Supreme Court of India
RESERVE BANK OF INDIA & ORS.versusC.N. SAHASRANAMAN & ORS.
- Citation
- 1986 INSC 100
- Decided
- 30 April 1986
- Disposal
- Appeal(s) allowed
- Bench
- R S PATHAK
Holding
The promotion scheme based on centre‑wise seniority and the contested clause are constitutionally valid and do not violate Articles 14 and 16.
Summary
The Reserve Bank of India (RBI) introduced a promotion scheme for staff officers (Grade II/A) based on centre‑wise seniority and a fixed ratio of candidates to vacancies, as set out in Administrative Circulars No. 8 and 9 of 13 May 1972. Three Grade‑II clerks at the Nagpur branch challenged the clause that limited the number of candidates for the qualifying test to twice the estimated vacancies, alleging it violated Articles 14 and 16 of the Constitution by making promotion chances depend on fortuitous vacancy patterns rather than merit. The Bombay High Court struck down that clause, but the Supreme Court, on special leave, upheld the scheme, holding that service rules need not satisfy every employee and must be judged on fairness, reasonableness and the majority’s interest, and that the scheme did not infringe constitutional equality guarantees. The Court also affirmed the validity of Circular No. 9 as a counterpart to Circular No. 8 and emphasized the primacy of collective bargaining under the Industrial Disputes Act. Consequently, the High Court’s order was set aside and the appeal was allowed, confirming the modified promotion scheme and regularising ad‑hoc promotions.
Issues considered
- The clause limiting the number of candidates for the qualifying test to twice the estimated vacancies violates Articles 14 and 16 of the Constitution.
- Whether centre‑wise seniority and the combined seniority scheme constitute a reasonable and non‑arbitrary method of promotion in public employment.
- Whether the scheme, as modified and approved by a majority referendum, is constitutionally valid.
Legislation cited
- Constitution of Indias. Article 12, s. Article 14, s. Article 16
- Industrial Disputes Act, 1947s. Section 18(1), s. Section 2(s)
- Reserve Bank of India (Staff) Regulations, 1948s. Regulation 31
Subjects
promotioncentre-wise senioritycombined seniority schemeequality before lawArticle 14Article 16Industrial Disputes Actpublic employmentservice lawReserve Bank of India
Judgment
881
RESERVE BANK OF INDIA & ORS.
A
v.
C.N. SAHASRAIWWI & ORS.
APRIL 30, l 986
B
[R.S. PATHAK AND SABYASACHI MUKHARJI, JJ.]
1 Centre-wise seniority and promotion through written
departmental examlnor Reserve Bank of India (Staff)
Regulations 1948 - Administrative Circular No. 8 and 9 dated
;
13.5.1972, clause ll(a)(i) of the Scheme for Promotion - Staff
c
'
r Officers Grade 11 (Now designated Grade A) covered under -
Whether part of the scheme is violative of guarantee of
equality before law and equal opportunity ln Public employment
~ as enshrined in Article 14 and 16 of the Constitution -
Industrial Disputes - Settlement by direct negotiations or
through collective bargaining value of.
D
The Reserve Bank of India had its offices at nearly 15
centres throughout India. The service conditions of the
employees of the Reserve Bank are governed by the Reserve Bank
of India (Staff) Regulations, 1948 and Administrative orders
• -~ passed from time to time and also by Industrial Disputes
E
Awards or Settlements by negotiations or settlement by
collective bargaining. In the Reserve Bank separrate
- departmentwise, Groupwise seniority and promotion for cadres
of officers and non-officers (Award Staff) was prevalent from
-t time to time.
,
F
In September 1962, the issue of maintenance of combined
seniority list at each centre for the purpose of promotions
was referred to the National industrial Tribunal presided over
by Justice K. T. Desai. The reconmendations of the said Desai
Award were approved by the Supreme Court in All India Reserve
Bank &lployees' Association v. Reserve Bank of India, [ 1966] 1
G
s.c.R. 25 @ 57 and Reserve Bank of 1ndia v. N.c. Palbral &
-j
On., [1977] 1 S.C.R. 377. In 1970, the Supervisory Staff in
class I was upgraded to staff officers in class I pursuant to
the Memorandum of Settlement dated 9th January, 1970 between
H
882 SUPREME COURT REPORTS [19861 2 .s.c.R.
A
the Bank and the All India Supervisory Staff Association,
subject. to certain conditions. The channel of promotion from+- ~
the post of clerk (Grade II) is staff officer (Grade A) and
further from that post to the staff officer (Grade B) and so
on upto Grade F. Prior to 6th June 1970, oral interviews of
all the eligible candidates were held for being considered for
B promotion. Then Administrative circular No. 20 was introduced
for the first time for departmental promotions of clerk Grade
!/(Assistant) etc. to the post of Staff Offker Grade II
(Sub-Accountants &Research Superintendent) in all the groups. 'I'
On 7th May 1972, the Bank took several steps towards equalis-
ing promotional opportunities of employees by introducing the
c Optee Scheme of 1965, the Optee Scheme of 1966 and finally by :
entering into a Memorandum of Settlement dated 7th May 1972 {
with the Association accepting the principle of maintenance of .
a combined seniority. On or about 7th May 1972, the Bank
forlllllated a "Scheme for Promotion; Staff Officer Grade II"+
after giving full opportunity to the Association to make its
D suggestions. On 7th May 1972 the Bank and the Association
further agreed by exchange of correspondence that the ratio of
direct recruits to the total strength of staff officers Grade
II shall be at 17. 5% - 82. 5%. On 13th May 1972, the Bank
introduced the Administrative Circular No. 8 on "Scheme for
Promotion: Staff Officers Grade II". On the same day the Bank
E introduced sillllltaneously the Administrative Circular No. 9 on~."'
"Scheme for combined Seniority List and Switch over from
non-clerical to clerical cadre with effect from 7th May 1972,
Both the circulars are binding on all employees of the Bank in -
view of the decision of the Supreme Court in M.C. Paliwal 's
case. On May 22, 1974, the Bank took a decision based on the "t-
F recol!IDi!ndations of the cadre Review Co11111ittee under the
Chairmanship of Mr. Justice J.L. Naim and issued Administra-
tive circular No.15 to prepare a c01m00n seniority List and to 1 '
provide for inter group mobility at the lowest level of (~
officers in Grade A with effect from 1st January 1970. On or '
about 7th l"anuary 1978, the Bank took further decision, based
G on the reco1111¥!ndations of two Collllllittees headed by Mr. Justice
Naim and Mr. Justice Thareja respectively and issued Ad-
ministrative Circular No. 8 to combine the seniority of all
officers in Grade 'B' and above with effect from 22nd May 1974
with a view to equalise opportunity for promotions among-t-
officers. Both the circulars Nos. 15 of 1974 and 8 of 1978, '
H were approved by the Supreme Court in V.T. Kban:r!Ode &Ors. v.
Reserve Bank of India & Anr., reported in [1982] 2 s.c.c. 7.
R.B.I. v. C.N. SAflASRANAMAN 883
A
The respondents who were grade U clerks working at
-1Nagpur Reserve Bank ever since their employment which
conmenced somewhere between 1960 and 1965 who were aggrieved
by Part of Clause II(a)(i) of the scheme for promotion - Staff
Officers Grade II covered under Administration Circular No. 8
challenged its validity averring that under the new scheme B
chance to appear in the examination depended not on relative
merits but merely on the fortuitus circWD!ltances, namely, the
number of vacancies occurring in a particular centre in a
\>anel year which had no nexus with the purpose of promotion
viz. to secure efficient cadre of staff officers. The High
Court accepted the pleas of the respondents and by its order
dated 19th March 1981 struck down that part of clause II(a)(i) c
of the scheme Us ted "Number of candidates for the qualifying
test". As a result no examination could be held for panel
~ears 1980-81, 1981-82 and 1983-84. Hence the appeal by
special leave.
Allowing the appeal and approving the modified scheme of D
1984 as per the orders and directions of the Supreme Court
including holding a referendum, the Court,
HELD:1. In service jurisprudence there cannot be any
\I' _.service
rule which would satisfy each and every employee and
its constitutionality has to be judged by considering whether E
it is fair, reasonable and does justice to the majority of the
employees and fortunes of sone individuals is not the
,. touch-stone. Further, whether there has been denial of
equality of the view of promotion or any constitutional right
--•inf ringed or not cannot be judged, where interest of large
number of people are concerned, in the abstract. [909 D-E;
B-C) F
--~
Kam! Kanti Datt & Ors. v. Union of India & Ors., [1980)
3 s.c.R. 811 referred to.
