# STATE BANK OF INDIA & ORS v. YOGENDRA KUMAR SRIVASTAVA & ORS

- **Citation:** [1987] 3 S.C.R. 115
- **Court:** Supreme Court of India
- **Decided:** 1987-05-01
- **Case number:** Civil Appeal Nos. 4125· 28 of 1986
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-bank-of-india-ors-v-yogendra-kumar-srivastava-ors-9705
- **Pages:** 22

## Headnote

t
STATE BANK OF INDIA & ORS.
A
v.
YOGENDRA KUMAR SRIVASTAVA & ORS.
MAY 1, 1987.
[0. CHINNAPPA REDDY AND MURARI MOHON DUTT, JJ.] B
Service Law
State Bank of India Officers' (Determination of Terms and Conditions of Service) Order, 1979: Paragraphs 2( 1), 3(h), 7, 8 & 18(5)-
Merger of Grade-I and Grade-II Officers existing on October 1, 1979 C
into Junior Management Grade-Probationary Trainee Officers
appointed in Grade-I on October 30/31, 1979-Fixation of inter se
seniority.
Statutory Construction
Repugnancy-'Definition' Clause-When repugnant to other
provisions.
Consequent to an agreement between the Executive Committee of
D
the Central Board of the appellant Bank and its Officers' Federation, in
pursuance of the Pillai Committee Report, the Grade-I and Grade-II
E
Officers discharging managerial and supervisory functions, were
merged into the new Junior Management Grade. It was agreed that
Officer> .,; Grade-H would be junior to the existing officers of Grade-I
and the seniority list would be prepared accordingly. Thereafter, in
exercise of powers conferred by suh-s. (1) of s. 43 of the State Bank of
India Act, 1955 the State Bank of India Officers' (Determination of
F
Terms and Conditions of Service) Order, 1979 was made and brought
into force with effect from October 1, 1979. Paragraph 2(1) of that
Order provided that it shall apply to the existing officers of the Bank
and to such employees of the Bank to whom it may be made applicable.
Under paragraph 3(h) the expression "existing officers" was defined to
mean officers in the service of the Bank Immediately prior to the
G
appointed date, i.e., October 1, 1979. Paragraph 7 provided for the
placement of existing officers on the appointed date in the correspond·
ing new grades and scales. Paragraph 8(1) provided for fltment of
existing officers in the new grades, and scales of pay in accordance with
paragraph 7, at a stage corresponding to the existing grade and scale.
Under paragraph 18(5) the seniority among the existing officers was to
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[1987} 3 S.C.R.
remain the same, i.e., the Officers Grade-I were to rank senior to
Officers Grade-II.
Certain Probationary{frainee Officers, who were appointed by
the Bank in Grade-I on October 30/31, 1979 before the Order was made
on December 19, 1979 rded writ petitions before the Allahabad High
Court and some others before the Delhi High Court claiming seniority
over the erstwhile Grade-II Officers, in which it was contended for the
Bank that since the petitioners were not the employees or the Bank on
October 1, 1979, i.e., the appointed date, they could not be given
seniority over the erstwhile Grade-II Officers, who were the 'existing
officers' within the meaning of the expression under paragraph 3(h) of
the Order.
The Allahabad High Court took the view that the expression
'existing officers' has to be read as including the Probationary Officers
and Trainee Officers, otherwise a repugnancy between the definition of
'existing officers' and the provisions of paragraph 7 and 8 or the Order
will arise, that the notional date of the coming into force of the Order,
viz., October 1, 1979 is only to protect the emolnments of the officers
and nothing else, and directed the Bank to prepare the seniority list of
its officers accordingly. The Delhi High Court, however, took a contrary view and dismissed the writ petitions.
E
In these appeals by the Bank against the decision or the Allahabad
High Court and Special Leave Petition by the Probationary {frainee
Officers against the decision of the Delhi High Court, it was submitted i
for the Probationary {frainee Officers in support of their contention
that they should be considered as 'existing officers' within the meaning
of paragraph 3(h) of the Order, that the Bank itself had treated them as
F
'existing officers' by fitting them to the Junior Management Grade and
giving them a higher start of Rs.960 p.m., that such fitment had been
made by the Bank follow

## Text

_Characters 0–39,920 of 50,747. This is a partial read: ask again with offset=39920 for what follows._

t
STATE BANK OF INDIA & ORS.
A
v.
YOGENDRA KUMAR SRIVASTAVA & ORS.
MAY 1, 1987.
[0. CHINNAPPA REDDY AND MURARI MOHON DUTT, JJ.] B
Service Law
State Bank of India Officers' (Determination of Terms and Conditions of Service) Order, 1979: Paragraphs 2( 1), 3(h), 7, 8 & 18(5)-
Merger of Grade-I and Grade-II Officers existing on October 1, 1979 C
into Junior Management Grade-Probationary Trainee Officers
appointed in Grade-I on October 30/31, 1979-Fixation of inter se
seniority.
Statutory Construction
Repugnancy-'Definition' Clause-When repugnant to other
provisions.
