# STATE BANK OF INDIA v. THE PRESil>ING OFFICER, CENTRAL GOVERNMENT LABOUR COURT, DHANBAD & ANR - **Citation:** [1973] 1 S.C.R. 126 - **Court:** Supreme Court of India - **Decided:** 1973 - **Case number:** C.A. No. 1270 of 1968 - **Bench:** C. A. Vaidialingam; P. Jaganmohan K. K. Mathew. Jj - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-bank-of-india-v-the-presil-ing-officer-central-government-labour-court-5743 - **Pages:** 13 ## Headnote REDDY AND Labour Law-Industrial Dis-pute-Sas~ry Award par6'graph 292, construction of-Direction in clause (2) of paragraph whether excludes Claus~ 4.(b)-Clause 5(a) of paragraph, applimbilit,v of. The second respondent was employed on 3-1-1947 as a Grade II Clerk in too. Imperial Bank of India (taken over by the State Bank of India in 1955) on a ecale running from Rs. 70 to Rs. 170. Shoirtly afWr, he was given a raise of Rs. 4 because of his proficiency in using the machine. On 1-1-49 he was promoted to Grade I. The Sastry Award prescribed a uniform scale of pay for clerks of Grade I & JI and gave directions to make fitments in that grade. The second respondent disput~ the conputiation of benefits admiscible to him undet the Award. In the consequent industrial dispute the Labour Court fixed the basic pay of the second respondent under paragraph 292 1 of the . Award as Rs. 164 p.m. as on 1-4-1954. The Labour Court; accepted his contention that clause (4)(b) of paragraph 292 should !Jj:· read with clause 5 (a) and that the latter clause was applicable to him because before. the Award came into force he was plromoted from Grade II to Grade I. The High Court confirmed the decision of the Labour Court. In appeal by the State Bank of India to this Court the questions that fell-for determination were: (i) whether the direction in clause (2) of paragraph 292 that the basic pay in the new· scale shall not exeoeed what point tO point adjustment would have given to the workman in tOO new scale has the effect of excluding clause (4)(b); (ii) whether s. (5)(a) of the paragraph was applicable to the second respondent. HELD : (i) The report of the Gajendragadkar Commission made it clear ·that what the Award meant in clause (2) when it referred to pointto-point adjustment is the placing of each employee at the stage in t)te new . scale to which re would have risen by reason of length of service had he entered service in the new scale. What was sought to be ensured by clause (2) was that the adjusted basic pay in the new scale shall not ex· ceed the point-to-point adjustment or the maximum of the scale.. I( the meaning given to the phrase point-to-point adjustment is what is stated by the Commission in the report, then there would be no itripediment in giving effect to the directions in clause ( 4 )(b) . It would not therefore be right to say that clause ( 4) (b) is to be ignored or that the advantage ends only with that,given in clause (4)(a). [136G-!37A] (ii) The directions given in clause 5 (a) are that the length of ;erv1ce in the scale in which the workman is and in which he gets an increment or increments either at the initi:ll start dr bv special promotion should be that which he would have taken to reach the basic pay which he would draw on 3 !st January 1950 with the initial start. The condition precedent to the applicbaility of the directions in this clause is the receipt of increment or increments by way of special promotion. The use of the word ··special" would itself >how that what is contemplated is advance increments in the same grade. [1370-FJ A B c D E F G H A D E F .G H STATE BANK v. LABOUR COURT (Jaganmohan Reddy, J.) 127 As the 2nd respondent di4 not get any increment or increments in the existing scale which was Grade I either at the iritial start or by way of special promotion, the directions in clause 5 (a) were inapplicable .IQ him and his nctual servico in , the c"'1re had to be computed for the purpose of clause ( 4) (b). The words 'same cadre' in the latter clause would refer to both Grade II and Grade I. The actual service in both the grades will alone be considi:red for giving him an increment for every three years of service which in his case would work out to one increl'nent in respect of his 3 years' service from 31-1-47 to 31-1-50. [137H-138BJ [The Court, applying the principles as laid down above, held that the second respondent had to be fitted in the new scale C>n a basic pay of ll.s. 148]. r State Bank of ## Text 126 STATE BANK OF INDIA Y. THE PRESil>ING OFFICER, CENTRAL GOVERNMENT LABOUR COURT, DHANBAD & ANR. A'pril 11, 1972 [C. A. VAIDIALINGAM; P. JAGANMOHAN K. K. MATHEW. JJ.J REDDY AND Labour Law-Industrial Dis-pute-Sas~ry Award par6'graph 292, construction of-Direction in clause (2) of paragraph whether excludes Claus~ 4.