2. Circular No. 9 is a counterpart of Circular No. 8.
G
Circular No. 8 having been held valid, by the Supreme Court
Circular No. 9 1111st also follow to be good. Circular No. 9
1-cannot stand in vaccum and in isolation. It is s step to the
' fulfilment of the object to be achieved by Circular No. 8,
Viewed in that point of view and as a feasibility and having
regard to the factors and in regard to the history of Reserve
H
Ban1t eaployees, the scheme as modified by the Ban1t and as
884 SUPREME COURT REPORTS [1986] 2 s.c.R.
A
accepted by vast majority indeed an over willing majority of
the workmen is a proper and just scheme and does not suffer~
from the vice of article 14 or article 16 <>r any other
constitutional guarantees. [909 F-G)
3.1 Settlement of disputes by direct negotiations or
B settlement through collective bargaining is always to be
preferred for it is best suited for indusrial peace which is
the aia of legislation for settlement of labour disputes-.
[909 H; 910 A) ~
New Standard F.ngineerlng Co. Ltd. v. II. L. Ahbyankar & ~
c Ors., [1978) 2 S.C.R. 798 and Tata F.ngineerlng & Locomtive v.
their Workmen, [1982] 1 S.C.R. 929 referred to. -'(" ...
3.2 The reference held pursuant to the orders of thil!~ . . .
Court dated Lnd May, 1984 undoubtedly indicates that majority
of the employees are in favour of acceptance of the modified
D settlement. In matters of service conditions it is difficult
to evolve as ideal set of norms governing various conditions
of services and in grey area where service rules operated, if
more than one view is possible without sacrl.ficing either
reasons or co111110nsense the ultimate choice has necessarily to
be conditioned by several considerations ensuring justice to~ "'
E as many as possible and injustice to as few. These principles
however, significant do not authorise the majority of the
employees to trample up~n the constitutional guarantees or
rights of the individuals or minority employees. Majority ..,.
cannot thwart or barter away the constitutional rights of the
1111.norities. The constitutional guarantees are to protect thist~
F very danger. But in judging the content of the constitutional
rights, the entire perspective of the equality of opportunity,
here and denial of equal right in public employment have to be~
viewed in a fair, reasonable and just perspective. Viewed in
that light, it is true there may be individual instances
exemplifying injustices by postponing or delaying the chances
G of promotions of the contesting respondents yet that does not
deny them their constitutional right in its proper measure,
and the considerations that have weighed with the making of
the m:>dified scheme and in light of the, other considerations,__
it 1111st be observed that with whatever care and objectivity or
foresight any rule is framed, soae hardship, inconvenience or
injustice might to result but the paramount consideration is
H
the reconciliation of the conflicting claims of two important
R.B •.I. v. C.N. SAHASRANAMAN 885
A
constituents of service - one which brings fresh clerical
~ employees and the other 1111ture experience. There has been a
happy merger of these two considerations in the scheme
proposed and in that merger, no violation of the guaranteed
rights of the opposing respondents have occurred. [910 C-il;
9ll A-B) B
3.3 The promotion scheme having been evolved after
~ careful consideration and having been in operation ever since
the inception of the Banlt with llOdif ication from time to till!
as a result of the negotiations under the Industrial Disputes
Act should not be modified drastically. In such matters one
should hasten slowly. [911 B-C) c
'rt 4.1 The promotion on the basis of centrewise seniority,
in the instant case is constitutionally valid, inas1111ch as the
appellant banlt is an undertaking which colll!s within the
Industrial Disputes Act, 1947 and the class Ill employees are
fully covered by the definition of the term "workman" in D
section 2(s) of the said Act and one of the principles
normally applicable in fixing their tel"lll!I and conditions of
service is industry-cum-region principle. [893 G-11)
~ ~ llamcbandra Sba*ar Deodhar & On. v. State of
Maharashtra & Ors., [1974) 2 S.C.R. 216 distinguished. E
Billllastan Anl:lbiotics v. 'lfurlLwt, [1967) l s.c.R. 652
and AU-India Reserve Bank Employees' Association v. Reserve
lie'*- of. l:ndia, [1966) 1 S.C.R. referred to.
~
4.2 The integration of different cadres into one cadre F
could not be said to involve any violation of the equality
. clause. The right of pr0110tion should not be confused with
mere chance of pr01D:>tion. Though the right to be considered
for promotion was a condition of service, 11ere chances of
prOllOtion were not. It is clear therefore, that the chances of
promotion in some areas occur more often in smaller centres G
' than in other bigger centres like Bombay, Calcutta, Delhi but
that is fortutious and would not really affect the question,
and violate articl!!S 14 and 16 of the Constitution. The
i justice of the case should be judged in conjunction with other
factors, the convenience, the future of the fllllily etc.
[899 G; 903 E-F) H
886 SUPREME COURT REPORTS [1986] 2 S.C.R.
A
laml ~tl ~t & Ors. v. Union of lndla & Ors., (1980]
3 s.c.R. 811, at pages 841-842; li>bd. Slmjat Ali v. Union of ~
Indla, (1975] l s.c.R. 449 and Reserve Bank of Indla v. c.r.
Dlgbe, (1982] 1 S.C.R. 107 at 121-122 referred to.
4.3 Regulation 31 of the Reserve Bank of India (Staff)
B
Regulations 1948 is subject to the condition that "unless in
any case it be otherwise distinctly provided." In the instant
case, it has been distinctly provided in the appointment ~
letters as to where the class III employees of the Bank are
liable to serve. All appointment letters issued to all staff
members appointed in class III and below ever since the
c inception of the Bank contained, identical or similar
provision specifying the offices in which of the Bank these {
employees are required to work. 'nlerefore, there was definite .
provision contrary to as contemplated by Regulation 31 of the +
Reserve Bank of India (Staff) Regulation 1948 and therefore
the general provisions of Regulation 31 would not have any
application. (904 B-<:; D-E]
D
4, 4 If an All -India cadre is enforced in respect of
Class III employees, it would result in injustice to all the
employees in that class at the injustice to all the employees
in that class at the smaller centres for a considerably long
period of time leading t!l industrial unrest. 'nle result of
applying the principles of an All-India cadree for this class
of employees would be that the senior-most in that whole cadre
All-India wise would alone have to be considered for
promotion. In such a case, for a considerable long time, only
employees of the older offices namely, Bombay, Nagpur, Madras, +-
F
Calcutta and Delhi will have to be considered, they being by
far senior most among the All-India employees and such a ,
consideration and empanelling would continue for a very long •
time as the principal basis of the settlement was not one of
promotion on merit but rather an upgradation on mere
seniority, the only qualification being an examination to •
G
determine fitness. Once fitness was determined by tlv'
examination the ranking in that examination did not come int_
play thereafter and the successful candidates were again
listed accordio.g to centrewise seniority in the matter of t-
upgradation and promoted as and when vacancies at that centre
occur. [905 A-El
H
CIVIL APPELLATE JURISDICTION Civil Appeal No. 3234 of
1981.
R.B.I. v. C,N, SAHASRANAMAN [SABYASACHI MUKHARJI, J,] 887
A
-+ From. the Judgment and Order dated 19th March, 1981 of
the Bombay High Court in Writ Petition No. 23311 of 1980.
G.B, Pai and R.H. Parihar for the Appellant.
C.N, Sahasranaman in person, S.P. Sharma in person, B
K.T,A. Anantha Raman, R. Basu Devan, A.K. Goel, Ajit
Pudissery, M.S. Gupta and V.J, Francis for the Respondents.
The Judgment of the Court was delivered by
SABYASACIU MUKHAllJI, J. In the Reserve Bank of India
separate Departmentwise and Groupwise seniority and promotion c
for cadres of Officers and non-Officers (Award Staff) was
prevalent. This would be apparent from the decision of this
Court in Reserve Bank of India v. N.C. Paliwal &Ors., [1977]
1 s.c.R. 377 as well as V.T. Khan"Ode and Ors. v. Reserve Bank
of India and Anr., [1982] 2 s.c.c. 7.
