# SOUTH MALABAR GRAMIN BANK v. CO-ORDINATION COMMITTEE OF SOUTH MALABAR

- **Citation:** [2001] 1 S.C.R. 742
- **Court:** Supreme Court of India
- **Decided:** 2001-01-31
- **Case number:** Civil Appeal No. 2218 of 1999
- **Bench:** G.B. Pattanaik, B.N. Agrawal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/south-malabar-gramin-bank-v-co-ordination-committee-of-south-malabar-17723
- **Pages:** 28

## Headnote

C
Service law
Regional Rural Banks Act, 1976-Section 17 (/) Proviso 2 -Pay
structure of Regional Rural Banks-Determination of-Claim of parity with
the pay strucfl/re of commercial banks-Tribunal awarding parity-Whether
D the pay would automatically get revised when pay of commercial bank
employees gets revised-Without determination by Central GovernmentHeld, pay structure could be revised only after the Central Government
exercises its power under the provisions of the Act and determines the same
-It would be duty bound to maintain the parity with the pay structure of
the employees of the commercial banks-Power conferred upon the Central
E Government, by the legislature cannot be taken aw0' by an award of a
tribunal.
P0' structure-Determination of-Whethe~ financial condition of the
employer bank relevant for determination-Held, no.
F
Words & Phrases-'Parity'-Meaning of.
Writ petitions under Article 32 of the Constitution were filed by Gram in
Bank Workers' Association and All India Regional Rural Bank Employees'
Association claiming parity in their pay structure with the pay structure of
the employees of rural banks of nationalised commercial banks. To decide
G the issues in the matter, Tribunal was appointed. The Tribunal in its award
held that the officers and the employees of the Regional Rural Banks (RRBs)
were entitled to claim parity with the officers and other employees of the
commercial banks in the matter of pay scale, allowances and other benefits.
H
'
Government of India implemented the award vide its order dated
742
, __
-
---JrS.M.G BANK 1·. CO-ORD. COMM. OF S M.G. BANK EMPLOYEE
743
22.2.1991 and the employees were also extended the benefit of 4th and 5th A
Bipartite Settlement on the basis of which the pay scale of commercial banks
has been determined. Thereafter pay structure of the employees of the
commercial banks got revised by 6th and 7th Bipartite Settlement, but there
was no corresponding revision of the pay structure of the employees of the
RRBs. The respondents therefore filed writ petition before the High Court,
claiming revision of their pay scale as per 6th and 7th Bipartite Settlement. B
Single Judge allowed the writ petition holding that since Government
of India, by extending 4th and 5th Bipartite Settlement in compliance of the
award, on principle having accepted the same, further consideration for
extending subsequent Bipartite Settlement was not required. Appeal to C
Division Bench wad dismissed.
In appeal to this Court, in an I.A. filed by the Central Government, it
was asserted that w.e.f. 1.4.2000 the pay scales of RRB employees would
become equal to that of their counterparts in commercial banks if they are
granted benefit of the 6th and 7th Bipartite Settlements.
D
Appellants contended that under second proviso to Section 17(1) of the
Regional Rural Banks Act, 1976, it was only the Central Government who
would determine the remunerations, and the legislature having indicated
guidelines in this respect the question of giving effect to any Bipartite
Settlement could not be given effect to; and that the award of the Tribunal E
would tantamount to usurping the jurisdiction of the Central Government;
and that the expression parity would not mean the same pay structure and
therefore the question of revision would have to be re-determined by Central
Government; and that for determination of the pay structure financial
condition of the bank, which is not very affluent, had to be taken into F
consideration. Respondents contended that the Tribunal having held that the
employees of RRBs were entitled to claim parity with the employees of
commercial banks, the same must be maintained for all times to come; and
that the financial condition of the bank was not germane for determination of
the pay scale.
G
Dismissing the appeals, the Court
HELD: I.I. On the construction of the award and the provisions of the
second proviso to Section 17(1) of the Regional Rural Banks Act, 1976, the
revision of pay struct

## Text

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A
B
SOUTH MALABAR GRAMIN BANK
v.
CO-ORDINATION COMMITTEE OF SOUTH MALABAR
GRAM IN BANK H1PLOYEES' UNION AND
SOUTH MALABAR GRAMIN BANK OFFICERS'
FEDERATION AND ORS.
JANUARY 31, 2001
(G.B. PATTANAIK AND B.N. AGRAWAL, JJ.]
C
Service law
Regional Rural Banks Act, 1976-Section 17 (/) Proviso 2 -Pay
structure of Regional Rural Banks-Determination of-Claim of parity with
the pay strucfl/re of commercial banks-Tribunal awarding parity-Whether
D the pay would automatically get revised when pay of commercial bank
employees gets revised-Without determination by Central GovernmentHeld, pay structure could be revised only after the Central Government
exercises its power under the provisions of the Act and determines the same
-It would be duty bound to maintain the parity with the pay structure of
the employees of the commercial banks-Power conferred upon the Central
E Government, by the legislature cannot be taken aw0' by an award of a
tribunal.