Consequent to an agreement between the Executive Committee of
D
the Central Board of the appellant Bank and its Officers' Federation, in
pursuance of the Pillai Committee Report, the Grade-I and Grade-II
E
Officers discharging managerial and supervisory functions, were
merged into the new Junior Management Grade. It was agreed that
Officer> .,; Grade-H would be junior to the existing officers of Grade-I
and the seniority list would be prepared accordingly. Thereafter, in
exercise of powers conferred by suh-s. (1) of s. 43 of the State Bank of
India Act, 1955 the State Bank of India Officers' (Determination of
F
Terms and Conditions of Service) Order, 1979 was made and brought
into force with effect from October 1, 1979. Paragraph 2(1) of that
Order provided that it shall apply to the existing officers of the Bank
and to such employees of the Bank to whom it may be made applicable.
Under paragraph 3(h) the expression "existing officers" was defined to
mean officers in the service of the Bank Immediately prior to the
G
appointed date, i.e., October 1, 1979. Paragraph 7 provided for the
placement of existing officers on the appointed date in the correspond·
ing new grades and scales. Paragraph 8(1) provided for fltment of
existing officers in the new grades, and scales of pay in accordance with
paragraph 7, at a stage corresponding to the existing grade and scale.
Under paragraph 18(5) the seniority among the existing officers was to
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remain the same, i.e., the Officers Grade-I were to rank senior to
Officers Grade-II.
Certain Probationary{frainee Officers, who were appointed by
the Bank in Grade-I on October 30/31, 1979 before the Order was made
on December 19, 1979 rded writ petitions before the Allahabad High
Court and some others before the Delhi High Court claiming seniority
over the erstwhile Grade-II Officers, in which it was contended for the
Bank that since the petitioners were not the employees or the Bank on
October 1, 1979, i.e., the appointed date, they could not be given
seniority over the erstwhile Grade-II Officers, who were the 'existing
officers' within the meaning of the expression under paragraph 3(h) of
the Order.
The Allahabad High Court took the view that the expression
'existing officers' has to be read as including the Probationary Officers
and Trainee Officers, otherwise a repugnancy between the definition of
'existing officers' and the provisions of paragraph 7 and 8 or the Order
will arise, that the notional date of the coming into force of the Order,
viz., October 1, 1979 is only to protect the emolnments of the officers
and nothing else, and directed the Bank to prepare the seniority list of
its officers accordingly. The Delhi High Court, however, took a contrary view and dismissed the writ petitions.
E
In these appeals by the Bank against the decision or the Allahabad
High Court and Special Leave Petition by the Probationary {frainee
Officers against the decision of the Delhi High Court, it was submitted i
for the Probationary {frainee Officers in support of their contention
that they should be considered as 'existing officers' within the meaning
of paragraph 3(h) of the Order, that the Bank itself had treated them as
F
'existing officers' by fitting them to the Junior Management Grade and
giving them a higher start of Rs.960 p.m., that such fitment had been
made by the Bank following the principles laid down in paragraphs 7
and 8 of the Order, that unless the expression 'existing officers' is read
as including 'Probationary/Trainee Officers', three will be a repugnancy between the dermition of 'existing officers', as contained in
G
paragraph 3(h) and the provisions of the paragraphs 7 and 8 of the
Order, that the definition of 'existing officers' is only illustrative and
-1. ·
not exhaustive, that the merger of officers of Grade-II and Grade-I into
the Junior Management Grade was only for the purpose of fitmeut in
the higher scale of pay and not for the purpose of seniority, that they
have to undergo tests which were more stringent than the tests to be
H
undergone by Grade-II Officers and as such Probationary /Trainee
,.,4.
STATE BANK v. Y.K. SRIVASTAVA
117
Officers, could not be. placed under Officers Grade-II in the seniority A
list, and that the Bank had no authority to give· retrospective operation
to the Order with effect from October 1, 1979 inasmuch as s. 43 of the
Act under which the Order has been passed, did not authorise the Bank
to pass any such Order with retrospective effect.
For the Bank it was contended that the order had not been made
8
retrospective, that all that has been done was that the Officers Grade-I
~ . and Grade-II, who were in the employment of the Bank immediately
before October 1, 1979 have been merged into one category, namely,
Junior Management Grade, in terms of the recommendations of the
Pillai Committee, that these Officers were already employees of the
Bank before October 1, 1979 and as such they were 'existing officers'
within the meaning of paragraph 3(h) of the Order, that the ProC
bationary/Trainee Officers, who were appointed on 30th/31st October,
1979 had no locus standi to challenge the Order or the merger of Officers Grade-I and Grade-II and that as no order has been passed under
paragraph 2(1) of the Order applying the same to the Probationary/
Trainee Officers, they were outside the purview of the Junior Manage0
ment Grade and, as such, were precluded from challenging the senij-··
t
ority of the erstwhile Officers of Grade-II.
Allowing the appeals and dismissing the special leave petition, this
Court.