D
In September, 1962, need was felt for maintenance of
combined seniority list at each centre for the purposes of
promotions recommended by National Industrial Tribunal
presided over by Mr. Justice K. T. Desai. The recommendations
~ of the said Desai Award for centre-wise combined seniority
were approved by this Court in 1966. See in this connection E
the observations in All India Reserve Ban1t F.ployees
Associatious v. Reserve Banlt of India, [1966] 1 s.c.R. 25 at
57 and Reserve Bank of India v. N.C. Paliwal &Ors., (supra).
In 1970, the Supervisory Staff in Class I was upgraded
to Staff Officers in Class I pursuant to the Memorandum of F
Settlement dated 9th January, 1970 between the Bank and the
All India Supervisory Staff Association, subject to certain
conditions.
Administrative Circular No. 20 dated 6th June, 1970 was
issued on introduction of written examination for departmental G
promotions of clerk Grade I/Assistants etc. to the post of
Staff Officers Grade II (Sub-Accountants and Research
"i Superintendents) in all the groups. This circular was not made
operative.
H
888 SUPREME COURT REPORTS [1986) 2 S,C,R.
A On 7th May, 1972, the Bank took several steps towards
equalising promotional opportunities of employees by ~
introducing the Optee Scheme of 1965, the Optee Scheme of 1966
and finally by entering into Memorandum of Settlement dsted
7th May, 1972 with the Association accepting the principle of
maintenance of a combined seniority list at a centre. See in
this connection the observations in Reserve Banlt of India v.
B
l!f,C, Palival, (supra).
On or about 7th May, 1972, the Bank foI'lllllated a Scheme ~
for Promotions : Staff Officer Grade II' after giving full
opportunity to the Association to make its suggestions. On 7th
May, 1972, the Bank and the Association further agreed by
c
.~
exchange of correspondence that the ratio of direct recruits
to the total strength of Staff Officers Grade 11 should be at
17. 5% : 82. 5%. Reference in this connection may be made to
Annexure 11 & 111 to the further Affidavit for the bank filed I
on 27th August, 1982 and which are in the appeal Paper Book at
p. 134 onwards.
D
On 13th May, 1972, the Bank introduced the
Administrative Circular No. 8 dsted 13th May, 1972 on 'Scheme
for Promotions - Staff Officers Grade 11' which is binding on
all employees of the Bank. On the same day the Bank introduced
si1111ltaneously the Administrative Circular No. 9 on 'Scheme
E for Combined Seniority List and switchover from non-clerical
to clerical cadre' with effect from 7th May, 1972 which is
binding on all employees of the Bank. The Constitutional ...
valdity of this scheme was upheld by this Court in lleaene
Banlt of India v. l!f,C. Palival (supra).
F
On 22nd May, 1974, the Bank took a decision, based on
the recommendations of the Cadre Review Committee under the •
Chairmanship of Mr. Justice J,L, Nain and issued the
Administrative Circular No, 15 dated 22nd May, 1974 to prepare
a common seniority list and to provide for inter group
mobility at the lowest level of officers in Grade 'A' wit1' ·
G effect from 1st January, 1970, See V.T. D•nawle & Ora. v.
Reserve Banlt of India, (supra).
On or about 7th January, 1978, the Bank took further
decision, based on the recommendations of two Committees, one
headed by Mr. Justice Nain and another headed by Mr. Thareja,
H
R.B. I. v. C.N. SAHASRANAMAN [SABYASACHI MUKllARJI, J,] 889
A
and issued Administrative Circular No. 8 dated 7th January,
~ 1978 to combine the seniority of all officers in Grade 'B' and
above with effect from 22nd May, 1974 with a vi.ew to equalise
opportunity for promotions among officers. In this connection,
reference may also be made to V.T. Khanzode & Ors. v. Reserve
Bank of India, (supra).
B
This appeal arises from a decision of the division bench
of the Bombay High Court, Nagpur dated 19th March, 1981
~whereby it has struck down a part of clause (II)(a)(t) of 'the
- Scheme for Promotion - Staff Officers Grade II (now designated
Grade 'A') covered under the Administration Circular No. 8
dated 13th May, 1972. It may be mentioned that as a result no
·,"-'examination could be held for panel years 1980-81, 1981-82, C
,r and 1982-83 •• The said clause was as follows :
"II. Number of candidates for the qualifying test:-
(a)(t) As estimate of the vacancies anticipated to
D
occur in each office during a 'panel year' i.e. 1st
September to 31st August will be declared by the
Bank in advance and the number of candidates tn
that office to be called for the test in order to
fill those vacancies in that office will not exceed
twice the number of such vacancies subject to sub-
E
clause ••••• "
• It may be mentioned that the decision was rendered in
respect of a petition under Article 226 of the Constitution by
_, three petitioners who were Grade II clerks working at Nagpur
Reserve Bank ever since their employment which commenced
somewhere between 1960 to 1965. The Reserve Bank has its F
---~ offices at nearly 15 centres throughout India. The service
conditions were governed by the Reserve Bank of India (Staff)
Regulations, 1948 (hereinafter called "Regulations").
The High Court by its order which ts under appeal has set
G
aside the tqiugned part of the scheme. It would be necessary
to refer to the said judgment briefly.
i It may be mentioned that this judgment of the High Court
I was delivered on 19th March, 1981. This Court granted special
' leave against the said judgment on 4th December, 1981. Then H
890 SUPREME COURT REPORTS (19861 2 s.c.R.
A
after that on 5th March, 1982, this Court upheld the
constitutional validity of the Administrative Circular No. 8 ~
dated 7th January, 1978 to combine the seniorty of all
Officers. See V.T. Khanzode & Ors. v. Reserve Bank of India,
(supra). This Court further directed on 29th July, 1982 that
in the interest of justice All India Reserve Bank Employees
B
Class III Work!Dan Associations and All India Reserve Bank
Workers Organisation be added as the party-respondents, and
the appeal was heard for some time. Then this appeal after
hearing was adjourned and this Court directed the Reserve Bank:l-
c
to frame a new scheme for proiootion by order dated 20th
October, 1982. On 13th December, 1982, the Bank filed further
affidavit, inter alia, annexing revised draft of clause II to
the Scheme for Proiootion of Staff Officers Grade 'A' annexed. /
to the Administrative Circular No. 8. This was submitted for "f
acceptance on behalf of the appellants before us. The amend- r
-
ment was opposed by the opposing respondents by their
Affidavits-in-Qpposition.
D
On 21st March, 1983, it is stated, that the Bank entered
into a settlement by exchange of letters with All India
Reserve Bank Enip' oyees Association which is recognised and
representative Union of Class III Work!Dan employees. The Bank
thereafter filed a Rejoinder setting out principles governing A
E recruitment and proiootion of Staff Officers Grade 'A' on 22nd
February, 1983 including the ioodification of the existing
scheme lllltually agreed between the Bank and the Association.
On 2nd May, 1984, this Court directed that the settlement
between the Bank and the Association be referred to Class III
employees and opinion of the majority shall be taken on the .t-
F basis of referendum by secret ballot and the result of the
referendum should be comllllllicated to this Court on 16th July, ,
1984 and the appeal to be heard thereafter. The result of the 'f-----
referendum by secret ballot was filed by t.he Bank by an \
Affidavit, The summary of the result of the referendum seeUB
to be as follows :
G
"PARTICULARS TOTAL VOTES PERCENTAGE TO
CAST AGGREGATE NO,
OF VOTES CAST
No, of votes
accepting the
H Settlement 11,309 67.67%
R,B, I, v. C.N. SAHASRANAMAN [SABYASACHI MUKllARJI, J,] 891
A
No. of votes not
-+ accepting the
Settlement 5,277 31.58%
No. of votes
declared invalid 126 oo. 75% B
16,712 100.00%
~
Total number of eligible voters 18,953
Total votes polled 16,712 (88.18%)"
The main question which needs determination is whether
c
part of the scheme mentioned before introduced by the Reserve
Bank of India is violative of guarantee of equality before law
t and of equal opportunity in public employment. as enshrined in
articles 14 and 16 of the Constitution. The High Court noted
that the point arose at the instance of three petitioners who
were Grade II working at Nagpur branch of Reserve Bank ever D
since their employment which conmenced somewhere between 1960
to 1965.
