Holding

The award of the National Industrial Tribunal shall be treated as an award of a tribunal under the Industrial Disputes Act, 1947, and RRB employees may seek its implementation under that Act regardless of whether they fall within the definition of "workman" in Section 2(s).

Summary

The All India Regional Rural Bank Employees Association and the All India Gramin Bank Workers Organisation filed writ petitions seeking pay parity between Regional Rural Bank (RRB) employees and those of nationalised commercial banks. A National Industrial Tribunal awarded that RRB employees be placed on the same pay scales as comparable state and sponsor‑bank employees and ordered payment of arrears up to 30 December 1990. The Government formed the Basu Committee to devise a scheme for discharging the arrears, which proposed staggered instalments based on the financial condition of each RRB. The Supreme Court directed that the Tribunal’s award be treated as an award of a tribunal under the Industrial Disputes Act, 1947, allowing RRB employees – even if not "workmen" under Section 2(s) – to seek implementation in the appropriate industrial dispute forum, and it approved a detailed payment schedule with no interest and placed responsibility on the Union of India to ensure compliance.

Issues considered

Whether the award of the National Industrial Tribunal constitutes an award under the Industrial Disputes Act, 1947.
Whether employees of Regional Rural Banks, irrespective of the definition of "workman" in Section 2(s), can invoke the remedies of the Industrial Disputes Act for implementation of the award.
How the liability for arrears awarded by the Tribunal should be discharged among RRBs with varying financial conditions.

Legislation cited

Subjects

pay parityindustrial disputesaward implementationRegional Rural Banksarrears paymentSection 2(s)employee rightsNational Industrial Tribunal

Judgment

G.S. KAUSHIK AND ANR. A
v.
UNION OF INDIA AND ORS.

APRIL 12, 1996
B
[S.C. AGRAWAL AND G.T. NANA VAT!, JJ.]

Labour Law :

Indust1ial Disputes Act, 1947-S.2(s) :
c
Awarcf-Employees of Regional Rural Banks and Nationalised Com-
mercial Bank-Paiity in emoluments between-Passed by National Jndus/lial
Tiibunal-Directions issued for its implemc11tatiolt-Co11stitutio11 of India
1950, A1t. 32.
D
The petitioners, All India Regional Rural Bank Employees Associa-
tion and All India Gramin Bank Workers Organisation representing the
employees of the Regional Rural Banks (RRBs.) filed writ petitions in this
Court seeking parity in emoluments between the employees of the Regional
Rural Banks inter seas well as the employees of the Nationalised Commer-
cial Banks. In Accordance with the directions by this Court giving in the E
said u·rit petitions, the Central Government constituted a National In-
dustrial Tribunal to decide the question relating to pay, salary, and other
benefits payable to the employees of RRBs.

The Tribunal gave its award holding that upto August 31, 1987 the F
employees of RRBs should be extended the pay scale and allowances as are
adnaissible to the State Govern1nent einployces in comparable posts and
status and that with effect from September l, 1987 the said employees shall
be entitled to the pay scales, allowances and other benefits on par with the
employees of comparable levels in corresponding posts of respective spon- G
sor banks. With regard to equation of posts, the Tribunal had held that
the Central Government might decide the same in consultation with such
authorities as it might consider necessary. The Central Government ap-
pointed an E!1uation Committee whose report had been accepted by the
Central Government whereby RRBs employees had been brought into the
sponsor bank scales of pay with effect from September 1, 1987. H
225
226 SUPREME COURT REPORTS [1996] SUPP.1 S.C.R.

A The petitioners filed the present applications in this Conrt seeking
directions regarding implementation of the directions given by the
Tribunal in the award. The main grievance of the applicants was regarding
non-payment of arrears payable to the employees of RRBs in terms of the
award of the Tribunal. This Court directed the respondents to prepare a
scheme in consultation with the Employees' Association with regard to the
B
discharge of the said liability of payment of arrears. In pursuance of the
said directions the Central Government constituted the 'Basu Committee',
to prepare a scheme with regard to payment of arrears to all the employees
of RRBs as a consequence of the implementation of the award of the
Tribunal read with the report of the Equation Committee, which submitted
C its report.

