Holding

The expression "existing officers" refers only to officers in service immediately prior to 1 October 1979; therefore probationary/trainee officers appointed on 30‑31 October 1979 are not covered by the order and cannot claim seniority over erstwhile Grade‑II officers.

Summary

The State Bank of India merged its Grade‑I and Grade‑II officers into a new Junior Management Grade effective 1 October 1979 under an order made under s.43 of the State Bank of India Act. Probationary and trainee officers appointed on 30‑31 October 1979 claimed seniority over the erstwhile Grade‑II officers, arguing that they should be treated as "existing officers" under paragraph 3(h) of the order. The Allahabad High Court held the opposite, while the Delhi High Court dismissed the petitions; the Supreme Court was asked to decide the proper construction of "existing officers" and whether the order could operate retrospectively. The Court held that "existing officers" means only those in service immediately before the appointed date, so the probationary/trainee officers are not covered and cannot claim seniority. It further ruled that the definition is not repugnant to paragraphs 7 and 8 and that the order does not have retrospective effect. Consequently, the Bank's appeal was allowed, the SLP dismissed, and all writ petitions against the order were dismissed.

Issues considered

The meaning of "existing officers" under paragraph 3(h) of the State Bank of India Officers' (Determination of Terms and Conditions of Service) Order, 1979.
Whether the definition of "existing officers" is repugnant to the provisions of paragraphs 7 and 8 of the Order.
Whether the Order can be given retrospective effect under s.43 of the State Bank of India Act, 1955.
Whether probationary/trainee officers appointed after 1 Oct 1979 have locus standi to challenge seniority determinations.

Legislation cited

State Bank of India Act, 1955s. 43(1), s. 43(2)

Subjects

service lawsenioritydefinition of termsexisting officersretrospective effectstatutory constructionState Bank of Indiaprobationary officersgrade merger

Judgment

STATE BANK OF INDIA & ORS. A
v.
YOGENDRA KUMAR SRIVASTAVA & ORS.

MAY 1, 1987.

[0. CHINNAPPA REDDY AND MURARI MOHON DUTT, JJ.] B

Service Law

State Bank of India Officers' (Determination of Terms and Con-
ditions of Service) Order, 1979: Paragraphs 2( 1), 3(h), 7, 8 & 18(5)-
Merger of Grade-I and Grade-II Officers existing on October 1, 1979 C
into Junior Management Grade-Probationary Trainee Officers
appointed in Grade-I on October 30/31, 1979-Fixation of inter se
seniority.

Statutory Construction
D
Repugnancy-'Definition' Clause-When repugnant to other
provisions.

Consequent to an agreement between the Executive Committee of
the Central Board of the appellant Bank and its Officers' Federation, in
pursuance of the Pillai Committee Report, the Grade-I and Grade-II E
Officers discharging managerial and supervisory functions, were
merged into the new Junior Management Grade. It was agreed that
Officer> .,; Grade-H would be junior to the existing officers of Grade-I

t
and the seniority list would be prepared accordingly. Thereafter, in
exercise of powers conferred by suh-s. (1) of s. 43 of the State Bank of
India Act, 1955 the State Bank of India Officers' (Determination of F
Terms and Conditions of Service) Order, 1979 was made and brought
into force with effect from October 1, 1979. Paragraph 2(1) of that
Order provided that it shall apply to the existing officers of the Bank
and to such employees of the Bank to whom it may be made applicable.
Under paragraph 3(h) the expression "existing officers" was defined to
mean officers in the service of the Bank Immediately prior to the G
appointed date, i.e., October 1, 1979. Paragraph 7 provided for the
placement of existing officers on the appointed date in the correspond·
ing new grades and scales. Paragraph 8(1) provided for fltment of
existing officers in the new grades, and scales of pay in accordance with
paragraph 7, at a stage corresponding to the existing grade and scale.
Under paragraph 18(5) the seniority among the existing officers was to H
115
i 16 SUPREME COURT REPORTS [1987} 3 S.C.R.

A remain the same, i.e., the Officers Grade-I were to rank senior to
Officers Grade-II.

Certain Probationary{frainee Officers, who were appointed by
the Bank in Grade-I on October 30/31, 1979 before the Order was made
on December 19, 1979 rded writ petitions before the Allahabad High
B Court and some others before the Delhi High Court claiming seniority
over the erstwhile Grade-II Officers, in which it was contended for the
Bank that since the petitioners were not the employees or the Bank on
October 1, 1979, i.e., the appointed date, they could not be given
seniority over the erstwhile Grade-II Officers, who were the 'existing
officers' within the meaning of the expression under paragraph 3(h) of
the Order.
c
The Allahabad High Court took the view that the expression
'existing officers' has to be read as including the Probationary Officers
and Trainee Officers, otherwise a repugnancy between the definition of
'existing officers' and the provisions of paragraph 7 and 8 or the Order
D will arise, that the notional date of the coming into force of the Order,
viz., October 1, 1979 is only to protect the emolnments of the officers
and nothing else, and directed the Bank to prepare the seniority list of
its officers accordingly. The Delhi High Court, however, took a con-
trary view and dismissed the writ petitions.