(b)-Clause 5(a) of paragraph, applimbilit,v of. The second respondent was employed on 3-1-1947 as a Grade II Clerk in too. Imperial Bank of India (taken over by the State Bank of India in 1955) on a ecale running from Rs. 70 to Rs. 170. Shoirtly afWr, he was given a raise of Rs. 4 because of his proficiency in using the machine. On 1-1-49 he was promoted to Grade I. The Sastry Award prescribed a uniform scale of pay for clerks of Grade I & JI and gave directions to make fitments in that grade. The second respondent disput~ the conputiation of benefits admiscible to him undet the Award. In the consequent industrial dispute the Labour Court fixed the basic pay of the second respondent under paragraph 292 1 of the . Award as Rs. 164 p.m. as on 1-4-1954. The Labour Court; accepted his contention that clause (4)(b) of paragraph 292 should !Jj:· read with clause 5 (a) and that the latter clause was applicable to him because before. the Award came into force he was plromoted from Grade II to Grade I. The High Court confirmed the decision of the Labour Court. In appeal by the State Bank of India to this Court the questions that fell-for determination were: (i) whether the direction in clause (2) of paragraph 292 that the basic pay in the new· scale shall not exeoeed what point tO point adjustment would have given to the workman in tOO new scale has the effect of excluding clause (4)(b); (ii) whether s. (5)(a) of the paragraph was applicable to the second respondent. HELD : (i) The report of the Gajendragadkar Commission made it clear ·that what the Award meant in clause (2) when it referred to pointto-point adjustment is the placing of each employee at the stage in t)te new . scale to which re would have risen by reason of length of service had he entered service in the new scale. What was sought to be ensured by clause (2) was that the adjusted basic pay in the new scale shall not ex· ceed the point-to-point adjustment or the maximum of the scale.. I( the meaning given to the phrase point-to-point adjustment is what is stated by the Commission in the report, then there would be no itripediment in giving effect to the directions in clause ( 4 )(b) . It would not therefore be right to say that clause ( 4) (b) is to be ignored or that the advantage ends only with that,given in clause (4)(a). [136G-!37A] (ii) The directions given in clause 5 (a) are that the length of ;erv1ce in the scale in which the workman is and in which he gets an increment or increments either at the initi:ll start dr bv special promotion should be that which he would have taken to reach the basic pay which he would draw on 3 !st January 1950 with the initial start. The condition precedent to the applicbaility of the directions in this clause is the receipt of increment or increments by way of special promotion. The use of the word ··special" would itself >how that what is contemplated is advance increments in the same grade. [1370-FJ A B c D E F G H A D E F .G H STATE BANK v. LABOUR COURT (Jaganmohan Reddy, J.) 127 As the 2nd respondent di4 not get any increment or increments in the existing scale which was Grade I either at the iritial start or by way of special promotion, the directions in clause 5 (a) were inapplicable .IQ him and his nctual servico in , the c"'1re had to be computed for the purpose of clause ( 4) (b). The words 'same cadre' in the latter clause would refer to both Grade II and Grade I. The actual service in both the grades will alone be considi:red for giving him an increment for every three years of service which in his case would work out to one increl'nent in respect of his 3 years' service from 31-1-47 to 31-1-50. [137H-138BJ [The Court, applying the principles as laid down above, held that the second respondent had to be fitted in the new scale C>n a basic pay of ll.s. 148]. r State Bank of India v. Prakash Chand Mehra, [1961) 2 L.L.J. 383 and Punjab National Bank Ltd. v. K. I,. Kharbanda, [1962] Suppl. 2 S.C.R. 977, refurred tC>. CIVIL APPELLATE JURISDICTION: C.A. No. 1270 of 1968. Appeal from the Judgment dated the April 24, 1967 of the Patna Hig)! Court ih Civil Writ Jurisdiction Case No. 567 of 1966. ] S. T. Desai.._H. L. Anand, V. N. Koura and A:;hok Grover, for the appellant. Respondent No. 2 appeared in person. The Judgment of the Court was delivered by P. Jaganmohan Reddy, J. This . appeal by certificate raises a question as to the interpretation and proper applicatio1. of paragraph· 292 of the, Sastry Award (hereinafter called '1he Award'). The 2nd respondell!t was employe,d on 13-1-1947 as a Grade II Clerk in the Imeperial Bank of India on a scale of Rs. 70-4126-EB-130-5-175. This Bank was subsequently taken over by the State Bank of India un'der the State Bank of India Act (Act XXIII of 1955). A few months after tlie respondent was employed he was given a pay of Rs. 7 41 - because of his proficiency in using the machine. On 13-1-48 he earned an