# ~· RESERVE BANK OF INDIA v. N. C. PALIWAL & OTHERS

- **Citation:** [1977] 1 S.C.R. 377
- **Court:** Supreme Court of India
- **Decided:** 1976-08-24
- **Case number:** Civil Appeal Nos. 123 l of 1973
- **Bench:** H. R. Khanna, P. N. Bhagwati, S. Murtaza Fazal Ali
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/reserve-bank-of-india-v-n-c-paliwal-others-6922
- **Pages:** 18

## Headnote

B
Constitution of India, 1950, Art. 14-Combined Seniority Scheme introduced
by the Reserve Bank of India to equalise opportunities of confirmation and promotion of Clerks-Some clerks <~IJected adversely by unforeseen circumstanceslf violative of equal opportunity clause-Right of State to integrated cadres and
lay down principles of seniority.
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 employees was only in the vacancies arising within their
Department at each centre. There were two grades of clerks in each Department,
namely, Grade I and Grade II. The pay scales of Grade I and Grade II clerks in
all the departments were the same and their conditions of service were also identical. There was automatic promotion from Grade II to Grade I and when a alerk
fr0m Grade II was promoted to officiate in Grade I, he got an additional officiating allowance of Rs. 25/- per month. There were also several categories of nonclerical posts in the General as well as Specialised Departments, and their pay
scale was the same as that of Grade II clerks. In view of expanding activities in
the Specialised Departments, there were greater opportunities for confirmation and
promotion for employees in the Specialised Departments than in the General
Department. This gave rise to dissatisfaction amongst employees in the General
Department and they claimed equal opportunities by having a combined seniority·
list for all the clerks for confirmation and promotion. The Reserve Bank, sought
to justify the separate seniority lists on the ground that the work in each department w~ of a special nature and intertransferability was undesirable and hard to
achieve. As a result of the recommendation of the National Tribunal, however,
the Reserve Bank mtroduced the Optee Scheme of 1965 as a first step towards
equalization of opportunities. Under the Scheme, the option to go over to
the>
Specialised Departments was confined to confirmed Grade II clerks and officiating
Grade I clerks in the General Department. If he exercised the 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 clerk 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. 25/-. Bis 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 the present case and some others were, at the time of introduction of the Optee Scheme, confirmed Grade JI 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 Optce Scheme and were absorbed
substantively as confirmed Grade TI clerks in one or the other of the Specialised
Departments. The clerks, other than the petitioners were. in du 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 introduc~d on May 13, 1972 as a result of continuous agitation by
the employees for full equafoation of opportunities between the General Department and the Specialised Departments. This Scheme was known as the Combined Sen;fJrity Scheme. and it sunerseded the Optee Scheme. It consisted of twe
parts. One part provided for the integration of the clerical staff of the General
Department wit

## Text

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I
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RESERVE BANK OF INDIA
v.
N. C. PALIWAL & OTHERS
August 24, 1976
3 77
A
[H. R. KHANNA, P. N. BHAGWATI AND S. MURTAZA FAZAL ALI, JJ.]
B
Constitution of India, 1950, Art. 14-Combined Seniority Scheme introduced
by the Reserve Bank of India to equalise opportunities of confirmation and promotion of Clerks-Some clerks <~IJected adversely by unforeseen circumstanceslf violative of equal opportunity clause-Right of State to integrated cadres and
lay down principles of seniority.
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 employees was only in the vacancies arising within their
Department at each centre. There were two grades of clerks in each Department,
namely, Grade I and Grade II. The pay scales of Grade I and Grade II clerks in
all the departments were the same and their conditions of service were also identical. There was automatic promotion from Grade II to Grade I and when a alerk
fr0m Grade II was promoted to officiate in Grade I, he got an additional officiating allowance of Rs. 25/- per month. There were also several categories of nonclerical posts in the General as well as Specialised Departments, and their pay
scale was the same as that of Grade II clerks. In view of expanding activities in
the Specialised Departments, there were greater opportunities for confirmation and
promotion for employees in the Specialised Departments than in the General
Department. This gave rise to dissatisfaction amongst employees in the General
Department and they claimed equal opportunities by having a combined seniority·
list for all the clerks for confirmation and promotion. The Reserve Bank, sought
to justify the separate seniority lists on the ground that the work in each department w~ of a special nature and intertransferability was undesirable and hard to
achieve. As a result of the recommendation of the National Tribunal, however,
the Reserve Bank mtroduced the Optee Scheme of 1965 as a first step towards
equalization of opportunities. Under the Scheme, the option to go over to
the>
Specialised Departments was confined to confirmed Grade II clerks and officiating
Grade I clerks in the General Department. If he exercised the 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 clerk 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. 25/-. Bis 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 the present case and some others were, at the time of introduction of the Optee Scheme, confirmed Grade JI 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 Optce Scheme and were absorbed
substantively as confirmed Grade TI clerks in one or the other of the Specialised
Departments. The clerks, other than the petitioners were. in du 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 introduc~d on May 13, 1972 as a result of continuous agitation by
the employees for full equafoation of opportunities between the General Department and the Specialised Departments. This Scheme was known as the Combined Sen;fJrity Scheme. and it sunerseded the Optee Scheme. It consisted of twe
parts. One part provided for the integration of the clerical staff of the General
Department with the clerical staff of the Specialised Departments, and the other,
c
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378
SUPREME COURT REPORTS
[1977] 1 S.C.R.