E
HELD: 1. The e_xpression 'existing officers' as deimed in paragraph 3(h) of the State Bank oflndia Officers' (Determination of Terms
and Conditions of Service) Order, 1979 means officers in the service of
the Bank immediately prior to the appointed date, i.e., October I,
1979. The Probationary/Trainee Officers who were appointed by the
Bank on 30/3lst October, 1979 after the appointed date conld not, F
therefore, be held to be 'existing. officers' wi'.hin the meaning of
paragraph 3(h) of the Order. [l28B; F]
2. It is incorrect to say that when an employee is fitted to a
particular scale of pay of another cadre, he does not become a member
of that cadre. In the instant case, the Probationary/Trainee Officers
were placed in the corresponding scales of pay in the Junior ManageG
ment Grade for the purpose of fitment in the new scales of pay. It may
be that such fitment has been made by the Bank following the principles
as laid down in paragraphs 7 and 8 of the Order presumably with a view
to removing any disparity between Officers Grade-I and Officers
Grade-II in the Junior Management Grade, but it cannot be said th~t
they were treated as existing officers and such fitment was made under
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SUPREME COURT REPORTS
[1987] 3 S.C.R.
paragraphs 7 and 8 of the Order. The Probationary /Trainee Officers
were not in the service of the Bank immediately prior to the appointed
date. As such the Bank could not treat them as existing officers for the
purpose of fitment or giving a higher scale of pay. [ 1280-F; B]
3.1 Repugnancy of the definition of any term may arise only if
such dermition does not agree with the subject or context of a particular
provision. But any action not in conformity with the provision of the
definition clause will not render the definition of a term repugnant to
the subject or context of any provision of the statute containing that
term. [129BC]
3.2 In the instant case, there is no ambiguity in the definition of
'existing officers', as given in paragraph 3(h) of the Order, nor is it in
any way repugnant to the subject or context of paragraphs 7 and 8. If
the Probationary /Trainee Officers are treated as 'existing officers' it
would be doing violence to the provision of paragraph 3(h). (129B; A]
D
4. The dermition of 'existing officers' in paragraph 3(h) does not
give any illustration whatsoever. On the contrary, it is quite specific
and points to only one class of officers who were in the service of the
-.?
Bank immediately prior to th~ appointed date and to whom any of the
rules, as mentioned in that paragraph were applicable. (1290]
E
5. All the officers of the Bank at the lower level before the ProF
G
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bationary or Trainee Officers were appointed on 30/31 October, 1979
had agreed that they would merge into a new grade, and Officers
·~
Grade-I would be senior to the Officers Grade-II. When two grades of
officers are merged into a new grade, the question of interse seniority
.
automatically arises and casts a duty on the employer to fix the seniority. Paragraph 18(5) of the Order lays down that the seniority among
the existing officers will remain the same, that is, the Officers Grade-I
will remain senior to Officers Grade-II. Therefore, it cannot be said that
the merger was only for the purpose of fitment in the higher scale and
not for purposes of seniority. [130B-O; 129F]
6. The question is not whether the Probationary/Trainee Officers
have to undergo more stringent tests than the tests to be undergone hy
~ -
Grade-II Officers, but whether the Probationary/Trainee Officers were
existing officers or not, that is to say, whether they were In the employment of the Bank Immediately prior to October 1, 1979. As they were
not existing officers, they could not claim seniority over the Officers of
Grade-II. [130FG]
STATE BANK v. Y.K. SRIVASTAVA
119
A·
7.1 Unless the statute, under which the rules are framed by the A
~
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t
· rule making authority, does not specifically authorise the making of
rules with retrospective effect, such authority cannot frame any rule
with retrospective effect. [130H-131A)
Ctmnanore Spinning and Weaving Mills Ltd. v. Collector of
Customs and Central Excise, Cochin, & Ors., [1970) 2 SCR 830;
Income-Tax Officer, Alleppey v. M.C. Ponnoose & Ors., [1970) 1 SCR
678; Hukam Chand etc. v. Union of India & Ors., [1973) 1 SCR 896
and Regional Transport Officer, Chittoor, & Ors. v. Associated Transport Madras (P) Ltd. & Ors., [1980) 4 SCC 597, referred to.
7 .2 In the instant case, it cannot be said that the Order was
retrospective in operation. AU that has been done by it is that the
Officers Grade-I and Grade-II in the employment of the Bank immediately prior to October 1, 1979 have been merged into one category,
namely, Junior Management Grade. Although the Order was actuaUy
published on December 19, 1979, the Officers of the Bank who were
there on or before October, 1, 1979 were aware of the fact that the
Order would be given effect to from October 1, 1979 as agreed to
between the Bank and the Officers' Federation. The appointed date is
relevant for the purpose of applicability of the Order to the Officers
who have been there in the service of the Bank immediately prior to the
appointed date. [131E; C; 132G-133A)
V. T. Khanzode & Ors. v. Reserve Bank of India & Anr., [1982) 4
SCR 411 and Reserve Bank of India v. C.N. Sahasranaman, [1986]
Suppl. SCC 143, referred to.
