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2003 DIGILAW 166 (HP)

ASHWANI KUMAR SHARMA v. HIMACHAL GRAMIN BANK

2003-06-29

LOKESHWAR SINGH PANTA

body2003
JUDGMENT Lokeshwar Singh Panta, J. : - In this writ petition filed under Articles 226/227 of the Constitution of India, the petitioners have prayed inter alia for the following reliefs : "(i) That Circular Nos. 9/94 dated 15.2.1994 (Annexure P-10) and 15/94 dated 2.4.1994 (Annexure P-11) may be quashed and set aside; (ii) That the clarification given by respondent No. 3 as referred to in Annexure P-II may be quashed and set aside in so far as the same goes contrary to the direction contained in the Award of National Industrial Tribunal for Regional Rural Banks dated 30.4.1990; (iii) That in case the respondents have recovered some amount out of the pay and other emoluments payable to the petitioners in accordance with the Circulars Annexure P-10 and P-11, the same may be directed to be refunded to the petitioners; (iv) That any other relief deemed just and proper in the circumstances of the case may also be granted; (v) Cost of the writ petition may also be awarded." 2. Petitioners No. 1 to 3, namely, Ashwani Kumar Sharma, Virender Kumar Rana and Manjit Singh Gathania are the employees of Himachal Gramin Bank, Mandi, respondent No. 1 herein whereas petitioners No. 4 and 5 namely Himachal Gramin Bank Karamchari Sangh and Himachal Gramin Bank Officers Organization are the registered Unions under the Trade Union Act. According to the petitioners the Regional Rural Banks Act, 1976 provides under Section 3 that the Central Government on the request of Sponsor Bank, may establish by notification in the official gazette, in a State or Union Territory one or more Regional Rural Bank with such name as may be specified in the notification and such Regional Rural Bank shall be a body corporate with perpetual succession and a common seal with power, subject to the provisions of the act to acquire, hold and dispose of the property and to contract and may sue and be sued in its name. In the State of Himachal Pradesh, at the request of Punjab National Bank, respondent No. 4 herein, being the Sponsor Bank the Central Government has established Himachal Gramin Bank respondent No. 1 here (hereinafter referred to Gramin Bank1) in December, 1976 with Head Office at Mandi, District Mandi. 3. In the State of Himachal Pradesh, at the request of Punjab National Bank, respondent No. 4 herein, being the Sponsor Bank the Central Government has established Himachal Gramin Bank respondent No. 1 here (hereinafter referred to Gramin Bank1) in December, 1976 with Head Office at Mandi, District Mandi. 3. The case of the petitioners is that the Employees Association of Regional Rural Banks demanding parity in respect of salary structure with the employees of Sponsor Banks had filed writ petitions Nos. 7149-50 of 1982 and 132/1984 in the Honble Supreme Court of India which were disposed of on Ist September, 1987 directing the Central Government to refer the dispute to the Tribunal, preferably to a retired Chief Justice of a High Court within four weeks from the date of the order. 4. The Government of India referred the dispute arising out of the writ petitions to the National Industrial Tribunal (hereinafter referred to NIT) vide notification No. 235 dated 26th November, 1987 published in Gazette of India. Sh. Justice S. Obul Reddi, Retired Chief Justice of High Court of Andhra Pradesh was appointed Chairman of NIT with the Headquarters of the NIT at Hyderabad. It was further provided in the notification that the decision of the NIT shall be final and binding. On establishment of NIT a notification dated 24.2.1988 was issued by the Tribunal calling upon the parties to submit their representations and claim statements and consequently representations were submitted by the petitioners and other interested persons. NIT examined 293 witnesses and consequently made and award on 30th April, 1980. A copy of the Award is placed on record of the writ petition as Annexure P-1. It was specifically held in the award that the Officers and other employees of the Regional Rural Banks (for short as RRBs) would be entitled to claim parity with the officers and other employees of the Sponsor-Banks in the matter of pay scales, allowances and other benefits. So far the issue of equation of posts in the RRBs in the Sponsor Banks the same was left to be decided by the Central Government in consultation with, such authorities as it may consider necessary. The Central government on receipt of the award of NIT constituted a Equation Committee on RRBs vide Telex Message No. 2775 dated 5.10.1990 under the Chairmanship of Sh. The Central government on receipt of the award of NIT constituted a Equation Committee on RRBs vide Telex Message No. 2775 dated 5.10.1990 under the Chairmanship of Sh. P.K. Kotaiah, M.D. National Bank for Agriculture and Rural Development (NABARD) consisting of four others members. The equation Committee in its report recommended that allowances and benefits which are provided in the Bipartite settlements and in Service Regulations of the concerned Sponsor Banks may be extended to the concerned RRBs employees and Officers respectively. The report of the Equation Committee was accepted by the Central Government on 16.1.1991 and thereafter the recommendations of the Committee were sent to all Chairmen and Managing Directors of all the Sponsors Banks and all the RRBs for implementation vide letter No. 11-3/90-RRB(1) dated 22.2.1991. A copy of the said letter is placed on record as Annexure P-2. 5. According to the petitioners, " consequent upon the implementation of the award read with report of the Equation Committee, certain changes were to be brought to in the service Regulations; Recruitment/Promotion- Policy for RRBs Staff. Certain other issues relating to fitment/benefits had also cropped up and therefore, it was decided that the NABARD may constitute a working group to study those aspects and advise the Government of India/NABARD. The NABARD accordingly constituted a Working Group on 22.8.1991 consisting of its Chief General Manager Shri. R.C.Gupta as its Chairman and 8 other members. The Working Group Committee submitted its report on 17th February, 1992 to the NABARD. The report of the Working Group Committee was accepted by the Government of India with certain modifications, altercations, additions and deletions etc. After the acceptance of the report of the Working Committee by the Government of India, the NABARD circulated instructions dated 20.3.1993 Annexure P-3 to all the Sponsor Banks as well as RRBs wherein it was required that the instructions issued by the Government of India dated 22.2.1991 