E In these appeals by the Bank against the decision or the Allahabad
High Court and Special Leave Petition by the Probationary{frainee
Officers against the decision of the Delhi High Court, it was submitted
for the Probationary{frainee Officers in support of their contention
that they should be considered as 'existing officers' within the meaning
i
of paragraph 3(h) of the Order, that the Bank itself had treated them as
F 'existing officers' by fitting them to the Junior Management Grade and
giving them a higher start of Rs.960 p.m., that such fitment had been
made by the Bank following the principles laid down in paragraphs 7
and 8 of the Order, that unless the expression 'existing officers' is read
as including 'Probationary/Trainee Officers', three will be a repu-
gnancy between the dermition of 'existing officers', as contained in
G paragraph 3(h) and the provisions of the paragraphs 7 and 8 of the
Order, that the definition of 'existing officers' is only illustrative and -1. ··
not exhaustive, that the merger of officers of Grade-II and Grade-I into
the Junior Management Grade was only for the purpose of fitmeut in
the higher scale of pay and not for the purpose of seniority, that they
have to undergo tests which were more stringent than the tests to be
H undergone by Grade-II Officers and as such Probationary/Trainee
STATE BANK v. Y.K. SRIVASTAVA 117

Officers, could not be. placed under Officers Grade-II in the seniority A
,.,4. list, and that the Bank had no authority to give· retrospective operation
to the Order with effect from October 1, 1979 inasmuch as s. 43 of the
Act under which the Order has been passed, did not authorise the Bank
to pass any such Order with retrospective effect.
For the Bank it was contended that the order had not been made 8
retrospective, that all that has been done was that the Officers Grade-I
~ . and Grade-II, who were in the employment of the Bank immediately
before October 1, 1979 have been merged into one category, namely,
Junior Management Grade, in terms of the recommendations of the
Pillai Committee, that these Officers were already employees of the
Bank before October 1, 1979 and as such they were 'existing officers'
within the meaning of paragraph 3(h) of the Order, that the Pro- C
bationary/Trainee Officers, who were appointed on 30th/31st October,
1979 had no locus standi to challenge the Order or the merger of Offi-
cers Grade-I and Grade-II and that as no order has been passed under
paragraph 2(1) of the Order applying the same to the Probationary/
Trainee Officers, they were outside the purview of the Junior Manage- 0
ment Grade and, as such, were precluded from challenging the seni-
ority of the erstwhile Officers of Grade-II.
j-··
Allowing the appeals and dismissing the special leave petition, this
Court.
E
HELD: 1. The e_xpression 'existing officers' as deimed in para-
graph 3(h) of the State Bank oflndia Officers' (Determination of Terms

t
and Conditions of Service) Order, 1979 means officers in the service of
the Bank immediately prior to the appointed date, i.e., October I,
1979. The Probationary/Trainee Officers who were appointed by the
Bank on 30/3lst October, 1979 after the appointed date conld not, F
therefore, be held to be 'existing. officers' wi'.hin the meaning of
paragraph 3(h) of the Order. [l28B; F]
2. It is incorrect to say that when an employee is fitted to a
particular scale of pay of another cadre, he does not become a member
of that cadre. In the instant case, the Probationary/Trainee Officers
were placed in the corresponding scales of pay in the Junior Manage- G
ment Grade for the purpose of fitment in the new scales of pay. It may
be that such fitment has been made by the Bank following the principles
as laid down in paragraphs 7 and 8 of the Order presumably with a view
to removing any disparity between Officers Grade-I and Officers
Grade-II in the Junior Management Grade, but it cannot be said th~t
they were treated as existing officers and such fitment was made under H
118 SUPREME COURT REPORTS [1987] 3 S.C.R.

A paragraphs 7 and 8 of the Order. The Probationary /Trainee Officers
were not in the service of the Bank immediately prior to the appointed
date. As such the Bank could not treat them as existing officers for the
purpose of fitment or giving a higher scale of pay. [1280-F; B]

3.1 Repugnancy of the definition of any term may arise only if
B such dermition does not agree with the subject or context of a particular
provision. But any action not in conformity with the provision of the
definition clause will not render the definition of a term repugnant to
the subject or context of any provision of the statute containing that
term. [129BC]

3.2 In the instant case, there is no ambiguity in the definition of
c 'existing officers', as given in paragraph 3(h) of the Order, nor is it in
any way repugnant to the subject or context of paragraphs 7 and 8. If
the Probationary/Trainee Officers are treated as 'existing officers' it
would be doing violence to the provision of paragraph 3(h). (129B; A]

D 4. The dermition of 'existing officers' in paragraph 3(h) does not
give any illustration whatsoever. On the contrary, it is quite specific
and points to only one class of officers who were in the service of the -.?
Bank immediately prior to th~ appointed date and to whom any of the
rules, as mentioned in that paragraph were applicable. (1290]

E 5. All the officers of the Bank at the lower level before the Pro-
bationary or Trainee Officers were appointed on 30/31 October, 1979
had agreed that they would merge into a new grade, and Officers ·~
Grade-I would be senior to the Officers Grade-II. When two grades of
officers are merged into a new grade, the question of interse seniority .
automatically arises and casts a duty on the employer to fix the senio-
F rity. Paragraph 18(5) of the Order lays down that the seniority among
the existing officers will remain the same, that is, the Officers Grade-I
will remain senior to Officers Grade-II. Therefore, it cannot be said that
the merger was only for the purpose of fitment in the higher scale and
not for purposes of seniority. [130B-O; 129F]

G 6. The question is not whether the Probationary/Trainee Officers
have to undergo more stringent tests than the tests to be undergone hy ~ -
Grade-II Officers, but whether the Probationary/Trainee Officers were
existing officers or not, that is to say, whether they were In the employ-
ment of the Bank Immediately prior to October 1, 1979. As they were
not existing officers, they could not claim seniority over the Officers of
H Grade-II. [130FG]
STATE BANK v. Y.K. SRIVASTAVA 119

A· 7.1 Unless the statute, under which the rules are framed by the A
· rule making authority, does not specifically authorise the making of
rules with retrospective effect, such authority cannot frame any rule
with retrospective effect. [130H-131A)

Ctmnanore Spinning and Weaving Mills Ltd. v. Collector of
Customs and Central Excise, Cochin, & Ors., [1970) 2 SCR 830; B
~ Income-Tax Officer, Alleppey v. M.C. Ponnoose & Ors., [1970) 1 SCR

~
678; Hukam Chand etc. v. Union of India & Ors., [1973) 1 SCR 896
and Regional Transport Officer, Chittoor, & Ors. v. Associated Trans-
port Madras (P) Ltd. & Ors., [1980) 4 SCC 597, referred to.