Disposing of the applications, this Court directed

1. The award of the National Industrial Tribunal shall be treated as
an award of a tribunal under the Industrial Disputes Act, 1947 and it will
D be open to the employees of Regional Rural Banks, irrespective of the fact
whether they fall within the ambit of the expression 'workman' as defined
in Section 2(s) of the Industrial Disputes Act or not, seek their remedies
for implementation of the award in respect of those matters before the
appropriate forum under the Industrial Disputes Act. [233-D-E]
E
2. The liability for payment ol arrears payable to the employees of
the RRBs for the period upto December 30, 1990 in terms of the award of
the Tribunal shall be discharged by the respondents in the following
manner : [232-B-C]

F (a) 53 RRBs, which are in profit, shall make payment as per the
scheme suggested by Basu Committee and will be operative from February
20, 1996. [232-C) •

(b) The RRBs which are being identified for restructuringlrevamp-
G ing will make payment as per the scheme suggested by Basu Committee
and will be operative with effect from August 20, 1996. [232-D)

(c) As regards remaining RRBs the scheme as suggested by Basu
Committee would apply subject to the modification that the amount of
arrears shall be paid in four instalments instead of three instalments as
H suggested by Basu Commitee and instalment will be for 25% of the amount
G.S. KAUSHIK v. u.o.r. 227

of arrears. The first instalment would be payable by August 20, 1997 and A
other instalments would be payable after yearly intervals. [232-E-F]

(d) The employees falling in categories (b) and (c), as mentioned at
page No. 74 of the Report of Basu Committee, shall be paid all the arrears
in lump sum in one instalment. Jn respect of 53 RRBs, which are in profit,
the said amount, if not paid, shall be paid by April 30, 1996. Jn respect of B
RRBs under restructnring/ revamping and remaining RRBs, the said
amount shall be paid by August 20, 1996 and August 20, 1997 respectively.
(232-F-G]
(e) The employees falling in categories (d) and (e) as mentioned at
page 74 of the report of the Basu Committee shall be paid the arrears in C
two instalments as suggested in the scheme prepared by Basu Committee.
Jn respect of RRBs under restruduring/ revamping and remaining RRBs,
the first instalment will be payable by Apdl 30, 1996, Angus! 20, 1996 and
August 20, 1997 and the second instalment will be payable by February 20,
1997, August 20, 1997 and August 20, 1998 respectively. (232-H; 233-A-B] D
(0 No interest will be payable on amount of arrears to be paid as
per these directions. (233-B]

(g) It will be the responsibility of the Union of India to ensure that
the payment are duly made as per these directions. (233-C] E
CIVIL ORIGINAL JURISDICTION : I.A. No. 1

IN

Writ Petition (c) No. 132, of 184 Etc.
F
Under Article 32 of the Constitution of India.

Dipankar P. Gupta, Solicitor General and Rajinder Sachhar, K.T.
Anantharaman) for Khaitan & Murthy, AK. Goel, Mis. Sheela Goel, S.N.
Terdol, Ms. Lakshmi Aiyangar, R.P. Srivastava, C.V. Subba Rao, R.N. G
Keshwani, Vijay Kumar Verma, P.K. Chakraborty, H.S. Parihar, Rishi Kesh
and Ms. A. Subhashini, for the appearing parties.

The Judgment of the Court was delivered by

S.C. AGRAWAL, J. : These applications for directions have been H
228 SUPREME COURT REPORTS [1996) SUPP. 1 S.C.R.

