Himachal Pradesh High Court
Sbi Officers Association vs Chief General Manager, Sbi And Ors. on 24 November, 2003
Equivalent citations: (2004)IIILLJ169HP
Author: Lokeshwar Singh Panta
Bench: Lokeshwar Singh Panta
JUDGMENT Lokeshwar Singh Panta, J.
1. This writ petition is filed by State Bank of India Officers Association, Himachal Pradesh Zonal Unit through its Deputy General Secretary Shri B.K. Sharma, seeking the following reliefs:
"(i) The impugned orders dated November 26, 1991 Annexure P-5 whereby the Hill and Fuel Allowance has been abolished by the Executive Committee of the Respondent No. 2 may kindly be quashed and set aside;
(ii) Directions may kindly be issued to the respondents to allow the Hill and Fuel Allowance and Special Area Allowance to the members of the petitioners Association as was being allowed ever since January 1, 1990;
(iii) Any other writ, order, or direction as this Hon'ble Court may deem just and proper in the facts and circumstances of the case, may also kindly be passed;
(iv) The cost of this writ petition may kindly be awarded in favour of the petitioners and against the respondents and justice may be done "
2. It is the case of the petitioners' Association that its members are employees of the State Bank of India. The terms and conditions of appointment and service of Officers in the Bank are governed by State Bank of India Officers' Service Rules framed under Sub-section (1) of Section 3 of the State Bank of India's Act, 1955 (hereinafter referred to as 'the Act' for short). According to Rule 23(x), an officer serving in a place mentioned in column (i) of the Table given therein shall be eligible for a Hill and Fuel Allowance as mentioned in Column (ii) of the Table against that place. Officers working in Special areas designated by the Central Board or the Executive Committee are entitled for Special Area Allowance in accordance with Rule 23(ii). The petitioners' Association has stated that while approving the Special Area Allowance a negotiation was held between the Indian Banks Association and Officers Organization whereby Special Area allowance was sanctioned in favour of the petitioners' Association and others by the Executive Committee of the Central Board vide its communication dated December 7, 1990, a copy whereof is annexed with the writ petition alongwith its Annexures as P-2, P-3 and P-4. As per the decision the Special Area Allowance was sanctioned in favour of the members of the petitioners Association and others on and w. e.f. January 1, 1990 in addition to Hill and Fuel Allowance ever since 1979. The members of the petitioners Association started drawing Special Area Allowance @ Rs. 100, Rs. 375 and Rs. 650 per month as is reflected at item No. 12 of Annexure P-3. According to the petitioners' Association, without the approval of the competent authority the Chief General Manager, State Bank of India, Chandigarh, respondent No. 1 herein on the instructions and guidelines of the Chairman, State Bank of] India, Central Office, Bombay, respondent No. 2 and the Union of India, Ministry of Finance, Banking Division, respondent No. 3 herein, abolished the grant of Hill and Fuel Allowance to the members of the petitioners Association from the date the Special Area Allowance was allowed to them i.e. on and w.e.f. January 1, 1990 retrospectively, though the members of the petitioners Association have continued to draw the Hill and Fuel Allowance on the strength of the decision arrived at and conveyed by the competent Authority vide Annexure P-2. In supersession of the earlier decision dated December 7, 1990 (Annexure P-2) another decision was taken by the Executive Committee of respondent No. 2 modifying the grant of Special Area Allowance. The communication of the said decision is marked as Annexure P-5.