7.2 In the instant case, it cannot be said that the Order was c
retrospective in operation. AU that has been done by it is that the
Officers Grade-I and Grade-II in the employment of the Bank imme-
~
diately prior to October 1, 1979 have been merged into one category,
namely, Junior Management Grade. Although the Order was actuaUy
published on December 19, 1979, the Officers of the Bank who were
there on or before October, 1, 1979 were aware of the fact that the D
• Order would be given effect to from October 1, 1979 as agreed to
'r between the Bank and the Officers' Federation. The appointed date is
relevant for the purpose of applicability of the Order to the Officers
who have been there in the service of the Bank immediately prior to the
appointed date. [131E; C; 132G-133A)
E
V. T. Khanzode & Ors. v. Reserve Bank of India & Anr., [1982) 4

t
SCR 411 and Reserve Bank of India v. C.N. Sahasranaman, [1986]
Suppl. SCC 143, referred to.

8. The distinction in the status of Officers Grade-I and Grade-II
having been abolished in the instant case, it is apparent that the Prob- F
ationary{Trainee Officers being Officers of Grade-I were of the same
status and position as the Officers of Grade-II. Admittedly, the erst-
while Officers of Grade-II were appointed much earlier than the Pro-
bationary{frainee Officers. They cannot, therefore, be considered
· senior to the erstwhile Officers Grade-II. [134G-13SAB)
G
~+- 9. The Probationary /Trainee Officers have not been brought
within the purview of the new cadre, viz., the Junior Management
Grade since no order has been passed under paragraph 2(1) of the
Order applying the same to them. As they are not in the Junior
Management Grade, which is a completely difJerent cadre, they have no
locus standi to challenge any benefit conferred on the Officers of the H

--- ---·
120 SUPREME COURT REPORTS [1987] 3 S.C.R.

A Junior Management Grade comprising erstwhile Officers Grade-I and
Officers Grade-II as were in the employment of the Bank prior to
October 1, 1979. [134F; CD; 135C]

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
4125·28 of 1986.
B
From the Judgment and Order dated 3.1.1986 of the Allahabad
High Court in Writ Petition No. 422 of 1981, 5900, 4207 and 5899 of
1985.

With
c Special Leave Petition (Civil) No. 3371of1982.

From ti,~ Judgment and Order dated 22.4.1981 of the High
Court of Delhi in Civil Writ Petition No. 823 of 1981.

D S.S. Sharma for the Appellants in C.A. Nos. 4125·28 of 1986.

Soli J. Sorabjee and Mrs. Madhu Sikri for the Petitioners in ~
S.L.P. No. 3371of1982.

S.N. Kacker and R.B. Mehrotra for Respondent No. I in
E C.A. No. 4125 of 1986.

S.P. Gupta and R.B. Mehrotra for Respondent Nos. 2 to 26 in
C.A. No. 4125 of 1986.

Shanti Bhushan and R.P. Kapur for the Respondents in S.L.P.
F No. 3371of1982.

The Judgment of the Court was delivered by

DUTT, J. In these appeals by sper;al leave and in the Special
Leave Petition the dispute relates to the seniority of erstwhile Officers
G Grade-II and the Probationary /Trainee Officers in the Grade-I of the
State Bank of India. -+,
In the lower level, the State Bank of India had two cetegories of
officers, naplely, Officers Grade-I and Officers Grade-II; the function
of the former was managerial and that of the latter supervisory. The
H conditions of service of these two categories of officers were, admit-
- STATE BANK v. Y.K. SRIVASTAVA [DUTT, J.J 121

tedly, governed by the State Bank of India (Supervising Staff) Service A
Rules, hereinafter referred to as 'the 1975 Rules'.

The 1975 Rules were not framed under the rule making power of
the Government, as conferred by section 49 of the State Bank of India
Act, but under section 43 of the Act, sub-section (1) of which provides
B
).._ that the State Bank may appoint such number of officers, advisers and
employees as it considers necessary or desirable for the efficient
.,..,
J,
performance of its functions, and determine the terms and conditions
of their appointment and service. Sub-section (2) of section 43 pro-

- vides that the officers, advisers and employees of the State Bank shall
exercise such powers and perform such duties as may, by general or
special order, be entrusted or delegated to them by the Central Board. c

>.-. Although the Officers Grade-I were superior iu rank to the
Officers Grade-II, there was little difference in the pay scales of these
two categories of officers. The duties, which were to be performed by
Officers Grade-I and Officers Grade-II, were also similar in nature.
D
Indeed, with the expansion of the banking activities, a large number of
Officers Grade-II were required to perform managerial duties which
1r normally were performed by Officers Grade-I. The Officers' Federa-
tion of the State Bank of India comprising both Officers Grade-I and
•' Grade-II had been demanding the abolition of the distinction between
these two Grades. The Bank, however, had been successfully resisti,ng
E
the demand made by the Officers' Federation from time to time. The

-'r Federation had, at one time started taking resort to agitational method
in order to force the Bank to abolish the theoretical distinction bet-
ween Officers Grade-I and Officers Grade-II.

-{ In the mean time, another external factor had crept into the
F
situation. The Government had appointed a Committee, known as
Pillai Committee, for considering a question of standardisation of
pay and allowances of the officers staff in the nationalised Banks.
After the Pillai Committee had submitted its report, the Government
declared its intention to apply the recommendations of the Pillai Com-
mittee to the State Bank ot India as well. According to the recommen-
G
...+- dations of the Pillai Committee, there should not be any distinction
between Officers Grade-I and Grade-II. The Committee recommen-
<led four Grades for officers and had provided for only one scale at the
junior management level. Four Grades of officers are as follows:-

1. Top Executive Grade. H
SUPREME COURT REPORTS (1987] 3 S.C.R.

A
2. Senior Management Grade.

3. Middle Management Grade.

4. Junior Management Grade.

B After proposals and counter-proposals between the Executive Com-
mittee of the Central Board of the State Bank of India and the Offi-
cers' Federation, the Committee agreed to do away with the distinc-
tion between Officers Grade-I and Grade-II, who would be placed in a
new cadre, called Junior Management Grade, having a scale of pay
being Scale-I-Rs.700-40-900-50-1100-EB-1200-60-!800. It was
C further agreed that the Officers Grade-II would be junior to the exist-
ing Officers Grade-I and the seniority list would be prepared
-
accordingly.