incre- ,ment and his basic pay was Rs. 781-. On 1·1-49 he ·was promoted ito Grade I so that on the date of his promotion he was drawing a basic pay of Rs. 100/-, On 1-1-50 he earned an incre~ ment and his basic pay was Rs. 1081-. The Sastry Award prescribed a uniform scale of pay for clerks of Grades I & II and gave directions to make fitments in that Grade. The 2nd respondent disput·~d the computation of the benefits admissible to hill'. under the A ward and consequenitJy applied for a settlement of his dispute under section 33C (2) of. the Indus1rial Disputes Act (XIV of 1947) which was referred to the Labour Court. The Labour Court allowed the application and fixed the basic pay of the J!pplicant under paragraph 292 of the Award . at Rs. 1641- p.m. as on 1-4-1954 wrth directions to the appellant to pay to' the respondent a .sum of Rs. 1647.91 for the period from SUPREME COURT REPORTS [1973] l s.C.ii. 1-4-54 to 31-12-61. The appellant challenged the Award under Articles 226 and 227 of the Constitution but the High Court accepting the interpretation placed by the Lavour Court on paragraph 292 of the Award dismissed lhe petition. Inasmuch as the dispute between the parties is depem::O~nt upon the view which can reasonably Q_e taken of paragraph 292 of the Award, it will be necessary to examine 1the directions contained therein. We give below the relevant directions of that paragraph as amended :- "292. . . . . Section II-for workmen who entered service ot the Bank before 31st January 1950-: (1) The workman's basic pay as on 31st January A B 1950 sl;iall not be reduced in any case. C (2) Subject to rule ( 1) the adjuS'ted basic pay in the new sc,Ue shall not exceed what pcint-to-poin:t adjustment would give him or the maximum in the new scale. (3) In the matter of adjustment all efficiency bats, 'whether in the previ<'•1sly existing scales or in the neiv scales fixed by the award, should be ignored. ( 4) Subject to ru:es ( 1) to (3) a workman's basic pay in th1.; new scale shall be fixed in the foJ\owing IPanner :- (a) A workman shall first be fitted into the scale of pay fixed by the said award (hereinafter called the new scale) by placing him at the st, "'"' in the new scale equal to, or next abOVe, his oasic pay as on 31st January 1950 in the present scale then in force (herein called the existing scale}. (b) To the basic pay into which he is fitted under cl. (a) the annual increment or inc.ements in the new scale as from that stage onwards should be added at the rate of one increment for every completed three years of service in the same cadre as on 31st January 1950 upto a limit.of twelve years' service; 1hereafter one increment for every four years of service up to another eight years' service and after that one incre" ment for every five years of service. ( 4A) After adjustments are made in accordance with the directions given. three further annual increments in the new scale will be added thereto for service for the three years 1951 to 1953. In addi1tion, the workman will be enlitled to draw his normal increment E F ' A B c D E F G H STATE BANK v. LABOUR COURT (Jaganmohan Reddy, 1.) 12-fl< for 1954 on ls't April 1954. Thereafter each succeeding years' annual 'increment shall take effect as and from 1st April of that year." ( 5) (a) Where a workman received an additional in" crement or. increments in his basic pay ehher at the iiiititil start or by way of special promotion later on, his length of service will be taken to be the period which would ordinarily br. necessary to bring a workman with the usual initial start without special promotion to that basic pay as (on) 31st January 1950, in the existing scale (fractions being roun&.!d off to the nearest ill'teger) (b) Similarly where a workman's increment or increments have been withheld prior to 31st January .J 950 •the length of service in his case will be calculated by subtracting the number of y.!ars for which the increments have b~·~n withheld. (c) x (6) x x x x x x x" It may be mentioned here :hat prior to the Award another Award known as the Sen Award was given on 12-8-50. This latter award, however, was declared void by the Supreme Court on 9-4-51. The pre-~n scales were •those fixed by the Award of an Industrial Tribunal known as Gupta Award admissible to the employees of tr;~ Imperial Bank of India, as it then was. The scales applicable •to the 2nd respondent who was employed on 13-1-47 in the Calcutta Branch were Rs. 70---4-126-EBl 30-5-l 75 when he was in Grade II and Rs. 100-8-180--- EB-10---250 when he was promoted to Grade I. The Award as subsequently modified prescribed only one scale of · pay of Rs. 85-5-100-6-112-7-140-8-164-9-245-10265-15-280 for clerical staff in 'A' class Banks in Class I areas. This .scale applied to 'the clerical staff employed at the Calcutta Branch.