under the •
Chairmanship
of
Mr.
Justice J,L,
Nain
and
issued the
Administrative Circular No, 15 dated 22nd May, 1974 to prepare
a common seniority list and to provide for inter group
mobility at the lowest level of officers in Grade 'A' wit1' ·
effect from 1st January, 1970, See V.T. D•nawle & Ora. v.
Reserve Banlt of India, (supra).
On or about 7th January, 1978, the Bank took further
decision, based on the recommendations of two Committees, one
headed by Mr. Justice Nain and another headed by Mr. Thareja,
-
R.B. I. v. C.N. SAHASRANAMAN
[SABYASACHI MUKllARJI, J,]
889
A
and issued Administrative Circular No. 8 dated 7th January,
~ 1978 to combine the seniority of all officers in Grade 'B' and
above with effect from 22nd May, 1974 with a vi.ew to equalise
opportunity for promotions among officers. In this connection,
reference may also be made to V.T. Khanzode & Ors. v. Reserve
Bank of India, (supra).
This appeal arises from a decision of the division bench
of the Bombay High Court, Nagpur dated 19th March,
1981
B
~whereby it has struck down a part of clause (II)(a)(t) of 'the
Scheme for Promotion - Staff Officers Grade II (now designated
Grade 'A') covered under the Administration Circular No. 8
dated 13th May, 1972. It may be mentioned that as a result no
·,"-'examination could be held for panel years 1980-81, 1981-82, C
,r and 1982-83 •• The said clause was as follows :
"II. Number of candidates for the qualifying test:-
(a)(t) As estimate of the vacancies anticipated to D
occur in each office during a 'panel year' i.e. 1st
September to 31st August will be declared by the
Bank in advance and the number of candidates tn
that office to be called for the test in order to
fill those vacancies in that office will not exceed
twice the number of such vacancies subject to subclause ••••• "
E
•
It may be mentioned that the decision was rendered in
respect of a petition under Article 226 of the Constitution by
_, three petitioners who were Grade II clerks working at Nagpur
Reserve Bank ever since their employment which commenced
somewhere between 1960 to 1965. The Reserve Bank has its F
---~ offices at nearly 15 centres throughout India. The service
conditions were governed by the Reserve Bank of India (Staff)
Regulations, 1948 (hereinafter called "Regulations").
I
'
The High Court by its order which ts under appeal has set G
aside the tqiugned part of the scheme. It would be necessary
to refer to the said judgment briefly.
i
It may be mentioned that this judgment of the High Court
was delivered on 19th March, 1981. This Court granted special
leave against the said judgment on 4th December, 1981. Then H
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SUPREME COURT REPORTS
(19861 2 s.c.R.
after that on
5th March,
1982,
this Court upheld the
constitutional validity of the Administrative Circular No. 8 ~
dated 7th January,
1978 to combine the seniorty of all
Officers. See V.T. Khanzode & Ors. v. Reserve Bank of India,
(supra). This Court further directed on 29th July, 1982 that
in the interest of justice All India Reserve Bank Employees
Class III Work!Dan Associations and All India Reserve Bank
Workers Organisation be added as the party-respondents, and
the appeal was heard for some time. Then this appeal after
hearing was adjourned and this Court directed the Reserve Bank:lto frame a new scheme for proiootion by order dated 20th
October, 1982. On 13th December, 1982, the Bank filed further
affidavit, inter alia, annexing revised draft of clause II to
the Scheme for Proiootion of Staff Officers Grade 'A' annexed. /
to the Administrative Circular No. 8. This was submitted for "f
acceptance on behalf of the appellants before us. The amend- r
ment
was
opposed
by
the opposing respondents
by their
Affidavits-in-Qpposition.
On 21st March, 1983, it is stated, that the Bank entered
into a settlement by exchange of letters with All India
Reserve Bank Enip' oyees Association which is recognised and
representative Union of Class III Work!Dan employees. The Bank
thereafter filed a Rejoinder setting out principles governing A
recruitment and proiootion of Staff Officers Grade 'A' on 22nd
February, 1983 including the ioodification of the existing
scheme lllltually agreed between the Bank and the Association.