3. The petitioners Association filed a Civil Suit before the senior Sub Judge (Court No. 3) at Shimla in the month of December, 1991 against the decision of the Executive Committee of respondent No. 2. Alongwith the suit an application for stay of recovery of the amount paid to the members of the petitioners Association was also filed under Order 39 Rules 1 and 2 CPC. Ex-parte stay was granted by the trial Court which was later on vacated. Being aggrieved the petitioners Association filed appeal before the learned District Judge, Shimla which was finally dismissed on August 18, 1993. According to the petitioners Association, its case was wrongly pleaded before the Civil Court seeking protection of the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 as the provisions of the said Act were not applicable to the employees of the State Bank of India and as such the petitioners Association has become the victim of wrong pleadings before the trial Court as well as before the learned District Judge. The Officers whose service conditions are governed under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 were also sanctioned Special Area Allowance by the respective banks after the Bipartite agreement was arrived at. The Board of Directors of a corresponding new Bank under Section 19 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 may after consultation with the Reserve Bank of India and with the previous sanction of the Central Government make regulations not inconsistent with the provisions of the Act' or any scheme made therein to provide for all the matters for which provisions is expedient for the purpose of giving effect to the provisions of the Act. Whereas in the case of other scheduled banks the service conditions can be altered with the previous consent of the Reserve Bank of India and the Central Government, no such corresponding provision has been provided in the State Bank of India Act, 1955 and the Rules framed thereunder, under which service conditions of the Officers are required to be varied with the approval of the Central Government. It is alleged that it is only the Central Board of Directors which is empowered to determine the conditions of service in respect of the Members of petitioners Association.
4. The petitioners Association further contended that after noticing wrong pleadings made before the Civil Courts, the petitioners Association filed an application in the Court of Sub-Judge 1st Class, (Court No. 3) Shimla under Order 23 Rule 1 read with Section 151 CPC for permission to withdraw the suit with liberty to rile the fresh suit on the same cause of action. The trial Court granted the requisite permission. Now the petitioners have filed the present writ petition challenging the said impugned order dated November 26, 1991 (Annexure P-5) inter alia on the following grounds:
"(A), That the Special Area Allowance was continued to be allowed to the Members of the Petitioners Association and others, the Hill and Fuel Allowances admissible under Rule 23(x) framed by the Central Board of Directors of the State Bank of India was abolished by the Executive Committee without jurisdiction and ultra vires of the provisions made under Section 43 of the Act;
(B) Hill and Fuel Allowance has been abolished retrospectively w.e.f. January 1, 1990 though the same was drawn by the Members of the Petitioners Association under Rule 23(x) of 1979 Rules framed under Section 43 of the State Bank of India Act, 1955. The Executive Committee or even the Central Board of Directors cannot make Rules being a delegate retrospectively affecting the vested rights of the Officers as has been done in the present case;
(C) That the order to abolish the Hill and Fuel Allowance retrospectively has allegedly been issued under the guidelines issued by the respondent No. 3 and the Government of India cannot issue any direction for the determination of the terms and conditions of service of Members of the petitioners' Association and others as it is the State Bank of India which is competent to determine the service conditions of the petitioners Association. The decision taken by the Authority concerned on the basis of the guidelines issued by respondent No. 3 is without any authority or power;
(D) The admissibility of Hill and Fuel Allowance and the Special Area Allowance are for different purposes, namely, the Hill and Fuel Allowance has been sanctioned keeping in view the topography of the station where the officer is posted at a particular height where he has to incur expenditure for fuel etc. for warming himself during winter season especially in snow bound areas. The purpose of granting Special Area Allowance is connected with the cost of living whereas the cost of living in the plain areas is less expensive than the cost of living in hilly areas is more expensive. Logically, therefore, to interlink these two separate allowances and allowing one by abolishing the other definitely tantamounts to defeat the purpose for which they were granted."