After the said agreement was reached between the Executive
Committee of the Central Board of the State Bank of India and the
D Officers' Federation, the Central Board, in exercise of the powers
conferred by sub-section (!) of section 43 of the State Bank of India
Act, passed an order, called State Bank of India Officers (Determina-
tion of Terms and Conditions of Service) Order, 1979, for short 'the
Order', determining certain terms and conditions of service of officers
in the Bank. Some of the provisions of the Order which are relevant
E for our purpose are extracted below:-

"l. (!) This order may be called State Bank of
India Officers (Determination of Terms and Conditions of
Service) Order, 1979.

F (2) This order shall come into force on the !st day of
October 1979.

2. (I) This order shall apply to "the existing officers
of the Bank and· to the officers of the Bank who are ap-
pointed or promoted to any of the grades mentioned in
G paragraph 4 and to such other employees of the Bank to
whom it may be made applicable by the Central Board or
the Executive Committee or the competent authority to the
extent and subject to such conditions as it may decide.

(2) It shall not apply, except to the extent specified
H by the Central Board or the Executive Committee or the
STATE BANK v. Y.K. SRIVASTAVA [DUTT, J.] 123

competent authority, to an officer during his tenure of A
service outside India or to employees engaged in any
country outside India and serving there.

3. In this order, unless there is anything repugnant to
the subject or context-
B
(a) "Appointed Date" means the 1st October 1979;

c
(h) "Existing Officers" means all officers in the
service of the Bank immediately prior to the ap-
pointed date and to whom any of the following
sets of Rules as amended or as deemed to have
been amended by appropriate resolutions of the D
Central Board or the Executive Committee are
applicable, namely:-

(i) Rules governing the service of Officers in the
Imperial Bank of India;
E
(ii) Rules governing the service of Assistants in
the Imperial Bank of India; and

(iii) State Bank of India (Supervising Staff)
Service Rules;
F
.............................................. '
...............................................
4. (1) There shall be the following four grades for
officers with the scales of pay specified against each of the
grades:- G
"'+
(A) Top Executive Grade:

Special Scale Rs.3500 (fixed}
Scale VII Rs.3250-125-3500
Scale VI Rs.3000-125-3250 H
124 SUPREME COURT REPORTS [1987] 3 S.C.R.

A (B) Senior Management Grade:

Scale V Rs.2500-100-3000
Scale IV-A Rs.2300-100-2600
Scale IV Rs.2000-100-2400
B
(C) Middle Management Grade:

Scale III Rs.1800-75-2250
Scale II Rs.1200-70-1550-75-2000

(D) Junior Management Grade:
c
Scale Rs. 700-40-900-50-1100-
EB-1200-60-1800

(2) Notwithstanding anything contained in sub-
paragraph (1), a Probationary Officer and a Trainee
D
Officer shall, on appointment, be placed at the stage of
Rs.860 in Scale I in the Junior Management Grade.

E
_ 7. Subject to the provisions of paragraph 6, existing
officers serving in the grades and scales of pay mentioned
in column 1 of the table given in Schedule I to this order
shall be placed as on the appointed date in the grade and
scale specified thereagainst in column 2 of the said
F schedule.

Provided that any difficulties or anomalies arising out
of the above placement shall be referred to a committee of
such persons as the Chairman of the Bank may appoint and
the decision of that committee in this regard shall be final.
G
8. ( 1) Every existing officer placed in any of the new
grades and scales of pay in accordance with paragraph 7,
shall be fitted at such stage in the new scale of pay cor-
responding to the existing grade and scale as specified in
Schedule II to this order.
H

--~
STATE BANK v. Y.K. SRIVASTAVA [DUTT, J.J 125

(2) Subject to sub-paragraph (3), on being so fitted A
in the new scale of pay, such officer shall be eligible to draw
the next increment, if any, in such new scale on the first day
of the month in which he would have been eligible to draw
increment in terms of the provisions in this behalf prior to
the appointed date.
B
(3) Where two or more officers having different
seniority in the scales of pay immediately before the
appointed date are fitted at the same stage in the new scale
of pay, different months may be fixed for the eligibility of
such officers for the next increment in the new scale of pay.
c
(4) The mere fact that on the appointed date an
officer happens to be posted in a post categorised as that of
a grade or scale higher than the one in which he is placed in
accordance with the provision of paragraph 7 will not by
itself entitle that officer to any higher placement or
fitment." D

The Order was actually made and published on 19th December,
1.979, but in view of paragraph 1(2) it came into force on the first day of
October, 1979. Under paragraph 2(1), it is inter alia provided that the
Order shall apply to the existing officers of the Bank and to such
employees of the Bank to whom it may be made applicable. Under E
paragraph 3(h), the expression "existing officers" has been defined as
meaning all officers in the service of the Bank, immediately prior to
the appointed date, that is to say, October 1, 1979. Thus, it follows
prima facie that the Order will apply only to the existing officers, that
is, the officers who were in the service of the Bank immediately prior
to the appointed date, which is October I, 1979. It is not disputed that F
no Order has been passed by the Central Board or the Executive
Committee or the competent authority directing the application of the
Order to employees of the Bank other than the existing officers, as
provided in paragraph 2( 1).

Before the Order was made and published on December 19, G
1979, certain Probationary Officers and Trainee Officers were
appointed by the Bank in Grade-I on October 30 and October 31,
1979. These Probationary/Trainee Officers, being Officers in Grade-I
were, on the dates they were appointed, superior in rank to the Offi-
cers Grade-II. These Probationary/Trainee Officers were fitted to the
Junior Management Grade: Scale-I, after the Order was passed creat- H
126 SUPREME COURT REPORTS [1987] 3 S.C.R.