-
On 2nd May, 1984, this Court directed that the settlement
between the Bank and the Association be referred to Class III
employees and opinion of the majority shall be taken on the .tbasis of referendum by secret ballot and the result of the
referendum should be comllllllicated to this Court on 16th July, ,
1984 and the appeal to be heard thereafter. The result of the 'f-----
referendum by secret ballot was filed by t.he Bank by an \
Affidavit, The summary of the result of the referendum seeUB
to be as follows :
"PARTICULARS
No, of votes
accepting the
Settlement
TOTAL VOTES
CAST
11,309
PERCENTAGE TO
AGGREGATE NO,
OF VOTES CAST
67.67%
-+
~
R,B, I, v. C.N. SAHASRANAMAN
[SABYASACHI MUKllARJI, J,]
891
No. of votes not
accepting the
Settlement
5,277
31.58%
No. of votes
declared invalid
126
oo. 75%
16,712
100.00%
Total number of eligible voters
18,953
Total votes polled
16,712 (88.18%)"
The main question which needs determination is whether
part of the scheme mentioned before introduced by the Reserve
Bank of India is violative of guarantee of equality before law
t
and of equal opportunity in public employment. as enshrined in
articles 14 and 16 of the Constitution. The High Court noted
that the point arose at the instance of three petitioners who
were Grade II working at Nagpur branch of Reserve Bank ever
since their employment which conmenced somewhere between 1960
to 1965.
i
The Reserve Bank has its offices at nearly 15 centres
throughout India. The channel of promotion from the post of
Clerk (Grade II) is Staff Officer (Grade A) and further from
the post to the Staff Officer (Grade B) and so on upto Grade
F. Prior to 6th June, 1970, oral interviews of all the
eligible candidates were held for being considered for
promotion. Then Administration Circular No. 20 was issued
introducing scheme of Written Examination for the first time
for giving departmental promotions. The learned judges of the
High Court were of the view that perhaps this was done to
introduce element of objectivity in the test. Candidates who
passed the said qualifying examination were included in the
'fit' list and became eligible being considered for promotion
to the next higher post. The High Court was concerned, as
mentioned hereinbefore, with the said new scheme which is
introduced by Circular dated 13th May, 1972,
Analysing the said scheme, the High Court was of the
view that under the new scheme candidates from a particular
centre numbering twice the anticipated vacancies in that
centre alone were eligible to appear in the departmental
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892
SUPREME COURT REPORTS
[1986] 2 S.C.R.
examination and consequently to quali.fy for promotion. The
grievance of the petitioners before the High Court was that
~
under the new scheme, chance to appear in the examination
depended not on relative merits but merely on the fortuitous
circumstances, namely, the number of vacancies occurring in
a particular centre in a panel year. According to the
petitioners, this had no nexus with the prupose of promotion
viz. to secure efficient cadre of Staff Officers and therefore
the scheme, according to the petitioners, was bad in law. The
High Court found considerable force in this submission.
iIn the impugned judgment under appeal the High Court
relied on Jlamchandra Shankar Deodbar & Ors. v. State of
Maharashtra & Ors., [1974] 2 S.C.R. 216. According to the High
Court the promotion on the basis of Centre-wise seniority was
opposed to the said decision of this Court. There, the +
petitioners were
Tahsildars
in the erstwhile State of
Hyderabad. After the new State of Bombay was constituted with
territories drawn from various existing States including
Hyderabad under the States Reorganisation Act, 1956, equation
of posts and determination of inter se seniority was done by
the Allocated Government Servants' (Absorption, Seniority, Pay
and Allowances) Rules, 1957. Under these rules of 1957, the
Government of Bombay declared that the posts of Mamlatdar in
the former State of Bombay should be deemed to be equivalent
to the posts of Tahsildar from the former State of Hyderabad
and the posts of Deputy Collector in the former State of
Bombay should be deemed to be equivalent to the posts of
Deputy Collector allocated from the former State of Hyderabad.