read with the present instructions may be implemented and followed strictly. Under item No. C of Annexure-III annexed with the letter dated 20.3.1993 the details of allowances including loan for purchase/construction of house, loans for purchase of conveyance, consumer loans, reimbursement of actual conveyance expenses incurred for official duties etc. on the lines on which the said loans are available to the employees of the Sponsors Banks have been made applicable from 1.3.1993. on the lines on which the said loans are available to the employees of the Sponsors Banks have been made applicable from 1.3.1993. The petitioners stated that in the light of the Award of NIT and subsequent recommendations of different Committees, the cumulative effect was that the employees in the RRBs were held entitled to benefits which were admissible to their counter parts in the Sponsors Banks whether on the basis of Bipartite Settlements or according to the provisions of Service Regulations the same were to be extended to the employees of the RRBs. The Punjab National Bank-respondent No. 4 herein (for short PNB) being Sponsor Bank of respondent Gramin Bank-respondent No. 1 has issued different Circulars providing for the grant of loan benefits to its employees. Under Circular No. 238 dated 16.12.1991 two schemes were circulated known as old scheme and new scheme. The old scheme will apply to the employees who joined the service before 18.9.1989 whereas new scheme was made applicable to those employees who joined the service on or after 18.9.1989. Under the old scheme the limit of loan was 90% of the costs and the loan amount was interested free. However, under the new scheme limit was 90% of the cost of Rs. 5,000/- whichever would be less and the loan was to carry simple interest @ 7.5% p.a. PNB issued another circular No. 128 dated 29.6.1991 providing the loans facility for the purchase of Consumer Goods. 6. Again two schemes, namely, first applicable for the employees who joined before 1.4.1991 and the second applicable to the employees who joined after 1.4.1991 were framed. Under the first scheme, the limit of loan was fixed 80% of the cost of the Consumer Goods subject to the maximum of 3 months total emoluments or Rs. 10,000/- whichever would be less and the rate of interest for first 5000/- was 12-1/2% p.a. and the next 5,000/- @ 15% p.a. The repayment was to be made in 36 equal monthly installments. Under the second Scheme, the loan limit was 90% of the cost of Rs. 15,000/-whichever would be less and the rate of interest was 16% p.a. which was subsequently reduced to 15% w.e.f. 27.10.1993. The loan was to be repaid in 60 equal monthly installments. However, with respect to the employees who joined before 1.4.1991 option was given to them to select either of the two Schemes. 15,000/-whichever would be less and the rate of interest was 16% p.a. which was subsequently reduced to 15% w.e.f. 27.10.1993. The loan was to be repaid in 60 equal monthly installments. However, with respect to the employees who joined before 1.4.1991 option was given to them to select either of the two Schemes. Copies of Circular Nos. 238 dated 16.12.1991 and 128 dated 29.6.1991 are placed on record Annexure P-4 and P-5 respectively. 7. Respondent No. 1 Gramin Bank issued identical circulars No. 20/93 dated 24.7.1993 (Annexure P-6 relating to Conveyance Allowance) and Circular No. 19/1993 dated 24.7.1993 (Annexure P-7 relating to Consumer Goods) on the lines of the loan circulars issued by PNB. On the basis of Circulars Annexures P-6 and P-7 issued by respondent No. 1 Gramin Bank, petitioner No. 1 to 3 and Members of the Association/Organization of petitioners No. 4 and 5 applied for the loans according to their entitlement. The respondent No. 1 Gramin Bank sanctioned loans in their favour by letters of request-cum-sanction letters mark Annexures P-8 and P-9 respectively. According to the petitioners, for 3-4 months after issuance of sanction letters Annexures P-8 and P-9 the respondent No. 1 Gramin Bank sanctioned the loans to its employees and thereafter the sanctions were withheld as a result thereof number of applications for the grant of loans remained pending with the employer. The subject matter was taken up by the representatives of the Union of respondent No. 1 Gramin Bank but they were informed that respondent No.1 Bank is governed by the instructions and guidelines issued by the NABARD/Sponsor Bank. It was on 15.2.1994 that Gramin Bank issued another loan Circular No. 9/1994 annexure P-10 pointing but that the facility of Consumer and Conveyance allowances as referred to in Circulars No. 19 and 20/93 were not applicable to the staff members of the Gramin Bank and only new schemes stipulated in the said circulars were made applicable to them. Circular Annexure P-10 is said to be based on some clarifications given by the NABARD regarding the applicability of the two schemes. It was also clarified in Annexure P-10 that the loans already sanctioned were to be treated under the New Schemes only. 8. Circular Annexure P-10 is said to be based on some clarifications given by the NABARD regarding the applicability of the two schemes. It was also clarified in Annexure P-10 that the loans already sanctioned were to be treated under the New Schemes only. 8. The representatives of respondents 4 and 5 represented against the Circular Annexure P-10 stating that the action of Gramin Bank was contrary to the award passed by NIT and there could not be any discrimination with respect to the applicability of the benefits admissible to the employees of the Sponsors Banks and the employees of the RBBs after the award had become final. It is the case of the petitioners that despite the objections, the Gramin Bank issued another loan Circular No. 15/94 dated 2.4.1994 Annexure P-11 whereby Gramin Bank directed that the loan amounts advanced in excess of Rs. 15,000/- being the maximum limit under the new schemes would be recovered from the concerned .employees in three monthly installments. The representatives of petitioner No. 4 and 5 again submitted representation against the circular dated 2.4.1994 Annexure P-11 requesting for the withdrawal of said circular as well as Circular No. 9/94 Annexure P-10 but till the date of filing of the writ petition no decision has been conveyed to the petitioners. The petitioners stated-that Circular Nos. 19/93 Annexure P-7 and 20/93 Annexure P-6 were issued after the approval of the Board of Directors of respondent No. 1 Gramin Bank whereas Circular No. 9/94 dated 15.2.1994 Annexure P-10 was issued without such approval. 