8. The distinction in the status of Officers Grade-I and Grade-II
having been abolished in the instant case, it is apparent that the Probationary {Trainee Officers being Officers of Grade-I were of the same
status and position as the Officers of Grade-II. Admittedly, the erstwhile Officers of Grade-II were appointed much earlier than the Probationary{frainee Officers. They cannot, therefore, be considered
· senior to the erstwhile Officers Grade-II. [134G-13SAB)
~+-
9. The Probationary /Trainee Officers have not been brought
within the purview of the new cadre, viz., the Junior Management
Grade since no order has been passed under paragraph 2(1) of the
Order applying the same to them. As they are not in the Junior
Management Grade, which is a completely difJerent cadre, they have no
locus standi to challenge any benefit conferred on the Officers of the
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SUPREME COURT REPORTS
[1987] 3 S.C.R.
A Junior Management Grade comprising erstwhile Officers Grade-I and
Officers Grade-II as were in the employment of the Bank prior to
October 1, 1979. [134F; CD; 135C]
B
c
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
4125· 28 of 1986.
From the Judgment and Order dated 3.1.1986 of the Allahabad
High Court in Writ Petition No. 422 of 1981, 5900, 4207 and 5899 of
1985.
With
Special Leave Petition (Civil) No. 3371of1982.
From ti,~ Judgment and Order dated 22.4.1981 of the High
Court of Delhi in Civil Writ Petition No. 823 of 1981.
D
S.S. Sharma for the Appellants in C.A. Nos. 4125·28 of 1986.
Soli J. Sorabjee and Mrs. Madhu Sikri for the Petitioners in
~
S.L.P. No. 3371of1982.
S.N. Kacker and R.B. Mehrotra for Respondent No. I in
E C.A. No. 4125 of 1986.
S.P. Gupta and R.B. Mehrotra for Respondent Nos. 2 to 26 in
C.A. No. 4125 of 1986.
Shanti Bhushan and R.P. Kapur for the Respondents in S.L.P.
F
No. 3371of1982.
The Judgment of the Court was delivered by
DUTT, J. In these appeals by sper;al leave and in the Special
Leave Petition the dispute relates to the seniority of erstwhile Officers
G Grade-II and the Probationary /Trainee Officers in the Grade-I of the
State Bank of India.
-+,
In the lower level, the State Bank of India had two cetegories of
officers, naplely, Officers Grade-I and Officers Grade-II; the function
of the former was managerial and that of the latter supervisory. The
H conditions of service of these two categories of officers were, admit-
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STATE BANK v. Y.K. SRIVASTAVA [DUTT, J.J
121
tedly, governed by the State Bank of India (Supervising Staff) Service A
Rules, hereinafter referred to as 'the 1975 Rules'.
The 1975 Rules were not framed under the rule making power of
the Government, as conferred by section 49 of the State Bank of India
Act, but under section 43 of the Act, sub-section (1) of which provides
B
that the State Bank may appoint such number of officers, advisers and
employees as it considers necessary or desirable for the efficient
performance of its functions, and determine the terms and conditions
of their appointment and service. Sub-section (2) of section 43 provides that the officers, advisers and employees of the State Bank shall
exercise such powers and perform such duties as may, by general or
special order, be entrusted or delegated to them by the Central Board. c
Although the Officers Grade-I were superior iu rank to the
Officers Grade-II, there was little difference in the pay scales of these
two categories of officers. The duties, which were to be performed by
Officers Grade-I and Officers Grade-II, were also similar in nature.
D
Indeed, with the expansion of the banking activities, a large number of
Officers Grade-II were required to perform managerial duties which
normally were performed by Officers Grade-I. The Officers' Federation of the State Bank of India comprising both Officers Grade-I and
Grade-II had been demanding the abolition of the distinction between
these two Grades. The Bank, however, had been successfully resisti,ng
E
the demand made by the Officers' Federation from time to time. The
Federation had, at one time started taking resort to agitational method
in order to force the Bank to abolish the theoretical distinction between Officers Grade-I and Officers Grade-II.
In the mean time, another external factor had crept into the
F
situation. The Government had appointed a Committee, known as
Pillai Committee, for considering a question of standardisation of
pay and allowances of the officers staff in the nationalised Banks.
After the Pillai Committee had submitted its report, the Government
declared its intention to apply the recommendations of the Pillai Committee to the State Bank ot India as well. According to the recommenG
dations of the Pillai Committee, there should not be any distinction
between Officers Grade-I and Grade-II. The Committee recommen-
<led four Grades for officers and had provided for only one scale at the
junior management level. Four Grades of officers are as follows:-
1. Top Executive Grade.
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SUPREME COURT REPORTS
(1987] 3 S.C.R.
A
2. Senior Management Grade.
3. Middle Management Grade.
4. Junior Management Grade.
B After proposals and counter-proposals between the Executive Committee of the Central Board of the State Bank of India and the Officers' Federation, the Committee agreed to do away with the distinction between Officers Grade-I and Grade-II, who would be placed in a
new cadre, called Junior Management Grade, having a scale of pay
being
Scale-I-Rs.700-40-900-50-1100-EB-1200-60-!800.
It
was
C further agreed that the Officers Grade-II would be junior to the existing Officers Grade-I and the seniority list would be prepared
accordingly.