P0' structure-Determination of-Whethe~ financial condition of the
employer bank relevant for determination-Held, no.
F
Words & Phrases-'Parity'-Meaning of.
Writ petitions under Article 32 of the Constitution were filed by Gram in
Bank Workers' Association and All India Regional Rural Bank Employees'
Association claiming parity in their pay structure with the pay structure of
the employees of rural banks of nationalised commercial banks. To decide
G the issues in the matter, Tribunal was appointed. The Tribunal in its award
held that the officers and the employees of the Regional Rural Banks (RRBs)
were entitled to claim parity with the officers and other employees of the
commercial banks in the matter of pay scale, allowances and other benefits.
H
'
Government of India implemented the award vide its order dated
742
, __
-
---JrS.M.G BANK 1·. CO-ORD. COMM. OF S M.G. BANK EMPLOYEE
743
22.2.1991 and the employees were also extended the benefit of 4th and 5th A
Bipartite Settlement on the basis of which the pay scale of commercial banks
has been determined. Thereafter pay structure of the employees of the
commercial banks got revised by 6th and 7th Bipartite Settlement, but there
was no corresponding revision of the pay structure of the employees of the
RRBs. The respondents therefore filed writ petition before the High Court,
claiming revision of their pay scale as per 6th and 7th Bipartite Settlement. B
Single Judge allowed the writ petition holding that since Government
of India, by extending 4th and 5th Bipartite Settlement in compliance of the
award, on principle having accepted the same, further consideration for
extending subsequent Bipartite Settlement was not required. Appeal to C
Division Bench wad dismissed.
In appeal to this Court, in an I.A. filed by the Central Government, it
was asserted that w.e.f. 1.4.2000 the pay scales of RRB employees would
become equal to that of their counterparts in commercial banks if they are
granted benefit of the 6th and 7th Bipartite Settlements.
D
Appellants contended that under second proviso to Section 17(1) of the
Regional Rural Banks Act, 1976, it was only the Central Government who
would determine the remunerations, and the legislature having indicated
guidelines in this respect the question of giving effect to any Bipartite
Settlement could not be given effect to; and that the award of the Tribunal E
would tantamount to usurping the jurisdiction of the Central Government;
and that the expression parity would not mean the same pay structure and
therefore the question of revision would have to be re-determined by Central
Government; and that for determination of the pay structure financial
condition of the bank, which is not very affluent, had to be taken into F
consideration. Respondents contended that the Tribunal having held that the
employees of RRBs were entitled to claim parity with the employees of
commercial banks, the same must be maintained for all times to come; and
that the financial condition of the bank was not germane for determination of
the pay scale.
G
Dismissing the appeals, the Court
HELD: I.I. On the construction of the award and the provisions of the
second proviso to Section 17(1) of the Regional Rural Banks Act, 1976, the
revision of pay structure of the employees of the RRBs could be made only
after the Central Government exercises its power under the provisions of the H
744
SUPREME COURT REPORTS
(2001] I S.C.R.
A Act and determines the same. If however, the Central Government fails to
discharge its obligation as in the case in hand, which would result in gross
disparity between the pay scales of the commercial banks and the Regional
Rural Bank, then a mandamus could be issued to the Central Government
for performance of its duties and the Central Government would be bound to
B perform its duties, taking into account all germane factors, including the
factor of the subsequent pay revision of the employees of the nationalised
commercial banks.1763-D-EI
~
1.2. The Legislature, while enacting a law on establishing and
incorporation of Regional Rural Bank, conferred power on the Central
C Government for determining lhe remuneration of the officers and employees
appointed by the Regional Rural Bank and that power conferred upon the
Central Government by the legislature cannot be taken away by an award of
a tribunal, constituted by the Central Government for redressing the
grievances of the employees, which were pending before a Court of law. Even
the prayer in the writ petition that ha·d filed in the Supreme Court was not for
D a declaration and mandamus that the employees of the Regional Rural Bank
would be entitled to the same scale of pay as and when the pay structure of
their counterparts in the nationalised commercial bank get revised. The
duties and powers conferred on Central Government under the Act could be
made nugatory by interpreting an award of a tribunal. The relevant findings
E of the tribunal does not in any manner even contemplate that the power and
jurisdiction of the Central Government under the second proviso to Subsection (1) of Section 17 would become redundant and the pay structure as