9. The petitioners have stated that on the basis of the award of the NIT, Officers and other employees of RRBs are entitled to claim parity in the matter of pay scales, allowances and other benefits with the Officers and other employees of the Sponsors Banks on and from 1st September, 1987 when the award of the NIT was implemented. The award has become final and therefore any benefit which is admissible to the employees of the Sponsors Banks would also be admissible to the employees of the RRBs but the benefit is to be curtailed only after 1.9.1987. The award has become final and therefore any benefit which is admissible to the employees of the Sponsors Banks would also be admissible to the employees of the RRBs but the benefit is to be curtailed only after 1.9.1987. The petitioners are aggrieved only against the arbitrary withdrawal of the benefits granted to them vide Circular No. 9/94 (Annexure P-10 and Circular No. 15/94 (Annexure P-11) as they are contrary to the directions contained in the award of NIT besides being violative of Article 14 of the Constitution of India. The petitioners also stated that once they received the benefits on the basis of Circulars Annexures P-6 and P-7, the action of the respondents to withdraw the benefits available to them without affording any opportunity of being heard is in violation of principle of Natural Justice. The clarification given by the NABARD is contrary to the award of NIT and once the equation of post was done by the Equation Committee, the benefits available to the employees of Sponsors Banks would be admissible to the employees of RRBs. The petitioners stated that any clarification given by the NABARD contrary to the directions contained in the award of NIT is liable to be quashed and set aside and respondent No. 1 Gramin Bank should be directed to ignore the said instructions as from paragraph 4.352 it is clear that the roll of the NABARD is not a rule making authority as it holds only consultative position. On the said premises the petitioners have prayed for the grant of above said reliefs in this writ petition. 10. The writ petition came up for admission before this Court on 9.5.1994 on which date notice of rule nisi was ordered to be issued to the respondents returnable within four weeks. Mr. K.S. Rathore, Additional Central Government Standing Counsel appeared and accepted notice on behalf of Union of India through Secretary (Finance) Banking Division, respondent No. 2-herein and NABARD respondent No. 3. On interim application the Bench stayed the recoveries of the amounts from the petitioners in pursuance to Annexures P-10 and P-11 to the Writ Petition. Again the matter was listed before the Bench on 20.9.1994 when on the request of learned Additional Central Government Standing Counsel four weeks further time was granted to respondents 2 and 3 to file affidavit(s)-in-reply. On interim application the Bench stayed the recoveries of the amounts from the petitioners in pursuance to Annexures P-10 and P-11 to the Writ Petition. Again the matter was listed before the Bench on 20.9.1994 when on the request of learned Additional Central Government Standing Counsel four weeks further time was granted to respondents 2 and 3 to file affidavit(s)-in-reply. No reply was filed by respondents 2 and 3 till 14.3.1995 when after hearing the learned Counsel for the parties the writ petition was admitted for final hearing. Interim order dated 9.5.1994 was confirmed subject to the conditions that petitioners would go on repaying the loan amount alongwith interest if any, under the respective schemes in which they were granted the said loans. The writ petition came up for final hearing on 16.4.2003 when the case was adjourned by this Court at the request of learned Counsel for the petitioners to enable her to seek instructions in the matter. However, the writ petition was heard in part on 4.7.2003 and thereafter the arguments were concluded on 7.7.2003 by the learned Counsel for the parties. 11. No affidavit(s)-in-reply till date has been filed by respondent No. 2 Union of India and respondent No. 3 NABARD. In the counter-filed by Gramin Bank, the Chairman of the Bank raised preliminary objections stating that the Gramin Bank is established Bank under the provisions of Regional Rural Banks Act, 1976 and PNB respondent No. 4 is the Sponsor Bank. It is the defence of Gramin Bank that under Section 24 of the Act, Bank has to follow the directions issued by the Central Government in the matters of policy involving public interest as the Central Government may give in consultation with the Reserve Bank of India. It is also stated that the Gramin Bank has also to follow the instructions of the NABARD and PNB being Sponsor Bank. The directions, if any, as prayed for by the petitioners in this writ petition are to be issued to respondents 2 and 4 and not to the Gramin Bank. It is also stated that the Gramin Bank has also to follow the instructions of the NABARD and PNB being Sponsor Bank. The directions, if any, as prayed for by the petitioners in this writ petition are to be issued to respondents 2 and 4 and not to the Gramin Bank. The stand of the Gramin Bank is that as per Clause-A of Annexure VI annexed with Annexure P-2 some of the benefits like pay and allowances had not been made applicable w.e.f. 1.9.1987 and as per Clause-B allowances and other benefits would have been made applicable w.e.f. 1.4.1991, thus, all the benefits like pay and allowances and other benefits have not been made admissible w.e.f. 1.9.1987 the date from, which the award of NIT had been made applicable. However, under Note-ll of Annexure P-6 annexed with Annexure P-2, it has been mentioned that "in respect of the allowances which may be applicable with retrospective but not mentioned here, a reference shall be made to Government of India by RRBs." The NABARD vide its letter dated 6.12.193 (Annexure RA) and letter dated 9.2.1994 (Annexure RB) alongwith enclosures Annexure RC instructed the PNB with respect to the implementation of the award of NIT read with Equation Committee recommendations and Working Group reports of RRBs. As there were two schemes applicable in PNB with option to the employees to adopt either of the scheme with respect to the grant of loans, housing, conveyance etc. the same pattern was adopted by Gramin Bank. However, in view of the instructions issued by NABARD and the PNB Annexures RA to RC the only benefit of latest scheme as applicable to the members of the staff of the Sponsor. Bank i.e. PNB has been made applicable and such excess loans which have been given to the various employees under the earlier schemes are now being realised in instalments. It is also stated that in view of paragraph 15 of Annexure P-2 whereunder it is provided that any interpretation or clarification of Bipartite settlement or Officers Staff Rules in respect of employees/Officers should be sought for from the Sponsor Bank and as the Sponsor Bank has only made one scheme applicable to the employees of Gramin Bank the same is being implemented and there is no violation of any Rules whatsoever as stated by the petitioners. 