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1998 DIGILAW 622 (PAT)

State Bank of India Officers Association v. State Bank of India

1998-09-01

ASOK KUMAR GANGULY

body1998
JUDGMENT : A.K. Ganguly, J.- This writ petition has been filed by an Association under the name and style of State Bank of India Officer's Association, Patna Circle representing the Officers of the State Bank of India. Patna Circle. 2. The grievance is about promotional policy followed by the State Bank of India (hereinafter called the said Bank). One of the prayers in this writ petition is for quashing of the advertisement issued by the said Bank dated 20.9.1986 by which the said Bank invited applications for direct recruitment on different posts on Middle Management Grade Scale III and Middle Management Grade Scale II in the Engineering side. There is a further prayer for issuance of a direction upon the said Bank to fill up the higher posts of Middle Management Grade Scale II, III and also the posts of higher grade by way of 100 percent promotion from the grades next below. There is also a prayer that a direction be issued upon the said Bank for treating all the Officers of the said Bank in a similar fashion in matters of their promotion. 3. Learned counsel for the petitioners in the• course of his submission relied very much on rule 7 of the State Bank of India (Supervising Staff) Service Rules (hereinafter called the said Rules) and relying on the said rules. it has been urged that the said rule is a statutory one and under the said statutory rules no distinction has been made in matters of promotion between the category of Officers, namely, between persons belonging to General category or a Specified category like Engineers, Technical Officers or Officers on the legal side. So the submission which has been advanced is that though the said statutory rules do not envisage any distinction between persons belonging to those two grades the said Bank is indulging in such discrimination in matters of promotion between persons belonging to different categories, namely, general category officers or specified category of officers. 4. It has been further urged that the persons who belong to the general category are appointed by way of direct recruitment to the Middle Management Grade Scale I (Supervising Officer). At the time of such recruitment, the directly recruited officers are not only given the scale of pay of Junior Management Grade Scale I but they are also allowed four additional increments. At the time of such recruitment, the directly recruited officers are not only given the scale of pay of Junior Management Grade Scale I but they are also allowed four additional increments. But if a person is appointed by way of direct recruitment to the said Junior Management Grade Scale I in a specialised category like Assistant Law Officer. Security Officer, Engineer, in such cases they are not allowed any additional increment but their pay is fixed in the initial stage of that particular scale of pay of the post to which they are appointed. This according to the petitioner, amounts to acting in a discriminatory manner and in violation of Article 14 of the Constitution of India. 5. The other grievance is about the mode of filling up of post. It has been stated that in the matter of appointment to higher grades like Middle Management Grade Scale II, Middle Management Grade Scale III, the respondent Bank from the very beginning is filling up all those posts by way of 100 per cent promotion in accordance with rule 7 of the said rules but from Annexure-' which is the impugned advertisement it will appear that the appointment to Middle Management Grade Scale II and III on the Engineering side is not made in accordance with rule 7 of the said Rules. But while filling up such posts in the specified category like Engineers, Law Officers, the procedure indicated in the impugned advertisement at Annexure-1 is followed. This, according to the petitioner, is an example of discrimination. 6. Reference in this connection has also been made to the report of Pillai Committee and it has been stated that appointment to the said Bank in the specialised category was examined by the said Committee and the said Committee by its report observed that specialist in the Bank should be accorded due promotion at par with other Officers of the general side. It has been further alleged that though the said Bank has adopted the said report of Pillai Committee, still they are not implementing the same. 7. it has further been alleged that there is no nexus between the discrimination which is practised by the Bank in the matters of promotion between the general category officers and specified category of officers and any purpose to be achieved by such discrimination. 7. it has further been alleged that there is no nexus between the discrimination which is practised by the Bank in the matters of promotion between the general category officers and specified category of officers and any purpose to be achieved by such discrimination. The absence of any nexus makes the Bank's action further vulnerable in view of Article 14 of the Constitution of India. 