decided in 1987, pursuant to the award of the tribunal in respect of the
employees of the Regional Rural Bank would automatically get revised as
and when the pay structure of the employees of the commercial banks get
:-if
F revised: 1762-G-H; ~6~~-'tl
1.3. In view of the fact that the Union of India in its Interlocutory
Application had already indicated that the employees of the RRBs will be
granted the new scales w.e.f. 01.04.2000 in line with scales granted to
commercial bank employees of equivalent level, the said determination shall
G be a determination under the second proviso to Sub-section (1) of Section 17
of the RRB Act and as such the salary of the employees of the RRB w.e.f. --.... •
01.04.2000 be determined accordingly. 1769-B-CI
t.4. In view of the definition of the expression "parity" and in the context
in which the tribunal came to hold that the employees of the Regional Rural
H Banks would be entitled to claim parity with the employees of the nationalised
S.M.G. BANK 1·. CO-ORD. COMM. OF S.~l.G. BANK EMPLOYEE
745
J
commercial banks, the Union Government, while exercising its power under A
J-· the proviso to Sub-section (I) of Section 17 would be guided by the conclusion
of the tribunal, and will not be justified in deciding the pay structure for the
employees of the Regional Rural Banks, which would bring in disparity
between the two groups of employees, even though there may be a slight
variation in the pay structure. (768-B-Cj
B
1.5. Though the contention of the appellant with regard to the power of
~
the Central Government to decide the pay structure of the employees of the
Regional Rural Banks is upheld, yet there cannot be any doubt that in so
deciding, the Central Government would be duty bound to maintain the parity
with the pay structure of the employees of the nationalised commercial banks c
in the same sens·e and spirit as the Tribunal decided and as was given effect
to by the Union Government in the year 1987. (768-D-E(
-~
Concise Oxford Dictionary; law lexicon Dictionat)',' Webster
Comprehensive Dictionary; 'Words and Phrases' Volume 31,- referred to.
D
2. The contention that in determining the wage structure of the
employees of the RRBs, the financial condition would be a relevant factor,
cannot be sustained. The conclus.ion of the tribunal has become final, the
award in question not having been assailed and on the other hand having been
~ implemented. In the aforesaid premises, it is a futile attempt on the part of
the employer as well as the Union of India to re-agitate the dispute, which has E
already been resolved and has been given effect to. Under the Regional Rural
--
Bank Act, while conferring power upon the Central Government to determine
the pay structure of the employees of the Regional Rural Bank, there has
been no whisper that the financial condition of the bank or capacity of the
~
employer to pay, would be a germane consideration. (767-E-D(
F
Express Newspapers (Private) ltd and Anr. v. The Union of India and
Ors., (1959( SCR 12; Standard Vacuum Refining Co. of India v. Its workmen
and anr., (1961(3 SCR 536; The Hindustan Times ltd New Delhi v. Their
Workmen, (1964(1SCR234 and Jacob M. Puthuparambil and Ors. v. Kera/a
Water Authorily and Ors., ( 1991 (1 SCR 28, distinguished.
G
__.;....
3. Since the tribunal has devoted considerable time and has considered
all aspects of the dispute between the parties and since the notification of the
• Union Government in appointing the tribunal indicated that the decision of
the tribunal shall be final and binding, the conclusions arr~ved, at on different
questions raised by the tribunal, cannot be assailed indirectly by taking H
746
SUPREME COURT REPORTS
[200 I] I S.C.R.
A recourse to a procedure either by the Union 'Government or by the Bank.
1768-F-GI
B
Food Corporation of India Workers' Union v. Food Corporation of
India and Ors., 119901 Suppl. SCC 29, referred to.
!The court directed that for maintaining parity between the employees
of the commercial Banks a'nd the employees of the Regi9naf Rural Banks,
Union Government shall decide the question as to what would be the salary of
the employees of the Regional Rural Banks subsequent to the 6th Bipartite
Settlement having been gi\'en effect to in case of employees of the commercial
banks, and with effect from what date and the benefit flowing from such
C decision be given to the Regional Rural Banks employees.j j769-DI
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2218 of
1999.
From the Judgment and Order dated 25.11.98 of the Kerala High Court
D in W.A. No. 1547 of 1998.
E
F
With
C.A. No; 2219 of 1999 and T.P. (Civil) No. 403 of 1999.
H.N. Salve, P.P. Rao, S.K. Dholakia, Jitendra Sharma, D.A. Dave, D.D.
Thakur, Rakesh Dwivedi (NP), G.L. Sanghi, T.V. Ratnam, C.L. Narasimhan, A.K.
Srivastava, Ms. Sushma Suri, R. Vasudevan, D.S. Chahar, Ms. Beena Pandey,
B.K. Pal, P.N. Jha, K.K. Rai, K.T. Anantharaman, C.K. Sasi, N. Manoj Kumar,
Rajiv Mehta, P.V. Dinesh, K.M.K. Nair, Ms. Malini Poduval, Yash Pal Dhingra
(N.P.), B.K. Sinha, B.K. Satija for the appearing parties.