The Reserve Bank has its offices at nearly 15 centres
throughout India. The channel of promotion from the post of
Clerk (Grade II) is Staff Officer (Grade A) and further from
E
the post to the Staff Officer (Grade B) and so on upto Grade
F. Prior to 6th June, 1970, oral interviews of all the
eligible candidates were held for being considered for
promotion. Then Administration Circular No. 20 was issued
introducing scheme of Written Examination for the first time
for giving departmental promotions. The learned judges of the
F
High Court were of the view that perhaps this was done to
introduce element of objectivity in the test. Candidates who
passed the said qualifying examination were included in the
'fit' list and became eligible being considered for promotion
to the next higher post. The High Court was concerned, as
mentioned hereinbefore, with the said new scheme which is
introduced by Circular dated 13th May, 1972, G
i Analysing the said scheme, the High Court was of the
view that under the new scheme candidates from a particular
centre numbering twice the anticipated vacancies in that
centre alone were eligible to appear in the departmental
H
892 SUPREME COURT REPORTS [1986] 2 S.C.R.
A examination and consequently to quali.fy for promotion. The
grievance of the petitioners before the High Court was that ~
under the new scheme, chance to appear in the examination
depended not on relative merits but merely on the fortuitous
circumstances, namely, the number of vacancies occurring in
a particular centre in a panel year. According to the
petitioners, this had no nexus with the prupose of promotion
B viz. to secure efficient cadre of Staff Officers and therefore
the scheme, according to the petitioners, was bad in law. The
High Court found considerable force in this submission. i-
In the impugned judgment under appeal the High Court
relied on Jlamchandra Shankar Deodbar & Ors. v. State of
c Maharashtra & Ors., [1974] 2 S.C.R. 216. According to the High
Court the promotion on the basis of Centre-wise seniority was
opposed to the said decision of this Court. There, the
petitioners were Tahsildars in the erstwhile State of +
Hyderabad. After the new State of Bombay was constituted with
territories drawn from various existing States including
D Hyderabad under the States Reorganisation Act, 1956, equation
of posts and determination of inter se seniority was done by
the Allocated Government Servants' (Absorption, Seniority, Pay
and Allowances) Rules, 1957. Under these rules of 1957, the
Government of Bombay declared that the posts of Mamlatdar in
the former State of Bombay should be deemed to be equivalent
E to the posts of Tahsildar from the former State of Hyderabad
and the posts of Deputy Collector in the former State of
Bombay should be deemed to be equivalent to the posts of
Deputy Collector allocated from the former State of Hyderabad.
The recruitment to the posts of Deputy Collector was provided +-
for by Rules of 30th July, 1959 (called 1959 Rules) according
F to which vacancies to the posts of Deputy Collector were to be
filled from three sources 50% by nomination on the basis of
the result of competitive examination; 25% by directly
recruited Mamlatdars who have put in at least seven years'
service including the period spent on probation and the
remaining 25% by Mamlatdars promoted from the lower ranks in
G the revene departments. The reservation of 25% i.n favour of
directly recruited Mamlatdars was made by the second proviso
of rule (1) of the Rules. On 7th April, 1961 the Government
laid dcMn the principles for regulating the preparation and
revision of select list of Mamlatdars/Tahsildars fit to be
appointed. It was held by this Court by a bench of five
H
R.B. I. v. C.N. SAHASRANAMAN [SABYASACHI MUKHARJI, J,] 893
A
learned judges that the second proviso to rule (1) of the 1959
""f Rules was void as being violative of Article 16 of the
Constitution. This Court was of the view that the procedure
for promotion to the cadre of Deputy Collectors followed by
the State Government was also invalid on the ground that it
denied equality of opportunity of promotion and was therefore B
hit by Article 16 of the Constitution and hence the Government
resolution dated 7th April, 1961 was quashed.
What was done in the aforesaid case was to have an
integrated service of Mamlatdars for the purpose of promotions
to Deputy Collectors' grade which was admittedly a State-wise
grade and that promotion was on the basis of merit-cum- c
. seniority. It was found that select list based on merit and
'(seniority Division-wise for promotion to higher grade, viz.
~ that of the Deputy Collector and these lists were liable to be
varied from time to time on periodical assessment of merits of
the incumbents in that list, and this Court was of the view
that it might lead to injustice in that if promotions were D
made from these lists Division-wise there was a possibility of
a less meritorious candidate with lesser seniority being
, romoted in preference to a more meritorious candidate
elsewhere. In the instant appeal it is necessary to consider
J- the question o"l' promotions from the Centre-wise cadre to an
·All India Cadre and not a State cadre. If, therefore, any E
analogy or parallel has to be sought, then it 111lSt be from the
All India cadre of the Government of India service. It may be
noted that in an All India Service considerati.ons other than
merit on seniority have to be taken into account. In the
-+appellant Bank, the procedure is to give a qualifying test
just to ascertain the fitness for upgradation. In effect F
upgradation is really done on the basis of seniority alone
subject to fitness. In Deodhar's case, the emphasis was rather
on merit rating and the discrimination was implicit against
, more meritorious candidates with higher seniority. But in the
instant case the appellant Bank is an undertaking which comes
within the Industrial Disputes Act, 1947 and the Class Ill G
employees are fully covered by the definition of the term
"workman" in section 2(s) of the said Act and one of the
i principles normally applicable in fixing their terms and
conditions of service is the Industry CIDI region principle. It
was stated by this Court in Hindustan Antibiotics v. Wot:km!n,
[1967] l S.C.R. 652 that those principle: should also be H
894 SUPREME COURT REPORTS [1986] 2 s.c.R.
A applied to State-run industries. The question whether the
recruitment to the lowest cadre of officers viz. Class A~
officers should be essentially from Class III employees by
promotion directly came up for consideration by this Court in
All-India Reserve Bault ~loyees' Association v. Reserve Bank
of India, [1966] 1 S.C.R. 25 and this Court held that a
workman can raise a dispute on such a point. It was in that
B context that a dispute was in fact raised and a settlement
under section 18(1) of the Industrial Disputes Act, 1947 was~
entered into with the recognised union namely All India Bank
Employees Association on 7th May, 1972, and the Administration
Circular AC-9 and AC-8 dated 13th May, 1972 issued.
c The High Court in the impugned judgment proceeded on the '( 1
basis that in fact the Class III employees of the Reserve Bank ,
of India belonged to an All India Cadre freely transferable+
from one place to another. This aspect will be dealt with
later on.
D The di vision bench of the Bombay High Court in the
decision under appeal found that the ratio of the said
decision in Deodhar's case applied to the facts and
circumstances of the instant case because the cadre of clerk
{Grade II) was all India cadre and not a local cadre and ~
secondly the post of Staff Officer (Group A) was a
E transferable one even in practice was a co111DOn point.
Examination was also held on All-India basis. Therefore, the
High Court was of the view that even if it was held that the
petitioner's post was not of All India cadre, it would make no
difference for applicability of the principle laid down by +-
this Court in Deodhar's case (supra).
F
Promotion was included in the ambit of equality of
employment or appointment under article 16 of the
Constitution, according to the Bombay High Court. The Bombay
High Court noted that there were very junior officers like
respondents 4 and 5 before the Bombay High Court Who had been
G posted then at Bhopal office. The petitioners before the
Bombay High Court were otherwise qualified and confirmed
employees having 15 years service to their credit and yet they y-
did not get the chance to appear in examination as employees
and some respondents got their chances even though they were
appointees of 1980 and were not even confirmed. The
H
R.B. I. v. C.N. SAHASRANAMAN (SABYASACHI MUKllARJI, J,] 895
A
respondents 4 and 5 before the Bombay High Court were given
-+the benefit not on the basis of comparative 11¥!rit but only on
the basis, according to the Bombay High Court, of fortuitous
event that there had been vacancies in Bhopal office.
Therefore, the basis on which the schell¥! provided was
promotion according to the vacancies in the zonal offices. B
This circumstance of anticipated vacancies in the zonal
offices has no nexus, according to the Bombay High Court, to
_..the 11¥!rlt-cum-seniority aspect. The Bombay High Court also
could not sustain the contention urged on behalf of the
appellant before us that the schell¥! was contractual and
therefore was binding on the petitioners. It was submitted
that the petitioners before the Bombay High Court and the C
, three respondents before us were not 11¥!mbers of the union and
) ' were not parties to the agreell¥!nt 11¥!ntioned before. Moreover,
t according to the High Court, by agreell¥!nt one could not give
up one's right. It was contended before the High Court that
the validity of the scheme had been upheld by the decision of
this Court in the case of Reserve Bank of India v. 11.C. 0
Paliwal & Ors., (supra) where one part of the scheme Call¥! up
for scrutiny, but according to the High Court as this point
was not the subject matter of scrutiny, the said decision did
not affect the position.
