Supreme Court of India

KSHETRIYA KISAN GRAMIN BANKversusD.B. SHARMA AND ORS.

Citation: 2000 INSC 527
Decided: 15 November 2000
Disposal: Appeal(s) allowed
Bench: G B PATTANAIK

Holding

The Supreme Court held that the Tribunal applied parity, the Equation Committee's sponsor‑bank based classification is valid and not violative of Article 14, and the High Court erred in interfering with the expert Committee’s decision.

Summary

The appellant Kshetriya Kisan Gramin Bank, an RRB sponsored by Uttar Pradesh Co‑operative Bank, challenged a High Court order that directed its officers to receive the same pay scales as officers of other RRBs sponsored by nationalised banks. The dispute originated from employees' petitions for pay parity with nationalised/commercial banks, which were referred to an Industrial Tribunal. The Tribunal held that the employees were entitled to parity with their respective sponsor banks, not to the doctrine of "equal pay for equal work". The Central Government formed an Equation Committee which recommended that the appellant bank's officers be equated with those of its own sponsor bank. The High Court erred by ignoring the Tribunal’s distinction and by interfering with the expert Committee’s classification. The Supreme Court held that the Committee’s classification based on sponsor bank was constitutionally valid, the Tribunal applied parity not equal‑pay principle, and the High Court could not tamper with the expert body’s decision. Consequently, the High Court judgment was set aside and the appeal allowed.

Issues considered

Whether the Industrial Tribunal applied the principle of "equal pay for equal work" or the principle of parity.
Whether the Equation Committee's classification of RRB officers based on their sponsor bank violates Article 14 of the Constitution.
Whether the High Court could validly interfere with the findings of the expert Equation Committee under Article 226.
Whether the pay structure of the appellant RRB should be determined by parity with its sponsor bank or with nationalised/commercial banks.

Legislation cited

Regional Rural Banks Act, 1976s. 17, s. 3, s. 6(2)

Subjects

Regional Rural Bankspay parityequal pay for equal workArticle 14Article 226Equation CommitteeIndustrial TribunalSponsor bankclassificationservice lawconstitutional law

Judgment

A KSHETRIYA KISAN GRAMIN BANK
v.
D.B. SHARMA AND ORS.

NOVEMBER 15, 2000

B [G.B. PATTANAIK, U.C. BANERJEE ANON. SANTOSH HEGDE, JJ.]

Service Law:

Regional Rural Banks Act, 1976-Sections 3, 6(2) & 17-Parity of
C pay-Equation-Employees of Regional Rural Banks seeking parity with
counterparts of nationalised or commercial banks-Equation Committee
recommending equation with counterparts of respective Sponsor Banks-All
Regional Rural Banks except Appellant Bank Sponsored by nationalised or
commercial banks-Appellant bank sponsored by V.P. Co-operative Bank
D Ltd-Equation challenged by employees of appellant bank-Held, equation
in consonance with second proviso to Section 17(1)-Concept of 'equal pay
for equal work' and 'claim of parity with others' different-Principle of 'equal
pay for equal work' not applied-Discrimination alleged-Whether equation
unconstitutional-Classification-Even Single institution can form class by
itself-Sponsor Bank plays vital role in establishment of Rural Banks-
E Classification on basis of Sponsor Bank valid-Held, equation not
unconstitutional-Constitution of India, 1950-Article I 4.

Constitution of India-Article 226-Interference-Scope of-Equation
Committee constitutedJor equation of pay-Committee an Expert Body
F consisting of specialised personnel-Decision and conclusion of committee
challenged-No a/legation of malice or extraneous consideration-High
Court tinkering with decision and conclusion of Committee-Whether
proper-Held, not proper.

G
Appellant is Regional Rural Bank established under Regional Rural
Banks Act, 1976 and sponsored by Uttar Pradesh Co-operative Bank Limited.
-
Upon Writ Petition being filed by employees of Regional Rural Banks seeking
parity in respect of pay, salary, allowances and other benefits with employees
of Nationalised Banks in corresponding or comparable posts, Central
Government referred said disputes to Industrial Tribunal. Tribunal held that
H officers and employees of Regional Rural Banks were entitled to claim parity
638
KSHETRIYA KISAN GRAM IN BANK v. D.B. SHARMA 639
with officers and other employees of sponsor banks and held that equation of A
posts and consequent fixation of new scales of pay, etc. should be decided by
Central Government. Thereafter, Central Government constituted an Equation
Committee and referred award to it which recommended equation of officers
- "- and employees of Regional Rural Banks with the counterparts of their sponsor
banks. Pursuant to said recommendations, Union Government issued B
notification under Proviso to sub-section (1) of Section 17 of the said Act
equating Branch Managers' post and pay of appellant bank with post and pay
of Assistant Manager ofU.P. Cooperative Bank Ltd.