5. The petitioners Association on the aforesaid grounds prays for the above stated reliefs.
6. In the affidavit-in-reply filed on behalf of the respondents 1 and 2, Sh. J.S. Bhatnagar, Chief General Manager, State Bank of India, Chandigarh, has raised the preliminary objection that the writ petition is not competent as the petitioners Association had already availed alternative efficacious remedy by filing civil suit in the Court of Sub Judge (3) Shimla which was later on withdrawn and the writ petition discloses no violation of Fundamental Rights. On merit, it is contended that the Hill and Fuel Allowance was allowed to the petitioners Association in accordance with the State Bank of India (Determination of Terms and Conditions of Service) Order, 1979 which was based upon the guidelines issued by the Government of India. The Bank by virtue of Section 18 of the State Bank of India Act, 1955 is obliged to obey any direction emanating from the Government of India in the matters of policy involving public interest. 1979 Order was approved by the Central Board of the Bank in exercise of its powers under Section 43 of the State Bank of India Act, 1955. The Authority to pay Special Area Allowance has been vested with the Central Board or the Executive Committee of the Central Board under Para 23 (ii) of Order 1979. The decision for payment of the rates and places has been taken by the Executive Committee of the Central Board on the basis of the rates and places as decided by the Government of India. The Government of India issued guidelines to modify the schemes which were accepted and adopted by the Executive Committee of the Central Board of the respondent Bank vide Annexure P-2 to the writ petition. The Executive Committee of the Central Board in its meeting held on October 10, 1991 approved the changes in the scheme of Special Area Allowance on account of revised Government guidelines. According to the decision of the Executive Committee of Central Board the places where both "Special Area Allowance and Hill and Fuel Allowance" are payable, to the eligible officers to draw only one allowance whichever is higher and the officers are not entitled to both the allowances. Replying respondents have denied that the petitioners have become victims of wrong pleadings of the suit. 1979 Order was passed by the Central Board of the respondent Bank on the guidelines issued by the Government of India and it cannot be said as a result of bipartite agreement. The Executive Committee can deal with all matters within the competence of the Central Board in accordance with Resolution 46(i) and (ii) of State Bank of India General Regulations marked Annexure R-1. The respondents have further stated that there is no question of abolition of the Special Area Allowance as according to Annexure P-5 the Officers of the petitioners Association are only entitled for payment of one allowance which is higher out of two allowances. Hill and Fuel Allowance is related to the altitude of the place whereas Special Area Allowance is paid at places which are having difficult topography including high altitude places. The allowances are paid to meet the higher cost of living arising out of the difficult geographical or climatic conditions. Also it is contended that a sister Association of the petitioners Association in North East State of the respondent Bank filed a writ petition in the Gauhati High Court on the same and identical grounds which was allowed by the learned single Judge but the Division Bench in Writ Appeal No. 13/1992 set aside the said judgment of the learned single Judge dated September 30, 1993.
7. Respondent No. 3 Union of India has not filed any separate reply.
8. No rejoinder has been filed by the petitioners Association to the affidavit-in-reply riled by respondents 1 and 2.
9. I have heard learned counsel for the parties. Mr. Rajiv Sharma, learned senior Advocate appearing on behalf of the petitioners Association contended that the suit was filed by the petitioners Association under Banking Companies Act whereas the service conditions of the employees of the petitioners Association are governed by the State Bank of India Act, 4 1955. The State Bank of India Officers Service Rules are framed under Section 43 of the State Bank of India Act, 1955 whereunder the members of the petitioners Association are allowed Special Area Allowance and Hill and Fuel Allowance. The Service Conditions of the Members of the Petitioners Association could not be altered by or amended by the Government of India on the basis of which the memorandum dated November 26, 1991 Annexure P-5 was issued by the General Manager (Operations) of the Bank. The Service Conditions of the Members of the petitioners Association can only be altered or amended by amendment of the Rules and the Bank cannot abrogate its functions to outside authority on the basis of said guidelines not in conformity to the provisions of Section 18 of the Act. The learned counsel next contended that the Special Area Allowance was paid to the members of the petitioners Association on the basis of settlement between the Associations and the Bank whereas Hill and Fuel Allowance was paid on the basis of the altitude of the place where the officials of the bank are posted. He further submitted that the Conditions of the Service of the employees cannot be changed retrospectively without notice to the Associations and, therefore, the action of the respondents is in violation of the Principles of Natural Justice. Lastly it was contended that once the Members of the Petitioners Association have received both the allowances, the amounts paid to them may not be recovered.