The main grounds on which the High court of Bombay set E
aside the impugned portion of the circular which has been set
out hereinbefore was the position that the presumption that
the staff from which the promotion was made na11¥!ly Class III
employees, clerical and non-clerical belonged to an All-India
cadre and that promotion on the basis of centre-wise seniority
was opposed to the decision of this Court in the case of ll.S. F
Deodhar (supra).
The three petitioners in the court below namely Shri
C.N. Sahasranaman, Shri R. Raman and Shri S.O. Peshkar who
were the three staff members in the employment of the
appellant Reserve Bank of India are respondents to this G
appeal. Intervention has been permitted by the Court during
the course of the proceedings by the All India Reserve Bank
Employees• Association, the recognised union who represented
'i the majority of the workmen, and the All India Reserve Bank
Workers Organisation who represented the minority of the
workers both of whom have been made party-respondents. The H
896 SUPREME COURT REPORTS [1986] 2 s.c.R.
A other interveners are All-India Reserve Bank Employees
Federation at Hyderabad and All-India Reserve Bank Staff +"
Association. The majority recognised union as well as the last
mentioned union are supporting the stand taken by the
appellant bank,
In order to appreciate the controversy in this case, it
B was highlighted before us that since the inception of the
bank, separate department-wise and group-wise seniority for~
promotion to the cadre of officers and non-officers were
maintained by the bank,
In 1972, following with recognised union, a combined
c seniority list was mintained as a result of the settlerent '{
and the two circulars A.G. Nos. 8 and 9 both dated 13th May,
1972. These are two anneKUres being AnneKUres 'A' and 'B' to-r
the special leave petition to this Court which are in the
Paper Book of this appeal. AnneKUre 'A' deals with the scheme
for combined seniority list and switchover from non-clerical
D to clerical cadre. It is not necessary to set out in extenso
the detailed schere, In this schere all employees in Class III
non-clerical cadre substantively in the categories that have
been listed as groups I, III, IV and V in the anneKUre who
were graduates or had passed both parts of Institute of i..
Bankers Examination would be eligible to exercise an option in
E accordance with sub-clause (a) or (b) of clause 2 to be
transferred, automatically and without any screening, to posts
in the clercial cadre and also to vacant and other posts than
purely stop gap or short term nature, subject to sub-clause
(b) mentioned in the scheme. Combined seniority scheme +,
introduced by the Reserve Bank to equalise opportunity of
F confirmation and promotion of class under the optee scheme (
came up for consideration by this Court in Reserve Sm* of ,
India v. N.C. Paliwal & Ors., (supra). There the Court noted
that at every centre of the Reserve Bank of India, there were
five departments, the General Department and four Specialised
Departments. There was a separate seniority list for the
G employees in each Department at each centre and confirmation
and promotion of elllployees was only in the vacancies arising
within their Department at each centre. There were two grades y-
of clerks in each Department, namely, Grade I and Grade II.
The pay scales of Grade I and Grade II clerks in all the
H
R,B, I, v. C.N. SAHASRANAMAN [SABYASACHI MUKHARJI, J,] 897
A
departments were the same and their conditions of service were
also identical. There was automatic promotion from Grade II to
Grade I. It ls not necessary to set out in details the
consequences. But it may be mentioned that this optee scheme
gave rise to dissatisfaction amongst the employees in the
General Department and they claimed equal opportunities for B
having combined seniority but justified a separate seniority
list on the ground that work tn each Department was of a
1 special nature and their lnterchangeabi llty was undesirable
""I and hard to achieve. As a result of the recommendations of the
National Tribunal, however, the Reserve Bank introduced the
optee scheme 1965 as a first step towards equalisation of
opportunity. Under the scbeme, the option to go over to the c
specialised Department was confined to confirmed Grade II
clerks and officiating Grade I class in the general
t department. If he exercised option, he was eligible to be
selected. If he was selected, he would be entitled to be
absorbed only as Grade II clerk in one of the specialised
departments with the result that if he was an officiating D
Grade I in the General Department at the time of the exercise
of the option, he would lose the benefit of officiation in
Grade I in the general department as also the monetary benefit
of Rs. 15. His seniority in the cadre of Grade II clerks in
the specialised department in which he was absorbed would be
determined on the basis of his length of service calculated E
from the date of his recruitment if he was a graduate when he
joined service, or from the date of his graduation if he
became a graduate whilst in service.
The petitioners in that case and some others were, at
the time of introduction of the Optee Scheme, confirmed Grade F
II clerks in the general department and some of them were
officiating in the general department as Grade I clerks. They
exercised the option under the Optee Scheme and were absorbed
substantively as confirmed Grade II clerks in one or the other
of the specialised departments. The clerks, other than the
petitioners were, in due course, in order of seniority, G
promoted as officiating Grade I clerks in their respective
specialised departments. But before the turn of the
petitioners for promotion came, a new Scheme was introduced on
13th May, 1972 as a result of continuous agitation by the
e8'>loyees for full equalisation of opportunities between the
general department and the specialised departments. The H·
898 SUPREME COURT REPORTS [1986] 2 S.C.R.
A.
scheme was known as the Combined Seniority Scheme, and it
superseded the Optee Scheme. It consisted of two parts as ·•
mentioned hereinbefore. One part provided for the integration
of the clerical staff of the General Department with the
clerical staff of the Specialised Departments, this is
annexure 'A.' of the present Paper Book and the other which is
B annexure 'B' in the present Paper Book for the integration of
the non-clerical staff with the clerical staff in all the
Departments. The Combinted Seniority Scheme gave an option to
the non-clerical employees to be transferred to posts in the i
clerical cadre, but in the interest of efficiency, prescribed
a qualification that only those employees in non-clerical
C cadre would be transferred who were either graduates or had
passed both parts of Institute of Bankers' Examination. For
determining their seniority vls-a-vi.s those in the clerical ~
cadre, the Combinted Seniority Scheme adopted the rule that .
1/3 of their total non-clerical service until 7th May, 1972 -t
( the date on which agreement was reached at between the Bank
D and its employees on the terms of the Combined Seniority
Scheme) or the date of acquiring the qualification should be
taken into account.
Allowing the appeal from the High Court and upholding
the validity of the Combined Seniority Scheme, this Court held
E that assuming that the Reserve Bank was State under article 12 ~
of the Constitution and therefore, subject to articles 14 and
16 of the Constitution, by the mere introduction of the Optee
Scheme, no promise or assurance could be spelt out on the part
of the Bank not to take any steps towards integration of other
employees not covered by the Optee Scheme. The Reserve Bank, i
F could not, on any principle of law or by any process of
implication, be held bound to hold its hands in the matter of
further integration, until the petitioners were promoted in I
the Specialised Departments. The only object of the Optee
Scheme was to equalise the promotional opportunities of Grade ~
II clerks in the General Department with those of Grade II ·'
G clerks in the Specialised Departments by giving an option t
the former to be absorbed in the latter. The object was
carried out as soon as the petitioners and other Grade II
clerks in the General Departent opted to be transferred to the
Specialised Departments. Then they became Grade II clerks in t
the specialised departments having the same promotional
H opportunities as the original Grade II clerks in the
R.B.I. v. C.N. SAHASRANAMAN (SABYASACHI MUKHARJI, J,] 899
A
, specialised departments. There was no assurance given by the
-+ Banlt that the promotional opportunities available to Grade II
clerks in the Specialised Departments would not be diminished.
This Court in the said decision was of the view that the
Combined Seniority Scheme did not affect the promotional op-
portunities of all Grade II clerks in the Specialised Depart-
B
ments, irrespective of whether they were original or trans-
feree Grade II clerks. It did not discriminate between trans-
feree Grade II clerks and original Grade II clerks. There was
~no breach of the principle that the promotional opportunities
of transferee Grade II clerks should be equal to those of
original Grade II clerks. The fact that some of the Grade II
cl~rks, junior to the petitioners, had become Grade I clerks
c
in the general departments, and so could be equated only with
r Grade I clerks in the specialised departments was a wholly
"t fortuitous result, according to this Court. This Court noted
: that it might cause heart-burning amongst the petitioners that
they were still continuing to be Grade II clerks but whenever
services were integrated, some hardship was bound to result as D
a necessary consequence of integration. This Court further
held that Reserve Banlt did not undertake that it would not
take any steps for bringing about total integration of the
clerical services until all the transferee Grade II clerks
were promoted. The Banlt was entitled to introduce the Combin-
J ed Seniority Scheme at. any time it thought fit and its E
validity could not be assailed on the ground that it was
introduced at a time when some of the transferee Grade II
clerks still remained to be promoted and so was discriminatory
against them. The fact that some transferee Grade II clerks
t had already obtained promotion as Grade I clerks in the
Specialised Departments by the time the Cabinet Seniority
F
Scheme was introduced, was all part of the exigencies of
. service and in law no grievance could be made against it.