8. In this matter the Bank has filed a detailed counter affidavit. In the counter affidavit the stand which has been taken is that there can be no legal bar on the part of the said Bank to make direct recruitment and there is no ru:e to the effect that all appointments in the cadre of officers in the Bank must be by way of promotion. It has been stated that in the functioning of the Bank circumstances may arise for meeting a particular need and in the interest of its functioning the services of an Officer in the specialised cadre or in general cadre is needed, in such cases, direct recruitment can be made since there is no legal bar. 9. About the Pillai Committee report, the stand taken in the counter affidavit is that the State Bank of India Officers (Determination of Terms and Conditions of Service) ORDER :, 1979 (hereinafter called the D.T.C.S. ORDER :) has not been passed on the report submitted by the Pillai Committee. It has been further stated that the terms of reference of the said Committee did not relate to the said Bank. The said Committee report was duly modified in consultation with the Central Government to fit in the conditions of the requirement of the said Bank. So the said report of the Pillai Committee has been adopted with necessary modifications and thereafter the aforesaid D.T.C.S. ORDER :was passed. It has further been stated that paragraph 7 of the said rule has been modified by the said D.T.C.S. ORDER :, 1979. It has been said that the aforesaid statutory rule of 1975 stands modified by the said D.T.C.S. ORDER :. 1979, and under the said D.T.C.S. ORDER :there is no requirement that the appointment to the Junior Management Grade can be only by way of promotion. It has been said that the aforesaid statutory rule of 1975 stands modified by the said D.T.C.S. ORDER :. 1979, and under the said D.T.C.S. ORDER :there is no requirement that the appointment to the Junior Management Grade can be only by way of promotion. It has also been stated that the promotion policy has been laid down by the Board and the Executive Committee of the Central Board of the said Bank and the promotions have been made in accordance with the said policy decision. It has also been stated that under Regulation 46(4) of the State Bank of India General Regulation, the Executive Committee of the Central Board of the said Bank and the promotions have been made in accordance with the said policy decision. It has also been stated that under Regulation 46(4) of the State Bank of India General Regulation, the Executive Committee of the Central Board is empowered to deal with any matter within the competence of the Central Board. In the said counter affidavit the role of general category officers and that of the specified category officers has been explained with reference to the inherent nature of the difference in their work culture. It has been stated that the general category officers of the Bank do carry out business functions of the Bank in general rule whereas the duty of the specialised category officers like Engineers, Technical Officers, Law Officers etc. are different_ and confined to their particular area of operation. Therefore, the stand is that having regard to the different nature of their work, they cannot be treated equally by the Bank. 10. It has also been stated that the Probationary Officers are given higher starting pay for the purpose of attracting best talent from the market and this aspect of the matter was considered by the appropriate authority while passing the D.T.C.S. ORDER :in consultation with the Government. The provision for giving additional increment to the Probationary Officers has been done with a purpose and no body can say that this is a discriminatory policy. It has been stated that if an Engineer or a Law Graduate competes with others in the matter of appointment as Probationary Officers, such' employee will also get those increments. The provision for giving additional increment to the Probationary Officers has been done with a purpose and no body can say that this is a discriminatory policy. It has been stated that if an Engineer or a Law Graduate competes with others in the matter of appointment as Probationary Officers, such' employee will also get those increments. it has been further stated that before the introduction of such provision in the D.T.C.S. ORDER :, discussions were held with All India State Bank of India Officers Federation which is a representative body of the officers of the said Bank and the petitioner association is affiliated with the said Federation and being an affiliate of the said Federation, the petitioner Association is also bound by the said policy decision. It has also been stated that the member of the petitioner Association are also entitled to apply pursuant to the advertisement impugned in the writ petition provided they have the requisite qualification. There is no bar on the existing staff of the said Bank from applying to the said advertisement. It has also been stated that there is no discrimination between the promotion policy followed in respect of the specialised category Officers and the general category Officers. It has been further stated that in respect of promotion to the Middle Management Grade III Scale there is an additional channel known as Merit channel meant for general category Officers. Under this channel Officers are required to appear in the written test and on total assessment of business performance, educational qualification, their professional qualification in banking, an assessment is made and marks are given separately. Such merit channel is not required for specialised category Officers as their roles are different and their promotion is based on seniority channel only and it has been further observed that the eligibility criteria for seniority channel promotion is one and the same in respect of general category Officers and specialised category Officers. It has been stated that contrary to the case made out in the writ petition promotion policy in, respect of the specialised category Officer is more liberal than the promotion policy followed in respect of general category officers. It has been stated that contrary to the case made out in the writ petition promotion policy in, respect of the specialised category Officer is more liberal than the promotion policy followed in respect of general category officers. It has been further stated that the general category Officers are directly engaged in Banking operations v, hereas the specialised cadre Officers are not directly egaged in Banking operation and thus they can not be treated equally in all respects about their service condition. From a perusal of the counter affidavit it appears that all the contentions raised in the writ petition have been answered. 