A ing such a Grade at Rs.960 p.m. with effect from 30/31-10-1979. These
Probationary/Trainee Officers, however, claimed that they were
seniors to the erstwhile Officers Grade-II and that they should be
placed above st.ch Officers Grade-II in the seniority list. As the Bank
had refused the claim of these Probationary/Trainee Officers, to
seniority over the erstwhile Officers Grade-II in the Junior Manage-
B ment Grade, some of them filed writ petitions before the Allahabad
High Court and some before the Delhi High Court. The Bank, how-
ever, opposed the writ petitions and contended that as they were not
the existing officers, that is to say, employees of the Bank on October
1, 1979, which is the appointed date, they could not be ·given the
seniority over the erstwhile Grade-II Officers, who were the existing
C officers within the meaning of the expression under paragraph 3(h) of
the Order.

The Allahabad High Court has faken the view that the expres-
sion "existing officers" has to be read as including the Probationary
Officers and Trainee Officers, otherwise a repugnancy between the
D definition of "existing officers" and the provisions of paragraphs 7 and
8 of the Order will arise. Further, it has been held that the notional
date of the coming into force of the Order, namely, 1-10-1979, is only
to protect the emoluments of the officers and nothing else. In that view
of the matter, the Allahabad High Court directed the Bank to prepare
the seniority list of its officers in the light of the observations made in
E the judgment. Although it was not specifically directed that the Prob-
ationary/Trainee Officers should be placed above the officers in the
erstwhile Grade-II in the seniority list, yet that would follow from the
findings made by the High Court.

On the other hand, the Delhi High Court took a contrary view
F and dismissed the writ petitions. Though according to the Allahabad
High Court, the Probationary /Trainee Officers should be placed
above the erstwhile officers in the Grade-II, according to the Delhi
High Court they would be placed below the Officers in the Grade-II.
Hence, these Appeals by the State Bank of India and the Special
Leave Petition by the Probationary/Trainee Officers. -
G
Mr. Kacker, learned counsel appearing on behalf of the Pro-
bationary/Trainee Officers, has urged that the Allahabad High Court
was justified in holding that the writ petitioners appointed as Pro-
bationary/Trainee Officers on 30/31- 10-1979, should be considered as
the existing officers within the meaning of paragraph 3(h) of the
H Order. It is submitted by him that the Bank itself had treated them as
STATE BANK v. Y.K. SRIVASTAVA [DUTT. J.I 127

existing officers. In support of that contention, the learned counsel A
has drawn our attention to the fact that the Bank had fitted the Pro-
bationary/Trainee Officers appointed on 30/31· 10-1979 to the Junior
Management Grade: Scale-I at Rs.960 p.m. Such fitment, according to
the learned counsel, was made under paragraphs 7 and 8 of the Order.

Paragraph 7 provides for the placement of existing officers on the B
>- appointed date in the corresponding grades and scales. It lays down,
inter alia, that the existing officers shall be placed as on the appointed

r date in the grade and scale specified in column 2 of Schedule I. Item
No. 9 of column 2 specifies the Junior Management Grade: Scale-I.

- Paragraph 8( 1) provides that every existing officer placed in any of the
new grades and scales of pay in accordance with paragraph 7, shall be
fitted at such stage in the new scale of pay corresponding to the exist· c
ing grade and scale as specified in Schedule II to the Order. It appears
_)L
that by a circular dated June 24, 1980, the followng directions were
given by the Chief General Manager, State Bank of India:·

"Officers who were promoted on or after the 1st October D
1979 but upto 31st December 1979, should be first fitted in
the old scale in terms of the then existing formula and
thereafter their basic pay should be refixed in the new scale
for Junior Management Grade Scale I in accordance with
the table given below:
E
..... 'i Basic pay in the Basic pay in the Basic pay in the
·-r- old clerical scale old officers' scale Junior Manage·
ment G.S.l. on the
--r date ofpromotion
F
Upto 350 500 950
370 540 1000
390 540 1000
420 580 1200
450 620 1200
480 665 1260 G
~--+-- 515 710 1320
550 755 1380

The basic pay of Probationary Officers and Trainee Offi-
cers who were appointed during the period 1st October
1979 to 31st December 1979, will also be fixed on the same H
basis."

- - ---- -·
128 SUPREME COURT REPORTS [ 1987[ 3 S.C.R.

A It is submitted on behalf of the Probationary/Trainee Officers -~
.that it is clear from the said circular that they were also treated as
existing officers, otherwise they could not be given the same benefit as
the other existing officers of the Bank.

The existing officers, as defined in paragraph 3(h), means all
B officers in the service of the Bank immediately prior to the appointed
date. Admittedly, the Probationary/Trainee Officers were not in the
.J
service of the Bank immediately prior to the appointed date, that is, .'"«"'
October 1, 1979. They cannot, therefore, be held to be the existing '
officers in the face of the definition of the expression in paragraph 3(h)
of the Order.
c It is difficult to accept the contention of the Probationary/
Trainee Officers that they were treated by the Bank as existing officers
merely because they were fitted to the Junior Management Grade:
Scale-I and given a higher start at Rs.960 p.m. It is incorrect to say that
when an employee is fitted to a particular scale of pay of another cadre,
D he does not become a member of that cadre. In the instant case, the
Probationary/Trainee Officers were placed in the corresponding scales
of pay in the Junior Management Grade for the purpose of fitment in
the new scales of pay. Indeed, as stated already, they were fitted to the
Junior Management Grade: Scale-I at Rs.960 p.m. It may be that such
fitment has been made by the Bank following the principles as laid
E down in paragraphs 7 and 8 of the Order, presumably with a view to
removing any disparity between Officers Grade-I and Officers Grade-
n in the Junior Management Grade, but it will be difficult to accept the
conten.tion made on behalf of the Probationary/Trainee Officers that
they were treated as existing officers and such fitment was made under
paragraphs 7 "and 8 of the Order. The Probationary/Trainee Officers
F appointed on 30/31-10-1979, that is, after 1- 10-1979, the appointed
date, are not existing officers within the meaning of paragraph 3(h) of
the Order and the Bank could not treat them as such for the purpose of
fitment or giving a higher scale of pay.