A filed in Writ Petitions "los. l32 of 1984 and 7149-50 of 1982. In the said
Writ Petitions filed by the All India Regional Rural Banks Employees
Association and the Ail India Gramiu Bank Worker's Organisation repre-
senting the employees of the Regional Rural Banks (for short 'RRBs'), the
petitioners sought parity in emoluments between the employees of RRBs
imer se as well as the employees of Nationalised Commercial Banks. The
B
said Writ Petitions were disposed of by this Court by the following order
dated September 1, 1987 :

"We are happy to know that the Central Government had agreed
to appoint a National Industrial Tribunal to decide the question
c relating to pay, salary, other allowances and other benefits payable
to the employees of Regional Rural Banks constituted under the
Regional Rural Banks Act, 1976. The learned counsel for the
petitioners also agreed that a reference may be made lo the
proposed Tribunal. In view of the above, it is not necessary to
pronounce on the questions of law raised in these writ petitions
D
before us. We leave all the contentions. The Central Government
shall refer the dispute to the Tribunal, preferable to a retired Chief
Justice of High Court, within four weeks from today. We hope that
the Tribunal will pronounce its award as expeditiously as possible.
These writ petitions are disposed of accordingly."
E
In accordance. with the directions given by this Court, the Central
Government, by order dated.November 26, 1987, constituted a National
Industrial Tribunal (hereinafter referred to as 'the Tribunal') consisting of
Hon'ble Mr. Justice S. Obul Reddy, retired Chief Justice of Andhra
p Pradesh High Court, as its Chairman. By the said order the disputes
relating to pay, salary, other allowances and other benefits payable to the
employees of RRBs in terms of the pleadings of the parties in Writ
Petitions (Civil) Nos. 7149-50 of 1982 and 132 of 1984 filed in this Court
were referred to the Tribunal. The Tribunal gave its award dated April 30,
1990, wherein the Tribunal has held that upto August 31, 1987 the
G employees of RRBs should be extended the pay scale and allowances as
are admissible to the State Government employees in comparable posts
and status and that with effect from September 1, 1987 the said employees
shall be entitled to the pay scales, allowances and other benefits on par
with the employees of comparable levels in corresponding posts of respec-
H live sponsor banks. With regard to equation of posts, the Tribunal has held
G.S. KAUSHIK v. U.0.1. [S.C. AGRAWAL, J.] 229

that the Government of India may decide the same in consultation with A
such authorities, as it may consider necessary. The Government of India
appointed an Equation Committee on October 5, 1990 under the Chair-
manship of Shri P. Kotaiah, the then Managing Director of the National
Bank for Agriculture and Rural Development (for short 'NABARD'). The
Equation Committee submitted its report on January 8.1991 which has B
been accepted by the Government of India and instructions have been
issued to ail the implementing agencies by circulars dated February 22,
1991 whereby RRBs employees have been brought into the sponsor bank
scales of p_ay with effect from September 1, 1987. The salaries of employees
in the employment of RRBs are being paid in the revised scales from
January 1, 1991. C

By these applications the applicants are seeking directions regarding
implementation of the directions given by the Tribunal in the award. The
main grievance of the applicants is regarding non-payment of arrears
payable to .the employees of RRBs in terms of the award of the Tribunal. D
As per the counter affidavit filed on behalf of the Union of India the said
liability is about Rs. 220 crores. By order dated September 12, 1994, the
Court directed the Union of India and NABARD to prepare a scheme in
consultation with the Employees' Association with regard to the discharge
of the said liability. In pursuance of the said directions, the Government of
India constituted a Committee under the Chairmanship of Shri K. Basu E
General Manger, NABARD, (hereinafter referred to as 'Basu
Committee'), to prepare a scheme with regard to payment of arrears to all
the employees of RRBs as a consequence of the implementation of the
award of the Tribunal read with the report of the Equation Committee.
Basu Committee, in its report dated February 22, 1995, has suggested a F
scheme for payment of the arrears payable to the employees of RRBs in
t.~r1ns of the award. Jn respect of the einployees who are in the employment
of RRBs as on the date of pronouncement of the Scheme and employees
who were/are dismissed/whose services were/arc terminated/who ceased to
be in employment of the RRBs by any other method save those who G
retired/resigned/deceased whether prior to or after the pronouncement of
the Scheme, the Scheme envisages payment of the arrears in three instal-
ments. The first instalment to be paid within six months from the date of
pronouncement of the scheme by this Court, the second instalment to be
paid not later than one year from the date of payment of the first instal-
ment, and the third instalment to be paid not later than one year from the H
230 SUPREME COURT REPORTS [1996] SUPP. 1 S.C.R.