The recruitment to the posts of Deputy Collector was provided
for by Rules of 30th July, 1959 (called 1959 Rules) according
to which vacancies to the posts of Deputy Collector were to be
filled from three sources 50% by nomination on the basis of
the result of
competitive examination;
25%
by directly
recruited Mamlatdars who have put in at least seven years'
service including the period spent on probation and the
remaining 25% by Mamlatdars promoted from the lower ranks in
the revene departments. The reservation of 25% i.n favour of
directly recruited Mamlatdars was made by the second proviso
of rule (1) of the Rules. On 7th April, 1961 the Government
laid dcMn the principles for regulating the preparation and
revision of select list of Mamlatdars/Tahsildars fit to be
appointed. It was held by this Court by a bench of five
+-
R.B. I. v. C.N. SAHASRANAMAN
[SABYASACHI MUKHARJI, J,]
893
learned judges that the second proviso to rule (1) of the 1959
""f Rules was void as being violative of Article 16 of the
Constitution. This Court was of the view that the procedure
A
for promotion to the cadre of Deputy Collectors followed by
the State Government was also invalid on the ground that it
denied equality of opportunity of promotion and was therefore
B
hit by Article 16 of the Constitution and hence the Government
resolution dated 7th April, 1961 was quashed.
What was done in the aforesaid case was to have an
integrated service of Mamlatdars for the purpose of promotions
to Deputy Collectors' grade which was admittedly a State-wise
grade and that promotion was on the basis of merit-cum-
.
seniority. It was found that select list based on merit and
'(seniority Division-wise for promotion to higher grade, viz.
~ that of the Deputy Collector and these lists were liable to be
varied from time to time on periodical assessment of merits of
the incumbents in that list, and this Court was of the view
that it might lead to injustice in that if promotions were
made from these lists Division-wise there was a possibility of
a less meritorious candidate with lesser seniority being
, romoted
in preference to a more
meritorious candidate
elsewhere. In the instant appeal it is necessary to consider
J- the question o"l' promotions from the Centre-wise cadre to an
·All India Cadre and not a State cadre. If, therefore, any
analogy or parallel has to be sought, then it 111lSt be from the
All India cadre of the Government of India service. It may be
noted that in an All India Service considerati.ons other than
merit on seniority have to be taken into account. In the
-+appellant Bank, the procedure is to give a qualifying test
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just to ascertain the fitness for upgradation. In effect
F
,
upgradation is really done on the basis of seniority alone
subject to fitness. In Deodhar's case, the emphasis was rather
on merit rating and the discrimination was implicit against
more meritorious candidates with higher seniority. But in the
instant case the appellant Bank is an undertaking which comes
within the Industrial Disputes Act, 1947 and
the Class Ill
G
employees are fully covered by the definition of the term
"workman" in section 2(s) of the said Act and one of the
i principles normally applicable in fixing their terms and
conditions of service is the Industry CIDI region principle. It
was stated by this Court in Hindustan Antibiotics v. Wot:km!n,
[1967] l S.C.R. 652 that those principle: should also be
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SUPREME COURT REPORTS
[1986] 2 s.c.R.
A
applied to State-run industries. The question whether the
recruitment to the lowest cadre of officers viz. Class A~
officers should be essentially from Class III employees by
promotion directly came up for consideration by this Court in
All-India Reserve Bault ~loyees' Association v. Reserve Bank
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of India, [1966] 1 S.C.R. 25 and this Court held that a
workman can raise a dispute on such a point. It was in that
context that a dispute was in fact raised and a settlement
under section 18(1) of the Industrial Disputes Act,
1947
was~
entered into with the recognised union namely All India Bank
Employees Association on 7th May, 1972, and the Administration
Circular AC-9 and AC-8 dated 13th May, 1972 issued.
The High Court in the impugned judgment proceeded on the '(1
basis that in fact the Class III employees of the Reserve Bank
,
of India belonged to an All India Cadre freely transferable+
from one place to another. This aspect will be dealt with
later on.