The Judgment of the Court was delivered by
PATTANAIK, J. South Malabar Gramin Bank and the Union of India,
have filed two civil appeals against the judgment of the Kerala High Court
dated 25.11.1998. The Division Bench of Kerala High Court by the impugned
G judgment, dismissed the appeals filed against the judgment of the learned
Single Judge and held that the Central Government having accepted the NIT
Award as well as the report of the Equation Committee and having given
effect to the 5th Bipartite Settlement between the employees of the sponsor
bank and the management, the employees and officers of the Regional Rural
Banks ipso facto would be entitled to the revision of their wages, as and when
H the wages of the sponsor bank employees get revised, pursuant to Bipartite
S.M.G. BANK v. CO-ORD COMM. OF S.M.G. BANK EMPLOYEE [PATTANAIK, .I.] 747
Settlement and, therefore· the subsequent Bipartite Settlements, namely the A
--.Jr 6th and 7th Bipartite Settlements should be given effect to revise the pay
structure of the officers and employees of the Regional Rural Banks also. In
these appeals, apart from the respondents, who had filed the writ petition in
I
Kerala High Court, namely Co-ordination Committee of South Malabar Gratilin
Bank Employees Union, All India Regional Rural Bank Employees Association, B
who had filed the writ petition in the Karnataka High Court had applied for
intervention. All India Regional Rural Bank Officers Federation, who happen
...,,._
to be the petitioner in Transfer Petition No. 403/99, All India Gramin Bank
Workers Organisation, who had filed a writ petition in this Court, under
Article 32 wherein order has been passed that writ petition would come after
disposal of the civil appeals, had made their respective submissions through c
different counsel, all the respondents having supported the judgment of the
learned Single Judge of Kerala High Court, as upheld in appeal by the
¥'
Division Bench. It may be noticed at this stage that the similar question had
been raised before the Calcutta High Court and a learned Single Judge of the
Calcutta High Court had dismissed those writ petitions by judgment dated D
5.9.95 in C.0. No. 12653/95 and C.O. No.12869/95 and the appeal against the
same before the Division Bench is pending. In the Karnataka High Court writ
petition No. 17905/97 had been filed by All India Regional Rural Bank
Employees' Association and that writ petition stood disposed of by judgment
~
dated 11th of November, 1998. The High Court allowed the writ petition,
quashed the appointment of the Committee as well as its Report dated 17th E
May. 1997 and issued directions to pay salary and allowances to all the
employees of Regional Rural Banks w.e.f. 1.11.1992 in accordance with the pay
and allowances and benefits implemented in respect of the employees of
Nationalised Commercial Banks as per the Memorandum of Settlement dated
14.2. I 995 and as per the wage revision given to those officers of the
F
·'::*:
Nationalised Commercial Banks from 1.11.92 and 1.7 .1993. Against the said
judgment, an appeal filed before the Division Bench is pending.
Writ Petitions under Article 32 of the Constitution had been filed in 1982
and 1994 in the Supreme Court, challenging the validity of Section I 7 of the
Regional Rural Banks Act, I 976 (hereinafter referred to as 'the Act') on the G
ground that the provision of Section 17 is ultra vires of Articles I 4 and 16
- -+-
of the Constitution. The writ petitions had been filed by All India Gramin Bank
Workers' Association and by All India Regional Rural Bank Employees'
Association. The employees of the Rural Banks had all along been making
a grievance that in .the matter of their pay structure, they are entitled to get
the same scale of pay, as is available to the employees of rural banks of H
748
SUPREME COURT REPORTS
[2001) I S.C.R.
A different nationalised commercial banks. But since the Government did not·
meet their demand, they filed the writ petitions under Article 32, as stated
earlier. It was prayed in the writ petitions that Section 17 of the Regional Rural
Banks Act, be struck down, as being ultra vires of Articles 14 and 16( 1) of
the Constitution and writ in the nature of mandamus be issued directing the
Union oflndia to fix the emolcments of the Regional Rural Bank Employees
B in conformity with the judicial maxim of "Equal pay for equal work" and
"industry-cum-region formula" and bring about parity in emoluments between
the employees of Regional Rural Banks inter se and employees of the
Nationalised Commercial Banks. While these writ petitions were being heard
in the Supreme Court, the Government of India agreed to appoint a National
C Industrial Tribunal to decide the question relating to pay, salary, other
allowances and other benefits payable to the employees of the Regional Rural
Banks constituted under the Regional Rural Banks Act, 1976 and the counsel
for the petitioners also agreed that a reference may be made to the proposed
tribunal. This Court, therefore left all the contentions open and directed the
D
Central Government to refer the dispute to the tribunal, preferably to a retired
Chief Justice of a High Court, who will pronounce its award as expeditiously
as possible. In terms of the aforesaid orders of this Court, the Central
Government appointed Justice S.Obul Reddi, retired Chief Justice of High
Court of Andhra Pradesh as Chairman of National Industrial Tribunal and
referred the disputes to the said tribunal. The Notification, appointing the
E tribunal stated that the decisions of the tribunal will be final and binding. The
tribunal thus appointed, passed an award after elaborate discussion of the
materials placed before it The ultimate directions of the tribunal were that
officers and employees of the Regional Rural Banks will be entitled to claim
parity with the officers and other employees of the sponsor banks in the
F
matter of pay scale, allowances and other benefits and the tribunal further
directed that the aforesaid award should be given effect to with effect from
1st September, 1987. With regard to equation of posts and consequent fixation
of the new scales of pay, allowances and other benefits for officers and
employees of the Regional Rural Banks at par with the officers and other
employees of the comparable level in corresponding posts in sponsor banks
G and their fitment into the new scales of pay as are applicable to officers of
sponsor banks, the tribunal held that it is a matter which has to be decided
by the Central Government in consultation with such authorities as it may
consider necessary and the award, according to the tribunal will cover all the
existing Regional Rural Banks. By 1st of September. 1987, the employees of
the nationalised commercial banks were getting their pay scales on the basis
H of 5th Bipartite Settlement and by implementation of the award of Justice S.