10. Per contra Mr. K.D. Sood, learned counsel appearing on behalf of respondents 1 and 2 contended that the allowances admissible to the Members of the petitioners Association are simple concessions and they do not form part of the salary. Policy decision has been taken by the respondents to pay one allowance out of the two whichever is higher according to the topography and altitude of the place where the employee is posted. He contended that the entire controversy involved in the present case has been settled at rest by a Division Bench of Gauhati High Court in Writ Appeal No. 13 of 1992 and the writ petition deserves to be dismissed on the basis of the reasoning and finding recorded by the Division Bench which has attained finality.
11. I have given my anxious and thoughtful considerations to the respective contentions of the learned counsel for the parties.
12. It is not in dispute that the petitioners Association filed a Civil Suit before the Sub Judge (3) Shimla in the month of December, 1991 challenging the action of the respondents. The Civil Suit purported to have been filed under bona fide belief seeking protection of various provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 was later on withdrawn by the petitioners Association. The Members of the petitioners Association are governed by the provisions of the State Bank of India Act, 1955. Section 18 of the said Act provides that in the discharge of its functions (including those relating to the subsidiary bank) State Bank shall be guided by such directions in the matters of policy involving public interest as the Central Government may in consultation with the Governor of the Reserve Bank and the Chairman of the State Bank give to it. All the directions by the Central Government shall be given through the Reserve Bank and, if any question arises whether a direction relates to a matter of policy involving public interest the decision of the Central Government thereon shall be final. State Bank of India Officers' Service Rules are framed under Section 43 of the State Bank of India Act, 1955, Chapter-V of the said Rules deals with allowances which are permissible to the employees of the Bank. Rule 23(ii) provides with a Special Area Allowance to the employees of the Bank at such places and at such rates as may be decided by the Central Board or the Executive Committee from time to time. Under Rule 23(x) Hill and Fuel Allowance is admissible to the Officer if he is serving in a place mentioned in Column (1) of the table at the rate mentioned in Column (2) thereof against that place. The Members of the petitioners Association posted in different parts of the State of Himachal Pradesh were allowed to be paid both the said allowances. By memorandum dated December 7, 1990 (Annexure P-2) issued by General Manager (Operations) of respondents 1 and 2 to all Branches/Offices in Chandigarh Circle certain guidelines were modified whereunder the Executive Committee of the Central Board, in its meeting held on November 15, 1990 had approved the improvements in service conditions in respect whereof understanding was arrived at earlier between the IBA and Officers Organizations. Alongwith the memorandum Annexure-A under the head Salient features of the improvements made in respect of certain provisions as approved by the Government dealing with the payment of various allowances to the members of the State Bank of India who are posted, in different States of the country including Himachal Pradesh. Special Area Allowance was to be paid to Officers/employees on and w.e.f. January 1, 1990 at places indicated in Column (1) and the amounts as setout in Column (2) till such time they are withdrawn or modified either wholly or partially. By Memorandum dated November 26, 1991 (Annexure P.5) the respondents 1 and 2 issued revised guidelines in respect of Special Area Allowance. Under the modified instructions the Executive Committee of the Central Board in their meeting held on October 3, 1991 had approved changes in the Scheme of payment of Special Area Allowance. The Executive Committee of the Central Board decided that in terms of the revised guidelines if Special Area Allowance and Hill and Fuel Allowance are both payable at any place then the officer is eligible to draw only the higher of the two allowances and not both. Modified instructions also provide that if such higher of the two allowances is less than the aggregate or Special Area Allowance and Hill and Fuel Allowance drawn by the Officer on December 31, 1989 then such difference shall be protected as personal allowance (Special Area) till such time the Officers remain in that place. It was also suggested that a suitable recovery would have to be made from those officials drawing both the allowances w.e.f. January 1, 1990 or later.