for the integration of the non-clerical staff with the clerical staff in all the Departments. The Combined Seniority Scheme gave an option to the non-clerical employees to be transferred to posts in the clerical cadre, but in the interest of efficiency, prescribed a qualification that only those employees in non-clerical cadres.
would be transferred who are either graduates or have passed both parts of Institute of Bankers' Examination, For determining their seniority vis-a-vis those in
the clerical cadre, the Combined Seniority Scheme adopted the rule that one third
of their total non-clerical service until 7th May, 1972 (the date on which agreement was reached between the Bank a1_1d its employees on the terms of the Combined Seniority Scheme) or the date of acquiring the qualification should be taken
into nccount.
The petitioners successfully challenged the Combined Seniority Scheme in the
High Court. The High Court held that the Scheme-was violative of Arts. 14 and
16 of the Constitution, because:
(1) The position which obtained when the
Combined Seniority Scheme was brought into force was that the petitioners were
still confirmed Grade II clerks in the Specialised Departments, while some of the
Grade II clerks in the General Departments, who were junior to them and who
had either not exercised the option, or having exercised the option, were not
selected, were promoted as Grade I Clerks in the General Departments. The
result was that these Grade II clerks who had been promoted as Grade I Clerks
in the General Department were equated to Grade I Clerks in the Specialised
Departments. Therefore, according to the petitioners, the Combined Seniority
Scheme had' the effect of prejudicing the promotional opportunities assured to the
petitioners under the Optee Scheme and hence the Combined Seniority Scheme
discriminated against the petitioners in relation to the clerical staff in the General
Department who either did not exercise the option under the Optee Scheme or
having exercised the option, were not selected; (2) it discriminated against the
petitioners vis-a-vis others who had opted under the Optee Scheme of 1965 and
who had obtained promotion as Grade I clerks in their respective Specialised
Departments before the introduction of the Combined Seniority Scheme; and
(3)(a) the Scheme treated alike the non-clerical staff as well as the clerical staff
by integrating them together in one cadre with a combined seniority list though
they formed two distinct and separate classes, and thus violated the equality
clause; (b) by permitting, in the case of non-clerical staff, one-third of the total
non-clerical service until 7th May, 1972 or the date of acquiring the qualification,
to be taken into account for the purpose of seniority, the Bank laid down a wholly
irrational and unjust principle of seniority in the integrated service and violated
the equal opportunity clause and; ( c) the seniority of the petitioners was adversely affected by the integration without giving any opportunity to them and
thus the introduction of the Combined Seniority Scheme violated the principles of
natural justice.
Allowing the appeal to this Court and upholding the validity of the Combined
Seniority Scheme,
HELD : (1) Assuming that the Reserve Bank is State under Art. 12, and
therefore subject to Arts. 14 and 16, by the mere introduction of the Optee Scheme
no promise or assurance could be spelt out on the part of the Bank not to take
any steps towards integration of other employees not covered by the Optee
Scheme. The Reserve Bank could not, on any principle of law or by any process
of implication, be held bound to hold its hands in the matter of further integration, until the petitioners were promoted in, the Specialised Departments. The only
object of the Optee Scheme was to equalise the promotional opportunities of
Grade II clerks in the General Departments with those of Grade II clerks in
the Specialised Departments by givin~ an option to the former to be ab,orbed
in the latter. This object was carried out oo soon as the petitioners and other
Grade II clerks in the General Departments opted to be t~ansferred t.o . the
Specialised Departments. Then they became Grade II clerks m the Specialised
Departments having the same promotional opportunities as the origit?al Grade II
clerks in the Specialised Departments. There was no assurance given by the
Bank that the promotional opportunities available to Grade II cler~s jn the Specialised Departments will not be diminished. The Combined ~emor1tv S~h~me
affected the promotional opportunities of all Grade II cl~rks m the Specialised
Departments, irrespective of whether they were oriirinal or transferee Gra?~ lT
clerks. It did not discriminate between trnnsferee Grade JI clerks and ongmal
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RESERVE BANK V. N. C. PALIWAL
379
-Grade II clerks. There was no breach of the principle that the promotional
A
opportunities of transferee Grade II clerks should be equal to those of original .