-
t
S.M.G. BANK 1· CO-ORD. COMM. OF S.M.G. llANK EMPLOYEE [PATTANAIK, .I] 749
Obul Reddi, the employees of the Regional Rural Banks were also given the A
--
benefit of the said 5th Bipartite Settlement on the basis of which the pay
structure of the Nationalised Commercial Banks had been determined.
Thereafter, when pay structure of the employees of the Nationalised Commercial
Banks were further revised in 1992 and 1997 by means
0of6th and 7th Bipartite
Settlements, as there was no corresponding revision of the pay structure of B
the employees of the Regional Rural Banks, the present litigation started
which had ultimately culminated in filing of these appeals, one by Union of
_,,.._
India and the other by the South Malabar Gramin Bank Management. Before
the High Court, the Bank took the stand that it is the Government of India,
who has to determine the salary of employees of Regional Rural Banks in
terms of Section I 7 of the Regional Rural Banks Act, 1976 and on the basis c
of the revised pay structure of the Nationalised Commercial Bank Employees,
pursuant to 6th and 7th Bipartite Settlements, the employees of the Regional
-...,.(
Rural Banks ipso facto cannot get their pay structure changed. It was also
stated that in fact the Reserve Bank of India had appointed S.C. Mahalik
Committee to examine the pay structure of the employees of the Regional D
Rural Banks and to suggest changes therein. The learned Single Judge of the
High Court came to the conclusion that by the decision of the Government
of India dated 22nd February, 1991 implemented the award of Justice S. Obul
Reddi and thereby extended the benefits of 4th and 5th Bipartite Settlements
and on principle having accepted the same, further consideration by the
Government of India or any order by the Government of India is not necessary E
for extending the benefits of the subsequent Bipartite Settlements to the
employees and officers of the Regional Rural Banks and accordingly, the
impugned direction was issued, which was upheld in appeal by the Division
Bench.
~
Mr. P.P. Rao, the learned senioi' counsel, appearing for the South Malabar F
Gram in Bank, contended before us that under the provisions of the Act, more
particularly under second proviso to Section 17( 1) of the Act, it is only the
Central Government, who has been conferred with the power to determine the
remuneration of the officers and employees appointed by the Regional Rural
Bank and for determining such remuneration, the legislature has also indicated G
the guidelines and this being the position the question of giving effect to any
-+
Bipartite settlement arrived at between the employees of the Nationalised
Commercial Banks and the Government ipso facto to the remuneration structure
of the officers and employees appointed by the Regional Rural Bank does not
arise. According to Mr. Rao, when the grievances and the anomalies that
existed prior to the appointment of Justice S. Obul Reddi Tribunal were H
750
SUPREME COURT REPORTS
12001] 1 S.C.R.
A focussed before the tribunal and the employees claimed the applicability of
''equal pay for equal work", the tribunal in no uncertain terms held that the
said principle cannot be made applicable and yet the tribunal held that the
employees of the Regional Rural Bank are entitled to claim parity with the pay
structure of the employees of the Nationalised Commercial Banks and in fact,
directed implementation of the pay structure of the employees of the
B Nationalised Commercial Banks, as it stood then in the year 1987, which had
been obtained on the basis of the 4th and 5th Bipartite Settlements and the
Government of India did implement the said award. But neither the award
anywhere indicated that all subsequent pay revision of the employees of the
Nationalised Commercial Banks would pro tanto be given effect to for
C determining the pay structure of the employees of the Regional Rural Banks,
nor such a direction could be given in law as that would be contrary to the
plain language of the second proviso to Sub-section (I) of Section 17 of the
Act and that would tantamount to usurping the jurisdiction of the Central
"'-'-
Government. According to Mr. Rao, the expression "parity" would not
necessarily mean the same pay structure and therefore, the question of pay
D revision of the Regional Rural Bank employees will have to be re-determined
by the Central Government in accordance with the guidelines stipulated in the
second proviso to Sub-section (I) of Section 17 and that in making such
determination, the existing pay structure of the Nationalised Commercial Banks
on the basis of any subsequent Bipartite settlement would be undoubtedly
E a relevant factor for the Central Government in arriving at a conclusion.