11. This being the factual aspect of the case urged by both sides, this Court has also to consider certain legal questions which have been raised by the learned counsel for the parties. 12. Learned counsel for the petitioner basically relied on rule 7 of the said Rules and says that under the said rule appointment to Officer's Grade II shall generally be made by promotion. 13. This Court is not in a position to accept that. Even under the said rule, appointment by way of direct recruitment is totally barred as would appear from the opening words of rule 7 of the said Rules which says that the appointment shall 'generally' be made by promotion from the Bank staff. Apart from that there is an explanation to the said rule and the explanation makes it clear that nothing in the rule shall be deemed to preclude direct recruitment of employees to the various grades of the supervising staff where the Central Board decides that special circumstances makes this necessary in the interest of the Bank. The said rule came into effect on 1st July, 1973 but the learned counsel for the respondent contended, and in my view, rightly that after the aforesaid D.T.C.S. ORDER :1979 has come into existence, the said rule does not govern the field and the said ORDER :has come into existence in 1979, long before the writ petition was filed challenging the impugned advertisement dated 20th September, 1986. 14. It appears that the said ORDER :has been framed by the Central Board of the said Bank determining the terms and conditions of appointment and service of the Officers of the Bank. 14. It appears that the said ORDER :has been framed by the Central Board of the said Bank determining the terms and conditions of appointment and service of the Officers of the Bank. In clause 17 of the said ORDER :it has been made clear that promotion to all grades of Officers in the Bank shall be made in accordance with the policy laid down by the Central Board or the Executive Committee from time to time. It may be noted that the said rule 17 is not under challenge. But the learned counsel for the petitioners has submitted that rule 17 has given un-guided discretion to the authorities and in support of such submission the learned counsel has relied on two decisions of the Supreme Court. 15. The first of such decision is in the case of Jai Singhani VS. Union of India reported in A.I.R. 1976 S.C. page 1427. Reliance in particular has been placed on paragraph 14 of the said Jai Singhani JUDGMENT : in which Justice V. Ramaswami, as His Lordship then was, speaking for the Constitution Bench of the Apex Court held that the absence of arbitrary power is the first essential of the rule of law upon which the whole constitutional system is based. His Lordships further explained the position by saying that in a system governed by the rule of law, a discretion when conferred upon an executive authority, must be confined within clearly defined limits. 16. Reliance has also been placed on another Constitution Bench decision of the Supreme Court in the case of E.P. Royappa vs State of Tamil Nadu and another reported in A.I.A. 1974 S.C. page 555. Particular reliance has been placed on paragraphs 85 and 86 of the said JUDGMENT :. In paragraph 85 of the said JUDGMENT : in E.P. Royappa (supra), Justice P.N.Bhagwati, as His Lordship, then was, in a concurring opinion held that where the operative reason for State action is not legitimate and relevant but is extraneous and outside the area of permissible considerations, it would amount to mala fide exercise of power and it will be hit by Articles 14 and 16 of the Constitution. 17. Learned counsel for the petitioner has also relied on another decision of the Supreme Court in the State of Punjab and another vs. Khan Chand reported in A.I.R. 1974 S.C. Page 543. 17. Learned counsel for the petitioner has also relied on another decision of the Supreme Court in the State of Punjab and another vs. Khan Chand reported in A.I.R. 1974 S.C. Page 543. Relying particularly on paragraph 8 of the said JUDGMENT :, learned counsel for the petitioner submitted that mere conferment of discretion on a person or authority does not violate Article 14 of the Constitution but what is objectionable is the conferment of arbitrary and uncontrolled discretion without any guideline. Learned counsel relied on the observation made in the said JUDGMENT : by Justice Khanna. as His Lordship then was where His Lordship has held that where the discretion is absolute. un-controlled and without any guidelines it degenerates into arbitrariness and also on the observation where the learned Judge held that when individuals act according to their sweet will, there are bound to be an element of 'pick and choose' according to the notion of the individuals and such conferment of discretion violates Article 14 of the Constitution. 18. The said JUDGMENT : of the Supreme Court in the case of State of Punjab (supra) was in the context of delegation of power. The question which was agitated before the Supreme Court was whether Section 2 of the East Punjab Movable Property (Requisitioning) Act, 1947 was valid or not. In this case we are not concerned with any question of delegation. Nor has the vires of any rule been challenged before this Court. 19. The principles which have been urged by the learned counsel for the petitioner that discretion must always be a guided one and it should not be undefined or un-guided are well settled and no body can contend that an executive authority or any authority under the Act can exercise un-canalised and un-guided discretion. 