, The integration of different cadres into one cadre could
not be said to involve any violation of the equality clause,
according to this Court. Therefore, the first part of the
G
scheme for combination stands affirmed by this Court in N.C.
Paliwal's case (supra).
It may be mentioned that it is the case of the Banlt that
the settlement and the circulars namely Circulars Nos. 8 and 9
referred to hereinbefore both dated 13th July, 1973 were the
H
900 SUPREME COURT REPORTS [19861 2 s.c.R.
A
culmination of a long process of negotiation and assessment by
the bank. Reference was made to the observations in the Awardl-
of the National Tribunal presided over by Justice K.T. Desai.
Indeed, this court referred to the said decision of Justice
K. T, Desai at page 382 and quoted from the said report.
Justice Desai had observed that it was desirable "1hen it
B was possible, without detriment to the Bank and without
affecting the efficiency, to group employees in a particular
category serving in different departments at one Centre,
together for the purpose of being considered for promotionf-
that a common seniority list of such employee,; should be
maintained. The same would result in opening up equal avenues
C of promotion for a large number of employees and there would
be lesser sense of frustration and greater peace of mind among
the employees. These observations of the National Tribunal '(
were also approved by this Court in All India Danit Employees
Association v. Reserve Bank of India, [1966] 1 S.C.R. 25 att
57.
D
In Reserve Bank of India v. N.C. Paliwal & Ors.,
(supra), at page 385 of the report, it was observed, inter
alia, as follows
"The Association continued to agitate for
E acceptance of its demand and ultimately, as a~
result of negotiations, an agreement dated 7th May,
1972 was arrived at between the Reserve Bank and
the Association by which the demand of the
Association was substantially conceded and the
principle of a combined seniority list was accepted-+
F by the Reserve Bank. The petitioners and some other
employees were, however, not members of the
Association and they refused to accept the terns of ~
this agreement and hence the Reserve Bank issued a
Circular dated 13th May, 1972 introducing a Scheme
for combined seniority list and switched over from
G non-clerical to clerical cadre with effect from 7th
May, 1972. This Scheme was substantially in the
same terns as the agreement dated 7th May, 1972 and I
we shall hereafter, for the sake of convenience,
refer to this Scheme as the Combined Seniority
Scheme.
H
R,B,I. v. C.N, SAllASRANAMAN [SABYASACHI MUKHARJ1, J,] 901
A
It may be lll!ntioned as was placed before us that before a
"' combined list at the centre was introduced, the provision was
based on department-wise seniority at each centre and the
working of the Reserve Bank department-wise had been explained
in the Paliwal 's case by this Court at pages 380 and 381 of
the report. It may be mentioned that the Circular AC-9 dated B
13th May, 1972 which was issued as mentioned before following
the statutory settlelll!nt dated the 7th May, 1972 under section
18(1) of the Industrial Disputes Act, 1947 was upheld in
A Paliwal 's case at page 380-382. This Circular was not
challenged before the Bombay High Court. The resulting
position is that the centre-wise seniority is the established
position and whatever promotions have to be effected 1111st be c
based on the centre-wise seniority, according to the
appellant. The other part of the Circular i.e. Circular AC-8
dated 13th May, 1972 only laid down certain procedural aspects
~ of promotion from clerical to non-clerical (Officer cadre) and
even if any part of Circular AC-8 was set aside, it would not
substantially affect the stand of the appellant Bank that the D
promotions are and would be made on the basis of combined
seniority. It is the case of the Bank that the principle of
centre-wise seniority was evolved after considerable
discussion and debate with all the concerned interests, viz.
who were represented by the recognised union, i.e, the All-
.), India Reserve Bank Employees' Association and all the view E
points, according to the Bank, were considered by the National
Tribunal and this Court had, as mentioned hereinbefore, in the
two decisions on two different occasions, upheld the validity
of the combined seniority ~cheme; namely All India Reserve
' - t Banit F.mployees' Association v. Reserve Banlt of India, at pa~e
57. and Reserve Banlt of India v. N,C, Paliwal, (supra) at pages F
380-382.
Indeed in the last mentioned case at page 394, the
validity of the combined seniority list has been subsequently
upheld by this Court.
G
The controversy in this appeal lies within a narrow area
but it has been urged against a vast compass and necessarily
would require examination of some aspects which are strictly
'1 not germane to the present issue. ·
It has to be borne in mind as has been mentioned herein- H
902 SUPREME COURT REPORTS [1986] 2 S.C.R.
A
before that A.G. 9 dated 13th May, 1972 has received the
acceptance and approval of this case in Paliwal 's case and i..
A.G. 9 and A.G. 8 form an integral part of the promotion and
regulation of the employment of the staff,
It was further emphasised from the point of view of
B justice and fairness that for a large majority of employees of
the Bank, the maintenance of centre-wise seniority was
essential. If Class III clerical and non-clerical staff are '"
treated as an All-India cadre, both the employees as well as
the Bank would find themselves in a difficult position because
the employees will render themselves to be freely transferable
c from one area to another and particularly for those employees
who are being transferred outside Bombay, Calcutta and Delhi,
may find it extremely difficult, according to the Bank, to get
housing accommodation (as the Bank woud not be in a position
t
to offer housing accommodation to all its employees). In such
a situation, it was submitted, it would become a problem of
D discipline for enforcement of transfer made if the same is
refused by the employees. It was, therefore, in those
circumstances that taking a pragmatic view the Bank had so far
not insisted on establishing an All-India cadre as far as the
non-officer staff was concerned. To add to the problem of
accommodation, there would be the problem of children's educa-
E tion at the new centres. The integration of various -'-
centre-wise grades into one All-India grade would also p6se
considerable administrative problems.
In V.T. Khanzode v. Reserve Ban1t of India, (supra), it
was noted that the private interest of employees of public
F undertakings should not override public interest and an effort
had to be made to harmonize the two considerations. No scheme
governing service matters could be foolproof and some section
or the other of employees was bound to feel aggrieved on the
score of f.ts expectations being falsified or remaining t<Y be
fulfilled. Arbitrariness, irrationality, perversity and mala
G fide will, of course, render any scheme unconstitutional but
the fact that the scheme does no satisfy the expectations of
every employee was no evidence of these. It was further
observed that the contentions of variations of the service
rules had to be judged in the light of the historical data
governing the constitution and Management of the Services
under Reserve Bank of India from time to time. Without an
R.B. I. v. C,N, SAllASRANAMAN [SABYASACHI MUKHARJI, J.] 903
A
awareness of ·the history leading to the events which the
~ petitioners have challenged as unconstitutional, it would not
be possible either to apprciate the position or to provide an
answer to it. These observations were made in connection with
the evaluation of integrated seniority list for the officers
Grade B and above. B
In Kamal Kanti ~tt & Ors. v. Union of India & Ors.,
[1980] 3 S.C.R. 811, at pages 841-842 this Court emphasised
.J, that in matters like fonru lat ion of seniority list where, in
respect of the rules of promotion, more than one view was
possible and that a choice had to be necessarily conditioned
by several considerations ensuring justice to as many as c
," possible and injustice to as few, it was not safe to test the
1 constitutionality of service rule on the touch stone of
·+ fortunes of individuals.
This Court had also observed that the right of promotion
should not be confused with mere chance of promotion. Though D
the right to be considered for promotion was a condition of
service, mere chances of promotion were not. See Mohd. sbujat
All v. Union of India, [1975] I S.C.R. 449. See also in this
connection the observations in R.S. lleoclhar v. State of
Maharashtra, (supra) at p. 230 and Reserve Banlt of India v.