. Grade lI clerks. The fact that some of the Grade II clerks, junior to the
petitioners, had become Grade I clerks in the General Departments, and so
could be equated only with Grade I clerks in the Specialised Departments is a
wholly fortuitous result. It might cause heart-burning amongst the petitieners
that they still continue to be Grade II clerks but whenever services are integrated,
some hardship is bound to result as a necessary. consequence of integration.
[389 F; 391 B-Gl
B
(2) The Reserve Bank did not undertake that it will not take any steps for
bringing about total integration of the clerical services until all the transferee
·Grade II clerks were promoted. The Reserve Bank was entitled to introduce the
Combined Seniority Scheme at any time it thought fit and its validity cannot be
assailed on the ground that it was introduced at a time when some of the transferee Grade II clerks still remained to be promoted and so was discriminatory
against them.
The fact that some transferee Grade II clerks had already obtained promotion as Grade I clerks in the Specialised Departments by the th~e
C
the Combined Seniority Scheme was introduced, is all part of the. exigencies of1
service and in law no grievance can be1 made against it. [392 D-E]
(3) (a) The integration of different cadres into one cadre cannot be sa·id to
involve any violation of the equality clause. It is entirely a matter for the State
to decide whether to have several different cadres or one integrated cadre in its
services.
That is a matter of policy which does not a-ttract the applicability of
the equality clause. The integration of non-clerical with clerical service sought
to be effectuated by the Combined Seniority Scheme cannot, in the circumstances,
D
be assailed as violative of the principl~ of quality. [393 F]
Kishori Mohan/al Bakshi v. Union of India AJR 1962 S.C. 1139 referred lo.
(b) It is open to the State to lay down a•ny rule which it thinks appropriate
for determining seniority in service and it is not competent to the Court to strike
down such a rule on the ground that in its opinion another rule would have been
better or more appropriate. The only enquiry which the Court can make is
whether the rule laiid down by the State is arbitrary and irrational so that it
E
results in inequality of opportunity amongst employees belonging to thco same
class. [393 G-H]
Jn the present case the employees from non-clerical cadres were being absorbed in the clerical cadre, and, therefore, a rule for determining their seniority
vis-a-vis those already in the clerical cadre had to be devised. To ignore their
-entire non-clerical service would have been unjust to them, a·nd to take into
account their entire non-clerical services would be unjust to those in the clerical
service. The Bank therefore, decided that one third of the non-clerical service
F
rendered by the employees coming from non-clerical cadres should be taken into
account for the purpose of determining seniority. It strikes a just balance between the conflicting claims of non-clerical and clerical staff a·nd cannot be condemned as arbitrary or discriminatory.
[394 A-BJ
to.
Anand Parkash Saksena v. Union of India [1968] 2 S.C.R. 611, referred
.
(c) (i) The contention that there was violation of principles of natural jllStJce wa.s not raised before the High Court; (ii) Even if the contention is allowed
G
·to be raised in this Court, there was no question of any existing seniority of the
petitio_ner~ being distu~bed by changing the rule of seniority. The problem was
of fittmg mto the clencal cadre employees coming from non-clerical cadres. For
that purpose, a new rule was required to be made. The rule did not affect the
petitioners' s~niority, and hence, there was no question of giving the petitioners
an opportumty to make representation against it. [394 E]
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 123 l of 1973
and 1408 of 197.
H
(From the Judgment and Order dated 11-5-1973 of the Delhi
High Court in Civil Writ No. 690/72).
A
380
SUPREME COURT REPORTS
( 1977] 1 S.C.R.
B. Sen, and I. N. Shroff for the Apellant (in Appeal No. 1231/73)
S. V. Gupte, P. P. Rao and A. K. Ganguli for Respondent Nos. 1,
2, 4, 6-18, 20, 22, 23, 25-32, 34 and 35.
M. K. Ramamurthi, C. N. Murti and R. C. Pathak for Respomdent
36.