Officers of Appellant Bank filed writ petition challenging the said
notification which was allowed by the High Court on the ground that Tribunal C
had accepted claim of employees of Appellant Bank that they are entitled to
pay scales which are given to employees of Commercial Banks; that nature
of job performed by officers of appellant bank and other Regional Rural Banks
sponsored by commercial or nationalised banks is similar; and that distinction
made by Equation Committee is in violation of the principle ' equal pay for
equal work'. High Court directed Central Government not to make any D
distinction between officers and employees of appellant bank and other
Gramin Banks and further directed that Assistant Branch Managers of
Appellant Bank Should get same scale of pay as Assistant Managers of other
Gramin Banks sponsored by Nationalised Banks. Aggrieved by the judgment
of High Court, Appellant Bank has filed the present appeal. E

Appellant-Bank contended that Tribunal had specifically negatived
applicability of plea of equal pay for equal work and had applied principle of
1 parity; that pay structure of sponsor bank was the relevant guiding factor in
determining pay structure of employees of Gramin Bank in view of Second
proviso to sub-section (I) of Section 17 which was taken into consideration F
by Tribunal while making its recommendation but ignored by the High Court
and since appellant bank was not sponsored by Nationalised or Commercial
bank, its employees cannot be equated with employees of other Regional Rural
Banks sponsored by Nationalised banks; that appellant bank constituted a
class by itself and having regard to sponsorsbip, such classification was G
.. permissible and would not violate Article 14; that giving effect to directions
of the High Court would lead to absurd consequences as pay scales of sponsor
bank would also have to be raised; and that decision of Expert Body appointed
for equation of posts or salary should not be easily interfered with by Courts.

Respondent contended that Regional Rural Banks Employees are H
640 SUPREME COURT REPORTS [2000) SUPP. 4 S.C.R.

A entitled to claim parity with employees of Nationalised and Commercial Banks
on the ground of similarity of duties and function which would be within the
guidelines contained in second proviso to sub-section (I) of Section 17 of the
Act; that Equation Committee could not have decided pay structure of
employees of Appellant Bank contrary to award of tribunal which was accepted A, ..

B by Central Government; and that conclusions of High Court are based on
findings of Tribunal.

Allowing the Appeal, the Court

HELD : l. The Tribunal never applied the principle of 'equal pay for
equal work' and on the other hand was of the view that the employees of the
C Regional Rural Banks will 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. The concept of 'equal pay for equal work' and the concept
of 'claim of parity with some others' are two different concepts and the
conclusion of the High Court having been based on a mis-reading of the
D findings of the Tribuna~ the said conclusion is vitiated and must be set aside.
(648-F; 651-C)

2. The Equation Committee held that whereas the officers and employees
of the Regional Rural Banks other than the appellant bank can be equated
with the officers and employees of their sponsor banks namely the Nationalised
E Banks or the Commercial Banks, but so far as the officers of the appellant
bank are concerned, they have to be equated with the officers ofits own Sponsor
Bank namely the U.P.. Cooperative Bank. There is no infirmity with the
Equation made by the Equation Committee on the basis of the pay structure of
the employees of the.respective Sponsor Banks and the same is in consonance
with the directions of the tribunal as well as the second proviso to sub-section
F (1) of Section 17. It is too well settled that even a single institution can form
a class by itself and while deciding the question ofviolatiop of Article 14 what
is required to be found out is whether there are any reasonable basis on which
a single person or group of persons are left out of the group and whether
there is any rational relatfon for such differentiation with the object sought
G to be achieved. In other words, what is necessary is that t'1ere must be a nexus
between the· basis of claSsffication and the object of such classification. This
being the test and the test being applied to the case in hand in the light of the
provisions of the Regional Rural Banks Act, 1976, it is the sponsor bank,
which plays a vital role in the establishment of the rural banks by Government
of India and when the Union Government is called upon to determine the
B remuneration of the officers and employees, appointed by the Regional Rural
KSHETRIY A KISAN GRAMIN BANK v. D.B. SHARMA 641
Banks, the statutory requirements that the Central Government shall have A
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.
This being the position and the Tribunal having specifically held that the
employees of the Regional Rural Banks are entitled to claim parity with the
employees of their sponsor banks, the ultimate decision of Equation Committee B
on the basis of such parity, cannot be held to be discriminatory nor can it be
held to be violative of Article 14. The High Court, therefore, committed serious
error on the basis that the employees of all the Regional Rural Banks are
entitled to the same parity, irrespective of the pay structure of the employees
of their respective sponsor banks.1649-C, D; 650-A-C)