After the said agreement was reached between the Executive
Committee of the Central Board of the State Bank of India and the
D Officers' Federation, the Central Board, in exercise of the powers
conferred by sub-section (!) of section 43 of the State Bank of India
Act, passed an order, called State Bank of India Officers (Determination of Terms and Conditions of Service) Order, 1979, for short 'the
Order', determining certain terms and conditions of service of officers
in the Bank. Some of the provisions of the Order which are relevant
E for our purpose are extracted below:-
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"l. (!) This order may be called State Bank of
India Officers (Determination of Terms and Conditions of
Service) Order, 1979.
(2) This order shall come into force on the !st day of
October 1979.
2. (I) This order shall apply to "the existing officers
of the Bank and· to the officers of the Bank who are appointed or promoted to any of the grades mentioned in
paragraph 4 and to such other employees of the Bank to
whom it may be made applicable by the Central Board or
the Executive Committee or the competent authority to the
extent and subject to such conditions as it may decide.
(2) It shall not apply, except to the extent specified
by the Central Board or the Executive Committee or the
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STATE BANK v. Y.K. SRIVASTAVA [DUTT, J.]
123
competent authority, to an officer during his tenure of
A
service outside India or to employees engaged in any
country outside India and serving there.
3. In this order, unless there is anything repugnant to
the subject or context-
(a) "Appointed Date" means the 1st October 1979;
(h) "Existing Officers" means all officers in the
service of the Bank immediately prior to the appointed date and to whom any of the following
B
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sets of Rules as amended or as deemed to have
been amended by appropriate resolutions of the
D
Central Board or the Executive Committee are
applicable, namely:-
(i) Rules governing the service of Officers in the
Imperial Bank of India;
(ii) Rules governing the service of Assistants in
the Imperial Bank of India; and
(iii) State Bank of India (Supervising Staff)
Service Rules;
.............................................. '
...............................................
4. (1) There shall be the following four grades for
officers with the scales of pay specified against each of the
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grades:-
G
(A) Top Executive Grade:
Special Scale
Scale VII
Scale VI
Rs.3500 (fixed}
Rs.3250-125-3500
Rs.3000-125-3250
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SUPREME COURT REPORTS
[1987] 3 S.C.R.
(B) Senior Management Grade:
Scale V
Scale IV-A
Scale IV
Rs.2500-100-3000
Rs.2300-100-2600
Rs.2000-100-2400
(C) Middle Management Grade:
Scale III
Scale II
Rs.1800-75-2250
Rs.1200-70-1550-75-2000
(D) Junior Management Grade:
Scale
Rs. 700-40-900-50-1100EB-1200-60-1800
(2) Notwithstanding anything contained in subparagraph (1), a Probationary Officer and a Trainee
Officer shall, on appointment, be placed at the stage of
Rs.860 in Scale I in the Junior Management Grade.
_
7. Subject to the provisions of paragraph 6, existing
officers serving in the grades and scales of pay mentioned
in column 1 of the table given in Schedule I to this order
shall be placed as on the appointed date in the grade and
scale specified thereagainst in column 2 of the said
schedule.
Provided that any difficulties or anomalies arising out
of the above placement shall be referred to a committee of
such persons as the Chairman of the Bank may appoint and
the decision of that committee in this regard shall be final.
8. ( 1) Every existing officer placed in any of the new
grades and scales of pay in accordance with paragraph 7,
shall be fitted at such stage in the new scale of pay corresponding to the existing grade and scale as specified in
Schedule II to this order.
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STATE BANK v. Y.K. SRIVASTAVA [DUTT, J.J
125
(2) Subject to sub-paragraph (3), on being so fitted
in the new scale of pay, such officer shall be eligible to draw
the next increment, if any, in such new scale on the first day
of the month in which he would have been eligible to draw
increment in terms of the provisions in this behalf prior to
the appointed date.
(3) Where two or more officers having different
seniority in the scales of pay immediately before the
appointed date are fitted at the same stage in the new scale
of pay, different months may be fixed for the eligibility of
such officers for the next increment in the new scale of pay.
( 4) The mere fact that on the appointed date an
officer happens to be posted in a post categorised as that of
a grade or scale higher than the one in which he is placed in
accordance with the provision of paragraph 7 will not by
itself entitle that officer to any higher placement or
fitment."
The Order was actually made and published on 19th December,
1.979, but in view of paragraph 1(2) it came into force on the first day of
October, 1979. Under paragraph 2(1), it is inter alia provided that the
Order shall apply to the existing officers of the Bank and to such
employees of the Bank to whom it may be made applicable. Under
paragraph 3(h), the expression "existing officers" has been defined as
meaning all officers in the service of the Bank, immediately prior to
the appointed date, that is to say, October 1, 1979. Thus, it follows
prima facie that the Order will apply only to the existing officers, that
is, the officers who were in the service of the Bank immediately prior
to the appointed date, which is October I, 1979. It is not disputed that
no Order has been passed by the Central Board or the Executive
Committee or the competent authority directing the application of the
Order to employees of the Bank other than the existing officers, as
provided in paragraph 2( 1).