We are unable to subscribe to the view of the Allahabad High
G Court that unless the expressioh "existing officers" is read as including
the Probationary/Trainee Officers, there will be a repugnancy
between the definition of existing officers, as contained 1n paragraph
3(h), and the provisions of paragraphs 7 and 8 of the Order. This view
of the Allahabad High Court proceeds on the assumption that the
Probationary /Trainee Officers having been given the benefit of extra
H emoluments by fitting them in the Junior Management Grade: Scale-I,

__
, ~
STATE BANK v. Y.K. SRIVASTAVA {DUTT, J.] 129

..4 they were treated as existing officers. In our opinion, if the Prob· A
ationary/Trainee Officers are treated as existing officers, it will be
doing violence to the provisions of paragraph 3(h) .• We do not think
that the definition of the expession "existing officers", as given in
paragraph 3(h) is, in any way, repugnant to the provisions of para·
graphs 7 and 8 of the Order. On the contrary, it is quite in harmony
with the said provisions and also the other provisions of the Order. B
~ There is no ambiguity in the definition of "existing officers" and in
regard to paragraphs 7 and 8 of the Order there is no repugnancy of
the definition to the subject or context. Repugnancy of the definition
1' of any term may arise only if such definition does not agree with the
subject or context of a particular provision. But, surely, any action not
~
in conformity with the provision of the definition clause will not render
the definition of a term repugnant to the subject or context of any
c
provision of the statute containing the term. We are also unable to
~- accept the contention of Mr. Kacker that the definition of "existing
officers" is only illustrative and not exhaustive and that such narrow
definition does not fit in everywhere. The definition does not give any
illustration whatsoever, and it is wrong to submit that the definition is D
illustrative. On the contrary, the definition under paragraph 3(h) is
y quite specific and points to only one class of officers, that is, the
officers who were in the service of the Bank immediately prior to 'the
appointed date and to whom any of the rules, as mentioned in that
paragraph, are applicable. In our view, therefore, the Probationary/
Trainee Officers appointed on 30/31· I0· 1979, that is, after the ap· E
pointed date, are not existing officers .
.- i
r In this connection, we may notice the argument of Mr. Gupta,
learned counsel appearing on behalf of some of the Probationary/
Trainee Officers, that the merger of Officers Grade-II and Grade-I
-(
into the Junior Management Grade was only for the purpose of fitment F
in the higher scale of pay and not for the purpose of seniority. It has
been already stated that it was the demand of the Officers' Federation,
representing both Officers Grade-I and Officers Grade-II, that the
distinction between these two Grades should be abolished in every
respect and, ultimately, it was agreed that they would be placed in one
grade, that is, the Junior Management Grade, having a higher scale of G
..+ pay, subject to this that the Officers Grade-I will be above the Officers
Grade-II in the seniority list. It appears from the Circular No. 9 issued
by the Officers' Federation, that the Pillai Committee's recommenda-
lions would be implemented in the State Bank Group from October 1,
1979. Thus, it was agreed by the Officers' Federation that a scheme
namely, the merger of Officers Grade-I and Officers Grade· II int~ H
130 SUPREME COURT REPORTS [1987] 3 S.C.R.

A Junior Management Grade would take place with effect from October
1, 1979 and that has been exactly given effect to by the Order under
which the existing Officers, that is, the officers who were in the emp-
loyment of the Bank immediately prior to October l, 1979, would be
placed in the new Junior Management Grade and to Scale-I, as con-
tained in Schedule I to the Order. In paragraph 2(1) of the Order,
B provision has been made for the application of the Order to other
officers. Thus, it is clear that all the officers of the Bank in the lower
level before the Probationary or Trainee Officers were appointed on
30131-10-1979 agreed that they would merge into a new Grade and
Officers Grade-I would be senior to the Officers Grade-II. This was
the result of the recommendations of the Pillai Committee suggesting
C that there should be one grade for the Officers Grade-I and II in the
lower level. It may be that Pillai Committee did not make any recom-
mendation with regard to seniority, but when two grades of officers
are merged into a new grade, the question of inter se seniority will
automatically arise and it will be the duty of the employer to fix the
seniority. Indeed, paragraph 18 of the Order lays down the principles
D for computing the seniority of the officers of the Bank. But, under
paragraph 18(5) of the Order, the seniority among the existing officers
will remain the same. In other words, the Officers Grade-I will remain
seniors to Officers Grade-II.

Another contention that has been made by Mr. Gupta for the
E Probationary /Trainee Officers is that these officers have to undergo
tests which are more stringent than the tests to be undergone by the
Grade-II Officers and, as such, the Probationary/Trainee Officers,
though they were appointed on 30/31-10-1979, should not be placed
under the Officers Grade-II in the seniority list. This, in our opinion, is
an argument in despair. The question is not whether the Probationary/
F Trainee Officers have to undergo more stringent tests than the tests to
be undergone by the Grade-II Officers, but the question is whether the
Probationary /Trainee Officers are existing officers or not, that is to
say, whether they were in the employment of the Bank immediately
prior to October 1, 1979. As the Probationary/Trainee Officers are not
existing officers, they cannot claim seniority over the Officers Grade-
G _ II, who are existing officers.

It is next contended that the Bank had no authority to give
retrospective operation to the Order with effect from October 1, 1979,
inasmuch as !lection 43 of the State Bank of India Act under which the
Order has been passed, does not autliorise the Bank to pass any such
H Order with retrospectivP. effect. It is now well settled that unless the
-
STATE BANK v. Y.K. SRIVASTAVA (DUTT, J.J 131

~ statute, under which the rules are framed by the rule making autho- A
rity, does not specifically authorise the making of rules with retrospec-
tive effect, such authority cannot frame any rule with retrospective
effect. (See Cannanore Spinning and Weaving Mills Ltd. v. Collector
of Customs and Central Excise, Cochin & Ors., [ 1970] 2 SCR 830;
Income-Tax Officer, Alleppey v. M.C. Ponnoose & Ors., (1970] 1 SCR
678; Hukam Chand etc. v. Union of India & Ors., (1973] 1 SCR 896 B
~ and Regional Transport Officer, Chittoor, & Ors. v. Associated Trans-

.,, port Madras (P) Ltd. & Ors., (1980] 4 SCC 597) .