B
M. K. Ramamurthi, C. N. Murti and R. C. Pathak for the Appellant (in Appeal No. 1408/74).
,
P. P. Rao and A. K. Ganguli' foi Respondents 1, 2, 4, 6-18, 20, 22,
23, 25, 32, 34 & 35.
\,,
B. Sen and I. N. Shroff 'for Respondent 36.
C
The Judgment of the Court was delivered by
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BHAGWATI, J.-The Reserve Bank of India is the appellant in
Civil Appeal No. 1231 of 1973.
This appeal,
on
certificate,
is
directed against a judgment of the High Court of Delhi allowing Writ
Petition No. 690 of 1972 filed by some of the employees of the Reserve
Bank challenging the validiy of the combined seniority Scheme issued
by the Reserve Bank of India by its Circular dated 13th May, 1972.
This judgment of the High Court is.also assailed by the All India
Reserve Bank Employees Association (hereinafter referred to as the
Association) by preferring Civiil Appeal No. 1408 of 1974 after obtaining certificate from the High Court. Both these appeals have been
heard together since they are directed against the same judgment and
all the arguments raised on behalf of the appellants are also common
except one additional [lrgument advanced on behalf of the Association
in Civil Appeal No. 1408 of 1974.
The facts giving rise to these two
appeals are a little important and it is necessary to state them in order
to appreciate the questions arising for determination in the appeals.
The primary purpose for which the .Reserve Bank of India was
originally constituted was "to regulate the issue of bank notes and the
keeping of the reserves with a view to securing monetary stability in
India and generally to operate the currency and the credit system of
the country to its advantage". But in course of time other functions
came to be added as a result of various statutes passed by the Parliament from time to time to meet the economic needs of the country.
The administrative machinery of the Reserve Bank for carrying out
these diverse functions
was at the material time divided into the
following five groups of departments: ( 1) Group I : General Side,
that is, Banking Department, Issue Department, Public Debt Division
and Exchange Control Department; (2) Group II: Department
of
Banking Operations, Development and Industrial Finance Department
and Department of Non-banking Companies; (3) Group III: Agricultural Credit Department, ( 4) Group IV : Economic Department and
Department of Statistics and (5) Group V: Industrial Development
Bank of India. The departments falling within the first group were
known as the general departments, while the departments falling within the other four groups were known as the specialised departments.
Though recruitment to these different groups
of departments was
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RESERVE BANK v. N. c. PALIWAL (Bhagwati, J.)
381
made on a common basis, each group of departments was treated as
a separate unit for the purpose of determining the seniority and promotion of the employees within that group and <his
was
don~ ?n
centrewise basis.
The result was that there was a separate semonty
list for the employees in each group of departments at each centre ef
the Reserve Bank and the employees could seek confirmation and promotion only in the vacancies arising within their own group of
departments at their own centre.
There were two grades of clerks in each group of departments,
namely, Grade I and Grade II.
The pay scales of Grade I and Grade
II clerks in all the groups of departments were the same and their
conditions of service were also identical.
There Was automatic promotion from Grade II to Grade I and when a clerk from Grade II
was promoted to officiate in Grade I he got an additional officiating
allowance of Rs. 25/- per month.
While Grade I
and
Grade II
clerks in the specialised departments were invariably graduates, those
in the general departments were not always so.
Some out of them
were graduates, while others were non-graduates.
There were
also
several categories of non-clerical posts in the general as well as specialised departments.
They were in Grade II and the pay scale of
this Grade was the same as that of Grade II clerks in the general and
specialised departments.
It appears from the Circular of the Reserve
Bank dated 13th May, 1963 that Stenographers, Typists and Coin/
Note Examiners, though falling within -the category of mm-clerical
staff,. were sometimes transferred as Grade II clerks and by this circular, it was decided that "with effect from 1st July, 1963, the trruasfer of staff-from one category to another should be governed" by the
principles there set out.
Two categories of transfers were
contemplated by this Circular : one was transfer by selection and the other
was transfer on grounds of health.
The first category of transfers by
selection required that the Stenographer, Typist or Coin/Note Examiner seeking transfer would have to be a graduate or should have
passed both parts of the Institute of Bankers' Examination and
his
application for transfer would be considered by the manager from the
point of view of his record of service and his suitability for transfer to
the clerical grade and he would then have to appear for
interview
before a selection board and it was only if he was selected that he
would be transferred as Grade II clerk.