A C.T. Dighe, [1982] I S.C.R. 107 at 121-122. E
It is apparent, therefore, that the chances of promotion
• in some areas occur more often in smaller centres than in
other bigger centres like Bombay, Calcutta, Delhi but that is
" 'y fortutious and would not really affect the question, and
violate articles 14 and 16 of the Constitution. The justice of F
the case should be judged in conjunction with other factors,
~ the convenience, the future of the family etc.
The High Court proceeded, inter alia, on the basis that
the fact that Class III employees of the Bank belonged to an
All-India cadre freely transferable from one place to another. G
Regulation 31 of the Reserve Bank of India (Staff)
"! Regulations, 1948 which is in Chapter IV namely; Conduct,
Disciplince and Appeals, is as follows :
"Unless in any case it be otherwise distinctly H
904 SUPREME COURT REPORTS [1986] 2 S.C.R.
A
provided, the whole time of an employee shall be at
the disposal of the Bank, and he shall serve the i.-
Bank in its business in such capacity and at such
place as he may from time to time be directed."
Regulation 31 as indicated is subject to the condition
B that 'unless in any case it be otherwise distinctly provided'.
In the instant case, it has been distinctly provided in the
appointment letters as to where the Class III employees of the J..
Bank are liable to serve. See for instance, the specimen copy
at page 107 of the Paper Book which clearly, inter alia,
provides as follows :
c
"He/She is liable to be posted either as Coin-Note -/
Examiner Gr.II or as Clerk Gr.II in any of the
department of the Bank at Bombay (Fort) or Byculla +
Offices."
D All appointment letters issued to all staff members
appointed in Class III and below ever since the inception of
the Bank contained, according to the Bank, identical or
similar provision specifying the off ices in which of the Bank
these employees are required to work. It appears, therefore,
there was definite provision contrary to as contemplated by ,._
E Regulation 31 of the Reserve Bank of India, (Staff) Regulation
1948 and therefore the general provisions of Regulation 31
would not have any application. In contrast, the appointment
letters issued to the officers had always im'oked general
provisions of Regulation 31 giving full power to the
management of the Bank to post or transfer the officers in any i ·
F office situated in India. For this purpose, specimen
appointment letter to an officer in Grade A may be referred (
to. See in this connection pages 98 to 108 of the paper book t---
wherein it is stated in (xi) as follows:.
"Posting and libility for transfer:
G
You are liable to be posted in any of the offices
of the Bank and to work in any of its departments
or the departments/offices of its associate )"
institutions as the Bank may decide. You will also
be liable for transfer to any place in India as the
H Bank may decide from time to time without payment
of any .allowance other than travelling allowance."
R.B. I. v. C.N. SAllASRANAMAN [SABYASACHI MUKHARJI, J.] 905
A
1 It was further submitted and it appears that there ls
"""good deal of substance in this that if an All-India cadre is
enforced in respect of Class III employees, it would result in
injustice to all the employees in that class at the smaller
centres for a considerably long period of time leading to
industrial unrest. The result of applying the principles of an B
All-India cadre for this class of employees would be that the
senior-most in that whole cadre AU-India-wise would alone
have to be considered for promotion. In such a case, for a
~considerable long time, only employees of the older offices,
namely, Bombay, Nagpur, Madras, Calcutta and Delhi will have
to be considered, they being by far senior-most among the
All-India employees and such a consideration and empanelling C
\_, would continue for a very long time as the principal basis of
j the settlement was not one of promotion on merit but rather an
' ~ upgradation on mere seniority, the only qualification being an
examination to determine fitness. Once fitness was determined
by the examination, the ranking in that examination did not
come into play thereafter and the successful candidates were o
again listed according to centre-wise seniority in the matter
of upgradation and promoted as and when vacancies at that
centre occur. It was submitted that the recrui.tment of Class
III employees at the lowest grade was made centre-wise by the
Managers of the offices concerned and not from one source at
~the centre as such recruitment would be administratively not E
feasible, to be undertaken.
It has to be borne in mind in deciding the controversy in
this case that in the course of this litigation on or about
• )'20th October, 1982, this Court by an order suggested the
appellant Bank that it might frame a new scheme for promotion, F
removing as far as possible any imbalances that might be
existing in the prevailing scheme. The appellant Bank,
thereafter, made certain sugges tlons which were not
acceptable to all the unions and more particularly to the
recognised union. In the circumstances, the Bank could not
proceed with the suggested scheme. G
'
Thereafter, the officers of the appellant Bank held
'f discussions with the representatives of the recognised union
viz., the All-India Reserve Bank Employees' Association, and
further modified the scheme agreed to under the settlement
dated 7th May, 1972. H
906 SUPREME COU!tr REPORTS [1986] 2 s.c.R.
A
As a result of the discussion with the employees of the,
Bank, certain decisions were taken regarding the prlnciplesfl-.
governing recruitment and promotlon for staff officers Grade
A. There are in the affidavit affirmed on 22nd February, 1983
by Shrl Pradeep Madhav Joshi, the Joint Chief Officer in the
Personnel Policy Department of the Reserve Bank of India along
B with the letter dated 21st February, 1983.
It was stated therein that the principles governing
recruitment and promotion for 'Staff Officer Grade A evolved~
in 1972 be, subject to the approval of this Court, modified on
the following terms; "(i) .10% of the vacancies of Staff
C Officers Grade A will be filled in exclusively by direct
recruitment. However, such o( the members of the staff who
comply with the eligibility requirements as might be Y
prescribed from time to time for direct recruitment, subject,
to relaxation in respect of age requirement as the Bank may+
decide, will be eligible to compete in the selection test.
D
(ii) Of the remaining 90% of the vacancies, 75% thereof will
be filled in on the basis of a written examination Le.
qualifying test in accordance with the scheme for promotions:
Staff Officers Grade A annexed to Administrative Circular No.8
dated 13th many, 1972 subject to the condition.s that no
E employee will be admitted to the qualifying test at any centre-'<
unless he has put in a minimum qualifying period of service of
three years in clerical grade as on a notified dated.
(iii) The residuary portion, i.e. 35% of the 90% of the vacan-
t
cies or in other words 22-1/2% of the total vacancies to the_,
F post of Staff Officers Grade A would be filled in on the
basis of an All-India Merit Test to be prescribed by the Bank
in consulation with the Reserve Bank of India Services Board
ordinarly, any employee who had put in a minimum of 9 years'
service in Class II would be eligible to take the test. If,
however, sufficient number of employees with 9 years' service
G were not available at any point of time, the Bank might
suitably reduce the conditions of qualifying service so that
candidate to the extent of at least thrice the number of
vacancies are available for the test. Notwithstanding such
reduction in qualifying service necessitated in the circums- r
tances indicated, in the case of non-clerical staff who are
H non-graduates, they would, however, be eligible for taking the
R.B.I. v. C.N. SAHASRANAMAN (SABYASACHI MUKHAR.JI, J.] 907
A
test only on completion of 9 years service. Successful
candidates would be empanelled in the central panel in order
of their comparative merits and they would be considered for
posting in order of their position in the central panel as,
when and where, the vacancies to posts of Staff Officer Grade
A in any of the offices of the Bank might arise.'' B
The appellant Bank addressed a letter to the Association
incorporating the aforesaid decision of the appellant Bank on
~ the modification of principles governing recruitment and
promotion for Staff Officer Grade A and the Association has,
by its letter confirmed the same.
c
It was submitted on behalf of the Bank that the modified
scheme envisages appointment of a candidate for the post of
Staff Officer Grade A through holding three different test,
~ viz. (i) qualifying test on the basis of centre-wise
seniority and estimation of vacancies of Staff Officers Grade
A for each centre, (ii) merit test for all employees with a D
minimum length of service of 9 years on all-India basis.
Successful candidates who will be empanelled in the central
panel in order of their comparative merits would be considered
for posting in order of their position in the central panel,
as, when and where the vacancies to the post of Staff Officers
Grade A in any of the offices of the Bank might arise; and E
(iii) Selection test for direct recruitment of candidates for
Staff Officer Grade A for inducting fresh blood for Staff
Officer Grade A which is the base level of officer and first
level of supervisory cadre. It was submitted on behalf of the
.* Bank that the modified scheme achieved just balance keeping in
view the interest of the employees as a class i.e. both of F
senior and experienced employees and junior and qualified
employees on the one hand and the interests of the Bank on the
other. It was further stated that earlier, 82-1/2% of the
vacancies were allotted to be filled on the centre-wise basis.