20. The question is one of applicability of those principles to the facts of this case. 21. Even though in this case validity of the Regulation or the Rules has not been questioned, since the aforesaid questions have been raised, especially in the context of clause 17 of the said D.T.C.S. ORDER :, this Court proposes to examine the validity of the same. 22. Under section 17 of the State Bank of India Act. 21. Even though in this case validity of the Regulation or the Rules has not been questioned, since the aforesaid questions have been raised, especially in the context of clause 17 of the said D.T.C.S. ORDER :, this Court proposes to examine the validity of the same. 22. Under section 17 of the State Bank of India Act. 1955 (hereinafter called the said Act) the general superintendence and direction of the affairs and business of the said Bank shall be 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 as are not by this Act expressly directed or required to be done by the State Bank in general meeting. 23. While vesting such power on the Central Board, guidance has been given in Section 17(2) of the said Act wherein it has been stated that in discharging its functions the Central Board shall act on business principles, regard being had to public interest. Under section 2(b) of the said Act, Central Board has been defined as the Central Board of Directors of the State Bank and under section 19 of the said Act the composition of Central Board has been laid down. The Central Board is, therefore, the highest decision making authority of the said Bank which is created under the said Act. Now it is not in dispute that the said D.T.C.S. ORDER :has been framed by the Central Board and under section 43(1) of the said Act. Section 43(1) of the said Act is an enabling provision to the effect that the said 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. Under section 43(2) of the said Act it has been stated 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. Therefore, the said D.T.C.S. ORDER :is an ORDER :within the meaning of Section 43 of the said Act framed by the Central Board. In the said ORDER :clause 17 has been framed. Clause 17 is set out below :- "17. Therefore, the said D.T.C.S. ORDER :is an ORDER :within the meaning of Section 43 of the said Act framed by the Central Board. In the said ORDER :clause 17 has been framed. Clause 17 is set out below :- "17. Promotions to all grades of Officers in the Bank shall be made in accordance with the policy laid down by the Central Board or the Executive Committee from time to time. 24. It has been made clear that promotion to all grades of Officers in the Bank shall be made in accordance with the policy laid down by the Central Board or the Executive Committee from time to time. Here the Executive Committee meant the Executive Committee of the Central Board in terms of clause 3(g) of the said ORDER :. Therefore, this Court cannot hold that the discretion conferred on the Central Board under rule 17 of the said ORDER :is un-guided discretion. The Central Board in the matters of laying down the promotion policy is obviously guided by the provisions of section 17 of the said Act which says that the Central Board shall exercise its power having regard to the business principle and in public interest. These are two acceptable norms of guidance which the Central Board can keep in mind while exercising its power. It appears from Annexures A and B to the Counter affidavit that the promotion policy in question has been framed as per resolution of the Executive Committee of the Central Board. Therefore, discretion of the Central Board is neither unfettered nor is it un-guided. Since such discretion has been exercised by Central Board by framing the D.T.C.S. ORDER :1979 in writing and thereafter issuing the impugned advertisement in 1986 there is no lack of predictability in the functioning of the Central Board of the said Bank. In this connection reference may be made to the memorandum filed before the Executive Committee of the Central Board which is at Annexure 'B' to the Counter affidavit. From a perusal of the said memorandum. it is clear that the matter was discussed in detail at the highest level, namely, by the Executive Committee of the Central Board and as a result whereof the provision of rule 7 of the Supervisory Staff Rule was not followed but instead of said rule 7 what was followed was paragraph 14 (1) of the said D.T.C.S. ORDER :. it is clear that the matter was discussed in detail at the highest level, namely, by the Executive Committee of the Central Board and as a result whereof the provision of rule 7 of the Supervisory Staff Rule was not followed but instead of said rule 7 what was followed was paragraph 14 (1) of the said D.T.C.S. ORDER :. From the aforesaid detailed and careful exercise it is clear that the discretion conferred upon the Central Board or its Executive Committee has not been exercised unreasonably or capriciously. 25. Having regard to the aforesaid discussion, this Court cannot say that the procedure followed by the Central Board in this matter as disclosed in Annexures A & B to the counter affidavit is either unreasonable or arbitrary. 26. In this connection some decisions have been cited by the learned counsel for the respondent Bank which are discussed below. 27. Learned counsel for the Bank urged that what has been impugned in this writ petition is the policy decision of the said Bank in the matters of promotion of such Officers. Learned counsel urged, and in my view quite rightly, that in the matters of policy decision interference of the Court should be confined to a very minimum extent and such interference can be justified only in a case where the policy followed is patently perverse or is ex facie bad in law. In support of this submission reliance was placed on a JUDGMENT : of the Supreme Court in the case of Union of India and others vs. Sri Tejram Parashramji Bombhate and others reported in JUDGMENT : Today 1991 (2) S.C. page 572. In a two Judges Bench JUDGMENT : of the Supreme Court it has been held that no Court or Tribunal can compel the Government to change its policy involving expenditure. In that case an appeal was filed from the Central Administrative Tribunal's JUDGMENT : whereby Tribunal issued directions compelling the Central Government to assess the needs of the School to create posts. The Supreme Court held that such direction by the Tribunal in matters of policy is without jurisdiction and unauthorised. 