3. The Equation Committee consisting of specialised personnel having
c
examined the relevant datas and having made the equation with their expertise
the same could not have been interfered with by the High Court, particularly
when neither there has been any allegation of malice or extraneous
consideration nor any materials on that score were before the Court.
1651-EJ D
State of U.P. and Ors. v. J.P. Chaurasia and Ors., 11989) 1 SCC 121,
relied on.
/

-
4. The High Court was fully in error in applying the pay structure of
j the Regional Rural Banks sponsored by the Nationalised Bank to the pay E
structure of the Appellant Bank which was sponsored by U.P. Co-operative
Bank. The employees of the Appellant Bank would get their pay structure as
per the Report of the Equation Committee which was duly accepted by the
Government.1651-D, Fl

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 13192 of 1996. F
From the Judgment and Order dated 16. I I. 95 of the Allahabad High
Court in W.P. No. 19929of1991.

Raju Ramachandran, D. Rama Krishna Reddy, D. Bharathi Reddy, Anil G
Kumar Jha, Sunil Kumar Jain, Vijay Hansaria, Rajiv K. Singh, S.W.A. Qadri,
Ms. Kiran Bhardwaj, S. Borthakur, Bipul Kumar, Ms. Sushma Suri, S.K. Dwivedi,
Gounar Agrawal, Ms.Nithi Dixit, Pardeep Misra and K.T. Anantharaman for
the appearing parties.

The Judgment of the Court was delivered by H
642 SUPREME COURT REPORTS [2000) SUPP. 4 S.C.R.

A PATTANAIK, J. The appellant is a Regional Rural Bank, established
under Section 3 of the Regional Rural Banks Act, 1976 and is sponsored by
the Uttar Prade.sh Co-operative Bank Limited, Lucknow, which is a society
registered under the U.P. Co-operative Societies Act. There are 196 Regional
Rural Banks in the country but out of them 195 banks are sponsored by the A. ....
B nationalised banks and it is only the appellant bank, which is sponsored by
the U.P. Co-operative Bank. Under Section 3 of the Regional Rural Banks Act,
1976, it is the Central Government, who by Notification in the official Gazette,
establishes one or more Regional Rural Banks, only on being requested by
a sponsor bank to establish the same. Under sub-section (3) of Section 3 of
the said Act it is the duty of the sponsor bank to aid and assist the Regional
C Rural Bank sponsored by it by subscribing to the share capital, training
personnel of such Regional Rural Bank and providing such managerial and
financial assistance to such Regional Rural Bank during the first five years
of its functioning as may be mutually agreed upon between the Sponsor Bank
and the Regional Rural Bank. Under sub-section (2) of Section 6, of the capital
issued by a Regional Rural Bank fifty per cent shall be subscribed by the
D Central Government, fifteen percent by the concerned State Government and
thirty five per cent by the Sponsor Bank. Under Section 17, the Regional Rural
Bank is empowered to appoint such number of officers and other employees
as it may consider necessary and may determine the terms and conditions of
their appointment and service. Under Second proviso to aforesaid Section 17
E remuneration of officers and other employees appointed by Regional Rural
Bank will be such as may 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
authorities of comparable level and status in the notified area. The employees
of the Regional Rural Banks filed Writ Petitions in this Court under Article
F 32, being Writ Petition Nos. 7149-50 of 1982 and 132 of 1984 seeking parity
in respect of pay, salary, allowances and other benefits with the employees
of Nationalised Banks in corresponding or comparable posts. This Court by
order dated I. 9. 1987 disposed of those Writ Petitions as the Central
Government agreed to appoint a National Industrial Tribunal to decide the
G question relating to pay, salary, allowances and other benefits payable to the
employees of the Regional Rural Banks constituted under the Regional Rural
Banks Act, 1976. Pursuance to the aforesaid order the Government of India
by Notification dated 26th November, 1987 referred the disputes raised in Writ
Petition Nos. 7 I 49-50 of 1982 and I 32 of 1984 to the Industrial Tribunal
consisting of a Retired Chief Justice of Andhra Pradesh High Court Justice
H Obul Reddy. The said Tribunal elaborately considered the materials placed
KSHETRIYA KISAN GRAM IN BANK v. D.B. SHARMA [PATTANAIK,J.j 643