F
Mr. Salve, the learned Solicitor General, appearing for the Union of India and
Mr. P.P. Rao, appearing for the Bank contended with vehemence that the
financial condition of the Regional Rural Banks is not that affluent so as to
enable the management to offer the pay structure, as is available to the
employees of the Nationalised Commercial Banks and in determining the pay
structure of the employees, the financial capacity as well as the performance
of the Bank cannot be totally ignored, rather the same should also be a
germane factor in the matter of dete:rmination. According to Mr. Rao, the
revision of pay scales being a periodic exercise in all spheres of public
employment and the Act having conferred the power on the Union Government
G by virtue of the second proviso to Section 17( I) of the Regional Rural Banks
Act, 1976, it would be for the Central Government to exercise that power at
reasonable intervals, depending upon the circumstances of the case and then
come to a conclusion on consideration of all germane factors, as to what
would be the pay structure of the employees of the Regional Rural Banks.
Mr. Rao also submitted that the legislature having clearly indicated by use
H of the expression "shall have due regard to" in the second proviso to Stib-
+-
--A-·
S.M.G.IJANK r.CO-ORD COMM OFS.M.G.BANKEMPLOYEE[PATTANAIK.J.] 751
section (I) of Section 17, it would be obligatory for the Central Government A
to find out the pay scales of the employees of local authorities as well as the
notified area of comparable level and status, and in this view of the matter,
if the contention of the employees is accepted, as has been accepted by the
High Court of Kerala, it would tantamount to going against the legislative
provision and such a construction is not permiss~ble. Mr. Rao, very strenuously
contend~d that the findings arrived at by the tribunal itself would indicate B
that the" tribunal never intended that as and when the pay structure of the
employees of the Nationalised Commercial Banks is changed on the basis of
any Bipartite Settlement, the same should ipso facto get reflected by revising
the pay structure of the employees of the Regional Rural Banks and in this
view of the matter, the High Court ofKerala committed serious error in issuing C
the impugned directions. Mr. Rao, the learned senior counsel further contended
that the Regional Rural Banks are separate statutory entities managed by
separate statutory Board of Directors subject to statutory controls by the
Reserve Bank of India and the Govt. of India. On the aforesaid premises on
principle, it cannot be held that the employees of the Regional Rural Banks D
are entitled to the same scales of pay, as are available to the employees of
the sponsored banks under bipartite settlements, without any further
determination by the Govt. of India or the Reserve Bank of India. According
to the learned counsel, the bipartite settlements ordinarily bind the employers
and employees who are parties to the same. Since the Regional Rural Banks
nor their employees were parties to such settlements, they cannot claim any E
benefit under the settlements in question. According to Mr. Rao, revision of
wage structure of the employees of the Regional Rural Banks will have to be
undertaken by the Govt. of India in accordance with the statutory provisions
contained in Section 17 of the Act and the Court can issue mandamus to the
Central Government for exercise of power under Section 17, ifthe said power
-,...
has not been exercised and in this view of the matter, the Kerala High Court F
was wholly unjustified in directing the pay revision of the employees, on the
basis of bipartite settlements arrived at and given effect to, in respect of the
employees of the Nationalised Commercial Bank.
Mr. DD. Thakur, appearing for Respondents I to 3 in C.A. No. 2218- G
2219/99, contended before us that the facts leading to the appointment of
Justice Obul Reddi, as a National Tribunal to decide the dispute between the
employees and management of the Regional Rural Banks, unequivocally
indicates that the dispute related to pay, salary, other allowances and other
benefits payable to the employees of the Regional Rural Banks. The said
tribunal having considered the dispute raised and having determined the H
752
SUPREME COURT REPORTS
[200 I J I S.C.R.
A same and that determination having been given effect to by allowing the pay
structure of the employees of the Nationalised Commerc:al Banks as it stood
on the date of the acceptance of the recommendations of the award of Justice
Obul Reddi, it is only logical that as and when the pay structure of the
employees of the Nationalised Commercial Banks get changed, the same must
be given effect to in respect of the employees of the Regional Rural Banks.
B According to Mr. Thakur, Obul Reddi Tribunal having held that the employees
of the Regional Rural Banks are entitled to claim parity with the employees
of the Nationalised Commercial Banks in the matter of pay structure, if there
is no pay revision of the employees of the Regional Rural Banks
notwithstanding such revision in case of employees of the Nationalised
C Commercial Banks, the decision of the tribunal to maintain parity would be
meaningless and the finality to the said decision of the tribunal becomes
meaningless. Consequently, even if the Central Government is required to
exercise its power under proviso to Sub-section( I) of Section 17, then the
same is a mere clerical act in implementation of the finally resolved dispute
by award of Justice Obul Reddi Tribunal and adjudged from this stand poin!,
D the High Court was fully justified in issuing the impugned direction. Mr.