12. According to Gramin. 12. According to Gramin. Bank the loans were issued to the petitioners under some misapprehension that they were also be given the benefits of two schemes, but lateron it was realised that the latest scheme prevalent in the PNB could have govern the terms and conditions of the service of the petitioners and thus such excessive loans which had been paid are being realised in instalments. Again it is stated that Circulars Nos. 19/93 and 20/93 were issued by the Gramin Bank with the approval of the Board of Directors in view of the instructions already received from the PNB being the Sponsor Bank and the contrary averments of the petitioners are denied. The Gramin Bank prays for the dismissal of the writ petition. 13. In reply filed on behalf of PNB Chief PS & LB Division, Sansad Marg, New Delhi has sated in preliminary objections that PNB, is a Sponsor Bank under the provisions of RRBs Act, 1976, established under the said Act. In terms of Section 17(1) of the RRBs Act the Government of India is authorized to determine the salary structure of the RRBs employees having due regard to the salary structures of the employees of the State Governments and Local Authorities of comparable levels and status in the notified areas. The PNB is to follow the instructions as well as guidelines issued by the NABARD as well as by the Government of India. It is submitted that the RRBs Employee Associations were demanding parity with the employees of the Sponsors Banks in respect of salary and other benefits on the principle of equal pay for equal work and in this behalf, the writ petitions under Article 32 of the Constitution of India were filed in the Supreme Court of India challenging inter alia the salary structure in the RRBs determined by the Government of India under the provisions of Section 17 of the Regional Rural Bank Act as discriminatory. The Honble Supreme Court of India passed orders on 1st September, 1987 directing the Central Government to constitute NIT and in compliance to the orders NIT was constituted and a dispute was referred to the Tribunal relating to pay, salaries and other allowances as well as other benefits payable to the employees of RRBs. The Honble Supreme Court of India passed orders on 1st September, 1987 directing the Central Government to constitute NIT and in compliance to the orders NIT was constituted and a dispute was referred to the Tribunal relating to pay, salaries and other allowances as well as other benefits payable to the employees of RRBs. The NIT made its award on 30.4.1990 holding inter alia that the Officers and other employees of the RRBs would be entitled to the pay scales, allowances and other benefited enjoyed by the respective State Government employees of comparable level and status till 31st of August, 1987 and thereafter w.e.f. 1st September, 1987 they would be entitled to the scales of pay, allowances and other benefits at par with the Officers and other employees of comparable, level in the corresponding posts in the Sponsors Banks. As regards equation of posts and fixation of pay, allowances and other benefits the NIT directed that so far as equation of posts and consequent fixation of new scales of pay, allowances and other benefits for officers and other employees of the RRBs at par with the officers and other employees of comparable level in corresponding posts in thee Sponsor Banks and their fitment into the new scales of pay as are applicable to Officers of Sponsor Banks the matter had to be decided by the Central Government in consultation with such authorities as it may consider necessary. The Government of India vide its letter dated 22.2.1991 (Annexure P-2) addressed to the Chairman and Managing Directors of all sponsors Banks informed that the award of NIT dated 30.4.1990 and the recommendations of the Equation Committee dated 16.1.1991 had since been accepted and accordingly issued instructions in terms of proviso (i) of Section 17 of RRBs Act, 1976 for implementing the award of NIT and the recommendations of the Equation Committee immediately. Paragraph 14 of the said letter categorically stated that the allowances/special allowances and other benefits which are provided in Bipartite Settlement and the Service Regulations of the concerned Sponsor Banks be extended to the employees/Officers of the RRBs respectively, but the letter would go to show that it does not provide that all the benefits given to the staff of Sponsor Banks by way of various circulars should be automatically passed on to the employees of the RRBs. It is also stated that consequent upon the issuance of Annexure P-2 certain operational problems had cropped up as the neterogenous pay scales, allowances etc. of the RRBs employees were sought to be converted into near homogeneous pay scales, allowances etc. of their Sponsor Banks. The Staff Service Regulations, Promotion and Recruitment Policy pertaining to RRBs also need relook with a view to bringing about necessary changes to suit the new environment. The Government of India was having discussions on all such matters wKH NABARD from time to time and it was decided that the NABARD must constitute a Working Group to study in depth various aspects and advise Government of India and NABARD on all such matters. The NABARD had accordingly constituted a Working Group vide notification dated 22.8.1991 under the Chairmanship of one of its Chief General Manager with 8 other members. The Working Group had submitted its report on 17th February, 1992. 