before it and gave its Award on 30th April, 1988. The said Tribunal by its A
Award came to hold that so far as the equation of posts and consequent
fixation of new scale of pay, allowances and other benefits for officers and
other employees of the Regio~al Rural Banks at par with the officers and other
employees of comparable level in the corresponding posts in the Sponsor
Banks and their fitment into new scale of pay, as are applicable to officers of B
Sponsor Bank in corresponding posts of comparable level, it is a matter which
has to be decided by the Central Government in consultation with such
authorities as it may consider necessary. In view of the aforesaid observations
of the Tribunal the Government of India constituted a Committee, called the
'Equation Committee' and referred the Award to the Committee seeking for a
report in the matter of Equation. On the basis of the recom'mendation of the C
Equation Committee dated 22nd February, 1991, the Union Government in
exercise of power under Proviso to sub-section (I) of Section 17 of the Act
issued certain directions whereunder the Branch Managers' post has been
equate_d with the post of Assistant Manager of the U.P. Co-operative Bank
Ltd. and the scale of pay for the latter post has also been made applicable
to the former post. This Notification of the Union Government was assailed D
by the concerned officers of the Bank by filing Writ Petition No. 19929 of
1991. The High Court of Allahabad having allowed the Writ Petitions and
having issued certain directions relating to the sala;y o( the employees of
Kshetriya Kisan Gramin Bank the present appeal has been filed by the Bank
on getting Special Leave to Appeal. By the impugned judgment the High E
Court set aside the circular of the Central Government dated 27th February,
1991, and directed not to make any discrimination between the officers and
employees of the Kshetriya Kisan Gramin Bank with the officers of the other
Gram in Banks and, further directed that the Assistant Branch Managers of the
Appellant Bank should get the same scale of pay as the Assistant Managers
of other Gramin Banks sponsored by the Nationalised Banks. For issuing F
aforesaid direction the High Court came to the conclusion that the Tribunal
has accepted the claim of the employees of Appellant Bank and had held that
they are entitled to the pay scales which are given to the employees of the
Commercial Bank. After referring to paragraph 4.428 of the Award the High
Court further came to the conclusion that the Equation Committee wrongly G
came to the conclusion that the Pftitioners being Branch Managers are
entitled to the pay scales of Assistant Manager on the plea that since the
Banks where. petitioners were previously employed have been sponsored by
Uttar Pradesh Cooperative Bank Limited, Lucknow and not by other
Nationalised Bank. Since the Kshetriya Kisan Gramin Bank, Mainpuri is the
only Bank which is sponsored by the Uttar Pradesh Cooperative Bank Limited, H
644 SUPREME COURT REPORTS [2000] SUPP. 4 S.C.R.

