JUDGMENT : ( 1. ) THIS is an appeal under clause 10 of the Letters patent against the order dated 6th January 1981 passed by a learned Single judge in M. P. No. 888 of 1979 by which Circular No. PER/o 36 of 1979, issued by the Bhopal Local Head Office of the State Bank of India, has been declared to be invalid in so far as it gives favourable treatment to the employees belonging to the Scheduled Castes and Tribes. ( 2. ) THE impugned circular relates to the promotion to the Officers grade II (Sub-Accountants ). The circular informed all Branch Managers, that it is proposed to conduct in November / December 1979 a written test and interview for promotion to the Officers Grade II (Sub-Accountants) cadre the Branch Managers were required to submit by the 15th October confidential reports of the eligible categories of staff working in the respective branches and sub-offices. The eligible categories of staff are described as below : "all clerks, clerk-typists, Stenographers, Head Clerks, Official-in-charges, Cashiers-cum-clerks, Cashiers, Cashier-cum-Godownkeepers, deputy Head Cashiers, Tellers and Cashier-in-charge, who will not be over 50 years of age as on the 1st December 1979 and who were confirmed in the Banks service on or before the 1st June 1973 (In the case of em-ployees belonging to Scheduled Castes /tribes, those who were confirmed on or before the 1st June 1974 ). " ( 3. ) A perusal of the circular will go to show that employees of the general category who had completed 6 1/2 years of confirmed service as on 1st December 1979 and employees belonging to the Scheduled Castes and tribes who had completed 5 1/2 years of service on that date were eligible to be considered for promotion. It is this relaxation of one year in case of employees of the Scheduled Castes and Tribes which has been held to be invalid by the order under appeal. In the opinion of the learned Single Judge, executive Committee of the Central Board or the Local Head Office at bhopal had no authority to give this concession to the employees belonging to the Scheduled Castes and Tribes for only the Central Board could issue orders or rules relating to the terms and conditions of employment. It has also been held that the Circular violates Rule 7 of the State Bank of India (Supervising Staff) Service Rules, 1975. It has also been held that the Circular violates Rule 7 of the State Bank of India (Supervising Staff) Service Rules, 1975. ( 4. ) FOR deciding the controversy arising in this appeal, it is first necessary to have a look at the relevant provisions of the State Bank of India Act, 1955 and the rules and regulations made thereunder. By section 17 of the. Act, the general superintendence and direction of the affairs and business of the State Bank are entrusted to the Central Board which may exercise all powers and do all such acts and things as may be exercised or done by the state Bank except those expressly directed or required to be done by the State bank in general meeting. Section 30 authorises the Central Board to constitute the executive committee and other committees of itself to exercise such powers and perform such duties as may, subject to such conditions, if any, as the Central Board may impose, be delegated to them by the Central board. Section 43 provides 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. " Section 49 (1) confers power on the Central Government, in consultation with the Reserve Bank, to make rules to provide for all matters for which provision is necessary or expedient for the purpose of giving effect to the provisions of the Act. Section 49 (2)enumerates certain matters on which rules can be made. Section 50 (I)confers power on the Central Board, after consultation with the Reserve Bank and with the previous sanction of the Central Government, to make regulations not inconsistent with the Act and the rules "to provide for all matters. for which provision is expedient for the purpose of giving effect to the provisions of the Act. " Section 50 (2) enumerates certain matters on which regulations can be made. Section 50 (3) provides that the first regulations shall be made by the Reserve Bank with the previous sanction of the Central government. The first regulations are known as the State Bank of India general Regulations, 1955. " Section 50 (2) enumerates certain matters on which regulations can be made. Section 50 (3) provides that the first regulations shall be made by the Reserve Bank with the previous sanction of the Central government. The first regulations are known as the State Bank of India general Regulations, 1955. Clause (I) of Regulation 46 constitutes the executive Committee and clause (2) of the same regulation provides that "subject to the other provisions of these regulations and to such general or special directions as the Central Board may give from time to time, the executive Committee may deal with any matter within the competence of the central Board. " The Central Board made the State Bank of India (Supervising Staff) Service Rules, 1975. Rule 7 (1) of these rules provides that "appointment to Officers" Grade II shall generally be made by promotion from the Banks staff. " Rule 31 (1) says that "all promotions shall be made in accordance with the policy laid down in this regard by the Executive committee from time to