• It will be seen that the fitment of the basic sal.arv of p.!rsons in Grade II and Grade I in the new scales be· came a matter of some controversv due to the difficulty of varia· tion in the total number of years for each of the grades in wi1ich an employee had to work out his increments. In Grade II the maximum grade could be attained in 24 years while Grade I had a ran_ge of 17 y.ears. In the new grade an ·employee took 24 vears to reach the maximum. In other words, the number of vears required to reach the maximum of basic" pay from the ini· !ial basic pay in Grade II and that in the new scale was the same. namely. 24 years. The only difficulty that would present itself 130 SUPREME COURT REPORTS [1973] l S.C.R. in the fitment of pay in the new grade was in respect of a promotion made prior to the coming into force of the new· scales from Grade II to C'!rade I. It is for this reason the directions contained in clauses 3, 4 and 5 of paragraph 292 were evolved basing the fitment both on the actual pay drawn and the increments which a person would notionally have earned having regard to the number of years which he would have taken in the new scale to draw the pay which he was actually getting on the date when the Award was brought into force. Ignoring the effi~iency bar as provided in clause ( 3) of paragraph 292, a workman has to be i;ued under clause ( 4 )(a) into the scale of pay fixed by the A ward placing him at the s'lage in the new scale equal to or next •Over his basic pay as on 31-1-50 in the pre-Sen scale 'then in force. It is J!Ot disputed by the parties ihat on 31-1-50 the 2nd respondent was drawing Rs. 1081- <1nd since in the new scale·he rould not be fixed In Rs. 1081. he has to be fitted in Rs. 112/c. As clause ( 4) is also subject to clause (2) the adjusted pay in the new ·scak is directed ?'\Ot to exceed what paint to point adjustment would give. the workman or the maximum in the new scale. Does this mean that after the fitment under clause (2) is made clause ( 4) (b) is to be ignored and only those increments specified in clause ( 4) are to be added ? Or is the workman also en· ritled to the increments specified in ( 4) (b) and if so, is that clause 'lo be read. with clause 5(a) as contended by 'the 2nd 1es1JOndent? On the as3umption that clause ( 4 )(b) is applicable the workman would be entitled to one increment for every thre~ :.>m1Jleted years of service in the cadre as on 31-1-50. There is also no dispute {hat he had completed three years from 13-1-47 to 31-1-50 and on' this basis he would be entitled to one increment so that the basic pay would be Rs. 119. Under clause (4A) he would further ·be entitled to three increments in the new scale for his service for the three years 195110 1953. It.is at this stage that the appellant and the 2nd respondent part ways. The appellant contends that the basic pay in the new scale is arrived at after adjus1men't under clauses (4)(a) and (4A) to 'three further increments, namely, 7+7+7=21 which added to Rs. 119/- would be Rs. 1401- and since the fitment was being made as from 1-4-54 he will be entitled to one more increment which is Rs. 81- giving him a total basic pay of Rs. 148/- The 2nd respondent. however. contends tha't clause ( 4 )(b) should be read with clause (5)(a) because before the Award came into force he was promoted to Grade I and his basic pay in that grade should be taken into consideration for which clause (5) (a) was designed. The appellant takes the stand tha't this clause is nat applicable because the additional increments under that clause are only in Tespect of any increment or increments in the basic pay at the A B c D E F G H A B c D E F G H STATE BANK v. LABOUR COURT (Jaganmohan Reddy, J,) 131 iiiilli.al stage_ or by way of special promo'tion later on in the same cadre which under clause ( 4 )(b) must mean Grade II. As the 2nd respondent was not given any increments in the basic pay at the initial stage nor was he given any increment by way of special promotion he will not be entitled to the benefit giV'en by .clause (5)(a). In rthis view, it is submitted that the interpretation placed by the Labour Court. brings para 292(5)(a) in direct confiiet with para 292( 4) (b) because the former was only a deeming provision and was intended for c:omputation of length of service. The Labour Court as weil as the High Court, however, interpreted the word 'cadre' in para 292( 4) (b) as covering all workmen in the cadre of clerks -and not differen't cadres, which means that both grade II and grade I of the pre-Sen Award are included in the same cadre and not different cadres. The High Court referred to paragraph 91 in which it was mentioned thaj: Gupta Award had reduced the four cadres of clerks with different grades of pay employed by Imperial Bank of India into iwo grades, namely, the junior clerks and senior ~Jerks