But once he was transferred
as Grade II clerk, his seniority in the new cadre would be counted
from the date on which he joined service, as a Typist or Coin/Note
Examiner and in the case of a Stenographer, from the date1 on which
he joineu service as a Typist or as a Stenographer
in
case
he
was directly recruited as such "provided that the said date shali not
be earlier than the date on which the transferee acquired the degree
or banking qualification by reason of which he became eligible for -
such transfer : that is to say, in the case of a Coin/Note Examiner/
Typist/Stenographer who graduates or acquires the banking qua!ilkations after the date of his joining service, he will be deemed to have
joined service "only on the date he acquired the said qualification".
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SUPREME COURT REPORTS
[1977] l S.C.R.
The second category of transfers was on grounds of health.
However, that is not material for our purpose and we need not consider it.
lt seems that in view of the expanding activities of the Reserve
Bank in the Specialised Departments, there were greater opportunities
for confirmation and promotion for
employees in the specialised
departments as compared to those available to
employees
in the
general departments.
This gave
rise
to
dissatisfaction
amongst
employees in the general department and they claimed for equalising
the confirmation and promotional opportunities by having a combined seniority list for all employees in Class III irrespective of the
departments to which they belonged basing promotions on such combined seniority list.
This question was also raised by the Association
before the National Tribunal consisting of Mr. Justice K. T.
Desai
and it was pleaded by the Association that "all promotions should be
made strictly according to the combined seniority irrespective of the
cadre of department".
The Reserve Bank, on the other hand, sought
to justify the maintenance of separate seniority lists for various departments on the ground that the work in each department was becoming
more and more of a special nature and inter-transferability was
not
only undesirable in the best interest of the Bank, but it was also hard
to achiefJe.
The National Tribunal, while not accepting the demand
of the Association and expressing its inability to give any direction to
the Reserve Bank in regard to this question, made the following
observations in its Award :
"I can only, generally, observe that it is desirable that
wherever it is possible, without detriment to the interests of
the Bank and without affecting the
efficiency,
to
group
employees in a particular category serving in different departments at one Centre together for the purpose of being considered for promotion a common seniority list of such empioyees should be maintained.
The same
would
result
in
opening up equal avenues of promotion for a large number
of employees and there would be lesser sense of frustration
and greater peace of mind among the employees."
T1J.ese observations of the National Tribunal were approved by
Hiday.atullah, J., as he then was, speaking on behalf of this Court in
Atl Indiu Bdnk Employees Association v. Reserve Bank of India(') at
page 57.
In view of these observations of the National Tribunal, which
were endorsed by this Court, the Reserve Bank took the first step
towards equalising the confirmation and promotional opportunities of
employees in the General Departments by introducing
the
Optee
Scheme of 1965 by a Circular dated 29th June, 1965.
Clause (1)
of the Scheme provided that all vacancies in Grade II Clerks occurring
in Specialised Departments in each centre upto
30th
June,
1970
would be treated as expansion vacancies to be filled up by transfer of
confirmed Grade II Clerks including officiating Grade I Clerks in the
-
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(1) [1966] 1 S.C.R. 25.
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RESERVE BANK v. N. c. PALIWAL (Bhagwati, J.)
383
General Departments.
The manner in which these vacancies shall be
A
filled was set out in clauses (2) and (3) which read
inter alia
as
fol1ows :
"A circular will be issued inviting applications in form
'A' from confirmed graduate Clerks Grade
II
(including
officiating Clerks Gr. I) of the General Side (Group I) for
the preparation of a panel of suitable employees who are
willing to opt for transfer to any of the Departments in
Groups II, III and V at each centre under
the
optee
scheme.-As regards the non-clerical staff transferred to the
clerical cadre, only those who have been absorbed against
permanent vacancies of clerks Gr. II on the General Side
will be eligible to opt for transfer.
(i) The panel will be a consolidated one, i.e., separate
panels will not be prepared for each of the Departments in
Groups II, III and V at each centre.
(ii) The option exercised by the employees will be subject to the approval of the 'Manager' depending
on their
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past record of service and suitability for transfer to depart- .
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ments in Groups II, III and V.
(iii) (a) The position of employees on the panel, recruited directly as clerks Gr. II from the waiting list of graduate
clerks Gr. II will be determined according to their dates of
recruitment.
(b) In the case of employees recruited from the waiting
list of undergraduate clerks Gr. II who have become graEtuiates while in service, and in the
case
of
non-clerical
graduate staff transferred to the clerical cadre, their position
in the panel will be determined according to their dates of
graduation.-
( iv) As and when vacancies arise in the Departments in
Groups II, III and V at each centre, they will be filled up by
drawing on the panel, the first vacancy going to the first
person on the panel, the second to the second and so on.