A date of payment of the second instalment. As per the said scheme the first
instalment would cover 50% of the arrears while the second and third
instalments each would be in respect of 25% of the said arrears. As regards
employees who have retired/resigned upto and including the date of
pronouncement of the scheme by this Court and in respect of legal heirs
of deceased employees who died either while in service or otherwise upto
B
and including the date of pronouncement of the scheme, it has been
suggested that the entire payment should be paid lump sum in one instal-
ment. As regards those employees who retired/resigned after the date of
pronouncement of the scheme by this Court and legal heirs of deceased
employees who died either in service or otherwise after the date of
c pronouncement of the scheme by this Court, it has been suggested that the
payment may be made in two instalments of 50% each Basu Committee
suggested that the funds for the purpose of payment should be provided
by the Government of India in the form of soft loan and there shall be a
moratorium for repayment of the loan by the RRBs to the Government of
D India for a period of five years from the date of the receipt of last
instalment by RRBs from the Government of India and the repayment of
the loan by RRBs to the Government of India after the moratorium period
shall be as determined by the Government of India in co11o5ultation with
each RRB separately. With regard to the rate of interest to be charged by
the Government of India from the RRBs, it is suggested that it shall not
E exceed one fourth of the Bank Rate prevailing as on the date of pronoun-
cement of the scheme by this Court.

The response of the Union of India to the scheme suggested by the
Basu Committee is contained in the affidavit of Shri Sudhir Shrivastava,
F Deputy Secretary, Ministry of Finance, Department of Economic Affairs,
Banking Division, dated February 20, 1996. In the said affidavit it has been
stated that providing loan to RRBs for the purpose of payment of arrears
as recommended by Basu Committee has been considered in depth and
was not found appropriate for the following reasons :

G
"(a) The RRBs are in wide different and varying financial position
and uniformity may not be consistent with their widely different
fi.nancial performance and achievements. The provision of loan
from Government of India, would require repayments and thus
H burden the RRBs.
G.S. KAUSH!K v. U.0.1. [S.C. AGRAWAL. J.] 231

(b) The provision of equity on the other hand is being made as a A
part of a comprehensive restructuring package. Further the servic-
ing of equity is optional and contingent on generation of profits.

(c) Any decision regarding RRBs should ideally also reflect the
views of the other two shareholders, namely, the sponsor bank and
State Governments. B

The equity routs necessarily requires examination by ·the said
·shareholders of the problems of continuing losses and financial
implications a.rising therefrom.

(d) The Government considers it infeasible and inappropriate to c
provide loans to RRBs towards financing revenne expenditure.
This would result in similar demands from other undertakings and
increasingly strain and drain Government's budgetary resources.
Government's view is to put together a package that will enhance
the viability of RRBs. The long term interests of the employees D
are also best subserved in this manner. The scheme for payment
of arrears, as stated above, is a bona fide attempt at reconciling
the interests of the depositors, the borrowers, the RRBs themselves
and the employees. Respondent No. 1 respectfully submits that the
Hon'ble Court may be pleased to approve the measures in the facts
and circumstances of the case stated hereinbefore." E

In the said affidavit the following course of action has been sug-
gested:
\
"(i) 49 out of 196 RRBs have been taken up for comprehensive
restrncturing by way of infusion of additional share capital. These F
49 banks along with 4 RRBs in profit (in all 53 RRBs) have already
been asked to make payments in accordance with the scheme
suggested by Basu Committee.

(ii) At least 50 more RRBs are being identified for restrnctur- G
ing/revamping. Such banks will also start paying the arrears as per
the scheme suggested by Basu Committee, within six months from
date.

(iii) It is submitted that the remaining RRBs will also commence
payment within six months from date but they may be allowed to H
232 SUPREME COURT REPORTS [1996J SUPP. J S.C.R.