14. The NABARD vide its letter No. IDD.RRCBD.4559/316 (GEN)r 92/93 dated 20.3.1993 informed the Chairmen and Managing Directors of all Sponsors Banks (except UPCB) that the Working Group Report dated 17.2.1992 on RRBs relating to issues arising out of the implementation of the NIT award read with Equation Committee recommendations, Staff Service Regulations and Recruitment and Promotion Policy etc. have since been accepted by the Government of India, with necessary charges as detailed in its Annexures I, II, III and IV and RRBs should follow the instructions issued by the Government of India vide Circular No. 11-3/1990-RRB(1) dated 22.2.1991 read with instructions of NABARD scrupulously and any violation in this regard was to be viewed seriously. The letter reveals that as regards the various loans and advances to be given by the RRBs to its staff. The Housing Loans, Conveyance Loan, Consumer Loan and Festival Advances could be granted on first come first serve basis. The budgeting system that should be followed by the RRBs for granting Housing, Conveyance and Consumer Loans is as per the norms laid down in the letter of NABARD and for the purpose of granting the said loans suitable schemes should be framed by the RRBs in consultation with their Sponsor Banks and the same would have to be approved by the Board of RRBs concerned before the loans are granted to the RRBs staff. The stand of the PNB, is that Circular Nos. The stand of the PNB, is that Circular Nos. 2 and 3A dated 16.12.1991 and 26.9.1991 cannot give right to the employees of the RRBs to get benefit of the Circulars of the Sponsor Bank as the Circular dated 20th March, 1993 issued by NABARD as per the instructions of the Government of India is binding on the Sponsor Bank, therefore, the claim laid by the petitioners in the writ petition is not at all sustainable. On merit, the PNB has stated that the NABARD has issued instructions as a delegated authority of the Central Government vide para 16 of Annexure P-2 and thereafter the bank has also issued instructions as per para 15 of the letter. The latest instructions relating to payment of loans as applicable to the employees of the Sponsor Bank have been made applicable with respect to the petitioners and other employees of Gramin Bank. 15. The petitioners in their rejoinder have stated that the award of the NIT has made no distinction regarding admissibility of the benefit by referring to a particular date or by referring to any first scheme or second scheme. The Award entitles the employees of the RRBs to parity in the pay-scales; allowances and other benefits vis-a-vis the employees of the Sponsor Banks. The petitioners averred that any exercise done by subsequent Committees appointed from time to time which are outside the scope of the award of NIT are meaningless and the recommendations and decisions of such Committee or of any such Authority cannot change the direction contained in the Award and the clarification given by the NABARD or by PNB are outside the scope of the Award and, therefore, the Gramin Bank cannot be permitted to take any benefit of those instructions and clarifications. No rejoinder to the counter-affidavit of PNB has been filed by the petitioners. 16. I have heard learned Counsel for the parties Mr. No rejoinder to the counter-affidavit of PNB has been filed by the petitioners. 16. I have heard learned Counsel for the parties Mr. Shrawan Dogra, learned Counsel for the petitioners contended that the Circular No. 9/94 dated 15.2.1994 and Circular No. 15/94 dated 2.4.1994 (Annexures P-10 and P-11) respectively issued by the Gramin Bank based on some instructions/ directions of the NABARD are contrary and in violation of paragraph 4.352 of the Award of NIT and the NABARD is not a rule making authority, as it colds only consultative position, thus, the instructions/directions of the NABARD are not binding on the PNB being Sponsor Bank nor on the Gramin Bank as NABARD has no legal authority to issue such, instructions in regard to the parity in the matter of pay scales, allowances and other benefits available to the employees of RRBs at part with the employees of the Sponsor Bank. He next contended that it is the Central Government who is the competent authority under proviso 2 of Section 17(1) of (The) Regional Rural Banks Act, 1976 (for short RR Banks Act) to decide the salary structure of the employees appointed by RRBs at par with the salary structure of the employees of the State Government and the local Authorities of comparable level and the instructions of the NABARD relied upon by the Gramin Bank in its Circulars Annexures P-10 and P-11 are without any authority and therefore, the said Circulars deserve to be set aside. In support of his submissions reliance is placed in a case of South Malabar Gramin Bank v. Coordination Committee of South Malabar Gramin Bank Employees Union and Sough Malabar Gramin Bank Officers Federation and others, 2001(4) SCC 101 : AIR 2001 SC 1028. 17. Per contra, learned Additional Central Government Standing Counsel contended that NABARD being the competent authority can exercise the powers on behalf of the Central Government, or a State Government or the Reserve Bank in the transaction of any business in respect of loans and advances granted or to be granted or bonds or debentures purchased or subscribed, for or to be purchased or subscribed for as provided under Section 38(II) of the National Bank, for Agricultural and Rural Development Act, 1981 (hereinafter referred to NABARD Act). According to the learned Counsel NABARD in exercise of its authority has clarified that two schemes were in operation in the Sponsor Banks by virtue of either agreement or undertaking reached by the Bank concerned with their employees/Officers and as such the employees/Officers were to opt only scheme. In case of RRBs, however, Housing loans and Vehicles loans have been introduced for the first time at par with the Sponsor Banks and Consumer loans have been introduced as per the instructions of the Government of India to RRBs and since there were no existing agreements on the subject, the latter scheme of the Sponsor Banks is made applicable to RRBs employees and the date of entry of such employees into the Banks notwithstanding. 18. I have given my anxious consideration to the respective contentions of the learned Counsel for the parties. 19. It is not in dispute that the NIT Award and the Report of the Equation Committee were under challenge in the case of South Malabar Gramin Bank (supra). In paragraph 11 of the report it is held : (See P. 118) 11. On the contentions raised by the learned Counsel for the parties, the first question that arises for consideration is whether the award given by justice Obul Reddi and accepted by the State Government and given effect to, can be construed to mean that the pay scales and other emoluments of the regional rural bank employees would stand automatically altered, and when the pay structure of the employees of the commercial banks gets revised, on the basis of the so-called bipartite settlement between the employer and the employees of those commercial banks. The award nowhere indicated this course of action nor could it have indicated so, in view of the provisions of the Regional Rural .Banks Act, conferring specific power on the Central Government to decide the pay structure of the employees of the regional rural banks. The second proviso to Section 17(1) of the Regional Rural Banks Act, 1976 reads thus : Provided further that the remuneration of officers and other employees appointed by a regional rural bank shall be such as may be determined such remuneration, the