An employee will have no choice of the Department to which
lie will lie posted.
The posting will be made in the ordcr
in which the vacancies arise.
( v) Officiating clerks Gr. I will be transferred
only in
their substantive capacity as clerks Gr. JI.
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(vi) (a) The seniority of the optees on transfer to the
Departments in Groups II, III and V will be determined on
the basis that their transfers to the concerned Departments
have been made in the interest of the Bank, that is to say,
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the substantive position of the transferee in the seniority list
of the Department concerned will
be fixed
above and
employee who joined service after the date of his recruitment
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SUPREME COURT REPORTS
(1977] l S.C.Ror date of graduation as the case may b:! and below the
employee who joined service before the date of his recruitment! graduation. ---
( c) The above method of fixation will, however be subject to the provision that if a substantively junior employee
in the Department to which the transferee is posted is already
officiating in that Department in a higher grade on a longterm basis on the date the transferee reports for duty that
officiating employee will be considered senior to the transferee.
The inter-se seniority of the transferee posted to
the same Departments in Group II, III and V will be fixed
in the order in wS.ich their names are listed in the panel.---
( viii) The panel will be revised annually."
It will be seen that under the Scheme the option to go over to the·
Specialised Departments was confined to confirmed Grade II Clerks.
and officiating Grade I Clerks in the General Departments.
But there
also, every Grade II Clerk and Officiating Grade I Clerk was not
entitled to be absorbed in the Specialised Departments as of right, but
he had to go through a process of selection and the option exercised
by him was "subject to the approval of the Manager depending on
his past record of service and suitability for transfer" to the Specialised
Departments. If he exercised the option and was selected, he would
be entitled to be absorbed only as Grade II Clerk in one of the Speciali~ed Departments with the result that if he was an officiating Grade I
Clerk in the General Departments at the time of the exercise of the
option, he would Jose the benefit of officiation in Grade I in the General
Departments as also the monetary benefit of Rs. 25/- per month
which he was getting during such officiation. His seniority in the cadre
of Grade II Clerks in the Specialised Department in which he was
absorbed would be liable to be determined on the basis of his length
of service calculated from the date of his recruitment if he was
also
a graduate when he joined service or from the date of his graduation
if he became a graduate whilst in service.
The rationale behind this
provision obviously was that graduation being regarded as
essential
qualification for being a Grade II Clerk in the Specialised Departments, the length of service from. the date of graduation alone should
be taken for the purpose of determining the seniority of transferees
from the General Departments.
The petitioners in Writ Petition No. 690 of 1972, who m_ay
for
the sake of convenience be hereafter referred to as the pettt10ners,
were, at the time of the introduction of the Optee Scheme of 1965,
confirmed Grade II Clerks in the General Departments and some of
them were officiating in the General Departments as Grade I Clerks.
Though most .of the petitioners were recruited as Grade II Clerk1s from
the beginning, so far as petitioners 4, 9, 16, 18, 19, _23 and 26 were
concerned, they were originally recruited to non-c!encaJ posts
an~
subsequently transferred as Grade II clerks bv selection and that is
how at the date when the Optee Scheme of 1965 came into force, they
were confirmed Grade II Clerks in the General Departments.
The
(
··'
RESERVE BANK v. N. c. PALIWAL (Bhagwati, J.)
385
petitioners exercised the option under the Optee Scheme of 1965 and
were absorbed substantively as confirmed -Grade II Clerks in one or
the other of the Specialised Departments.
Obviously,
the consequence was that those of the petitioners who were officiating as Grade
I Clerks in the General Departments lost their officiating position as a
result of this transfer together with the attendant monetary benefit of
Rs. 251- per month.
Besides the petitioners, there were also other confirmed Grade II
Clerks and Officiating Grade I Clerks in the
General Departments
who, having exercised the option and being selected, were taken over
as confirmed Grade II Clerks in the Specialised Departments.
Some
of them-a few-were, in due course, in order of seniority, promoted
A
B
as Officiating Grade I Clerks in their respective Specialised Departc
ments.
But before the turn of the petitioners for promotion could
arrive, a new Scheme was brought into force to which we shall presently
refer.
It appears that the Association was not
satisfied with the
Optee Scheme of 1965 as .it did not go far enough and equalised
opportunitie1s for only a section of the
employees
in the
General
Departments, namely confirmed Grade II Clerks and Officiating Grade
I Clerks, leaving the rest in the same disadvantageous position
as
D
before.