A Lucknow and all other rural Banks have been sponsored by the Nationalised
Banks, the High Court is of the opinion that the distinction made by the
Equation Committee is in gross violation of catena of decisions of the Supreme
Court relating to the principle 'equal pay for equal work'. The High Court also
came to the conclusion that 27 officers of the Appellant Bank have been
B discriminated in the payment of salary and pay scales as they are otherwise
entitled to get the same pay scales of the Commercial Banks as well as
Nationalised Banks. On the question of job evaluation the High Court also
came to the conclusion that the nature of job being performed by the officers
of the Appellant Bank is not dis-similar to that being performed by those
spon!>ored by Commercial or Nationalised Banks and, therefore, there cannot
C be a discriminatibn in the matter of pay scales and other benefits with their
counter-parts.
-
At the outset, it may be stated that Appellant Bank did not file any
counter-affidavit in support of the Government order or the recommendation
of the Equation Committee. Mr. Raju Ramachandran, learned senior counsel
D appearing for the appellant submitted that without controverting any facts
which the employees of the Bank might have averred in the Writ Petitions
filed before the High Court, the appellant would be able to assail the
conclusions of the High Court emanating the ultimate direction with reference
to the very Award of the Tribunal and the report of the Equation Committee
E in as much as the High Court has failed to appreciate the basic principles on
which the Tribunal proceeded and has mis-read the findings of the Tribunal
which has vitiated the ultimate conclusions. According to Mr. Ramachandran
the Tribunal had specifically negatived the applicability of the plea of 'equal
pay for equal work.' On the other hand the Tribunal thought it fit to apply
the principle of parity for determining the salary and other conditions of
F service of the employees of the Regional Rural Banks. If the principle of parity
is to be applied then the employees of the Appellant Bank can have their pay
structure with reference to the Sponsor Bank of the appellant, namely, U.P.
Cooperative Bank Ltd., Lucknow, and not the salary of Commercial or
Nationalised Banks who happen to be the sponsor or ofl95 other Regional
G Rural Banks. Mr. Ramachandran also further urged that under the statute the
remuneration of officers appointed by Regional Rural Bank could be determined
by the Central Government under the Second proviso to sub-section (I) of
Section t7 and while making such determination the Central Goverpment is
duty bound to have due regard to the salary structure of the e·mployees of
the State Government and the local authorities of comparable level and status
H in the notified area where the Bank situates. The aforesaid criteria fixed under
KSHETRIYA KISAN GRAM IN BANK v. D.B. SHARMA [PATTANAIK,J.] 645
the statute will also weigh with the Tribunal appointed for determining the A
pay structure of these employees who in essence is discharging the function
of the Central Government. This being the position, it is obvious that the pay
structure of the Sponsor Bank at the State level will be the relevant guiding
factor and, as such, the Equation Committee had rightly detennined the pay
structure of the respondent employees bearing in mind the criteria fixed under B
the statute. The High Court, therefore, contended by Mr. Ramachandran,
completely overlooked aforesaid statutory criteria while recording its
conclusions and giving ultimate directions. Mr. Ramachandran also contended
that the Tribunal, bearing in mind the germane considerations for determination
of pay structure of the employees of the Regional Rural Banks came to hold
that maintaining a parity with the employees of the Sponsor Bank would not C
be inconsistent with the second proviso to sub-section (I) of Section 17, but
the High Court, however, had totally ignored the aforesaid statutory criteria
provided under the second proviso to sub-section (I) to Section 17, and thus
committed gross error in equating the employees of the Appellant Bank with
the employees of the other Regional Rural Banks whose sponsoror are the
Nationalised Banks in the matter of the pay structure of the employees. D
According to Mr. Ramachandran under the scheme of the Act the umbilical
links between the Sponsor Bank and the Regional Rural Bank sponsored by
them cannot be ignored and on the other hand the same must be borne in
mind while deciding the pay structure and other service conditions of the
employees. Mr. Ramachandran also contended that a single Gramin Bank, like E
Appellant Bank may constitute a class by itself and having regard to the
sponsorship in question in fact such a classification would be permissible and
would not violate the provisions of Article 14. According to Mr. Ramachandran,
ifthe impugned direction of the High Court is given effect,;
to then necessarily
the pay scales of the Sponsor Bank of the appellant namely, U.P. Cooperative
Bank Ltd. will have to be raised and it would lead to absurd consequences F
which must be avoided. Mr. Ramachandran lastly submitted that in the matter
of equation of posts or equation of salary of employees, the Expert Body
appointed for the purposes is the best judge by virtue of its expertise and
r •• the decision of such Expert Body should not be interfered with by the Court
unless either malafides are alleged and proved or the Court comes to a G
conclusion that the decision is on account of extraneous consideration or it
makes a hostile discrimination and arbitrary in nature. In the case in hand
none of these having been alleged and established the High Court committed
serious error in interfering with the conclusion of the Equation Committee
who had gone into detail and had determined the pay structure of the officers
of the Appellant Bank. H
646 SUPREME COURT REPORTS [2000] SUPP. 4 S.C.R.