Mr. Shanti Bhushan, learned counsel appearing on behalf of the
State Bank of India, however, submits that the impugned Order has
not been made retrospective, as contended on behalf of the Proba- c
tionary/Trainee Officers. All that has been done by the Order is that
the Officers Grade-I and Grade-II have been merged into one cate-
'Jc. gory, namely, Junior Management Grade with effect from October 1,
1979. These Officers were already employees of the Bank before
October 1, 1979 and, as such, they are existing officers within the
meaning of paragraph 3(h) of the Order. Further, it is submitted by D
him that the Bank after considering the injustice done to the Officers
y· Grade-II numbering about 15,000, sought to remove the same by
abolishing the distinction between Officers Grade-I and Officers
Grade-II in terms of the recommendations of the Pillai Committee by
the impugned Order with effect from October 1, 1979. It may be that
there was some delay in publishing the decision of the Bank, that is, E

- ~
the Order, but it cannot be said that the Order is retrospective in
operation.

Mr. Shanti Bhushan points out that in V. T. Khanzode & Ors. v.
Reserve Bank of India & Anr., (1982] 4 SCR 411 this Court upheld the
' decision of the Reserve Bank of India as regards the introduction of
common seniority, inter-group and mobility amongst different grades
F

of officers belonging to Group-I, Group-ll and Group-III with retros-
pective effect from May 22, 1974. In that case, officers belonging to
Group-I urged that the scheme should be brought into effect from
January I, 1976, while those belonging to Groups-II and III wanted
the scheme to be brought into effect from January 1, 1970. The Central G
··+ Board of the Reserve Bank struck a balance by choosing the date May
22, 1974. Chandrachud, C.J. delivering the judgment of the Court held
that it was the best solution in the peculiar circumstances of the case
and that in order to rectify the imbalances and anomalies caused by the
compartmental-wise and group-wise seniority, it was necessary to give
retrospective effect to the combined seniority list. Further, it has been H
132 SUPREME COURT REPORTS [ 1987] 3 S.C.R.

A observed by the learned Chief Justice that no scheme governing
service matter can be fool-proof and some section or the other of
employees is bound to feel aggrieved on the score of its expectations
being falsified or remaining to be fulfilled. Mr. Shanti Bhushan has also
placed reliance upon the observation of Sabyasachi Mukharji, J., in
Reserve Bank of India v. C.N. Sahasranaman, [1986] Suppl. SCC 143.
B It has been observed by Mukharji, J that whether there has been
denial of equality or any constitutional right infringed or not cannot be
published where interests of large number of people are concerned, in
judged the abstract. Further, it has been observed that in service juris-
prudence there cannot be any service rule which would satisfy each
and every employee and its constitutionality has to be judged by
C considering whether it is fair, reasonable and does justice to the
majority of the emloyees.

Relying upon the above two decisions of this Court, it is submit-
ted on behalf of the State Bank of India that in the instant case also a
large number of employees, particularly the Officers Grade-II num-
D bering about 15,0(_)0, have been benefitted. Indeed, justice has been
done to these 15 ,000 employees as agreed to by the Officers' Federa-
tion of the Bank comprising both Officers Grade-I and Officers Grade-
n. Counsel submits that existing officers have been given the benefit
of the Junior Management Grade: Scale-I with effect from 1.10.1979.
So, the Order was also given effect to from that date, which is the
E appointed date. It is submitted that the Order has been given effect to
from 1-10-1979 in the interest of a large number of employees of the
Bank. The Probationary/Trainee Officers, who are only 900 in number
and appointed on 30/31-10-1979, have no locus standi to challenge the
Order or the merger of Officers Grade-I and Officers Grade-ll in one
cadre, namely, Junior Management Grade, as per the recommenda-
F tions of the Pillai Committee. 'y-
It is not disputed that negotiations had been going on between
the Bank and the Officers' Federation as to how and in what manner
the recommendations of the Pillai Committee accepted by the Govern-
ment would be given effect to. Ultimately, it was decided that the
G recommendations would be given effect to from 1-10-1979 by merging
the two categories of officers who were in the employment of the
Bank, immediately prior to 1-10-1979 into one category, namely, the
Junior Management Grade. Although the Order was actually pub-
lished on December 19, 1979, the officers of the Bank, who were there
on or before October l, 1979, were aware of the fact that the Order
H would be given effect to from October 1, 1979, as agreed to between

..,_.._ -- ... --
-
STATE BANK v. Y.K. SRIVASTAVA (DUTT. J.] 133

the Bank and the Officer's Federation. The appointed date is relevant
A
for the purpose of applicability of the Order to the officers, who had
been there in the service of the Bank immediately prior to the
appointed date.

Mr. Soli Sorabjee, learned counsel appearing on behalf of the
petitioners in the Special Leave Petition No. 3371 of 1982, has drawn B
our attention to a telex message which has been communicated to all
the petitioners instructing them to complete their formalities and to
join the duty well before October 31, 1979 in their own interest. Tele-
grams were also sent to the petitioners to the following effect:-

"Reference to your selection as Probationary Officer and C
our communications to you for immediate completion of
necessary formalities. We reiterate that the Pillai Commit-
tee's recommendations are likely to be implemented
shortly. If you join after implementation thereof, you shall
be governed by the revised terms of service and salary
scales. You are advised in your own interest to complete D
the remaining formalities viz., ( 1) acceptance of our offer
by 20th October, 1979 and be ready to join duty around
25th idem at the place to be intimated to you after comple-
tion of formalities, failing which the risk of change in the
salary structure and other conditions will be yours."
E
From the telex and telegraph messages, it is contended that they
\
show that the Bank had decided to give effect to the Order with effect
'r from 30/31-10-1979. We are unable to accept this contention. There is
no indication in the telex or telegram that the Order will be given
effect to from October 30/31, 1979. The telegram really mentions that
if the petitioners join after implementation of the recommendations of F
the Pillai Committee, they will be governed by the revised terms of
service and salary scales. Indeed, it has been already noticed that after
the appointment of the Probationary/Trainee Officers on 30/31-10-
1979, they were fitted to the Junior Management Grade: Scale-I and
given a higher start at Rs.960 p.m. The telex and the telegram to which
our attention has been drawn, do not seem to be of any consequence to G
the Probationary /Trainee Officers and does not at all support their
contention that the Order was intended to be given effect to from
30/31-10-1979,