The Association, therefore, continued to press its
demand
for complete equalisation of opportunities and in 1969, the Reserve
Bank took one further step with a view to
partly satisfying
that
demand.
The Reserve Bank introduced another Scheme called the
Optee Scheme of 1969 for transfer of confirmed Grade I Clerks in
the General Departments to the Specialised Departments to the extent
of one-third of the long term normal vacancies of
Grade I Clerks
E
arising in the Specialised Departments during
the period from Ist
February, 1969 to 30th June, 1970. But this also did not satisfy the
Association for what the Association desired was full equalisation of
opportunities between the General Departments and the Specialised
Departments.
The Association continued to agitate for acceptance
of its demand and ultimately, as a result of negotiationis, an agreement
dated 7th May, 1972 was arrived at between the Reserve Bank and
F
the Association by which the demand of the Association was substantially conceded and the principle of a combined seniority list was
accepted by the Reserve Bank.
The petitioners
and some other
employees were, however, not members of the Association and they
refused to accept the terms of this agreement and hence the Reserve
Bank issued a Circular dated 13th May, 1972 introducing a Scheme
for combined seniority list and switched over from non-clerical
to
G
clerical cadre
with effect from 7th May, 1972.
This
Scheme was
substantially in the same terms as the agreement dated 7th May, 1972
and we shall hereafter, for the sake of convenience, refer to
this
Scheme as the Combined Seniority Scheme.
The Combined Seniority Scheme co11JSisted broadly of two parts.
One part provided for the integration of the clerical staff of the GeneH
ral Departments with the clerical staff of the Specialised Departments
and the other, for the _switchover and integration of the non-clerical
staff with the clerical staff in all the Departments of the Reserve Bank
A
B
c
D
E
F
G
H
386
SUPREME COURT REPORTS
[1977] 1 S.C.R.
Clauses (8) and (9) dealt with the first part and they provided inter
alia as follows :
"8. Combined Seniority between
clerical
staff in
departments
different
The seniority lists of the staff mentioned below working in the
general side and Specialised Departments (i.e. in all the Groups I to
V of the Department-wise grouping)
will be merged into one with
effect from 7th May, 1972 in accordance with the provisions of clause
IO in the manner set out below :
(a) All Clerks Grade II, Field Investigators and
Clerks
Grade I (with less
than one year
total
officiating
service) will be placed in tlhe combined seniority list,
· relative seniority of an employee being fixed according
to the date of his first appointment as
Clerk/Field
Investigator.
(b) All confirmed Clerks Grade I, Clerks Grade I officiating as such on 7th May, 1972 with one year or more1
total officiating service, Assistants (temporary, officiating as well as confirmed) and Field Inspectors will be
placed in the combined seniority list ranking as a group
above the employees listed under sub-clause (a) above.
The relative seniority of an employee will be fixed on
the basis of the total length of service put in by him
from the date he first started officiating as Clerk Grade
I/Field Inspector after deducting
therefrom
periods
during which he reverted as clerk Grade II/Field Investigator otherwise than on
account
of proceeding
on leave.
(c) Fixation of seniority as referred to in sub-clauses (a)
and (b) above will be subject to the proviso that the
inter-se position as between
two
employees
in the
existing groupwise/departmentwise seniority lists is not
disturbed to the detriment
of any senior
employee
within the same group/department except as provided
for in clause 6 and sub-clause ( e) below.
(d)
(e)
x
x
x
x
The seniority of class III personnel having been fixed
as provided for in sub-clauses (a) and (b) above the
seniority of an optee, selected
clerk in the
existing
specialised departments Whose seniority compared to his
juniors in the existing General si\fe is adversely affected
will be protected to the extent of his entitlement had he
not opted/been
selected
under
the
optee/selected
scheme :
Provided that he shall apply in this regard
in writing within one month from the
date of notification of the combined
seniority list.
Applications
RESERVE BANK V. N. C. PALIWAL (Bhagwati, J.)
387
for such adjustments will not be entertained after
A
expiry of the period stipulated above.
9. (i) (a) Employees officiating as Clerks Grade I on 7th
May,
1972 .
. An employee officiating as a Clerk Grade I as on 7th May 1972
will continue to officiate without prejudice to the claims of employees
whose position may be above him in the combined seniority list. If
he reverts, his next promotion will be according to his substantive
seniority in the combined list.
Reversion only on account of proceeding on leave will not be deemed as reversion for the ptirpose of
this clause.