and though para 5 31 has used expressions like 'officers grade' and 'clerical grade' it is not possible to hold that each grade of clerks with a particular scale of pay was considered to be a cadre by itself. Jn its view the m~re mention of one grade or two grades for 1the clerical staff does not justify the conclusion that - each grade with a particular scale of pay was taken to_ be a separate cadre of service. On the contrary its impression was that the clerical staff was taken to be a cadre even if it had at one point of time differell't grades with different scales of pay. It accordingly ht;ld that the interpretation placed by the Labour Court was correct and that the expression 'in the same cadre' occurring in paragraph 292(4)(b) of the Award was equivalent to '111e expression 'in 1the same grade'. On this interpretation paragraph 292 ( 5 )(a) was read with paragraph 292 ( 4 )(b). If so read, the respondent would be en'titled to three increments instead of one increment as contended by the 2nd respondent. Once the amount to be added to 'Ille basic pay drawn as on 31-1-50 is fixed in the new scale which is F.s. 112/- by reference to the deeming provision under (5)(a) read with (4)(b) the second respondent would be entitled to three increments for every notional year on the -basis th;rt if he had not been given special increments at the beginning and promotion to Grade I on 1-1-49 .he would have take'n 10 years to reach the basic pav he was then dfawing. Applying this principle ho~ would get three increments of pay fo.- three years amounting to Rs. 21/-, which added to -Rs. 112/- would give him l: basic salary of Rs. 133/-. Thereafter under cl~use ( 4t})!for .the years 1951 to 1953 he would have to be given 3 further mcrements, namely, 7+8+8= 23 and thereafter .he ;would earri another increment as on 1st . .·.,, .... , ' '•, . .;:,.. ,.,~: . 132 SUPREME COURT REPORTS [1973] 1 <;.C.R. April 1954 so that the incremen'ts under clause ( 4A) would be Rs. 31/- which added ·:o Rs. 133/- wm:ld entitle him to a basic salary of Rs. 164/-. This is the claim of the 2nd respondent which has been upheld on the' basis of the interpretation placed both by the Labour Court ?.nd •the High Court. Before we embark on an examination of the rival contentions it will be u~~ful ·to mention that after the Awaid the question of its implement:ttion was considered by the Labour App.~llate Tribunal which gave its decision on 28-4-1954. The Cen'tral Government thereafter modified the Labour Appellate Tribunal's decision on 24-8-54 and on the same date app·Jinted Gajendragadkar, J. (as he then was), to enquire into and ascertain the effect of 1th~ decision of the Labour Appellate Tribunal as modified by 'the Central Government in respect of the emoluments of the Bank employees. On 25-7-1955 the Commission made its. report which were incorporated in the Indu&trial Disputes (Banking .Compani·~s Decioion) Act (XU of 1955). The Award with modifications as already ~~ out, was to become effective from the 1st of Apxil 1954. The decision in this case will, therefore, depend upon the interpretation 10 be placed on the modified directions. Though both sides have given their own respective examples of the fitment that should be made under these directions, the question whether the assumption underlying the respective worksheets is valid or not would ul'timately dep~nd upon the proper interpretation of the directions relating to the frtment of the emoluments of the employees in the new scale. The learned Advocate .for the appellant during his main arguments did not lay stress on clause (2) of paragraph 292 and in fact stated that these can be ignored. What was emphasised was that clause (a) cannot be read wlth clause (b) as contended by the 2nd respondent; that the existing scale mentioned in clause ( 4 )(a) is the pre-Sen sea le and the weightage that is admissible to the 2nd respondent is in 'that existing pre-Sen $Cale of on.~ increment for every 3 years of actual service which would only entitle him to one increment as he had actually served for 3 years. from 13-1-1947 to 31-1-1950 which latt·~r date is the crucial date on which fitment has to be made as sp.~cified in t~e directions in paragraph ( 4) (b). Alternatively h was contended that even if clause (5)(a),was to be read with clause (4)(b), though that :lause was inapplicable as the 2nd respondent had got a prom6tion from Grade II to Grade I, as he had on 1-1-1949 served 2 years. and if to that service is added the notional service und·~r clause ( 5) (a) after he gat his promotion to Grade I he would have served 2 mQre years. This advantage he would h1Ve enjoyed as he would have been fitted in Rs. 102/ - in the Junior scale and A B c D E F G H .A .B c D E F G H STATE BANK v. LABOUR COURT (JaganmohanReddy, /.) 