Under the modified Scheme, the percentage was brought down to
67-1/2. It was necessary to make gradual change as the total G
change in the existing procedure would have created industrial
unrest and would have led to other imbalances in operation.
Further it was submitted that the modified scheme
provided that no employee would be admitted to the qualifying
test at any centre unless he has put in a minimum qualifying H
908 SUPREME COURT REPORTS [1986] 2 S,C,R,
A
period of service of three years in clerical cadre as on a
notified date. It was submitted on behalf of 'the Bank that one ~
of the factors that influenced the High Court in the judgment
under appeal was that raw junior employees from Bhopal Off ice
were eligible to appear for the qualifying test, as apparent
from the decision under• appeal. It was submitted that with the
B
modification, no employee who had put in less than three years
of service would be admitted to the qualifying test and the
grievance that even temporary and junior employees would .l
become eligible would no longer survive. ...
The correctness or otherwise of the decision of the
c Bombay High Court in the light of the modified scheme has to
be judged from various angles.
On behalf of the opposing respondent, Shri C, N.
Sahasranaman made his submissions orally in person. lie ~
submitted that at pages 296 to 299, 306, 307 and 310 of the
D Paper Book, the appellant had admitted that the impugned
scheme of promotions had led to serious imbalances in
opportunities for appearing at the examinations. With this
admission, it was urged by respondents appearing in person
that the question of law raised by them in their affidavit
have been concluded by themselves and therefore they could not
E have any grievances whatsoever against the impugned judgment >..
of the Bombay High Court. It was submitted that matters
relating to the imbalances contained by the impugned Circular
No.8 had already been considered at length by this Court and
this Court had directed on 20th October, 1982 to foI"lll.llate a
new policy removing the imbalances in the impugned policy.
i
.F
It was submitted by the opposing respondents that
equality right of Class III employees which was an All-India ~
Institution would be affected even in the modified scheme
suggested by the Bank, It was urged that it would be destruc-
tive of the All-India stature of the Reserve Bank of India.
G
The main grievance of the respondents was that there was
violation of the constitutional right and it will hamper
development of an All-India Institution and All-India cadre.
Regarding reference to the case of N.C. Paliwal, it was
H submitted on behalf of the opposing respondents that this
R.B. I. v. C.N. SAHASRANAMAN (SABYASACHI MIJKHARJI, J.] 909
A
Court had not struck down the impugned circular on the ground
~ that it did not ensure equality of chances of promotion but on
the ground that the scheme did not ensure equality of
opportunity to be considered for promotion. The equality of
chances of promotion and the equality to be considered for
promotion, according to the respondents, are two different
B
questions and the grievance of the respondents was that there
was denial of equality to be considered for promotion.
Whether there has been denial of equality of the view of
..
- \
promotion or any constitutional right infringed or not cannot
be judged, where interest of large number of people are
concerned, in the abstract. Vast majority, indeed the
overwhelming majority of the workmen are in favour of the
'f scheme as evolved by the Bank, as modified as it· would be
c
-1 apparent from the submissions urged on bahalf of All-India
Reserve Bank Employees' Association impleaded as
party-respondent in this appeal as well as All India Reserve
Bank Employees' Federation, Hyderabad. It has to be borne in
mind that in service jurisprudence there cannot be any service D
rule- which would satisfy each and every employee and its
constitutionality has to be judged by considering whether it
is fair, reasonable and does justice to the majority of the
A
employees and fortunes of some individuals is not the
touch-stone. See ln this connection the observations of this
Court in Kamal Kantl Dutt & Ors. v. Union of India and Ors., E
(supra).
Furthermore it appears to us that Circular No.9 is a
• r counterpart of Circular No.8. Circular No. 8 having been held
valid, Circular No. 9 1111st also follow to be good. Circular
No. 8 cannot stand in vacuum and in isolation. It is a step to F
~· the fulfilment of the object to be achieved by Circular No. 9.
Viewed in that point of view and as a feasibility and having
regard to the factors and in regard to the history of Reserve
Bank employees, we are of the opinion that the scheme as
modified by the Bank and as accepted by vast majority of their
employees is a proper and just scheme and does not suffer from G
the vice of article 14 or article 16 or any other
'f constitutional guarantees.
It is well to bear in mind the fact that settlement of
disputes by direct negotiations or settlement through
H
910 SUPREME COURT REPORTS [1986) 2 s.c.R.
A
collective bargaining is always to be preferred for it is best
suited for industrial peace which the aim of legislation for ).._
settlement of labour disputes. See the observations in New
Standard l!ngineering Co. Ltd. v. N.L. Abhyankar and Ors.,
A.I.R. 1978 S.C. 982 at 984 = [1978) 2 S.C.R. 798. This view
has again been reiterated by t.his Court in Tata l!ngineering &
Locom:>tive v. Dieir Wort.en, A.I.R. 1981 S.C. 2163 = [1982) 1
B
S,C,R. 929, The order of this Court dated 2nd May, 1984 and
the referendum and the result thereof have been set out ~
hereinbefore.
c
We may, however, note that about the proper manner of
holding this referendum, certain doubts were expressed at the
time of hearing of this appeal. The Referendum undoubtedly Yi
indicates that majority of the employees are ill favour of .
acceptance of the oodified settlement. In matters of service +
-
conditions, it is difficult to evolve as ideal set of norms
governing various conditions of services and in grey area
where service rules operated, if oore than one view is
D
possible without sacrificing either reasons or common-sense,
the ultimate choice has necessarily to be conditioned by
several considerations ensuring justice to as many as possible
and injustice to as few. See in this connection the
observations in K.K. Dutta v. Union of India (supra) at page
A
841. These principles, however significant, do not authorise
E
the majority of the employees to trample upon the
constitutional guarantees or rights of the individual or
minority employees. Majority cannot thwart or barter away the
constitutional rights of the minorities. The constitutional
guarantees are to protect this very danger. But in judging the i
content of the constitutional rights, the entire perspective
F
of the equality of opportunity here and denial of equal right
in public employment have to be viewed in a fair, reasonable .-k_
and just perspective. Viewed in that light, it Is true, there { -
may be individual instances exemplifying injustice by
postponing or delaying the chances of proootions of the
contesting respondents yet that does not deny them their
G
constitutional right in its proper measure, and the
considerations that have weighed with the making of the
oodif ied scheme and ia the light of the other considerations ,.,
mentioned hereinbefore, we 1111st observe that with whatever r
care and objectivity or foresight any rule is framed, some
hardship, inconvenience or injustice might to result but the
H
R.B.I. v. C.N. SAHASRANAMAN [SABYASACHI MUKHARJI, J,] 911
A
paramount consideration is the reconciliation of the
~ conflicting claim> of two important constituents of service -
one which brings fresh clerical employees and the other mature
experience. There has been a happy merger of these two
considerations in the scheme proposed and in that merger, no
violation of the guaranteed rights of the opposing respondents B
have occurred.
It has further to be borne in mind that the promotion
~scheme having been evolved after careful consideration and
having been in operation ever since the inception of the Bank
with modification from time to time as a result of the
negotiations under the Industrial Disputes Act should not be c
\ modified drastically. In such matters one should hasten
} slowly.
,\
In the premises we affirm the scheme as modified by the
second modification referred to hereinbefore in the letter
dated 21st February, 1983 and as explained in the affidavit of D
Pradeep Madhav Joshi filed on 22nd February, 1983. We further
direct that the adhoc promotions made under the directions of
this Court in terms of the Order dated 22nd May, 1984 be
regularised. The opposing respondents have appeared in person
and have made submissions. They have made valuable
,;., contributions. The constitutionality of a scheme or if there E
is a violation of a right can only be decided if it is
questioned.
In that view of the matter the opposing respondents
.- tshould be amply compensated. We award cost of Rs.5000 jointly
to them or if they are appearing singly then singly. Amounts F
already paid by the Bank should be adjusted against the amount
-1- to be paid. If more amounts than Rs. 5000 have already been
paid then nothing need be refunded or paid. The decision of
the Bombay High Court is set aside. The appeal is allowed and
the order of the Bombay High Court substituted by the order
mentioned hereinbefore. G
Civil Misc. Petition No. 14834 of 1985 - application for
intervention and Civil Misc. Petition No. 14822 of 1985 -
'i application for impleading are allowed and are disposed of
along with the above order.
H
S.R. Appeal allowed.
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