B
(b) Promotion as Clerks Grade I between 7th May 1972
and the notification of the combined seniority list.
C
Promotionis during this pedod will be made with reference to the
existing departmental/ groupwise seniority list but without prejudice
to the claims of seniors in the combined seniority list.
When the
combined seniority list, becomes available, a review of all such promotions made in the interregum will be made and senior employees not
officiating in the higher grades will be promoted by replacing
the
D
junior employees.
The review will be completed within a period of
two weelrn.
(c) Promotions as Clerks Grade I thereafter.
Promotions will be made from the combined seniority list"
The second part was provided for in clauses (1) to (7) and these
E
clauses, so far as material read thus :
"1. Combined seniority between clerical staff and eligible
non-clerical staff opting for switchover :
(a) All employees in Class III non-clerical cadre substan-
(b)
tively in the categories that have been listed as groups
I, ill, IV and V in the annexure (Reference is not to
the department-wise groups) who are graduates or have
passed both parts of Institute of Bankers Examination
will 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
clerical cadre which are vacant and are other than of a
purely stop gap or short term nature, subject to subclause (b) below.
Actual transfer to positions involving clerical duties will be effected in a phased manner
as laid down in clause 7.
On such option being exercised within the period of two
months as per clause 2 (a), or one month as per clause
2 (b) as the case may be, the position of such optee
will be fixed in the combined seniority list by counting
for the purpose of seniority in the clerical cadre onethird of his total non-clerical service in Class III in the
F
G
H
A
B
c
D
E
F
G
11
388
SUPREME CGURT REPORTS
[1977] 1 S.C.R.
3.
2. (a)
(b)
Ban~ unt_il 7t.h May 1972 or the ?ate of acquiring the
quahficatwn i.e. the date qf pub!Ication of t!he r~sults
of the examination, as the case may be
(v:ide clauses
3(a) and 3(b).
x
x
x
x
x
Any employee who acquires the qualification for eligibility after the 7th May 1972, will
have, wiehin one
month of acquiring the said qualification, to exercise
his option whether he
desires to switch over to the
clerical cadre with his seniority
being determined as
per clause l(b). The option once exercised shall
be
final subject to the right of revocation and with
the
same consequences, as at subclause (a) above. Those
eligible but not exercising the option within the aforesaid period of one month shall
lose
the
right
of
option thereafter.
(a) The notional seniority in
the clerical cadrg of
those
employees who are eligible for switchover on the 7th
May 1972 and ex1.0rcise their option under clause 2(a)
will be fixed with effect from 7th May 1972.
(b) In respect of empleyees who
acquire the
eligibility
qualification in future and exercise their option under
clause 2 (b), their notional
seniority in the
clerical
cadre will be fixed with effect from the date of acquiring such qualification viz.
date of publication of the
results of the examination.
(c) Fixation of seniority whether under sub-clause (a) or
(b) will, howewr, be subject to the proviso
that the
inter-se position as between two
employees
in
the
concerned soniority list of non-clerical employees as it
stood immediately before
the 7th Mav 1972 or the
date of acquiring the
qualification for switchover is
not disturbed to the detriment of a senior employee
as in the relevant seniority list.
(Illustration for fixation of seniority is Enclosure I)
4. (a) An employee opting for switshover
will, for the purpose of compilation of the combined . 10eniority list, .be
deem~d to be n member of the clcncal cadre
w1t,h
effect from the date as at clauses 3(a)
and 3(b),
as the case may be.
(b) Until such time as he is actually tran~fcrred to ~he cl~ri
cal cadre :m optee from the no11-clencal grade 111 which
he is placed at the time of option nnd will accordii:gly
remain eligible for
promotion
in
the
non-clencal
cadre;
Provided that an employee officiating in a category that
is listed as group II, VI, ·VU or VJU of Ani:exure as the
case mav be confirmed in that category only if he revokes
his earli~r option before confirmation, for which he will have
an oppodunity,"
).·
)_
I
RESERVE BANK v. N. c. PALIWAL (Bhagwati, J.)
389
1t may be pointed out that though the Optee Scheme of 1965 was
.origrnally imended to be operative only upro 30th June, 1970, it was
.contmued nght upto the ume that the Combined Seniority Scheme
.came_ into force.
The effect of the Combined Seniority Scheme was
that _it superseded the Optee Scheme of 1965.
The petitioners were
~ggneved by t~e Combined Seniority Scheme since according to them
A
it affe_cted thelf chances of confirmation and promotion and placed
the1:11 m a disadvantageous position and accordingly they filed Civil
Wnt No.