28. The next JUDGMENT : which has been cited on this point is in the case of Indian Railway Service of Mechanical Engineers Association and others vs. Indian Railway Traffic Service Association and others reported in J. T. 1993(3) S.C. paqge 474. 28. The next JUDGMENT : which has been cited on this point is in the case of Indian Railway Service of Mechanical Engineers Association and others vs. Indian Railway Traffic Service Association and others reported in J. T. 1993(3) S.C. paqge 474. In that case the question which came up was also about the policy relating to the scheme for appointment of General Managers and the same was also a matter of policy. In that case also the matter went from the Tribunal. The Tribunal interfered with the said policy. In that context in paragraph 18 of the said JUDGMENT : the Court relying on various previous JUDGMENT :s expressly approved the observation of the Supreme Court in Asif Hameed vs. State of Jammu and Kashmir reported in A.I.R. 1989 S.C. page 1988. The Court expressly quoted the following observation from Asif's case in paragraph 18 of the said JUDGMENT : which is extracted below: "While exercising power of judicial review of administrative action, the Court is not an appellate authority. The Constitution does not permit the Court to direct or advise the Executive in matter of policy or to sermonize qua any matter which under the Constitution lies within the sphere of legislature or executive, provided these authorities do not transgress their constitutional limits or statutory powers." 29. The said principle was also reiterated in 1998 in the case of Sher Singh and others vs. Union of India and others reported in 1995(5) S.L.R. page 654 which is also reported in (1995) 6 S.C.C. page 515. In this case three Judges Bench of the Supreme Court held that the Court will not normally dictate the statutory authority to exercise its discretion in a particular way and it has also been stated that the Court cannot interfere in the matters of policy decision of the statutory authority except when is shown that the policy is prima facie unfair, mala fide or contrary to any statutory direction. 30. In the instant case. neither any rule nor any clause of the D.T.C.S. ORDER :, 1979, discussed above, have even been challenged by the petitioner. In fact no such challenge to the rule and the said ORDER :is legally sustainable as this Court has already held. 31. 30. In the instant case. neither any rule nor any clause of the D.T.C.S. ORDER :, 1979, discussed above, have even been challenged by the petitioner. In fact no such challenge to the rule and the said ORDER :is legally sustainable as this Court has already held. 31. This Court .is thus unable to hold that any promotion policy adopted by the said Bank in accordance with the said D.T.C.S. ORDER :is ex facie un-reasonable or offends the equality clause of the Constitution. 32. The ground of discrimination in the implementation of the Bank's policy is also not borne out from the records of the case. It is well known that the plea of equality can be urged only amongst the equals. On this point also some decisions were cited but this point is so fundamental that no decision is required in support of this proposition. Here from the stand taken in the counter affidavit it is quite clear that there is a valid distinction in the matter of work culture and in the matter of nature of operation between the specialised Officers and the General category Officers. The general category Officers are directly linked with banking operation whereas the specialised category Officers are not so and they do the specified nature of work. Therefore, there is valid reason for not treating the two categories of Officers similarly. Behind such decision of the said Bank, there exists a 'value judgement' of the authorities who are monitoring and controlling the Banking operation of the said Bank. This 'value JUDGMENT :' is not to be reviewed by the Court in the absence of any manifest and proved ground of unreasonableness. This Court does not find any such ground in this case. 33. So in the matter of promotion policy jf any distinction is made between the two category of Officers that is not hit by Article 14 of the Constitution of India. Article 14, as it is well known, does not forbid classification based on intelligible differentia. The said intelligible differentia has been disclosed in the counter affidavit. Therefore, no case of discrimination has been proved in this case. It is obviously true that the onus to prove the discrimination lies on the person who alleges it. Here no discrimination is borne out from the record of the case. The said intelligible differentia has been disclosed in the counter affidavit. Therefore, no case of discrimination has been proved in this case. It is obviously true that the onus to prove the discrimination lies on the person who alleges it. Here no discrimination is borne out from the record of the case. So this Court does not hold that the promotion policy adopted by the said Bank is violative of Article 14 of the Constitution. 34. For the aforesaid discussions and the reasons indicated above. this court does not find any merit in this writ petition. This writ petition is accordingly dismissed. But in the facts and circumstances of the case, there will be no ORDER :as to cost.