It is next contended by the learned counsel, appearing on behalf
of the Probationary/Trainee Officers, that the impugned Order takes H

/ . ...-.
A
134 SUPREME COURT REPORTS [1987] 3 S.C.R.

away the vested right of seniority of the Probationary/Trainee Officers
with retrospective effect. In elaboration of the contention, it is pointed
j
out that on the day these Probationary/Trainee Officers were appoin-
ted, namely, on October 30/31-10-1979, they were admittedly seniors
to the Officers Grade-II. This seniority of the Probationary/Trainee
Officers has been taken away bly giving retrospective operation to the
B Order. It is submitted that the Bank has no authority to take away the
vested right of seniority of the Probationary /Trainee Officers with
retrospective effect. On the other hand, it is contended by Mr. Shanti
Bhushan, learned counsel appearing on behalf of the State Bank of
India, that there is no question of vested right to seniority. Seniority is
relevant only for the purpose of promotion. A right to be considered
C for promotion is a vested right, but a mere chance of promotion is not
such a right. It is submitted that the right of the Probationary/Trainee
Officers to be considered for promotion has not been affected in the
least by the Order, nor have their chances of promotion been affected.
Moreover, no order has been passed under paragraph 2(1) of the
Order applying the same to the Probationary/Trainee Officers. These
D Officers are outside the purview of the Junior Management Grade
and, as such, they are precluded from challenging the seniority of the
erstwhile Officers Grade-II, now placed in a completely different
category. In other words, it is the contention of the State Bank of
India that the Probationary/Trainee Officers, who have been appoin-
ted on 30/31- 10-1979 as Officers Grade-I, cannot challenge any benefit
E that is conferred on the offic~rs of a different cadre, namely, the
Junior Management Grade.

It is not necessary for us to decide whether there is any vested
right to seniority or not. The Probationary/Traihee Officers have not
been brought within the purview of the new cadre, that is, the Junior
F Management Grade. Indeed, it is the complaint of the learned
counsel, appearing on behalf of these Officers, that they have been
totally ignored by the Order inasmuch as no provision has been made
about them in the Order. We have already noticed that it was the
contention of the Officers' Federation that there should not be any
distinction in the status of Officers Grade-I and Officers Grade-II. It
G was urged that such distinction should be abolished and both these
categories of officers should be placed in one categor{ so that they
have the same status and position. The State Bank of India accepted
the demand of the Officers' Federation and the distinction has been
removed. In these circumstances, it is apparent that the Probationary/
Trainee Officers being Officers Grade-I, are of the same status and
H position as the Officers Grade-II. Admittedly, the erstwhile Officers
STATE BANK v. Y.K. SRIVASTAVA [DUTT. J.] !35
~·
Grade-II were appointed much earlier than the Probationary /Trainee
A
Officers, who were the writ petitioners in the High Courts. Although
they had to perform almost the same duty and there was no difference
between their positions, they had to suffer an artificial distinction and
placed below the Officers Grade-I, who were considered to be
superior in rank to the Officers Grade-II. After the Bank had decided
~ that both these two categories of officers were same in status and
position and such decision having been impk:,,_med, we are afraid, it
B

_,,, is difficult to accept the contention made on behalf of the Proba-
tionary /Trainee Officer; that they should be considered senior to the
erstwhile Officers Grade-II.

Moreover, there is some force in the contention made on behalf
of the Bank that as the Probationary/Trainee Officers are not in the
c
'x Junior Management Grade which is a different cadre, they have no
locus standi to challenge any benefit conferred on the officers of the
Junior Management Grade comprising erstwhile Officers Grade-I and
Officers Grade-II, as were in the employment of the Bank prior to
October I, 1979. D
'y
It is submitted by Mr. Shanti Bhushan that the Probationary/
Trainee Officers, with whom we are concerned, have not been pre-
judiced in the least by the Order having come into force on and from
October I, 1979. The learned counsel has categorically stated before
us that all these officers will be included in the Junior Management E
Grade and an order in that regard will be passed under paragraph 2(1)
'
)- of the Order. It is pointed out by him that everybody will be con-
sidered for promotion from the Junior Management Grade to the Mid-
die Management Grade. Thus, even though the Probationary/Trainee

, Officers are placed below the erstwhile Officers Grade-II, they will be
allowed to appear at the written test, one of the modes prescribed for F
promotion, along with others including the erstwhile Officers Grade-
II, provided they complete six years of service in Grade-I. Apart from
this, the Probationary/Trainee Officers have been fitted to the higher
scale of pay in the Scale-I of the Junior Management Grade, although
they have not been formally included in that Grade. In these circums-
~
t lances, it cannot be said that the Probationary /Trainee Officers have G
been prejudiced by the Order. We are sure that the Bank will take
immediate steps for applying the order to the Probatirn ary/Trainee
Officers. No other point has been urged on behalf of the !''flies.

For the reasons aforesaid, the judgment of the Al Jhabad High
Court is set aside and the Civil Appeals are ,allowed. The judgment of H
136 SUPREME COURT REPORTS [1987] 3 S.C.R.

A the Delhi High Court is affirmed and the Special Leave Petition is
dismissed. All the Writ Petitions filed by the Probationary/Trainee
Officers are also dismissed. There will, however, be no order as to
costs in any of these Appeals or in the Special Leave Petition.

P.S.S. Appeals allowed & Petition dismissed.
B

----·-- - ·-~· - -.,