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2014 DIGILAW 60 (SIK)

Tseten Tashi Bhutia v. State Bank of Sikkim

2014-08-26

S.P.WANGDI

body2014
Judgment Wangdi, J. 1.(i). The Petitioner, a General Manager under the Respondent No.1, State Bank of Sikkim, went on voluntary retirement w.e.f. 30-04-2010. He has preferred this Writ Petition having been deprived of payment of gratuity in terms of the recommendations of the 4th Pay Commission which, as per the Petitioner, had been adopted by a Resolution of the Board of Directors of the State Bank of Sikkim. (ii) The Petitioner states that the Government of Sikkim, Respondent No.3, accepted the recommendations of the 4th Pay Commission by Notification No.210/GEN/ DOP dated 18-11-2009 filed as Annexure P-2 to the Writ Petition in terms of which Notification No.212/GEN/DOP dated 26-11-2009, Annexure P-3, was issued publishing the Sikkim Government Services (Revised Pay) Rules, 2009 to enhance the pay and allowances of the persons appointed in the State services and posts in connection with the affairs of the State of Sikkim. Similarly, the Sikkim Government Services (Revised Pension) Rules, 2010 was also published vide Notification No.40/FIN/PGIPF dated 12-01-2010, Annexure P-4, revising the retirement benefits of the State Government employees who were governed by the Sikkim Government Services (Pension) Rules, 1990. (iii) It is stated that by Circular Ref. No.SBS/Gtk/ HO/42/10/159 dated 16-06-2010, Annexure P-7, the Respondent-Bank adopted the various Notifications issued by the State-Respondent No.3 pertaining to revisions of pay and other emoluments. This was followed by a Resolution of the Board of Directors passed in its 154th Meeting held on 12-08-2010, Annexure P-8, adopting the recommendations of the 4th Pay Commission and approving disbursal of arrears on account of the revised salary of the persons serving in the State Bank of Sikkim. (iv) It is stated that on his retirement, the Petitioner was surprised to find that the gratuity in his case was calculated as per Clause (v) of the Resolution passed by the Board of Directors in its 16th Meeting held on 31-07-1971, Annexure P-17, i.e., 18 months’ basic pay of the salary last drawn by him amounting to Rs.3,88,800/-only. (iv) It is stated that on his retirement, the Petitioner was surprised to find that the gratuity in his case was calculated as per Clause (v) of the Resolution passed by the Board of Directors in its 16th Meeting held on 31-07-1971, Annexure P-17, i.e., 18 months’ basic pay of the salary last drawn by him amounting to Rs.3,88,800/-only. (v) In response to the representations made by him in this regard to the Respondents No.1 and 2 demanding that he be paid gratuity in terms of the 4th Pay Commission that was adopted by the State Bank of Sikkim, he was informed that he was not entitled to it as the recommendations on the pension and policy on gratuity had not been adopted by the Bank and that they were still following the rates prescribed as per the 16th Meeting of the Board of Directors held on 31-07-1971. Other applications filed by the Petitioner under the Right to Information Act, 2005, seeking information relating to the adoption of the 4th Pay Commission by the Board of Directors, was responded to by the Respondents No.1 and 2 reiterating the same position as conveyed in their reply to the Petitioner’s representations earlier. (vi) Being thus aggrieved, he has preferred this Writ Petition seeking, inter alia, for a direction upon the Respondents No.1 and 2 to release the unpaid gratuity in terms of the recommendations of the 4th Pay Commission with interest @ 10% w.e.f. 01-04-2010. 2. The Respondents No.1 and 2 in their counter-affidavit have stated that there is no specific Rules governing grant of pensionary benefits to the employees of the State Bank of Sikkim and that neither the Sikkim Government Services (Pension) Rules, 1990, nor the Sikkim Government Services (Revised Pension) Rules, 2010, have any application to the employees of the State Bank of Sikkim. For the purpose of payment of gratuity, the State Bank of Sikkim was following the Resolution adopted by the Board of Directors in its 16th Meeting held on 31-07-1971 until 01-03-2011 on and from which date the State Bank of Sikkim (Classification, Recruitment and Promotion) Regulations, 2011, prescribing its own Rule pertaining to gratuity came into force. It is stated that the Gratuity Rules so adopted was distinct from the one provided under the State Government Rules. It is stated that the Gratuity Rules so adopted was distinct from the one provided under the State Government Rules. It is the case of the Respondent-Bank that since the Petitioner voluntarily retired from the State Bank of Sikkim on 30-04-2010, his retirement benefits including gratuity was initially calculated at Rs.3,88,800/-but, after the implementation of the 4th Pay Commission the component of gratuity was reworked at Rs.6,38,820/-as an incidence of the new basic pay worked out in terms of the 4th Pay Revision. The Respondent-Bank states that the Petitioner suffers from mis-conception and, therefore, the Writ Petition was not maintainable. 