time. ( 5. ) IT appears from the order sheets of the case before the learned single Judge that arguments were heard and order was reserved on 20th november 1980 On 2nd December 1980 the appellants, who were respondents before the learned Single Judge, filed a supplementary statement in support of the impugned circular. Arguments were then again heard by the learned Single Judge on 3rd December 1980 and order was reserved. The learned Single Judge in the order under appeal has considered the points raised in the supplementary statement filed by the appellants It appears to us that no opportunity to controvert the facts stated in the supplementary statement and affidavit was sought by the petitioners. When the appeal was heard by us, we made it clear during arguments that the supplementary statement having been admitted and considered by the learned Single Judge, could not be ignored and that if the petitioners who are respondents before us wanted to file any rejoinder they could be given that opportunity. No such opportunity, however, was prayed for. ( 6. No such opportunity, however, was prayed for. ( 6. ) THE supplementary statement filed by the appellants before the learned Single Judge makes it clear that the impugned circular was issued in implementation of the scheme known as "the scheme for reservations of posts to be filled in through promotion within the Bank by Scheduled Castes / scheduled Tribes employees" which was approved by the Executive Committee in March 1978. The resolution of the Executive Committee, the memorandum of the Deputy Managing Director on the subject and the scheme are annexed to the supplementary statement. Paragraph 1. 2 of the Scheme provides that it will apply to those posts in the award as well as supervising cadres which are filled in by promotion where the element of direct recruitment does not exceed 50% of the vacancies. , Paragraph 1. 3 states that where the scheme applies to any posts filled in by promotions within the Award cadre, or from the Award cadre to supervisory cadre, "the rates at which reservation would require to be made will be 15% for Scheduled Castes and 7 1/2% for Scheduled Tribes. " Paragraph 3. 2 then states that "where adequate number of employees with normal service are not available, service norms in the case of SC/st clerks and cashiers will be relaxed by two years where in any circle the eligibility norm in respect of number of years of service is 8 years and above, where it is below 8 years service, it will be relaxed by i year. " ( 7. ) A perusal of the Scheme approved by the Executive Committee goes to show that it applies also to posts in the supervising cadres which are filed in by promotion where the element of direct recruitment does not exceed 50% of the vacancies. The reservation in favour of the Scheduled Castes and tribes made by the Scheme is 15% and 7 1/2% respectively. Further, if adequate number of employees with normal service requirement are not available, the scheme makes provision for relaxation of eligibility requirement in case of employees belonging to the Scheduled Castes and Tribes. When the normal eligibility requirement is 8 years service or above, relaxation by two years and when it is below 8 years, relaxation by one year is permitted. ( 8. When the normal eligibility requirement is 8 years service or above, relaxation by two years and when it is below 8 years, relaxation by one year is permitted. ( 8. ) THE impugned circular fixes the normal eligibility requirement as 6 1/2 years confirmed service for promotion to the officers Grade II (Sub-Accountants Cadre ). This part of the eligibility requirement has not been challenged and must be accepted as valid. As the normal eligibility requirement is less than 8 years service, relaxation upto one year could be granted to employees, belonging to the Scheduled Castes and Tribes in pursuance of paragraph 32 of the Scheme and it is this relaxation which the impugned circular grants to these employees. The appellants stand is, therefore, correct that the impugned circular relaxes the eligibility requirement for employees belonging to the Scheduled Castes and Tribes according to the Scheme approved by the Executive Committee and the circular is in effect a step towards the implementation of that Scheme. ( 9. ) THERE is a sharp divergence of opinion on the question whether the state Bank of India (Supervising Staff) Service Rules have any statutory force. The Allahabad High Court in K. L. Tripathi v. State Bank of India, 1978 Lab. I C. 441. held that these rules are in the nature of executive instructions issued by the Central board under section 43. The same view was taken by the Delhi High Court in a. R. Joshi v. State Bank of India, 1978 Lab. I. C. NOC 22, Delhi. The Orissa High Court, however, in jagannath v. State Bank of India, 1979 Lab. I C. 752. took the view that the rules are statutory and have the force of regulation made under section 50 (1 ). In Dattatraya v. State Bank of India, 1969 MP L J 166. a Division Bench of this Court considered the State Bank of India (Sub-Accountants and Head-Cashiers) Service Rules and held that they were in the nature of bye-laws made under section 43 and the Inherent powers available to a statutory corporation. The learned single Judge has held that the Supervising Staff Rules