Thakur also contended that the power of the Central Government under
proviso 2 to Sub-section( I) of Section 17 must be held to have got exhausted
on the date the Central Government ac1~epted the award of Justice Obul Reddi
and question of re-determining the remuneration of the employees of the
E Regional Rural Banks would not arise, since they are entitled to a parity with
the remuneration paid to the employees of the Nationalised Commercial Banks.
Mr. Thakur also urged that in giving effect to the award of the tribunal and
in maintaining the parity between the employees of the RRBs with the employees
of the Nationalised Commercial Banks, so far as their remuneration is concerned,
there can hardly be any justification to restrict the parity, only for a limited
F period proximate to the date of the award and not after that. It is contended
by Shri Thakur that the parity must be maintained for all times to come and
necessarily, therefore, as and when the remuneration of the employees of the
commercial banks is revised, pursuant to any settlement between the employees
and the management of such banks, the appropriate authority must give effect
G to the same, so far as the employees of the Regional Rural Banks are concerned.
Mr. Thakur urged that in fact by Government order dated 22nd February, 1991,
the Bipartite Settlement between the management and employees of the
Nationalised Commercial Banks, so far as their pay, allowances and other
benefits are concerned, was given effect to and extended to the employees/
officers of the Regional Rural Banks and therefore, there is no justification for
H not giving effect to the subsequent Bipartite Settlement between the employees
S.M.G. BANK v. CO-ORD. COMM. OF S.M G. BANK EMPLOYEE IPATTANAIK, l] 753
and management of Nationalised Commercial Banks on the basis of which the A
pay structure stood revised for the employees of the commercial banks. Mi.
Thakur also contended that the financial capacity as well as the performance
of the Regional Rural Banks had been placed before Justice Obul Reddi
Tribunal, but the tribunal positively came to the conclusion that the said
financial capacity cannot be a germane factor in determining the pay structure B
of the employees of the Regional Rural Banks and then decided that there
should be a parity between the employees of the Nationalised Commercial
Banks and the employees of the Regional Rural Banks. This being the position,
it is futile for the employer-management as well as the Govt. of India to
contend that the pay structure of the employees of the Regional Rural Banks
could be revised only after due consideration by the Govt. of India under C
proviso to Sub-section( I) of Section 17 and after passing of any order
thereunder. According to Mr. Thakur, such view of the matter would keep the
dispute pending notwithstanding the resolve of the dispute by a tribunal
appointed by the Govt. of India itself and notwithstanding the fact that the
Government of India and the employer-management did accept the
recommendations of the tribunal and gave effect to the said decision.
D
Mr. S.K. Dholakia, the learned senior counsel, appearing for the
petitioners in Transfer Petition No. 403199, filed on behalf of All India Regional
Rural Bank Officers' Federation, contended that the lack of funds or resources
of the employer-Regional Rural Banks will not in any way affect the E
constitutional rights of the employees of such rural banks enshrined under
Article 14 of the Constitution of India. According to Mr. Dholakia, the
detennination of Obul Reddi Tribunal to maintain parity between the employees
of the commercial banks and the employees of the Regional Rural Banks is
nothing but a decision to give equal treatment to the employees of both the
organisations and, therefore, a11y treatment by the employer to the employees F
of the Regional Rural Banks which make them unequal with the employees of
the Nationalised Commercial Banks would violate the provisions of Article 14
and would be discriminatory in nature. Mr. Dholakia also contended that the
object of constituting Regional Rural Banks under the statute was not profit
making but to develop rural economy and therefore, the contention of Mr. Rao G
tha! the financial resources is a vital consideration, cannot be accepted.
According to Mr. Dholakia, the award of Obul Reddi on the basis of 4th and
5th Bipartite Settlements entered into between the employees and employer
of the Nationalised Commercial Banks is merely an index for maintaining parity
and that being the position as and when subsequent bipartite settlements are
entered into by the employees and the employer of the commercial banks, the H
754
SUPREME COURT REPORTS
[2001] J S.C.R.
A same must be give·n effect to in determining the pay structure of the employees
._,.._
B
of the Regional Rural Banks, so that parity could be maintained. In refuting
the dismal picture of the Regional Rural Banks placed by the learned Solicitor
General, Mr. Dholakia placed before us the report of the Reserve Bank of India
which according to him gives a contrary picture.