The di vision bench of the Bombay High Court in the
decision under appeal found that the ratio of the said
decision
in
Deodhar's
case
applied
to
the
facts
and
circumstances of the instant case because the cadre of clerk
{Grade II) was all India cadre and not a local cadre and ~
secondly
the
post
of
Staff
Officer
(Group
A)
was
a
transferable
one
even in practice was
a
co111DOn
point.
Examination was also held on All-India basis. Therefore, the
High Court was of the view that even if it was held that the
petitioner's post was not of All India cadre, it would make no
difference for applicability of the principle laid down by +-
this Court in Deodhar's case (supra).
Promotion was
included in the ambit of equality of
employment
or
appointment
under
article
16
of
the
Constitution, according to the Bombay High Court. The Bombay
High Court noted that there were very junior officers like
respondents 4 and 5 before the Bombay High Court Who had been
posted then at Bhopal office. The petitioners before the
Bombay High Court were otherwise qualified and confirmed
employees having 15 years service to their credit and yet they ydid not get the chance to appear in examination as employees
and some respondents got their chances even though they were
appointees
of
1980
and
were
not
even
confirmed.
The
R.B. I. v. C.N. SAHASRANAMAN
(SABYASACHI MUKllARJI, J,]
895
A
respondents 4 and 5 before the Bombay High Court were given
-+the benefit not on the basis of
comparative 11¥!rit but only on
the basis, according to the Bombay High Court, of fortuitous
event
that there had
been vacancies in Bhopal office.
Therefore,
the basis
on which
the
schell¥!
provided was
promotion according to the vacancies in the zonal offices. B
This circumstance
of anticipated vacancies in the zonal
offices has no nexus, according to the Bombay High Court, to
_..the 11¥!rlt-cum-seniority aspect. The Bombay High Court also
could not sustain the contention urged on behalf of the
appellant before us that the schell¥! was contractual and
therefore was binding on the petitioners. It was submitted
that the petitioners before the Bombay High Court and the C
,
three respondents before us were not 11¥!mbers of the union and
)' were not parties to the agreell¥!nt 11¥!ntioned before. Moreover,
t according to the High Court, by agreell¥!nt one could not give
up one's right. It was contended before the High Court that
the validity of the scheme had been upheld by the decision of
this Court in the case of Reserve Bank of India v. 11.C. 0
Paliwal & Ors., (supra) where one part of the scheme Call¥! up
for scrutiny, but according to the High Court as this point
was not the subject matter of scrutiny, the said decision did
not affect the position.
The main grounds on which the High court of Bombay set E
aside the impugned portion of the circular which has been set
out hereinbefore was the position that the presumption that
the staff from which the promotion was made na11¥!ly Class III
employees, clerical and non-clerical belonged to an All-India
cadre and that promotion on the basis of centre-wise seniority
was opposed to the decision of this Court in the case of ll.S. F
Deodhar (supra).
The three petitioners in the court below namely Shri
C.N. Sahasranaman, Shri R. Raman and Shri S.O. Peshkar who
were the three staff members
in the employment
of the
appellant Reserve Bank of India are respondents to this G
appeal. Intervention has been permitted by the Court during
the course of the proceedings by the All India Reserve Bank
Employees• Association, the recognised union who represented
'i the majority of the workmen, and the All India Reserve Bank
Workers Organisation who represented the minority of the
workers both of whom have been made party-respondents. The H
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SUPREME COURT REPORTS
[1986] 2 s.c.R.
other
interveners
are
All-India
Reserve
Bank
Employees
Federation at Hyderabad and All -India Reserve Bank Staff +"
Association. The majority recognised union as well as the last
mentioned
union are supporting the stand taken by
the
appellant bank,
In order to appreciate the controversy in this case, it
was highlighted before us that since the inception of the
bank, separate department-wise and group-wise seniority for~
promotion to the cadre of officers and non-officers were
maintained by the bank,
In 1972, following with recognised union, a combined
seniority list was mintained as a result of the settlerent '{
and the two circulars A.G. Nos. 8 and 9 both dated 13th May,
1972. These are two anneKUres being AnneKUres 'A' and 'B' to-r
the special leave petition to this Court which are in the
Paper Book of this appeal. AnneKUre 'A' deals with the scheme
for combined seniority list and switchover from non-clerical
to clerical cadre. It is not necessary to set out in extenso
the detailed schere, In this schere all employees in Class III
non-clerical cadre substantively in the categories that have
been listed as groups I, III, IV and V in the anneKUre who
were graduates or had passed both parts of Institute of i..