13. The arguments raised by the learned senior counsel for the petitioners Association in this writ petition are identical to the contentions made on behalf of the State Bank of India Officers Association North Eastern Circle before the learned Judges of the Gauhati High Court in Writ Appeal No. 13 of 1992. In paragraph 6 of the said judgment (Annexure R-2) it is stated that the State Bank of India clarified that by a subsequent order, February 1, 1992 has been fixed the date on which the change would be brought into force. Therefore, the alleged vice of retrospectivity w.e.f. January 1, 1990 no longer subsisted. They said reasoning will hold good in the present case as the Members of the petitioners Association are similarly situated.
14. Section 2(b) of 'the Act' defines "Central Board" to mean the Central Board of Directors of the State Bank. By virtue of Section 17 of 'the Act' the general superintendence and direction of the affairs and business of the State Bank are entrusted to the Central Board which may exercise all powers and do all such acts and things as may be exercised or done by the State Bank and are not by this Act expressly directed or required to be done by the State Bank in general meeting. As noticed above Section 18 authorizes the Central Board in discharge of its functions to be guided by such directions in matters of policy involving public interest as Central Government may give to it in consultation with the Governor of the Reserve Bank and the Chairman of the State Bank. Section-19 prescribes the composition of the Central Board. It consists of various categories of persons and other authorities.
15. The Central Board may constitute such and so many Committees including an Executive Committee, of itself as it deems fit to exercise such powers and perform such duties as may, subject to such conditions, if any, as the Central Board may impose, be delegated to them by the Central Board. The Executive Committee which took the decision modifying the instructions contained in memorandum dated December 7, 1990 (Annexure P-2) and subsequent memorandum dated November 26, 1991 (Annexure P-5) which has been challenged in this writ petition is the Executive Committee contemplated in Section 30 of 'the Act'. Section 50 authorizes Central Board in consultation with the Reserve Bank and with the previous sanction of the Central Government to make regulations not inconsistent with 'the Art' and the Rules made thereunder, to provide for all matters for which provision is expedient for the purpose of giving effect to the provisions of 'the Act'. Power to frame Regulations regarding formation of Committees of the Central Board and the delegation of powers and functions of the Central Board to such Committees and the conduct of business in such Committees, as prescribed in sub-section (2)(g).
16. By virtue of Section 43 of 'the Act', State Bank of India Officers Service Rules were framed. Under Section 17 of the Act it is the Central Board which functions on behalf of the Bank. It is by virtue of such power that Central Board is authorised to act on behalf of the State Bank. The Executive Committee can exercise such powers and perform such duties as may be imposed or delegated to it by the Central Board by virtue of Section 30 of the Act. Special Area Allowance at such places and at such rates was to be paid to the Members of the petitioners Association as may be decided by Central Board or the Executive Committee from time to time by virtue of Rule 23 (ii). Reading Sections 17, 30 and 43 of 'the Act' with Rule 23(ii) of the Rules, there can be no doubt that the power of prescribing terms and conditions of Service of Officers and Employees of the State Bank of India can be exercised by the Executive Committee. Therefore, there is no doubt that the Executive Committee has the power to bring about the changes in the terms and conditions or appointment and service of the Officers and Employees of the Bank, The learned Judges of the Division Bench of Gauhati High Court have held that the Scheme of the management provided in 'the Act' and the provisions in the Regulations the delegation of power on the Executive Committee by the Central Board is contemplated by Section 30 of 'the Act'. The Statute itself confers unlimited powers of delegation on the Central Board and the Board has so delegated all its powers to the Executive Committee by virtue of the Regulation 46(2) and the contention of the employees of the State Bank of India that such delegation would be contrary to the Statute could not be accepted. It has also been held that the Special Area Allowance is admissible in regard to such areas as are declared by the Central Board or the Executive Committee. So far as the Hill and Fuel Allowances is concerned the prescription is given on the basis of altitude. Both allowances are admissible only where an officer works at a particular place which is above the prescribed altitude and which is also a Special Area. The Special Area Allowance is based on the nature of the area and the Hill and Fuel Allowance is dependent on nature of the area.