A Mr. Anantharaman, advocate appearing for some of the respondents,
however, submitted that in terms of industrial jurisprudence the Regional
Rural Bank employees are entitled to claim parity with the employees of
Nationalised and Commercial Banks on the ground of similarity of duties and
function and the same would be within the guidelines contained in the second
B proviso to sub-section (1) of Section 17 of the Act and in fact the Tribunal
has held so, and this being the position, the Equation Committee could not
have decided the pay structure of the employees of the Appellant Bank
differently from the employees of the other Regional Rural Banks and,
accordingly the High Court was fully justified in coming to its conclusion
about the discrimination meted out to the officers of the Appellant Bank and
C was fully justified in issuing the impugned direction which need not be
interfered with by this Court. According to Mr. Anantharaman the Award of
the Tribunal having been accepted by the Central Government in toto, it is
the Equation Committee which committed error in granting different pay
structure for the officers of the Appellant Bank on the basis of so-called
parity with the employees of its Sponsor Bank and as such, it was just and
D reasonable for the High Court to interfere with the same and the impugned
judgment does not suffer from any legal infirmity so as to be interfered with
by this Court. The counsel, further contends that neither the Bank nor the
Union of India nor even the Sponsor Bank having filed any counter-affidavit
in the High Court, are not entitled to assail the conclusions of the High Court
E which is based on a reading of the findings of the Tribunals and based on
the sound principles of discrimination under the Constitution and it would not
be appropriate for this Court to interfere with the same. In his submissions
as well as in the written submissions filed in this Court, the learned counsel
referred to various paragraphs of the Award to indicate that the very grievance
of the employees ofthe Bank was to have parity with the employees of the
F Nationalised and Commercial Banks and that grievance has been satisfied
only by impugned judgment of the High Court. Consequently the impugned
judgment does not require to be interfered with by this Court.

Mr. Vijay Hansaria, learned counsel appearing for some of the
G respondents on the other hand submitted that even in the matter of equation
the Equation Committee was not justified in equating the officers of the
Appellant Bank with clerks and other grades of employees of the Sponsor
Bank, as is apparent from the conclusion made and in this view of the matter
it would constitute hostile discrimination and such discrimination having
been struck down by the High Court the judgment of the High Court need
H not be interfered with by this Court.
KSHETRIYA KISAN GRAM IN BANK v. D.B. SHARMA [PA TTANAIK. J.J 647
In view of the rival submissions at the Bar, the first question that arises A
for our consideration is whether the Tribunal had really accepted the plea of
principle of 'Equal pay for Equal work' or had rejected the same and instead,
had applied the principle of parity. We have gone through the award passed
by Justice Obul Reddi. The dispute which had been referred to the tribunal
for its decision was the dispute relating to pay, salary, allowances and other B
benefits payable to the employees of the Regional Rural Banks in terms of
the pleadings of the parties in the Writ Petition (Civil) Nos. 7149-50/82 and
132 of 1984, filed in the Supreme Court of India. The first two writ petitions
had been filed by the All India Grameen Bank Workers Organisation and the
third one had been filed by the All India Regional Rural Bank Employees
Association. It is undoubtedly true that in the writ petition, prayer had been C
made for issuance ofa mandamus to fix the emoluments of the Regional Rural
Bank employees in conformity with the laid down judicial maxims of 'equal
pay for equal work' and 'industry-cum-region formula' and bring about parity
in emoluments between the employees of Regional Rural Banks inter se and
employees of the Nationalised Commercial Banks. The Tribunal on
consideration of the stand of the parties and various statistics given by the D
Banks, came to a conclusion that there would be no serious economic
repercussions, if the parity in the matter of pay-scales and allowances, is
given to the Regional Rural Banks employees. It also came to the conclusion
that there cannot be any comparison between the District Central Co-operative
Banks and Regional Rural Banks inasmuch as Co-operatives are a State E
subject and the said banks are run by the State Governments; whereas
Regional Rural Banks are run by the Central Government under an Act of
Parliament. It also found that the work carried out by Regional Rural Bank
employees and Nationalised commercial bank employees is the same, both in
quality and quantity. It further found that there are absolutely no grounds
whatsoever to deny parity between the employees of the rural branches of F
the Commercial Banks and those of Regional Rural Banks, applying the
yardstick of cost of living and volume of business. It also found that the
Regional Rural Banks and the rural branches of the Commercial Banks perform
the identical functions and duties. The tribunal came to hold on the basis of
evidence on record that the employees of Regional Rural Banks form a G
separate class under a separate statute and so are the employees of the
Commercial Banks. In paragraph 4.422, the tribunal held:

"4.422. I further observed in para 4.149 that "I must make it very clear
in this connection and let there be no ambiguity about it, that my
finding that the RRB employees form a separate class and that, H
648 SUPREME COURT REPORTS [2000] SUPP. 4 S.C.R .