Central Government shall have due regard to the salary structure of the employees of the State Government and the local authorities of comparable level and status in the notified area. The legislature, therefore, while enacting a law for establishment and incorporation of the regional rural banks, conferred power on the Central Government for determining the remuneration of the officers and employees appointed by the regional rural banks and that power conferred upon the Central Government by the legislature cannot be taken away by an award of a tribunal, constituted by the Central Government for redressing the grievances of the employees, which were pending before a court of law. Even the prayer in the writ petition that had been filed in the Supreme Court was not for a declaration and mandamus that the employees of the regional rural banks would be entitled to the same scale of pay as and when the pay structure of their counterparts in the nationalized commercial banks gets revised. To construe the award of Justice Obul Reddi in the manner as was contended by the counsel appearing for the employees of the Bank would tantamount to making the second proviso to Section 17(1) of the Act nugatory, redundant and otiose and by no stretch of imagination the duties and powers conferred on the Central Government under the Act could be made nugatory by interpreting an award of a tribunal. The disputes raised before the Court being disputes on several questions of facts, the Court and the Union Government thought it fit to be adjudicated upon by a Tribunal and the Tribunal on discussion on materials gave its award. The relevant findings of the Tribunal, which we have quoted earlier in this judgment, does not in any manner even contemplate that the power and jurisdiction of the Central Government under the second proviso to sub-section (1) of Section 17 would become redundant and the pay structure as decided in 1987, pursuant to the award of the Tribunal in respect of the employees of the regional rural banks would automatically get revised as and when the pay structure of the employees of the commercial banks gets revised. On the construction of the award of Justice Obul Reddi and the provisions of the second proviso to Section 17(1) of the Act, we have no hesitation to hold that the revision of pay structure of the employees of the regional rural banks could be made, only after the Central Government exercises its power, under the provisions of the Act and determines the same. If however, the Central Government fails to discharge its obligation as in the case in hand, which would result in gross disparity between the pay scales of the commercial banks and the regional rural banks, then a mandamus could be issued to the Central Government for performance of its duties and the Central Government would be bound to perform its duties, taking into account all germane factors, including the factor of the subsequent pay revision of the employees of the nationalized commercial banks." Further in paragraph 14 it is observed : (SCC P 123) 14. In the light of the conclusions arrived at by us, the contention of Mr. Sanghi that the very idea of the employer to appoint a fresh committee for re -determination of the pay structure of the employees of the regional rural banks is nothing but an attempt to get over the effect of the grant of parity under Justice Obul Reddi Tribunal, is of great substance. It has to be borne in mind that the Tribunal has devoted considerable time and has considered all aspects of the dispute between the parties and the notification itself of the Union Government in appointing the Tribunal, indicated that the decision of the Tribunal shall be final and binding. In this view of the matter, the conclusions arrived at on different questions raised by the Tribunal, cannot be assailed indirectly by taking recourse to a procedure either by the Union Government or by the Bank. Though, we have on hesitation in coming to a conclusion that the Union Government possesses the power to determine the pay structure in accordance with the second proviso to sub-section (1) of Section 17 and, therefore, that power has to be exercised soon after any pay revision of the employees of the nationalized commercial banks is effected and while exercising that power, the Union Government should try to maintain the parity between the pay structure of the employees of the regional rural banks and the employees of the nationalized commercial banks. 20. The Supreme Court issued certain directions to the Union of India for maintaining the parity between the employees of the commercial banks and the employees of the Regional Rural Banks in regard to the pay structure of the employees in paragraphs 1-5, 16 and 17 of the report. 21. 20. The Supreme Court issued certain directions to the Union of India for maintaining the parity between the employees of the commercial banks and the employees of the Regional Rural Banks in regard to the pay structure of the employees in paragraphs 1-5, 16 and 17 of the report. 21. In implementation of the directions of the Supreme Court in South Malabar Graim Bank case, (2001(4) S.C.C. 101) (supra), the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division) issued a notification dated 11.4.2001. Interlocutory applications and contempt petitions were filed in the Supreme Court arising out of the judgment dated 31.1.2001 in South Malabar Gramin Bank v. Coordination Committee of S.M.G.B. Employees Union, .2001(4) S.C.C. 101 in a case All India Regional Rural Bank Officers Federation v. Govt. of India and others, 2002(3) S.C.C. 554. The Supreme Court has held that the financial capacity of the employer cannot be held to be a germane consideration for determination of the wage structure of the employees and Parliament enacted the Act for bringing into existence the Regional Rural Banks with the idea of helping the rural masses of the country, the employees of such rural banks cannot suffer on account of financial incapacity of the employer. Paras (ii) and (iii) of the notification dated 11.4.2001 cannot be held to be in compliance with the judgment and directions of the Supreme Court in Sucha Malabar Gramin Bank case, 2001(4) SCC 101 (supra). But at the same time it is held that the appropriate authority need not be punished under the provisions of the Contempt of Courts Act, even if the notification is in direct contravention of the judgment of the Supreme Court as the present case is not one of deliberate violation. The Supreme Court directed that the employees of the Regional Rural Banks should be paid their current salaries on the basis of determination made under the notification dated 11.4.2001, the new basic pay having been arrived at, as on 1.4.2000 forthwith. Para (i) thereof should be immediately implemented and the employees should be paid accordingly. Paragraphs (ii) and (iii) of the notification were quashed and the Central Government was directed to issue a fresh notification for proper implementation of the judgments of the Court. 