13'.l would have taken 2 mop~ years •to reach the basic pay of Rs. ll21-. Even on this basis the 2nd respondent would only be entitled to one incre;nent. The learned Advocate for the appellant while replying to the submissions of the second respondent who presented his case personally, raised for the first :ime a cont.~ntion based on clause (2) in support of which he cited the decision of this Court in State BQnk of India v. Prakash Chand Mehra('.). According" •to this submission a limitation was introduced by clause (2) which is made applicable to the fixation of basic pay under clause ( 4) by the words 'subjec•t to clauses (1) to ( 3) '. The direction in clause (2) that the basic pay in the new scale shall nat exceed what point-to-point adjustmerrt would have given him in the new scale, it is ~aicl, excludL' • ;, "C ( 4 )(b) and the 2nd respondent would not be entitled to any mcP~ment for every completed three years of service in the same cadre as on 31-1-50. If this view is accepted '!he 2nd respondent would merely be entitled to 4 increments at the rate of Rs. 7/- ·~ach in the new scale as on 1-4-54, and his pay "will have to be fixed at Rs. 140/ - and not as ·~arlier contended on behalf of the appellant, at Rs. 1481-. There is no difficulty in so far as clause ( 4 )(a) is concerned because the basic pay of the 2nd respondent in the existing scale of Grade I which was Rs. 108/- would be fitted in lhe new scale in that next nearest basic"pay of Rs. 1121-. As we stated earlier, the pre-Sen scale for Clerks was compri9~d of both Grade I and Grade IL In the Punjab National Bank Ltd. v. K. L. Kharbanda(2), this Court had said that the Sastry Aw<11:d provided one grade for all clerical workmen by whatever naine they were known in the Bank. It cannot be disputed that a workman in Grade II as well as in Grade I is nonetheless in the pre-Sen scale which are in the same cadre. Clause 4 (b) directs 1hat to the basic pay into which he is fiNed under clause (a) one increment for every completed 3 wars of his service in the same cadre as on 31-1-50 should be added" This in our view is an additional advantage which is sought to be given and is not to be restricted by clause (2) which on the interpretation suggested would terrnina'te the advantage of placing him in the new scale with clau>e · (4)(a) itself. Some meaning has to be given to the words 'lo the basic pay' in clause ( 4 )(b) which can only be additional increment or incr~ments based on the length of service. H is true that in State Bank of India v" Prakash Chand Mehra('.), it was observed : "Giving as. we must, natural meaning to the words used in rules 2 and 4, we are of opinion 1hat in no case can the basic pay be fixed at a higher figure than (ll [1961] 2 LU JB. (2) [1%2] SuprL 2 S.C.R. 9"7. 134 SUPREME COURT REPORTS [1973] l S.C.R. whJ!f the point-to-point adjustment would give to the workman or the maximum in the new scale. Under rule 4 (a) the"workman's basic pay is Rs. 90 and under rule 4 ( b) to 1this basic pay has to be added two increments in respyct of the new scale so that the basic pay would become fixed, apart from the limitation of rule 2, at RJi. 100. If that were correct, the salary would be Rs. 126 on 1 April 1954. There is however the limitaition introduced by rule 2 which is made applicable to the fixation o[ the basic pay under rule 4 by the words "subject to rules I to 3". Admittedly, point-to-point adju&tment would give the respondent a basic pay of. Rs. 90. .This limit cannot therefore be excel)cled; and so, in spite of rule 4(b), the basic pay for a~plying the new scale would be Rs. 90 and not Rs. 100". In that case the respondent had entered the Bank's service on 20-2-43 and on the 31st January 1950 he was getting a salary of Rs. 86/ - p~m. On 1-4-54 he was employed at Abohar Branch of the Imperial Bank of India and on 15-5-54 he was transferred to Amrit.Sar. Under the classification in the Bank Award, Abohar was class IV area while Amritsar was a Class II area. On the basis that Abohar was a class IV area the respondent's salary was fixed ':Jy the Bank on 1-4-54 at Rs. 112/- p.m. and on his transfer to Amritsar, a class 11 area, in consideration of his length of service he was given three increments and his salary was fixed at Rs. 133/-. The respondent's case.was that he was entitled to three increments over Rs. 126/- which it is said he was drawing at Abohar, i .. e. Rs. 148/- p.m. On a dispute being referred under section 33C(2) of the Industrial Disputes Act, the Labour Court, Delhi accepted the respondent's case that his pay should be fixed at Rs. 1481- p.m. Though the court die;! not apply clause ( 4 )( b) it nonetheless came to the same conclusion on the basis that Abohar was treated as a class IV area with retrospective effect from 1-4-54 and the calculation on that basis would fix his basic salary at Rs. 126/•_ on 