are rules made under section 43 and that they also can be treated as regulations made under section 50 (I ). The learned single Judge has held that the Supervising Staff Rules are rules made under section 43 and that they also can be treated as regulations made under section 50 (I ). We do not find it necessary to go into the controversy whether these rules are statutory or executive in nature, for even assuming them to be statutory, we do not find that they are in any manner in conflict with the impugned circular which has been issued in implementation of the Scheme made by the Executive Committee. But we would like to observe that the learned counsel for the appellants has made a categorical statement before us on behalf of the State Bank that these rules were not made after consultation with the Reserve Bank or with the previous sanction of the Central Government. The learned single judge proceeded on the view that as there was no such statement in the return filed by the appellants, consultation with the Reserve Bank and previous sanction of the Central Government must be presumed and so the rules could be taken to be regulations made under section 50 (I ). We do not think that a matter of such importance, could be decided merely on technicality of pleadings, more so when the rules do not purport to be regulations made under section 50. The Division Bench ruling in Dattatrayas case being binding on the learned single Judge it should have been held that the rules were in the nature of bye-laws, made under section 43. However, as already indicated, we do not want to pursue this matter any further. ( 10. ) IT is true that under section 17 of the Act the Central Board is entrusted with all the powers of the bank and it may be assumed that the board in making the Supervising Service Staff Rules has exercised the powers conferred by section 43 on the Bank to determine the terms and conditions of appointment of employees. But this does not mean that the Executive Committee has no power on this subject. We have already noticed that the Central board may constitute an Executive Committee and other committees and delegate to them its powers. The Executive Committee has been constituted by Regulation 46 to "deal with any matter within the competence of the central Board". But this does not mean that the Executive Committee has no power on this subject. We have already noticed that the Central board may constitute an Executive Committee and other committees and delegate to them its powers. The Executive Committee has been constituted by Regulation 46 to "deal with any matter within the competence of the central Board". The Executive Committee, therefore, has also the power to determine the terms and conditions of appointment of employees under section 43. The Executive Committee had thus power to frame the scheme in pursuance of which the impugned circular has been issued. The objection, however, to the Executive Committee exercising such a power appears to be that the Scheme in so far as it is being implemented by the impugned circular goes against Rule 7 of the Supervising Staff Service Rules. In our opinion, there is no merit whatsoever in this objection. Rule 7 only provides that appointment to officers Grade II shall generally be made by promotion. It does not say whether there should or should not be any reservation for the benefit of employees belonging to the Scheduled Castes and tribes or whether there should or should not be any relaxation in matters of eligibility in their favour. Any scheme made by the Executive Committee in the matter of reservation or in the matter of relaxation in eligibility requirement for promotion to Officers Grade II cannot, therefore, be held to go against Rule 7. Further, Rule 31 (3) in specific terms leaves the determination of policy in matters of promotion to the Executive Committee. As already seen, it says that "all promotions should be made in accordance with the policy laid down in this regard by the Executive Committee from time to time;" The decision taken by the Executive Committee in framing the Scheme in matters of reservation and relaxation of eligibility requirement for employees belonging to the Scheduled Castes and Tribes is a policy decision in regard to promotion and falls clearly within the jurisdiction of the Executive Committee under Rule 31. The provision in Rule 7 that appointments to Grade II shall generally be made by promotion from the Banks staff should be read along with Rule 31. The provision in Rule 7 that appointments to Grade II shall generally be made by promotion from the Banks staff should be read along with Rule 31. Read together, these rules mean that appointments to Officers grade II shall be made by promotion from the Banks staff in accordance with the policy laid down in this regard by the Executive Committee from time to time. The reservation and relaxation under the Scheme made by the Executive Committee can, therefore, in no sense be said to contravene any provision made in the Supervising Staff Service Rules. ( 11. ) LEARNED counsel for the respondent by relying on paragraph 1. 