Before the Order was made and published on December 19,
1979, certain Probationary Officers and Trainee Officers were
appointed by the Bank in Grade-I on October 30 and October 31,
1979. These Probationary/Trainee Officers, being Officers in Grade-I
were, on the dates they were appointed, superior in rank to the Officers Grade-II. These Probationary/Trainee Officers were fitted to the
Junior Management Grade: Scale-I, after the Order was passed creatA
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SUPREME COURT REPORTS
[1987] 3 S.C.R.
A ing such a Grade at Rs.960 p.m. with effect from 30/31-10-1979. These
Probationary/Trainee Officers, however, claimed that they were
seniors to the erstwhile Officers Grade-II and that they should be
placed above st.ch Officers Grade-II in the seniority list. As the Bank
had refused the claim of these Probationary/Trainee Officers, to
seniority over the erstwhile Officers Grade-II in the Junior ManageB ment Grade, some of them filed writ petitions before the Allahabad
High Court and some before the Delhi High Court. The Bank, however, opposed the writ petitions and contended that as they were not
the existing officers, that is to say, employees of the Bank on October
1, 1979, which is the appointed date, they could not be ·given the
seniority over the erstwhile Grade-II Officers, who were the existing
C officers within the meaning of the expression under paragraph 3(h) of
the Order.
The Allahabad High Court has faken the view that the expression "existing officers" has to be read as including the Probationary
Officers and Trainee Officers, otherwise a repugnancy between the
D definition of "existing officers" and the provisions of paragraphs 7 and
8 of the Order will arise. Further, it has been held that the notional
date of the coming into force of the Order, namely, 1-10-1979, is only
to protect the emoluments of the officers and nothing else. In that view
of the matter, the Allahabad High Court directed the Bank to prepare
the seniority list of its officers in the light of the observations made in
E the judgment. Although it was not specifically directed that the Probationary/Trainee Officers should be placed above the officers in the
erstwhile Grade-II in the seniority list, yet that would follow from the
findings made by the High Court.
On the other hand, the Delhi High Court took a contrary view
F and dismissed the writ petitions. Though according to the Allahabad
High Court, the Probationary /Trainee Officers should be placed
above the erstwhile officers in the Grade-II, according to the Delhi
High Court they would be placed below the Officers in the Grade-II.
Hence, these Appeals by the State Bank of India and the Special
G
Leave Petition by the Probationary/Trainee Officers.
-
Mr. Kacker, learned counsel appearing on behalf of the Probationary/Trainee Officers, has urged that the Allahabad High Court
was justified in holding that the writ petitioners appointed as Probationary/Trainee Officers on 30/31-10-1979, should be considered as
the existing officers within the meaning of paragraph 3(h) of the
H Order. It is submitted by him that the Bank itself had treated them as
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STATE BANK v. Y.K. SRIVASTAVA [DUTT. J.I
127
existing officers. In support of that contention, the learned counsel
A
has drawn our attention to the fact that the Bank had fitted the Probationary/Trainee Officers appointed on 30/31· 10-1979 to the Junior
Management Grade: Scale-I at Rs.960 p.m. Such fitment, according to
the learned counsel, was made under paragraphs 7 and 8 of the Order.
Paragraph 7 provides for the placement of existing officers on the
B
appointed date in the corresponding grades and scales. It lays down,
inter alia, that the existing officers shall be placed as on the appointed
date in the grade and scale specified in column 2 of Schedule I. Item
No. 9 of column 2 specifies the Junior Management Grade: Scale-I.
Paragraph 8( 1) provides that every existing officer placed in any of the
new grades and scales of pay in accordance with paragraph 7, shall be
fitted at such stage in the new scale of pay corresponding to the exist· c
ing grade and scale as specified in Schedule II to the Order. It appears
that by a circular dated June 24, 1980, the followng directions were
given by the Chief General Manager, State Bank of India:·
"Officers who were promoted on or after the 1st October
D
1979 but upto 31st December 1979, should be first fitted in
the old scale in terms of the then existing formula and
thereafter their basic pay should be refixed in the new scale
for Junior Management Grade Scale I in accordance with
the table given below:
E
Basic pay in the
Basic pay in the
Basic pay in the
old clerical scale
old officers' scale
Junior Manage·
ment G.S.l. on the
date of promotion
F
Upto
350
500
950
370
540
1000
390
540
1000
420
580
1200
450
620
1200
480
665
1260
G
515
710
1320
550
755
1380
The basic pay of Probationary Officers and Trainee Officers who were appointed during the period 1st October
1979 to 31st December 1979, will also be fixed on the same
H
basis."
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128
SUPREME COURT REPORTS
[ 1987[ 3 S.C.R.
A
It is submitted on behalf of the Probationary/Trainee Officers
. that it is clear from the said circular that they were also treated as
existing officers, otherwise they could not be given the same benefit as
the other existing officers of the Bank.