1-4-54 and on transfer from that area to· Amritsar, a class II area, he would 11;et an increment and his ·salary would be fixed at Rs. 133/ -. In that case the meaning and significance of the term 'point-tcipoint adjustment' mentioned in clause (2) was ncit discussed. nor has there been anything said as to the contingencies in which those directi_ons were to be applied. If point-to-point adjustment signifies the fixation of the workman at the stage in the new scale equal ito or above his basic pay as on 31-1-50, clause (4) (a) itself has provided for that and there was no need for clause (2) or clause ( 4) (b). A perusal of· the report of the Gajendragadkar Commission in this respect, however, furnishes a clue to ~bis A B c D E F G H A B c D E F G H STATE BANK v. LABOUR COURT (Jaganmohan Reddy, J.) l:t5 enigma. In paragraphs 109 to 111 the Commission sets out the directions in the Award, the modification made by'-the Labour Appellate Tribunal and the Government's decision thereon. A reference to paragraph 109 would not only show the nature of the scheme proposed in the Award but indicates what in fact was meant by point-to-point adjustment. It is there observe« as follows "109. In fitting the existing staff in the revised pay structure the Sen Tribunal gave empfoyees the benefit of what virtually amounted to point to point adjustment that is, the placing of each employee at the stage in the new scale to which he would have risen by reason. of the length of his service had he entered service on the new scale. After a careful consideration of the various aspects of the question raised by the provisions contained in the Sen Award tl:ie Sastry Tribunal by and large followed the recommendations of the Central Pay Commission that when persons on the existing scale of pay were brought on to the new scales recommended for them, their initial pay should be fixed at 1the stage in the proposed scale next above the pay they were drawing in the existing scale and special increments added' to it at the rate of or.~ increment in the proposed scale for every 'three completed years of service subject t:i certain ceilings in regard to the incr~ase to be allowed. The Sastry Tribunal recommended that a workman should first be fitted into the scale of pay fixed by its award at the stage in the new scale equal to or next above his basic pay as on the 31st January 1950 in the existing scale (pre-Sen scale) and annual increments. in the new scale as from that stage onwards added at the · rate of one increment for every compl~ted three years of his service subject to a maximum of 4 increments. It also recommendeel that two further annual increments in the new scale should be added to the basic pay fixed in the manner descrit.~d above for service for the two years 1951 and 1952 and the worker should be en'titled. to draw his normal increment for 1953 and succeec!ing years from 1st April of each, year. There were, besides, certain other recommendations aimeJ at .giving protection to a workman's basic pay and emoluments as on the 31st January 19 50, and covering cases of special increments granted or Increments withheld etc. It also recommendeft tha't subject to a workman's basic pay as on the 31st January 1950 not being reduced in any case the adjusted. basic pay iii tl;ie new· I .136 SUPREME COURT REPORTS [1973] I S.C.!{ . scale s]!ould not exceed what point to point adjus·tment would give him or the maximum in the new seal·~". The Labour Appellate Tribunal agreed with the scheme of .adjustment given by the Award except in regard to the weightage in respect of whicb.. it recommended the removal of the 1_2 years' limit for adding one increment for ev~ry three years. In its place it proposed !\ \apering off of the weightage after 12 years, by the addition of one increment for cwry 4 years in the next 8 years and one increment for every 5 years for the next five years. Though the Government modified the Labour Appellate Tribu· nal's recommendation by confirming the Award, it decided to adopt what was proposed by· the Labour Appellate Tribunal m respect of the ·weightage of qne increment for every three years. The Commission, however, did not accept the Governmenrs .decision but made the following recommendations in para 112 :- "112. The question raised by the modification thus made b2' Governm~nt is not likely 'to affect a very large number of employees. On the merits, it seems to me that much call be said in favour of the view taken by the Labour Appellate Tribunal. If, in adjusting emplqyees in the new wage structure, they are entitled to have tl}e_ir pre\ious service taken into account, it is difficult to apprecia~~ why a-line should be drawn at the end of 1,velve years' service and it should be held tha't an employee would not be entitled to claim any c;redit for any_ period of service beyond