3. During the arguments, the parties have reiterated what have been stated in their respective pleadings. Additionally, on behalf of the Petitioner, Mr. Zangpo Sherpa, Learned Counsel, submits that he has also been discriminated in as much as several officers and employees who had retired from service after the Petitioner were paid as per the new Gratuity Rules while depriving the Petitioner of such benefit. 4(i). On a careful consideration of the respective submissions, the pleadings and the documents on record, I find that the question that would settle the dispute is as to whether or not the State Bank of Sikkim by adopting Notification No.210/GEN/DOP dated 18-11-2009, issued by the Government of Sikkim, had accepted the entire recommendations of the 4th Pay Commission as mentioned therein, in particular, the following:- “1. The Pay Band and Grade Pays in respect of general category of employees as well as the State Government teachers will be modified as shown in Annexure I & I A. 2. The revised pay scales and Dearness Allowance will be effective from 1st January 2006 while other allowances will be payable w.e.f 1st April 2009. 3. The revised pension will be effective from 1st January, 2006. 4. The Medical Relief for the State Government pensioners will be enhanced to Rs.1000 per month against Rs.500 p.m. recommended by the Commission. 5. 40% of the arrear on account of revision of pay and allowances will be payable in 200910, another 40% in 2010-11 and the balance 20% in 2011-12.” (ii) As would appear from the above, there are four components in the recommendations, viz., (a) Pay Band and Grade Pays; (b) Dearness Allowance; (c) Revised Pension; and (d) Medical Relief. 5. 40% of the arrear on account of revision of pay and allowances will be payable in 200910, another 40% in 2010-11 and the balance 20% in 2011-12.” (ii) As would appear from the above, there are four components in the recommendations, viz., (a) Pay Band and Grade Pays; (b) Dearness Allowance; (c) Revised Pension; and (d) Medical Relief. (iii) In pursuance of the above Notification, the Government of Sikkim by Notification No.212/GEN/DOP dated 26-11-2009 published the Sikkim Government Services (Revised Pay) Rules, 2009 and by Notification No.40/FIN/PGIPF dated 12-01-2010 by which the Sikkim Government Services (Revised Pension) Rules, 2010 was published. It may be noted that by the Notification dated 18-11-2009 host of other benefits and emoluments entitled only to the Government servants were also revised. (iv) In so far as the State Bank of Sikkim is concerned, the first of the action taken in adopting the recommendations of the 4th Pay Commission was by issuing Circular bearing Ref. No.SBS/Gtk/HO/42/10/159 dated 16-06-2010, Annexure P-7. Since this Circular is crucial in arriving at a finding as to whether the the State Bank of Sikkim had adopted the entire recommendations of the 4th Pay Commission or not, it is felt essential to reproduce it below:- “Registered Office & Head Office: 31-A, NATIONAL HIGHWAY, GANGTOK-737101, (SIKKIM) Phone :-202465 (15 LINES) ………………………..………………………………… STATE BANK OF SIKKIM REF. No.SBS/Gtk/HO/42/10/159 DATE 16/06/2010 CIRCULAR Pursuant to the decision taken by the Board of Directors on 08.06.2010 for the adoption of the recommendation of the 4th Pay Commission as adapted by the State Govt. and the modalities of its implementation in the State Bank of Sikkim, the management hereby adopts the following Notifications & Circular of revised pay structure effecting from 01.01.2006. (01) Govt. of Sikkim Gazette Notification No.210/GEN/DOP dated 18.11.2009. (02) Govt. of Sikkim Gazette Notification No.212/GEN/DOP dated 26.11.2009. (03) Govt. of Sikkim Gazette Notification No. 213/GEN/DOP dated 26.11.2009. (04) Circular No GOS/1(32) BUD/FIN/13 dated 7th Nov. 2009. The arrears of revised pay fixation should be calculated in the form of due and drawn format and seek prior vetting from the competent authority of Head Office before release for payment for rectification, subject to deduction of various advances as already notified earlier. (04) Circular No GOS/1(32) BUD/FIN/13 dated 7th Nov. 2009. The arrears of revised pay fixation should be calculated in the form of due and drawn format and seek prior vetting from the competent authority of Head Office before release for payment for rectification, subject to deduction of various advances as already notified earlier. Sd/- Chief General Manager ………………………………………………………………….” (v) It is the case of the Respondent-Bank that the Board of Directors of the State Bank of Sikkim in its 154th Meeting held on 12-08-2010 had adopted the 4th Pay Commission only to a limited extent of the revision of salaries and nothing further. (vi) Appearing on their behalf, Mr. J. B. Pradhan, Learned Additional Advocate General, pointed out that the agenda note for the meeting pertaining to the subject clearly reveals this fact. I have perused the relevant agenda note which is reproduced below for convenience:- “AGENDA NO.06: SERVICE MATTERS (a) Framing and adoption of Service Rules The Bank does not have set of service rules of its own and therefore would like to frame a fresh set of Service Rules, which will be based on Sikkim Government Service Rules and as well as other nationalized Banks as to suit upon the needs of the Bank. The lack of fixed set of rules and regulations governing the service in the Bank has led to confusion in several service matters concerning various bank employees and it is found mandatory that the service rules be framed and adopted as soon as possible. In this regard the Bank has engaged the services of Mr. Dilu Kr. Pradhan, a retired government servant and an expert on Sikkim Government Service Rules. (b) Pay Revision, Arrears. The management would like to appraise the Board that with the report of fourth pay commission the salary of all the state Government employees have been increased and the Bank would like to seek the permission of the Board for the disbursement of the arrears in salaries as per the recommendation of the fourth pay commission. The Bank has been following the letter and spirit of the mode of monetary works decided by the Government of Sikkim from its inception. The Bank also adopted the pay scales and allowances as recommended by the 1st, 2nd and 3rd Pay Commissions respectively. The Bank also released to its staffs the interim relief in 2008 and 2009. The Bank has been following the letter and spirit of the mode of monetary works decided by the Government of Sikkim from its inception. The Bank also adopted the pay scales and allowances as recommended by the 1st, 2nd and 3rd Pay Commissions respectively. The Bank also released to its staffs the interim relief in 2008 and 2009. The Bank employees are purely guided by the State Government Pay and allowances rules and as per the said rules, the State Bank of Sikkim employees are not eligible to claim for any cash incentives/bonus on account of operating profits. Therefore, it would only be appropriate to allow the Bank staff to draw the revised pay scales and allowances which the Government employees have already received. The tentative estimate of the liability of pay revision in accordance with the recommendations of the fourth pay commission is approximately Rs.5,31,20,000.00 which the Bank will be able to meet from its own resources without any budgetary support from the State Government.” (vii) The Resolution adopted on the above agenda reads as under:- “AGENDA NO.: 6 SERVICE MATTERS DECISION: (a) Framing and adoption of Service Rules The Board approved the management’s proposal to frame a fresh set of Service Rules and directed to go ahead with the proposal to engage the services of Mr. Dilu Kr. Padhan, a retired government servant and an expert on Sikkim Government Service Rules for framing the proposed service rules. (b) Pay Revision, Arrears The Board accorded its approval for the adoption of recommendations of 4th Pay commission and also approved for subsequent disbursement of arrear in salaries. (c) Ratification of Banking Pay Revision The Board took note of the step taken by the management for revision of Banking pay vide Circular No.:SBS/ GTK(HO)/42/10/403 dated 09.07.2010 (Annexure -16) and ratified/confirmed the action taken.” (viii) On a bare reading of the above, it becomes quite evident that the State Bank of Sikkim had adopted the recommendations of the 4th Pay Commission only in respect of pay revision and arrears and nothing further. There was some confusion as regards the date appearing in the Circular, Annexure P-7, referred to above, in as much as it is dated 16-06-2010 and was said to have been issued pursuant to the decision taken by the Board of Directors on 08-06-2010 for adoption of the recommendations of the 4th Pay Commission, etc. There was some confusion as regards the date appearing in the Circular, Annexure P-7, referred to above, in as much as it is dated 16-06-2010 and was said to have been issued pursuant to the decision taken by the Board of Directors on 08-06-2010 for adoption of the recommendations of the 4th Pay Commission, etc. On being asked to explain this anomaly, it was submitted on behalf of the Respondent-Bank that the Circular was issued on a decision taken by the