2 of the Scheme first argued that the Scheme applies where the element of direct recruitment does not exceed 50% of the vacancies which means that there is some element of direct recruitment but as under Rule 7 (1) of the Supervising staff Service Rules, there in ho element of direct recruitment, the Scheme could not be applied for promotions to the Officers Grade II. In our opinion, there is no merit in this argument. If all the vacancies in a cadre are to be filled in by promotion and none by direct recruitment, still it Will be said that the element of direct recruitment does not exceed 50%. For satisfying the condition laid down in paragraph 1. 2 by the words "where the element of direct recruitment does not exceed 50% of the vacancies", it is not necessary that there must be some element of direct recruitment. Even in a case where there is no direct recruitment at all it can be said that the element of direct recruitment does not exceed 50%. ( 12. ) IT was then argued that the impugned circular deals with more categories for promotion than referred to in paragraph 3. 2 of the Scheme. We have already noted that the circular refers to "clerks, clerk-typists, Stenographers, Head-clerks, Officiai-ih-charges, Cashiers-cum-clerks, Cashiers, cashier-cum-Godownkeepers, Deputy Head-Cashiers, Tellers and Cashier-in-charge". The Scheme in paragraph 3. 2 refers to "clerks and Cashiers". In our opinion there in no conflict. The expression "clerks and Cashiers" as used in paragraph 3. 2 has to be liberally construed and so construed it will include all the categories referred to in the circular. ( 13. ) IT was next argued that paragraph 3. The Scheme in paragraph 3. 2 refers to "clerks and Cashiers". In our opinion there in no conflict. The expression "clerks and Cashiers" as used in paragraph 3. 2 has to be liberally construed and so construed it will include all the categories referred to in the circular. ( 13. ) IT was next argued that paragraph 3. 2 does not fix any length of service after confirmation as an eligibility norm and, therefore, there can be no question of relaxation in such a matter. This argument is also without any substance. The object of paragraph 3. 2 is hot to fix any eligibility norm. The object is only to relax upto two years or one year, as the case may be, the number of years of service required as an eligibility norm. The circular in so far as it is not challenged requires 6 1/2 years of service after confirmation as an eligibility norm for general category of employees. The relaxation therefore, available under paragraph 3. 2 of the Scheme in favour of employees belonging to the Scheduled Castes and Tribes is one year and for them the eligibility norm would be 5 1/2 years of service after confirmation. ( 14. ) IT was lastly argued that relaxation under paragraph 3. 2 can be granted only where adequate number of employees with normal service are not available and as one does not know as to what was the position in 1979, the relaxation granted by the impugned circular cannot be said to be consistent with the Scheme. We are unable to accept this argument also. There is no allegation that adequate number of employees belonging to the scheduled Castes and Tribes were available with normal eligibility norm. It must be presumed that the circular was issued consistent with the Scheme and that adequate number of employees with normal eligibility norm were not available. Even assuming that adequate number of employees belonging to the Scheduled Castes and Tribes were available still the circular, if at all, would be prejudicial to the interest of the employees belonging to the scheduled Castes and Tribes with normal eligibility norm and the petitioners will have no right to question it. ( 15. ) WE are unable to accept that the circular is not consistent with the scheme. It is plain that the relaxation granted by the circular was wholly consistent with paragraph 3. ( 15. ) WE are unable to accept that the circular is not consistent with the scheme. It is plain that the relaxation granted by the circular was wholly consistent with paragraph 3. 2 of the Scheme and in fact the circular was issued in implementation of the Scheme. ( 16. ) THE State Bank of India falls within the definition of State under article 12 of the Constitution; See Bank of India 0. A. v. Bank of India, 1979 MP L J 561. The bank has to fall in line with the policy laid down by the Central Government in matters of reservation and relaxation. It is now impossible to dispute that relaxation in matters of eligibility granted in favour of the Scheduled castes and Tribes or other backward classes offends fundamental rights of other employees either under Article 14 or Article 16. In S. S. Sharma v. Union of India, AIR 1981 SC 588 . the Supreme Court said that "it is now well accepted and has been affirmed by successive decisions of this Court that relaxation of eligibility criteria would be justified in the case of candidates of backward class". Relaxation in such matters to the Scheduled Castes and Tribes and other backward classes is a just and reasonable classification having rational nexus to the object of providing equal opportunity for all citizens in matters relating to employment or appointment to public office; State of Kerala v. N. M. Thomas, AIR 1976 SC 490 . ( 17. ) THE appeal is allowed. The order of the learned Single Judge is set aside and the Writ Petition filed by the respondents is dismissed Parties shall bear their own costs throughout. Appeal allowed.