Mr. D.A. Dave, the learned senior counsel appearing for All India
Regional Rural Bank Employees' Association-intervenor, submitted that the
failure of the Nationalised Commercial Banks and the State Bank of India in
fulfilling their obligation in the field of rural banking resulted in the
establishment of the Regional Rural Banks. Such Regional Rural Banks have
C in fact taken over the function of the rural branches of the Nationalised
Commercial Banks. The Parliament enacted the Act for constitution of Regional
Rural Banks to augment the rural economy. When the employees of such
·"""
Regional Rural Banks had approached this Court by filing petition under
Article 32, voicing a grievance with regard to their salary structure and
remuneration and claiming 'equal pay for equal work' and 'industry-cum ..
D region formula' basis and wanted a writ of mandamus to the Union of India,
the Central Government itself chose to appoint a tribunal, who was none else
than a Chief Justice of a High Court and the Government itself decided that
the decision of such tribunal would be final and binding on the parties, with
the obvious object that the controversies would be resolved once for all. This
E is apparent from para 1.01 of the award of Justice Obul Reddi. The very nature
of the dispute was such that it cannot be limited to any specified period and
on the other hand, it must be for all times to come. This being the position
and the tribunal having considered the grievances of the parties and the
respective stand of the parties for over a period of two and a half years and
having given its findings and holding that the employees of the Regional
F Rural Banks are entitled to claim parity with the employees of the Nationalised
Commercial Banks, it would be a travesty of justice, if such parity is maintained
on the date of acceptance of the award and not thereafter. According to Mr.
Dave, having regard to the findings arrived at by Justice Obul Reddi, and the
ultimate conclusion that the employees of the Regional Rural Banks are
G entitled to claim parity with the employees of the Nationalised Commercial
Banks w.e.f. 1.9.1987 onwards, the date on which the Supreme Court disposed
of the writ petition by appointing the tribunal and the Central Government
having accepted the same and giving effect to the same after appointing the
Equation Committee for equation of posts and thereafter, extending the benefits
of the pay structure which the Nationalised Commercial Banks had received
H under the 4th and 5th bipartite settlements to the Regional Rural Banks
S.M.G. BANK v. CO-ORD. COMM. OF S.M.G. BANK EMPLOYEE(PATTANAIK, J] 755
employees, there cannot be any manner of doubt that the employees of the A
· Regional Rural Banks would be entitled to the effect of the 6th and the 7th
bipartite settlements arrived at between the employees and the employer of
the Nationalised Commercial Banks and the High Court of Kerala rightly
allowed the relief sought for. According to Mr. Dave, that an award of an
industrial tribunal and the obligations arising out of an award remains binding B
and continue to be binding on the parties which can be replaced only by a
. -r
subsequent award or a settlement and that being the position, there is no
other alternative for the management of the Regional Rural Banks as well as
the Government of India to give effect to the 6th and 7th bipartite settlements
on the basis of which the pay structure of the employees of the Nationalised
Commercial Banks stood revised to maintain the parity in terms of the award C
of Justice Obul Reddi and such decision of the tribunal( Justice Obul Reddi)
cannot be whittled down by an executive order of the Central Government.
According to Mr. Dave, the claim of the Union Government, as reflected
through the submissions of the learned Solicitor General on the basis of
financial constraint and current economic policy is nothing but a colourable
exercise of power and is not available to be urged in view of the findings of D
Obul Reddi Tribunal. In fact the tribunal itself considered the alleged ground
of incapacity to pay and negatived the same while granting parity in the
matter of emoluments between the employees of the Regional Rural Banks
and the employees of the Nationalised Commercial Banks. Any method or
contraviance, according to Mr. Dave for non-maintaining the parity at any E
point of time would grossly violate the decision of the tribunal and as such
cannot be sustained by this Court. Mr. Dave also contended that the dispute
having been resolved by an adjudication of a tribunal, the issue may not be
allowed to be re-opened, unless there is material change in the circumstances
~
and in fact there has been no change in the circumstances. Mr. Dave contends
~
F
that the dictionary meaning of the word "parity" being equality, it is unthinkable
that the so-called parity which had been maintained w.e.f. 1.9.87 would be
given a go-bye by taking recourse to the exercise of power under proviso 2
to Sub-section( I) of Section 17 and even if such power exists, then that power
has to be exucised in effectuating the award and in not contravening the
award. ln this view of the matter the judgment of the Kerala High Court, G
~-
according to Mr. Dave, need not be interfered with and the pay structure as
is available to the employees of the Nationalised Commercial Banks could be
given to the employees of the Regional Rural Banks. According to Mr. Dave,
non-implementation of the benefits which the employees of the Nationalised
Commercial Banks have received on the basis of the subsequent bipartite
settlement to the employees of the Regional Rural Banks, has brought about H
756
SUPREME COURT REPORTS
[200 I] I S.C.R.
A gross disparity and this is contrary to the letter and the spirit of the award
,_
itself. On the language of the second proviso to Sub-section (I) of Section
17 and the expression "having regard to" used therein, Mr.