Board of Directors by circulation on 08-06-2010 and this was formally adopted in its 154th Meeting held on 12-08-2010 as discussed earlier. In my view, this appears to be a reasonable explanation and there appears to be consistency in the Circular and the Resolution of the Board of Directors held on 12-08-2010 in its 154th Meeting. (ix) Mr. Zangpo Sherpa would submit that when in serial no.1 of the Circular, Gazette Notification No.210/GEN/DOP dated 18-11-2009 has been stated to have been adopted, by implication, therefore, the entire recommendations of the 4th Pay Commission would be deemed to have been adopted by the Bank. I am unable to be impressed by this submission. No doubt, the Notification does find mention at serial no.1 of the Circular, Annexure P-7 but, the subsequent Notifications mentioned in serial nos.2, 3 and 4 of that very Circular renders the position untenable since those emanate from the very Notification dated 18-11-2009 contained in serial no.1. Propositions placed by Mr. Sherpa also appears to be improbable since the Gazette Notification as observed earlier also brings within its ambit a host of other benefits and emoluments which admittedly are not being enjoyed by the employees under the State Bank of Sikkim. The decisions in Municipal Corporation of Delhi vs. Dharam Prakash Sharma and Another : (1998) 7 SCC 221 and Purshottam Lal and Others vs. Union of India and Another: AIR 1973 SC 1088 , will have no application as those were rendered in the facts and circumstances peculiar to those cases which are different from the one before us. The decisions in Municipal Corporation of Delhi vs. Dharam Prakash Sharma and Another : (1998) 7 SCC 221 and Purshottam Lal and Others vs. Union of India and Another: AIR 1973 SC 1088 , will have no application as those were rendered in the facts and circumstances peculiar to those cases which are different from the one before us. (x) The first of the case of Municipal Corporation of Delhi was one in which the question involved was as to whether once payment of pension and gratuity under the Pension Rules is made applicable to the employees of MCD, the provisions of payment of gratuity under the Payment of Gratuity Act would also be applicable or not. The question was answered in the affirmative by holding that “in view of the overriding provisions contained in Section 14 of the Payment of Gratuity Act, the provision for gratuity under the Pension Rules will have no effect. ……….. Section 5 of the Payment of Gratuity Act has conferred authority on the appropriate Government to exempt any establishment from the operation of the provisions of the Act, if in its opinion the employees of such establishment are in receipt of gratuity or pensionary benefits not less favourable than the benefits conferred under this Act.” As it was found that MCD had not taken steps to invoke the power of the Central Government under Section 5 of the Payment of Gratuity Act, it was held that the employees of the MCD would be entitled to the payment of gratuity under the Payment of Gratuity Act notwithstanding the fact that the provisions of Pension Rules have been made applicable to them for the purpose of determining the pension. In the second case of Purshottam Lal the question involved was as to whether it was permissible for the Government to implement the recommendations of Pay Commission selectively when it had accepted the entire recommendations. Answering the question it was held that if the Government accepts the recommendations of the Pay Commission to the reference made by the Government in respect of all the government employees, it is bound to implement them in respect of all the government employees and if does so selectively, it would amount to breach of Articles 14 and 16 of the Constitution of India. Therefore, the facts of the cases being clearly distinguishable from the one before us they are of no assistance to the Petitioner. (xi) In any case, we find that the position stands explained by virtue of the agenda note and the decision thereon taken by the Board of Directors of the State Bank of Sikkim in its 154th meeting noted earlier. I am inclined to agree with the submission of the Learned Additional Advocate General that from the very reading of the relevant Clause pertaining to the pensionary benefits provided in Clauses 6.1 to 6.34 of the Recommendations of the 4th Pay Commission, it is apparent that it pertains to the Death-cum-Retirement Gratuity Rules and other emoluments applicable to the government servants under the relevant Government Rules. For better understanding, we may reproduce below the relevant entry in the Clause referred to above:- “VI. PENSIONARY BENEFITS : (6.1 to 6.34) Recommendations of the 4th Pay Commission. Decisions of the Government (i) ………………………… …………………………………. (ii) ………………………… …………………………………… (iii) The ceiling of DCRG may be increased from Rs.3.50 lakhs to Rs. 10.00 lakhs. (6.15) Accepted. (iv) …………………………… ……………………………………. ” (xii) From the entries in the above table, it is apparent that the ceiling of Death-cum-Retirement Gratuity was recommended to be enhanced from Rs.3.50 lakhs to Rs.10 lakhs. Admittedly, rate prescribed in the Resolution of the Board of Directors in its 16th Meeting held on 31-07-1971 does not provide for a ceiling as would appear from its relevant extract reproduced below:- “b) It was further resolved that Gratuity be granted to the permanent employees of the Bank who have completed at least five years of service on the following terms : i) For every completed year of service in the Bank half month’s basic salary last drawn by the employee. ii) But if the employee has served the Bank for ten completed years he will be entitled to eight months basic salary last drawn by him. iii) But if the employee has served the Bank for fifteen completed years he will be entitled to twelve months basic salary last drawn by him. iv) But if the employee has served the Bank for twenty completed years he will be entitled for fifteen months basic salary last drawn by him. iii) But if the employee has served the Bank for fifteen completed years he will be entitled to twelve months basic salary last drawn by him. iv) But if the employee has served the Bank for twenty completed years he will be entitled for fifteen months basic salary last drawn by him. v) And if the employee has served the Bank for twenty five or over completed years of service he will be entitled to eighteen months basic salary last drawn by him.” As per the Respondents No.1 and 2, this Resolution was being followed for payment of gratuity to its employees until the State Bank of Sikkim Regulations, 2011, was framed. (xiii) I have perused a copy of the State Bank of Sikkim Service Regulations, 2011. This Regulations have been brought into effect from 01-03-2011 by Notification No.SBS/Gtk/HO/43/11/1055 dated 01-03-2011. Regulation 49 provides for ‘Gratuity’ which appears to be in accordance with the recommendations of the 4th Pay Commission. Had the Petitioner retired after 01-03-2011 he would have been entitled to the revised gratuity. Unfortunately, this is not the case. It is also noticed, as already observed, that the Regulations were made effective prospectively from 01-03-2011. Since the date of the retirement of the Petitioner does not fall after the Regulations had come into force, he unfortunately would not be entitled to the benefits provided therein. The other Officers who got the benefit under the new Regulations had retired after it was brought into force. (xiv) The State Bank of Sikkim is a creature of Proclamation dated 24-06-1968 and, therefore, a Statutory Body vested with the powers and function as prescribed under the Proclamation. Article 8 of the Proclamation vests in the Board the power of general superintendence and direction of the affairs and business of the Bank. Therefore, a decision taken by the Board of Directors would have statutory force which, of course, shall be subject to the Regulations framed by the Board of Directors in exercise of the powers conferred on them by Article 47 of the Proclamation. Therefore, contrary to what have been submitted by Mr. Zangpo Sherpa, Learned Counsel for the Petitioner, the decision of the Board of Directors taken in its 16th Meeting prescribing the gratuity will prevail as a Statutory Rule to be followed by the Bank. Therefore, contrary to what have been submitted by Mr. Zangpo Sherpa, Learned Counsel for the Petitioner, the decision of the Board of Directors taken in its 16th Meeting prescribing the gratuity will prevail as a Statutory Rule to be followed by the Bank. This, of course, stands superseded w.e.f. 01-03-2011 on and from which day the Regulations came into force. 5. For all the reasons stated above, the Writ Petition would not be maintainable. However, before parting it may be observed that in matters of revision of salaries and allowances, generally Rules providing such revision are made effective retrospectively by a year or two. In the case of the 4th Pay Commission it was three years taking into consideration the year it had became due. Although such consideration would not strictly apply to the Respondent-Bank, it may, however, consider as to whether the Regulations of 2011 could be given retrospective effect by about 2 years so that persons who have put in more than 30 years service like the Petitioner, could be brought within its ambit. This, in my view, would be fair and reasonable. However, this is a decision which the Bank in its wisdom will have to take. 6. With the above observation, the Writ Petition stands disposed of. 7. No order as to costs.