A pay in four equal annual instalments."

The learned Solicitor General of India, appearing for the Union of
India, has submitted that the number of RRBs in the category li) men-
tioned above is now 53.

B Having regard to the submissions contained in the affidavit of Shri
Sudhir Shrivastava, we direct that the liability for payment of arrears
payable to the employees of the RRBs for the period upto December 30,
1990 in terms of the award of the Tribunal shall be discharged in the
following manner :

C (1) 53 RRBs, as mentioned in para 4(i) of the affidavit of Shri Sudhir
Srivastava, shall make payment as per the scheme suggested by Basu
Committee in its report dated February 22, 1995. The said scheme in
respect of these banks will be operative with effect from February 20, 1996.

(2) The RRBs falling under para 4(ii) of the affidavit of Shri Sudhir
D
Srivastava, will make payment as per the scheme suggested by Basu Com-
mittee. In respect of these Banks the scheme will be operative with effect
from August 2G, 1996.

(3) As regards remaining RRBs falling under para 4(iii) of the
E affidavit of Shri Sudhir Srivastava, the scheme as suggested by.Basu Com-
mittee would apply subject to the modification that the amount of arrears
shall be paid in four instalments instead of three instalments as suggested
by Basu Committee and each instalment will be for 25% of the amount of
arrears. The first instalment would 1.Je payable by August 20, 1997 and other
instalments would be payable after yearly intervals.
F
(4) The employees falling in categories (b) and (c), as mentioned at
page No. 74 of the Report of Basu Committee, shall be paid all the arrears
in lump sum in one instalment. In respect of RRBs mentioned in para 4(i)
of the affidavit of Shri Sudhir Srivastava the said amount, if not paid, shall
G be paid by April 30, 1996. In respect of RRBs mentioned in paras (ii) and
(iii) of the affidavit of Shri Sudhir Srivastava, the said amount shall be paid
by August 20, 1996 and August 20, 1997 respectively.

(5) The employees falling in categories (d) and (e) as mentioned at
page 74 of the report of the Basu Committee shall be paid the arrears in
H two instalments as suggested in the scheme prepared by Basu Committee.
<~.S. K1\liSl!IK 1·. ll.O.I. [S.C.NiRi\\V,\l.,J.[ 233

ln rc,pccl of RRB, mentioned in paras 4(i), 4(ii) and 4(iii) of the affidavit A
nf Shri Sudhir Sriva.'>taYa. the first in~,taln1ent \\'ill he payable by ;\pril .10,
JlJ 1J(l, Au~U.\I lfi, \l)'.)(1 and ..\ugust :?.n, 1997 and the :-iccond in:~taln1cnt \Vil\
he 11~1yahk: h) February 20, 1997, .A.11g:ust 20: 19')7 and 1\ugu~t 20, 1998
n.:::-pc{:I l\\.:!y.

((1) Nu interest \\'ill be paj'ahlc 1_in ctrnnunt ()f ~irrears lo be paid as B
per thc~,c directinns.

(7) It \\·ill be th·.:: r<.:sponsibility of the Union of India Lo cnsu1c th:.it
the payn1c11t are July n1adc as per these direclions.

Apart from the payment of arrears, the petitioners ha\'e alsi.J snugh1 c
directions in respect of other directions given by the "rrihunal in !he A\\·ard.
We do nol propose to deal with these gri~vances of lhc pc!iLiuncr~. \\!;,:.
lhcreforc, direct that the a\vard of the National Industrial Tribun;d :,h.d!
be treated as an award of a tribunal under the Industrial Disputes Art.
1947 and it will be open to the employees of RRBs, irrespective of the facl
L'
\vhcther they fall within the an1bit of lhe expression \vorkrnan' as defined
in Section 2(s) of the Industrial Disputes Act or not, to seek their remedies
for implementation of the a\vard in respect of those matters hefore the
appropriate forum under the Industrial Disputes Act. The applications for
directions are disposed of accordingly. No costs.
E
V.S.S. Matter disposed of.