Bankers Examination would be eligible to exercise an option in
accordance with sub-clause (a) or (b) of clause 2 to be
transferred, automatically and without any screening, to posts
in the clercial cadre and also to vacant and other posts than
purely stop gap or short term nature, subject to sub-clause
(b)
mentioned
in the scheme.
Combined
seniority scheme +
introduced by the Reserve Bank to equalise opportunity of
confirmation and promotion of class under the optee scheme
(
came up for consideration by this Court in Reserve Sm* of ,
India v. N.C. Paliwal & Ors., (supra). There the Court noted
that at every centre of the Reserve Bank of India, there were
five departments, the General Department and four Specialised
Departments. There was a separate seniority list for the
employees in each Department at each centre and confirmation
and promotion of elllployees was only in the vacancies arising
within their Department at each centre. There were two grades yof clerks in each Department, namely, Grade I and Grade II.
The pay scales of Grade I and Grade II clerks in all the
R,B, I, v. C.N. SAHASRANAMAN
[SABYASACHI MUKHARJI, J,]
897
departments were the same and their conditions of service were
also identical. There was automatic promotion from Grade II to
Grade I. It ls not necessary to set out in details the
consequences. But it may be mentioned that this optee scheme
gave rise to dissatisfaction amongst the employees in the
General Department and they claimed equal opportunities for
having combined seniority but justified a separate seniority
list on the ground that work tn each Department was of a
1 special nature and their lnterchangeabi llty was undesirable
""I and hard to achieve. As a result of the recommendations of the
National Tribunal, however, the Reserve Bank introduced the
optee scheme 1965 as a first step towards equalisation of
opportunity. Under the scbeme, the option to go over to the
specialised Department was confined to confirmed Grade II
clerks
and
officiating
Grade
I
class
in
the
general
t
department. If he exercised option, he was eligible to be
selected. If he was selected, he would be entitled to be
absorbed only as Grade II clerk in one of the specialised
departments with the result that if he was an officiating
Grade I in the General Department at the time of the exercise
of the option, he would lose the benefit of officiation in
Grade I in the general department as also the monetary benefit
of Rs. 15. His seniority in the cadre of Grade II clerks in
the specialised department in which he was absorbed would be
determined on the basis of his length of service calculated
from the date of his recruitment if he was a graduate when he
joined service, or from the date of his graduation if he
became a graduate whilst in service.
The petitioners in that case and some others were, at
the time of introduction of the Optee Scheme, confirmed Grade
II clerks in the general department and some of them were
officiating in the general department as Grade I clerks. They
exercised the option under the Optee Scheme and were absorbed
substantively as confirmed Grade II clerks in one or the other
of the specialised departments. The clerks, other than the
petitioners were, in due course, in order of seniority,
promoted as officiating Grade I clerks in their respective
specialised
departments.
But
before
the
turn
of
the
petitioners for promotion came, a new Scheme was introduced on
13th May, 1972 as a result of continuous agitation by the
e8'>loyees for full equalisation of opportunities between the
general department and
the specialised departments.
The
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SUPREME COURT REPORTS
[1986] 2 S.C.R.
scheme was known as the Combined Seniority Scheme, and it
superseded the Optee Scheme. It consisted of two parts as ·•
mentioned hereinbefore. One part provided for the integration
of the clerical staff of the General Department with the
clerical staff
of
the
Specialised Departments,
this is
annexure 'A.' of the present Paper Book and the other which is
B
annexure 'B' in the present Paper Book for the integration of
the non-clerical staff with the clerical staff in all the
Departments.