The existing officers, as defined in paragraph 3(h), means all
B officers in the service of the Bank immediately prior to the appointed
date. Admittedly, the Probationary/Trainee Officers were not in the
service of the Bank immediately prior to the appointed date, that is,
October 1, 1979. They cannot, therefore, be held to be the existing
officers in the face of the definition of the expression in paragraph 3(h)
of the Order.
c
It is difficult to accept the contention of the Probationary/
Trainee Officers that they were treated by the Bank as existing officers
merely because they were fitted to the Junior Management Grade:
Scale-I and given a higher start at Rs.960 p.m. It is incorrect to say that
when an employee is fitted to a particular scale of pay of another cadre,
D he does not become a member of that cadre. In the instant case, the
Probationary/Trainee Officers were placed in the corresponding scales
of pay in the Junior Management Grade for the purpose of fitment in
the new scales of pay. Indeed, as stated already, they were fitted to the
Junior Management Grade: Scale-I at Rs.960 p.m. It may be that such
fitment has been made by the Bank following the principles as laid
E down in paragraphs 7 and 8 of the Order, presumably with a view to
removing any disparity between Officers Grade-I and Officers Graden in the Junior Management Grade, but it will be difficult to accept the
conten.tion made on behalf of the Probationary/Trainee Officers that
they were treated as existing officers and such fitment was made under
paragraphs 7 "and 8 of the Order. The Probationary/Trainee Officers
F appointed on 30/31-10-1979, that is, after 1-10-1979, the appointed
date, are not existing officers within the meaning of paragraph 3(h) of
the Order and the Bank could not treat them as such for the purpose of
fitment or giving a higher scale of pay.
We are unable to subscribe to the view of the Allahabad High
G Court that unless the expressioh "existing officers" is read as including
the Probationary/Trainee Officers, there will be a repugnancy
between the definition of existing officers, as contained 1n paragraph
3(h), and the provisions of paragraphs 7 and 8 of the Order. This view
of the Allahabad High Court proceeds on the assumption that the
Probationary /Trainee Officers having been given the benefit of extra
H emoluments by fitting them in the Junior Management Grade: Scale-I,
, __
~
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STATE BANK v. Y.K. SRIVASTAVA {DUTT, J.]
129
..4
they were treated as existing officers. In our opinion, if the Prob·
A
ationary/Trainee Officers are treated as existing officers, it will be
doing violence to the provisions of paragraph 3(h) .• We do not think
that the definition of the expession "existing officers", as given in
paragraph 3(h) is, in any way, repugnant to the provisions of para·
graphs 7 and 8 of the Order. On the contrary, it is quite in harmony
with the said provisions and also the other provisions of the Order.
B
~ There is no ambiguity in the definition of "existing officers" and in
regard to paragraphs 7 and 8 of the Order there is no repugnancy of
1'
the definition to the subject or context. Repugnancy of the definition
of any term may arise only if such definition does not agree with the
subject or context of a particular provision. But, surely, any action not
~
in conformity with the provision of the definition clause will not render c
the definition of a term repugnant to the subject or context of any
~-
provision of the statute containing the term. We are also unable to
accept the contention of Mr. Kacker that the definition of "existing
officers" is only illustrative and not exhaustive and that such narrow
definition does not fit in everywhere. The definition does not give any
illustration whatsoever, and it is wrong to submit that the definition is
D
illustrative. On the contrary, the definition under paragraph 3(h) is
y
quite specific and points to only one class of officers, that is, the
officers who were in the service of the Bank immediately prior to 'the
appointed date and to whom any of the rules, as mentioned in that
paragraph, are applicable. In our view, therefore, the Probationary/
Trainee Officers appointed on 30/31· I0· 1979, that is, after the ap·
E
pointed date, are not existing officers .
.-
i r
In this connection, we may notice the argument of Mr. Gupta,
learned counsel appearing on behalf of some of the Probationary/
-(
Trainee Officers, that the merger of Officers Grade-II and Grade-I
into the Junior Management Grade was only for the purpose of fitment
F
in the higher scale of pay and not for the purpose of seniority. It has
been already stated that it was the demand of the Officers' Federation,
representing both Officers Grade-I and Officers Grade-II, that the
distinction between these two Grades should be abolished in every
respect and, ultimately, it was agreed that they would be placed in one
grade, that is, the Junior Management Grade, having a higher scale of G
.... +
pay, subject to this that the Officers Grade-I will be above the Officers
Grade-II in the seniority list. It appears from the Circular No. 9 issued
by the Officers' Federation, that the Pillai Committee's recommendalions would be implemented in the State Bank Group from October 1,
1979. Thus, it was agreed by the Officers' Federation that a scheme
namely, the merger of Officers Grade-I and Officers Grade· II int~ H
-
130
SUPREME COURT REPORTS
[1987] 3 S.C.R.