.A therefore, they are not discriminated against so as to attract the
doctrine of"equal pay for equa.l work", has to be disengaged and de-

-
linked from the question of their claim for parity in their pay structure
with the sponsor bank employees in corresponding and comparable
posts within the framework of the 2nd proviso on the facts and
circumstances of the case. Shred of legal nuances, their claims have
B to be exa.mined on the principles of justice and equity".

Ultimately, the Tribunal held that the officers and employees of the ./

Regional Rural Banks will be entitled to claim parity with the officers and other
employees of the sponsor banks in the matter of pay scales, allowances and
C other benefits. In paragraph 4.428, the Tribunal held as follows:

"4.428. So far as the equation of posts and the consequent fixation
of the new scales of pay, allowances and other benefits for Officers
and other employees of the RRBs on par with the Officers and other
employees of comparable level in corresponding posts in sponsor
banks and their fitment into the new scales of pay as are applicable
D to Officers of Sponsor Banks in corresponding posts of comparable
level, it is a matter which has to be decided by the Central Government
in consultation "Yith such authorities as it may consider necessary.
This will also include the pay scales, benefits, other allowances and
fitment of sub-staff of the RRBs with the sub- staff of Sponsor Banks.
E This Award is accordingly passed and it shall cover.all existing RRBs.
The Award shall be given effect to from Olst day of September, 1987."

· In view of the aforesaid conclusions of the Tribunal on the basis of
evidence placed before it, the conclusion is irresistible that the Tribunal never
applied the principle of 'equal pay for equal work' and on the other hand was
F of the view that the employees of the Regional Rural Banks will 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 and for determining
the parity, it left the matter to be decided by the Central Government in
consultation with such authorities as it may consider necessary. We are, -
... ,.,..
G therefore, persuaded to accept the submissions of Mr. Ramachandran,
appearing for the appellant that while resolving the dispute of the employees
of the Regional Rural Banks, the Tribunal did not apply the so- called principle
of 'equal pay for equal work' and on the other hand applied the principle of
parity with the officers of the respective Sponsor Banks.

H The next question then arises for consideration is as to what has. been
KSFIETRIYA KISANGRAMIN BANK v. D.B.SHARMA [PATTANAIK,J.] 649

done by the Central Government to arrive at the parity. The Central Government A
appointed an Equation Committee, which Committee discharged the function
of equation of posts with the Sponsor Banks. The Equation Committee was
a Committee of five Members with Shri P. Kotaiah as its Chairman. It referred
to the findings of the Tribunal in its Award in paragraph 4.425, which entitles
the employees to claim parity with the officers and employees of the Sponsor
Banks in the matter of pay scales, allowances and other benefits. It considered B
also the suggestions of the different Associations. It opined that the Personnel
of the appellant bank should be equated only with the Personnel of comparable
level in its Sponsor Bank, viz. the Uttar Pradesh Co-operative Bank Ltd. It
thereafter, took up the task of equation of posts and recommended the

- equation on the basis of some broad criteria and held that whereas the C
officers and employees of the Regional Rural Banks other than the appellant
bank can be equated with the officers and employees of their Sponsor Banks
'namely' the Nationalised Banks or the Commercial Banks, but so far as the
officers of the appellant bank is concerned, they have to be equated with the
officers of its own Sponsor Bank 'namely' the U.P. Co- operative Bank. The
Committee also took up the case of equation in detail and submitted its D
recommendation. We see no infirmity with the Equation made by the Equation
Committee on the basis of the pay structure of the employees of the respective
Sponsor Banks and the same is in consonance with the directions of the
Tribunal as well as the second proviso to sub-section( 1) of Section 17. The
High Court, however, in the impugned judgment without properly applying its E
mind to the relevant conclusions of the Tribunal as well as the very basis on
which the Equation Committee discharged its obligation of doing the job of
equation, erroneously, came to the conclusion that since the nature of job
perform~d by the employees of the appellant bank is not dis-similar to that
being performed by those sponsored by Commercial or Nationalised Banks,
a difference of pay scales and other benefits would tantamount to F
discrimination. The aforesaid conclusion is wholly mis-conceived and in utter
disregard to the findings of the Tribunal as well as the principles enshrined
in Article 14 of the Constitution. It is too well settled that even a single
institution can form a class by itself and while deciding the question of
violation of Article 14 what is required to be found out is whether there are G
any reasonable basis on which a single person or group of persons are left
out of the group and whether there is any rational relation for such
differentiation with the object sought to be achieved. In other words, what
is necessary is that there must be a nexus between the basis of classification
and the object of such classification. This being the test and the test being
applied to the case in hand in the light of the provisions of the Regional Rural H
650 SUPREME COURT REPORTS [2000] SUPP. 4 S.C.R.