22. Para (i) thereof should be immediately implemented and the employees should be paid accordingly. Paragraphs (ii) and (iii) of the notification were quashed and the Central Government was directed to issue a fresh notification for proper implementation of the judgments of the Court. 22. After the NIT award the Central Government constituted a Equation Committee on RRBs vide Telex Message No. 2775 dated 5.10.1990 under the Chairmanship of P. Kotaiah, M.D. NABARD with four other members. The Equation Committee recommended that allowances and benefits which are provided tin the bipartite settlements and in service Regulations of the concerned Sponsor Banks may be extended to the concerned RRBs employees and Officers respectively. The report of the Equation Committee was accepted by the Government of India and the recommendations of the Committee were sent to all Chairman and Managing Directors of all the Sponsor Banks for implementation vide letter No. 11-3/90-RRB(1) dated 22.2.1991 (Annexure P-2). Paragraph 14 of the letter dated 22.2.1991 of the Under Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division), makes it clear that the allowances/special allowances and other benefits which are provided in bipartite settlements and the Service Regulations-of the concerned Sponsor Banks be extended to the employees/Officers of RRBs, respectively. The allowances and other benefits which will have retrospective and prospective effects and detailed in Annexure VI annexed with Annexure P-2. The facility of Consumer and Conveyance allowances to the staff Members of RRBs which are available to the employees of the Sponsor Banks are not -reflected in Annexure VI. Clause B deals with allowances and other benefits which ire applicable with effect from 1.3.1991. Note-II of clause B reads: In respect of the allowances which may be applicable with respective but not mentioned here, a reference shall be made to the GOI by the RRBs. 23. Consequent upon the implementation of the NIT award read with Equitation Committee Report certain changes were to be brought about for Recruitment/Promotion Policy for RRB staff. It was, therefore, decided that the NABARD may constitute a Working Group to study those aspects and advise the Government of India and NABARD. The NABARD accordingly constituted a Working Group on 22.8.1991 consisting of its Chief General Manager as its Chairman and 8 other members. It was, therefore, decided that the NABARD may constitute a Working Group to study those aspects and advise the Government of India and NABARD. The NABARD accordingly constituted a Working Group on 22.8.1991 consisting of its Chief General Manager as its Chairman and 8 other members. The Working Group Committee submitted its report on 17th February, 1992 to the NABARD which was later on accepted by Government of India with certain modifications; alterations; additions and deletion etc. After the acceptance of the report of the Working Committee by the Government of India, the NABARD circulated instructions dated 20.3.1993 to all Sponsor Banks as well as RRBs directing them to implement and strictly follow instructions of Government of India dated 22.2.1991 read with instructions of the NABARD. In para 7 of the letter issued by General Manager of NABARD dated 20th March, 1992 (Annexure P-3) it is specifically stated that Housing Loan, Conveyance Loan, consumer Loan and Festival Advance should be sanctioned on first come first serve basis by the RRBs to their staff in consultation with their Sponsor Banks and the same would have to be approved by the Board of RRB concerned before the loans are granted to RRB staff. Clause-C of Annexure III attached with the said letter, deal with allowances and other benefits applicable from 1.3.1993. Sub-clause (2) thereof provides that loans for purchase of Conveyance including subsequent loans should be given as per the practices prevailing in the Sponsor Bank. The PNB issued Loans and Advances Circular No. 238 dated December 16, 1991 (Annexure P-4) on the subject of Scheme for advances to members of staff for purchase of Cars/Scooters/Motor Cycles/Mopeds and Bicycles. The maximum amount of loan, rate of interest and other terms and conditions are specifically mentioned therein. The H.P. Gramin Bank based upon the circular of P.N.B. a Sponsor Bank, vide circular No. 20/93 dated 24th July, 1993 (Annexure P-6) formed scheme for advances to. members of staff for purchase of cars/scooters/Motor Cycles etc. etc. stipulating the extent of amount of loan, rat of interest, interest free loan, repayment of loan and other relevant terms and conditions. 24. As noticed above, the NIT award there was no mention of two schemes in operation in the Sponsor Banks by virtue of either agreement or undertaking reached by the concerned banks with their employees/Officers. etc. stipulating the extent of amount of loan, rat of interest, interest free loan, repayment of loan and other relevant terms and conditions. 24. As noticed above, the NIT award there was no mention of two schemes in operation in the Sponsor Banks by virtue of either agreement or undertaking reached by the concerned banks with their employees/Officers. In Regional Rural Banks facilities of Housing Loan, Vehicle Loan, Consumer Goods Loan etc. were introduced for the first time at par with the Sponsor Banks as per the Government of India instructions to the RRBs. In paragraph 4.352 of the NIT award proviso 2 to Section 17(1) of the RRB Act was considered and it was held that the NABARD was not a rule making authority and it holds only consultative authority. In that view of the matter, it cannot be said that NABARD was the competent authority to issue any instructions to the Sponsor Banks and the RRBs, contrary to the NIT award without the authority of the Government of India. As per Note-II of Annexure VI attached with letter dated 22.2.1991 (Annexure P-2) of the Under Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs, (Banking Division) issued to the Chairman and Banking Directors of all Sponsor Banks (except UPCD) an the Chairman of all RRBS informing them that the Government of India had accepted the NIT award dated 30.1.1990 and the recommendations of the Equation Committee dated 16.1.1991 and in terms of proviso (1) of Section 17 of RRB Act, 1976 instructions were issued for implementing the NIT award and recommendations of the Equation Committee