A Junior Management Grade would take place with effect from October
1, 1979 and that has been exactly given effect to by the Order under
which the existing Officers, that is, the officers who were in the employment of the Bank immediately prior to October l, 1979, would be
placed in the new Junior Management Grade and to Scale-I, as contained in Schedule I to the Order. In paragraph 2(1) of the Order,
B provision has been made for the application of the Order to other
officers. Thus, it is clear that all the officers of the Bank in the lower
level before the Probationary or Trainee Officers were appointed on
30131-10-1979 agreed that they would merge into a new Grade and
Officers Grade-I would be senior to the Officers Grade-II. This was
the result of the recommendations of the Pillai Committee suggesting
C that there should be one grade for the Officers Grade-I and II in the
lower level. It may be that Pillai Committee did not make any recommendation with regard to seniority, but when two grades of officers
are merged into a new grade, the question of inter se seniority will
automatically arise and it will be the duty of the employer to fix the
seniority. Indeed, paragraph 18 of the Order lays down the principles
D for computing the seniority of the officers of the Bank. But, under
paragraph 18(5) of the Order, the seniority among the existing officers
will remain the same. In other words, the Officers Grade-I will remain
seniors to Officers Grade-II.
Another contention that has been made by Mr. Gupta for the
E Probationary /Trainee Officers is that these officers have to undergo
tests which are more stringent than the tests to be undergone by the
Grade-II Officers and, as such, the Probationary/Trainee Officers,
though they were appointed on 30/31-10-1979, should not be placed
under the Officers Grade-II in the seniority list. This, in our opinion, is
an argument in despair. The question is not whether the Probationary/
F Trainee Officers have to undergo more stringent tests than the tests to
be undergone by the Grade-II Officers, but the question is whether the
Probationary /Trainee Officers are existing officers or not, that is to
say, whether they were in the employment of the Bank immediately
prior to October 1, 1979. As the Probationary/Trainee Officers are not
existing officers, they cannot claim seniority over the Officers GradeG _ II, who are existing officers.
It is next contended that the Bank had no authority to give
retrospective operation to the Order with effect from October 1, 1979,
inasmuch as !lection 43 of the State Bank of India Act under which the
Order has been passed, does not autliorise the Bank to pass any such
H Order with retrospectivP. effect. It is now well settled that unless the
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STATE BANK v. Y.K. SRIVASTAVA (DUTT, J.J
131
~ statute, under which the rules are framed by the rule making authoA
rity, does not specifically authorise the making of rules with retrospective effect, such authority cannot frame any rule with retrospective
effect. (See Cannanore Spinning and Weaving Mills Ltd. v. Collector
of Customs and Central Excise, Cochin & Ors., [ 1970] 2 SCR 830;
Income-Tax Officer, Alleppey v. M.C. Ponnoose & Ors., (1970] 1 SCR
678; Hukam Chand etc. v. Union of India & Ors., (1973] 1 SCR 896
B
~ and Regional Transport Officer, Chittoor, & Ors. v. Associated Transport Madras (P) Ltd. & Ors., (1980] 4 SCC 597) .
.,,
Mr. Shanti Bhushan, learned counsel appearing on behalf of the
State Bank of India, however, submits that the impugned Order has
not been made retrospective, as contended on behalf of the Proba- c
tionary/Trainee Officers. All that has been done by the Order is that
'Jc ..
the Officers Grade-I and Grade-II have been merged into one category, namely, Junior Management Grade with effect from October 1,
1979. These Officers were already employees of the Bank before
October 1, 1979 and, as such, they are existing officers within the
meaning of paragraph 3(h) of the Order. Further, it is submitted by
D
him that the Bank after considering the injustice done to the Officers
y·
Grade-II numbering about 15,000, sought to remove the same by
abolishing the distinction between Officers Grade-I and Officers
Grade-II in terms of the recommendations of the Pillai Committee by
the impugned Order with effect from October 1, 1979. It may be that
there was some delay in publishing the decision of the Bank, that is,
E
the Order, but it cannot be said that the Order is retrospective in
-
operation.
~
Mr. Shanti Bhushan points out that in V. T. Khanzode & Ors. v.
'
Reserve Bank of India & Anr., (1982] 4 SCR 411 this Court upheld the
decision of the Reserve Bank of India as regards the introduction of
F
common seniority, inter-group and mobility amongst different grades
of officers belonging to Group-I, Group-ll and Group-III with retrospective effect from May 22, 1974. In that case, officers belonging to
Group-I urged that the scheme should be brought into effect from
January I, 1976, while those belonging to Groups-II and III wanted
the scheme to be brought into effect from January 1, 1970. The Central
G
··+ Board of the Reserve Bank struck a balance by choosing the date May
22, 1974. Chandrachud, C.J. delivering the judgment of the Court held
that it was the best solution in the peculiar circumstances of the case
and that in order to rectify the imbalances and anomalies caused by the
compartmental-wise and group-wise seniority, it was necessary to give
H
retrospective effect to the combined seniority list. Further, it has been
132
SUPREME COURT REPORTS
[ 1987] 3 S.C.R.
A observed by the learned Chief Justice that no scheme governing
service matter can be fool-proof and some section or the other of
employees is bound to feel aggrieved on the score of its expectations
being falsified or remaining to be fulfilled. Mr. Shanti Bhushan has also
placed reliance upon the observation of Sabyasachi Mukharji, J., in
Reserve Bank of India v. C.N. Sahasranaman, [1986] Suppl.