17. In the teeth of the reasoning and finding recorded by the Division Bench dated September 30, 1993 in Writ Appeal No. 13 of 1992 a copy whereof is placed on record as Annexure R-2, no relief can be granted to the petitioners' Association in this case. The entire I controversy stands settled by the Bench.
18. The ratio of the law as laid down in Ex-Major N. C. Singhal v. Director General, Armed Forces Medical Services, New Delhi and Anr. AIR 1972 SC 628 : 1972 (4) SCC 765 : 1972-I-LLJ-249, relied upon by the learned senior counsel for the petitioners Association will not be applicable in the peculiar facts and circumstances of the present case. In that case the Supreme Court has said that the Government has no power to alter or modify the conditions of service of a Government Servant with retrospective effect to the prejudice of the Government Servant when the conditions of service of persons serving the Union or a State is prescribed by Rules framed under Article 309 of the Constitution of India.
19. In State Bank of India v. Yogendra Kumar Srivastava and Ors., AIR 1987 SC 1399 : 1987 (3) SCC 10 : 1988-I-LLJ-41, it is held that unless the statute under which the Rules are framed by the Rule making Authority does not specifically authorize the making of the Rules with retrospective effect such authority cannot frame any Rule with retrospective effect. As noticed above in the present case respondents have fixed February 1, 1992 as the date on which the change would be brought into force, therefore, the retrospectivity w.e.f. January 1, 1990 no longer subsists as held by the learned Judges of Gauhati High Court.
20. In LIC of India v. D.J. Bahadur and Ors., AIR 1980 SC 2181 : 1981 (1) SCC 316 : 1981-I-LLJ-l, the question involved was about the period of settlement between the Life Insurance Corporation and its Class-Ill and Class-IV Employees regarding payment of Annual Cash Bonus. In the present case the payment of Special Area Allowance and Hill and Fuel Allowance are not based on settlement between the employees of the State Bank of India and the State Bank of India.
21. The revised guidelines issued by the Government of India are in the nature of Public Policy and on that basis memorandum dated November 26, 1991 (Annexure P-5) was issued by respondent Bank. It cannot be said that the Government has in any way interfered with in I running of the State Bank of India. Therefore, | the petitioners Association cannot derive any help from the judgment of the Supreme Court in Managing Director, Orissa Industrial Infrastructure Development Corporation Bhubaneswar v. Sarat Chandra Patnaik and Anr., 1996 (4) SCC 590.
22. In CMP No. 3695/1993 a Division Bench of this Court on December 13, 1993 passed interim order staying the operation of Annexure P-5 dated November 26, 1991. The petitioners were allowed to continue to avail the Special Area Allowance as they have been availing before the impugned order was passed. Subsequently, on September 21, 1994 it was clarified that by the aforesaid stay order dated December 13, 1993 the operation of Annexure P-S has been stayed and for that reason the petitioners and its members are not entitled to claim any benefit under the said order. They will however, continue to get the allowance as they were getting before the aforesaid order and the stay order was directed to be read in the context of the said explanation. Now if after order dated September 21, 1994 the petitioners have been paid Special Area Allowance and Hill and Fuel Allowance by respondents 1 and 2 to their employees till date they shall be entitled to draw only the higher of the two allowances and if excess payment is made to them, it shall only be just and proper not to recover any excess amount already paid to them. (Sahib Ram v. State of Haryana and Ors., 1995 Supp. (1) SCC 18, Shyam Babu Verma and Ors. v. Union of India and Ors., 1994 (2) SCC 521 : 1994-I-LLJ-815, Nand Kishore Sharma and Ors. v. State of Bihar and Ors., 1995 Supp. (3) SCC 722, B.S. Sindhu v. Union of India and Ors., 1971 (1) SLR 600, I and S.H. Shirekar v. Union of India and Ors., 1985-I-LLJ-91 (Guj).
23. No other point was urged by the learned counsel for the parties.
24. For the reasons aforementioned, there is no merit in this writ petition and it is dismissed accordingly. The parties shall bear their own costs.