immediately. Alongwith the said letter Annexure-VI was appended. In Note (II) of Annexure VI it is specifically mentioned that in respect of allowances which may be applicable with retrospective but not mention in the Annexure reference shall be made to the Government of India by the RRBs. The benefits of the Conveyance loans the subject-matter of the present writ petition do not find place in Annexure VI thus, the issue whether the Staff members of the HP. Gramin Bank have been rightly given the benefits of the loans for the purchase of Cars/Motor Cycles/Bicycles/Moped etc. The benefits of the Conveyance loans the subject-matter of the present writ petition do not find place in Annexure VI thus, the issue whether the Staff members of the HP. Gramin Bank have been rightly given the benefits of the loans for the purchase of Cars/Motor Cycles/Bicycles/Moped etc. at par with the staff of the Sponsor Bank in the subject matter which can only be decided by the Government of India under Note II and as per proviso 2 of Section 17(1) of the Regional Rural Banks Act, 1976. Under Proviso (2) of Section 17(1) of the Regional Rural Banks Act, 1976 the remuneration of officers and other employees appointed by a Regional Rural Bank shall be determined by the Central Government, and, in determining such remuneration, the Central Government shall have due regard to the salary structure of the employees of the State Government and the Local Authority of the comparable level and status in the Notified area. In the light of the provisions of the Act, the instructions purported to have been issued by the NABARD and relied upon by the H.P. Gramin Bank in loan Circular No. 9/94 dated 15.2.1994 (Annexure P-10) and Loan Circlar No. 15/94 dated 2.4.1994 (Annexure P-11) shall have no binding force on the H.P. Gramin Bank as those instructions are issued not by the competent authority i.e. the Government of India. 25. The contention of the learned Additional Central Government Standing Counsel that NABARD a National Bank under the National Bank for A&R Development Act, 1981 by virtue of Section 38(ii) issued the instructions as an agent for the Central Government in regard to the tractions for any business, in respect of loans and advances granted or to be granted or bond or debentures purchased or subscribed for or to be purchased or subscribed for cannot be accepted in view of proviso (2). of Section 17(1) of the RRBs Act, 1976 which has been held to be intra vires of the Constitution by the Supreme Court in South Malabar Gramin Banks case. 26. of Section 17(1) of the RRBs Act, 1976 which has been held to be intra vires of the Constitution by the Supreme Court in South Malabar Gramin Banks case. 26. The aims and object of the National Bank for Agricultural and Rural Development Act, 1981 is to establish a bank for providing credit for the promotion of Agricultural, Small Scale Industries, Cottage and Village Industries, Handicrafts and other Rural Crafts and other allied economic activities in rural areas with a view to promoting integrated rural development and securing prosperity of rural areas and for matters connected therewith or accidental thereto. The aims and object of the Regional Rural Banks Act, 1976 is to provide for the incorporation, regulation and winding up of Regional Rural Banks with a view of developing the rural economy by providing, for the purpose of development of agriculture, trade, commerce, industry and other productive activities in the rural areas, credit and other facilities, particularly to the small and marginal farmers, agricultural labourers, artisans and small entrepreneurs and for matters connected therewith and incidental thereto. By virtue of Section 3 of the Act Central Government may, if requested so to do by a Sponsor Bank, by notification in the Official Gazette, establish i a State or Union Territory, one or more Regional Rural Banks with such name as may be specified in the notification and may, by the said or subsequent notification, specify the local limits within which each Regional Rural Bank shall operate. The HP. Gramin Bank respondent No. 1 herein was established by the Central Government under Section 3 of the Act. The Head Office of the H.P. Gramin Bank is notified at Mandi by the Central Government after consultation with the National Bank to mean the NABARD and the PNB in a Sponsor Bank as defined in clause (g) of Section 2 of the Act. 27. On consideration of the entire material on record and in the light of the judgments of the Supreme Court in South Malabar Gramin Banks case and subsequent judgment in All India Regional Rural Bank Officers Federation v. Govt. 27. On consideration of the entire material on record and in the light of the judgments of the Supreme Court in South Malabar Gramin Banks case and subsequent judgment in All India Regional Rural Bank Officers Federation v. Govt. of India (supra), and the NIT award as well as Note II of Annexure P-VI attached with letter dated 22.2.1991 (Annexure P-2) and Proviso 2 of Section 17(1), of the Act the Regional Rural Banks Act, 1976, Loan Circular No. 9/94 dated 15.2.1994 (Annexure P-10) and Loan Circular No. 15/94 dated 2.4.1994 (Annexure P-11) issued by the Himachal Gramin Bank are not sustainable and they deserve to be set aside as NABARD has no authority under law to direct the RRBs and Sponsor Banks to follow a particular scheme to RRB employees. 28. No other point was urged by the learned Counsel for the parties. 29. In the result, for the aforesaid reasons, the writ petition is allowed and Loan Circular No. 9/94 dated 15.2.1994 (Annexure P-10) and Loan Circular No. 15/94 dated 2.4.1994 (Annexure P-11) issued by Himachal Gramin Bank, respondent No. 1 are set aside. The Central Government shall consider the matter regarding scheme for advances for purchase of Cars/Scooters/Motor Cycles/Mopdes and Bicycles to the staff of Regional Rural Banks after taking into consideration Note (II) of Annexure VI attached to letter dated 22.2.1991 (Annexure P-2) of the Under Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs (Banking Division) and in conformity with proviso 2 of Section 17(1) of the (The) Regional Rural Banks Act, 1976. The decision shall be taken by the Central Government within four months from today. The recoveries of the loan amount in pursuance to Annexures P-10 and Annexure P-11 shall not be effected from the petitioners by the Himachal Gramin Bank and the petitioners shall comply with the order dated 14.3.1995 passed by this Court in CMP No. 728/1994 whereby interim order dated 9.5.1994 was confirmed with further directions issued to the petitioners. 30. In the facts and circumstances of the case, parties are left to bear their own costs. -