A Banks Act, 1976, it is the Sponsor Bank, which plays a vital role in the
establishment of the rural banks by Government of India and when the Union
Government is called upon to determine the remuneration of the officers and
employees, appointed by the Regional Rural Banks, the statutory requirements
that the Central Government shall have due regard to the salary structure of
the employees of the State Government and the local authorities of comparable
B level and status in the notified area. This being the position and the Tribunal
having specifically held that the employees of the Regional Rural Banks are
entitled to claim parity with the employees of their Sponsor Banks, the ·' .
ultimate decision of the Equation Committee on the basis of such parity,
cannot be held to be discriminatory nor can it be held to be violative of Article
C 14. The High Court, in our opinion, therefore, committed serious error on the
basis that the employees of all the Regional Rural Banks are entitled to the
same parity, irrespective of the pay structure of the employees of their
respective Sponsor Banks. The impugned judgment of the High Court on th is
score stands vitiated.

D The next question that arises for consideration is, as to what extent the
High Court would be justified in exercise of its extraordinary jurisdiction under
Article 226 to interfere with the findings of an Expert Body like the Equation
Committee. In State of U.P. and Ors. v. J.P. Chaurasia and Ors., [1989] I SCC
121, this Court unequivocally helc! that in the matter of equation of posts or
E equation of pay, the same should be left to the Executive Government, who
can get it determined by expert bodies like Pay Commission, and such Expert
body would be the best judge to evaluate the nature of duties and
responsibilities of posts and when such determihation by a Commission or
Committee is made, the Court should normally accept it and should not try
to tinker with such equivalence unless it is shown that it was made with
F extraneous consideration. Bearing in mind the aforesaid parameters and on
examining the impugned judgment of the Allahabad High Court, we have no
hesitation to come to the conclusion that the High Court has tried to tinker
with the conclusions and decisions of the Equation Committee, even in the
absence of any allegations or materials that such decision of the Equation
G Comm\ttee was on extraneous considerations. The Judgment and direction of
the High Court on this score is accordingly vitiated. The further conclusion
of the High Court to the effect :

"in our view although Tribunal arrived at the necessary conclusion
that the petitioners may be paid 'equal pay for equal work' because
H of similarity in the nature of job performed by them being at par with
KSHETRIYAKISANGRAMIN BANK v. D.B.SHARMA[PATTANAIK,J.] 651
the Branch Manager of the Commercial Bank, there was no reason for A
making any discrimination on the part of the Central Government to
take the contrary view on the basis of the fact that since the petitioners
are attached to Rural Banks, which is sponsored by U.P. Cooperative
Bank Ltd."

is a thorough mis-reading of the findings of the Tribunal. As has been stated B
earlier, the Tribunal in no uncertain terms, came to the conclusion that the
principle of 'equal pay for equal work' cannot be applied, though the
employees of the Regional Rural Banks can claim parity with the employees
of their Sponsor Banks. The concept of 'equal pay for equal work' and the
concept of 'claim of parity with some others' are two different concepts and C
the conclusion of the High Court having been based on a mis-reading of the
findings of the Tribunal, the said conclusion is vitiated and must be set aside.
The conclusion of the High Court that the Equation Committee erroneously
equated the Branch Managers of the Appellant Bank with the Assistant
Managers of other Banks is also a conclusion not based upon any rational
basis and the High Court was fully in error in applying the pay structure of D
the Regional Rural Banks sponsored by the Nationalised Bank to the pay
structure of the Appellant Bank which was sponsored by U.P. Co-operative
Bank. The Equation Committee consisting of specialised personnel having
examined the relevant datas and having made the equation with their expertise
the same could not have been interfered with by the High Court, particularly E
when neither there has been any allegation of malice or extraneous
consideration nor any materials on that score were there before the Court.

In the aforesaid premises, the impugned judgment of the Allahabad
High Court is set aside and this appeal is allowed. The employees of the
Appellant Bank would get their pay structure as per the Report of the Equation F
Committee which was duly accepted by the Government.

A.K.T. Appeal allowed.

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