the said line. T 11e modifi.:ation made by Government confirms the provi- . sions made by the Sastry Tribunal, and these provisions. -as I have just indicated, allow certain increments in li·~u of twelve years' service. If fairplay an<.! equity justify these provisions, it would seem to follow that the same considerations would justify the additional provisions that have been made by 1he Labour Appellate Tribunal decision. On the merits, 1herefore, I am inclined to agree with the view takP-n by the Labour Appellate Tribunal". It would appear clear from the abov~ recommendation that what the Award meant in clause (2) when it referred to point- -'to-point adjustment is the placing of each employee at the stage in the new scale to which he would have risen by reason of the length of service had he enter~d service in the new scale. What was sought to be ensur.~d by clause (2) was that the adjusted basic pay in the new scale shall not exceed. the point-to-point adjustment or the maxipmm of the scale. If the meaning given to the phrase point-to-point adjustment, is what is · S1ated by th·~ A B c D E F G I H j • ' A B c E F G H STAT£ BANK"· LABOUR COURT (laganmohan Reddy,/,) 137 CommisSion in the report, then there would be no impediment in gi~ effect to the directions in clause ( 4 )( b) . It would not, therefore, .be right to say that clause ( 4) (b) is to be ignored or that the advantage ends only with that given in clause (4)(a). The ne~ .question is what is it that clause ( S) (a) provides for ? Does it provide for computing the length of service for the purposes of giving one incremell't for every three years of notional service worked out on the basis of the service that would be required for a workman to reach the basic pay which he was .i.•awing in the eXisting scale ? The contention of the 2nd respondent is \bat taking the basic pay drawn by him as on 31st January 1950 to the nearest i:lteger. the length of service should be computed on ·the basis of the number of years which he would have to serve ·in the junior, scale to draw that amoull't of basic pay. It appears 'to us on a careful examination of the terms of clause (5) (a) that the directions in this clause are inapplicable to him. Clause ( 5) (a) provides for only the cases of those who start on a higher initial basic pay by getting additional increments or are given advance increments in any scale whether junior or .senior. In such contingencies how the length of service for the purposes of clause ( 4 )(b) is to be computed was provided for in clause ( 5 )(b). The directions given in that clause are that the length of service in the scale in which he is and in which he l!:O't an increment or increments either at the initial start or by special promotion should be that which be would have taken io reach the basic pay which he would draw on 31st January' 1950 with the initial start. The condition precedent to the applicability of the directions in this clause is the receipt of increments or increment by way of special promotion. An increment is in the same scale while a promotion is from one scale to a hjgber scale. A promotion from a lower grade to a higher grade tho11gb both the l(Tades may be in the same cadre is not an increment or increments by way of special promotion. The use of the word 'special' would itself show that what is contemplated is advance increments in the same grade. What is sought to be taken into account by the Award is the actual service of the workman or where he has been l(iven increments in the. same scale he is sought to be compensated by· giving him a corresponding advantage in the new scale. This is sought to be effected by takinl!: into account the increment or increments earned in the cadre in computing the length of service under clause ( 4 )(b). As the· 2nd respondent did not l(et any increment or increments in the existinl!: scale which was Grade I either at the initial start or by way .of speeial promotion, the actual service in the cadre has to be computed for the purposes of clause ( 4) (b). The words 'same cadre' in that clause as explained earlier would refer to both Grade II ·and Grade I. The actual service in both the ll}-Ll208SupCI/72 138 sUPREME cOORT REPQRTS f,1;9'73] l S.C.lL l grades will alone be considered for .giving him an, increment fot every three years of service which in his cllb1: works. out to one increment in respect of his 3 yealt' service from 13-1-47 to 31-1-50 •. Even if the initial increment of Rs. 41- in Grade II which was given to him for being proficient in the working of a machine is taken into account under clause ( 5,) (b) that would add one more year to the three years of actual service rendered by him but that does not give him any further advanta!'e. He will only be entitled to one increment under clause ( 4 )(b) . In the result we hold